COVER
COVER - shares | 3 Months Ended | |
Mar. 31, 2021 | May 01, 2021 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-39593 | |
Entity Registrant Name | Shattuck Labs, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 81-2575858 | |
Entity Address, Address Line One | 500 W. 5th Street | |
Entity Address, Address Line Two | Suite 1200 | |
Entity Address, City or Town | Austin | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78701 | |
City Area Code | 512 | |
Local Phone Number | 900-4690 | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | STTK | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 41,904,619 | |
Entity Central Index Key | 0001680367 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Former Address | ||
Document Information [Line Items] | ||
Entity Address, Address Line One | 1018 W. 11th Street | |
Entity Address, Address Line Two | Suite 100 | |
Entity Address, City or Town | Austin | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78703 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 84,734 | $ 157,898 |
Short-term investments | 236,442 | 177,551 |
Prepaid expenses and other current assets | 9,901 | 10,190 |
Total current assets | 331,077 | 345,639 |
Property and equipment, net | 5,411 | 3,000 |
Other assets | 362 | 349 |
Total assets | 336,850 | 348,988 |
Current liabilities: | ||
Accounts payable | 2,995 | 1,754 |
Accrued expenses | 5,249 | 7,352 |
Deferred revenue | 9,659 | 7,728 |
Total current liabilities | 17,903 | 16,834 |
Deferred revenue, net of current portion | 18,088 | 21,306 |
Deferred rent | 2,197 | 987 |
Total liabilities | 38,188 | 39,127 |
Commitments and contingencies (Note 5) | ||
Stockholders' equity: | ||
Common stock, $0.0001 par value: 300,000,000 shares authorized; 41,792,726 and 41,779,183 shares issued and 41,786,011 and 41,767,431 shares outstanding at March 31, 2021 and December 31, 2020, respectively | 5 | 5 |
Additional paid-in capital | 383,223 | 382,012 |
Accumulated other comprehensive loss | (660) | (63) |
Accumulated deficit | (83,906) | (72,093) |
Total stockholders’ equity | 298,662 | 309,861 |
Total liabilities and stockholders’ equity | $ 336,850 | $ 348,988 |
BALANCE SHEETS - Parenthetical
BALANCE SHEETS - Parenthetical - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 41,792,726 | 41,779,183 |
Common stock, shares outstanding (in shares) | 41,786,011 | 41,767,431 |
STATEMENTS OF OPERATIONS AND CO
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Revenue from Contract with Customer, Product and Service [Extensible List] | us-gaap:LicenseMember | |
Collaboration revenue - related party | $ 2,270 | $ 2,976 |
Operating expenses: | ||
Research and development | 10,337 | 8,137 |
General and administrative | 4,356 | 1,600 |
Expense from operations | 14,693 | 9,737 |
Loss from operations | (12,423) | (6,761) |
Other income (expense): | ||
Interest income | 696 | 250 |
Other | (86) | (43) |
Total other income | 610 | 207 |
Net loss | (11,813) | (6,554) |
Unrealized gain (loss) on short-term investments | (597) | 61 |
Comprehensive loss | $ (12,410) | $ (6,493) |
Net loss per share – basic and diluted (in dollars per share) | $ (0.28) | $ (0.86) |
Weighted-average shares outstanding – basic and diluted (in shares) | 41,774,111 | 7,620,838 |
STATEMENTS OF CHANGES IN REDEEM
STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Series A Redeemable Convertible Preferred Stock | Series B Redeemable Convertible Preferred Stock |
Beginning balance (in shares) at Dec. 31, 2019 | 7,600,877 | ||||||
Beginning balance at Dec. 31, 2019 | $ (34,548) | $ 1 | $ 887 | $ 54 | $ (35,490) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Exercise of stock options (in shares) | 28,113 | ||||||
Exercise of stock options | 6 | 6 | |||||
Vesting of common stock previously subject to vesting requirements (in shares) | 5,037 | ||||||
Stock-based compensation expense | 174 | 174 | |||||
Unrealized gain (loss) on investments | 61 | 61 | |||||
Net loss | (6,554) | (6,554) | |||||
Ending balance (in shares) at Mar. 31, 2020 | 7,634,027 | ||||||
Ending balance at Mar. 31, 2020 | (40,861) | $ 1 | 1,067 | 115 | (42,044) | ||
Preferred stock, beginning balance (in shares) at Dec. 31, 2019 | 1,093,019 | 0 | |||||
Preferred stock, beginning balance at Dec. 31, 2019 | $ 49,064 | $ 0 | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Sale of Series B redeemable convertible preferred stock, net of issuance costs (in shares) | 550,571 | ||||||
Sale of Series B redeemable convertible preferred stock, net of issuance costs | $ 34,427 | ||||||
Preferred stock, ending balance (in shares) at Mar. 31, 2020 | 1,093,019 | 550,571 | |||||
Preferred stock, ending balance at Mar. 31, 2020 | $ 49,064 | $ 34,427 | |||||
Beginning balance (in shares) at Dec. 31, 2020 | 41,767,431 | ||||||
Beginning balance at Dec. 31, 2020 | $ 309,861 | $ 5 | 382,012 | (63) | (72,093) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Exercise of stock options (in shares) | 13,543 | 13,543 | |||||
Exercise of stock options | $ 31 | 31 | |||||
Vesting of common stock previously subject to vesting requirements (in shares) | 5,037 | ||||||
Stock-based compensation expense | 1,180 | 1,180 | |||||
Unrealized gain (loss) on investments | (597) | (597) | |||||
Net loss | (11,813) | (11,813) | |||||
Ending balance (in shares) at Mar. 31, 2021 | 41,786,011 | ||||||
Ending balance at Mar. 31, 2021 | $ 298,662 | $ 5 | $ 383,223 | $ (660) | $ (83,906) |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (11,813) | $ (6,554) |
Adjustments to reconcile net loss to net cash used in operations: | ||
Depreciation | 228 | 140 |
Stock-based compensation | 1,180 | 174 |
Accretion of short-term investments | 0 | (38) |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | 289 | 183 |
Other assets | (13) | 67 |
Accounts payable | 1,241 | (1,450) |
Accrued expenses | (2,102) | (221) |
Deferred revenue | (1,288) | (2,808) |
Deferred rent | 1,210 | 54 |
Net cash used in operating activities | (11,068) | (10,453) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (2,638) | (108) |
Sale and maturities of short-term investments | 14,996 | 9,545 |
Purchases of short-term investments | (74,485) | (2,739) |
Net cash (used in) provided by investing activities | (62,127) | 6,698 |
Cash flows from financing activities: | ||
Proceeds from the sale of Series B redeemable convertible preferred stock, net of issuance costs | 0 | 34,427 |
Exercise of stock options | 31 | 6 |
Net cash provided by financing activities | 31 | 34,433 |
Net increase (decrease) in cash and cash equivalents | (73,164) | 30,678 |
Cash and cash equivalents, beginning of period | 157,898 | 7,013 |
Cash and cash equivalents, end of period | $ 84,734 | $ 37,691 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business Shattuck Labs, Inc. (the “Company”) was incorporated in 2016 in the State of Delaware and is a clinical-stage biopharmaceutical company developing dual-sided fusion proteins, including its ARC ® and GADLEN ™ platforms, as novel classes of biologic medicines capable of multifunctional activity with potential applications in oncology and inflammatory diseases. Using its proprietary technology, the Company is building a pipeline of therapeutics, initially focused on the treatment of solid tumors and hematologic malignancies. The Company has two clinical-stage product candidates, SL-172154 and SL-279252, and has several compounds in preclinical development. Liquidity The Company has incurred losses and negative cash flows from operations since inception and has an accumulated deficit of $83.9 million as of March 31, 2021. The Company anticipates incurring additional losses and negative cash flows from operations until such time, if ever, that it can generate significant sales of its product candidates currently in development, and is highly dependent on its ability to find additional sources of funding in the form of licensing of its technology, collaboration agreements and/or public and private debt and equity financings. Adequate additional funding may not be available to the Company on acceptable terms, or at all. The failure to raise funds as and when needed could have a negative impact on the Company’s financial condition and ability to pursue its clinical operations, research and development and commercialization of its product candidates. Management believes that the Company’s cash and cash equivalents and short-term investments of $321.2 million as of March 31, 2021 are sufficient to fund projected operations of the Company through at least the end of 2024. COVID-19 Pandemic On March 10, 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. The virus and actions taken to mitigate its spread have had, and are expected to continue to have, a broad adverse impact on the economies and financial markets of many countries, including the geographical areas in which the Company operates and conducts its business and in which the Company’s partners operate and conduct their business. The Company is currently following the recommendations of local health authorities to minimize exposure risk for its team members and visitors. However, the scale and scope of this pandemic is unknown and the duration of the business disruption and related financial impact cannot be reasonably estimated at this time. While the Company has implemented specific business continuity plans to reduce the potential impact of COVID-19, there is no guarantee that the Company’s continuity plans will be successful. The Company has already experienced disruptions to its business such as work-from-home orders for offices and similar disruptions have occurred for its partners. Specifically, the outbreak has caused disruptions in its ability to manufacture clinical trial materials, including the acquisition of raw materials needed for such manufacturing, enrollment and treatment of patients in clinical trials in process, and slowdowns and shutdowns of the laboratories and other service providers that are being relied upon in the development of the Company’s product candidates. The extent to which the COVID-19 pandemic or any other health epidemic may impact the Company’s results will depend on future developments, which are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of COVID-19 and the actions to mitigate its impact, among others. Accordingly, the COVID-19 pandemic could have a material adverse effect on the Company’s business, results of operations and financial condition. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited interim financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Unaudited Interim Financial Statements In the opinion of management, the accompanying interim financial statements include all normal and recurring adjustments (which consist primarily of accruals, estimates and assumptions that impact the financial statements) considered necessary to present fairly the Company’s financial position, its results of operations, statements of changes in redeemable convertible preferred stock and stockholders’ equity (deficit) and cash flows for the interim periods presented. Operating results for interim periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. These interim financial statements, presented herein, do not contain all required disclosures under GAAP for annual financial statements. The accompanying unaudited interim financial statements should be read in conjunction with the annual audited financial statements and related notes in our Annual Report on Form 10-K for the year ended December 31, 2020. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, revenue recognition, the accrual of research and development expenses, and the valuation of stock-based awards. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates, if any, are recorded in the period in which they become known and actual results could differ from management’s estimates. Fair Value of Financial Instruments Fair value is defined as the price that would be received upon the sale of an asset or paid upon the transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. Fair value measurements are classified and disclosed in one of the following categories: • Level 1: Observable inputs such as quoted prices in active markets for identical assets the reporting entity has the ability to access as of the measurement date; • Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and • Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Fair value measurements are classified based on the lowest level of input that is significant to the measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of the assets and liabilities and their placement within the fair value hierarchy levels. The determination of the fair values stated below takes into account the market for its financial assets and liabilities, the associated credit risk and other factors as required. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Management believes that the carrying amounts of the Company’s financial instruments, including short-term investments and accounts payable, approximate fair value due to the short-term nature of those instruments. Concentration of Risk Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of cash, cash equivalents and short-term investments. The Company maintains its cash and cash equivalents at one accredited financial institution in amounts that exceed federally-insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. The Company invests in only highly-rated debt securities that management believes protects the Company from risk of default and impairment of value. All of the Company’s revenue is derived from its collaboration agreement with Millennium Pharmaceuticals, Inc., a wholly-owned subsidiary of Takeda Pharmaceutical Company Limited (“Takeda”) (see Note 8). The Company is highly dependent on a single third-party contract manufacturing organization (“CMO”) to supply drug products for its research and development activities of its programs, including clinical trials and non- clinical studies. These programs could be adversely affected by a significant interruption in the supply of such drug products. The Company is highly dependent on two contract research organizations (“CROs”) and a limited number of third-party service providers to manage and support its clinical trials. These programs could be adversely affected by a significant disruption in services provided by these CROs and third parties. Cash and Cash Equivalents The Company considers all demand deposits with financial institutions and all highly liquid investments with original maturities of 90 days or less at the date of purchase to be cash and cash equivalents. Cash and cash equivalents consisted of $4.6 million held in operating accounts, $20.1 million held in money market funds and $60.0 million held in government obligations as of March 31, 2021 and $2.7 million held in operating accounts, $80.2 million held in money market funds and $75.0 million held in government obligations as of December 31, 2020. Short-Term Investments Short-term investments consist of highly-rated debt securities and U.S. Treasury and corporate entity commercial paper with maturities of more than three months but less than one year at the date of purchase. The Company classifies its short-term investments at the time of purchase as available-for-sale securities. Available-for-sale securities are carried at fair value. Unrealized gains and losses on available-for-sale securities are reported in accumulated other comprehensive income, a component of stockholders’ equity, until realized. The Company adopted ASU 2016-13, Measurement of Credit Losses on Financial Instruments , on January 1, 2020, which amended its accounting for available-for-sale debt securities. Credit impairments are recorded through an allowance rather than a direct write-down of the security and are recorded through a charge to the statements of operations. Unrealized gains or losses not related to credit impairments are recorded in accumulated other comprehensive income, a component of stockholders' equity, until realized. The Company reviews available-for-sale debt securities for impairments related to credit losses and other factors each quarter. As of March 31, 2021, the unrealized losses were not material. Deferred Offering Costs The Company capitalizes certain legal, accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs will be recorded against gross proceeds. Series A, Series B and Series B-1 Redeemable Convertible Preferred Stock The Company records shares of redeemable convertible preferred stock at their respective fair values on the date of issuance, net of issuance costs. The redeemable convertible preferred stock is recorded outside of stockholders’ equity on the balance sheet because the shares contain liquidation features that are not solely within the Company’s control. Upon the completion of the Company's initial public offering (“IPO”) in the fourth quarter of 2020, all outstanding shares of the Company's redeemable convertible preferred stock were converted into common stock. See Note 6 for a discussion of the redeemable convertible preferred stock. Revenue Recognition Collaboration revenue is recognized in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). Arrangements with collaborators may include licenses to intellectual property, research and development services, manufacturing services for clinical and commercial supply and participation on joint steering committees. The Company evaluates the promised goods or services in the contract to determine which promises, or group of promises, represent performance obligations. In contemplation of whether a promised good or service meets the criteria required of a performance obligation, the Company considers the stage of development of the underlying intellectual property, the capabilities and expertise of the customer relative to the underlying intellectual property and whether the promised goods or services are integral to or dependent on other promises in the contract. When accounting for an arrangement that contains multiple performance obligations, the Company must develop judgmental assumptions, which may include market conditions, reimbursement rates for personnel costs, development timelines and probabilities of regulatory success to determine the stand-alone selling price for each performance obligation identified in the contract. Upon the amendment of an existing agreement, the Company evaluates whether the amendment represents a modification to an existing contract which would be recorded through a cumulative catch-up to revenue, or a separate contract. If it is determined that it is a separate contract, the Company will evaluate the necessary revenue recognition through the five-step process described below. When the Company concludes that a contract should be accounted for as a combined performance obligation and recognized over time, the Company must then determine the period over which revenue should be recognized and the method by which to measure revenue. The Company generally recognizes revenue using a cost-based input method. The Company recognizes collaboration revenue when its customer or collaborator obtains control of promised goods or services, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the following five steps are performed: i. identify the contract(s) with a customer; ii. identify the performance obligations in the contract; iii. determine the transaction price; iv. allocate the transaction price to the performance obligations within the contract; and v. recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it determines that it is probable it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within the contract to determine whether each promised good or service is a performance obligation. The promised goods or services in the Company’s arrangements may consist of a license, or options to license, the Company’s intellectual property and research, development and manufacturing services. The Company may provide options to additional items in such arrangements, which are accounted for as separate contracts when the customer elects to exercise such options, unless the option provides a material right to the customer. Performance obligations are promises in a contract to transfer a distinct good or service to the customer that (i) the customer can benefit from on its own or together with other readily available resources, and (ii) is separately identifiable from other promises in the contract. Goods or services that are not individually distinct performance obligations are combined with other promised goods or services until such combined group of promises meet the requirements of a performance obligation. The Company determines transaction price based on the amount of consideration the Company expects to receive for transferring the promised goods or services in the contract. Consideration may be fixed, variable or a combination of both. At contract inception for arrangements that include variable consideration, the Company estimates the probability and extent of consideration it expects to receive under the contract utilizing either the most-likely amount method or expected amount method, whichever best estimates the amount expected to be received. The Company then considers any constraints on the variable consideration and includes variable consideration in the transaction price to the extent it is deemed probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company then allocates the transaction price to each performance obligation based on the relative standalone selling price and recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) control is transferred to the customer and the performance obligation is satisfied. For performance obligations which consist of licenses and other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The Company records amounts as accounts receivable when the right to consideration is deemed unconditional. When consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a contract, a contract liability is recorded as deferred revenue. Amounts received prior to satisfying the revenue recognition criteria are recognized as deferred revenue in the Company’s accompanying balance sheet. Deferred revenues expected to be recognized as revenue within the 12 months following the balance sheet date are classified as a current liability. Deferred revenues not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as non-current liabilities. The Company’s collaboration revenue arrangements may include the following: Up-front License Fees: If a license is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from nonrefundable, up-front fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Milestone Payments: At the inception of an agreement that includes research and development milestone payments, the Company evaluates each milestone to determine when and how much of the milestone to include in the transaction price. The Company first estimates the amount of the milestone payment that the Company could receive using either the expected value or the most-likely amount approach. The Company primarily uses the most-likely amount approach as that approach is generally most predictive for milestone payments with a binary outcome. The Company then considers whether any portion of that estimated amount is subject to the variable consideration constraint (that is, whether it is probable that a significant reversal of cumulative revenue would not occur upon resolution of the uncertainty). The Company updates the estimate of variable consideration included in the transaction price at each reporting date which includes updating the assessment of the likely amount of consideration and the application of the constraint to reflect current facts and circumstances. Royalties: For arrangements that include sales-based royalties, including milestone payments based on a level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not granted a development and commercialization license nor recognized any revenue related to sales-based royalties or milestone payments based on the level of sales. Research and Development Services: The Company will record costs associated with development and process optimization activities as research and development expenses in the statements of operations and comprehensive loss consistent with ASC 730, Research and Development. The Company considered the guidance in ASC 808, Collaborative Agreements and will recognize the payments received from these agreements as revenue when the related costs are incurred. Research and Development Costs Research and development cost are expensed as incurred, and include salaries, stock-based compensation and other personnel-related costs, equipment and supplies, depreciation, preclinical studies, clinical trials and manufacturing development activities. A substantial portion of the Company’s ongoing research and development activities are conducted by third-party service providers, including contract research and manufacturing organizations. The Company accrues for expenses resulting from obligations under agreements with CROs, CMOs and other outside service providers for which payment flows do not match the periods over which materials or services are provided to the Company. Accruals are recorded based on estimates of services received and efforts expended pursuant to agreements established with CROs, CMOs and other outside service providers. These estimates are typically based on contracted amounts applied to the proportion of work performed and determined through analysis with internal personnel and external service providers as to the progress or stage of completion of the services. In the event advance payments are made to a CRO, CMO or outside service provider, the payments will be recorded as a prepaid asset which will be amortized as the contracted services are performed. As actual costs become known, the Company adjusts its accruals and prepaid assets accordingly. Inputs, such as the services performed, the number of patients enrolled or the study duration, may vary from the Company’s estimates, resulting in adjustments to research and development expense in future periods. The Company makes significant judgements and estimates in determining the accrual and/or prepaid balance in each reporting period and changes in these estimates may result in material changes to the Company’s accruals that could materially affect the Company’s results of operations. Net Loss Per Share Basic loss per share of common stock is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during each period. Diluted loss per share of common stock includes the effect, if any, from the potential exercise or conversion of securities, such as redeemable convertible preferred stock, convertible notes, stock options and unvested shares of restricted stock, which would result in the issuance of incremental shares of common stock. For diluted net loss per share, the weighted-average number of shares of common stock is the same for basic net loss per share due to the fact that when a net loss exists, dilutive securities are not included in the calculation as the impact is anti-dilutive. The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive: Three Months Ended March 31, 2021 2020 Redeemable convertible preferred stock as converted to common stock — 11,258,514 Stock options 2,723,617 1,706,065 Unvested restricted stock 6,715 26,863 2,730,332 12,991,442 Other Comprehensive Income (Loss) Other comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Other comprehensive income (loss) is comprised of the net loss and unrealized gains and losses on short-term investments. Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2019-12, Income Taxes: Simplifying the Accounting for Income Taxes . The ASU removes certain exceptions to the general principles in ASC 740, Income Taxes and also clarifies and amends existing guidance to improve consistent application. This ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within that fiscal year, with early adoption permitted. The Company adopted this pronouncement effective January 2021 and it did not have a material impact on the financial statements or related disclosures. Recently Issued Accounting Pronouncements (not yet adopted) In February 2016, the FASB issued ASU No. 2016-02, Leases which requires a lessee to record a right-of-use asset and a corresponding lease liability on the |
Short-Term Investments
Short-Term Investments | 3 Months Ended |
Mar. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Short-Term Investments | Short-Term Investments The following table represents the Company’s available for sale short-term investments by major security type (amounts in thousands): March 31, 2021 Amortized Gross Unrealized Total Short-term investments U.S. government securities $ 237,102 $ (660) $ 236,442 Total short-term investments $ 237,102 $ (660) $ 236,442 December 31, 2020 Amortized Gross Unrealized Total Short-term investments U.S. government securities $ 177,614 $ (63) $ 177,551 Total short-term investments $ 177,614 $ (63) $ 177,551 The Company’s short-term investment instruments and cash and cash equivalents are classified using Level 1 inputs within the fair value hierarchy and are valued using quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. Debt securities as of March 31, 2021 have an average maturity of 0.61 years. |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses consisted of the following (amounts in thousands): March 31, December 31, Research and development contract costs $ 3,803 $ 5,382 Compensation and related benefits 877 1,551 Other 569 419 Total accrued expenses $ 5,249 $ 7,352 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Leases Future minimum payments, by year and in aggregate, under non-cancelable operating leases consist of the following as of March 31, 2021 (amounts in thousands): 2021 $ 702 2022 1,058 2023 1,089 2024 1,120 2025 1,152 Thereafter 2,814 Total minimum lease payments $ 7,935 In January 2021, the Company signed a lease for its new Austin office. The lease includes approximately 8,000 square feet and has an expiration date of 6 years from commencement, which is expected in the second quarter of 2021. Total rent payments are estimated to be $1.8 million over the lease term. Heat License Agreement In connection with a license agreement with Heat Biologics Inc. (“Heat”), the Company is required to make payments of up to $20.6 million in aggregate for the achievement of specified development, regulatory and commercial sales milestones for certain licensed products. The Company is required to pay Heat a percentage of upfront fees or other non-royalty payments not tied to milestone events that it receives in connection with certain sublicenses of the licensed patents. The Company is also required to pay Heat a royalty on all of its worldwide net sales, those of its affiliates, and sublicenses of certain licensed patents in the low single digits. The Company has not recorded a liability for the payments aforementioned given the achievement of specified development, regulatory and commercial sales milestones for certain licensed products is not probable as of the balance sheet date. Litigation From time to time, the Company may become involved in various legal actions arising in the ordinary course of business. As of March 31, 2021, management was not aware of any existing, pending or threatened legal actions that may have a material impact on the financial position, results of operations or cash flows of the Company. Contractual Obligations |
Preferred Stock
Preferred Stock | 3 Months Ended |
Mar. 31, 2021 | |
Temporary Equity Disclosure [Abstract] | |
Preferred Stock | Preferred Stock During the three months ended March 31, 2020, the Company entered into various stock purchase agreements with new and existing investors pursuant to which the Company sold an aggregate 550,571 shares of Series B redeemable convertible preferred stock at $62.88051 per share for aggregate proceeds of $34.6 million. The Company's Series A, Series B and Series B-1 redeemable convertible preferred stock converted into common stock upon the completion of the Company's IPO and the rights, preferences and terms are no longer applicable. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation 2020 Equity Incentive Plan In September 2020, the Company adopted the 2020 Stock Incentive Plan (the “2020 Plan”) which, as of the adoption date, replaced the 2016 Stock Incentive Plan. Under the 2020 Plan, the share reserve automatically increases on January 1st of each year beginning in 2021 and ending with a final increase on January 1, 2030 in an amount equal to 4% of the Company's outstanding common shares on December 31st of the preceding calendar year. The Board of Directors may provide that there will be no increase in the share reserve for any such year or that the increase in the share reserve may be smaller than would otherwise occur. The Board of Directors authorized an increase of 445,809 shares available for issuance under the 2020 Plan effective as of January 1, 2021, and as of March 31, 2021 there were 4,170,263 shares available for future grants. The 2020 Plan permits the granting of options and restricted stock. The terms of the agreements under the 2020 Plan are determined by the Company’s Board of Directors. The Company’s awards vest based on the terms in the agreements and generally vest over four years and have a term of 10 years. 2020 Employee Stock Purchase Plan The 2020 Employee Stock Purchase Plan (“2020 ESPP”) became effective in connection with the Company's IPO. A total of 395,795 shares of common stock were reserved for issuance under the 2020 ESPP. Eligible employees may purchase shares of common stock under the 2020 ESPP at 85% of the lower of the fair market value of the Company’s common stock as of the first or the last day of each offering period. Employees are limited to contributing 15% of the employee’s eligible compensation and may not purchase more than $25,000 of stock during any calendar year or more than 600 shares during any one purchase period. The share reserve automatically increases on January 1st of each calendar year, for ten years, commencing on January 1, 2021, in an amount equal to 1% of the total number of shares of common stock outstanding on December 31st of the preceding calendar year. The Board of Directors may act prior to January 1st of a given year to provide that there will be no January 1st increase of the share reserve for such year or that the increase in the share reserve for such year will be a smaller number of shares of common stock than would otherwise occur pursuant to the preceding sentence. The Company recorded stock-based compensation expense in the following expense categories of its accompanying unaudited interim statements of operations and comprehensive loss (amounts in thousands): Three Months Ended March 31, 2021 2020 Research and development $ 414 $ 111 General and administrative 766 63 Total stock-based compensation $ 1,180 $ 174 The following table summarizes option activity under the 2020 Plan and the 2016 Stock Incentive Plan: Options Weighted Average Exercise Price Weighted Average Remaining Contract Life (Years) Balance at January 1, 2021 2,742,022 $7.95 8.82 Granted 11,000 39.15 Exercised (13,543) 2.63 Forfeited (15,862) 17.30 Balance at March 31, 2021 2,723,617 $8.05 8.55 Vested and expected to vest 2,679,192 $7.96 8.54 Exercisable at the end of the period 1,024,982 $3.27 7.80 Options granted during the three months ended March 31, 2021 had a weighted-average grant-date fair value of $27.11. As of March 31, 2021, unrecognized compensation cost for options issued was $11.5 million, and will be recognized over an estimated weighted-average amortization period of 2.64 years. The aggregate intrinsic value of options outstanding and exercisable as of March 31, 2021 was $26.6 million. The fair value of each option is estimated on the date of grant using a Black-Scholes option pricing model which takes into account inputs such as the exercise price, the estimated fair value of the underlying common stock at grant date, expected term, expected stock price volatility, risk-free interest rate and dividend yield. The fair value of stock options was determined using the methods and assumptions discussed below. • The expected term of employee stock options with service-based vesting is determined using the “simplified” method, whereby the expected life equals the arithmetic average of the vesting term and the original contractual term of the option due to the Company’s lack of sufficient historical data. The expected term of nonemployee options is equal to the contractual term. • The expected stock price volatility is based on historical volatilities of comparable public entities within the Company’s industry. • The risk-free interest rate is based on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the expected term. • The expected dividend yield is 0% because the Company has not historically paid, and does not expect for the foreseeable future to pay a dividend on its common stock. • Prior to the Company’s IPO, its Board of Directors periodically estimated the fair value of the Company’s common stock considering, among other things, contemporaneous valuations of its common stock prepared by an unrelated third-party valuation firm. Subsequent to the Company’s IPO, the shares are issued at no less than the market price on date of grant. The grant date fair value of each option grant was estimated throughout the three months ended March 31, 2021 using the Black-Scholes option-pricing model using the following weighted-average assumptions: Expected term - years 6.08 Expected volatility 81.14% Risk-free interest rate 1.00% Expected dividends — For accounting purposes, the restricted shares are considered the issuance of share-based payments as opposed to the sale of stock and as such, the Company has recognized compensation expense for these awards. 25% percent of the shares became immediately vested and the remaining shares vest monthly over 36 months so long as the grantee remains employed by or provides service to the Company. The following table summarizes the activity relating to these shares: Awards Outstanding at December 31, 2020 11,752 Vested (5,037) Outstanding at March 31, 2021 6,715 |
Collaboration Agreement - Relat
Collaboration Agreement - Related Party | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Collaboration Agreement - Related Party | Collaboration Agreement - Related Party In August 2017, the Company entered into a Collaboration Agreement with Takeda related to the development of certain ARC molecules, as amended in April 2018, October 2018 and March 2020 (the “Collaboration Agreement”). Under the Collaboration Agreement, the Company is responsible to use commercially reasonable efforts to further research and development of six molecules. At the end of the development term Takeda may elect (on a molecule-by-molecule basis) to license exclusively and obtain exclusive rights to undertake further clinical development and commercialization of up to four molecules. Additionally, Takeda was granted a right of first negotiation (“ROFN”) to enter into licenses for each molecule within a specified class of ARC molecules. The Company received cash of $1.2 million and none for the three months ended March 31, 2021 and 2020, respectively, from Takeda under the Collaboration Agreement and has recognized total aggregate revenue of $54.2 million through March 31, 2021 under the Collaboration Agreement. The Company assessed this arrangement in accordance with ASC 606 and concluded that the Collaboration Agreement had four distinct performance obligations representing the combination of research and development services and participation in a joint development committee associated with six molecules. The Company also concluded that since the option for the exclusive license is deemed to be at fair value, the option does not provide the customer with a material right; and should be accounted for if and when the option is exercised. Finally, the Company noted that the ROFN does not guarantee that Takeda can negotiate a license for molecules at prices that are below their respective standalone selling prices and further noted that if Takeda exercises the ROFN, the license fee will be negotiated at the standalone selling price for each molecule. The Company recognizes revenue for the allocated up-front payments using a cost-based input measure. In applying the cost-based input method of revenue recognition, the Company used actual costs incurred relative to budgeted costs expected to be incurred for the combined performance obligation. Revenue is recognized based on actual costs incurred as a percentage of total budgeted costs as the Company completes its performance obligation over the estimated service period. The Company recognizes revenue related to the reimbursable cost as they are incurred. |
Related-Party Transactions
Related-Party Transactions | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party Transactions As of December 31, 2020, Takeda held an approximate 5.0% ownership interest in the Company’s outstanding shares. Considering the resignation of the Takeda director and percent ownership as of December 31, 2020, the Company no longer considers Takeda a related party. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events None. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Unaudited Interim Financial Statements | Basis of Presentation The accompanying unaudited interim financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Unaudited Interim Financial Statements In the opinion of management, the accompanying interim financial statements include all normal and recurring adjustments (which consist primarily of accruals, estimates and assumptions that impact the financial |
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 amounts reported in the financial statements and accompanying notes. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, revenue recognition, the accrual of research and development expenses, and the valuation of stock-based awards. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates, if any, are recorded in the period in which they become known and actual results could differ from management’s estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received upon the sale of an asset or paid upon the transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. Fair value measurements are classified and disclosed in one of the following categories: • Level 1: Observable inputs such as quoted prices in active markets for identical assets the reporting entity has the ability to access as of the measurement date; • Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and • Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Fair value measurements are classified based on the lowest level of input that is significant to the measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of the assets and liabilities and their placement within the fair value hierarchy levels. The determination of the fair values stated below takes into account the market for its financial assets and liabilities, the associated credit risk and other factors as required. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Management believes that the carrying amounts of the Company’s financial instruments, including short-term investments and accounts payable, approximate fair value due to the short-term nature of those instruments. |
Concentration of Risk | Concentration of Risk Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of cash, cash equivalents and short-term investments. The Company maintains its cash and cash equivalents at one accredited financial institution in amounts that exceed federally-insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. The Company invests in only highly-rated debt securities that management believes protects the Company from risk of default and impairment of value. All of the Company’s revenue is derived from its collaboration agreement with Millennium Pharmaceuticals, Inc., a wholly-owned subsidiary of Takeda Pharmaceutical Company Limited (“Takeda”) (see Note 8). The Company is highly dependent on a single third-party contract manufacturing organization (“CMO”) to supply drug products for its research and development activities of its programs, including clinical trials and non- |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all demand deposits with financial institutions and all highly liquid investments with original maturities of 90 days or less at the date of purchase to be cash and cash equivalents. Cash and cash equivalents consisted of $4.6 million held in operating accounts, $20.1 million held in money market funds and $60.0 million held in government obligations as of March 31, 2021 and $2.7 million held in operating accounts, $80.2 million held in money market funds and $75.0 million held in government obligations as of December 31, 2020. |
Short-Term Investments | Short-Term Investments Short-term investments consist of highly-rated debt securities and U.S. Treasury and corporate entity commercial paper with maturities of more than three months but less than one year at the date of purchase. The Company classifies its short-term investments at the time of purchase as available-for-sale securities. Available-for-sale securities are carried at fair value. Unrealized gains and losses on available-for-sale securities are reported in accumulated other comprehensive income, a component of stockholders’ equity, until realized. The Company adopted ASU 2016-13, Measurement of Credit Losses on Financial Instruments , on January 1, 2020, which amended its accounting for available-for-sale debt securities. Credit impairments are recorded through an allowance rather than a direct write-down of the security and are recorded through a charge to the statements of operations. Unrealized gains or losses not related to credit impairments are recorded in accumulated other comprehensive income, a component of stockholders' equity, until realized. The Company reviews available-for-sale debt securities for impairments related to credit losses and other factors each quarter. As of March 31, 2021, the unrealized losses were not material. |
Deferred Offering Costs | Deferred Offering CostsThe Company capitalizes certain legal, accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs will be recorded against gross proceeds. |
Series A, Series B and Series B-1 Redeemable Convertible Preferred Stock | Series A, Series B and Series B-1 Redeemable Convertible Preferred Stock The Company records shares of redeemable convertible preferred stock at their respective fair values on the date of issuance, net of issuance costs. The redeemable convertible preferred stock is recorded outside of stockholders’ equity on the balance sheet because the shares contain liquidation features that are not solely within the Company’s control. Upon the completion of the Company's initial public offering (“IPO”) in the fourth quarter of 2020, all outstanding shares of the Company's redeemable convertible preferred stock were converted into common stock. See Note 6 for a discussion of the redeemable convertible preferred stock. |
Revenue Recognition | Revenue Recognition Collaboration revenue is recognized in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). Arrangements with collaborators may include licenses to intellectual property, research and development services, manufacturing services for clinical and commercial supply and participation on joint steering committees. The Company evaluates the promised goods or services in the contract to determine which promises, or group of promises, represent performance obligations. In contemplation of whether a promised good or service meets the criteria required of a performance obligation, the Company considers the stage of development of the underlying intellectual property, the capabilities and expertise of the customer relative to the underlying intellectual property and whether the promised goods or services are integral to or dependent on other promises in the contract. When accounting for an arrangement that contains multiple performance obligations, the Company must develop judgmental assumptions, which may include market conditions, reimbursement rates for personnel costs, development timelines and probabilities of regulatory success to determine the stand-alone selling price for each performance obligation identified in the contract. Upon the amendment of an existing agreement, the Company evaluates whether the amendment represents a modification to an existing contract which would be recorded through a cumulative catch-up to revenue, or a separate contract. If it is determined that it is a separate contract, the Company will evaluate the necessary revenue recognition through the five-step process described below. When the Company concludes that a contract should be accounted for as a combined performance obligation and recognized over time, the Company must then determine the period over which revenue should be recognized and the method by which to measure revenue. The Company generally recognizes revenue using a cost-based input method. The Company recognizes collaboration revenue when its customer or collaborator obtains control of promised goods or services, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the following five steps are performed: i. identify the contract(s) with a customer; ii. identify the performance obligations in the contract; iii. determine the transaction price; iv. allocate the transaction price to the performance obligations within the contract; and v. recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it determines that it is probable it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within the contract to determine whether each promised good or service is a performance obligation. The promised goods or services in the Company’s arrangements may consist of a license, or options to license, the Company’s intellectual property and research, development and manufacturing services. The Company may provide options to additional items in such arrangements, which are accounted for as separate contracts when the customer elects to exercise such options, unless the option provides a material right to the customer. Performance obligations are promises in a contract to transfer a distinct good or service to the customer that (i) the customer can benefit from on its own or together with other readily available resources, and (ii) is separately identifiable from other promises in the contract. Goods or services that are not individually distinct performance obligations are combined with other promised goods or services until such combined group of promises meet the requirements of a performance obligation. The Company determines transaction price based on the amount of consideration the Company expects to receive for transferring the promised goods or services in the contract. Consideration may be fixed, variable or a combination of both. At contract inception for arrangements that include variable consideration, the Company estimates the probability and extent of consideration it expects to receive under the contract utilizing either the most-likely amount method or expected amount method, whichever best estimates the amount expected to be received. The Company then considers any constraints on the variable consideration and includes variable consideration in the transaction price to the extent it is deemed probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company then allocates the transaction price to each performance obligation based on the relative standalone selling price and recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) control is transferred to the customer and the performance obligation is satisfied. For performance obligations which consist of licenses and other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The Company records amounts as accounts receivable when the right to consideration is deemed unconditional. When consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a contract, a contract liability is recorded as deferred revenue. Amounts received prior to satisfying the revenue recognition criteria are recognized as deferred revenue in the Company’s accompanying balance sheet. Deferred revenues expected to be recognized as revenue within the 12 months following the balance sheet date are classified as a current liability. Deferred revenues not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as non-current liabilities. The Company’s collaboration revenue arrangements may include the following: Up-front License Fees: If a license is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from nonrefundable, up-front fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Milestone Payments: At the inception of an agreement that includes research and development milestone payments, the Company evaluates each milestone to determine when and how much of the milestone to include in the transaction price. The Company first estimates the amount of the milestone payment that the Company could receive using either the expected value or the most-likely amount approach. The Company primarily uses the most-likely amount approach as that approach is generally most predictive for milestone payments with a binary outcome. The Company then considers whether any portion of that estimated amount is subject to the variable consideration constraint (that is, whether it is probable that a significant reversal of cumulative revenue would not occur upon resolution of the uncertainty). The Company updates the estimate of variable consideration included in the transaction price at each reporting date which includes updating the assessment of the likely amount of consideration and the application of the constraint to reflect current facts and circumstances. Royalties: For arrangements that include sales-based royalties, including milestone payments based on a level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not granted a development and commercialization license nor recognized any revenue related to sales-based royalties or milestone payments based on the level of sales. Research and Development Services: The Company will record costs associated with development and process optimization activities as research and development expenses in the statements of operations and comprehensive loss consistent with ASC 730, Research and Development. The Company considered the guidance in ASC 808, Collaborative Agreements |
Research and Development Costs | Research and Development Costs Research and development cost are expensed as incurred, and include salaries, stock-based compensation and other personnel-related costs, equipment and supplies, depreciation, preclinical studies, clinical trials and manufacturing development activities. A substantial portion of the Company’s ongoing research and development activities are conducted by third-party service providers, including contract research and manufacturing organizations. The Company accrues for expenses resulting from obligations under agreements with CROs, CMOs and other outside service providers for which payment flows do not match the periods over which materials or services are provided to the Company. Accruals are recorded based on estimates of services received and efforts expended pursuant to agreements established with CROs, CMOs and other outside service providers. These estimates are typically based on contracted amounts applied to the proportion of work performed and determined through analysis with internal |
Net Loss Per Share | Net Loss Per Share Basic loss per share of common stock is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during each period. Diluted loss per share of common stock includes the effect, if any, from the potential exercise or conversion of securities, such as redeemable convertible preferred stock, convertible notes, stock options and unvested shares of restricted stock, which would result in the issuance of incremental shares of common stock. For diluted net loss per share, the weighted-average number of shares of common stock is the same for basic net loss per share due to the fact that when a net loss exists, dilutive securities are not included in the calculation as the impact is anti-dilutive. The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive: Three Months Ended March 31, 2021 2020 Redeemable convertible preferred stock as converted to common stock — 11,258,514 Stock options 2,723,617 1,706,065 Unvested restricted stock 6,715 26,863 2,730,332 12,991,442 |
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) Other comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Other comprehensive income (loss) is comprised of the net loss and unrealized gains and losses on short-term investments. |
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements (not yet adopted) | Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2019-12, Income Taxes: Simplifying the Accounting for Income Taxes . The ASU removes certain exceptions to the general principles in ASC 740, Income Taxes and also clarifies and amends existing guidance to improve consistent application. This ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within that fiscal year, with early adoption permitted. The Company adopted this pronouncement effective January 2021 and it did not have a material impact on the financial statements or related disclosures. Recently Issued Accounting Pronouncements (not yet adopted) In February 2016, the FASB issued ASU No. 2016-02, Leases which requires a lessee to record a right-of-use asset and a corresponding lease liability on the |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of antidilutive securities excluded from computation of net loss per share | The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive: Three Months Ended March 31, 2021 2020 Redeemable convertible preferred stock as converted to common stock — 11,258,514 Stock options 2,723,617 1,706,065 Unvested restricted stock 6,715 26,863 2,730,332 12,991,442 |
Short-Term Investments (Tables)
Short-Term Investments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of available for sale short-term investments | The following table represents the Company’s available for sale short-term investments by major security type (amounts in thousands): March 31, 2021 Amortized Gross Unrealized Total Short-term investments U.S. government securities $ 237,102 $ (660) $ 236,442 Total short-term investments $ 237,102 $ (660) $ 236,442 December 31, 2020 Amortized Gross Unrealized Total Short-term investments U.S. government securities $ 177,614 $ (63) $ 177,551 Total short-term investments $ 177,614 $ (63) $ 177,551 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses | Accrued expenses consisted of the following (amounts in thousands): March 31, December 31, Research and development contract costs $ 3,803 $ 5,382 Compensation and related benefits 877 1,551 Other 569 419 Total accrued expenses $ 5,249 $ 7,352 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum rental payments for operating leases | Future minimum payments, by year and in aggregate, under non-cancelable operating leases consist of the following as of March 31, 2021 (amounts in thousands): 2021 $ 702 2022 1,058 2023 1,089 2024 1,120 2025 1,152 Thereafter 2,814 Total minimum lease payments $ 7,935 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock-based compensation expense | The Company recorded stock-based compensation expense in the following expense categories of its accompanying unaudited interim statements of operations and comprehensive loss (amounts in thousands): Three Months Ended March 31, 2021 2020 Research and development $ 414 $ 111 General and administrative 766 63 Total stock-based compensation $ 1,180 $ 174 |
Schedule of option activity | The following table summarizes option activity under the 2020 Plan and the 2016 Stock Incentive Plan: Options Weighted Average Exercise Price Weighted Average Remaining Contract Life (Years) Balance at January 1, 2021 2,742,022 $7.95 8.82 Granted 11,000 39.15 Exercised (13,543) 2.63 Forfeited (15,862) 17.30 Balance at March 31, 2021 2,723,617 $8.05 8.55 Vested and expected to vest 2,679,192 $7.96 8.54 Exercisable at the end of the period 1,024,982 $3.27 7.80 |
Schedule of valuation assumptions | The grant date fair value of each option grant was estimated throughout the three months ended March 31, 2021 using the Black-Scholes option-pricing model using the following weighted-average assumptions: Expected term - years 6.08 Expected volatility 81.14% Risk-free interest rate 1.00% Expected dividends — |
Schedule of restricted stock activity | Awards Outstanding at December 31, 2020 11,752 Vested (5,037) Outstanding at March 31, 2021 6,715 |
Organization and Description _2
Organization and Description of Business (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accumulated deficit | $ 83,906 | $ 72,093 |
Cash, cash equivalents, and short-term investments | $ 321,200 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | $ 84,734 | $ 157,898 |
Operating Account | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | 4,600 | 2,700 |
Money Market Funds | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | 20,100 | 80,200 |
Government Obligations | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | $ 60,000 | $ 75,000 |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of anti-dilutive securities (Details) - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of net loss per share (in shares) | 2,730,332 | 12,991,442 |
Redeemable convertible preferred stock as converted to common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of net loss per share (in shares) | 0 | 11,258,514 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of net loss per share (in shares) | 2,723,617 | 1,706,065 |
Unvested restricted stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of net loss per share (in shares) | 6,715 | 26,863 |
Short-Term Investments - Schedu
Short-Term Investments - Schedule of available for sale short-term investments (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Short-term investments | ||
Amortized Cost | $ 237,102 | $ 177,614 |
Gross Unrealized Loss | (660) | (63) |
Total Fair Value | 236,442 | 177,551 |
U.S. government securities | ||
Short-term investments | ||
Amortized Cost | 237,102 | 177,614 |
Gross Unrealized Loss | (660) | (63) |
Total Fair Value | $ 236,442 | $ 177,551 |
Short-Term Investments - Narrat
Short-Term Investments - Narrative (Details) | Mar. 31, 2021 |
Investments, Debt and Equity Securities [Abstract] | |
Debt securities, average maturity term | 7 months 9 days |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of accrued expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Research and development contract costs | $ 3,803 | $ 5,382 |
Compensation and related benefits | 877 | 1,551 |
Other | 569 | 419 |
Accrued expenses | $ 5,249 | $ 7,352 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of minimum lease payments (Details) $ in Thousands | Mar. 31, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2021 | $ 702 |
2022 | 1,058 |
2023 | 1,089 |
2024 | 1,120 |
2025 | 1,152 |
Thereafter | 2,814 |
Total minimum lease payments | $ 7,935 |
Commitments and Contingencies_2
Commitments and Contingencies - Narrative (Details) ft² in Thousands | 1 Months Ended | |
Jan. 31, 2021USD ($)ft² | Mar. 31, 2021USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | ||
License agreement, maximum payment | $ 20,600,000 | |
Accrued royalty | 0 | |
Lessee, Lease, Description [Line Items] | ||
Total minimum lease payments | $ 7,935,000 | |
Relocation of Austin Office | ||
Lessee, Lease, Description [Line Items] | ||
Lessee, operating lease, leased area | ft² | 8 | |
Lessee, operating lease, term | 6 years | |
Total minimum lease payments | $ 1,800,000 |
Preferred Stock (Details)
Preferred Stock (Details) - Series B Redeemable Convertible Preferred Stock $ / shares in Units, $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($)$ / sharesshares | |
Temporary Equity [Line Items] | |
Preferred stock sold (in shares) | shares | 550,571 |
Sale of preferred stock (in dollars per share) | $ / shares | $ 62.88051 |
Sale of stock, proceeds received | $ | $ 34.6 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) | Jan. 01, 2021shares | Oct. 14, 2020USD ($)shares | Mar. 31, 2021USD ($)$ / sharesshares | Sep. 30, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Grant date fair value (in dollars per share) | $ / shares | $ 27.11 | |||
Unrecognized compensation cost | $ | $ 11,500,000 | |||
Aggregate intrinsic value of options outstanding | $ | 26,600,000 | |||
Aggregate intrinsic value of options exercisable | $ | $ 26,600,000 | |||
Restricted Stock | Tranche One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting rights, percentage | 25.00% | |||
Restricted Stock | Tranche Two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation, vesting period | 36 months | |||
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted-average amortization period | 2 years 7 months 20 days | |||
Expected dividends | 0.00% | |||
2020 Stock Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Increase in number of shares authorized, percentage of capital stock outstanding | 0.04 | |||
Additional number of shares authorized (in shares) | shares | 445,809 | |||
Number of shares available for future grant (in shares) | shares | 4,170,263 | |||
Stock-based compensation, vesting period | 4 years | |||
Share-based compensation, expiration period | 10 years | |||
2020 Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Increase in number of shares authorized, percentage of capital stock outstanding | 0.01 | |||
Shares reserved for future issuance | shares | 395,795 | |||
Purchase price of common stock in percent | 85.00% | |||
Contribution limit in percentage of employee's eligible compensation | 15.00% | |||
Maximum value of shares per employee during any calendar year | $ | $ 25,000 | |||
Maximum number of shares per employee during any one purchase period (in shares) | shares | 600 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of stock-based compensation expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 1,180 | $ 174 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 414 | 111 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 766 | $ 63 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of option activity (Details) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Options | ||
Options, beginning balance (in shares) | 2,742,022 | |
Options, granted (in shares) | 11,000 | |
Options, exercised (in shares) | (13,543) | |
Options, forfeited (in shares) | (15,862) | |
Options, ending balance (in shares) | 2,723,617 | 2,742,022 |
Options, vested and expected to vest (in shares) | 2,679,192 | |
Options, exercisable (in shares) | 1,024,982 | |
Weighted Average Exercise Price | ||
Weighted average exercise price, beginning balance (in dollars per share) | $ 7.95 | |
Weighted average exercise price, granted (in dollars per share) | 39.15 | |
Weighted average exercise price, exercised (in dollars per share) | 2.63 | |
Weighted average exercise price, forfeited (in dollars per share) | 17.30 | |
Weighted average exercise price, ending balance (in dollars per share) | 8.05 | $ 7.95 |
Weighted average exercise price, vested and expected to vest (in dollars per share) | 7.96 | |
Weighted average exercise price, exercisable (in dollars per share) | $ 3.27 | |
Weighted Average Remaining Contract Life (Years) | ||
Weighted average remaining contract life, outstanding | 8 years 6 months 18 days | 8 years 9 months 25 days |
Weighted average remaining contract life, vested and expected to vest | 8 years 6 months 14 days | |
Weighted average remaining contract life, exercisable | 7 years 9 months 18 days |
Stock-Based Compensation - Sc_3
Stock-Based Compensation - Schedule of valuation assumptions (Details) - Stock options | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term - years | 6 years 29 days |
Expected volatility | 81.14% |
Risk-free interest rate | 1.00% |
Expected dividends | 0.00% |
Stock-Based Compensation - sc_4
Stock-Based Compensation - schedule of restricted stock activity (Details) - Restricted Stock | 3 Months Ended |
Mar. 31, 2021shares | |
Awards | |
Awards, beginning balance (in shares) | 11,752 |
Awards, vested (in shares) | (5,037) |
Awards, ending balance (in shares) | 6,715 |
Collaboration Agreement - Rel_2
Collaboration Agreement - Related Party (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 44 Months Ended | |
Aug. 31, 2017molecule | Mar. 31, 2021USD ($)moleculeobligation | Mar. 31, 2020USD ($) | Mar. 31, 2021USD ($)obligation | |
Related Party Transaction [Line Items] | ||||
Collaboration revenue - related party | $ 2,270 | $ 2,976 | ||
Takeda | Investor | Collaborative Arrangement | ||||
Related Party Transaction [Line Items] | ||||
Collaborative arrangement, number of molecules | molecule | 6 | 6 | ||
Option to exclusively license, number of molecules | molecule | 4 | |||
Proceeds from collaborators | $ 1,200 | $ 0 | ||
Collaboration revenue - related party | $ 54,200 | |||
Number of performance obligations | obligation | 4 | 4 |
Related-Party Transactions (Det
Related-Party Transactions (Details) | Dec. 31, 2020 |
Takeda | |
Related Party Transaction [Line Items] | |
Shareholder ownership percentage | 0.050 |