Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 14, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2023 | |
Entity File Number | 001-38935 | |
Entity Registrant Name | ATRECA, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 27-3723255 | |
Entity Address, Address Line One | 835 Industrial Road, Suite 400 | |
Entity Address, City or Town | San Carlos | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94070 | |
City Area Code | 650 | |
Local Phone Number | 595-2595 | |
Title of 12(b) Security | Class A Common Stock | |
Trading Symbol | BCEL | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001532346 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Class A common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 32,908,634 | |
Class B common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 6,715,441 |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current Assets | ||
Cash and cash equivalents | $ 13,470 | $ 30,819 |
Investments | 7,918 | 39,676 |
Prepaid expenses and other current assets | 3,305 | 7,531 |
Total current assets | 24,693 | 78,026 |
Property and equipment, net | 1,614 | 37,972 |
Operating lease right-of-use assets | 36,056 | |
Deposits and other | 35 | 2,976 |
Total assets | 26,342 | 155,030 |
Current Liabilities | ||
Accounts payable | 4,062 | 1,741 |
Accrued expenses | 9,292 | 9,681 |
Operating lease liabilities, current portion | 1,281 | 3,544 |
Other current liabilities | 948 | 1,327 |
Total current liabilities | 15,583 | 16,293 |
Operating lease liabilities, net of current portion | 60,331 | |
Total liabilities | 15,583 | 76,624 |
Commitment and contingencies (Note 9) | ||
Stockholders' equity | ||
Additional paid-in capital | 544,094 | 535,592 |
Accumulated other comprehensive loss | (4) | (266) |
Accumulated deficit | (533,335) | (456,924) |
Total stockholders' equity | 10,759 | 78,406 |
Total liabilities and stockholders' equity | 26,342 | 155,030 |
Class A common stock | ||
Stockholders' equity | ||
Common stock | 3 | 3 |
Class B common stock | ||
Stockholders' equity | ||
Common stock | $ 1 | $ 1 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Class A common stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 650,000,000 | 650,000,000 |
Common stock, shares issued (in shares) | 32,908,634 | 32,351,950 |
Common stock, shares outstanding (in shares) | 32,908,634 | 32,351,950 |
Class B common stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 6,715,441 | 6,715,441 |
Common stock, shares outstanding (in shares) | 6,715,441 | 6,715,441 |
Statements of Operations
Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Expenses | ||||
Research and development | $ 10,407 | $ 16,045 | $ 36,774 | $ 53,062 |
General and administrative | 5,386 | 7,247 | 20,300 | 23,930 |
Restructuring and impairment charges | 20,856 | 20,856 | ||
Total expenses | 36,649 | 23,292 | 77,930 | 76,992 |
Interest and other income (expense) | ||||
Other income | 80 | 243 | 750 | |
Interest income | 354 | 233 | 1,276 | 430 |
Net other income (expense) | 434 | 233 | 1,519 | 1,180 |
Loss before income tax expense | (36,215) | (23,059) | (76,411) | (75,812) |
Net loss | $ (36,215) | $ (23,059) | $ (76,411) | $ (75,812) |
Net loss per share, basic (in dollars per share) | $ (0.92) | $ (0.60) | $ (1.95) | $ (1.97) |
Net loss per share, diluted (in dollars per share) | $ (0.92) | $ (0.60) | $ (1.95) | $ (1.97) |
Weighted-average shares used in computing net loss per share, basic (in shares) | 39,354,502 | 38,720,575 | 39,202,045 | 38,434,327 |
Weighted-average shares used in computing net loss per share, diluted (in shares) | 39,354,502 | 38,720,575 | 39,202,045 | 38,434,327 |
Statements of Loss and Comprehe
Statements of Loss and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statements of Loss and Comprehensive Loss | ||||
Net loss | $ (36,215) | $ (23,059) | $ (76,411) | $ (75,812) |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on available-for-sale debt securities | (6) | 80 | 262 | (479) |
Comprehensive loss | $ (36,221) | $ (22,979) | $ (76,149) | $ (76,291) |
Statements of Stockholders' Equ
Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total |
Balances at beginning at Dec. 31, 2021 | $ 4 | $ 514,794 | $ (102) | $ (359,767) | $ 154,929 |
Balances at beginning (in shares) at Dec. 31, 2021 | 37,758,797 | ||||
Issuance of common stock through "at-the-market" offering, net of underwriter discount and issuance costs | 3,509 | 3,509 | |||
Issuance of common stock through "at-the-market" offering, net of underwriter discount and issuance costs (in shares) | 700,000 | ||||
Issuance of common stock upon exercise of options | 76 | 76 | |||
Issuance of common stock upon exercise of options (in shares) | 16,666 | ||||
Issuance of common stock under the Employee Stock Purchase Plan | 322 | 322 | |||
Issuance of common stock under the Employee Stock Purchase Plan (in shares) | 207,538 | ||||
Stock-based compensation | 13,708 | 13,708 | |||
Unrealized gain (loss) on available-for-sale debt securities | (479) | (479) | |||
Net loss | (75,812) | (75,812) | |||
Vesting of restricted stock units (in shares) | 384,390 | ||||
Balances at end at Sep. 30, 2022 | $ 4 | 532,409 | (581) | (435,579) | 96,253 |
Balances at end (in shares) at Sep. 30, 2022 | 39,067,391 | ||||
Balances at beginning at Jun. 30, 2022 | $ 4 | 528,380 | (661) | (412,520) | 115,203 |
Balances at beginning (in shares) at Jun. 30, 2022 | 38,591,436 | ||||
Issuance of common stock under the Employee Stock Purchase Plan | 145 | 145 | |||
Issuance of common stock under the Employee Stock Purchase Plan (in shares) | 91,565 | ||||
Stock-based compensation | 3,884 | 3,884 | |||
Unrealized gain (loss) on available-for-sale debt securities | 80 | 80 | |||
Net loss | (23,059) | (23,059) | |||
Vesting of restricted stock units (in shares) | 384,390 | ||||
Balances at end at Sep. 30, 2022 | $ 4 | 532,409 | (581) | (435,579) | 96,253 |
Balances at end (in shares) at Sep. 30, 2022 | 39,067,391 | ||||
Balances at beginning at Dec. 31, 2022 | $ 4 | 535,592 | (266) | (456,924) | 78,406 |
Balances at beginning (in shares) at Dec. 31, 2022 | 39,067,391 | ||||
Issuance of common stock under the Employee Stock Purchase Plan | 119 | 119 | |||
Issuance of common stock under the Employee Stock Purchase Plan (in shares) | 121,117 | ||||
Stock-based compensation | 8,383 | 8,383 | |||
Unrealized gain (loss) on available-for-sale debt securities | 262 | 262 | |||
Net loss | (76,411) | (76,411) | |||
Vesting of restricted stock units (in shares) | 435,567 | ||||
Balances at end at Sep. 30, 2023 | $ 4 | 544,094 | (4) | (533,335) | 10,759 |
Balances at end (in shares) at Sep. 30, 2023 | 39,624,075 | ||||
Balances at beginning at Jun. 30, 2023 | $ 4 | 541,787 | 2 | (497,120) | 44,673 |
Balances at beginning (in shares) at Jun. 30, 2023 | 39,156,584 | ||||
Issuance of common stock under the Employee Stock Purchase Plan | 10 | 10 | |||
Issuance of common stock under the Employee Stock Purchase Plan (in shares) | 31,924 | ||||
Stock-based compensation | 2,297 | 2,297 | |||
Unrealized gain (loss) on available-for-sale debt securities | (6) | (6) | |||
Net loss | (36,215) | (36,215) | |||
Vesting of restricted stock units (in shares) | 435,567 | ||||
Balances at end at Sep. 30, 2023 | $ 4 | $ 544,094 | $ (4) | $ (533,335) | $ 10,759 |
Balances at end (in shares) at Sep. 30, 2023 | 39,624,075 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash Flows from Operating Activities | ||
Net loss | $ (76,411) | $ (75,812) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 3,480 | 4,081 |
Amortization of operating right-of-use asset | 1,359 | 1,197 |
Impairment charges | 685 | |
Stock-based compensation | 8,383 | 13,708 |
Amortization of discount or premium on available-for-sale securities | (318) | 90 |
Loss on lease termination | 8,768 | |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | 7,442 | (2,133) |
Accounts payable | 834 | (1,671) |
Accrued expenses | (1,504) | (2,136) |
Other current liabilities | (379) | (236) |
Operating lease liabilities | (1,983) | (2,376) |
Net cash used in operating activities | (49,644) | (65,288) |
Cash Flows from Investing Activities | ||
Purchase of property and equipment | (162) | (739) |
Purchase of investments | (16,647) | (60,504) |
Proceeds from maturities of investments | 48,985 | 48,442 |
Net cash provided by (used in) investing activities | 32,176 | (12,801) |
Cash Flows from Financing Activities | ||
Proceeds from the issuance of Class A common stock under the Employee Stock Purchase Plan | 119 | 322 |
Proceeds from exercise of stock options | 76 | |
Proceeds from issuance of common shares in "at-the-market" equity offering, net of issuance costs | 3,509 | |
Principal payments on capital lease obligations | (4) | |
Net cash provided by financing activities | 119 | 3,903 |
Net change in cash, cash equivalents and restricted cash | (17,349) | (74,186) |
Cash, cash equivalents and restricted cash, beginning of period | 31,934 | 96,204 |
Cash, cash equivalents and restricted cash, end of period | 14,585 | 22,018 |
Supplemental Schedule of Non-Cash Investing and Financing Activities | ||
Purchases of property and equipment included in accounts payable and accrued liabilities | $ 30 | |
Reclassification of fixed assets held-for-sale | $ 275 |
Business
Business | 9 Months Ended |
Sep. 30, 2023 | |
Business | |
Business | Notes to Unaudited Interim Financial Statements 1. Business Nature of Business Atreca, Inc. (the “Company”) was incorporated in the State of Delaware on June 11, 2010 (“inception”), and is located in San Carlos, California. The Company is a biopharmaceutical company utilizing its differentiated platform to discover and develop novel antibody-based immunotherapeutics to treat a range of solid tumor types. APN-497444 is a Company-discovered antibody targeting a novel, tumor-specific glycan, which displays uniform and tumor-selective binding with high target prevalence in colorectal cancer and exhibits compelling preclinical anti-tumor activity and initial safety when weaponized as an antibody-drug conjugate (“ADC”). The Company operates in a single segment. Since inception, the Company has been primarily engaged in research and development, raising capital, building its management team and building its intellectual property portfolio. In August 2023, the Company implemented a reorganization of its operations. As part of the reorganization, the Company undertook cost-saving initiatives, including a workforce reduction of approximately 40% of its employees and the suspension of the development of ATRC-101, its lead product candidate (collectively, the “August 2023 Reorganization”). The total cost related to the workforce reduction was approximately $1.3 million, all of which is cash-based expenditures related primarily to severance payments. The Company recognized substantially all the charges related to the workforce reduction in the quarter ended September 30, 2023. In September 2023, the Company entered into an Agreement for Modification of Lease and Voluntary Surrender of Premises (the “Lease Modification Agreement”) with ARE-San Francisco No. 63, LLC, a Delaware limited liability company (the “Landlord”), to terminate that certain Lease Agreement dated as of July 17, 2019, as amended by that certain Letter Agreement dated as of August 24, 2020 (the “Lease”), by and between the Company and Landlord, for certain premises located at 835 Industrial Road, San Carlos, California 94070 (the “Premises”) that served as the Company’s headquarters. The term of the Lease was scheduled to expire on April 30, 2033. The Lease Modification Agreement provides that the Lease will terminate on the earlier of (i) April 30, 2024, and (ii) such earlier date that the Landlord elects to terminate the Lease after November 30, 2023, pursuant to certain accelerated termination rights with respect to the Premises. The Company and the Landlord acknowledge and agree that the Company has elected to vacate the Premises as of November 30, 2023. As consideration for the Landlord’s agreement to enter into the Lease Modification Agreement and accelerate the expiration date of the Lease, the Company has agreed to pay a lease modification payment to the Landlord in an amount of $5.1 million. As of September 30, 2023, the Company paid $4.0 million of the lease modification payment. The Company additionally conveyed the ownership of certain assets, including its lab equipment and leasehold improvement, to the Landlord. The net carrying value of the transferred assets was $32.1 million. Further to the Company’s ongoing reorganization efforts, the Company is devoting substantial time and resources to exploring potential strategic transactions and business alternatives focused on maximizing stockholder value, including, but not limited to, a merger, sale of part or all its clinical, preclinical and discovery platform assets, business combination, and/or similar transaction. In November 2023, the Company implemented a further reduction in its workforce while maintaining the necessary support to continue exploring potential strategic transactions and business alternatives (the “November 2023 Reorganization”). Refer to Note 16, Subsequent Events. Despite devoting significant efforts to identifying and evaluating potential strategic alternatives, there can be no assurance that this strategic review process will result in the Company pursuing any transaction or that any transaction, if pursued, will be completed on attractive terms or at all. The Company’s board of directors has not approved a definitive course of action. Additionally, there can be no assurances that any particular course of action, business arrangement or transaction, or series of transactions, will be pursued, successfully consummated or lead to increased stockholder value. Nasdaq Delisting Notification On September 8, 2023, the Company received a notice from The Nasdaq Stock Market LLC, or Nasdaq, notifying us that on September 7, 2023, the average closing price of our Class A common stock, $0.0001 par value per share, over the prior 30 consecutive trading days had fallen below $1.00 per share, which is the minimum average closing price required to maintain listing on Nasdaq under Nasdaq Listing Rule 5450(a)(1), or the Minimum Bid Requirement. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company have 180 calendar days to regain compliance with the Minimum Bid Requirement, or the Grace Period, subject to a potential 180 calendar day extension, as described below. To regain compliance, the closing bid price of the Class A common stock must be at least $1.00 per share for a minimum of ten If the Company does not achieve compliance with the Minimum Bid Requirement by March 6, 2024, the end of the Grace Period, the Company may be eligible for an additional 180 calendar day period to regain compliance. To qualify, the Company will be required to meet the continued listing requirement for market value of our publicly held shares and all other Nasdaq initial listing standards, with the exception of the bid price requirement, and will need to provide written notice to Nasdaq of our intention to cure the deficiency during the second compliance period by effecting a reverse stock split if necessary. However, if it appears to Nasdaq staff that the Company will not be able to cure the deficiency, or if the Company do not meet the other Nasdaq listing standards, Nasdaq could provide notice that the Class A common stock will be subject to delisting. In the event the Company receive notice that the Class A common stock is being delisted, the Company would be entitled to appeal the determination to a Nasdaq Listing Qualifications Panel and request a hearing. There can be no assurance that the Company will be able to regain compliance with the Minimum Bid Requirement or maintain compliance with the other listing requirements. The notice has no immediate effect on the listing or trading of the Class A common stock, which will continue to be listed and traded on Nasdaq, subject to our compliance with the other Nasdaq listing standards. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of the Company. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been or omitted pursuant to the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Therefore, these unaudited financial statements should be read in conjunction with the audited financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC on March 29, 2023. Going Concern In accordance with Accounting Standards Codification (“ASC”) 205-40, Going Concern, the Company evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued. This evaluation initially does not take into consideration the potential mitigating effect of our plans that have not been fully implemented as of the date the financial statements are issued. When substantial doubt exists under this methodology, we evaluate whether the mitigating effect of its plans sufficiently alleviates substantial doubt about our ability to continue as a going concern. The mitigating effect of our plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued. In performing this analysis, we excluded certain elements of our operating plan that cannot be considered probable. The Company expects to generate operating losses and negative operating cash flows in the future and the need for additional funding to support its planned operations raise substantial doubt regarding its ability to continue as a going concern for a period of one year after the date of the unaudited financial statements are issued. In August 2023, the Company commenced a reorganization plan to preserve capital and reduce operating costs. The Company has also begun the exploration of strategic alternatives, which may include a merger, sale of part or all its clinical, preclinical and discovery platform assets, business combination, and/or similar transaction. The Company has concluded the likelihood that its plan to successfully obtain sufficient funding from one or more of these sources or adequately reduce expenditures, while reasonably possible, is less than probable. As a result, the Company believes that its existing cash, cash equivalents and investments will only be sufficient to fund its planned operating and capital needs into the first quarter of 2024. Accordingly, the Company has concluded that substantial doubt exists about its ability to continue as a going concern for a period of at least twelve months from the date of issuance of these unaudited financial statements. The accompanying unaudited financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The unaudited financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of income and expenses in the financial statements and accompanying notes. Actual results could differ from those estimates. Key estimates in the financial statements include estimated useful lives of property and equipment, impairment of long-lived assets, accrued expenses, valuation of deferred income tax assets, fair value of available-for-sale debt securities and fair value of options granted under the Company's stock option plan. Unaudited Interim Financial Statements The accompanying financial statements are unaudited. The unaudited interim financial statements have been prepared on the same basis as the annual financial statements and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for the fair statement of the Company’s financial position as of September 30, 2023 and its results of operations for the three and nine months ended September 30, 2023 and 2022, and statements of cash flows for the nine months ended September 30, 2023 and 2022. The financial data and the other financial information contained in these notes to the financial statements related to the three-month and nine-month periods ended September 30, 2023 and 2022 are also unaudited. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any other future annual or interim period. The balance sheet as of December 31, 2022 included herein was derived from the audited financial statements as of that date. Other Income Other income is comprised of amounts earned from services performed under service agreements. The Company follows the provisions of Accounting Standards Update 2014-09 ASC Topic 606, Revenue from Contracts with Customers ( ). In determining the appropriate amount of other income to be recognized as it fulfills its obligations under the agreements, the Company performs the following steps: (i) identifies the promised goods or services in the contract; (ii) determines whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measures the transaction price, including the constraint on variable consideration; (iv) allocates the transaction price to the performance obligations based on estimated selling prices; and (v) recognizes other income when (or as) the Company satisfies each performance obligation. The Company generally allocates the transaction price to distinct performance obligations at their stand-alone selling prices, determined by their estimated costs plus some margin. Performance obligations are generally delivered over time and recognized based upon observable inputs as the related research services are performed, which are recorded as research and development expenses. Amounts due under service agreements are generally billed monthly as services are delivered and do not generally result in contract liabilities or assets. In March 2022, the Company entered into an agreement with a third party for the assignment of certain non-core intellectual property. The initial consideration was classified as other income and recognized upon completion of the assignment. The agreement provides for additional consideration in the event of commercial exploitation of the intellectual property. The term of the agreement extends to the date of expiration of the last to expire of any of the assigned patents. In October, 2022, the Company entered into the Grant Agreement with the Bill & Melinda Gates Foundation under which it was awarded a grant totaling up to $1.2 million for its malaria program. The parties amended the agreement in December 2022 to extend the grant term. During the three months and nine months ended September 30, 2023, the Company recognized $80,000 and $243,000 of income related to the Grant Agreement, respectively, and had $0.9 million of unused funds received recorded as deferred revenue within accrued and other current liabilities. The Company recorded no receivables under service and license agreements as of September 30, 2023 and December 31, 2022. Collaborations Historically, we have entered into a number of discovery collaborations as we developed our discovery platform. These collaborations have generally focused on identifying novel antibodies in areas of significant unmet medical need. In July 2020, the Company entered into a Collaboration and License Agreement with Xencor, Inc. (the “Xencor Agreement”), to research, develop and commercialize novel CD3 bispecific antibodies as potential therapeutics in oncology. The Company evaluated the Xencor Agreement under the provisions of ASC 606 and ASU 2018-18, Collaborative Arrangements (Topic 808) Clarifying the Interaction between Topic 808 and Topic 606. The Company concluded that Xencor, Inc. is not a customer as there are no distinct units of account that are reflective of a vendor-customer relationship or exchange of consideration for the research activities. The Company’s share of any collaboration expense is recognized as a research and development expense on the Company’s statement of operations. For the cost-sharing related to the research program, the Company will follow the presentation and disclosure guidance of ASC 808, Collaboration Agreements The Company and Xencor recently elected to terminate the joint program commenced in early 2023. In-Licensing Arrangements – Development In April 2022 million. The Company also received an option to obtain an exclusive license to research, develop, manufacture, and commercialize certain ADCs for additional license fees and royalties. Unless earlier terminated or extended, the term of the research license and the commercial option is The Company will be required to use commercially reasonable efforts to develop and commercialize at least one licensed product and the Company will pay to Zymeworks an option exercise fee, and lump sum payments upon the achievement of certain development and regulatory milestones and commercial milestones. In addition, with respect to each licensed product, the Company will pay tiered royalties on net sales of licensed products at single-digit royalty rates. The research license fee of $5.0 million was expensed to research and development expense in April 2022 in accordance with the Company's research and development expense policy. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents include all cash balances and highly liquid investments purchased with an original maturity of three months or less. The Company maintained restricted cash of $1.1 million as of both September 30, 2023 and December 31, 2022. These amounts as of September 30, 2023 and December 31, 2022 are included in prepaids and other current assets and deposits and other, respectively, in the accompanying balance sheets and is comprised solely of letter of credit required pursuant to the lease for Company facilities. The Company’s reconciliation of cash and cash equivalents and restricted cash reported within the balance sheets that sum to the total of the same amounts shown in the statements of cash flows were as follows (in thousands): September 30, December 31, 2023 2022 Cash and cash equivalents $ 13,470 $ 30,819 Restricted cash 1,115 1,115 Cash, cash equivalents and restricted cash shown in the condensed statements of cash flows $ 14,585 $ 31,934 Investments The Company considers securities purchased with original maturities greater than three months to be investments. The Company’s policy is to protect the value of its investment portfolio and minimize principal risk by earning returns based on current interest rates. The Company’s intent is to convert all investments into cash to be used for operations and has classified them as available for sale. For purposes of determining realized gains and losses, the cost of debt securities sold is based on specific identification. Interest and dividends on securities classified as available-for-sale are included in interest income. Leases The Company determines if an arrangement is, or contains, a lease at inception. The Company measures lease liabilities based on the present value of lease payments over the lease term. As the Company’s leases generally do not provide an implicit discount rate, the net present value of future minimum lease payments is determined using the Company’s incremental borrowing rate. Options in the lease terms to extend or terminate the lease are not reflected in the lease liabilities unless it is reasonably certain that any such option will be exercised. The Company measures right-of-use assets at the lease commencement date based on the corresponding lease liabilities adjusted for (i) prepayments made to the lessor at or before the commencement date, (ii) initial direct costs incurred and (iii) certain tenant incentives under the lease. The Company evaluates the recoverability of the right-of-use assets for possible impairment in accordance with the long-lived assets policy. The Company has elected not to recognize right-of-use assets or lease liabilities for leases with an initial lease term of twelve months or less. The Company’s lease agreements do not contain residual value guarantees or covenants. Lease expense is recognized on a straight-line basis over the terms of the leases. Incentives granted under the Company’s facilities lease, including rent holidays, are recognized as adjustments to lease expense on a straight-line basis over the terms of the leases. Risks and Uncertainties The Company is subject to a number of risks associated with companies at a similar stage, including dependence on key individuals, competition from similar services and larger companies, volatility of the industry, ability to obtain regulatory clearance, ability to obtain adequate financing to support growth, the ability to attract and retain additional qualified personnel to manage the anticipated growth of the Company and general economic conditions. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents, investments and other receivables included in prepaid and other current assets. Cash and cash equivalents are held at three financial institutions and were in excess of the Federal Deposit Insurance Corporation insurable limit at September 30, 2023 and December 31, 2022. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, result of operations, and cash flows. Additionally, cash and cash equivalents and investments are maintained at brokerage firms for which amounts are insured by the Securities Investor Protection Corporation subject to legal limits. The Company does not require collateral or other security for other receivables. Research and Development Costs Research and development costs are expensed as incurred. Research and development costs consist primarily of salaries and benefits, consultant fees, stock-based compensation, certain facility costs, and other costs associated with preclinical and clinical development. Stock-Based Compensation The Company generally grants stock options to its employees for a fixed number of shares with an exercise price equal to the fair value of the underlying shares at the date of grant. The Company accounts for stock option grants using the fair value method. The fair value of options is calculated using the Black-Scholes option pricing model. For restricted stock units, fair value is based on the closing price of the Company’s Class A common stock on the grant date. Stock-based compensation is recognized as the underlying options vest using the straight-line attribution approach, and forfeitures are recorded as they occur. Emerging Growth Company Status The Company is an “emerging growth company” (“EGC”) as defined in the Jumpstart Our Business Startups Act, (“JOBS Act”), and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not EGCs. The Company may take advantage of these exemptions until it is no longer an EGC under Section 107 of the JOBS Act, which provides that an EGC can take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards. The Company has elected to use the extended transition period for complying with new or revised accounting standards, and as a result of this election, the Company’s financial statements may not be comparable to companies that comply with public company Financial Accounting Standards Board (“FASB”) standards’ effective dates. The Company may take advantage of these exemptions up until the last day of the fiscal year following the fifth anniversary of the IPO or such earlier time that the Company is no longer an EGC. Restructuring and Impairment Charges During the three months ended September 30, 2023, the Company undertook certain operational and organizational steps in connection with a strategic reorganization plan and related cost-saving measures. These measures included discontinuing the ongoing clinical trial of ATRC-101, modifying the primary premises Lease and reducing overall workforce. Refer to Note 8, Leases Reorganization and Other Charges Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, or Topic 326: Measurement of Credit Losses on Financial Instruments and subsequent amendments to the initial guidance under ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2020-03, and ASU 2020-02 which amends the current approach to estimate credit losses on certain financial assets, including trade and other receivables. The amendment replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. For available-for-sale debt securities, credit losses should be recorded through an allowance for credit losses. The Company adopted this accounting standard as of January 1, 2023. The adoption of this standard did not have any impact to the Company’s financial statements as credit losses at the transition date were not expected, based on the evaluation of the Company’s available-for-sale debt securities. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 3. Fair Value of Financial Instruments The fair value of the Company's assets and liabilities, which qualify as financial instruments under FASB ASC 820, Fair Value Measurements and Disclosures September 30, 2023 Level 1 Level 2 Level 3 Total Assets Money market funds $ 11,940 $ — $ — $ 11,940 U.S. Treasury securities 7,918 — — 7,918 Total $ 19,858 $ — $ — $ 19,858 December 31, 2022 Level 1 Level 2 Level 3 Total Assets Money market funds $ 29,658 $ — $ — $ 29,658 Certificates of deposit 483 — — 483 Corporate debt securities — 1,996 — 1,996 U.S. Treasury securities 37,197 — — 37,197 Total $ 67,338 $ 1,996 $ — $ 69,334 The Company utilized the market approach and Level 1 valuation inputs to value its money market funds, certificates of deposit, and U.S. government treasury securities because published fair market values were readily available. The Company measured the fair value of corporate debt securities using Level 2 valuation inputs, which are based on quoted prices and market observable data of similar instruments. As of both September 30, 2023 and December 31, 2022, the remaining contractual maturity of all marketable securities was less than one year. |
Cash, Cash Equivalents and Inve
Cash, Cash Equivalents and Investments | 9 Months Ended |
Sep. 30, 2023 | |
Cash, Cash Equivalents and Investments | |
Cash, Cash Equivalents and Investments | 4. Cash, Cash Equivalents and Investments The fair value and the amortized cost of cash, cash equivalents and available-for-sale investments by major security type consist of the following (in thousands): Gross Gross Estimated Cash and Amortized Unrealized Unrealized Fair Cash September 30, 2023 Cost Gains Losses Value Equivalents Investment Cash, cash equivalents and money market funds $ 13,470 $ — $ — $ 13,470 $ 13,470 $ — Available-for-sale: U.S. Treasury securities 7,922 — (4) 7,918 — 7,918 Total $ 21,392 $ — $ (4) $ 21,388 $ 13,470 $ 7,918 Gross Gross Estimated Cash and Amortized Unrealized Unrealized Fair Cash Short-term December 31, 2022 Cost Gains Losses Value Equivalents Investment Cash, cash equivalents and money market funds $ 30,819 $ — $ — $ 30,819 $ 30,819 $ — Available-for-sale: U.S. Treasury securities 37,458 — (261) 37,197 — 37,197 Corporate debt securities 1,999 — (3) 1,996 — 1,996 Certificates of deposit 485 — (2) 483 — 483 Total $ 70,761 $ — $ (266) $ 70,495 $ 30,819 $ 39,676 The Company evaluated the securities for other-than-temporary impairment and considered the decline in market value for the securities to be primarily attributable to current economic and market conditions. It is not more likely than not that the Company will be required to sell the securities, and the Company has no intention to do so prior to the recovery of the amortized cost basis. Based on this analysis, these marketable securities were not considered to be other-than-temporarily impaired as of September 30, 2023. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 9 Months Ended |
Sep. 30, 2023 | |
Prepaid Expenses and Other Current Assets. | |
Prepaid Expenses and Other Current Assets | 5. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following (in thousands): September 30, December 31, 2023 2022 Vendor prepayments and deposits $ 1,064 $ 2,010 Restricted cash deposits 1,115 — Prepaid insurance 614 1,026 Prepaid facility maintenance fee — 336 Other receivables 180 3,985 Interest receivables and other current assets 332 174 Total prepaid expenses and other current assets $ 3,305 $ 7,531 |
Property and Equipment, net
Property and Equipment, net | 9 Months Ended |
Sep. 30, 2023 | |
Property and Equipment, net | |
Property and Equipment, net | 6. Property and Equipment, net Property and equipment, net consists of the following (in thousands): September 30, December 31, 2023 2022 Laboratory equipment $ 6,762 $ 13,191 Furniture and fixtures — 1,929 Computer hardware and software 864 1,518 Leasehold improvements — 37,908 Construction in process — 178 7,626 54,724 Less accumulated depreciation and amortization (6,012) (16,752) Total property and equipment, net $ 1,614 $ 37,972 Depreciation and amortization expense was $0.9 million and $1.4 million for the three months ended September 30, 2023 and 2022, respectively, and $3.5 million and $4.1 million for the nine months ended September 30, 2023 and 2022, respectively. In December 2022, the Company identified certain long-lived assets no longer utilized under current or expected future operations. Accordingly, the Company recognized impairment expense of $0.4 million in 2022. In January 2023, certain long-lived assets with carrying value of $0.1 million met the criteria to be classified as held for sale and classified as current assets included in prepaid and other current assets. In September 2023, as a part of the Company’s 2023 August 2023 Reorganization, the Company identified certain long-lived assets no longer utilized for current or expected future operations. Accordingly, the Company recognized impairment expense of $0.7 million during the nine months ended September 30, 2023. Certain long-lived assets with a carrying value of $0.3 million met the criteria to be classified as held for sale and classified as current assets included in prepaid and other current assets. Additionally, the Company transferred ownership of certain long-lived assets with a carrying value of $32.1 million to the Landlord as additional consideration for the Lease Modification Agreement. |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2023 | |
Accrued Expenses | |
Accrued Expenses | 7. Accrued Expenses Accrued expenses consist of the following (in thousands): September 30, December 31, 2023 2022 Compensation and related benefits $ 154 $ 3,789 Accrued severance expense 4,679 — License fees — 3,000 Contract research fees 2,631 2,201 Lease termination fees 1,115 — Costs to terminate contracts 500 — Professional fees 153 128 Other 60 563 Total accrued expenses $ 9,292 $ 9,681 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases | |
Leases | 8. Leases The Company leases its office facilities under a non-cancellable operating lease agreement that expires in April 2033. Under the terms of the leases, the Company is responsible for certain insurance, property taxes and maintenance expenses. The office facilities lease agreements contain scheduled increases over the lease term. The Company was not party to any finance leases as of September 30, 2023. In September 2023, the Company entered into the Lease Modification Agreement with the Landlord. The Lease Modification Agreement provides that the Lease will terminate on the earlier of (i) April 30, 2024, and (ii) such earlier date that the Landlord elects to terminate the Lease after November 30, 2023 (the “Effective Date”). As consideration for the Landlord’s agreement to enter into the Lease Modification Agreement and accelerate the expiration date of the Lease, the Company has agreed to pay a lease modification payment to the Landlord in the amount of $5.1 million. The Company additionally conveyed the ownership of certain assets, including its lab equipment and leasehold improvements to the Landlord. The net carrying value of the transferred assets was $32.1 million. As the Effective Date is subsequent to September 30, 2023, the Company accounted for the change as a lease modification that reduced the remaining lease term. Upon the modification, the Company decreased its operating lease liabilities by $60.0 million and right-of-use asset by $34.7 million and the remaining amount was recognized as a gain from lease termination. This gain was offset by the $5.1 million termination fee, $1.5 million other expenses and $32.1 million of the transferred assets paid as additional considerations for the lease termination. The Company recognized a net loss on the lease termination of $12.8 million. The Company's future lease payments as of September 30, 2023, which are presented as current portion of operating lease liabilities, and operating lease liabilities, net of current portion on the Company's balance sheets (in thousands, except weighted-average data) are as follows: Operating Leases Periods 2023 - remainder $ 1,281 Total lease payments $ 1,281 Less: imputed interest — Present value of lease liabilities $ 1,281 Lease liabilities, current 1,281 Lease liabilities, noncurrent — Total lease liabilities $ 1,281 Weighted-average remaining lease term (in years) 0.2 Weighted-average discount rate 0.00% Lease expenses under the Company’s operating leases were $1.5 million for each of the three months ended September 30, 2023 and 2022, and $4.4 million for each of the nine months ended September 30, 2023 and 2022. Variable lease expenses for operating leases were $1.0 million and $0.9 million for the three months ended September 30, 2023 and 2022, respectively, and $2.9 million and $2.6 million for the nine months ended September 30, 2023 and 2022, respectively. Practical Expedients Leases with an initial term of 12 months or less are not recorded on the balance sheets. The Company recognizes the lease expense for such leases on a straight-line basis over the lease term. The Company has elected to account for lease (e.g., fixed payments including rent) and non-lease components (e.g., common-area maintenance costs) as a single combined lease component under ASC 842 as the lease components are the predominant elements of the combined components. As part of the transition to ASC 842, the Company elected to use the modified retrospective transition method with the new standard being applied as of the January 1, 2022 adoption date. Additionally, the Company has elected, as of the adoption date, not to reassess whether expired or existing contracts contain leases under the new definition of a lease, not to reassess the lease classification for expired or existing leases, and not to reassess whether previously capitalized initial direct costs would qualify for capitalization under ASC 842. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies | |
Commitments and Contingencies | 9. Commitments and Contingencies Litigation The Company is not aware of any asserted or unasserted claims against it where it believes that an unfavorable resolution would have an adverse material impact on the operations or financial position of the Company. Strategic Financial Advisor In August 2023, the Company engaged with an advisor to act as the Company’s exclusive strategic financial advisor in connection with a potential strategic transaction including but not limited to an acquisition, merger, business combination or other transaction. Upon the consummation of any such transaction, the Company expects to pay the advisor a success fee. At this time, the Company and the strategic financial advisor have not executed a formal agreement for the advisory services. The Company is unable to estimate the fee associated with the advisory service. During the three and nine months ended September 30, 2023, the Company did not record any expense related to this engagement. |
Reorganization and Other Charge
Reorganization and Other Charges | 9 Months Ended |
Sep. 30, 2023 | |
Reorganization and Other Charges | |
Reorganization and Other Charges | 10. Reorganization and Other Charges On June 1, 2022, the Company implemented and announced a corporate reorganization of its operations. In connection with the reorganization, the Company undertook a workforce reduction and recorded severance and employee benefits charges of $0.7 million to operating expenses in the quarter ended September 30, 2022. As of September 30, 2023, there was no outstanding liability related to severance and employee benefit charges and does not expect to incur any material additional costs related to the June 2022 reorganization. The Company’s reorganization plans required management to evaluate matters related to involuntary termination benefits provided pursuant to a benefit arrangement, contract termination costs and the impairment of long-lived assets in accordance with generally accepted accounting principles. The recognition of the Company’s liability for termination benefits is based on contractual agreements and whether employees are required to render service until they are terminated in order to receive the termination benefits and, if so, whether the employee will be retained to render service beyond a minimum retention period. The Company’s contract termination costs represent costs to terminate a contract before the end of its term or costs that will continue to be incurred under a contract for its remaining term without economic benefit to the Company and is recognized at fair value when the contract is terminated or the Company ceases using the right conveyed by the contract. The impairment of long-lived assets is based on the fair value of the Company's long-lived asset group as determined by actual sale transactions. As a result of the reorganization of its operations, the Company incurred the following restructuring and impairment charges, which are recorded in the statements of operations and comprehensive loss: Three and Nine Months Ended September 30, 2023 (in thousands) Employee termination benefits $ 5,956 Impairment of property, plant, and equipment 685 Loss on lease termination 12,768 Contract termination costs 1,447 Total reorganization and impairment charges $ 20,856 Employee Termination Benefits Employees affected by the reduction in workforce under the August 2023 Reorganization received involuntary termination benefits that are provided pursuant to a post-employment benefit arrangement. For employees who were notified of their termination and have no requirements to provide future service, the Company recognized the liability for the termination benefits in full at fair value in the period in which they were incurred. For employees who are required to render services beyond a minimum retention period to receive their one-time termination benefits, the Company is recognizing the termination benefits ratably over their future service periods. The Company expects to incur approximately $5.9 million of employee termination benefits expense to implement the reorganization of its operations of which $1.3 million has been paid in the nine months ended September 30, 2023. The following table shows the liability related to employee termination benefits: Three and Nine Months Ended September 30, 2023 (in thousands) Accrued employee termination benefits beginning balance $ — Employee termination benefit charges incurred during the period 1,277 Accrued termination benefit estimates 4,679 Amounts paid or otherwise settled during the period (1,277) Accrued employee termination benefits as of September 30, 2023 $ 4,679 Impairment of Property, Plant and Equipment As a result of the August 2023 Reorganization, the Company determined that sufficient indicators existed to trigger the performance of an interim long-lived asset impairment analysis as of September 30, 2023. In the third quarter of 2023, the Company tested the recoverability of its asset group using entity-specific undiscounted cash flows. Based on these undiscounted cash flows, the Company concluded the undiscounted future cash flows expected to result from the use and eventual disposition of its long-lived assets were less than the carrying value of the asset group. Therefore, the Company measured the long-lived asset impairment as the amount by which the carrying value of the asset group exceeds its fair value and recorded an impairment Additionally, in conjunction with the August 2023 Reorganization, the Company committed to a plan to actively sell specific assets within its asset group, primarily its laboratory equipment. The laboratory equipment met all of the prescribed criteria required to classify it as held for sale. On September 30, 2023, $0.3 million of laboratory equipment and furniture and fixtures was classified as held for sale as current assets on the balance sheet as the disposal was expected to be consummated within one year of the balance sheet date. The sale was completed in October 2023. Loss on Lease Termination Contract Termination Costs As part of the August 2023 Reorganization, the Company recognized expenses for the termination of vendor contracts before the end of their term and costs that continue to be incurred under certain contracts with no future economic benefit to the Company. The Company recognized these contract termination costs in full in the period in which they no longer held an economic benefit to the Company. During the nine months ended September 30, 2023, the Company incurred $1.4 million of contract termination costs, which it estimates to be the full amount of such costs to be incurred related to the August 2023 Reorganization. The following table shows the liability related to contract termination costs: Three and Nine Months Ended September 30, 2023 (in thousands) Accrued contract termination costs beginning balance $ — Contract termination costs incurred during the period 1,448 Amounts paid or otherwise settled during the period (1,448) Accrued contract termination costs as of September 30, 2023 $ — |
Capital Stock
Capital Stock | 9 Months Ended |
Sep. 30, 2023 | |
Capital Stock | |
Capital Stock | 11. Capital Stock Class A and Class B Common Stock On June 2, 2019, the board of directors of the Company authorized the issuance of 650,000,000 shares of Class A common stock, $0.0001 par value per share, 50,000,000 shares of Class B common stock, $0.0001 par value per share and 300,000,000 shares of preferred stock, $0.0001 par value per share, upon the filing of the Company’s Amended and Restated Certificate of Incorporation. Each holder of Class A common stock is entitled to one vote and each holder of Class B common stock is not entitled to vote except as may be required by law and shall not be entitled to vote on the election of directors at any time. Sales Agreement In August 2020, the Company entered into an at-the-market sales agreement with Cowen and Company, LLC (“Cowen”), to issue and sell through Cowen, acting as the Company’s sales agent and/or principal, shares of the Company’s Class A common stock, having an aggregate offering price of up to $100.0 million (the “2020 ATM”). As of September 30, 2023, the Company issued and sold 1,493,361 shares of its Class A common stock. Cumulative net proceeds from the sales were $7.9 million after deducting underwriting fees of $0.3 million and issuance costs of $0.3 million. During the nine months ended September 30, 2023 and 2022, the Company sold zero and 700,000 shares of its Class A common stock, respectively. On July 18, 2023, the Company filed with the SEC a shelf registration statement on Form S-3, which was declared effective on August 17, 2023. Pursuant to such registration statement, the Company may offer and sell securities having an aggregate public offering price of up to $300 million (the “2023 ATM”). In connection with the filing of such registration statement, the Company entered into a new at-the-market sales agreement with Cowen to issue and sell through Cowen, acting as the Company’s sales agent and/or principal, shares of the Company’s Class A common stock, having an aggregate offering price of up to $91.5 million. Pursuant to the sales agreement, the Company will pay Cowen a commission rate equal to 3.0% of the gross sales price of any shares of the Company’s Class A common stock sold. To date, the Company has not sold any shares of its Class A common stock under the 2023 ATM. |
Equity Incentive Plans
Equity Incentive Plans | 9 Months Ended |
Sep. 30, 2023 | |
Equity Incentive Plans | |
Equity Incentive Plans | 12. Equity Incentive Plans 2019 Equity Incentive Plan and 2023 Inducement Plan The Company’s board of directors adopted and our stockholders approved our 2019 Equity Incentive Plan (the “2019 Plan”) on June 2, 2019, and June 7, 2019, respectively. The 2019 Plan became effective on June 19, 2019, and no further grants will be made under the Company’s 2010 Equity Incentive Plan (the “2010 Plan”). The purpose of the 2019 Plan, through the grant of stock awards including stock options and other stock-based awards, including restricted stock units (“RSUs”), is to help the Company secure and retain the services of eligible award recipients, provide incentives for such persons to exert maximum efforts for our success and that of the Company’s affiliates, and provide a means by which the eligible recipients may benefit from increases in the value of the Company’s Class A common stock. On February 9, 2023, the 2023 Inducement Plan, or the Inducement Plan, became effective. Subject to adjustment from time to time as provided in the Inducement Plan, 1.0 million shares of Class A common stock are available for issuance under the Inducement Plan. The purpose of the Inducement Plan is to attract, retain and motivate certain new employees of the Company. The Inducement Plan is administered by the compensation committee of the Company’s board of directors. Under the terms of the Inducement Plan, the compensation committee may grant equity awards, including nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock, and other stock awards to new employees of the Company. Stock Option Repricing Effective June 13, 2022, the Company’s board of directors approved a one-time repricing of previously granted and outstanding vested and unvested stock options with exercise prices greater than or equal to $9.00 per share under the 2010 Plan and the 2019 Plan held by eligible employees. As a result, the exercise price for these awards was modified to $1.845 per share, which was the closing price of the Company’s Class A common stock as reported on the Nasdaq Global Select Market on June 13, 2022. No other terms of the repriced stock options were modified, and the repriced stock options will continue to vest according to their original vesting schedules and will retain their original expiration dates. As a result of the repricing, 3,606,163 vested and unvested stock options outstanding as of June 13, 2022 with original exercise prices ranging from $9.87 to $22.10, were repriced. The repricing resulted in incremental stock-based compensation expense of $2.5 million, of which $0.1 million and $0.2 million were expensed during the three months ended September 30, 2023 and 2022, respectively, and $0.3 million and $1.7 million were expensed during the nine months ended September 30, 2023 and 2022, respectively. Remaining $0.3 million related to unvested stock option awards will be amortized on a straight-line basis over the weighted-average vesting period of those awards of approximately 0.5 years. Stock Options Stock option activity under the 2019 Plan, the 2010 Plan and the Inducement Plan is as follow: Options Outstanding Weighted- Average Aggregate Weighted- Remaining Intrinsic Number Average Contractual Value of Shares Exercise Price Life (years) (in thousands) Balances, December 31, 2022 6,373,534 $ 3.56 7.3 $ 2 Granted 2,981,883 1.45 Cancelled (715,601) 2.94 Balances, September 30, 2023 8,639,816 $ 2.88 7.4 $ — Vested and expected to vest at September 30, 2023 8,639,816 $ 2.88 7.4 $ — Exercisable at September 30, 2023 5,213,153 $ 3.58 6.4 $ — Vested at September 30, 2023 5,213,153 $ 3.58 6.4 $ — The weighted-average exercise price, weighted-average remaining contractual life and aggregate intrinsic value as of September 30, 2023 reflect the impact of the stock option repricing discussed above. The weighted-average grant date fair value of options granted in the nine months ended September 30, 2023 and 2022 was $1.08 and $1.28, respectively. The fair value of each option is estimated on the date of grant using the Black-Scholes option pricing model, assuming no expected dividends and the following weighted average assumptions: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Expected life (in years) 6.05 — 5.97 5.88 Volatility 99.1 % — % 87.2 % 85.9 % Risk-free interest rate 4.2 % — % 3.8 % 3.2 % Expected volatility is based on volatilities of public peer companies operating in the Company’s industry. The expected life of the options is estimated using the simplified method detailed in SEC Staff Accounting Bulletin No. 107. The simplified method calculates the expected term as the mid-point between the weighted-average time to vesting and the contractual maturity. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. The Company has elected to account for forfeitures as they occur, rather than estimate expected forfeitures. Restricted Stock Units The 2019 Plan provides for the issuance of RSUs to employees, directors and consultants. RSUs vest over either period of two years with 50% vesting on the one year anniversary of the award and the remainder vesting The following table summarizes RSU activity for the nine months ended September 30, 2023: Weighted-Average Number Grant Date of Shares Fair Value per RSU Unvested Balances, December 31, 2022 330,440 $ 6.15 RSUs Granted 439,458 1.49 RSUs Vested (435,567) 4.66 RSUs Cancelled (86,080) 3.33 Unvested Balances, September 30, 2023 248,251 $ 1.49 2019 Employee Stock Purchase Plan The Company’s board of directors adopted the 2019 Employee Stock Purchase Plan (“ESPP”) on June 2, 2019, and the Company’s stockholders approved the ESPP on June 7, 2019. During the three months ended September 30, 2023 and 2022, the expense related to the ESPP was $0.1 million and $0.2 million, respectively. During the nine months ended September 30, 2023 and 2022, the expense related to the ESPP was $0.3 million and $0.7 million, respectively. The fair value of each ESPP is estimated on the date of grant using the Black-Scholes option pricing model, assuming Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Expected life (in years) 0.5 - 2.0 0.5 - 2.0 0.5 - 2.0 0.5 - 2.0 Volatility 105.1 - 139.7 % 88.0 - 96.7 % 84.6 - 139.7 % 79.0 - 96.7 % Risk-free interest rate 4.9 - % 3.3 - % 4.9 - % 0.6 - % The Company recognized $2.3 million and $3.9 million of stock based compensation expense related to the 2019 Plan, 2010 Plan, and ESPP for the three months ended September 30, 2023 and 2022, respectively. The Company recognized $8.4 million and $13.7 million of stock-based compensation expense related to the 2019 Plan, 2010 Plan, and ESPP for the nine months ended September 30, 2023 and 2022, respectively. The compensation expense is allocated on a departmental basis, based on the classification of the option holder, as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Research and development $ 968 $ 1,869 $ 3,570 $ 6,576 General and administrative 1,329 2,015 4,813 7,132 $ 2,297 $ 3,884 $ 8,383 $ 13,708 No income tax benefits have been recognized in the statements of operations for stock-based compensation arrangements and no stock-based compensation costs have been capitalized as property and equipment as of September 30, 2023. Unrecognized compensation expense as of September 30, 2023 totaled $7.7 million related to non-vested stock options with a remaining weighted-average requisite service period of 1.9 years and $0.3 million related to non-vested RSUs with a remaining weighted-average requisite service period of 1.8 years. |
401(k) Plan
401(k) Plan | 9 Months Ended |
Sep. 30, 2023 | |
401(k) Plan | |
401(k) Plan | 13. 401(k) Plan The Company has a 401(k) plan that qualifies as a deferred compensation arrangement under Section 401 of the Code. Eligible employees may elect to defer a portion of their pretax earnings subject to certain statutory limits. Beginning January 1, 2021, the Company matches 100% up to the first $5,000 contributed by a participant. All matching contributions are immediately vested. Total matching contributions to the 401(k) Plan were zero or de minimus and $0.1 for the three months ended September 30, 2023 and 2022, respectively, and $0.4 million and $0.6 million for the nine months ended September 30, 2023 and 2022, respectively. |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2023 | |
Net Loss Per Share | |
Net Loss Per Share | 14. Net Loss Per Share The following outstanding potentially dilutive common shares were excluded from the computation of diluted net loss per share for the periods presented because the impact of including them would have been antidilutive: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Common stock options 8,639,816 6,823,018 8,639,816 6,823,018 Unvested restricted stock units 248,251 352,620 248,251 352,620 Common stock warrants — 49,997 — 49,997 8,888,067 7,225,635 8,888,067 7,225,635 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions | |
Related Party Transactions | 15. Related Party Transactions The Company recorded other income of $80,000 and zero during the three months ended September 30, 2023 and 2022, respectively, and $243,000 and zero during the nine months ended September 30, 2023 and 2022, respectively, under the Grant Agreement and service contracts with a stockholder. The Company had no receivable from the stockholder as of both September 30, 2023 and December 31, 2022. The Company recorded expense of $0.3 million during each of the three months ended September 30, 2023 and 2022, respectively, and the Company recorded expense of $0.7 million and $0.9 million during the nine months ended September 30, 2023 and 2022, respectively, related to intellectual property and other legal services performed by a related party. An immediate family member of Tito A. Serafini (“Dr. Serafini”), a member of our board of directors and our Chief Strategy Officer, is a partner of the legal service provider. The Company has a payable of $0.1 million and $0.2 million to the related party as of September 30, 2023 and December 31, 2022, respectively. The Company recorded expense of $0.3 million and $0.1 million during the three months ended September 30, 2023 and 2022, respectively, and the Company recorded expense of $0.7 million and $1.0 million during the nine months ended September 30, 2023 and 2022, respectively, related to legal services performed by a related party. An immediate family member of Dr. Serafini is a partner of the legal service provider. The Company has a payable of $133,000 and $33,000 to the related party as of both September 30, 2023 and December 31, 2022. The Company recorded research and development expense of $63,000 during each of the three months ended September 30, 2023 and 2022 and $0.2 million during each of the nine months ended September 30, 2023 and 2022, respectively, under consulting agreements with a member of the Company’s board of directors. In September, the Company terminated the consulting agreement between the Company and William Robinson. The Company has a payable of $74,000 to the member of the Company’s board of directors as of both September 30, 2023 and December 31, 2022. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events | |
Subsequent Events | 16. November 2023 Reorganization In connection with the Company’s ongoing reorganization efforts, on November 9, 2023, the Company implemented a further reduction in its workforce while maintaining the necessary support to continue exploring potential strategic transactions and business alternatives available to the Company. As part of the November 2023 Reorganization, the Company implemented a further reduction in its workforce of approximately 40% of its then-current employees. The total cost related to the workforce reduction is estimated to be approximately $0.9 million, all of which is cash-based expenditures related primarily to severance payments. The Company recognized substantially all the charges related to the workforce reduction in the quarter ended September 30, 2023. These estimates are subject to a number of assumptions and actual results may differ. The Company may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the workforce reduction. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of the Company. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been or omitted pursuant to the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Therefore, these unaudited financial statements should be read in conjunction with the audited financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC on March 29, 2023. |
Going Concern | Going Concern In accordance with Accounting Standards Codification (“ASC”) 205-40, Going Concern, the Company evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued. This evaluation initially does not take into consideration the potential mitigating effect of our plans that have not been fully implemented as of the date the financial statements are issued. When substantial doubt exists under this methodology, we evaluate whether the mitigating effect of its plans sufficiently alleviates substantial doubt about our ability to continue as a going concern. The mitigating effect of our plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued. In performing this analysis, we excluded certain elements of our operating plan that cannot be considered probable. The Company expects to generate operating losses and negative operating cash flows in the future and the need for additional funding to support its planned operations raise substantial doubt regarding its ability to continue as a going concern for a period of one year after the date of the unaudited financial statements are issued. In August 2023, the Company commenced a reorganization plan to preserve capital and reduce operating costs. The Company has also begun the exploration of strategic alternatives, which may include a merger, sale of part or all its clinical, preclinical and discovery platform assets, business combination, and/or similar transaction. The Company has concluded the likelihood that its plan to successfully obtain sufficient funding from one or more of these sources or adequately reduce expenditures, while reasonably possible, is less than probable. As a result, the Company believes that its existing cash, cash equivalents and investments will only be sufficient to fund its planned operating and capital needs into the first quarter of 2024. Accordingly, the Company has concluded that substantial doubt exists about its ability to continue as a going concern for a period of at least twelve months from the date of issuance of these unaudited financial statements. The accompanying unaudited financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The unaudited financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of income and expenses in the financial statements and accompanying notes. Actual results could differ from those estimates. Key estimates in the financial statements include estimated useful lives of property and equipment, impairment of long-lived assets, accrued expenses, valuation of deferred income tax assets, fair value of available-for-sale debt securities and fair value of options granted under the Company's stock option plan. |
Unaudited Interim Condensed Financial Statements | Unaudited Interim Financial Statements The accompanying financial statements are unaudited. The unaudited interim financial statements have been prepared on the same basis as the annual financial statements and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for the fair statement of the Company’s financial position as of September 30, 2023 and its results of operations for the three and nine months ended September 30, 2023 and 2022, and statements of cash flows for the nine months ended September 30, 2023 and 2022. The financial data and the other financial information contained in these notes to the financial statements related to the three-month and nine-month periods ended September 30, 2023 and 2022 are also unaudited. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any other future annual or interim period. The balance sheet as of December 31, 2022 included herein was derived from the audited financial statements as of that date. |
Other Income | Other Income Other income is comprised of amounts earned from services performed under service agreements. The Company follows the provisions of Accounting Standards Update 2014-09 ASC Topic 606, Revenue from Contracts with Customers ( ). In determining the appropriate amount of other income to be recognized as it fulfills its obligations under the agreements, the Company performs the following steps: (i) identifies the promised goods or services in the contract; (ii) determines whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measures the transaction price, including the constraint on variable consideration; (iv) allocates the transaction price to the performance obligations based on estimated selling prices; and (v) recognizes other income when (or as) the Company satisfies each performance obligation. The Company generally allocates the transaction price to distinct performance obligations at their stand-alone selling prices, determined by their estimated costs plus some margin. Performance obligations are generally delivered over time and recognized based upon observable inputs as the related research services are performed, which are recorded as research and development expenses. Amounts due under service agreements are generally billed monthly as services are delivered and do not generally result in contract liabilities or assets. In March 2022, the Company entered into an agreement with a third party for the assignment of certain non-core intellectual property. The initial consideration was classified as other income and recognized upon completion of the assignment. The agreement provides for additional consideration in the event of commercial exploitation of the intellectual property. The term of the agreement extends to the date of expiration of the last to expire of any of the assigned patents. In October, 2022, the Company entered into the Grant Agreement with the Bill & Melinda Gates Foundation under which it was awarded a grant totaling up to $1.2 million for its malaria program. The parties amended the agreement in December 2022 to extend the grant term. During the three months and nine months ended September 30, 2023, the Company recognized $80,000 and $243,000 of income related to the Grant Agreement, respectively, and had $0.9 million of unused funds received recorded as deferred revenue within accrued and other current liabilities. The Company recorded no receivables under service and license agreements as of September 30, 2023 and December 31, 2022. |
Collaborations | Collaborations Historically, we have entered into a number of discovery collaborations as we developed our discovery platform. These collaborations have generally focused on identifying novel antibodies in areas of significant unmet medical need. In July 2020, the Company entered into a Collaboration and License Agreement with Xencor, Inc. (the “Xencor Agreement”), to research, develop and commercialize novel CD3 bispecific antibodies as potential therapeutics in oncology. The Company evaluated the Xencor Agreement under the provisions of ASC 606 and ASU 2018-18, Collaborative Arrangements (Topic 808) Clarifying the Interaction between Topic 808 and Topic 606. The Company concluded that Xencor, Inc. is not a customer as there are no distinct units of account that are reflective of a vendor-customer relationship or exchange of consideration for the research activities. The Company’s share of any collaboration expense is recognized as a research and development expense on the Company’s statement of operations. For the cost-sharing related to the research program, the Company will follow the presentation and disclosure guidance of ASC 808, Collaboration Agreements |
In-Licensing Arrangements - Development | In-Licensing Arrangements – Development In April 2022 million. The Company also received an option to obtain an exclusive license to research, develop, manufacture, and commercialize certain ADCs for additional license fees and royalties. Unless earlier terminated or extended, the term of the research license and the commercial option is The Company will be required to use commercially reasonable efforts to develop and commercialize at least one licensed product and the Company will pay to Zymeworks an option exercise fee, and lump sum payments upon the achievement of certain development and regulatory milestones and commercial milestones. In addition, with respect to each licensed product, the Company will pay tiered royalties on net sales of licensed products at single-digit royalty rates. The research license fee of $5.0 million was expensed to research and development expense in April 2022 in accordance with the Company's research and development expense policy. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents include all cash balances and highly liquid investments purchased with an original maturity of three months or less. The Company maintained restricted cash of $1.1 million as of both September 30, 2023 and December 31, 2022. These amounts as of September 30, 2023 and December 31, 2022 are included in prepaids and other current assets and deposits and other, respectively, in the accompanying balance sheets and is comprised solely of letter of credit required pursuant to the lease for Company facilities. The Company’s reconciliation of cash and cash equivalents and restricted cash reported within the balance sheets that sum to the total of the same amounts shown in the statements of cash flows were as follows (in thousands): September 30, December 31, 2023 2022 Cash and cash equivalents $ 13,470 $ 30,819 Restricted cash 1,115 1,115 Cash, cash equivalents and restricted cash shown in the condensed statements of cash flows $ 14,585 $ 31,934 |
Investments | Investments The Company considers securities purchased with original maturities greater than three months to be investments. The Company’s policy is to protect the value of its investment portfolio and minimize principal risk by earning returns based on current interest rates. The Company’s intent is to convert all investments into cash to be used for operations and has classified them as available for sale. For purposes of determining realized gains and losses, the cost of debt securities sold is based on specific identification. Interest and dividends on securities classified as available-for-sale are included in interest income. |
Leases | Leases The Company determines if an arrangement is, or contains, a lease at inception. The Company measures lease liabilities based on the present value of lease payments over the lease term. As the Company’s leases generally do not provide an implicit discount rate, the net present value of future minimum lease payments is determined using the Company’s incremental borrowing rate. Options in the lease terms to extend or terminate the lease are not reflected in the lease liabilities unless it is reasonably certain that any such option will be exercised. The Company measures right-of-use assets at the lease commencement date based on the corresponding lease liabilities adjusted for (i) prepayments made to the lessor at or before the commencement date, (ii) initial direct costs incurred and (iii) certain tenant incentives under the lease. The Company evaluates the recoverability of the right-of-use assets for possible impairment in accordance with the long-lived assets policy. The Company has elected not to recognize right-of-use assets or lease liabilities for leases with an initial lease term of twelve months or less. The Company’s lease agreements do not contain residual value guarantees or covenants. Lease expense is recognized on a straight-line basis over the terms of the leases. Incentives granted under the Company’s facilities lease, including rent holidays, are recognized as adjustments to lease expense on a straight-line basis over the terms of the leases. |
Risks and Uncertainties | Risks and Uncertainties The Company is subject to a number of risks associated with companies at a similar stage, including dependence on key individuals, competition from similar services and larger companies, volatility of the industry, ability to obtain regulatory clearance, ability to obtain adequate financing to support growth, the ability to attract and retain additional qualified personnel to manage the anticipated growth of the Company and general economic conditions. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents, investments and other receivables included in prepaid and other current assets. Cash and cash equivalents are held at three financial institutions and were in excess of the Federal Deposit Insurance Corporation insurable limit at September 30, 2023 and December 31, 2022. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, result of operations, and cash flows. Additionally, cash and cash equivalents and investments are maintained at brokerage firms for which amounts are insured by the Securities Investor Protection Corporation subject to legal limits. The Company does not require collateral or other security for other receivables. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred. Research and development costs consist primarily of salaries and benefits, consultant fees, stock-based compensation, certain facility costs, and other costs associated with preclinical and clinical development. |
Stock-Based Compensation | Stock-Based Compensation The Company generally grants stock options to its employees for a fixed number of shares with an exercise price equal to the fair value of the underlying shares at the date of grant. The Company accounts for stock option grants using the fair value method. The fair value of options is calculated using the Black-Scholes option pricing model. For restricted stock units, fair value is based on the closing price of the Company’s Class A common stock on the grant date. Stock-based compensation is recognized as the underlying options vest using the straight-line attribution approach, and forfeitures are recorded as they occur. |
Emerging Growth Company Status | Emerging Growth Company Status The Company is an “emerging growth company” (“EGC”) as defined in the Jumpstart Our Business Startups Act, (“JOBS Act”), and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not EGCs. The Company may take advantage of these exemptions until it is no longer an EGC under Section 107 of the JOBS Act, which provides that an EGC can take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards. The Company has elected to use the extended transition period for complying with new or revised accounting standards, and as a result of this election, the Company’s financial statements may not be comparable to companies that comply with public company Financial Accounting Standards Board (“FASB”) standards’ effective dates. The Company may take advantage of these exemptions up until the last day of the fiscal year following the fifth anniversary of the IPO or such earlier time that the Company is no longer an EGC. |
Restructuring and Impairment Charges | Restructuring and Impairment Charges During the three months ended September 30, 2023, the Company undertook certain operational and organizational steps in connection with a strategic reorganization plan and related cost-saving measures. These measures included discontinuing the ongoing clinical trial of ATRC-101, modifying the primary premises Lease and reducing overall workforce. Refer to Note 8, Leases Reorganization and Other Charges |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, or Topic 326: Measurement of Credit Losses on Financial Instruments and subsequent amendments to the initial guidance under ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2020-03, and ASU 2020-02 which amends the current approach to estimate credit losses on certain financial assets, including trade and other receivables. The amendment replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. For available-for-sale debt securities, credit losses should be recorded through an allowance for credit losses. The Company adopted this accounting standard as of January 1, 2023. The adoption of this standard did not have any impact to the Company’s financial statements as credit losses at the transition date were not expected, based on the evaluation of the Company’s available-for-sale debt securities. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Summary of Significant Accounting Policies | |
Schedule of reconciliation of cash and cash equivalents and restricted cash | The Company’s reconciliation of cash and cash equivalents and restricted cash reported within the balance sheets that sum to the total of the same amounts shown in the statements of cash flows were as follows (in thousands): September 30, December 31, 2023 2022 Cash and cash equivalents $ 13,470 $ 30,819 Restricted cash 1,115 1,115 Cash, cash equivalents and restricted cash shown in the condensed statements of cash flows $ 14,585 $ 31,934 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value of Financial Instruments | |
Summary of financial assets and liabilities subject to fair value measurements on a recurring basis | The Company’s financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used for such measurements were as follows (in thousands): September 30, 2023 Level 1 Level 2 Level 3 Total Assets Money market funds $ 11,940 $ — $ — $ 11,940 U.S. Treasury securities 7,918 — — 7,918 Total $ 19,858 $ — $ — $ 19,858 December 31, 2022 Level 1 Level 2 Level 3 Total Assets Money market funds $ 29,658 $ — $ — $ 29,658 Certificates of deposit 483 — — 483 Corporate debt securities — 1,996 — 1,996 U.S. Treasury securities 37,197 — — 37,197 Total $ 67,338 $ 1,996 $ — $ 69,334 |
Cash, Cash Equivalents and In_2
Cash, Cash Equivalents and Investments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Cash, Cash Equivalents and Investments | |
Summary of fair value and the amortized cost of cash, cash equivalents and available-for-sale investments by major security type | The fair value and the amortized cost of cash, cash equivalents and available-for-sale investments by major security type consist of the following (in thousands): Gross Gross Estimated Cash and Amortized Unrealized Unrealized Fair Cash September 30, 2023 Cost Gains Losses Value Equivalents Investment Cash, cash equivalents and money market funds $ 13,470 $ — $ — $ 13,470 $ 13,470 $ — Available-for-sale: U.S. Treasury securities 7,922 — (4) 7,918 — 7,918 Total $ 21,392 $ — $ (4) $ 21,388 $ 13,470 $ 7,918 Gross Gross Estimated Cash and Amortized Unrealized Unrealized Fair Cash Short-term December 31, 2022 Cost Gains Losses Value Equivalents Investment Cash, cash equivalents and money market funds $ 30,819 $ — $ — $ 30,819 $ 30,819 $ — Available-for-sale: U.S. Treasury securities 37,458 — (261) 37,197 — 37,197 Corporate debt securities 1,999 — (3) 1,996 — 1,996 Certificates of deposit 485 — (2) 483 — 483 Total $ 70,761 $ — $ (266) $ 70,495 $ 30,819 $ 39,676 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Prepaid Expenses and Other Current Assets. | |
Summary of prepaid expenses and other current assets | Prepaid expenses and other current assets consist of the following (in thousands): September 30, December 31, 2023 2022 Vendor prepayments and deposits $ 1,064 $ 2,010 Restricted cash deposits 1,115 — Prepaid insurance 614 1,026 Prepaid facility maintenance fee — 336 Other receivables 180 3,985 Interest receivables and other current assets 332 174 Total prepaid expenses and other current assets $ 3,305 $ 7,531 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property and Equipment, net | |
Summary of property and equipment | Property and equipment, net consists of the following (in thousands): September 30, December 31, 2023 2022 Laboratory equipment $ 6,762 $ 13,191 Furniture and fixtures — 1,929 Computer hardware and software 864 1,518 Leasehold improvements — 37,908 Construction in process — 178 7,626 54,724 Less accumulated depreciation and amortization (6,012) (16,752) Total property and equipment, net $ 1,614 $ 37,972 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accrued Expenses | |
Summary of accrued expenses | Accrued expenses consist of the following (in thousands): September 30, December 31, 2023 2022 Compensation and related benefits $ 154 $ 3,789 Accrued severance expense 4,679 — License fees — 3,000 Contract research fees 2,631 2,201 Lease termination fees 1,115 — Costs to terminate contracts 500 — Professional fees 153 128 Other 60 563 Total accrued expenses $ 9,292 $ 9,681 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases | |
Schedule of future lease payments | The Company's future lease payments as of September 30, 2023, which are presented as current portion of operating lease liabilities, and operating lease liabilities, net of current portion on the Company's balance sheets (in thousands, except weighted-average data) are as follows: Operating Leases Periods 2023 - remainder $ 1,281 Total lease payments $ 1,281 Less: imputed interest — Present value of lease liabilities $ 1,281 Lease liabilities, current 1,281 Lease liabilities, noncurrent — Total lease liabilities $ 1,281 Weighted-average remaining lease term (in years) 0.2 Weighted-average discount rate 0.00% |
Reorganization and Other Char_2
Reorganization and Other Charges (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Reorganization and Other Charges | |
Schedule of reorganization plan, restructuring and impairment charges | Three and Nine Months Ended September 30, 2023 (in thousands) Employee termination benefits $ 5,956 Impairment of property, plant, and equipment 685 Loss on lease termination 12,768 Contract termination costs 1,447 Total reorganization and impairment charges $ 20,856 |
Schedule of employee termination benefits | Three and Nine Months Ended September 30, 2023 (in thousands) Accrued employee termination benefits beginning balance $ — Employee termination benefit charges incurred during the period 1,277 Accrued termination benefit estimates 4,679 Amounts paid or otherwise settled during the period (1,277) Accrued employee termination benefits as of September 30, 2023 $ 4,679 |
Schedule of contract termination costs | Three and Nine Months Ended September 30, 2023 (in thousands) Accrued contract termination costs beginning balance $ — Contract termination costs incurred during the period 1,448 Amounts paid or otherwise settled during the period (1,448) Accrued contract termination costs as of September 30, 2023 $ — |
Equity Incentive Plans (Tables)
Equity Incentive Plans (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of stock option activity | Options Outstanding Weighted- Average Aggregate Weighted- Remaining Intrinsic Number Average Contractual Value of Shares Exercise Price Life (years) (in thousands) Balances, December 31, 2022 6,373,534 $ 3.56 7.3 $ 2 Granted 2,981,883 1.45 Cancelled (715,601) 2.94 Balances, September 30, 2023 8,639,816 $ 2.88 7.4 $ — Vested and expected to vest at September 30, 2023 8,639,816 $ 2.88 7.4 $ — Exercisable at September 30, 2023 5,213,153 $ 3.58 6.4 $ — Vested at September 30, 2023 5,213,153 $ 3.58 6.4 $ — |
Schedule of summarizes RSU activity | Weighted-Average Number Grant Date of Shares Fair Value per RSU Unvested Balances, December 31, 2022 330,440 $ 6.15 RSUs Granted 439,458 1.49 RSUs Vested (435,567) 4.66 RSUs Cancelled (86,080) 3.33 Unvested Balances, September 30, 2023 248,251 $ 1.49 |
Schedule of stock-based compensation expense | The compensation expense is allocated on a departmental basis, based on the classification of the option holder, as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Research and development $ 968 $ 1,869 $ 3,570 $ 6,576 General and administrative 1,329 2,015 4,813 7,132 $ 2,297 $ 3,884 $ 8,383 $ 13,708 |
2019 Plan and 2010 Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of share-based payment award, stock options, valuation assumptions | Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Expected life (in years) 6.05 — 5.97 5.88 Volatility 99.1 % — % 87.2 % 85.9 % Risk-free interest rate 4.2 % — % 3.8 % 3.2 % |
2019 Employee Stock Purchase Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of share-based payment award, stock options, valuation assumptions | Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Expected life (in years) 0.5 - 2.0 0.5 - 2.0 0.5 - 2.0 0.5 - 2.0 Volatility 105.1 - 139.7 % 88.0 - 96.7 % 84.6 - 139.7 % 79.0 - 96.7 % Risk-free interest rate 4.9 - % 3.3 - % 4.9 - % 0.6 - % |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Net Loss Per Share | |
Schedule of antidilutive securities excluded from computation of earnings per share | Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Common stock options 8,639,816 6,823,018 8,639,816 6,823,018 Unvested restricted stock units 248,251 352,620 248,251 352,620 Common stock warrants — 49,997 — 49,997 8,888,067 7,225,635 8,888,067 7,225,635 |
Business - Nature of Business (
Business - Nature of Business (Details) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended | |
Sep. 30, 2023 | Aug. 31, 2023 | Sep. 30, 2023 | |
Business | |||
Workforce reduction percentage | 40% | ||
Severance payments | $ 1.3 | ||
Lease modification payment to Landlord | $ 5.1 | ||
Payments for Operating Lease Modification | $ 4 | ||
Net carrying value of transferred asset | $ 32.1 | $ 32.1 |
Business - Nasdaq Delisting Not
Business - Nasdaq Delisting Notification (Details) - $ / shares | Sep. 08, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | Jun. 02, 2019 |
Business | ||||
Consecutive business days | 30 days | |||
Grace period | 180 days | |||
Consecutive business days in grace period | 10 days | |||
Additional grace period | 180 days | |||
Class A common stock | ||||
Business | ||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Minimum | ||||
Business | ||||
Offering price | 1 | |||
Minimum | Class A common stock | ||||
Business | ||||
Offering price | $ 1 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) $ in Millions | Sep. 30, 2023 USD ($) Institution | Dec. 31, 2022 USD ($) Institution |
Other Income | ||
Number of financial institutions holding cash and cash and cash equivalents | Institution | 3 | 3 |
Assignment and License Agreement | Prepaid expenses and other current assets | ||
Other Income | ||
Receivables under agreements | $ | $ 0 | $ 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Other Income and Collaborations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | Oct. 31, 2022 | |
Prepaid expenses and other current assets | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Research cost sharing provision receivable | $ 180,000 | $ 180,000 | ||
Accrued expenses | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Research cost sharing provision payable | $ 12,000 | |||
Grant Agreement | Bill & Melinda Gates Foundation | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Amount of grant awarded | $ 1,200,000 | |||
Income related to Grant Agreement | 80,000 | 243,000 | ||
Grant Agreement | Bill & Melinda Gates Foundation | Accrued and other current liabilities | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Unused funds received recorded as deferred revenue | $ 900,000 | $ 900,000 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - In-Licensing Arrangements - Development (Details) - Option and license agreement - Zymeworks Inc $ in Millions | 1 Months Ended |
Apr. 30, 2022 USD ($) | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Commercial option to extend research license | 2 years |
Upfront consideration for purchase of license | $ 5 |
Term of the research license | 2 years |
Research and development | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Upfront consideration for purchase of license | $ 5 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Cash and cash equivalents and restricted cash reported within the condensed balance sheets | ||||
Cash and cash equivalents | $ 13,470 | $ 30,819 | ||
Restricted cash | $ 1,115 | $ 1,115 | ||
Restricted Cash, Asset, Statement of Financial Position [Extensible List] | Prepaid Expense and Other Assets, Current | Prepaid Expense and Other Assets, Current | ||
Cash, cash equivalents and restricted cash shown in the condensed statements of cash flows | $ 14,585 | $ 31,934 | $ 22,018 | $ 96,204 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Financial assets and liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Maximum | ||
Company's financial assets and liabilities subject to fair value measurements on a recurring basis | ||
Remaining contractual maturity of marketable securities (in years) | 1 year | 1 year |
Recurring basis | ||
Assets | ||
Total assets | $ 19,858 | $ 69,334 |
Recurring basis | Money market funds | ||
Assets | ||
Total assets | 11,940 | 29,658 |
Recurring basis | Certificates of deposit | ||
Assets | ||
Total assets | 483 | |
Recurring basis | Corporate debt securities | ||
Assets | ||
Total assets | 1,996 | |
Recurring basis | U.S. Treasury securities | ||
Assets | ||
Total assets | 7,918 | 37,197 |
Recurring basis | Level 1 | ||
Assets | ||
Total assets | 19,858 | 67,338 |
Recurring basis | Level 1 | Money market funds | ||
Assets | ||
Total assets | 11,940 | 29,658 |
Recurring basis | Level 1 | Certificates of deposit | ||
Assets | ||
Total assets | 483 | |
Recurring basis | Level 1 | Corporate debt securities | ||
Assets | ||
Total assets | 0 | |
Recurring basis | Level 1 | U.S. Treasury securities | ||
Assets | ||
Total assets | 7,918 | 37,197 |
Recurring basis | Level 2 | ||
Assets | ||
Total assets | 0 | 1,996 |
Recurring basis | Level 2 | Money market funds | ||
Assets | ||
Total assets | 0 | 0 |
Recurring basis | Level 2 | Certificates of deposit | ||
Assets | ||
Total assets | 0 | |
Recurring basis | Level 2 | Corporate debt securities | ||
Assets | ||
Total assets | 1,996 | |
Recurring basis | Level 2 | U.S. Treasury securities | ||
Assets | ||
Total assets | 0 | 0 |
Recurring basis | Level 3 | ||
Assets | ||
Total assets | 0 | 0 |
Recurring basis | Level 3 | Money market funds | ||
Assets | ||
Total assets | 0 | 0 |
Recurring basis | Level 3 | Certificates of deposit | ||
Assets | ||
Total assets | 0 | |
Recurring basis | Level 3 | Corporate debt securities | ||
Assets | ||
Total assets | 0 | |
Recurring basis | Level 3 | U.S. Treasury securities | ||
Assets | ||
Total assets | $ 0 | $ 0 |
Cash, Cash Equivalents and In_3
Cash, Cash Equivalents and Investments - Fair value and Amortized cost (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-sale [Line Items] | ||
Cash and Cash Equivalents | $ 13,470 | $ 30,819 |
Investments | 7,918 | 39,676 |
Cash, cash equivalents and money market funds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cash and Cash Equivalents | 13,470 | 30,819 |
Available-for-sale: | ||
Amortized Cost | 13,470 | 30,819 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 13,470 | 30,819 |
U.S. Treasury securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Investments | 7,918 | 37,197 |
Available-for-sale: | ||
Amortized Cost | 7,922 | 37,458 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (4) | (261) |
Estimated Fair Value | 7,918 | 37,197 |
Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Investments | 1,996 | |
Available-for-sale: | ||
Amortized Cost | 1,999 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (3) | |
Estimated Fair Value | 1,996 | |
Certificates of deposit | ||
Debt Securities, Available-for-sale [Line Items] | ||
Investments | 483 | |
Available-for-sale: | ||
Amortized Cost | 485 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (2) | |
Estimated Fair Value | 483 | |
Total | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cash and Cash Equivalents | 13,470 | 30,819 |
Investments | 7,918 | 39,676 |
Available-for-sale: | ||
Amortized Cost | 21,392 | 70,761 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (4) | (266) |
Estimated Fair Value | $ 21,388 | $ 70,495 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Prepaid Expenses and Other Current Assets. | ||
Vendor prepayments and deposits | $ 1,064 | $ 2,010 |
Restricted cash deposits | 1,115 | |
Prepaid insurance | 614 | 1,026 |
Prepaid facility maintenance fee | 336 | |
Other receivables | 180 | 3,985 |
Interest receivables and other current assets | 332 | 174 |
Total prepaid expenses and other current assets | $ 3,305 | $ 7,531 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Jan. 31, 2023 | |
Property, Plant and Equipment, Net, by Type [Abstract] | ||||||
Property, plant and equipment, gross | $ 7,626 | $ 7,626 | $ 54,724 | |||
Less accumulated depreciation and amortization | (6,012) | (6,012) | (16,752) | |||
Total property and equipment, net | 1,614 | 1,614 | 37,972 | |||
Depreciation and amortization expense | 900 | $ 1,400 | 3,500 | $ 4,100 | ||
Asset impairment | 685 | 400 | ||||
Carrying value of long lived assets | 300 | 300 | $ 100 | |||
Carrying value of long lived assets transferred | 32,100 | 32,100 | ||||
Laboratory equipment | ||||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||||
Property, plant and equipment, gross | 6,762 | 6,762 | 13,191 | |||
Furniture and fixtures | ||||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||||
Property, plant and equipment, gross | 1,929 | |||||
Computer hardware and software | ||||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||||
Property, plant and equipment, gross | $ 864 | $ 864 | 1,518 | |||
Leasehold improvements | ||||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||||
Property, plant and equipment, gross | 37,908 | |||||
Construction-in-process | ||||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||||
Property, plant and equipment, gross | $ 178 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Accrued Expenses | ||
Compensation and related benefits | $ 154 | $ 3,789 |
Accrued severance expense | 4,679 | |
License fees | 3,000 | |
Contract research fees | 2,631 | 2,201 |
Lease termination fees | 1,115 | |
Costs to terminate contracts | 500 | |
Professional fees | 153 | 128 |
Other | 60 | 563 |
Total accrued expenses | $ 9,292 | $ 9,681 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Oct. 01, 2023 | Sep. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Lessee, Lease, Description [Line Items] | |||||||
Lease modification payment to Landlord | $ 5,100 | ||||||
Net carrying value of transferred asset | $ 32,100 | $ 32,100 | $ 32,100 | ||||
Increase (decrease) in Operating lease liabilities | (1,983) | $ (2,376) | |||||
Operating lease right-of-use assets | $ 36,056 | ||||||
Lease expense | 1,500 | $ 1,500 | 4,400 | 4,400 | |||
Variable lease expense | $ 1,000 | $ 900 | $ 2,900 | $ 2,600 | |||
Subsequent event | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Lease modification payment to Landlord | $ 5,100 | ||||||
Increase (decrease) in Operating lease liabilities | (60,000) | ||||||
Operating lease right-of-use assets | 34,700 | ||||||
Other expenses | 1,500 | ||||||
Additional consideration for lease termination | 32,100 | ||||||
Gain (loss) on termination of lease | $ (12,800) |
Leases - Future lease payments
Leases - Future lease payments (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Leases | ||
2023 - remainder | $ 1,281 | |
Total lease payments | 1,281 | |
Present value of lease liabilities | 1,281 | |
Lease liabilities, current | $ 1,281 | $ 3,544 |
Lease liabilities, noncurrent | $ 60,331 | |
Weighted-average remaining lease term (in years) | 2 months 12 days | |
Weighted-average discount rate | 0% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 | Sep. 30, 2023 | |
Operating leases | ||
Strategic financial advisor expenses | $ 0 | $ 0 |
Reorganization and Other Char_3
Reorganization and Other Charges (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Aug. 31, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Dec. 31, 2022 | |
Restructuring Cost and Reserve [Line Items] | |||||
Severance and employee benefits charges | $ 1,300 | ||||
Impairment charges | $ 685 | $ 400 | |||
Loss on lease termination | 8,768 | ||||
Total reorganization and impairment charges | $ 20,856 | 20,856 | |||
June 2022 Reorganization | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Severance and employee benefits charges | $ 700 | ||||
Outstanding liability | $ 0 | 0 | |||
August 2023 Reorganization | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Employee termination benefits | 5,956 | ||||
Impairment charges | 685 | ||||
Loss on lease termination | 12,768 | ||||
Contract termination costs | 1,447 | ||||
Total reorganization and impairment charges | $ 20,856 |
Reorganization and Other Char_4
Reorganization and Other Charges - Employee Termination Benefits (Details) - August 2023 Reorganization $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Employee termination benefits | $ 5,956 |
Employee Severance [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Employee termination benefits | 5,900 |
Employee termination benefits paid | 1,300 |
Employee termination benefits charges incurred during the period | 1,277 |
Accrued termination benefits charges estimates | 4,679 |
Amounts paid or otherwise settled during the period | (1,277) |
Accrued employee termination benefits as of September 30, 2023 | $ 4,679 |
Reorganization and Other Char_5
Reorganization and Other Charges - Impairment of Property, Plant and Equipment (Details) $ in Millions | 1 Months Ended | 3 Months Ended |
Sep. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||
Lease modification payment to Landlord | $ 5.1 | |
Net carrying value of transferred asset | 32.1 | $ 32.1 |
August 2023 Reorganization | ||
Restructuring Cost and Reserve [Line Items] | ||
Long-lived asset impairment | $ 0.7 | |
Impairment, Long-Lived Asset, Held-for-Use, Statement of Income or Comprehensive Income [Extensible Enumeration] | Restructuring Costs and Asset Impairment Charges | |
Lease Modification Agreement | August 2023 Reorganization | ||
Restructuring Cost and Reserve [Line Items] | ||
Lease modification payment to Landlord | 5.1 | |
Net carrying value of transferred asset | 32.1 | $ 32.1 |
Laboratory equipment and furniture and fixtures | Current Assets | August 2023 Reorganization | ||
Restructuring Cost and Reserve [Line Items] | ||
Assets held for sale | $ 0.3 | $ 0.3 |
Reorganization and Other Char_6
Reorganization and Other Charges - Contract Termination Costs (Details) - August 2023 Reorganization $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Contract termination costs incurred during the period | $ 1,447 |
Vendor Contract | |
Restructuring Cost and Reserve [Line Items] | |
Contract termination costs incurred during the period | 1,448 |
Amounts paid or otherwise settled during the period | $ (1,448) |
Capital Stock (Details)
Capital Stock (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | 38 Months Ended | ||||||
Jun. 02, 2019 Vote $ / shares shares | Sep. 30, 2023 $ / shares shares | Sep. 30, 2022 USD ($) shares | Sep. 30, 2023 USD ($) $ / shares shares | Sep. 08, 2023 $ / shares | Jul. 18, 2023 USD ($) | Dec. 31, 2022 $ / shares shares | Aug. 31, 2020 USD ($) | |
Class of Stock [Line Items] | ||||||||
Preferred stock, shares authorized | shares | 300,000,000 | |||||||
Preferred stock par value | $ / shares | $ 0.0001 | |||||||
Net proceeds from sales | $ 3,509 | |||||||
At the Market Offering | ||||||||
Class of Stock [Line Items] | ||||||||
Maximum aggregate public offering price | $ 300,000 | |||||||
Class A common stock | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, shares authorized (in shares) | shares | 650,000,000 | 650,000,000 | 650,000,000 | 650,000,000 | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Number of votes entitled per share | Vote | 1 | |||||||
Class A common stock | At the Market Offering | ||||||||
Class of Stock [Line Items] | ||||||||
Maximum aggregate public offering price | $ 91,500 | |||||||
Sales agent commission, as a percent of gross proceeds | 3% | |||||||
Class A common stock | 2020 ATM | ||||||||
Class of Stock [Line Items] | ||||||||
Maximum aggregate public offering price | $ 100,000 | |||||||
Shares sold | shares | 0 | 700,000 | 1,493,361 | |||||
Net proceeds from sales | $ 7,900 | |||||||
Underwriting fees | 300 | |||||||
Issuance costs deduction amount from gross proceeds | $ 300 | |||||||
Class B common stock | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, shares authorized (in shares) | shares | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Equity Incentive Plans - Stock
Equity Incentive Plans - Stock Option Repricing (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Jun. 13, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Feb. 09, 2023 | Dec. 31, 2022 | Jun. 02, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation expense, vested | $ 2,297 | $ 3,884 | $ 8,383 | $ 13,708 | ||||
Class A common stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Common stock, shares authorized (in shares) | 650,000,000 | 650,000,000 | 650,000,000 | 650,000,000 | ||||
2019 Plan and 2010 Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Exercise price | $ 9 | |||||||
Modified exercise price | $ 1.845 | |||||||
Number of Stock options outstanding | 3,606,163 | |||||||
Exercise price, lower range limit | $ 9.87 | |||||||
Exercise price, upper range limit | $ 22.10 | |||||||
Incremental stock based compensation expense | $ 2,500 | |||||||
Stock-based compensation expense, vested | $ 100 | $ 200 | $ 300 | $ 1,700 | ||||
Stock-based compensation expense, unvested | $ 300 | |||||||
Remaining weighted-average vesting period | 6 months | |||||||
2023 Inducement plan | Class A common stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Common stock, shares authorized (in shares) | 1,000,000 |
Equity Incentive Plans - Stoc_2
Equity Incentive Plans - Stock option (Details) - 2019 Plan and 2010 Plan and the Inducement Plan - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Number of Shares | ||
Balance at beginning of period (in shares) | 6,373,534 | |
Granted (in shares) | 2,981,883 | |
Cancelled (in shares) | (715,601) | |
Balance at end of period (in shares) | 8,639,816 | 6,373,534 |
Vested and expected to vest at end of period (in shares) | 8,639,816 | |
Exercisable at end of period (in shares) | 5,213,153 | |
Vested at end of period (in shares) | 5,213,153 | |
Weighted-Average Exercise Price | ||
Balance at beginning of period (in dollars per share) | $ 3.56 | |
Granted (in dollars per share) | 1.45 | |
Cancelled (in dollars per share) | 2.94 | |
Balance at end of period (in dollars per share) | 2.88 | $ 3.56 |
Vested and expected to vest at end of period (in dollars per share) | 2.88 | |
Exercisable at end of period (in dollars per share) | 3.58 | |
Vested at end of period (in dollars per share) | $ 3.58 | |
Weighted-Average Remaining Contractual Life | ||
Weighted-average remaining contractual life of options (years) | 7 years 4 months 24 days | 7 years 3 months 18 days |
Vested and expected to vest at end of period (in years) | 7 years 4 months 24 days | |
Exercisable at end of period (in years) | 6 years 4 months 24 days | |
Vested at end of period (in years) | 6 years 4 months 24 days | |
Aggregate Intrinsic Value | ||
Aggregate intrinsic value of options | $ 2 |
Equity Incentive Plans - Weight
Equity Incentive Plans - Weighted-average grant date fair value (Details) - 2019 Plan and 2010 Plan and the Inducement Plan - $ / shares | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average grant date fair value (in dollars per share) | $ 1.08 | $ 1.28 | |
Expected dividend | 0% | 0% |
Equity Incentive Plans - Weig_2
Equity Incentive Plans - Weighted average assumptions (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
2019 Employee Stock Purchase Plan | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||
Expected life (in years) | 6 months | 6 months | 6 months | 6 months |
Volatility | 105.10% | 88% | 84.60% | 79% |
Risk-free interest rate | 4.90% | 3.30% | 4.90% | 0.60% |
2019 Employee Stock Purchase Plan | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||
Expected life (in years) | 2 years | 2 years | 2 years | 2 years |
Volatility | 139.70% | 96.70% | 139.70% | 96.70% |
Risk-free interest rate | 5.50% | 3.50% | 5.50% | 3.50% |
2019 Plan and 2010 Plan and the Inducement Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||
Expected life (in years) | 6 years 18 days | 0 years | 5 years 11 months 19 days | 5 years 10 months 17 days |
Volatility | 99.10% | 87.20% | 85.90% | |
Risk-free interest rate | 4.20% | 3.80% | 3.20% |
Equity Incentive Plans - Restri
Equity Incentive Plans - Restricted Stock Units (Details) - Unvested restricted stock units | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Number of Shares | |
Unvested balance, at beginning of period (in shares) | shares | 330,440 |
RSUs Granted (in shares) | shares | 439,458 |
RSUs Vested (in shares) | shares | (435,567) |
RSUs Cancelled (in shares) | shares | (86,080) |
Unvested balance, at end of period (in shares) | shares | 248,251 |
Weighted-Average Grant Date Fair Value per RSU | |
Weighted-Average Grant Date Fair Value per RSU Unvested balance, at beginning of period (in dollars per share) | $ / shares | $ 6.15 |
RSUs Granted (in dollars per share) | $ / shares | 1.49 |
RSUs Vested (in dollars per share) | $ / shares | 4.66 |
RSUs Cancelled (in dollars per share) | $ / shares | 3.33 |
Weighted-Average Grant Date Fair Value per RSU Unvested balance, at end of period (in dollars per share) | $ / shares | $ 1.49 |
Tranche One | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 2 years |
Vesting percentage | 50% |
Tranche One | Vesting period - Year One | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting percentage | 50% |
Tranche Two | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 3 years |
Tranche Two | Vesting period - Year One | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting percentage | 33% |
Tranche Two | Vesting period - Year Two | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting percentage | 33% |
Tranche Two | Vesting period - Year Three | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting percentage | 33% |
Equity Incentive Plans - 2019 E
Equity Incentive Plans - 2019 Employee Stock Purchase Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 2,297 | $ 3,884 | $ 8,383 | $ 13,708 |
2019 Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 100 | $ 200 | $ 300 | $ 700 |
Expected dividend | 0% | 0% | 0% | 0% |
Equity Incentive Plans - Stock-
Equity Incentive Plans - Stock-based compensation expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 2,297 | $ 3,884 | $ 8,383 | $ 13,708 |
Income tax benefits for stock-based compensation | 0 | |||
Stock-based compensation costs capitalized | 0 | |||
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 968 | 1,869 | 3,570 | 6,576 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 1,329 | $ 2,015 | $ 4,813 | $ 7,132 |
Equity Incentive Plans - Unreco
Equity Incentive Plans - Unrecognized compensation (Details) - 2019 Plan $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Common stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation expense | $ 7.7 |
Remaining weighted-average requisite service period | 1 year 10 months 24 days |
Unvested restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation expense | $ 0.3 |
Remaining weighted-average requisite service period | 1 year 9 months 18 days |
401(k) Plan (Details)
401(k) Plan (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
401(k) Plan | ||||
Employer contribution (as a percent) | 100% | |||
Amount up to which the employer matches 100 percent contribution | $ 5,000 | |||
Total matching contributions | $ 0 | $ 100,000 | $ 400,000 | $ 600,000 |
Net Loss Per Share - Antidiluti
Net Loss Per Share - Antidilutive securities (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities not included in the diluted net loss per share calculation | 8,888,067 | 7,225,635 | 8,888,067 | 7,225,635 |
Common stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities not included in the diluted net loss per share calculation | 8,639,816 | 6,823,018 | 8,639,816 | 6,823,018 |
Unvested restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities not included in the diluted net loss per share calculation | 248,251 | 352,620 | 248,251 | 352,620 |
Common stock warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities not included in the diluted net loss per share calculation | 49,997 | 49,997 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Stockholder | Grant Agreement and Service Contracts | |||||
Related Party Transaction [Line Items] | |||||
Other income | $ 80,000 | $ 0 | $ 243,000 | $ 0 | |
Receivable from stockholders | 0 | 0 | $ 0 | ||
Member of Board of Directors | Research and development | |||||
Related Party Transaction [Line Items] | |||||
Due to related party | 74,000 | 74,000 | 74,000 | ||
Research and development expense | 63,000 | 63,000 | 200,000 | 200,000 | |
Immediate family member of Dr Serafini | Intellectual property related legal fees | |||||
Related Party Transaction [Line Items] | |||||
Expense | 300,000 | 300,000 | 700,000 | 900,000 | |
Due to related party | 100,000 | 100,000 | 200,000 | ||
Immediate family member of Dr Serafini | Other legal fees | |||||
Related Party Transaction [Line Items] | |||||
Expense | 300,000 | $ 100,000 | 700,000 | $ 1,000,000 | |
Due to related party | $ 133,000 | $ 133,000 | $ 33,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | 1 Months Ended | |
Nov. 09, 2023 | Aug. 31, 2023 | |
Subsequent Event [Line Items] | ||
Workforce reduction percentage | 40% | |
Severance payments | $ 1.3 | |
Subsequent event | November 2023 Reorganization \ | ||
Subsequent Event [Line Items] | ||
Severance payments | $ 0.9 | |
Percent of reduction in workforce | 40% |