Satsuma Pharmaceuticals (STSA) 10-Q 11 May 23 2023 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2023	May 08, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Entity Registrant Name	Satsuma Pharmaceuticals, Inc.
Entity Central Index Key	0001692830
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Shell Company	false
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity File Number	001-39041
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	81-3039831
Entity Address, Address Line One	4819 Emperor Boulevard
Entity Address, Address Line Two	Suite 340
Entity Address, City or Town	Durham
Entity Address, State or Province	NC
Entity Address, Postal Zip Code	27703
City Area Code	650
Local Phone Number	410-3200
Document Quarterly Report	true
Document Transition Report	false
Title of 12(b) Security	Common stock, par value $0.0001
Trading Symbol	STSA
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding		33,152,498

Condensed Balance Sheets (Unaud

Condensed Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Assets
Cash and cash equivalents	$ 19,526	$ 16,429
Short-term marketable securities	21,844	36,052
Prepaid expenses and other current assets	2,005	2,328
Total current assets	43,375	54,809
Operating lease right-of-use asset	82	108
Other non-current assets	22	22
Total assets	43,479	54,939
Liabilities
Accounts payable	874	1,911
Accrued and other current liabilities	4,841	6,066
Operating lease liability	116	138
Total current liabilities	5,831	8,115
Total liabilities	5,831	8,115
Commitments and contingencies (Note 7)
Stockholders’ equity
Preferred stock, $0.0001 par value, 10,000,000 shares authorized as of March 31, 2023 and December 31, 2022; no shares issued and outstanding as of March 31, 2023 and December 31, 2022
Common stock, $0.0001 par value, 300,000,000 shares authorized as of March 31, 2023 and December 31, 2022; 33,152,498 shares issued and outstanding as of March 31, 2023 and December 31, 2022	3	3
Additional paid-in-capital	259,735	258,642
Accumulated other comprehensive loss	(5)	(30)
Accumulated deficit	(222,085)	(211,791)
Total stockholders’ equity	37,648	46,824
Total liabilities and stockholders’ equity	$ 43,479	$ 54,939

Condensed Balance Sheets (Una_2

Condensed Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2023	Dec. 31, 2022
Statement Of Financial Position [Abstract]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	33,152,498	33,152,498
Common stock, shares outstanding	33,152,498	33,152,498

Condensed Statements of Operati

Condensed Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Operating expenses
Research and development	$ 7,459	$ 11,556
General and administrative	3,309	3,990
Total operating expenses	10,768	15,546
Loss from operations	(10,768)	(15,546)
Interest income	474	40
Interest expense		(11)
Net loss	(10,294)	(15,517)
Unrealized gain (loss) on marketable securities	25	(79)
Comprehensive loss	$ (10,269)	$ (15,596)
Net loss per share attributable to common stockholders, basic	$ (0.31)	$ (0.49)
Net loss per share attributable to common stockholders, diluted	$ (0.31)	$ (0.49)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic	33,152,498	31,545,564
Weighted-average shares used in computing net loss per share attributable to common stockholders, diluted	33,152,498	31,545,564

Condensed Statements of Stockho

Condensed Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit
Beginning balance at Dec. 31, 2021	$ 101,340	$ 3	$ 243,115	$ (42)	$ (141,736)
Beginning balance, Shares at Dec. 31, 2021		31,545,564
Stock-based compensation	1,239		1,239
Net loss	(15,517)				(15,517)
Other comprehensive income (loss)	(79)			(79)
Ending balance at Mar. 31, 2022	86,983	$ 3	244,354	(121)	(157,253)
Ending Balance, Shares at Mar. 31, 2022		31,545,564
Beginning balance at Dec. 31, 2022	46,824	$ 3	258,642	(30)	(211,791)
Beginning balance, Shares at Dec. 31, 2022		33,152,498
Stock-based compensation	1,093		1,093
Net loss	(10,294)				(10,294)
Other comprehensive income (loss)	25			25
Ending balance at Mar. 31, 2023	$ 37,648	$ 3	$ 259,735	$ (5)	$ (222,085)
Ending Balance, Shares at Mar. 31, 2023		33,152,498

Condensed Statements of Cash Fl

Condensed Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities
Net loss	$ (10,294)	$ (15,517)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation	0	92
Amortization of operating lease right-of-use asset	37	37
Non-cash interest expense, and amortization of debt discount and issuance costs		3
Amortization of premiums / (accretion of discounts), net on marketable securities	(249)	253
Stock-based compensation	1,093	1,239
Changes in assets and liabilities
Prepaid expenses and other assets	323	1,178
Accounts payable	(1,037)	339
Accrued and other current liabilities	(1,225)	(1,900)
Operating lease liabilities, net	(33)	(41)
Net cash used in operating activities	(11,385)	(14,317)
Cash flows from investing activities
Purchases of marketable securities	(1,430)	(1,989)
Proceeds from maturities of marketable securities	15,912	22,354
Purchases of property and equipment		(24)
Net cash provided by investing activities	14,482	20,341
Cash flows from financing activities
Repayment of debt		(500)
Net cash used in financing activities		(500)
Net increase in cash and cash equivalents	3,097	5,524
Cash and cash equivalents
Cash and cash equivalents, at beginning of period	16,429	15,835
Cash and cash equivalents, at end of period	19,526	21,359
Supplemental disclosure of cash flow information:
Cash paid for interest		11
Supplemental non-cash investing and financing activities:
Operating lease right-of-use asset recorded on the adoption of ASC 842		80
Operating lease right-of-use assets obtained in exchange for new lease liabilities	$ 11	201
Purchases of property and equipment in accounts payable and accrued and other current liabilities		$ 39

Organization and Summary of Sig

Organization and Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2023
Accounting Policies [Abstract]
Organization and Summary of significant Accounting Policies	Note 1. Organization and Summary of Significant Accounting Policies Description of the Business Satsuma Pharmaceuticals, Inc. (the “Company”) is a development-stage biopharmaceutical company developing a novel therapeutic for the acute treatment of migraine. The Company’s product candidate, STS101, is a drug-device combination of a proprietary dry-powder formulation of dihydroergotamine mesylate, or DHE, which can be quickly and easily self-administered by a proprietary pre-filled, single-use, nasal delivery device. The Company, headquartered in South San Francisco, was incorporated in 2016 in the state of Delaware. At-the-Market Equity Offering In October 2020, the Company entered into a sales agreement (the “SVB Sales Agreement”) with SVB Securities LLC (formerly known as SVB Leerink LLC) (“SVB”) to sell shares of its common stock, from time to time, through an at-the-market (“ATM”) equity offering program under which SVB acted as its sales agent and pursuant to which the Company could sell common stock for aggregate gross sales proceeds of up to $ 50.0 million. The issuance and sale of shares of common stock by the Company pursuant to the SVB Sales Agreement was deemed an ATM offering under the Securities Act of 1933, as amended. SVB was entitled to compensation for its services equal to up to 3.0 % of the gross proceeds of any shares of common stock sold through SVB under the SVB Sales Agreement. In September 2022, the Company issued and sold 1,538,461 shares of common stock under the SVB Sales Agreement. The shares were sold at a price of $ 6.50 per share for aggregate net proceeds of approximately $ 9.7 million, after deducting sales commission of $ 0.3 million payable by the Company. Prior to the quarter ended September 30, 2022, the Company had not issued any shares of common stock under the SVB Sales Agreement. In October 2022, the Company terminated the SVB Sales Agreement and the offer and sale of shares under the SVB Sales Agreement prospectus supplement filed in October 2020. In November 2022, the Company entered into an At-the-Market Sales Agreement (the “Virtu Sales Agreement”), with Virtu Americas LLC (“Virtu”), to sell shares of its common stock, from time to time, through an ATM equity offering program under which Virtu will act as its sales agent and pursuant to which the Company may sell common stock for aggregate gross sales proceeds of up to $ 100.0 million. The issuance and sale of shares of common stock by the Company pursuant to the Virtu Sales Agreement is deemed an ATM offering under the Securities Act of 1933, as amended. Virtu is entitled to compensation for its services equal to up to 3.0 % of the gross proceeds of any shares of common stock sold through Virtu under the Virtu Sales Agreement. As of March 31, 2023, no shares of common stock have been sold pursuant to this agreement. Liquidity The Company is subject to risks and uncertainties common to early-stage companies in the biopharmaceutical industry, including, but not limited to, risks of clinical delays or failure, development by competitors of new technological innovations, protection of proprietary technology, dependence on key personnel, reliance on contract manufacturing organizations (“CMOs”) and contract research organizations (“CROs”), compliance with government regulations and the need to obtain additional financing to fund operations. STS101 is an investigational product candidate that will require completion of clinical development prior to any submission for regulatory approval and commercialization, if approved. These efforts require significant amounts of additional capital, adequate personnel, infrastructure, and extensive compliance and reporting. The Company has incurred significant losses and negative cash flows from operations in all periods since its inception and had an accumulated deficit of $ 222.1 million as of March 31, 2023. The Company has historically financed its operations primarily through its initial public offering (“IPO”), private placements of its equity securities, an ATM equity offering and borrowings under its former long-term debt facility. The Company has no products approved for sale, and the Company has not generated any revenue since its inception. The Company expects to incur significant additional operating losses over at least the next several years. There can be no assurance that in the event the Company requires additional financing, such financing will be available on terms which are favorable or at all. Failure to generate sufficient cash flows from operations or raise additional capital to support its operations would have a material adverse effect on the Company’s ability to achieve its intended business objectives. The Company has suffered recurring losses from operations that raise substantial doubt about its ability to continue as a going concern. As a result of the reported topline results from the STS101 SUMMIT Phase 3 efficacy trial, the Company does not plan to invest in commercialization of STS101. The Company will continue to look for strategic alternatives and does not plan on raising additional funds. As of March 31, 2023, the Company had cash, cash equivalents and marketable securities of $ 41.4 million. The Company’s management believes that the Company’s cash, cash equivalents and marketable securities may not be sufficient to continue as a going concern for a period of one year from the issuance date of these unaudited interim condensed financial statements and as such, substantial doubt exists about the Company’s ability to continue as a going concern. Failure to manage discretionary spending may adversely impact the Company’s ability to achieve its intended business objectives and have an adverse effect on its results of operations and future prospects. The accompanying unaudited interim condensed financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The accompanying unaudited interim condensed financial statements do not reflect any adjustments relating to the recoverability and reclassifications of assets and liabilities that might be necessary if the Company is unable to continue as a going concern. During the quarter ended December 31, 2022, the Company recorded an impairment loss of $ 11.7 million consisting of $ 6.7 million impairment loss to write down the property and equipment to its fair market value, $ 2.2 million impairment loss to write off prepaid expenses and other current assets related to purchases of property and equipment, and $ 2.8 million impairment loss to accrue non-cancelable future payments related to purchases of the property and equipment. The impairment loss was a result of the reported topline results from the STS101 SUMMIT Phase 3 efficacy trial and the plan not to invest in commercialization of STS101. On April 16, 2023, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Shin Nippon Biomedical Laboratories, Ltd., a Japanese corporation (the “Parent” or “SNBL”) and SNBL23 Merger Sub, Inc., a Delaware corporation and a direct wholly owned subsidiary of the Parent (the “Purchaser”). The Merger Agreement provides that, upon the terms and subject to the conditions thereof, as promptly as practicable (but in no event more than fifteen (15) business days after the date of the Merger Agreement), Purchaser will commence a tender offer (the “Offer”) to acquire (upon the terms and subject to the conditions of the Merger Agreement) any and all of the issued and outstanding shares of common stock, par value $ 0.0001 per share, of the Company (the “Company Common Stock”) in exchange for (i) an amount in cash equal to $ 0.91 , without interest and less applicable withholding taxes (the “Per Share Price”), and (ii) one contingent value right per share of Company Common Stock (a “CVR”) representing the right to receive, subject to the terms and conditions of the Contingent Value Rights Agreement, substantially in the form attached to the Merger Agreement (the “CVR Agreement”), the consideration set forth in the CVR Agreement (the CVRs together with the aggregate Per Share Price paid in accordance with the Merger Agreement, the “Offer Consideration”). The Merger Agreement includes a remedy of specific performance and is not subject to a financing condition. As soon as practicable following the completion of the Offer, upon the terms and subject to the conditions of the Merger Agreement, Purchaser will be merged with and into the Company, with the Company surviving as a wholly owned subsidiary of Parent (the “Merger”). The Merger Agreement contemplates that the Merger will be effected pursuant to Section 251(h) of the General Corporation Law of the State of Delaware (the “DGCL”), which permits completion of the Merger without a vote of the holders of the Company Common Stock upon the acquisition by Purchaser of a majority of the aggregate number of the shares of Company Common Stock. Subject to the terms and conditions of the Merger Agreement, if certain conditions are satisfied and the Offer closes, Parent, following the satisfaction of such conditions, would acquire any remaining shares by virtue of the Merger, with the Company surviving the Merger as a wholly-owned subsidiary of Parent. If the Merger is consummated, the Company will cease to be a publicly-traded company. The consummation of the transaction is subject to customary closing conditions, including the Company’s stockholders tendering a minimum number of shares of Company Common Stock in the Offer. Concurrently with the execution of the Merger Agreement, the Parent entered into a tender and support agreement (the “Support Agreement”) with certain stockholders and directors of the Company (the “Supporting Persons”), who in the aggregate own approximately 18.8 % of the Company Common Stock, pursuant to which such Supporting Persons have agreed, among other things, to tender their shares of Company Common Stock in the Offer and to vote against certain matters at meetings of the Company’s stockholders which are intended to or would reasonably be expected to impede, delay or prevent, in any material respect, the Offer or the Merger. Basis of Presentation The unaudited interim condensed financial statements and accompanying notes have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), as defined by the Financial Accounting Standards Board, or the FASB. Unaudited Interim Financial Information The accompanying condensed balance sheet as of March 31, 2023, the condensed statements of operations and comprehensive loss, the condensed statements of stockholders’ equity and the condensed statements of cash flows for the three months ended March 31, 2023 and 2022 are unaudited. The unaudited interim condensed financial statements have been prepared on the same basis as the audited annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of March 31, 2023 and the results of its operations and its cash flows for the three months ended March 31, 2023 and 2022. The financial data and other information disclosed in these notes related to the three months ended March 31, 2023 and 2022 are also unaudited. The results for the three months ended March 31, 2023 are not necessarily indicative of results to be expected for the year ending December 31, 2023, any other interim periods, or any future year or period. The balance sheet as of December 31, 2022 included herein was derived from the audited financial statements as of that date. Certain disclosures have been condensed or omitted from the unaudited interim condensed financial statements. The accompanying interim unaudited condensed financial statements should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2022, which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the Securities and Exchange Commission, or the SEC, on March 28, 2023. Use of Estimates The preparation of unaudited interim condensed financial statements in conformity with U.S. 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 unaudited interim condensed financial statements and the reported amounts of income and expenses during the reporting period. Such estimates include the accrual of research and development expenses, impairment of property and equipment and the fair value of stock-based awards. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the impact of the COVID-19 pandemic and related impacts on the global economy which may delay the enrollment of subjects for our clinical trials and may disrupt our supply chain for development and manufacturing activities, and adjust those estimates and assumptions when facts and circumstances dictate. Actual results could differ materially from those estimates and assumptions. Concentration of Credit Risk The Company has no significant off-balance sheet concentrations of credit risk. Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents and marketable securities. Substantially all the Company’s cash, cash equivalents and marketable securities are held by Silicon Valley Bank, and the Company historically has relied primarily on Silicon Valley Bank for commercial banking services. On March 10, 2023, the California Department of Financial Protection and Innovation closed Silicon Valley Bank and appointed the Federal Deposit Insurance Corporation ("FDIC") as receiver. On March 12, 2023, the U.S. Department of the Treasury, the Federal Reserve and the FDIC released a joint statement confirming that all depositors of Silicon Valley Bank would have access to all of their money after only one business day of closure, including funds held in uninsured deposit accounts. The Company received full access to the funds in its deposit and money market accounts on March 13, 2023. In light of actions by the federal government to fully protect deposit accounts, the Company has not experienced any credit losses on its deposits of cash or cash equivalents. The Company invests its cash equivalents in marketable securities and money market funds. Credit Losses - Marketable Securities For marketable securities in an unrealized loss position, the Company will periodically assess its portfolio for impairment. The assessment first considers the intent or requirement to sell the marketable security. If either of these criteria are met, the amortized cost basis will be written down to fair value through earnings. If not met, the Company evaluates whether the decline resulted from credit losses or other factors by considering the extent to which fair value is less than amortized cost, any changes to the rating of the marketable security by a rating agency, and any adverse conditions specifically related to the marketable security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the marketable security is compared to the amortized cost basis of the marketable security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive loss. Impairment of Long-Lived Assets Long-lived assets consist of property and equipment. The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable or that the useful life is shorter than the Company had originally estimated. Recoverability is measured by comparison of the carrying amount of the asset or asset group to the future undiscounted cash flows which the asset or asset group is expected to generate. If the asset or asset group is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset or asset group exceeds the fair value of the asset or asset group. If the useful life is shorter than originally estimated, the Company amortizes the remaining carrying value over the new shorter useful life. In November 2022, the Company reported topline results from the STS101 SUMMIT Phase 3 efficacy trial. Although topline data showed numerical differences in favor of STS101 5.2 mg versus placebo on the pre-specified co-primary endpoints of freedom from pain and freedom from most bothersome symptom at two hours post-administration, these differences did not achieve statistical significance. This significant change was a triggering event which resulted in an evaluation of impairment of the Company's property and equipment which were designed for future use in production of STS101 after the commercialization. The Company evaluated the recoverability of the property and equipment by comparing their carrying amount to the future undiscounted cash flows expected to be generated by the assets to determine if the carrying value was not recoverable. The recoverability test indicated that the Company's property and equipment were impaired. As a result, the Company recognized an impairment loss of $ 11.7 million for the quarter ended December 31, 2022. Recent Accounting Pronouncements New Accounting Pronouncements Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) , to provide financial statement users with more useful information about expected credit losses, which was subsequently updated by ASU 2019-04, Codification Improvements to Topic 326, Financial Instrument - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, and ASU 2019-05, Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief. The amendment updates the guidance for measuring and recording credit losses on financial assets measured at amortized cost by replacing the “incurred loss” model with an “expected loss” model. Accordingly, these financial assets will be presented at the net amount expected to be collected. The amendment also requires that credit losses related to available-for-sale debt securities be recorded as an allowance through net income rather than reducing the carrying amount under the current, other-than-temporary-impairment model. In November 2019, the FASB issued ASU No. 2019-10, according to which, the new standard is effective for public business entities that meet the definition of an SEC filer, excluding entities eligible to be smaller reporting companies (“SRC”) as defined by the SEC, for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. For all other entities, the new standard is effective for fiscal years beginning after December 15, 2022, and interim periods within that fiscal year. The Company adopted this ASU effective January 1, 2023 . The adoption of this ASU did no t have a material effect on the Company’s financial statements and related disclosures.

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2023
Fair Value Disclosures [Abstract]
Fair Value Measurements	2. Fair Value Measurements The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the unaudited interim condensed financial statements on a recurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a three-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows: Level 1—Observable inputs, such as quoted prices in active markets for identical assets or liabilities at the measurement date. 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 which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value. As of March 31, 2023, financial assets measured and recognized at fair value were as follows (in thousands): Fair Value Measurements at March 31, 2023 Level 1 Level 2 Level 3 Total Assets U.S. government bonds $ 13,876 $ — $ — $ 13,876 U.S. government agency bonds — 1,444 — 1,444 Corporate bonds — 6,446 — 6,446 Asset backed securities — 78 — 78 Marketable securities 13,876 7,968 — 21,844 Money market funds (1) 19,463 — — 19,463 Total fair value of assets $ 33,339 $ 7,968 $ — $ 41,307 (1) Included in cash and cash equivalents on the balance sheet. Fair Value Measurements at March 31, 2023 Amortized Gross Gross Estimate Assets U.S. government bonds $ 13,883 $ 1 $ ( 8 ) $ 13,876 U.S. government agency bonds 1,443 1 — 1,444 Corporate bonds 6,445 1 — 6,446 Asset backed securities 78 — — 78 Marketable securities 21,849 3 ( 8 ) 21,844 Money market funds (1) 19,463 — — 19,463 Total fair value of assets $ 41,312 $ 3 $ ( 8 ) $ 41,307 (1) Included in cash and cash equivalents on the balance sheet. As of December 31, 2022, financial assets measured and recognized at fair value were as follows (in thousands): Fair Value Measurements at December 31, 2022 Level 1 Level 2 Level 3 Total Assets U.S. government bonds $ 18,703 $ — $ — $ 18,703 Corporate bonds — 16,941 — 16,941 Asset backed securities — 408 — 408 Marketable securities 18,703 17,349 — 36,052 Money market funds (1) 16,384 — — 16,384 Total fair value of assets $ 35,087 $ 17,349 $ — $ 52,436 (1) Included in cash and cash equivalents on the balance sheet Fair Value Measurements at December 31, 2022 Amortized Gross Gross Estimate Assets U.S. government bonds $ 18,724 $ 2 $ ( 23 ) $ 18,703 Corporate bonds 16,947 1 ( 7 ) 16,941 Asset backed securities 411 — ( 3 ) 408 Marketable securities 36,082 3 ( 33 ) 36,052 Money market funds (1) 16,384 — — 16,384 Total fair value of assets $ 52,466 $ 3 $ ( 33 ) $ 52,436 (1) Included in cash and cash equivalents on the balance sheet. There were no financial liabilities measured and recognized at fair value as of March 31, 2023 and December 31, 2022. The unrealized losses for marketable securities related to changes in interest rates. No allowance for credit losses was recorded as of March 31, 2023 and December 31, 2022, and no impairment losses were recognized for the three months ended March 31, 2023.

Balance Sheet Components

Balance Sheet Components	3 Months Ended
	Mar. 31, 2023
Balance Sheet Related Disclosures [Abstract]
Balance Sheet Components	3. Balance Sheet Components Property and Equipment, Net Depreciation is computed using the straight-line method. Depreciation expense was $ 0 and $ 0.1 million for the three months ended March 31, 2023 and 2022, respectively. In 2022, the Company performed a recoverability test for its property and equipment when it was determined that it was more likely than not that the carrying value of the long-lived assets would not be recoverable. As a result, the Company recognized a non-cash impairment loss of $ 6.7 million in the quarter ended December 31, 2022, to write down the property and equipment to its fair market value, which was determined to be nil as of December 31, 2022. The Company determined that prepaid expenses and other current assets of $ 2.2 million related to purchases of property and equipment were impaired as of December 31, 2022. The Company recognized a non-cash impairment loss of $ 2.2 million in the quarter ended December 31, 2022, to write off prepaid expenses and other current assets related to purchases of property and equipment. Additionally, as of December 31, 2022, the Company had non-cancelable future payments of $ 2.8 million related to purchases of the property and equipment. The Company recognized a non-cash impairment loss of $ 2.8 million in the quarter ended December 31, 2022, and recorded a $ 2.8 million accrued impairment loss in accrued and other current liabilities on the Company's balance sheets. Accrued and Other Current Liabilities Accrued and other current liabilities consisted of the following (in thousands): March 31, December 31, 2023 2022 Accrued salaries and benefits $ 460 $ 536 Accrued severance payments 1,310 — Accrued research and development expenses 1,661 2,630 Accrued impairment loss 965 2,765 Accrued professional services 392 66 Other 53 69 Total $ 4,841 $ 6,066

Debt

Debt	3 Months Ended
	Mar. 31, 2023
Debt Disclosure [Abstract]
Debt	4. Debt On October 26, 2018, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with Silicon Valley Bank. The Loan Agreement provided for loan advances of up to $ 10.0 million. The first advance (the “Term A Loan”) of $ 5.0 million was available for draw down by the Company as of the effective date of the Loan Agreement. The remaining $ 5.0 million under the facility was never drawn down and is no longer available for draw. Interest on the loan advances were payable monthly at a floating per annum rate equal to the greater of 1.5 % above the prime rate or 6.5 %. Upon the occurrence of an event of default, interest would increase to 5.0 % above the rate that is otherwise applicable. The maturity date of the loan advances was May 1, 2022 . The effective interest rate of the Term Loan approximated its stated interest rates. The Company incurred debt issuance costs of $ 0.1 million, which was presented as reduction of the Term A Loan advance balance. Debt issuance cost and final payment of $ 0.3 million was recognized as additional interest expense using the effective interest method over the term of the loan. On May 3, 2022, the Company repaid its entire obligation under the Loan Agreement amounting to $ 0.4 million, including outstanding loan amount of $ 0.2 million and final payment of $ 0.2 million.

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Mar. 31, 2023
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Stock-Based Compensation	5. Stock-Based Compensation A summary of stock option activity for the three months ended March 31, 2023 is set forth below: Outstanding Options Shares Number of Weighted Weighted- Balance, January 1, 2023 665,900 5,292,403 $ 6.84 7.9 Options cancelled 86,744 ( 86,744 ) $ 4.21 Balance, March 31, 2023 752,644 5,205,659 $ 6.88 7.6 Exercisable as of March 31, 2023 2,554,076 $ 8.72 6.4 Vested and expected to vest, March 31, 2023 5,205,659 $ 6.88 7.6 The weighted-average grant-date fair value of options granted during the three months ended March 31, 2022 was $ 3.42 per share. No stock options were granted during the three months ended March 31, 2023. As of March 31, 2023, the total unrecognized stock-based compensation expense for stock options was $ 5.8 million, which is expected to be recognized over a weighted-average period of 2.2 years. The total fair value of options vested for the three months ended March 31, 2023 and 2022 was $ 1.2 million and $ 1.2 million, respectively. 2019 Employee Share Purchase Plan In September 2019, the Company adopted the 2019 Employee Share Purchase Plan (“ESPP”), which became effective on the day of effectiveness of the Company’s registration statement on Form S-1 filed in connection with its IPO. As of March 31, 2023, 724,258 shares under the ESPP remain available for purchase. The offering period and purchase period is determined by the board of directors. As of March 31, 2023, no new offerings had been authorized. Stock-Based Compensation Expense Total stock-based compensation expense recorded related to options granted to employees and non-employees was as follows (in thousands): Three Months Ended March 31, 2023 2022 Research and development $ 318 $ 436 General and administrative 775 803 $ 1,093 $ 1,239

Net Loss Per Share Attributable

Net Loss Per Share Attributable to Common Stockholders	3 Months Ended
	Mar. 31, 2023
Earnings Per Share [Abstract]
Net Loss Per Share Attributable to Common Stockholders	6. Net Loss Per Share Attributable to Common Stockholders The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders (in thousands, except share and per share data): Three Months Ended March 31, 2023 2022 Numerator: Net loss attributable to common stockholders $ ( 10,294 ) $ ( 15,517 ) Denominator: Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted 33,152,498 31,545,564 Net loss per share attributable to common stockholders, basic and diluted $ ( 0.31 ) $ ( 0.49 ) The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share attributable to common stockholders for the period presented because including them would have been antidilutive: March 31, 2023 2022 Options to purchase common stock 5,205,659 3,214,903 Shares committed under ESPP — 28,746 Total 5,205,659 3,243,649

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2023
Commitments And Contingencies Disclosure [Abstract]
Commitments and Contingencies	7. Commitments and Contingencies Operating Leases Operating lease cost consists of the following (in thousands): Three Months Ended March 31, 2023 2022 Operating lease cost $ 40 $ 39 Short-term lease cost 38 33 Total lease cost $ 78 $ 72 The maturities of operating lease liabilities as of March 31, 2023 are as follows (in thousands): March 31, 2023 2023 (remaining nine months) $ 130 Total undiscounted lease payments 130 Less: imputed interest 14 Total operating lease liability 116 Less: current portion 116 Operating lease liability, net of current portion $ — As of March 31, 2023, the remaining term for the operating lease in North Carolina was 0.6 years, and the discount rate used to measure the lease liability for such operating lease upon recognition was 9.8 %. During the three months ended March 31, 2023 and 2022, cash paid for amounts included in operating lease liabilities of less than $ 0.1 million and less than $ 0.1 million , respectively, was included in cash flows from operating activities on the condensed statements of cash flows.

Workforce Reduction

Workforce Reduction	3 Months Ended
	Mar. 31, 2023
Restructuring and Related Activities [Abstract]
Workforce Reduction	9. Workforce Reduction On March 27, 2023, the Company's board of directors approved a plan to reduce its workforce by 9 employees, or approximately 36 % of its total headcount as of such date (the "Workforce Reduction"), in order to preserve cash and maximize the value of STS101 for a potential strategic transaction partner. In connection with the Workforce Reduction, the position of Detlef Albrecht, M.D., the Company's Chief Medical Officer, with the Company was eliminated. During the three months ended March 31, 2023, the Company incurred aggregate charges in connection with the Workforce Reduction of approximat ely $ 1.3 million, which related primarily to severance payments and related continuation of benefits costs, all of which resulted in cash expenditures, along with the payment of approximately $ 0.2 million in accrued benefits including paid-time-off.

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2023
Income Tax Disclosure [Abstract]
Income Taxes	8. Income Taxes For the three months ended March 31, 2023 and 2022, the Company did no t record an income tax provision. The U.S. federal and California deferred tax assets generated from the Company’s net operating losses have been fully reserved, as the Company believes it is more likely than not the benefit will not be realized.

Organization and Summary of S_2

Organization and Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2023
Accounting Policies [Abstract]
Description of the Business	Description of the Business Satsuma Pharmaceuticals, Inc. (the “Company”) is a development-stage biopharmaceutical company developing a novel therapeutic for the acute treatment of migraine. The Company’s product candidate, STS101, is a drug-device combination of a proprietary dry-powder formulation of dihydroergotamine mesylate, or DHE, which can be quickly and easily self-administered by a proprietary pre-filled, single-use, nasal delivery device. The Company, headquartered in South San Francisco, was incorporated in 2016 in the state of Delaware.
At-The-Market Equity Offering	At-the-Market Equity Offering In October 2020, the Company entered into a sales agreement (the “SVB Sales Agreement”) with SVB Securities LLC (formerly known as SVB Leerink LLC) (“SVB”) to sell shares of its common stock, from time to time, through an at-the-market (“ATM”) equity offering program under which SVB acted as its sales agent and pursuant to which the Company could sell common stock for aggregate gross sales proceeds of up to $ 50.0 million. The issuance and sale of shares of common stock by the Company pursuant to the SVB Sales Agreement was deemed an ATM offering under the Securities Act of 1933, as amended. SVB was entitled to compensation for its services equal to up to 3.0 % of the gross proceeds of any shares of common stock sold through SVB under the SVB Sales Agreement. In September 2022, the Company issued and sold 1,538,461 shares of common stock under the SVB Sales Agreement. The shares were sold at a price of $ 6.50 per share for aggregate net proceeds of approximately $ 9.7 million, after deducting sales commission of $ 0.3 million payable by the Company. Prior to the quarter ended September 30, 2022, the Company had not issued any shares of common stock under the SVB Sales Agreement. In October 2022, the Company terminated the SVB Sales Agreement and the offer and sale of shares under the SVB Sales Agreement prospectus supplement filed in October 2020. In November 2022, the Company entered into an At-the-Market Sales Agreement (the “Virtu Sales Agreement”), with Virtu Americas LLC (“Virtu”), to sell shares of its common stock, from time to time, through an ATM equity offering program under which Virtu will act as its sales agent and pursuant to which the Company may sell common stock for aggregate gross sales proceeds of up to $ 100.0 million. The issuance and sale of shares of common stock by the Company pursuant to the Virtu Sales Agreement is deemed an ATM offering under the Securities Act of 1933, as amended. Virtu is entitled to compensation for its services equal to up to 3.0 % of the gross proceeds of any shares of common stock sold through Virtu under the Virtu Sales Agreement. As of March 31, 2023, no shares of common stock have been sold pursuant to this agreement.
Liquidity	Liquidity The Company is subject to risks and uncertainties common to early-stage companies in the biopharmaceutical industry, including, but not limited to, risks of clinical delays or failure, development by competitors of new technological innovations, protection of proprietary technology, dependence on key personnel, reliance on contract manufacturing organizations (“CMOs”) and contract research organizations (“CROs”), compliance with government regulations and the need to obtain additional financing to fund operations. STS101 is an investigational product candidate that will require completion of clinical development prior to any submission for regulatory approval and commercialization, if approved. These efforts require significant amounts of additional capital, adequate personnel, infrastructure, and extensive compliance and reporting. The Company has incurred significant losses and negative cash flows from operations in all periods since its inception and had an accumulated deficit of $ 222.1 million as of March 31, 2023. The Company has historically financed its operations primarily through its initial public offering (“IPO”), private placements of its equity securities, an ATM equity offering and borrowings under its former long-term debt facility. The Company has no products approved for sale, and the Company has not generated any revenue since its inception. The Company expects to incur significant additional operating losses over at least the next several years. There can be no assurance that in the event the Company requires additional financing, such financing will be available on terms which are favorable or at all. Failure to generate sufficient cash flows from operations or raise additional capital to support its operations would have a material adverse effect on the Company’s ability to achieve its intended business objectives. The Company has suffered recurring losses from operations that raise substantial doubt about its ability to continue as a going concern. As a result of the reported topline results from the STS101 SUMMIT Phase 3 efficacy trial, the Company does not plan to invest in commercialization of STS101. The Company will continue to look for strategic alternatives and does not plan on raising additional funds. As of March 31, 2023, the Company had cash, cash equivalents and marketable securities of $ 41.4 million. The Company’s management believes that the Company’s cash, cash equivalents and marketable securities may not be sufficient to continue as a going concern for a period of one year from the issuance date of these unaudited interim condensed financial statements and as such, substantial doubt exists about the Company’s ability to continue as a going concern. Failure to manage discretionary spending may adversely impact the Company’s ability to achieve its intended business objectives and have an adverse effect on its results of operations and future prospects. The accompanying unaudited interim condensed financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The accompanying unaudited interim condensed financial statements do not reflect any adjustments relating to the recoverability and reclassifications of assets and liabilities that might be necessary if the Company is unable to continue as a going concern. During the quarter ended December 31, 2022, the Company recorded an impairment loss of $ 11.7 million consisting of $ 6.7 million impairment loss to write down the property and equipment to its fair market value, $ 2.2 million impairment loss to write off prepaid expenses and other current assets related to purchases of property and equipment, and $ 2.8 million impairment loss to accrue non-cancelable future payments related to purchases of the property and equipment. The impairment loss was a result of the reported topline results from the STS101 SUMMIT Phase 3 efficacy trial and the plan not to invest in commercialization of STS101. On April 16, 2023, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Shin Nippon Biomedical Laboratories, Ltd., a Japanese corporation (the “Parent” or “SNBL”) and SNBL23 Merger Sub, Inc., a Delaware corporation and a direct wholly owned subsidiary of the Parent (the “Purchaser”). The Merger Agreement provides that, upon the terms and subject to the conditions thereof, as promptly as practicable (but in no event more than fifteen (15) business days after the date of the Merger Agreement), Purchaser will commence a tender offer (the “Offer”) to acquire (upon the terms and subject to the conditions of the Merger Agreement) any and all of the issued and outstanding shares of common stock, par value $ 0.0001 per share, of the Company (the “Company Common Stock”) in exchange for (i) an amount in cash equal to $ 0.91 , without interest and less applicable withholding taxes (the “Per Share Price”), and (ii) one contingent value right per share of Company Common Stock (a “CVR”) representing the right to receive, subject to the terms and conditions of the Contingent Value Rights Agreement, substantially in the form attached to the Merger Agreement (the “CVR Agreement”), the consideration set forth in the CVR Agreement (the CVRs together with the aggregate Per Share Price paid in accordance with the Merger Agreement, the “Offer Consideration”). The Merger Agreement includes a remedy of specific performance and is not subject to a financing condition. As soon as practicable following the completion of the Offer, upon the terms and subject to the conditions of the Merger Agreement, Purchaser will be merged with and into the Company, with the Company surviving as a wholly owned subsidiary of Parent (the “Merger”). The Merger Agreement contemplates that the Merger will be effected pursuant to Section 251(h) of the General Corporation Law of the State of Delaware (the “DGCL”), which permits completion of the Merger without a vote of the holders of the Company Common Stock upon the acquisition by Purchaser of a majority of the aggregate number of the shares of Company Common Stock. Subject to the terms and conditions of the Merger Agreement, if certain conditions are satisfied and the Offer closes, Parent, following the satisfaction of such conditions, would acquire any remaining shares by virtue of the Merger, with the Company surviving the Merger as a wholly-owned subsidiary of Parent. If the Merger is consummated, the Company will cease to be a publicly-traded company. The consummation of the transaction is subject to customary closing conditions, including the Company’s stockholders tendering a minimum number of shares of Company Common Stock in the Offer. Concurrently with the execution of the Merger Agreement, the Parent entered into a tender and support agreement (the “Support Agreement”) with certain stockholders and directors of the Company (the “Supporting Persons”), who in the aggregate own approximately 18.8 % of the Company Common Stock, pursuant to which such Supporting Persons have agreed, among other things, to tender their shares of Company Common Stock in the Offer and to vote against certain matters at meetings of the Company’s stockholders which are intended to or would reasonably be expected to impede, delay or prevent, in any material respect, the Offer or the Merger.
Basis of Presentation	Basis of Presentation The unaudited interim condensed financial statements and accompanying notes have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), as defined by the Financial Accounting Standards Board, or the FASB.
Unaudited Interim Financial Information	Unaudited Interim Financial Information The accompanying condensed balance sheet as of March 31, 2023, the condensed statements of operations and comprehensive loss, the condensed statements of stockholders’ equity and the condensed statements of cash flows for the three months ended March 31, 2023 and 2022 are unaudited. The unaudited interim condensed financial statements have been prepared on the same basis as the audited annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of March 31, 2023 and the results of its operations and its cash flows for the three months ended March 31, 2023 and 2022. The financial data and other information disclosed in these notes related to the three months ended March 31, 2023 and 2022 are also unaudited. The results for the three months ended March 31, 2023 are not necessarily indicative of results to be expected for the year ending December 31, 2023, any other interim periods, or any future year or period. The balance sheet as of December 31, 2022 included herein was derived from the audited financial statements as of that date. Certain disclosures have been condensed or omitted from the unaudited interim condensed financial statements. The accompanying interim unaudited condensed financial statements should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2022, which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the Securities and Exchange Commission, or the SEC, on March 28, 2023.
Use of Estimates	Use of Estimates The preparation of unaudited interim condensed financial statements in conformity with U.S. 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 unaudited interim condensed financial statements and the reported amounts of income and expenses during the reporting period. Such estimates include the accrual of research and development expenses, impairment of property and equipment and the fair value of stock-based awards. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the impact of the COVID-19 pandemic and related impacts on the global economy which may delay the enrollment of subjects for our clinical trials and may disrupt our supply chain for development and manufacturing activities, and adjust those estimates and assumptions when facts and circumstances dictate. Actual results could differ materially from those estimates and assumptions.
Concentration of Credit Risk	Concentration of Credit Risk The Company has no significant off-balance sheet concentrations of credit risk. Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents and marketable securities. Substantially all the Company’s cash, cash equivalents and marketable securities are held by Silicon Valley Bank, and the Company historically has relied primarily on Silicon Valley Bank for commercial banking services. On March 10, 2023, the California Department of Financial Protection and Innovation closed Silicon Valley Bank and appointed the Federal Deposit Insurance Corporation ("FDIC") as receiver. On March 12, 2023, the U.S. Department of the Treasury, the Federal Reserve and the FDIC released a joint statement confirming that all depositors of Silicon Valley Bank would have access to all of their money after only one business day of closure, including funds held in uninsured deposit accounts. The Company received full access to the funds in its deposit and money market accounts on March 13, 2023. In light of actions by the federal government to fully protect deposit accounts, the Company has not experienced any credit losses on its deposits of cash or cash equivalents. The Company invests its cash equivalents in marketable securities and money market funds.
Credit Losses - Marketable Securities	Credit Losses - Marketable Securities For marketable securities in an unrealized loss position, the Company will periodically assess its portfolio for impairment. The assessment first considers the intent or requirement to sell the marketable security. If either of these criteria are met, the amortized cost basis will be written down to fair value through earnings. If not met, the Company evaluates whether the decline resulted from credit losses or other factors by considering the extent to which fair value is less than amortized cost, any changes to the rating of the marketable security by a rating agency, and any adverse conditions specifically related to the marketable security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the marketable security is compared to the amortized cost basis of the marketable security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive loss.
Impairment of Long-Lived Assets	Impairment of Long-Lived Assets Long-lived assets consist of property and equipment. The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable or that the useful life is shorter than the Company had originally estimated. Recoverability is measured by comparison of the carrying amount of the asset or asset group to the future undiscounted cash flows which the asset or asset group is expected to generate. If the asset or asset group is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset or asset group exceeds the fair value of the asset or asset group. If the useful life is shorter than originally estimated, the Company amortizes the remaining carrying value over the new shorter useful life. In November 2022, the Company reported topline results from the STS101 SUMMIT Phase 3 efficacy trial. Although topline data showed numerical differences in favor of STS101 5.2 mg versus placebo on the pre-specified co-primary endpoints of freedom from pain and freedom from most bothersome symptom at two hours post-administration, these differences did not achieve statistical significance. This significant change was a triggering event which resulted in an evaluation of impairment of the Company's property and equipment which were designed for future use in production of STS101 after the commercialization. The Company evaluated the recoverability of the property and equipment by comparing their carrying amount to the future undiscounted cash flows expected to be generated by the assets to determine if the carrying value was not recoverable. The recoverability test indicated that the Company's property and equipment were impaired. As a result, the Company recognized an impairment loss of $ 11.7 million for the quarter ended December 31, 2022.
Recent Accounting Pronouncements	Recent Accounting Pronouncements New Accounting Pronouncements Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) , to provide financial statement users with more useful information about expected credit losses, which was subsequently updated by ASU 2019-04, Codification Improvements to Topic 326, Financial Instrument - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, and ASU 2019-05, Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief. The amendment updates the guidance for measuring and recording credit losses on financial assets measured at amortized cost by replacing the “incurred loss” model with an “expected loss” model. Accordingly, these financial assets will be presented at the net amount expected to be collected. The amendment also requires that credit losses related to available-for-sale debt securities be recorded as an allowance through net income rather than reducing the carrying amount under the current, other-than-temporary-impairment model. In November 2019, the FASB issued ASU No. 2019-10, according to which, the new standard is effective for public business entities that meet the definition of an SEC filer, excluding entities eligible to be smaller reporting companies (“SRC”) as defined by the SEC, for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. For all other entities, the new standard is effective for fiscal years beginning after December 15, 2022, and interim periods within that fiscal year. The Company adopted this ASU effective January 1, 2023 . The adoption of this ASU did no t have a material effect on the Company’s financial statements and related disclosures.

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2023
Fair Value Disclosures [Abstract]
Schedule of Financial Assets Measured and Recognized at Fair Value	As of March 31, 2023, financial assets measured and recognized at fair value were as follows (in thousands): Fair Value Measurements at March 31, 2023 Level 1 Level 2 Level 3 Total Assets U.S. government bonds $ 13,876 $ — $ — $ 13,876 U.S. government agency bonds — 1,444 — 1,444 Corporate bonds — 6,446 — 6,446 Asset backed securities — 78 — 78 Marketable securities 13,876 7,968 — 21,844 Money market funds (1) 19,463 — — 19,463 Total fair value of assets $ 33,339 $ 7,968 $ — $ 41,307 (1) Included in cash and cash equivalents on the balance sheet. Fair Value Measurements at March 31, 2023 Amortized Gross Gross Estimate Assets U.S. government bonds $ 13,883 $ 1 $ ( 8 ) $ 13,876 U.S. government agency bonds 1,443 1 — 1,444 Corporate bonds 6,445 1 — 6,446 Asset backed securities 78 — — 78 Marketable securities 21,849 3 ( 8 ) 21,844 Money market funds (1) 19,463 — — 19,463 Total fair value of assets $ 41,312 $ 3 $ ( 8 ) $ 41,307 (1) Included in cash and cash equivalents on the balance sheet. As of December 31, 2022, financial assets measured and recognized at fair value were as follows (in thousands): Fair Value Measurements at December 31, 2022 Level 1 Level 2 Level 3 Total Assets U.S. government bonds $ 18,703 $ — $ — $ 18,703 Corporate bonds — 16,941 — 16,941 Asset backed securities — 408 — 408 Marketable securities 18,703 17,349 — 36,052 Money market funds (1) 16,384 — — 16,384 Total fair value of assets $ 35,087 $ 17,349 $ — $ 52,436 (1) Included in cash and cash equivalents on the balance sheet Fair Value Measurements at December 31, 2022 Amortized Gross Gross Estimate Assets U.S. government bonds $ 18,724 $ 2 $ ( 23 ) $ 18,703 Corporate bonds 16,947 1 ( 7 ) 16,941 Asset backed securities 411 — ( 3 ) 408 Marketable securities 36,082 3 ( 33 ) 36,052 Money market funds (1) 16,384 — — 16,384 Total fair value of assets $ 52,466 $ 3 $ ( 33 ) $ 52,436 (1) Included in cash and cash equivalents on the balance sheet.

Balance Sheet Components (Table

Balance Sheet Components (Tables)	3 Months Ended
	Mar. 31, 2023
Balance Sheet Related Disclosures [Abstract]
Schedule of Accrued and Other Current Liabilities	Accrued and other current liabilities consisted of the following (in thousands): March 31, December 31, 2023 2022 Accrued salaries and benefits $ 460 $ 536 Accrued severance payments 1,310 — Accrued research and development expenses 1,661 2,630 Accrued impairment loss 965 2,765 Accrued professional services 392 66 Other 53 69 Total $ 4,841 $ 6,066

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2023
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Schedule of Stock Option Activity	A summary of stock option activity for the three months ended March 31, 2023 is set forth below: Outstanding Options Shares Number of Weighted Weighted- Balance, January 1, 2023 665,900 5,292,403 $ 6.84 7.9 Options cancelled 86,744 ( 86,744 ) $ 4.21 Balance, March 31, 2023 752,644 5,205,659 $ 6.88 7.6 Exercisable as of March 31, 2023 2,554,076 $ 8.72 6.4 Vested and expected to vest, March 31, 2023 5,205,659 $ 6.88 7.6
Summary of Stock Based Compensation Expense	Total stock-based compensation expense recorded related to options granted to employees and non-employees was as follows (in thousands): Three Months Ended March 31, 2023 2022 Research and development $ 318 $ 436 General and administrative 775 803 $ 1,093 $ 1,239

Net Loss Per Share Attributab_2

Net Loss Per Share Attributable to Common Stockholders (Tables)	3 Months Ended
	Mar. 31, 2023
Earnings Per Share [Abstract]
Schedule of Computation of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders	The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders (in thousands, except share and per share data): Three Months Ended March 31, 2023 2022 Numerator: Net loss attributable to common stockholders $ ( 10,294 ) $ ( 15,517 ) Denominator: Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted 33,152,498 31,545,564 Net loss per share attributable to common stockholders, basic and diluted $ ( 0.31 ) $ ( 0.49 )
Schedule of Potentially Dilutive Securities Excluded from Computation of Diluted Net Loss Per Share	The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share attributable to common stockholders for the period presented because including them would have been antidilutive: March 31, 2023 2022 Options to purchase common stock 5,205,659 3,214,903 Shares committed under ESPP — 28,746 Total 5,205,659 3,243,649

Commitments and Contingencies (

Commitments and Contingencies (Tables)	3 Months Ended
	Mar. 31, 2023
Commitments And Contingencies Disclosure [Abstract]
Schedule of Operating Lease Cost	Operating lease cost consists of the following (in thousands): Three Months Ended March 31, 2023 2022 Operating lease cost $ 40 $ 39 Short-term lease cost 38 33 Total lease cost $ 78 $ 72
Schedule of Maturities of Operating Lease Liabilities	The maturities of operating lease liabilities as of March 31, 2023 are as follows (in thousands): March 31, 2023 2023 (remaining nine months) $ 130 Total undiscounted lease payments 130 Less: imputed interest 14 Total operating lease liability 116 Less: current portion 116 Operating lease liability, net of current portion $ —

Organization and Summary of S_3

Organization and Summary of Significant Accounting Policies - Additional Information (Details) - USD ($)			1 Months Ended		3 Months Ended
	Apr. 16, 2023	Nov. 03, 2022	Sep. 30, 2022	Oct. 31, 2020	Mar. 31, 2023	Dec. 31, 2022	Jan. 01, 2023
Organization And Summary Of Significant Accounting Policies [Line Items]
Cash, cash equivalents and marketable securities					$ 41,400,000
Impairments of long-lived assets					$ 0	$ 11,700,000
Common stock, par value					$ 0.0001	$ 0.0001
Accumulated deficit					$ 222,085,000	$ 211,791,000
Operating lease right-of-use asset					82,000	108,000
Operating lease, liability					$ 116,000
ASU 2016-13
Organization And Summary Of Significant Accounting Policies [Line Items]
Change in accounting principle, ASU, adopted [true false]					true
Change in accounting principle, ASU, adoption date							Jan. 01, 2023
Change in accounting principle, ASU, immaterial effect [true false]					true
Property and Equipment
Organization And Summary Of Significant Accounting Policies [Line Items]
Impairments of long-lived assets						6,700,000
Prepaid Expenses and Other Current Assets
Organization And Summary Of Significant Accounting Policies [Line Items]
Impairments of long-lived assets						2,200,000
Accrued and Other Current Liabilities
Organization And Summary Of Significant Accounting Policies [Line Items]
Impairments of long-lived assets						$ 2,800,000
Merger Agreement | Subsequent Event
Organization And Summary Of Significant Accounting Policies [Line Items]
Common stock, par value	$ 0.0001
Amount in cash in exchange for shares	$ 0.91
Merger Agreement | Supporting Persons | Subsequent Event
Organization And Summary Of Significant Accounting Policies [Line Items]
Aggreagate percentage of shares owned	18.80%
Common Stock | At-the-Market Equity Offering | SVB Securities LLC
Organization And Summary Of Significant Accounting Policies [Line Items]
Share issued			1,538,461
Gross proceeds from issuance of common stock			$ 9,700,000
Maximum aggregate gross expected sales proceeds				$ 50,000,000
Maximum compensation for services of gross proceeds				3%
Sale of stock, price per share			$ 6.50
Payments of stock issuance costs			$ 300,000
Common Stock | At-the-Market Equity Offering | Virtu Americas LLC
Organization And Summary Of Significant Accounting Policies [Line Items]
Share issued					0
Gross proceeds from issuance of common stock		$ 100,000,000
Common Stock | At-the-Market Equity Offering | Virtu Americas LLC | Maximum
Organization And Summary Of Significant Accounting Policies [Line Items]
Percentage of compensation for services of gross proceeds of common shares		3%

Fair Value Measurements - Sched

Fair Value Measurements - Schedule of Financial Assets Measured and Recognized at Fair Value (Details) - Recurring - USD ($) $ in Thousands		Mar. 31, 2023	Dec. 31, 2022
Assets
Marketable Securities		$ 21,844	$ 36,052
Total fair value of assets		41,307	52,436
Marketable Securities Amortized Cost		21,849	36,082
Marketable Securities Gross Unrealized Gains		3	3
Marketable Securities Gross Unrealized Losses		(8)	(33)
Marketable Securities Estimate Fair Value		21,844	36,052
Amortized Cost		41,312	52,466
Gross Unrealized Gains		3	3
Gross Unrealized Losses		(8)	(33)
Estimate Fair Value		41,307	52,436
U.S. government Bonds
Assets
Marketable Securities		13,876	18,703
Marketable Securities Amortized Cost		13,883	18,724
Marketable Securities Gross Unrealized Gains		1	2
Marketable Securities Gross Unrealized Losses		8	23
Marketable Securities Estimate Fair Value		13,876	18,703
U.S. government Agency Bonds
Assets
Marketable Securities		1,444
Marketable Securities Amortized Cost		1,443
Marketable Securities Gross Unrealized Gains		1
Marketable Securities Estimate Fair Value		1,444
Corporate Bonds
Assets
Marketable Securities		6,446	16,941
Marketable Securities Amortized Cost		6,445	16,947
Marketable Securities Gross Unrealized Gains		1	1
Marketable Securities Gross Unrealized Losses			7
Marketable Securities Estimate Fair Value		6,446	16,941
Asset Backed Securities
Assets
Marketable Securities		78	408
Marketable Securities Amortized Cost		78	411
Marketable Securities Gross Unrealized Losses			3
Marketable Securities Estimate Fair Value		78	408
Money Market Funds
Assets
Money market funds	[1]	19,463	16,384
Amortized Cost	[1]	19,463	16,384
Estimate Fair Value	[1]	19,463	16,384
Level 1
Assets
Marketable Securities		13,876	18,703
Total fair value of assets		33,339	35,087
Level 1 | U.S. government Bonds
Assets
Marketable Securities		13,876	18,703
Level 1 | Money Market Funds
Assets
Money market funds	[1]	19,463	16,384
Level 2
Assets
Marketable Securities		7,968	17,349
Total fair value of assets		7,968	17,349
Level 2 | U.S. government Agency Bonds
Assets
Marketable Securities		1,444
Level 2 | Corporate Bonds
Assets
Marketable Securities		6,446	16,941
Level 2 | Asset Backed Securities
Assets
Marketable Securities		$ 78	$ 408
[1] Included in cash and cash equivalents on the balance sheet.

Fair Value Measurements - Addit

Fair Value Measurements - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Allowance for credit losses	$ 0	$ 0
Impairment loss	0	11,700,000
Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial liabilities measured and recognized	$ 0	$ 0

Balance Sheet Components - Addi

Balance Sheet Components - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022
Balance Sheet Components [Line Items]
Depreciation expense	$ 0		$ 92,000
Impairments of long-lived assets	0	$ 11,700,000
Property and equipment fair market value		0
Prepaid expenses and other current assets	$ 2,005,000	2,328,000
Non-cancelable future payments		2,800,000
Property and Equipment
Balance Sheet Components [Line Items]
Impairments of long-lived assets		6,700,000
Prepaid expenses and other current assets		2,200,000
Prepaid Expenses and Other Current Assets
Balance Sheet Components [Line Items]
Impairments of long-lived assets		2,200,000
Accrued and Other Current Liabilities
Balance Sheet Components [Line Items]
Impairments of long-lived assets		$ 2,800,000

Balance Sheet Components - Sche

Balance Sheet Components - Schedule of Accrued and Other Current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Payables And Accruals [Abstract]
Accrued salaries and benefits	$ 460	$ 536
Accrued severance payments	1,310
Accrued research and development expenses	1,661	2,630
Accrued impairment loss	965	2,765
Accrued professional services	392	66
Other	53	69
Total	$ 4,841	$ 6,066

Debt - Additional Information (

Debt - Additional Information (Details) - Loan Agreement - Silicon Valley Bank - USD ($)			12 Months Ended
	May 03, 2022	Oct. 26, 2018	Dec. 31, 2022
Debt Instrument [Line Items]
Debt instrument, maximum borrowing capacity		$ 10,000,000
Debt instrument, floating interest rate percentage		6.50%
Debt instrument, interest rate increase percentage		5%
Debt instrument, maturity date		May 01, 2022
Debt issuance cost final payment recognized as additional interest expense			$ 300,000
Repayments of obligation	$ 400,000
Outstanding loan amount	200,000
Long-term debt final payment	$ 200,000
Greater above Prime Rate
Debt Instrument [Line Items]
Debt instrument, floating interest rate percentage		1.50%
Term A Loan
Debt Instrument [Line Items]
Debt instrument, current borrowing capacity		$ 5,000,000
Debt issuance costs			$ 100,000
Term Loan
Debt Instrument [Line Items]
Debt instrument, remaining borrowing capacity, no longer available for draw		$ 5,000,000

Stock-Based Compensation - Sche

Stock-Based Compensation - Schedule of Stock Option Activity (Details) - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Compensation Related Costs [Abstract]
Shares Available for Grant, Beginning Balance	665,900
Shares Available for Grant, Options cancelled	86,744
Shares Available for Grant, Ending Balance	752,644	665,900
Outstanding Options, Number of Shares, Beginning Balance	5,292,403
Outstanding Options, Number of Shares, Options cancelled	(86,744)
Outstanding Options, Number of Shares, Ending Balance	5,205,659	5,292,403
Outstanding Options, Number of Shares, Exercisable as of March 31, 2023	2,554,076
Outstanding Options, Number of Shares, Vested and expected to vest, March 31, 2023	5,205,659
Outstanding Options, Weighted Average Exercise Price, Beginning Balance	$ 6.84
Outstanding Options, Weighted Average Exercise Price, Options cancelled	4.21
Outstanding Options, Weighted Average Exercise Price, Ending Balance	6.88	$ 6.84
Shares Available for Grant, Exercisable as of March 31, 2023	8.72
Shares Available for Grant, Vested and expected to vest, March 31, 2023	$ 6.88
Weighted Average Remaining Contractual Term, Balance	7 years 7 months 6 days	7 years 10 months 24 days
Weighted Average Remaining Contractual Term, Exercisable as of March 31, 2023	6 years 4 months 24 days
Weighted Average Remaining Contractual Term, Vested and expected to vest, March 31, 2023	7 years 7 months 6 days

Stock-Based Compensation - Addi

Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Weighted average grant-date fair value of options granted		$ 3.42
Stock option granted	0
Unrecognized stock-based compensation expense	$ 5.8
Unrecognized stock-based compensation expense, weighted-average recognition period	2 years 2 months 12 days
Fair value of options vested	$ 1.2	$ 1.2
2019 Employee Share Purchase Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock, shares reserved for issuance	724,258

Stock-Based Compensation - Summ

Stock-Based Compensation - Summary of Stock Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 1,093	$ 1,239
Research and Development
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation expense	318	436
General and Administrative
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 775	$ 803

Net Loss Per Share Attributab_3

Net Loss Per Share Attributable to Common Stockholders - Schedule of Computation of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Numerator:
Net loss attributable to common stockholders	$ (10,294)	$ (15,517)
Denominator:
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic	33,152,498	31,545,564
Weighted-average shares used in computing net loss per share attributable to common stockholders, diluted	33,152,498	31,545,564
Net loss per share attributable to common stockholders, basic	$ (0.31)	$ (0.49)
Net loss per share attributable to common stockholders, diluted	$ (0.31)	$ (0.49)

Net Loss Per Share Attributab_4

Net Loss Per Share Attributable to Common Stockholders - Schedule of Potentially Dilutive Securities Excluded from Computation of Diluted Net Loss Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Potentially dilutive securities outstanding	5,205,659	3,243,649
Options to Purchase Common Stock
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Potentially dilutive securities outstanding	5,205,659	3,214,903
Shares Committed Under ESPP
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Potentially dilutive securities outstanding		28,746

Commitments and Contingencies -

Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Operating Lease Liabilities Payments Due [Abstract]
Operating lease remaining term	7 months 6 days
Operating lease discount rate	9.80%
Cash paid included in operating lease liabilities	$ 0.1	$ 0.1

Commitments and Contingencies_2

Commitments and Contingencies - Schedule of Operating Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Commitments And Contingencies Disclosure [Abstract]
Operating lease cost	$ 40	$ 39
Short-term lease cost	38	33
Total lease cost	$ 78	$ 72

Commitments and Contingencies_3

Commitments and Contingencies - Schedule of Future Minimum Lease Payments Under Non-cancelable Operating Leases (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Operating Lease Liabilities Payments Due [Abstract]
2023	$ 130
Total minimum lease payments	$ 130

Commitments and Contingencies_4

Commitments and Contingencies - Schedule of Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Commitments And Contingencies Disclosure [Abstract]
2023 (remaining nine months)	$ 130
Total minimum lease payments	130
Less: imputed interest	14
Total operating lease liability	116
Less: current portion	$ 116	$ 138

Income Taxes - Additional Infor

Income Taxes - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 0	$ 0

Workforce Reduction - Additiona

Workforce Reduction - Additional Information (Details) $ in Millions		3 Months Ended
	Mar. 27, 2023 Employee	Mar. 31, 2023 USD ($)
Restructuring and Related Activities [Abstract]
Reduction in workforce | Employee	9
Reduction in workforce, percentage	36%
Workforce reduction charges		$ 1.3
Workforce reduction payment in accrued benefits		$ 0.2