Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 04, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | KZR | |
Entity Registrant Name | Kezar Life Sciences, Inc. | |
Entity Central Index Key | 0001645666 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 72,692,963 | |
Entity Interactive Data Current | Yes | |
Entity Current Reporting Status | Yes | |
Entity File Number | 001-38542 | |
Entity Tax Identification Number | 47-3366145 | |
Entity Address, Address Line One | 4000 Shoreline Court | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | South San Francisco | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94080 | |
City Area Code | 650 | |
Local Phone Number | 822-5600 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Security Exchange Name | NASDAQ | |
Entity Incorporation, State or Country Code | DE |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 28,109 | $ 40,456 |
Marketable securities | 208,480 | 236,105 |
Prepaid expenses | 5,982 | 8,241 |
Other current assets | 933 | 920 |
Total current assets | 243,504 | 285,722 |
Property and equipment, net | 4,666 | 3,431 |
Operating lease right-of-use asset | 8,647 | 9,741 |
Other assets | 6,562 | 674 |
Total assets | 263,379 | 299,568 |
Current liabilities: | ||
Accounts payable | 2,492 | 2,479 |
Accrued and other current liabilities | 8,463 | 5,953 |
Operating lease liabilities, current | 2,782 | 2,565 |
Total current liabilities | 13,737 | 10,997 |
Operating lease liabilities, noncurrent | 7,413 | 8,865 |
Long-term debt | 9,952 | 9,834 |
Total liabilities | 31,102 | 29,696 |
Stockholders' equity: | ||
Common stock, $0.001 par value, 250,000,000 and 125,000,000 shares authorized as of June 30,2023 (unaudited) and December 31, 2022; respectively; 72,532,814 and 68,493,429 shares issued and outstanding as of June 30, 2023 (unaudited) and December 31, 2022,respectively | 73 | 68 |
Preferred stock, $0.001 par value, 10,000,000 shares authorized, zero shares issued and outstanding as of June 30, 2023 (unaudited) and December 31, 2022 | 0 | 0 |
Additional paid-in capital | 528,434 | 519,620 |
Accumulated other comprehensive loss | (830) | (923) |
Accumulated deficit | (295,400) | (248,893) |
Total stockholders' equity | 232,277 | 269,872 |
Total liabilities and stockholders' equity | $ 263,379 | $ 299,568 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 125,000,000 |
Common stock, shares issued | 72,532,814 | 68,493,429 |
Common stock, shares outstanding | 72,532,814 | 68,493,429 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Operating expenses: | ||||
Research and development | $ 20,999 | $ 11,346 | $ 39,317 | $ 22,290 |
General and administrative | 5,785 | 4,977 | 11,991 | 9,911 |
Total operating expenses | 26,784 | 16,323 | 51,308 | 32,201 |
Loss from operations | (26,784) | (16,323) | (51,308) | (32,201) |
Interest income | 2,861 | 408 | 5,556 | 516 |
Interest expense | (385) | (272) | (755) | (526) |
Net loss | $ (24,308) | $ (16,187) | $ (46,507) | $ (32,211) |
Net loss per common share, Basic | $ (0.34) | $ (0.25) | $ (0.64) | $ (0.52) |
Net loss per common share, Diluted | $ (0.34) | $ (0.25) | $ (0.64) | $ (0.52) |
Weighted-average shares used to compute net loss per common share, Basic | 72,461,850 | 64,279,634 | 72,395,410 | 62,465,092 |
Weighted-average shares used to compute net loss per common share, Diluted | 72,461,850 | 64,279,634 | 72,395,410 | 62,465,092 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (24,308) | $ (16,187) | $ (46,507) | $ (32,211) |
Other comprehensive loss | ||||
Foreign currency translation adjustments | (5) | (64) | (17) | (39) |
Unrealized (loss) gain on marketable securities | (302) | (318) | 110 | (834) |
Total other comprehensive (loss) gain, net of tax | (307) | (382) | 93 | (873) |
Comprehensive loss | $ (24,615) | $ (16,569) | $ (46,414) | $ (33,084) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | ATM Agreement | Common Stock | Common Stock ATM Agreement | Additional Paid-in Capital | Additional Paid-in Capital ATM Agreement | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Balance at Dec. 31, 2021 | $ 196,876 | $ 56 | $ 377,765 | $ (291) | $ (180,654) | |||
Balance, shares at Dec. 31, 2021 | 56,259,747 | |||||||
Issuance of common stock net of offering costs | $ 48,642 | $ 4 | $ 48,638 | |||||
Issuance of common stock net of offering costs, shares | 3,245,738 | |||||||
Issuance of common stock under equity incentive plans | 208 | 208 | ||||||
Issuance of common stock under equity incentive plans, shares | 59,174 | |||||||
Stock-based compensation expense | 3,104 | 3,104 | ||||||
Other comprehensive gain (loss) | (491) | (491) | ||||||
Net loss | (16,024) | (16,024) | ||||||
Balance at Mar. 31, 2022 | 232,315 | $ 60 | 429,715 | (782) | (196,678) | |||
Balance, shares at Mar. 31, 2022 | 59,564,659 | |||||||
Balance at Dec. 31, 2021 | 196,876 | $ 56 | 377,765 | (291) | (180,654) | |||
Balance, shares at Dec. 31, 2021 | 56,259,747 | |||||||
Other comprehensive gain (loss) | (873) | |||||||
Net loss | (32,211) | |||||||
Balance at Jun. 30, 2022 | 297,364 | $ 68 | 511,325 | (1,164) | (212,865) | |||
Balance, shares at Jun. 30, 2022 | 68,341,642 | |||||||
Balance at Mar. 31, 2022 | 232,315 | $ 60 | 429,715 | (782) | (196,678) | |||
Balance, shares at Mar. 31, 2022 | 59,564,659 | |||||||
Issuance of common stock net of offering costs | 77,900 | $ 8 | 77,892 | |||||
Issuance of common stock net of offering costs, shares | 8,665,961 | |||||||
Issuance of common stock under equity incentive plans | 420 | 420 | ||||||
Issuance of common stock under equity incentive plans, shares | 111,022 | |||||||
Stock-based compensation expense | 3,298 | 3,298 | ||||||
Other comprehensive gain (loss) | (382) | (382) | ||||||
Net loss | (16,187) | (16,187) | ||||||
Balance at Jun. 30, 2022 | 297,364 | $ 68 | 511,325 | (1,164) | (212,865) | |||
Balance, shares at Jun. 30, 2022 | 68,341,642 | |||||||
Balance at Dec. 31, 2022 | 269,872 | $ 68 | 519,620 | (923) | (248,893) | |||
Balance, shares at Dec. 31, 2022 | 68,493,429 | |||||||
Cashless exercise of pre-funded warrants, shares | 2,236,233 | |||||||
Cashless exercise of pre-funded warrants | $ 2 | (2) | ||||||
Issuance of common stock under equity incentive plans | 154 | $ 1 | 153 | |||||
Issuance of common stock under equity incentive plans, shares | 86,338 | |||||||
Stock-based compensation expense | 4,263 | 4,263 | ||||||
Other comprehensive gain (loss) | 400 | 400 | ||||||
Net loss | (22,199) | (22,199) | ||||||
Balance at Mar. 31, 2023 | 252,490 | $ 71 | 524,034 | (523) | (271,092) | |||
Balance, shares at Mar. 31, 2023 | 70,816,000 | |||||||
Balance at Dec. 31, 2022 | 269,872 | $ 68 | 519,620 | (923) | (248,893) | |||
Balance, shares at Dec. 31, 2022 | 68,493,429 | |||||||
Issuance of common stock net of offering costs, shares | 0 | |||||||
Other comprehensive gain (loss) | 93 | |||||||
Net loss | (46,507) | |||||||
Balance at Jun. 30, 2023 | 232,277 | $ 73 | 528,434 | (830) | (295,400) | |||
Balance, shares at Jun. 30, 2023 | 72,532,814 | |||||||
Balance at Mar. 31, 2023 | 252,490 | $ 71 | 524,034 | (523) | (271,092) | |||
Balance, shares at Mar. 31, 2023 | 70,816,000 | |||||||
Cashless exercise of pre-funded warrants, shares | 1,556,643 | |||||||
Cashless exercise of pre-funded warrants | $ 2 | (2) | ||||||
Issuance of common stock under equity incentive plans | 382 | 382 | ||||||
Issuance of common stock under equity incentive plans, shares | 160,171 | |||||||
Stock-based compensation expense | 4,020 | 4,020 | ||||||
Other comprehensive gain (loss) | (307) | (307) | ||||||
Net loss | (24,308) | (24,308) | ||||||
Balance at Jun. 30, 2023 | $ 232,277 | $ 73 | $ 528,434 | $ (830) | $ (295,400) | |||
Balance, shares at Jun. 30, 2023 | 72,532,814 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2022 | Mar. 31, 2022 | |
ATM Agreement | ||
Issuance of common stock under the ATM Agreement, net of offering costs | $ 2,409 | $ 1,504 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (46,507) | $ (32,211) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 508 | 848 |
Stock-based compensation | 8,283 | 6,402 |
Amortization of premiums and discounts on marketable securities | (3,532) | 579 |
Amortization of debt discount and issuance costs and other non-cash interest | 118 | 106 |
Loss on disposition of fixed assets | 0 | 4 |
Changes in operating assets and liabilities | ||
Prepaid expenses, other current assets and other long-term assets | (3,642) | (1,191) |
Accounts payable, accrued and other current liabilities | 2,453 | (560) |
Operating lease asset and liabilities | (141) | (580) |
Net cash used in operating activities | (42,460) | (26,603) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (1,673) | (632) |
Purchases of marketable securities | (95,233) | (142,080) |
Maturities of marketable securities | 126,500 | 84,689 |
Net cash provided by (used in) investing activities | 29,594 | (58,023) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock and warrants, net of issuance costs | 0 | 126,542 |
Proceeds from issuance of common stock under equity incentive plans | 536 | 628 |
Net cash provided by financing activities | 536 | 127,170 |
Effect of exchange rate changes on cash and cash equivalents | (17) | (39) |
Net (decrease) increase in cash and cash equivalents | (12,347) | 42,505 |
Cash and cash equivalents at the beginning of period | 40,456 | 62,882 |
Cash and cash equivalents at the end of period | 28,109 | 105,387 |
Supplemental disclosures of noncash investing and financing information: | ||
Purchases of property and equipment in accounts payable | 117 | 557 |
Par value of common stock upon cashless exercise of prefunded warrants | 4 | 0 |
Supplemental disclosures | ||
Cash paid for interest | $ 637 | $ 219 |
Organization and Description of
Organization and Description of the Business | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of the Business | 1. Organization and Description of the Business Description of Business Kezar Life Sciences, Inc. (the “Company,” “we,” “us,” or “our”) was incorporated in the state of Delaware in February 2015 and commenced operations in June 2015. The Company is a clinical-stage biotechnology company discovering and developing breakthrough treatments in immune-mediated and oncologic disorders. The Company’s principal operations are in South San Francisco, California, and it operates in one segment. Liquidity Since commencing operations in mid-2015, substantially all of the Company’s efforts have been focused on research, development, and the advancement of the Company’s product candidates, zetomipzomib (KZR-616) and KZR-261. The Company’s ultimate success depends on the outcome of these ongoing research and development activities. The Company has not yet generated product sales and as a result has experienced operating losses since inception and had an accumulated deficit of $ 295.4 million as of June 30, 2023. The Company expects to incur additional losses in the future to conduct research and development and will need to raise additional capital to fully implement management’s business plan. The Company intends to raise such capital through the issuance of additional equity, and potentially through borrowings, strategic alliances with partner companies and other licensing transactions. However, if such financing is not available at adequate levels, the Company may need to reevaluate its operating plans. Management believes that its existing cash, cash equivalents and marketable securities will be sufficient to fund the Company’s cash requirements for at least 12 months following the issuance of these financial statements. In December 2021, the Company entered into a Sales Agreement (the “ATM Agreement”) with Cowen and Company, LLC (“Cowen”), pursuant to which the Company can offer and sell, from time to time at its sole discretion through Cowen, as its sales agent, shares of its common stock having an aggregate offering price of up to $ 200.0 million. Any shares of its common stock sold will be issued pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-261774). The Company will pay Cowen a commission up to 3.0 % of the gross sales proceeds of any shares of its common stock sold through Cowen under the ATM Agreement and also has provided Cowen with indemnification and contribution rights. As of June 30, 2023, we have sold an aggregate of 11,986,003 shares of our common stock for gross proceeds of approximately $ 131.7 million at a weighted average purchase price of $ 10.98 per share pursuant to the ATM Agreement. As of June 30, 2023, a pproximately $ 68.3 million remains available under the ATM Agreement . No shares were sold under the ATM Agreement during the three months ended June 30, 2023. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Significant Accounting Policies The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2022 and the notes thereto, which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the U.S. Securities and Exchange Commission (“SEC”) on March 14, 2023 (the “Annual Report”), and there have been no material changes during the six months ended June 30, 2023. Basis of Presentation and Consolidation The condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and include the Company’s accounts and those of its wholly owned Australian subsidiary, Kezar Life Sciences Australia Pty Ltd., which is a proprietary company limited by shares. All intercompany balances and transactions have been eliminated upon consolidation. The condensed consolidated balance sheet as of December 31, 2022 has been derived from the audited consolidated financial statements at that date but does not include all information and footnotes required by GAAP for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements included in the Annual Report. Unaudited Condensed Consolidated Financial Statements The accompanying financial information as of June 30, 2023 is unaudited. The interim condensed consolidated financial statements included in this report reflect all adjustments (consisting only of normal recurring adjustments) that our management considers necessary for the fair statement of the results of operations for the interim periods covered and of our financial condition at the date of the interim balance sheet. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The results for interim periods are not necessarily indicative of the results for the entire year or any other interim period. The accompanying condensed consolidated financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto included in our Annual Report. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Significant items subject to such estimates and assumptions include the valuation of marketable securities, stock-based compensation, and accrued research and development costs. Management bases its estimates on historical experience and on various other market-specific relevant assumptions that management believes to be reasonable under the circumstances. Actual results may differ from those estimates. Estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require the exercise of judgment. As of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, assumptions and judgments or revise the carrying value of its assets or liabilities. These estimates may change as new events occur and additional information is obtained and are recognized in the consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to the Company’s consolidated financial statements. Recent Accounting Pronouncements Reference Rate Reform . In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to accounting guidance on contract modifications and hedge accounting to ease entities’ financial reporting burdens as the market transitions from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. This guidance generally allows for contract modifications solely related to the replacement of the reference rate to be accounted for as a continuation of the existing contract instead of as an extinguishment of the contract, without triggering certain accounting impacts that could be required associated with an extinguishment of the contract. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022 to December 31, 2024. As discussed in note 7 of the condensed consolidated financial statements, in June 2023 our loan agreement was amended and effective July 1, 2023, the interest base transitioned from LIBOR to Secured Overnight Financing Rate ("SOFR"). We applied the above guidance when accounting for this change (as discussed further in note 7), and adoption of this guidance did not have a material impact on our financial statements. As of June 30, 2023, we have no debt instruments that use LIBOR as a reference rate, and this guidance is not expected to have a material impact on our financial statements in the future. There have been no other recent accounting pronouncements, changes in accounting pronouncements or recently adopted accounting guidance that are expected to have a material impact on the Company’s condensed consolidated financial statements upon adoption. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. Fair Value Measurements Financial assets and liabilities are recorded at fair value. The carrying amount of certain financial instruments, including cash, cash equivalents, other current assets, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities. Assets and liabilities recorded at fair value on a recurring basis in the condensed consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows: Level 1 : Quoted prices in active markets for identical assets or liabilities. Level 2 : Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 : Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. The Company applies fair value accounting for all financial assets and liabilities and nonfinancial assets and liabilities that are required to be recognized or disclosed at fair value in the financial statements. The Company determines the fair value of Level 1 assets using quoted prices in active markets for identical assets. The Company reviews trading activity and pricing for Level 2 investments as of each measurement date. Level 2 inputs, which are obtained from various third-party data providers, represent quoted prices for similar assets in active markets and were derived from observable market data, or, if not directly observable, were derived from or corroborated by other observable market data. In certain cases, where there is limited activity or less transparency around inputs to valuation, securities are classified as Level 3 within the valuation hierarchy. The Company did not have any assets or liabilities measured using Level 3 inputs as of June 30, 2023 or December 31, 2022. The following table summarizes the Company’s financial assets measured at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy as described above (in thousands): June 30, 2023 Total Level 1 Level 2 Level 3 Financial Assets: Cash equivalents: U.S. Treasury money market funds $ 27,429 $ 27,429 $ — $ — Marketable securities: U.S. Treasury securities 15,951 15,951 — — Commercial paper 75,544 — 75,544 — U.S. agency bonds 116,985 — 116,985 — Total $ 235,909 $ 43,380 $ 192,529 $ — December 31, 2022 Total Level 1 Level 2 Level 3 Financial Assets: Cash equivalents: U.S. Treasury money market funds $ 38,745 $ 38,745 $ — $ — Marketable securities: U.S. Treasury securities 40,141 40,141 — — Commercial paper 117,478 — 117,478 — Corporate debt securities 1,978 — 1,978 — U.S. agency bonds 76,508 — 76,508 — Total $ 274,850 $ 78,886 $ 195,964 $ — |
Available-for-Sale Securities
Available-for-Sale Securities | 6 Months Ended |
Jun. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Available-for-Sale Securities | 4. Available-for-Sale Securities The following table is a summary of available-for-sale securities recorded in cash and cash equivalents or marketable securities in the Company’s condensed consolidated balance sheets (in thousands): June 30, 2023 Amortized Cost Unrealized Unrealized Fair Value Cash equivalents: U.S. Treasury money market funds $ 27,429 $ — $ — $ 27,429 Marketable securities: U.S. Treasury securities 16,076 — ( 125 ) 15,951 Commercial paper 75,708 2 ( 166 ) 75,544 U.S. agency bonds 117,265 2 ( 282 ) 116,985 Total available-for-sale securities $ 236,478 $ 4 $ ( 573 ) $ 235,909 Cash 680 Total cash, cash equivalent and marketable securities $ 236,589 December 31, 2022 Amortized Cost Unrealized Unrealized Fair Value Cash equivalents: U.S. Treasury money market funds $ 38,745 $ — $ — $ 38,745 Marketable securities: U.S. Treasury securities 40,340 — ( 199 ) 40,141 Commercial paper 117,855 2 ( 379 ) 117,478 Corporate debt securities 1,978 — — 1,978 U.S. agency bonds 76,610 56 ( 158 ) 76,508 Total available-for-sale securities $ 275,528 $ 58 $ ( 736 ) $ 274,850 Cash 1,711 Total cash, cash equivalent and marketable securities $ 276,561 The Company has no t recognized an allowance for credit losses on any securities in an unrealized loss position a s of June 30, 2023 and December 31, 2022. The following table displays additional information regarding gross unrealized losses and fair value by major security type for available-for-sale securities in an unrealized loss position as of June 30, 2023 and December 31, 2022 (in thousands): June 30, 2023 Less than 12 consecutive months 12 months or greater Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Treasury securities $ 6,393 $ ( 30 ) $ 9,558 $ ( 95 ) Commercial paper 64,610 ( 166 ) — — U.S. agency bonds 110,538 ( 282 ) — — Total $ 181,541 $ ( 478 ) $ 9,558 $ ( 95 ) December 31, 2022 Less than 12 consecutive months 12 months or greater Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Treasury securities $ 33,782 $ ( 196 ) $ 6,359 $ ( 3 ) Commercial paper 112,706 ( 379 ) — — Corporate debt securities 1,978 — — — U.S. agency bonds 33,942 ( 147 ) 5,490 ( 11 ) Total $ 182,408 $ ( 722 ) $ 11,849 $ ( 14 ) The Company believes that the individual unrealized losses represent temporary declines primarily resulting from interest rate changes. The Company currently does not intend to sell these securities prior to maturity and does not consider these investments to be other-than-temporarily impaired as of June 30, 2023. There were no sales of available-for-sale securities in any of the periods presented. As of June 30, 2023, the amortized cost and estimated fair value of the Company’s available-for-sale securities by contractual maturity are shown below (in thousands): Amortized Estimated Available-for-sale securities maturing in: Cost Fair Value One year or less $ 226,825 $ 226,351 One to two years 9,653 9,558 Total available-for-sale securities $ 236,478 $ 235,909 |
Balance Sheet Components
Balance Sheet Components | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Components | 5. Balance Sheet Components Prepaid Expenses Prepaid expenses consisted of the following (in thousands): June 30, December 31, Advance for clinical-related costs, current $ 4,523 $ 6,760 License, dues and subscription 678 376 Insurance 172 741 Others 609 364 Total prepaid expenses $ 5,982 $ 8,241 Property and Equipment, Net Property and equipment consisted of the following (in thousands): June 30, December 31, Leasehold improvements $ 3,551 $ 3,366 Furniture, laboratory and office equipment 5,832 4,423 Computer equipment 353 244 Total property and equipment 9,736 8,033 Less accumulated depreciation and amortization ( 5,070 ) ( 4,602 ) Property and equipment, net $ 4,666 $ 3,431 Depreciation expense was $ 0.2 million and $ 0.5 million for each of the three and six months ended June 30, 2023, respectively, compared to $ 0.2 million and $ 0.5 million for the three and six months ended June 30, 2022, respectively. Other Assets Other assts consisted of the following (in thousands): June 30, December 31, Advance for clinical related costs, non-current $ 5,696 $ — Deposits for operating lease 674 674 Others 192 — Total other assets $ 6,562 $ 674 Accrued and Other Current Liabilities Accrued liabilities consisted of the following (in thousands): June 30, December 31, Accrued clinical costs $ 4,426 $ 1,007 Accrued preclinical and research costs 1,792 1,368 Accrued employee-related costs 1,926 3,260 Accrued professional services 141 53 Other 178 265 Total accrued liabilities $ 8,463 $ 5,953 |
Lease
Lease | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Lease | 6. Lease In November 2022, the Company entered into an amendment to the lease agreement for its corporate headquarters in South San Francisco, California, which expanded the leased premises in the same building as its corporate headquarters and extended the lease term of the original premises to be coterminous with the expansion premises to July 31, 2026 . The transaction was treated as a lease modification as of the effective date and resulted in the recognition of approximately $ 8.0 million in new lease liabilities and right-of-use (“ROU”) assets. Information related to the Company’s ROU asset and related lease liabilities were as follows (in thousands): Three months ended Six months ended Cash paid for operating lease liabilities $ 631 $ 1,236 Operating lease costs 866 1,732 Variable lease costs 387 735 Maturities of lease liabilities as of June 30, 2023 were as follows: Less than 12 months $ 3,828 13 - 24 months 3,957 25 - 36 months 4,095 37 - 48 months 347 Total undiscounted lease payments 12,227 Less: imputed interest ( 2,032 ) Total lease liabilities $ 10,195 Operating lease liabilities, current $ 2,782 Operating lease liabilities, noncurrent 7,413 Total operating lease liabilities $ 10,195 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 7. Long-Term Debt In November 2021, the Company entered into a loan agreement (the “Loan Agreement”) with Oxford Finance, LLC (“Oxford Finance” ), which provided the Company up to $ 50.0 million in borrowing capacity across five potential tranches (each a “Term Loan,” and collectively “Term Loans” ). The initial tranche of $ 10.0 million was funded at the closing of the Loan Agreement. The remaining tranches were dependent on achieving certain clinical trial milestones. The Company has declined these tranches in borrowing capacity available to it under the Loan Agreement. The loan facility is secured by all assets except intellectual property, which is subject to a negative pledge, and will mature on November 1, 2026 . There are no warrants or financial covenants associated with the Loan Agreement. Until June 30, 2023, the Term Loans bore interest at a floating per annum rate (based on the actual number of days elapsed divided by a year of 360 days) equal to the sum of (a) the greater of (i) 30-day U.S. LIBOR rate reported in the Wall Street Journal on the last business day of the month that immediately precedes the month in which the interest will accrue and (ii) 0.08 %, plus (b) 7.87 %. The Company is required to make monthly interest-only payments prior to the amortization date of January 1, 2025, subject to a potential one-year extension upon satisfaction of certain conditions. In June 2023, Oxford Finance informed the Company that a LIBOR transition event would occur effective July 1, 2023 and replaced the LIBOR rate with the 1-month CME term SOFR plus 0.1 %. The rate change did not require contract remeasurement at the effective date of the change or a reassessment of any previous accounting determinations pertaining to the facility. The rate change did not have a material impact on the Company’s financial statements. All unpaid principal and accrued and unpaid interest with respect to each Term Loan is due and payable in full on November 1, 2026 (the “Maturity Date”). The Company has the option to prepay the outstanding balance prior to maturity, subject to a prepayment fee of 1.0 % to 2.0 % depending upon when the prepayment occurs. Upon repayment of the Term Loans, the Company is required to make a final payment fee to the lenders equal to 6.5 % of the original principal amount of the Term Loans funded which will be accrued by charges to interest expense over the term of the loans using the effective interest method. The Loan Agreement also includes subjective acceleration clauses which permit the lenders to accelerate the Maturity Date under certain circumstances, including, but not limited to, material adverse effects on a Company’s financial status or otherwise. As of June 30, 2023, the Company is in compliance with all covenants in the Loan Agreement. Interest expense was $ 0.4 million and $ 0.8 million for the three and six months ended June 30, 2023, respectively, compared to $ 0.3 million and $ 0.5 million for the three and six months ended June 30, 2022, respectively. The initial effective interest rate on the Term Loans, including the amortization of the debt discount and issuance costs, and accretion of the final payment, was 11 %. The components of the long-term debt balance are as follows: June 30, December 31, Principal loan balance $ 10,000 $ 10,000 Unamortized debt discount and issuance costs ( 292 ) ( 342 ) Cumulative accretion of final fee 244 176 Long-term debt, net $ 9,952 $ 9,834 As of June 30, 2023, the estimated future principal payments due were as follows: Years Ending December 31, 2023 $ — 2024 — 2025 5,217 2026 4,783 Total $ 10,000 |
Pre-Funded Warrants
Pre-Funded Warrants | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Pre-Funded Warrants | 8. Pre-Funded Warrants In connection with the Company’s previous underwritten public offerings, the Company issued pre-funded warrants to purchase an aggregate of 3,793,706 shares of the Company’s common stock. Each pre-funded warrant entitled the holder to purchase shares of common stock at an exercise price of $ 0.001 per share and expired 20 years from the date of issuance. These warrants were recorded as a component of stockholders’ equity within additional paid-in capital. In January 2023, warrant holders exercised 2,236,553 shares of outstanding pre-funded warrants at an exercise price of $ 0.001 per share. In April 2023, warrant holders exercised the remaining 1,557,153 shares of outstanding pre-funded warrants. As of June 30, 2023, there were no pre-funded warrants outstanding. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 9. Stock-Based Compensation Stock Incentive Plans 2022 Inducement Plan In April 2022, the Company adopted the Kezar Life Sciences, Inc. 2022 Inducement Plan (the “Inducement Plan”), which is a non-stockholder approved stock plan adopted pursuant to the “inducement exception” provided under Nasdaq Listing Rule 5635(c)(4), for the award of nonstatutory stock options (“NSOs”), restricted stock units (“RSUs”) and other equity awards as permitted by the Inducement Plan (collectively, “Inducement Awards”) to persons not previously an employee or director of the Company, or following a bona fide period of non-employment, as an inducement material to such persons entering into employment with the Company (“Eligible Recipients”). Under the Inducement Plan, the Company may grant up to 3,000,000 shares of Common Stock in the form of Inducement Awards to Eligible Recipients in compliance with the requirements of Nasdaq Listing Rule 5635(c)(4). Awards must be approved by either a majority of the Company’s independent directors or the Company’s independent compensation committee. Consultants and directors are not eligible to received grants under the Inducement Plan. As of June 30, 2023, options to purchase 1,313,000 shares of common stock were outstanding, and 1,687,000 shares were available for future issuance under the Inducement Plan. 2018 Equity Incentive Plan In June 2018, the Company’s board of directors adopted and its stockholders approved the 2018 Equity Incentive Plan (the “2018 Plan”), which became effective as of June 20, 2018, at which point no further grants could be made under the 2015 Equity Incentive Plan (the “2015 Plan”) described below. Under the 2018 Plan, the Company may grant incentive stock options (“ISOs”), NSOs, stock appreciation rights, restricted stock awards, RSUs and other stock-based awards. As of June 30, 2023, options to purchase 10,212,197 shares of common stock and 433,611 RSUs were outstanding, and 1,499,142 shares were available for future issuance under the 2018 Plan. Initially, subject to adjustment as provided in the 2018 Plan, the aggregate number of shares of the Company’s common stock authorized for issuance pursuant to stock awards under the 2018 Plan was 4,000,000 shares, which is the sum of (i) 1,600,692 shares plus (ii) the number of shares reserved and available for issuance under the 2015 Plan at the time the 2018 Plan became effective and (iii) the number of shares subject to stock options or other stock awards granted under the 2015 Plan that expire, terminate are forfeited or otherwise not issued, or are withheld to satisfy a tax withholding obligation in connection with an award or to satisfy a purchase or exercise price of an award (such as upon the expiration or termination of a stock award prior to vesting). The number of shares of the Company’s common stock reserved for issuance under the 2018 Plan automatically increases on January 1 of each year, beginning on January 1, 2019 and continuing through and including January 1, 2028 , by 5 % of the total number of shares of capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by the Company’s board of directors prior to such increase. The maximum number of shares that may be issued upon the exercise of ISOs under the 2018 Plan is 12,500,000 shares. 2015 Equity Incentive Plan The Company’s 2015 Plan provided for the granting of ISOs and NSOs to employees, directors and consultants at the discretion of its board of directors. The 2015 Plan was terminated as to future awards in June 2018, although it continues to govern the terms of options that remain outstanding under the 2015 Plan. No additional stock awards will be granted under the 2015 Plan, and all outstanding stock awards granted under the 2015 Plan that are repurchased, forfeited, expire or are cancelled will become available for grant under the 2018 Plan in accordance with its terms. Options granted under the 2015 Plan expire no later than 10 years from the date of grant. Options granted under the 2015 Plan vest over periods determined by the Company’s board of directors, generally over four years . The 2015 Plan allows for early exercise of certain options prior to vesting. Upon termination of employment, the unvested shares are subject to repurchase at the original exercise price. As of June 30, 2023, options to purchase 1,436,808 shares of common stock were outstanding under the 2015 Plan. 2018 Employee Stock Purchase Plan In June 2018, the Company’s board of directors adopted and its stockholders approved the 2018 Employee Stock Purchase Plan (the “ESPP”), which became effective as of June 20, 2018. The ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the U.S. Internal Revenue Code of 1986, as amended. The number of shares of common stock initially reserved for issuance under the ESPP was 200,000 shares. The ESPP provides for an annual increase on January 1 of each year, beginning on January 1, 2019 and continuing through and including January 1, 2028, equal to the lesser of (i) 1 % of the shares of common stock outstanding on the last day of the prior fiscal year or (ii) 375,000 shares, or a lesser number of shares determined by the Company’s board of directors prior to such increase. In December 2022, the Company’s board of directors acted such that there was no increase of the number of shares of common stock reserved for issuance under the ESPP as of January 1, 2023. As of June 30, 2023, 503,836 shares of common stock had been issued under the ESPP and 829,388 shares remained available for future issuance under the ESPP. The price per share of common stock to be paid by an ESPP participant on the applicable purchase date of an offering period shall be equal to 85 % of the lesser of the fair market value of a share of common stock on (i) the applicable offering date or (ii) the applicable purchase date. The Company’s board of directors authorized an initial six-month offering period beginning on November 16, 2018 and ending on May 15, 2019 . The Company’s board of directors has subsequently authorized additional six-month offering periods, with the most recent offering period beginning on May 16, 2023 . Stock Option Activity The following table summarizes activity under the Company’s stock option plans and related information (in thousands, except share and per share amounts): Number of Weighted Weighted Aggregate Outstanding as of December 31, 2022 9,684,810 $ 8.12 7.6 $ 15,407 Options granted 4,043,994 $ 5.91 Options exercised ( 106,921 ) $ 2.00 $ 302 Options cancelled/forfeited ( 659,878 ) $ 9.16 Outstanding as of June 30, 2023 12,962,005 $ 7.43 7.8 $ 489 Vested and exercisable as of June 30, 2023 6,151,141 $ 7.19 6.5 $ 489 The weighted average grant date fair value of options granted during the three and six months ended June 30, 2023 was $ 2.19 and $ 4.45 per share, respectively. The aggregate intrinsic values of exercised stock options during the three and six months ended June 30, 2023 were $ 24 thousand and $ 0.3 million, respectively. The aggregate intrinsic value is calculated as the difference between the exercise price and the estimated fair value of the Company’s common stock at the date of exercise. Restricted Stock Units Activity During the six months ended June 30, 2023, the Company granted RSUs to certain employees pursuant to the 2018 Plan. One-third of each RSU grant will vest annually following the vesting commencement dates, over a vesting period of 3 years . RSUs are awards that entitle the holder to receive freely tradable shares of the Company's common stock upon vesting and are not forfeitable once fully vested. The valuations for these RSUs were based on the closing prices of the Company's common stock on the grant dates and recognized as stock-based compensation expenses over the respective vesting terms. Number of RSUs Outstanding Weighted Average Grant-Date Fair Price Outstanding as of December 31, 2022 434,790 $ 9.80 RSUs granted 81,619 $ 6.84 RSUs vested ( 13,989 ) $ 14.55 RSUs forfeited ( 68,809 ) $ 9.27 Outstanding as of June 30, 2023 433,611 $ 9.17 Stock-Based Compensation Expense Total stock-based compensation expense recognized by function was as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Research and development $ 2,013 $ 1,595 $ 4,281 $ 2,918 General and administrative 2,007 1,703 4,002 3,484 Total stock-based compensation expense $ 4,020 $ 3,298 $ 8,283 $ 6,402 As of June 30, 2023, the unrecognized stock-based compensation cost related to outstanding unvested stock options and RSUs that are expected to vest was $ 39.5 million with an estimated weighted average amortization period of 2.8 years. The fair value of the stock options granted is calculated using the Black-Scholes option-pricing model with the following range of assumptions: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Expected term (years) 5.5 - 6.1 5.5 - 6.0 5.5 - 6.1 5.3 - 6.0 Expected volatility 88.0 - 88.3 % 84.3 - 88.4 % 87.8 - 88.3 % 84.3 - 88.4 % Risk-free interest rate 3.5 - 3.9 % 2.8 - 3.2 % 3.5 - 4.3 % 1.6 - 3.2 % Expected dividend yield — — — — The expected term of options granted represents the period of time that options granted are expected to be outstanding and was determined by calculating the midpoint between the date of vesting and the contractual life of each option. The expected term of the ESPP rights is equal to the six-month look-back period. Volatility is based on the average of the historical volatility of the Company's stock price and that of a peer group of public companies over the expected term. The peer group was selected on the basis of operational and economic similarity with the Company’s principal business operations. The risk-free interest rate for the expected term of the options is based on the U.S. Treasury yield curve with a maturity equal to the expected term in effect at the time of grant. The Company has no t paid, and does not anticipate paying, cash dividends on its shares of common stock; therefore, the expected dividend yield is zero . |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes No provision for income taxes was recorded for the three and six months ended June 30, 2023 and 2022, respectively. Deferred tax assets generated from the Company’s net operating losses have been fully reserved, as the Company believes it is not more likely than not that the benefit will be realized. Effective January 1, 2022, under the Tax Cuts and Jobs Act, for tax purposes the Company is required to capitalize and subsequently amortize all R&D expenditures over five years for research activities conducted in the U.S. and over fifteen years for research activities conducted outside of the U.S. Given the significant loss and credit carryforwards in the U.S., the Company does not anticipate having a change in valuation allowance assertion. In March 2020, the Coronavirus Aid, Relief and Economic Security (“CARES”) Act was signed into law. The CARES Act included several tax changes as part of its economic package. These changes principally related to expanded net operating loss carryback periods, increases to interest deductibility limitations, and accelerated alternative minimum tax refunds. The CARES Act enacted the Employee Retention Credit (“ERC”) to incentivize companies to retain employees, which was subsequently modified by extension of the CARES Act. Under the provisions of the CARES Act and its subsequent extension, the Company was eligible for ERCs, subject to certain criteria. During the six months ended June 30, 2023, the Company received refunds of approximately $ 1.4 million related to ERCs that offset the related payroll expenses in the respective operating costs and expenses line item in the condensed consolidated statements of operations. In December 2015, the Protecting Americans from Tax Hikes Act of 2015 (the “PATH Act”) was signed into law, which created several new research and development (“R&D”) tax credit provisions, including allowing qualified small businesses to utilize the R&D credit against the employer’s portion of payroll tax up to a maximum of $ 250,000 per year. The Company qualified as a small business under the PATH Act for 2016 through 2020. During the six months ended June 30, 2022, the Company utilized $ 79,000 of R&D tax credits as a reduction of payroll expenses to offset its payroll tax liabilities. All R&D tax credits have been fully utilized as of December 31, 2022. |
Net Loss per Share
Net Loss per Share | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 11. Net Loss Per Share Net Loss Per Share The following table sets forth the calculation of basic and diluted net loss per share during the periods presented (in thousands, except share and per share data): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Numerator: Net loss $ ( 24,308 ) $ ( 16,187 ) $ ( 46,507 ) $ ( 32,211 ) Denominator: Weighted-average shares of common stock outstanding 72,461,850 64,279,634 72,395,410 62,465,092 Net loss per share, basic and diluted $ ( 0.34 ) $ ( 0.25 ) $ ( 0.64 ) $ ( 0.52 ) Basic net loss per common share is calculated by dividing net loss by the weighted-average number of shares of common stock and pre-funded warrants outstanding during the period, without consideration of common share equivalents. Diluted net loss per common share is computed by dividing net loss by the weighted-average number of shares of common stock, pre-funded warrants and common share equivalents outstanding for the period. The pre-funded warrants are included in the computation of basic and diluted net loss per common share as the exercise price is negligible and the pre-funded warrants were fully vested and exercisable. Common share equivalents are only included in the calculation of diluted net loss per common share when their effect is dilutive. Potential dilutive securities, which include, vested and unvested options to purchase common stock and RSUs subject to future vesting have been excluded from the computation of diluted net loss per share as the effect is antidilutive. Therefore, the denominator used to calculate both basic and diluted net loss per common share is the same in all periods presented. The following outstanding shares of common stock equivalents were excluded from the computation of the diluted net loss per share for the periods presented because their effect would have been anti-dilutive: Three and Six Months Ended 2023 2022 Stock options to purchase common stock 12,962,005 9,206,327 Restricted stock units subject to future vesting 433,611 41,935 Total 13,395,616 9,248,262 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 12. Related Party Transactions In connection with the resignation of Christopher Kirk, Ph.D. from his role as President and Chief Scientific Officer of the Company, the Company and Dr. Kirk entered into an Advisor Agreement, effective as of April 22, 2023 (the “Advisor Agreement”), pursuant to which Dr. Kirk will provide scientific and strategic advisory services as a consultant to the Company (the “Services”). The Services will be provided at a rate of $ 41,050 per month, and the Company will reimburse Dr. Kirk for the cost of premiums for continued COBRA coverage through the expiration date of the Advisor Agreement. Dr. Kirk remains a member of the Board of Directors of the Company following his resignation. Pursuant to the Advisor Agreement, the Company recognized approximately $ 96,000 of compensation expense during the three and six months ended June 30, 2023, which was recorded in accounts payable and accrued liabilities as of June 30, 2023. |
Subsequent Event
Subsequent Event | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Event | 13. Subsequent Event On July 24, 2023, the Compensation Committee of the Company’s Board of Directors approved a stock option repricing (the “Option Repricing”) in which the exercise price of certain outstanding options to purchase shares of the Company’s common stock under the 2018 Plan was reduced to $ 2.28 per share, the closing price of the Common Stock on July 24, 2023. Outstanding options that were granted under the 2015 Plan and the Inducement Plan were not included in the Option Repricing. The Option Repricing includes options granted pursuant to the 2018 Plan that are held by, among others, members of the Company’s Board of the Directors (other than options granted in June 2023) and the Company’s named executive officers and principal financial officer. As a result of the Option Repricing, 9,904,755 vested and unvested stock options outstanding as of July 24, 2023 granted under the 2018 Plan with original exercise prices ranging from $ 2.44 to $ 22.85 , were repriced. We will account for the Option Repricing as an equity modification whereby the incremental fair value attributable to the repriced option awards, as measured on the date of reprice, will be recognized as additional stock-based compensation expense over the remaining requisite service period, which is largely through the end of 2026. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of presentation and consolidation | Basis of Presentation and Consolidation The condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and include the Company’s accounts and those of its wholly owned Australian subsidiary, Kezar Life Sciences Australia Pty Ltd., which is a proprietary company limited by shares. All intercompany balances and transactions have been eliminated upon consolidation. The condensed consolidated balance sheet as of December 31, 2022 has been derived from the audited consolidated financial statements at that date but does not include all information and footnotes required by GAAP for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements included in the Annual Report. |
Unaudited Condensed Consolidated Financial Statements | Unaudited Condensed Consolidated Financial Statements The accompanying financial information as of June 30, 2023 is unaudited. The interim condensed consolidated financial statements included in this report reflect all adjustments (consisting only of normal recurring adjustments) that our management considers necessary for the fair statement of the results of operations for the interim periods covered and of our financial condition at the date of the interim balance sheet. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The results for interim periods are not necessarily indicative of the results for the entire year or any other interim period. The accompanying condensed consolidated financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto included in our Annual Report. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Significant items subject to such estimates and assumptions include the valuation of marketable securities, stock-based compensation, and accrued research and development costs. Management bases its estimates on historical experience and on various other market-specific relevant assumptions that management believes to be reasonable under the circumstances. Actual results may differ from those estimates. Estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require the exercise of judgment. As of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, assumptions and judgments or revise the carrying value of its assets or liabilities. These estimates may change as new events occur and additional information is obtained and are recognized in the consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to the Company’s consolidated financial statements. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Reference Rate Reform . In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to accounting guidance on contract modifications and hedge accounting to ease entities’ financial reporting burdens as the market transitions from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. This guidance generally allows for contract modifications solely related to the replacement of the reference rate to be accounted for as a continuation of the existing contract instead of as an extinguishment of the contract, without triggering certain accounting impacts that could be required associated with an extinguishment of the contract. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022 to December 31, 2024. As discussed in note 7 of the condensed consolidated financial statements, in June 2023 our loan agreement was amended and effective July 1, 2023, the interest base transitioned from LIBOR to Secured Overnight Financing Rate ("SOFR"). We applied the above guidance when accounting for this change (as discussed further in note 7), and adoption of this guidance did not have a material impact on our financial statements. As of June 30, 2023, we have no debt instruments that use LIBOR as a reference rate, and this guidance is not expected to have a material impact on our financial statements in the future. There have been no other recent accounting pronouncements, changes in accounting pronouncements or recently adopted accounting guidance that are expected to have a material impact on the Company’s condensed consolidated financial statements upon adoption. |
Fair Value Measurements | Level 1 : Quoted prices in active markets for identical assets or liabilities. Level 2 : Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 : Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. The Company applies fair value accounting for all financial assets and liabilities and nonfinancial assets and liabilities that are required to be recognized or disclosed at fair value in the financial statements. The Company determines the fair value of Level 1 assets using quoted prices in active markets for identical assets. The Company reviews trading activity and pricing for Level 2 investments as of each measurement date. Level 2 inputs, which are obtained from various third-party data providers, represent quoted prices for similar assets in active markets and were derived from observable market data, or, if not directly observable, were derived from or corroborated by other observable market data. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Assets Measured at Fair Value on a Recurring Basis | The following table summarizes the Company’s financial assets measured at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy as described above (in thousands): June 30, 2023 Total Level 1 Level 2 Level 3 Financial Assets: Cash equivalents: U.S. Treasury money market funds $ 27,429 $ 27,429 $ — $ — Marketable securities: U.S. Treasury securities 15,951 15,951 — — Commercial paper 75,544 — 75,544 — U.S. agency bonds 116,985 — 116,985 — Total $ 235,909 $ 43,380 $ 192,529 $ — December 31, 2022 Total Level 1 Level 2 Level 3 Financial Assets: Cash equivalents: U.S. Treasury money market funds $ 38,745 $ 38,745 $ — $ — Marketable securities: U.S. Treasury securities 40,141 40,141 — — Commercial paper 117,478 — 117,478 — Corporate debt securities 1,978 — 1,978 — U.S. agency bonds 76,508 — 76,508 — Total $ 274,850 $ 78,886 $ 195,964 $ — |
Available-for-Sale Securities (
Available-for-Sale Securities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Available-For-Sale Securities Recorded in Cash and Cash Equivalents or Marketable Securities | The following table is a summary of available-for-sale securities recorded in cash and cash equivalents or marketable securities in the Company’s condensed consolidated balance sheets (in thousands): June 30, 2023 Amortized Cost Unrealized Unrealized Fair Value Cash equivalents: U.S. Treasury money market funds $ 27,429 $ — $ — $ 27,429 Marketable securities: U.S. Treasury securities 16,076 — ( 125 ) 15,951 Commercial paper 75,708 2 ( 166 ) 75,544 U.S. agency bonds 117,265 2 ( 282 ) 116,985 Total available-for-sale securities $ 236,478 $ 4 $ ( 573 ) $ 235,909 Cash 680 Total cash, cash equivalent and marketable securities $ 236,589 December 31, 2022 Amortized Cost Unrealized Unrealized Fair Value Cash equivalents: U.S. Treasury money market funds $ 38,745 $ — $ — $ 38,745 Marketable securities: U.S. Treasury securities 40,340 — ( 199 ) 40,141 Commercial paper 117,855 2 ( 379 ) 117,478 Corporate debt securities 1,978 — — 1,978 U.S. agency bonds 76,610 56 ( 158 ) 76,508 Total available-for-sale securities $ 275,528 $ 58 $ ( 736 ) $ 274,850 Cash 1,711 Total cash, cash equivalent and marketable securities $ 276,561 The Company has no t recognized an allowance for credit losses on any securities in an unrealized loss position a |
Summary of Gross Unrealized Losses and Fair Value by Major Security Type for Available-For-Sale Securities in Unrealized Loss Position | The following table displays additional information regarding gross unrealized losses and fair value by major security type for available-for-sale securities in an unrealized loss position as of June 30, 2023 and December 31, 2022 (in thousands): June 30, 2023 Less than 12 consecutive months 12 months or greater Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Treasury securities $ 6,393 $ ( 30 ) $ 9,558 $ ( 95 ) Commercial paper 64,610 ( 166 ) — — U.S. agency bonds 110,538 ( 282 ) — — Total $ 181,541 $ ( 478 ) $ 9,558 $ ( 95 ) December 31, 2022 Less than 12 consecutive months 12 months or greater Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Treasury securities $ 33,782 $ ( 196 ) $ 6,359 $ ( 3 ) Commercial paper 112,706 ( 379 ) — — Corporate debt securities 1,978 — — — U.S. agency bonds 33,942 ( 147 ) 5,490 ( 11 ) Total $ 182,408 $ ( 722 ) $ 11,849 $ ( 14 ) |
Summary of Amortized Cost and Estimated Fair Value of Available-for-sale Securities by Contractual Maturity | As of June 30, 2023, the amortized cost and estimated fair value of the Company’s available-for-sale securities by contractual maturity are shown below (in thousands): Amortized Estimated Available-for-sale securities maturing in: Cost Fair Value One year or less $ 226,825 $ 226,351 One to two years 9,653 9,558 Total available-for-sale securities $ 236,478 $ 235,909 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Prepaid Expenses | Prepaid expenses consisted of the following (in thousands): June 30, December 31, Advance for clinical-related costs, current $ 4,523 $ 6,760 License, dues and subscription 678 376 Insurance 172 741 Others 609 364 Total prepaid expenses $ 5,982 $ 8,241 |
Property and Equipment, Net | Property and equipment consisted of the following (in thousands): June 30, December 31, Leasehold improvements $ 3,551 $ 3,366 Furniture, laboratory and office equipment 5,832 4,423 Computer equipment 353 244 Total property and equipment 9,736 8,033 Less accumulated depreciation and amortization ( 5,070 ) ( 4,602 ) Property and equipment, net $ 4,666 $ 3,431 |
Other Assets | Other assts consisted of the following (in thousands): June 30, December 31, Advance for clinical related costs, non-current $ 5,696 $ — Deposits for operating lease 674 674 Others 192 — Total other assets $ 6,562 $ 674 |
Accrued and Other Current Liabilities | Accrued liabilities consisted of the following (in thousands): June 30, December 31, Accrued clinical costs $ 4,426 $ 1,007 Accrued preclinical and research costs 1,792 1,368 Accrued employee-related costs 1,926 3,260 Accrued professional services 141 53 Other 178 265 Total accrued liabilities $ 8,463 $ 5,953 |
Lease (Tables)
Lease (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Details of Right-of-Use Assets and Lease Liabilities | Information related to the Company’s ROU asset and related lease liabilities were as follows (in thousands): Three months ended Six months ended Cash paid for operating lease liabilities $ 631 $ 1,236 Operating lease costs 866 1,732 Variable lease costs 387 735 Maturities of lease liabilities as of June 30, 2023 were as follows: Less than 12 months $ 3,828 13 - 24 months 3,957 25 - 36 months 4,095 37 - 48 months 347 Total undiscounted lease payments 12,227 Less: imputed interest ( 2,032 ) Total lease liabilities $ 10,195 Operating lease liabilities, current $ 2,782 Operating lease liabilities, noncurrent 7,413 Total operating lease liabilities $ 10,195 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Balance | The components of the long-term debt balance are as follows: June 30, December 31, Principal loan balance $ 10,000 $ 10,000 Unamortized debt discount and issuance costs ( 292 ) ( 342 ) Cumulative accretion of final fee 244 176 Long-term debt, net $ 9,952 $ 9,834 |
Schedule of Estimated Future Principal Payments | As of June 30, 2023, the estimated future principal payments due were as follows: Years Ending December 31, 2023 $ — 2024 — 2025 5,217 2026 4,783 Total $ 10,000 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Activity under Stock Option Plans and Related Information | The following table summarizes activity under the Company’s stock option plans and related information (in thousands, except share and per share amounts): Number of Weighted Weighted Aggregate Outstanding as of December 31, 2022 9,684,810 $ 8.12 7.6 $ 15,407 Options granted 4,043,994 $ 5.91 Options exercised ( 106,921 ) $ 2.00 $ 302 Options cancelled/forfeited ( 659,878 ) $ 9.16 Outstanding as of June 30, 2023 12,962,005 $ 7.43 7.8 $ 489 Vested and exercisable as of June 30, 2023 6,151,141 $ 7.19 6.5 $ 489 |
Summary of RSU Activity | Number of RSUs Outstanding Weighted Average Grant-Date Fair Price Outstanding as of December 31, 2022 434,790 $ 9.80 RSUs granted 81,619 $ 6.84 RSUs vested ( 13,989 ) $ 14.55 RSUs forfeited ( 68,809 ) $ 9.27 Outstanding as of June 30, 2023 433,611 $ 9.17 |
Stock-Based Compensation Expense Recognized | Total stock-based compensation expense recognized by function was as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Research and development $ 2,013 $ 1,595 $ 4,281 $ 2,918 General and administrative 2,007 1,703 4,002 3,484 Total stock-based compensation expense $ 4,020 $ 3,298 $ 8,283 $ 6,402 |
Fair Value of Employee Stock Options Granted is Calculated Using Black Scholes Option Pricing Model with Range of Assumptions | The fair value of the stock options granted is calculated using the Black-Scholes option-pricing model with the following range of assumptions: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Expected term (years) 5.5 - 6.1 5.5 - 6.0 5.5 - 6.1 5.3 - 6.0 Expected volatility 88.0 - 88.3 % 84.3 - 88.4 % 87.8 - 88.3 % 84.3 - 88.4 % Risk-free interest rate 3.5 - 3.9 % 2.8 - 3.2 % 3.5 - 4.3 % 1.6 - 3.2 % Expected dividend yield — — — — |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Calculation of Basic and Diluted Net Loss per Share | The following table sets forth the calculation of basic and diluted net loss per share during the periods presented (in thousands, except share and per share data): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Numerator: Net loss $ ( 24,308 ) $ ( 16,187 ) $ ( 46,507 ) $ ( 32,211 ) Denominator: Weighted-average shares of common stock outstanding 72,461,850 64,279,634 72,395,410 62,465,092 Net loss per share, basic and diluted $ ( 0.34 ) $ ( 0.25 ) $ ( 0.64 ) $ ( 0.52 ) |
Anti-dilutive Outstanding Shares of Common Stock Equivalents Excluded from Computation of Diluted Net Loss per Share | The following outstanding shares of common stock equivalents were excluded from the computation of the diluted net loss per share for the periods presented because their effect would have been anti-dilutive: Three and Six Months Ended 2023 2022 Stock options to purchase common stock 12,962,005 9,206,327 Restricted stock units subject to future vesting 433,611 41,935 Total 13,395,616 9,248,262 |
Organization and Description _2
Organization and Description of the Business - Additional Information (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 6 Months Ended | 19 Months Ended | |
Dec. 31, 2021 USD ($) | Jun. 30, 2023 USD ($) Segment shares | Jun. 30, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) | |
Organization And Description Of Business [Line Items] | ||||
Number of operating segments | Segment | 1 | |||
Accumulated deficit | $ 295,400 | $ 295,400 | $ 248,893 | |
ATM Agreement | ||||
Organization And Description Of Business [Line Items] | ||||
Issuance of common stock | shares | 0 | |||
ATM Agreement | Cowen and Company LLC | ||||
Organization And Description Of Business [Line Items] | ||||
Percentage of commission on gross sales proceeds of issuance of common stock | 3% | |||
Weighted average purchase price, per share | $ / shares | $ 10.98 | |||
Remaining amount with sales agreement | $ 68,300 | $ 68,300 | ||
Issuance of common stock | shares | 11,986,003 | |||
Net proceeds from the public offering | $ 131,700 | |||
Minimum | ||||
Organization And Description Of Business [Line Items] | ||||
Sufficient cash and cash equivalents available period term | 12 months | |||
Maximum | ATM Agreement | Cowen and Company LLC | ||||
Organization And Description Of Business [Line Items] | ||||
Common stock aggregate offering price | $ 200,000 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Assets Measured at Fair Value on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Financial Assets | $ 235,909 | $ 274,850 |
Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Financial Assets | 43,380 | 78,886 |
Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Financial Assets | 192,529 | 195,964 |
U.S. Treasury Money Market Funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Financial Assets | 27,429 | 38,745 |
U.S. Treasury Money Market Funds | Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Financial Assets | 27,429 | 38,745 |
U.S. Treasury Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Financial Assets | 15,951 | 40,141 |
U.S. Treasury Securities | Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Financial Assets | 15,951 | 40,141 |
Commercial paper | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Financial Assets | 75,544 | 117,478 |
Commercial paper | Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Financial Assets | 75,544 | 117,478 |
Corporate debt securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Financial Assets | 1,978 | |
Corporate debt securities | Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Financial Assets | 1,978 | |
U.S. agency bonds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Financial Assets | 116,985 | 76,508 |
U.S. agency bonds | Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Financial Assets | $ 116,985 | $ 76,508 |
Available-for-Sale Securities -
Available-for-Sale Securities - Summary of Available-For-Sale Securities Recorded in Cash and Cash Equivalents or Marketable Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total available-for-sale securities, Amortized Cost | $ 236,478 | |
Fair Value | 235,909 | |
Fair Value, Measurements, Recurring | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total available-for-sale securities, Amortized Cost | 236,478 | $ 275,528 |
Unrealized Gains | 4 | 58 |
Unrealized Losses | (573) | (736) |
Fair Value | 235,909 | 274,850 |
Cash | 680 | 1,711 |
Total cash, cash equivalent and marketable securities | 236,589 | 276,561 |
Fair Value, Measurements, Recurring | U.S. Treasury Money Market Funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total available-for-sale securities, Amortized Cost | 27,429 | 38,745 |
Fair Value | 27,429 | 38,745 |
Fair Value, Measurements, Recurring | U.S. Treasury Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total available-for-sale securities, Amortized Cost | 16,076 | 40,340 |
Unrealized Losses | (125) | (199) |
Fair Value | 15,951 | 40,141 |
Fair Value, Measurements, Recurring | Commercial paper | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total available-for-sale securities, Amortized Cost | 75,708 | 117,855 |
Unrealized Gains | 2 | 2 |
Unrealized Losses | (166) | (379) |
Fair Value | 75,544 | 117,478 |
Fair Value, Measurements, Recurring | Corporate debt securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total available-for-sale securities, Amortized Cost | 1,978 | |
Fair Value | 1,978 | |
Fair Value, Measurements, Recurring | U.S. agency bonds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total available-for-sale securities, Amortized Cost | 117,265 | 76,610 |
Unrealized Gains | 2 | 56 |
Unrealized Losses | (282) | (158) |
Fair Value | $ 116,985 | $ 76,508 |
Available-for-Sale Securities_2
Available-for-Sale Securities - Additional Information (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | ||
Allowance for credit losses on securities in unrealized loss position | $ 0 | $ 0 |
Sale of available-for-sale securities | $ 0 |
Available-for-Sale Securities_3
Available-for-Sale Securities - Summary of Gross Unrealized Losses and Fair Value by Major Security Type for Available-For-Sale Securities in Unrealized Loss Position (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair Value, Less than 12 months | $ 181,541 | $ 182,408 |
Unrealized Losses, Less than 12 months | (478) | (722) |
Fair Value, 12 months or greater | 9,558 | 11,849 |
Unrealized Losses, 12 months or greater | (95) | (14) |
U.S. Treasury Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair Value, Less than 12 months | 6,393 | 33,782 |
Unrealized Losses, Less than 12 months | (30) | (196) |
Fair Value, 12 months or greater | 9,558 | 6,359 |
Unrealized Losses, 12 months or greater | (95) | (3) |
Commercial paper | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair Value, Less than 12 months | 64,610 | 112,706 |
Unrealized Losses, Less than 12 months | (166) | (379) |
Corporate debt securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair Value, Less than 12 months | 1,978 | |
U.S. agency bonds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair Value, Less than 12 months | 110,538 | 33,942 |
Unrealized Losses, Less than 12 months | $ (282) | (147) |
Fair Value, 12 months or greater | 5,490 | |
Unrealized Losses, 12 months or greater | $ (11) |
Available-for-Sale Securities_4
Available-for-Sale Securities - Summary of Amortized Cost and Estimated Fair Value of Available-for-sale Securities by Contractual Maturity (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Available-for-sale securities maturing, Amortized Cost: | |
In one year or less, Amortized Cost | $ 226,825 |
In one to two years, Amortized Cost | 9,653 |
Total available-for-sale securities, Amortized Cost | 236,478 |
Available-for-sale securities maturing, Estimated Fair Value: | |
In one year or less, Estimated Fair Value | 226,351 |
In one to two years, Estimated Fair Value | 9,558 |
Total available-for-sale securities, Estimated Fair Value | $ 235,909 |
Balance Sheet Components - Prep
Balance Sheet Components - Prepaid Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Prepaid Expense, Current [Abstract] | ||
Advance for clinical-related costs, current | $ 4,523 | $ 6,760 |
License, dues and subscription | 678 | 376 |
Insurance | 172 | 741 |
Others | 609 | 364 |
Total prepaid expenses | $ 5,982 | $ 8,241 |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment, Net (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Property Plant And Equipment [Line Items] | ||
Total property and equipment | $ 9,736 | $ 8,033 |
Less accumulated depreciation and amortization | (5,070) | (4,602) |
Property and equipment, net | 4,666 | 3,431 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 3,551 | 3,366 |
Furniture, Laboratory and Office Equipment | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 5,832 | 4,423 |
Computer Equipment | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | $ 353 | $ 244 |
Balance Sheet Components - Addi
Balance Sheet Components - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Depreciation expense | $ 0.2 | $ 0.2 | $ 0.5 | $ 0.5 |
Balance Sheet Components - Othe
Balance Sheet Components - Other Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Other Assets [Abstract] | ||
Advance for clinical related costs, non-current | $ 5,696 | $ 0 |
Deposits for operating lease | 674 | 674 |
Others | 192 | 0 |
Total other assets | $ 6,562 | $ 674 |
Balance Sheet Components - Accr
Balance Sheet Components - Accrued and Other Current Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued clinical costs | $ 4,426 | $ 1,007 |
Accrued preclinical and research costs | 1,792 | 1,368 |
Accrued employee-related costs | 1,926 | 3,260 |
Accrued professional services | 141 | 53 |
Other | 178 | 265 |
Total accrued liabilities | $ 8,463 | $ 5,953 |
Lease - Additional Information
Lease - Additional Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Nov. 01, 2022 | |
Operating lease liability | $ 10,195 | |
South San Francisco, California [Member] | ||
Operating lease, option to extend | July 31, 2026 | |
Operating lease liability | $ 8,000 |
Lease - Details of Right-of-Use
Lease - Details of Right-of-Use Assets and Lease Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | |
Lessee Disclosure [Abstract] | |||
Cash paid for operating lease liabilities | $ 631 | $ 1,236 | |
Operating lease costs | 866 | 1,732 | |
Variable lease costs | 387 | 735 | |
Less than 12 months | 3,828 | 3,828 | |
13 - 24 months | 3,957 | 3,957 | |
25 - 36 months | 4,095 | 4,095 | |
37 - 48 months | 347 | 347 | |
Total undiscounted lease payments | 12,227 | 12,227 | |
Less: imputed interest | (2,032) | (2,032) | |
Total lease liabilities | 10,195 | 10,195 | |
Operating lease liabilities, current | 2,782 | 2,782 | $ 2,565 |
Operating lease liabilities, noncurrent | 7,413 | 7,413 | $ 8,865 |
Total operating lease liabilities | $ 10,195 | $ 10,195 |
Debt - Additional Information (
Debt - Additional Information (Details) - Oxford Finance LLC $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2021 USD ($) Tranche | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | |
SOFR | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, additional interest rate | 0.10% | ||||
Loan and Security Agreement | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 50 | ||||
Number of tranches | Tranche | 5 | ||||
Line of credit facility, Maturity period | Nov. 01, 2026 | ||||
Line of credit facility frequency of payments | monthly interest-only payments | ||||
Line of credit facility, extension period | 1 year | ||||
Final payment fee percentage | 6.50% | ||||
Interest expense | $ 0.4 | $ 0.3 | $ 0.8 | $ 0.5 | |
Effective interest rate percentage | 11% | ||||
Loan and Security Agreement | Minimum | |||||
Debt Instrument [Line Items] | |||||
Prepayment fee percentage | 1% | ||||
Loan and Security Agreement | Maximum | |||||
Debt Instrument [Line Items] | |||||
Prepayment fee percentage | 2% | ||||
Loan and Security Agreement | Tranche One | |||||
Debt Instrument [Line Items] | |||||
Current borrowing capacity | $ 10 | ||||
Loan and Security Agreement | Equal To Sum Of A | Floor Rate | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, additional interest rate | 0.08% | ||||
Loan and Security Agreement | Equal To Sum Of B | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, interest rate | 7.87% |
Debt - Schedule of Long-term De
Debt - Schedule of Long-term Debt Balance (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
Principal loan balance | $ 10,000 | $ 10,000 |
Unamortized debt discount and issuance costs | (292) | (342) |
Cumulative accretion of final fee | 244 | 176 |
Long-term debt, net | $ 9,952 | $ 9,834 |
Debt - Schedule of Estimated Fu
Debt - Schedule of Estimated Future Principal Payments (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Debt Disclosure [Abstract] | |
2025 | $ 5,217 |
2026 | 4,783 |
Total | $ 10,000 |
Pre-Funded Warrants - Additiona
Pre-Funded Warrants - Additional Information (Details) - $ / shares | Jun. 30, 2023 | Apr. 30, 2023 | Jan. 31, 2023 | Dec. 31, 2022 |
Class Of Warrant Or Right [Line Items] | ||||
Pre funded warrants to purchase shares of common stock | 1,557,153 | 2,236,553 | ||
Pre funded warrants exercise price | $ 0.001 | $ 0.001 | ||
Pre-funded warrants, term | 20 years | |||
Pre-funded warrants outstanding | 0 | |||
Underwritten Public Offering | ||||
Class Of Warrant Or Right [Line Items] | ||||
Pre funded warrants to purchase shares of common stock | 3,793,706 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Mar. 31, 2023 | Jan. 01, 2023 | Dec. 31, 2022 | Jun. 30, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Stock options shares outstanding | 12,962,005 | 12,962,005 | 9,684,810 | |||||
Common stock, shares issued | 72,532,814 | 72,532,814 | 68,493,429 | |||||
Aggregate intrinsic value of exercised stock options | $ 24,000 | $ 302,000 | ||||||
Payments of dividends of common stock | $ 0 | |||||||
Expected dividend yield | 0% | 0% | 0% | 0% | ||||
Maximum | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Expected term | 6 years 1 month 6 days | 6 years | 6 years 1 month 6 days | 6 years | ||||
Minimum | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Expected term | 5 years 6 months | 5 years 6 months | 5 years 6 months | 5 years 3 months 18 days | ||||
ESPP | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Expected term | 6 months | |||||||
Employee options | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Unrecognized stock-based compensation cost | $ 39,500,000 | $ 39,500,000 | ||||||
Estimated weighted average amortization period | 2 years 9 months 18 days | |||||||
2022 Stock Inducement Plan | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Stock options shares outstanding | 1,313,000 | 1,313,000 | ||||||
Shares granted | 3,000,000 | |||||||
Shares available for future issuance | 1,687,000 | 1,687,000 | ||||||
2018 Equity Incentive Plan | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Stock options shares outstanding | 10,212,197 | 10,212,197 | ||||||
Shares available for future issuance | 1,499,142 | 1,499,142 | ||||||
Number of shares will increase automatically through every year on specified date | --01-01 | |||||||
Number of shares increase automatically continuing through maximum period | beginning on January 1, 2019 and continuing through and including January 1, 2028 | |||||||
Weighted average grant date fair value of options granted | $ 2.19 | $ 4.45 | ||||||
2018 Equity Incentive Plan | Common Stock | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Maximum number of shares authorized available for issuance | 1,600,692 | 1,600,692 | ||||||
Increase in number of shares reserved for issuance as percentage of total number of shares of capital stock outstanding on last date of preceding calendar year | 5% | |||||||
2018 Equity Incentive Plan | Maximum | Common Stock | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Maximum number of shares authorized available for issuance | 4,000,000 | 4,000,000 | ||||||
2018 Equity Incentive Plan | Incentive Stock Options | Maximum | Common Stock | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Maximum number of shares issued upon exercise of incentive stock options | 12,500,000 | 12,500,000 | ||||||
2018 Equity Incentive Plan | RSU Member | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Stock options shares outstanding | 433,611 | 433,611 | ||||||
Option grant vesting period | 3 years | |||||||
2015 Equity Incentive Plan | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Option grant vesting period | 4 years | |||||||
Options to purchase of common stock outstanding | 1,436,808 | 1,436,808 | ||||||
2015 Equity Incentive Plan | Maximum | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Options granted expiry period | 10 years | |||||||
2018 Employee Stock Purchase Plan | Common Stock | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Shares available for future issuance | 829,388 | 829,388 | 200,000 | |||||
Additional shares available for future issuance | 0 | |||||||
Common stock, shares issued | 503,836 | 503,836 | ||||||
Authorized an offering beginning period | Nov. 16, 2018 | |||||||
Authorized an offering ending period | May 15, 2019 | |||||||
Authorized an additional offering beginning period | May 16, 2023 | |||||||
2018 Employee Stock Purchase Plan | Maximum | Common Stock | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Percentage of annual increase in number of common stock shares | 1% | |||||||
Annual increase in number of common stock shares | 375,000 | |||||||
Option price per share of common stock at fair market value | 85% |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Activity under Stock Option Plans and Related Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |||
Number of options outstanding, Outstanding, Beginning balance | 9,684,810 | ||
Number of options outstanding, Options granted | 4,043,994 | ||
Number of options outstanding, Options exercised | (106,921) | ||
Number of Options outstanding, Options cancelled/forfeited | (659,878) | ||
Number of options outstanding, Outstanding, Ending balance | 12,962,005 | 12,962,005 | 9,684,810 |
Number of options outstanding, options vested and exercisable | 6,151,141 | 6,151,141 | |
Weighted average exercise price, Outstanding, Beginning balance | $ 8.12 | ||
Weighted average exercise price, Options granted | 5.91 | ||
Weighted average exercise price, Options exercised | 2 | ||
Weighted average exercise price, Options cancelled/forfeited | 9.16 | ||
Weighted average exercise price, Outstanding, Ending balance | $ 7.43 | 7.43 | $ 8.12 |
Weighted average exercise price, options vested and exercisable | $ 7.19 | $ 7.19 | |
Weighted average remaining contractual term, (Years) Outstanding balance | 7 years 9 months 18 days | 7 years 7 months 6 days | |
Weighted average remaining contractual term, (Years) options vested and exercisable | 6 years 6 months | ||
Aggregate intrinsic value, Outstanding, Beginning balance | $ 15,407 | ||
Aggregate intrinsic value, Options exercised | $ 24 | 302 | |
Aggregate intrinsic value, Outstanding, Ending balance | 489 | 489 | $ 15,407 |
Aggregate intrinsic value, options vested and exercisable | $ 489 | $ 489 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of RSU Activity (Details) | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Weighted average exercise price, Outstanding, Beginning balance | $ 8.12 |
Weighted average exercise price, Options cancelled/forfeited | 9.16 |
Weighted average exercise price, Outstanding, Ending balance | $ 7.43 |
RSU Member | 2018 Equity Incentive Plan | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of shares outstanding, beginning balance | shares | 434,790 |
Number of shares, granted | shares | 81,619 |
Number of shares, vested | shares | (13,989) |
Number of shares, forfeited | shares | (68,809) |
Number of shares outstanding, ending balance | shares | 433,611 |
Weighted average exercise price, Outstanding, Beginning balance | $ 9.8 |
Weighted average exercise price, granted | 6.84 |
Weighted Average Exercise Price, Vested | 14.55 |
Weighted average exercise price, Options cancelled/forfeited | 9.27 |
Weighted average exercise price, Outstanding, Ending balance | $ 9.17 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Expense Recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 4,020 | $ 3,298 | $ 8,283 | $ 6,402 |
Research and Development Expense | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 2,013 | 1,595 | 4,281 | 2,918 |
General and Administrative Expense | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 2,007 | $ 1,703 | $ 4,002 | $ 3,484 |
Stock-Based Compensation - Fair
Stock-Based Compensation - Fair Value of Stock Options Granted is Calculated Using Black Scholes Option Pricing Model with Range of Assumptions (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Expected volatility, Minimum | 88% | 84.30% | 87.80% | 84.30% |
Expected volatility, Maximum | 88.30% | 88.40% | 88.30% | 88.40% |
Risk-free interest rate, Minimum | 3.50% | 2.80% | 3.50% | 1.60% |
Risk-free interest rate, Maximum | 3.90% | 3.20% | 4.30% | 3.20% |
Expected dividend yield | 0% | 0% | 0% | 0% |
Minimum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Expected term (years) | 5 years 6 months | 5 years 6 months | 5 years 6 months | 5 years 3 months 18 days |
Maximum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Expected term (years) | 6 years 1 month 6 days | 6 years | 6 years 1 month 6 days | 6 years |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Operating Loss Carryforwards [Line Items] | |||||
Provision for income taxes | $ 0 | $ 0 | $ 0 | $ 0 | |
Income tax refunds received | $ 1,400,000 | ||||
Research and development tax credit utilized as reduction of payroll expenses | $ 79,000 | ||||
Research and development tax credit utilized against employer's portion of payroll tax | $ 250,000 | ||||
U S [Member] | |||||
Operating Loss Carryforwards [Line Items] | |||||
Research and development activities amortize period | 5 years | ||||
Non - U S [Member] | |||||
Operating Loss Carryforwards [Line Items] | |||||
Research and development activities amortize period | 15 years |
Net Loss Per Share - Calculatio
Net Loss Per Share - Calculation of Basic and Diluted Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Numerator: | ||||||
Net loss | $ (24,308) | $ (22,199) | $ (16,187) | $ (16,024) | $ (46,507) | $ (32,211) |
Denominator: | ||||||
Weighted-average shares of common stock outstanding | 72,461,850 | 64,279,634 | 72,395,410 | 62,465,092 | ||
Net loss per common share, Basic | $ (0.34) | $ (0.25) | $ (0.64) | $ (0.52) | ||
Net loss per common share, Diluted | $ (0.34) | $ (0.25) | $ (0.64) | $ (0.52) |
Net Loss Per Share - Anti-dilut
Net Loss Per Share - Anti-dilutive Outstanding Shares of Common Stock Equivalents Excluded from Computation of Diluted Net Loss per Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of diluted net loss per share | 13,395,616 | 9,248,262 | 13,395,616 | 9,248,262 |
Stock Options to Purchase Common Stock [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of diluted net loss per share | 12,962,005 | 9,206,327 | 12,962,005 | 9,206,327 |
Restricted Stock Units Subject to Future Vesting [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of diluted net loss per share | 433,611 | 41,935 | 433,611 | 41,935 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2023 | Jun. 30, 2023 | |
Related Party Transaction [Line Items] | ||
Advisor agreement, effective date | Apr. 22, 2023 | |
Compensation expense | $ 96,000 | $ 96,000 |
Director | ||
Related Party Transaction [Line Items] | ||
Consultant fee per month | $ 41,050 |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Details) - $ / shares | Jul. 24, 2023 | Jun. 30, 2023 | Dec. 31, 2022 |
Subsequent Event [Line Items] | |||
Stock options shares outstanding | 12,962,005 | 9,684,810 | |
Subsequent Event | 2018 Plan | |||
Subsequent Event [Line Items] | |||
Modified exercise price | $ 2.28 | ||
Stock options shares outstanding | 9,904,755 | ||
Exercise prices, lower range | $ 2.44 | ||
Exercise prices, upper range | $ 22.85 |