Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 31, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | HARP | |
Entity Registrant Name | Harpoon Therapeutics, Inc. | |
Entity Central Index Key | 0001708493 | |
Current Fiscal Year End Date | --12-31 | |
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 File Number | 001-38800 | |
Entity Tax Identification Number | 47-3458693 | |
Entity Common Stock, Shares Outstanding | 16,932,272 | |
Title of 12(b) Security | Common stock, par value $0.0001 per share | |
Security Exchange Name | NASDAQ | |
Entity Address, Address Line One | 611 Gateway Boulevard | |
Entity Address, Address Line Two | Suite 400 | |
Entity Address, City or Town | South San Francisco | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94080 | |
City Area Code | 650 | |
Local Phone Number | 443-7400 | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Transition Report | false |
Condensed Balance Sheets (unaud
Condensed Balance Sheets (unaudited) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 17,738 | $ 51,614 |
Short-term marketable securities | 13,870 | 1,498 |
Prepaid expenses and other current assets | 2,688 | 1,615 |
Total current assets | 34,296 | 54,727 |
Property and equipment, net | 3,527 | 7,237 |
Operating lease right-of-use assets | 8,857 | 10,854 |
Other assets | 898 | 911 |
Total assets | 47,578 | 73,729 |
Current liabilities | ||
Accounts payable | 3,435 | 4,712 |
Accrued liabilities | 11,697 | 14,361 |
Deferred revenue, current | 0 | 30,937 |
Operating lease liabilities, current | 2,974 | 2,423 |
Total current liabilities | 18,106 | 52,433 |
Deferred revenue, noncurrent | 0 | 2,314 |
Operating lease liabilities, net of current portion | 11,530 | 13,583 |
Embedded redemption liability | 4,574 | 0 |
Series A mandatorily redeemable preferred stock | 8,827 | 0 |
Total liabilities | 43,037 | 68,330 |
Commitments and contingencies (Note 6) | ||
Stockholders' equity | ||
Common stock, $0.0001 par value; 150,000,000 shares authorized at September 30, 2023 and December 31, 2022; 4,108,769 shares and 3,578,668 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively | 1 | 4 |
Additional paid-in capital | 369,141 | 357,921 |
Accumulated other comprehensive income (loss) | 1 | (3) |
Accumulated deficit | (364,602) | (352,523) |
Total stockholders' equity | 4,541 | 5,399 |
Total liabilities and stockholders' equity | $ 47,578 | $ 73,729 |
Condensed Balance Sheets (una_2
Condensed Balance Sheets (unaudited) (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, Authorized | 150,000,000 | 150,000,000 |
Common stock, issued | 4,108,769 | 3,578,668 |
Common stock, outstanding | 4,108,769 | 3,578,668 |
Condensed Statements of Operati
Condensed Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue | ||||
Total revenue | $ 4,448 | $ 13,617 | $ 33,252 | $ 27,826 |
Revenue, Product and Service [Extensible Enumeration] | Total revenue | Total revenue | Total revenue | Total revenue |
Operating expenses | ||||
Research and development | $ 12,325 | $ 20,977 | $ 39,684 | $ 62,446 |
General and administrative | 4,262 | 4,529 | 12,250 | 14,993 |
Impairment of long-lived assets | 0 | 0 | 1,729 | 0 |
Total operating expenses | 16,587 | 25,506 | 53,663 | 77,439 |
Loss from operations | (12,139) | (11,889) | (20,411) | (49,613) |
Interest income, net | 480 | 289 | 1,520 | 433 |
Interest expense | (2,046) | 0 | (3,744) | 0 |
Other income (expense), net | 11,903 | (40) | 10,556 | (132) |
Net loss attributable to common stockholders | (1,802) | (11,640) | (12,079) | (49,312) |
Other comprehensive loss: | ||||
Net unrealized (loss) gain on marketable securities | (4) | 28 | 4 | 19 |
Comprehensive loss | $ (1,806) | $ (11,612) | $ (12,075) | $ (49,293) |
Net loss attributable to common stockholders per share, basic | $ (0.46) | $ (3.52) | $ (3.17) | $ (14.95) |
Net loss attributable to common stockholders per share, diluted | $ (0.46) | $ (3.52) | $ (3.17) | $ (14.95) |
Weighted-average shares used in computing net loss per share, basic | 3,947,995 | 3,306,215 | 3,807,955 | 3,299,357 |
Weighted-average shares used in computing net loss per share, diluted | 3,947,995 | 3,306,215 | 3,807,955 | 3,299,357 |
Condensed Statements of Stockho
Condensed Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive (Loss) | Accumulated Deficit |
Beginning balances at Dec. 31, 2021 | $ 58,070 | $ 4 | $ 342,905 | $ (47) | $ (284,792) |
Beginning balances, shares at Dec. 31, 2021 | 3,276,579 | ||||
Issuance of common stock under equity incentive plans including exercise of stock options | 830 | 830 | |||
Issuance of common stock under equity incentive plans including exercise of stock options, shares | 30,991 | ||||
Vesting of early exercisable stock options | 3 | 3 | |||
Vesting of early exercisable stock options, Shares | 173 | ||||
Stock-based compensation | 2,843 | 2,843 | |||
Net income (Loss) | (20,321) | (20,321) | |||
Unrealized gain on marketable securities | (41) | (41) | |||
Ending balance at Mar. 31, 2022 | 41,384 | $ 4 | 346,581 | (88) | (305,113) |
Ending balance, shares at Mar. 31, 2022 | 3,307,742 | ||||
Beginning balances at Dec. 31, 2021 | 58,070 | $ 4 | 342,905 | (47) | (284,792) |
Beginning balances, shares at Dec. 31, 2021 | 3,276,579 | ||||
Net income (Loss) | (49,312) | ||||
Unrealized gain on marketable securities | 19 | ||||
Ending balance at Sep. 30, 2022 | 16,912 | $ 4 | 351,040 | (28) | (334,104) |
Ending balance, shares at Sep. 30, 2022 | 3,322,871 | ||||
Beginning balances at Mar. 31, 2022 | 41,384 | $ 4 | 346,581 | (88) | (305,113) |
Beginning balances, shares at Mar. 31, 2022 | 3,307,742 | ||||
Issuance of common stock under equity incentive plans including exercise of stock options | 53 | 53 | |||
Issuance of common stock under equity incentive plans including exercise of stock options, shares | 2,616 | ||||
Vesting of early exercisable stock options | 3 | 3 | |||
Vesting of early exercisable stock options, Shares | 173 | ||||
Stock-based compensation | 2,521 | 2,521 | |||
Net income (Loss) | (17,351) | (17,351) | |||
Unrealized gain on marketable securities | 32 | 32 | |||
Ending balance at Jun. 30, 2022 | 26,642 | $ 4 | 349,158 | (56) | (322,464) |
Ending balance, shares at Jun. 30, 2022 | 3,310,531 | ||||
Issuance of common stock under equity incentive plans including exercise of stock options | 101 | 101 | |||
Issuance of common stock under equity incentive plans including exercise of stock options, shares | 12,224 | ||||
Vesting of early exercisable stock options | 2 | 2 | |||
Vesting of early exercisable stock options, Shares | 115 | ||||
Stock-based compensation | 1,779 | 1,779 | |||
Net income (Loss) | (11,640) | (11,640) | |||
Unrealized gain on marketable securities | 28 | 28 | |||
Ending balance at Sep. 30, 2022 | 16,912 | $ 4 | 351,040 | (28) | (334,104) |
Ending balance, shares at Sep. 30, 2022 | 3,322,871 | ||||
Beginning balances at Dec. 31, 2022 | 5,399 | $ 4 | 357,921 | (3) | (352,523) |
Beginning balances, shares at Dec. 31, 2022 | 3,578,668 | ||||
Issuance of common stock under equity incentive plans including exercise of stock options | 93 | 93 | |||
Issuance of common stock under equity incentive plans including exercise of stock options, shares | 14,825 | ||||
Issuance of common stock warrants in connection with the sale of Series A mandatorily redeemable preferred stock | 3,881 | 3,881 | |||
Issuance of common stock pursuant to ATM facility | 1,525 | 1,525 | |||
Issuance of common stock pursuant to ATM facility, shares | 166,078 | ||||
Stock-based compensation | 1,133 | 1,133 | |||
Net income (Loss) | (11,338) | (11,338) | |||
Unrealized gain on marketable securities | 3 | 3 | |||
Ending balance at Mar. 31, 2023 | 696 | $ 4 | 364,553 | (363,861) | |
Ending balance, shares at Mar. 31, 2023 | 3,759,571 | ||||
Beginning balances at Dec. 31, 2022 | 5,399 | $ 4 | 357,921 | (3) | (352,523) |
Beginning balances, shares at Dec. 31, 2022 | 3,578,668 | ||||
Net income (Loss) | (12,079) | ||||
Unrealized gain on marketable securities | 4 | ||||
Ending balance at Sep. 30, 2023 | 4,541 | $ 1 | 369,141 | 1 | (364,602) |
Ending balance, shares at Sep. 30, 2023 | 4,108,769 | ||||
Beginning balances at Mar. 31, 2023 | 696 | $ 4 | 364,553 | (363,861) | |
Beginning balances, shares at Mar. 31, 2023 | 3,759,571 | ||||
Issuance of common stock pursuant to ATM facility | 171 | 171 | |||
Issuance of common stock pursuant to ATM facility, shares | 37,684 | ||||
Stock-based compensation | 1,065 | 1,065 | |||
Net income (Loss) | 1,061 | 1,061 | |||
Unrealized gain on marketable securities | 5 | 5 | |||
Ending balance at Jun. 30, 2023 | 2,998 | $ 4 | 365,789 | 5 | (362,800) |
Ending balance, shares at Jun. 30, 2023 | 3,797,256 | ||||
Issuance of common stock under equity incentive plans including exercise of stock options | 96 | 96 | |||
Issuance of common stock under equity incentive plans including exercise of stock options, shares | 27,989 | ||||
Par value reclass for 10 to 1 reverse stock split | $ (3) | 3 | |||
Issuance of common stock pursuant to ATM facility | 2,335 | 2,335 | |||
Issuance of common stock pursuant to ATM facility, shares | 283,525 | ||||
Stock-based compensation | 918 | 918 | |||
Net income (Loss) | (1,802) | (1,802) | |||
Unrealized gain on marketable securities | (4) | (4) | |||
Ending balance at Sep. 30, 2023 | $ 4,541 | $ 1 | $ 369,141 | $ 1 | $ (364,602) |
Ending balance, shares at Sep. 30, 2023 | 4,108,769 |
Condensed Statements of Stock_2
Condensed Statements of Stockholders' Equity (Unaudited) (Parenthetical) | 3 Months Ended |
Sep. 30, 2023 | |
Par value reclass reverse stock split ratio | 10 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities | ||
Net loss attributable to common stockholders | $ (12,079) | $ (49,312) |
Adjustments to reconcile net loss attributable to common stockholders to net cash provided by (used in) operating activities | ||
Stock-based compensation expense | 3,116 | 7,143 |
Depreciation and amortization | 1,268 | 1,679 |
Non-cash lease expense | 1,079 | 508 |
Loss on sale and disposal of fixed assets | 443 | 0 |
Impairment of long-lived assets | 1,729 | 0 |
Change in fair value of embedded redemption liability | (10,971) | 0 |
Issuance cost for embedded redemption liability | 807 | 0 |
Accretion of redemption value discount | 3,744 | 0 |
Net amortization of (discounts) and premiums on marketable securities | (215) | 413 |
Changes in operating assets and liabilities | ||
Prepaid expenses and other assets | (1,344) | (455) |
Other assets | 41 | 49 |
Accounts payable | (1,008) | (53) |
Accrued liabilities | (2,848) | (1,724) |
Deferred revenue | (33,251) | (27,826) |
Operating lease liabilities | (1,502) | (1,214) |
Net cash used in operating activities | (50,991) | (70,792) |
Cash flows from investing activities | ||
Purchases of property and equipment | (91) | (319) |
Purchases of marketable securities | (15,652) | (24,426) |
Maturities of marketable securities | 3,500 | 100,235 |
Proceeds from sale of equipment | 1,279 | 0 |
Net cash (used in) provided by investing activities | (10,964) | 75,490 |
Cash flows from financing activities | ||
Proceeds from issuance of Series A Preferred Stock, net of issuance cost | 23,703 | 0 |
Payments of deferred issuance costs | (311) | 0 |
Proceeds from issuance of common stock, net of issuance cost | 4,031 | 983 |
Proceeds from issuance of common stock in connection with employee benefit plans | 189 | 0 |
Net cash provided by financing activities | 27,612 | 983 |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (34,343) | 5,681 |
Cash, cash equivalents, and restricted cash at beginning of period | 52,287 | 45,360 |
Cash, cash equivalents, and restricted cash at end of period | 17,944 | 51,041 |
Supplemental disclosures of non-cash investing and financing information | ||
Purchases of property and equipment included in accrued liabilities and accounts payable | 0 | 28 |
Reclassification of employee stock liability to equity upon vesting | $ 0 | $ 8 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | 1. Organization Description of Business Harpoon Therapeutics, Inc. (the “Company”) is a clinical-stage immunotherapy company developing a novel class of T cell engagers that harness the power of the body’s immune system to treat patients suffering from cancer and other diseases. T cell engagers are engineered proteins that direct a patient’s own T cells to kill target cells that express specific proteins, or antigens, carried by the target cells. Using a proprietary Tri-specific T cell Activating Construct (“TriTAC”), platform, the Company is developing a pipeline of novel T cell engagers, or TriTACs, initially focused on the treatment of solid tumors and hematologic malignancies. The Company is also developing its ProTriTAC platform, which builds upon the core elements of the TriTAC platform by utilizing a prodrug approach designed to allow T cell engagers to address cancer targets that would otherwise be limited by on-target toxicities. The Company's third proprietary technology platform, extended release TriTAC-XR, is designed to mitigate cytokine release syndrome. The Company was incorporated in Delaware in March 2015 and is headquartered in South San Francisco, California. Liquidity Since inception, the Company has incurred significant losses and has negative cash flows from operations. As of September 30, 2023, the Company had an accumulated deficit of $ 364.6 million . Management expects to continue to incur additional substantial losses in the foreseeable future as a result of the Company’s research and development activities. On November 14, 2022, the Company announced a corporate restructuring designed to reduce operating expenses and align the Company's core activities with its focused clinical programs that are expected to drive long-term growth. The restructuring was completed in June 2023. In March 2023, the Company sold and issued (i) 25,000 shares of the 8.000 % Series A mandatorily redeemable preferred stock, par value $ 0.0001 per share (“Series A Preferred Stock”), and (ii) warrants to purchase up to an aggregate of 748,576 shares of the Company’s common stock (the “Series A Warrants”). The shares of Series A Preferred Stock and accompanying Series A Warrants were sold at a purchase price of $ 1,000 per share of Series A Preferred Stock, ("March 2023 Preferred Financing") The total gross proceeds received from the sale of the Series A Preferred Stock and Series A Warrants in the Private Placement were $ 25.0 million, which does not include any proceeds that may be received upon exercise of the Series A Warrants. As of September 30, 2023, there were 748,576 Series A Warrants issued and outstanding, each exercisable for one share of common stock at price of $ 9.78885 per share and no warrants had been exercised. In June 2023, the Company reduced its corporate facilities footprint by subletting all of its Cove Lease (as defined below) research labs and associated office space. During the three and nine months ended September 30, 2023, the Company sold 283,525 and 487,287 shares under the Sales Agreement for total net proceeds of approximately $ 2.4 million and $ 4.2 million, respectively. (See Note 9 Equity ) As of September 30, 2023, the Company had cash, cash equivalents and short-term marketable securities of $ 31.6 million, which is available to fund future operations. The Company believes as of September 30, 2023 that its cash, cash equivalents, and short-term marketable securities, combined with cost savings from its recently completed restructuring plan and cash raised in the October 2023 Financing, defined below, provides sufficient capital resources to continue its operations for at least 12 months from the issuance date of the accompanying unaudited condensed financial statements. October 2023 Financing As described in Note 11 Subsequent Events , in October 2023, the Company entered into a Securities Purchase Agreement, or the “October 2023 Financing,” pursuant to which the Company received gross proceeds of $ 100 million at closing, before deducting placement agent fees and offering expenses, and could receive up to an additional $ 50 million of gross proceeds upon cash exercise of the October 2023 Cash Warrants. In connection with the October 2023 Financing, the requisite holders of the Series A Preferred Stock approved an extension of the anniversary redemption date of the Series A Preferred Stock from March 23, 2026, or 3 years (the third anniversary of the original issuance date) to March 23, 2028, or 5 years , (the fifth anniversary of the original issuance date). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of SEC Regulation S-X for interim financial information. The accompanying unaudited condensed financial statements and notes should be read in conjunction with the audited annual financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on March 27, 2023 (the “2022 Annual Report on Form 10-K”). The Balance Sheet as of December 31, 2022 was derived from the audited annual financial statements as of the period then ended. Certain information and footnote disclosures typically included in the Company's audited annual financial statements have been condensed or omitted. The accompanying unaudited condensed financial statements reflect all adjustments that, in the opinion of management, are necessary for a fair statement of the results of the interim periods presented. All such adjustments are of a normal recurring nature except for the impacts of adopting new accounting standards discussed below. The accompanying unaudited condensed financial results are not necessarily indicative of results expected for the full fiscal year or for any subsequent interim period. Except where noted below, there were no material changes to the Company's significant accounting and financial reporting policies in the accompanying unaudited condensed financial statements from those reflected in the 2022 Annual Report on Form 10-K. For further information with regard to the Company’s Significant Accounting Policies, please refer to Note 2, “ Summary of Significant Accounting Policies ,” to the Company’s audited annual financial statements included in the 2022 Annual Report on Form 10-K which have been prepared in accordance with GAAP. Reverse Stock Split On June 22, 2023, at the Company’s 2023 annual meeting of stockholders, the stockholders approved the Reverse Stock Split (the “Reverse Stock Split”). On August 15, 2023, the Company’s board of directors approved the implementation of the reverse stock split at a ratio of 1 for 10 . The Reverse Stock Split became effective upon the filing of the Certificate of Amendment to its amended and restated certificate of incorporation, and the Company’s common stock began trading on a split-adjusted basis on September 1, 2023. The par value per share of the common stock remained unchanged. No fractional common shares were issued as a result of the Reverse Stock Split. Any stockholder who would have been entitled to receive a fractional share as a result of the Reverse Stock Split received cash payments in lieu of such fractional shares in an amount determined based on the closing price of the Company's common stock as of the effective date. All share and per share information included in the accompanying unaudited condensed financial statements has been retrospectively adjusted to reflect this Reverse Stock Split. Updates to Significant Accounting Policies On January 1, 2023, the Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent amendments to the initial guidance: ASU 2018-19 and ASU 2019-04 (collectively, “2016-13”). There was no material impact to the Company’s financial statements upon adoption. Available-for-Sale Securities The Company is exposed to credit losses through its investments in available-for-sale securities ("AFS"). An investment is impaired if the fair value of the investment is less than its amortized cost basis. The Company reviews each impaired AFS security held in its portfolio to determine whether the decline in fair value below its amortized cost basis is the result of credit losses or other factors. An allowance for credit losses is to be recorded as a charge to net loss attributable to common stockholders in an amount equal to the difference between the impaired security’s amortized cost basis and the amount expected to be collected over the lifetime of security, limited by the amount that the fair value is less than its amortized cost basis. Any remaining difference between its amortized cost basis and fair value is deemed not to be due to expected credit losses and is recorded as a component of accumulated other comprehensive income (loss). The Company’s impairment review considers several factors to determine if an expected credit loss is present including the discounted present value of expected cash flows of the security, the capacity to hold a security or sell a security before recovery of the decline in amortized cost, the credit rating of the security and forecasted and historical factors that affect the value of the security. As of September 30, 2023, the Company did not identify indicators of a decline in credit quality for the AFS held. The Company's AFS held at December 31, 2022 matured during the nine months ended September 30, 2023 at full face value and all proceeds were received. Use of Estimates The preparation of unaudited condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the unaudited condensed financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates and assumptions made in the accompanying unaudited condensed financial statements include, but are not limited to, valuation of the Series A Preferred Stock, valuation of the derivative liabilities, allowance for credit losses, the fair value of stock options and warrants, the research period of the collaboration agreements with AbbVie Biotechnology Ltd. (“AbbVie”), operating lease asset and lease liabilities, income tax uncertainties and certain accruals. Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the Company’s Chief Operating Decision Maker in making decisions regarding resource allocation and assessing performance. To date, the Company has viewed its operations and manages its business as one segment operating primarily in the United States. Cash, Cash Equivalents and Restricted Cash The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents. Cash equivalents consist primarily of amounts invested in money market accounts and are stated at fair value. There are no significant unrealized gains or losses on the money market funds for the periods presented. As of September 30, 2023 and December 31, 2022, the Company classified $ 0.2 million and $ 0.7 million, respectively, as restricted cash related to a letter of credit established for an operating lease entered into in August 2018 and as collateral related to a security deposit for an operating lease entered into in October 2021. The restricted cash is classified in “Other assets” in the unaudited condensed balance sheets. See Note 6 Commitments and Contingencies . The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the unaudited condensed balance sheets. As of September 30, 2023 December 31, 2022 (in thousands) Balance Sheets Cash and cash equivalents $ 17,738 $ 51,614 Restricted cash (included in other assets) 206 673 Total cash, cash equivalents and restricted cash $ 17,944 $ 52,287 Marketable Securities The Company generally invests its excess cash in money market funds and investment grade short-term to intermediate-term fixed income securities. Such investments are included in cash and cash equivalents, short-term marketable securities or long-term marketable securities on the unaudited condensed balance sheets. Marketable securities with a maturity date greater than 90 days and less than one year at each unaudited condensed balance sheet date are classified as short-term. Marketable securities with a maturity date greater than one year at each unaudited condensed balance sheet date are classified as long-term. All of the Company’s marketable securities are considered available-for-sale and are reported at fair value with unrealized gains and losses included as a component of stockholders’ equity. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity, which is included in interest income, net on the unaudited condensed statements of operations and comprehensive loss. Realized gains and losses, if any, on marketable securities are included in interest income, net on the unaudited condensed statements of operations and comprehensive loss. The cost of securities sold is determined using specific identification. The Company periodically evaluates its available-for-sale marketable debt securities for impairment. When the fair value of a marketable debt security is below its amortized cost, the amortized cost is reduced to its fair value if it is more likely than not that the Company is required to sell the impaired security before recovery of its amortized cost basis, or the Company has the intention to sell the security. If neither of these conditions are met, the Company determines whether the impairment is due to credit losses by comparing the present value of the expected cash flows of the security with its amortized cost basis. The amount of impairment recognized is limited to the excess of the amortized cost over the fair value of the security. An allowance for credit losses for the excess of amortized cost over the expected cash flows is recorded in other income (expense), net on the unaudited condensed statements of operations and comprehensive loss. Impairment losses that are not credit-related are included in accumulated other comprehensive income (loss) in stockholders’ equity. Concentration of Credit Risk The Company is subject to credit risk from its portfolio of cash equivalents and marketable securities. The Company invests in money market funds through a major U.S. bank and is exposed to credit risk in the event of default by the financial institution to the extent of amounts recorded on the unaudited condensed balance sheets. The Company invests in money market funds and investment grade short- to intermediate-term fixed income securities. Under its investment policy, the Company limits amounts invested in such securities by credit rating, maturity, industry group, investment type and issuer, except for securities issued by the U.S. government. The Company is not exposed to any significant concentrations of credit risk from these financial instruments. The goals of the Company’s investment policy, in order of priority, are as follows: preservation of principal, liquidity of investments, fiduciary control of cash and investments, prevention of inappropriate concentrations of investments, and obtaining the best yields. The Company minimizes the amount of credit exposure by investing cash that is not required for immediate operating needs in money market funds and marketable securities. Leases The Company evaluates arrangements at inception to determine if an arrangement is or contains a lease. Operating lease assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the commencement date of the lease based upon the present value of lease payments over the lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company uses an incremental borrowing rate that the Company would expect to incur for a fully collateralized loan over a similar term under similar economic conditions to determine the present value of the lease payments. The lease payments used to determine the Company’s operating lease assets may include lease incentives and stated rent increases and are recognized in the Company’s operating lease assets in the unaudited condensed balance sheets. Operating lease liabilities are accreted over the term of the lease using the incremental borrowing rate and the associated expense is recorded to operating expenses in the unaudited condensed statement of operations and comprehensive loss. The Company recognizes lease expenses on a straight-line basis over the lease term. Variable lease payments are recognized as the associated obligation is incurred. Fair Value Measurement Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, or an exit price, in the principal or most advantageous market for that asset or liability in an orderly transaction between market participants on the measurement date, and established a fair value hierarchy that requires an entity to maximize the use of observable inputs, where available, and minimize the use of unobservable inputs when measuring fair value. The Company measures fair value based on a three-level hierarchy of inputs, of which the first two are considered observable and the last unobservable. Unobservable inputs reflect the Company’s own assumptions about current market conditions. The three-level hierarchy of inputs is as follows: Level 1—Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and Level 3— Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The carrying amounts reflected in the accompanying unaudited condensed balance sheets for cash and cash equivalents, restricted cash, short-term marketable securities, prepaid expenses, other current assets, accounts payable, accrued expenses and other current liabilities approximate their fair values due to their short-term nature. Property and Equipment, Net Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed on a straight-line basis over the estimated useful lives of the related assets, generally three to five years . Leasehold improvements are amortized using the straight-line method over the shorter of the assets’ estimated useful lives or the remaining term of the lease. Depreciation and amortization begin at the time the asset is placed in service. Maintenance and repairs are charged to operations as incurred. Upon sale or retirement of assets, the cost and related accumulated depreciation are removed from the unaudited condensed balance sheet and the resulting gain or loss is reflected in operations. There were no material gains or losses for the sales or retirement of assets for any of the periods presented. Impairment of Long-Lived Assets The Company evaluates its long-lived assets, including property and equipment, for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets or group of assets may not be fully recoverable. If indicators of impairment exist and the undiscounted future cash flows that the assets are expected to generate are less than the carrying amount of the assets, the Company reduces the carrying amount of the assets through an impairment charge to their estimated fair values based on a discounted cash flow approach or, when available and appropriate, to comparable market values. For the three and nine months ended September 30, 2023, the Company recorded non-cash impairment charges of zero and $ 0.9 m illion to right-of-use assets associated with the Cove Lease and $ 0.8 million to leasehold improvements related to the Cove Lease to reduce their carrying values to their fair values using a discounted cash flow approach. Revenue Recognition In accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“Topic 606”), the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which 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 Topic 606, the Company performs the following five steps: (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 in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods and services it transfers to the customer. At contract inception, the Company assesses the goods or services promised within each contract that falls under the scope of Topic 606, determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The Company enters into corporate collaborations under which it may obtain upfront license fees, research and development funding, and development, regulatory and commercial milestone payments and royalty payments. The Company’s performance obligations under these arrangements may include licenses of intellectual property, distribution rights, research and development services, delivery of manufactured product and/or participation on joint steering committees. Licenses of intellectual property: If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue from upfront license fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgement 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 proportional performance for purposes of recognizing revenue from non-refundable, up-front fees. The Company evaluates the measure of proportional performance each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The Company recognizes collaboration revenue by measuring the progress toward complete satisfaction of the performance obligation using an input measure. In order to recognize revenue over the research and development period, the Company measures actual costs incurred to date compared to the overall total expected costs to satisfy the performance obligation. Revenues are recognized as the program costs are incurred. The Company will re-evaluate the estimate of expected costs to satisfy the performance obligation each reporting period and make adjustments for any significant changes. Milestone payments: At the inception of each arrangement that includes development, regulatory or commercial milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price. Topic 606 suggests two alternatives to use when estimating the amount of variable consideration: the expected value method and the most likely amount method. Under the expected value method, an entity considers the sum of probability-weighted amounts in a range of possible consideration amounts. Under the most likely amount method, an entity considers the single most likely amount in a range of possible consideration amounts. Whichever method is used, it should be consistently applied throughout the life of the contract; however, it is not necessary for the Company to use the same approach for all contracts. The Company expects to use the most likely amount method for development and regulatory milestone payments. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s or the licensee’s control, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis. The Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability or achievement of each such milestone and any related constraint, and if necessary, adjusts its estimates of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment. Commercial milestones and royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and in which the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue when the related sales occur. To date, the Company has not recognized any royalty revenue resulting from its collaboration arrangements. Upfront payments and fees are recorded as deferred revenue upon receipt or when due and may require deferral of revenue recognition to a future period until the Company performs its obligations (i.e. research and development services) under these arrangements. Amounts due to the Company are recorded as accounts receivable when the Company’s right to consideration is unconditional. Amounts recognized as revenue prior to receipt are recorded as contract assets included in prepaid expenses and other current assets on the Company’s unaudited condensed balance sheet. If the Company expects to have an unconditional right to receive the consideration in the next twelve months, this will be classified in current assets. Research and Development Expenses and Accrued Research and Development Costs The Company expenses research and development costs as incurred. Research and development expenses consist of personnel costs for the Company’s research and product development employees. Also included are non-personnel costs such as professional fees payable to third parties for preclinical studies, clinical trials, research services, production of materials for clinical trials, laboratory supplies and equipment maintenance and depreciation, intellectual property licenses and other consulting costs. The Company estimates preclinical and clinical study and research expenses based on the services performed, pursuant to contracts with research institutions that conduct and manage preclinical studies, clinical trials and research services and manufacturing organizations in connection with the production of materials for clinical trials on its behalf. The Company estimates these expenses based on discussions with internal management personnel and external service providers as to the progress or stage of completion of services and the contracted fees to be paid for such services. The Company records the estimated costs of research and development activities based upon the estimated amount of services provided but not yet invoiced and includes these costs in development expenses. The Company accrues for these costs based on factors such as estimates of the work completed and in accordance with agreements established with its third-party service provides under the service agreements. The Company makes significant judgments and estimates in determining the accrued liabilities balance in each reporting period. As actual costs become known, the Company adjusts its accrued liabilities. The Company has not experienced any material differences between accrued costs and actual costs incurred. However, the status and timing of actual services performed may vary from the Company’s estimates, resulting in adjustments to expense in future periods. Changes in these estimates that result in material changes to the Company’s accruals could materially affect the Company’s results of operations. Payments associated with licensing agreements to acquire exclusive license to develop, use, manufacture and commercialize products that have not reached technological feasibility and do not have alternate future use are expensed as incurred. Payments made to third parties under these arrangements in advance of the performance of the related services by the third parties are recorded as prepaid expenses until the services are rendered. Such payments are evaluated for current or long-term classification based on when such services are expected to be received. Stock-Based Compensation The Company maintains a stock-based compensation plan as a long-term incentive for employees, consultants and members of the Company’s board of directors (the “Board”). The plan allows for the issuance of non-statutory options (“NSOs”), incentive stock options to employees, NSOs to non-employees and restricted stock units (RSUs). Share-based payments are measured using fair-value-based measurements and recognized as compensation expense over the service period in which the awards are expected to vest. The Company’s fair-value-based measurements of awards to employees, directors and consultants as of the grant date utilize the single-option award-valuation approach, and the Company uses the straight-line method for expense attribution. The fair-value-based measurements of options granted to non-employees are remeasured at each period end until the options vest and are amortized to expense as earned. The valuation model used for calculating the estimated fair value of stock awards is the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires the Company to make assumptions and judgments about the variables used in the calculations, including the expected term (weighted-average period of time that the options granted are expected to be outstanding), the expected volatility of the Company’s common stock, the related risk-free interest rate and the expected dividend yield. The Company has elected to recognize forfeitures of share-based payment awards as they occur. Income Taxes Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates applied to taxable income in the years in which those temporary differences are expected to be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. Financial statement effects of uncertain tax positions are recognized when it is more-likely-than-not, based on the technical merits of the position, that it will be sustained upon examination. Interest and penalties related to unrecognized tax benefits are included as a component of Other expense, net. To date, there have been no interest or penalties charged in relation to the unrecognized tax benefits. The Company accounts for uncertain tax positions in accordance with ASC 740-10, Accounting for Uncertainty in Income Taxes . The Company assesses all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. Assessing an uncertain tax position begins with the initial determination of the position’s sustainability and is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed, and the Company will determine whether (i) the factors underlying the sustainability assertion have changed and (ii) the amount of the recognized tax benefit is still appropriate. The recognition and measurement of tax benefits requires significant judgment. Judgment concerning the recognition and measurement of a tax benefit might change as new information becomes available. The Company includes any penalties and interest expense related to income taxes as a component of the provision for income tax, as necessary. To date, there have been no interest or penalties charged in relation to the unrecognized tax benefits. Net Loss Per Share Attributable to Common Stockholders Basic net loss per share attributable to common stockholders is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, without consideration of potentially dilutive securities. Diluted net loss per share attributable to common stockholders is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, without consideration of potentially dilutive securities. See Note 10 Net Loss Per Share Attributable to Common Stockholders . Comprehensive Loss Comprehensive loss includes net loss attributable to common stockholders and certain changes in stockholders' equity that are excluded from net loss attributable to common stockholders, primarily unrealized gains or losses on the Company’s marketable securities. Emerging Growth Company Status The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that the Company (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, the accompanying unaudited condensed financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. Recent Accounting Pronouncements Adopted In June 2016, the Financial Accounting Standards Board (the FASB) issued ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which requires that expected credit losses relating to financial assets measured on an amortized cost basis and available-for-sale debt securities be recorded through an allowance for credit losses. ASU 2016-13 limits the amount of credit losses to |
Fair Value Measurement
Fair Value Measurement | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | 3. Fair Value Measurement The following table presents information about the Company’s financial assets that are measured at fair value and indicates the fair value hierarchy of the valuation: September 30, 2023 Total Level 1 Level 2 Level 3 (in thousands) Assets Cash equivalents: Money market funds $ 17,236 $ 17,236 $ — $ — Total cash equivalents 17,236 17,236 $ — $ — Short-term marketable securities: U.S. government securities 13,870 13,870 — — Total cash equivalents and marketable securities $ 31,106 $ 31,106 $ — $ — Liabilities Derivative liability $ 1,029 $ — $ — $ 1,029 Total liabilities $ 1,029 $ — $ — $ 1,029 The Company's Level 3 embedded redemption liability pertaining to the Series A Preferred Stock was valued utilizing a probability-weighted cash flow approach, including variables for the probability and timing of potential licensing transactions and a discount rate reflecting an estimated investor rate of return ( 30 % as of September 30, 2023) which are deemed to be Level 3 inputs in the fair value hierarchy. The Company recorded a remeasurement fair value change for the embedded redemption liability of the Series A Preferred Stock of $ 11.2 millio n and $ 11.0 million for the three and nine months ended September 30, 2023. December 31, 2022 Total Level 1 Level 2 Level 3 (in thousands) Assets Cash equivalents: Money market funds $ 45,963 $ 45,963 $ — $ — Short-term marketable securities: U.S. government securities 1,498 — 1,498 — Total cash equivalents and marketable securities $ 47,461 $ 45,963 $ 1,498 $ — The Company’s Level 2 securities are valued using third-party pricing sources. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly. There were no transfers between Level 1 and Level 2 for the nine months ended September 30, 2023 and the year ended December 31, 2022. |
Available-for-Sale Securities
Available-for-Sale Securities | 9 Months Ended |
Sep. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Available-for-Sale Securities | 4. Available-for-Sale Securities At September 30, 2023, the Company held money market funds and U.S. government treasury securities as cash equivalents and short-term marketable securities. All marketable securities were considered available-for-sale at September 30, 2023. As of September 30, 2023, no indicators of a decline in credit quality was noted for the money market funds and U.S. government securities. The amortized cost, gross unrealized holding gains or losses, and fair value of the Company’s marketable securities by major security type at each unaudited condensed balance sheets date are summarized in the tables below: September 30, 2023 Amortized Cost Gross Gross Allowance Fair Value (in thousands) Cash equivalents Money market funds $ 17,236 $ — $ — $ — $ 17,236 Total cash equivalents 17,236 — — — 17,236 Short-term marketable securities: U.S. government securities 13,869 1 — — 13,870 Total short-term marketable securities 13,869 1 — — 13,870 Total $ 31,105 $ 1 $ — $ — $ 31,106 December 31, 2022 Amortized Cost Gross Gross Fair Value (in thousands) Cash equivalents Money market funds $ 45,963 $ — $ — $ 45,963 Total cash equivalents 45,963 — — 45,963 Short-term marketable securities: U.S. government securities 1,501 — ( 3 ) 1,498 Total short-term marketable securities 1,501 — ( 3 ) 1,498 Total $ 47,464 $ — $ ( 3 ) $ 47,461 As of December 31, 2022, unrealized losses on investments were not material and were not the result of a decline in credit quality. Unrealized losses are generally due to interest rate fluctuations, as opposed to declines in credit quality. All investments held at December 31, 2022 matured at par value. Accrued interest receivable was $ 0.1 million as of September 30, 2023 and was recorded in prepaid expenses and other current assets. As of September 30, 2023, all short-term marketable securities held mature within one year. |
Balance Sheet Components
Balance Sheet Components | 9 Months Ended |
Sep. 30, 2023 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Components | 5. Balance Sheet Components Property and Equipment, Net Property and equipment, net consists of the following: September 30, December 31, 2023 2022 (in thousands) Leasehold improvements $ 3,626 $ 8,872 Computer equipment and software 91 91 Furniture and fixtures 137 585 Laboratory equipment — 6,232 3,854 15,780 Less: Accumulated depreciation and amortization ( 327 ) ( 8,543 ) Total property and equipment, net $ 3,527 $ 7,237 Depreciation and amortization expense for property and equipment amounted to $ 0.2 million and $ 1.3 million and $ 0.5 million and $ 1.7 million for each of the three and nine months ended September 30, 2023 and September 30, 2022, respectively. Loss on sale and disposal of fixed assets was zero and $ 0.4 million for the three and nine months ended September 30, 2023. Accrued Liabilities Accrued liabilities consist of the following: September 30, December 31, 2023 2022 (in thousands) Accrued research and development $ 8,519 $ 8,569 Accrued personnel costs 2,677 4,760 Accrued professional and consulting fees 444 896 Other 57 136 Total accrued liabilities $ 11,697 $ 14,361 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 6. Commitments and Contingencies Leases In August 2018, the Company entered into a lease agreement for the office and laboratory space in South San Francisco, California (the “Cove Lease”). The lease commencement date was July 1, 2019 , at which time the Company took occupancy. The Cove Lease includes an option to renew, exercisable at the Company’s sole discretion, with a renewal term for an additional period of eight years . Therefore, the operating lease right-of-use asset and lease liabilities on the unaudited condensed balance sheets only contemplate the initial lease term. The Cove Lease qualifies as an operating lease. In June 2023, the Company entered into a lease assignment agreement to sublease the Cove Lease office and laboratory space, vacated the space and moved into the Gateway Lease (as defined below) office space. The Company recorded $ 0.6 million sublease rental income on a straight line basis in other income (expense), net for the three and nine months ended September 30, 2023. As of September 30, 2023, the Company's total minimum rentals to be received in the future under noncancelable subleases are $ 9.4 million. See Note 8 Restructuring and Impairment . In October 2021, the Company entered into a lease agreement for office space in South San Francisco, California (the “Gateway Lease”). The Gateway Lease commencement date was December 19, 2022 , at which time the Company obtained control, gained physical access and was able to occupy. The Gateway Lease does not contain a renewal option. Therefore, the right-of-use asset and lease liabilities on the unaudited condensed balance sheets only contemplate the initial lease term through March 31, 2028. The Gateway Lease qualifies as an operating lease. The following table summarizes the presentation in the Company’s unaudited condensed balance sheets of its operating leases (in thousands): As of Assets: Operating lease right-of-use assets $ 8,857 Liabilities Operating lease liabilities $ 2,974 Operating lease liabilities, net of current portion 11,530 Total operating lease liabilities $ 14,504 The Company incurred $ 0.2 million in variable lease costs for each of the three months ended September 30, 2023 and September 30, 2022. The Company incurred $ 0.7 million in variable lease costs for the nine months ended September 30, 2023 and $ 0.6 million for the nine months ended September 30, 2022. Future minimum lease payments as of September 30, 2023 are as follows (in thousands): Operating Lease Remainder of 2023 $ 1,729 2024 4,233 2025 4,351 2026 4,494 2027 2,785 2028 and thereafter 384 Total future minimum lease payments 17,976 Less imputed interest 3,472 Total $ 14,504 As of September 30, 2023, the weighted average remaining lease term was 4.0 years and the weighted average incremental borrowing rate used to determine the operating lease liability was 9.32 %. |
Collaboration, License & Clinic
Collaboration, License & Clinical Supply Agreements | 9 Months Ended |
Sep. 30, 2023 | |
Collaboration And License Agreements [Abstract] | |
Collaboration, License & Clinical Supply Agreements | 7. Collaboration, License & Clinical Supply Agreements Development and Option with AbbVie On November 20, 2019, the Company entered into a Development and Option Agreement with AbbVie (as amended, the “Development and Option Agreement”) in connection with the Company’s HPN217 program, which targets BCMA. Pursuant to such agreement, the Company granted to AbbVie an option to a worldwide, exclusive license under the Company’s patents and know-how applicable to the HPN217 program to develop, manufacture, and commercialize products arising from the HPN217 program and targeting BCMA (the “HPN217 Products”). Under the Development and Option Agreement, the Company filed an Investigational New Drug Application for HPN217 and is responsible for conducting clinical development activities pursuant to a mutually agreed development plan, including conducting a Phase 1/2 clinical trial of HPN217, in order for AbbVie to determine whether it wishes to exercise its option to take a worldwide, exclusive license to such HPN217 program. Upon execution of the Development and Option Agreement, the Company received an upfront payment of $ 30.0 million. Additionally, in June 2020, the Company received a development milestone payment of $ 50.0 million as a result of initiating its Phase 1/2 clinical trial by dosing the first patient in the trial in April 2020. The Company assessed the Development and Option Agreement in accordance with Topic 606 and concluded that AbbVie is a customer under this agreement. The Company identified the following performance obligation at the inception of the Development and Option Agreement consisting of the initial development activities. The Company evaluated AbbVie’s option to obtain a worldwide exclusive license for HPN217 to determine whether it provides AbbVie with any material rights. The Company concluded that the option was not issued at a significant and incremental discount, and therefore do not provide material rights. As such, the option is excluded as a performance obligation at the outset of the agreement. At the inception of the agreement, the transaction price included the $ 30.0 million up-front consideration received in December 2019 and a development milestone of up to $ 50.0 million to be received upon dosing of the first patient in the HPN217 Phase 1/2 clinical trial within a specified time period, for a total transaction price of $ 80.0 million. In April 2020, the Company had achieved this development milestone as a result of dosing its first patient in the Phase 1/2 clinical trial of HPN217 and received $ 50.0 million in June 2020. The remaining development, commercialization, and sales milestones along with sales-based royalties were not included in the transaction price, as these milestone amounts were fully constrained on the probability of achievement. The Company will reevaluate the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur, and, if necessary, adjust its estimate of the transaction price. The transaction price of $ 80.0 million relates to a single unit of accounting. The initial development activities are considered a single unit of accounting. The Company recognizes revenue associated with the performance obligation as the initial development activities are performed using an input method, according to the costs incurred as related to the estimated costs for the development and regulatory activities to be performed through the delivery of the HPN217 Opt-in report. The transfer of control occurs over this time period and, in management’s judgment, is the best measure of progress towards satisfying the performance obligation. Such estimates are reviewed by the Company on a periodic basis and, if necessary, the Company will adjust the measure of performance and related revenue recognition. In September 2023, AbbVie notified the Company that it will not exercise the exclusive license for HPN217. The Development and Option Agreement was terminated effective as of October 12, 2023, and the Company had no remaining performance obligations as of September 30, 2023. The program has been and will remain exclusively owned by the Company, and the Company plans to complete the ongoing Phase 1 clinical trial. In the three months ended September 30, 2023, the Company realized the remaining deferred revenue of $ 4.4 million. The Company recognized $ 4.4 million and $ 8.2 million of revenue for the three months ended September 30, 2023 and 2022, respectively. The Company recognized $ 21.7 million and $ 22.4 million of revenue for the nine months ended September 30, 2023 and 2022, respectively. As of September 30, 2023, the Company's balance of deferred revenue was zero . Amended and Restated Discovery Collaboration Agreement with AbbVie On August 16, 2021, the Company entered into Amendment No. 1 to the Amended and Restated Discovery Collaboration and License Agreement with AbbVie, or the First Amendment, which amends the Amended and Restated Discovery Collaboration and License Agreement entered on November 20, 2019, between the Company and AbbVie (such agreement, as amended by the First Amendment, the "Restated Collaboration Agreement"). The Restated Collaboration Agreement amends and restates the Discovery Collaboration and License Agreement entered into between the Company and AbbVie, dated October 20, 2017, and amended April 3, 2019, or the Original Collaboration Agreement. Pursuant to the First Amendment, the Company and AbbVie agreed to include the ProTriTAC technology within the Restated Collaboration Agreement. Pursuant to the Original Collaboration Agreement, the Company granted to AbbVie worldwide exclusive rights to develop and commercialize products that incorporate the Company’s proprietary TriTAC technology together with soluble T cell receptors, or TCRs provided by AbbVie that bind to targets accepted by the parties. Under the terms of the Original Collaboration Agreement, AbbVie was granted the right to designate up to two targets for development of TriTAC constructs, which it selected in 2017 and 2019, respectively. Pursuant to the Restated Collaboration Agreement, AbbVie is permitted to designate two further targets, with an option to select up to four additional targets, selected during a specified period following the effective date, to be the subject of activities under the collaboration, and is granted a worldwide, exclusive license to develop and commercialize products that incorporate either the Company’s proprietary TriTAC platform technology, or (as a result of and pursuant to the First Amendment) its ProTriTAC platform technology, to pursue available TCRs and/or antibody targets. Such products may incorporate antibodies provided by AbbVie or by the Company. During a period of up to four years following the date of AbbVie’s designation of each target for the products, and subject to confirmation of target availability, the Company and AbbVie will conduct certain research and discovery activities under a mutually agreed discovery and research plan in connection with the creation and evaluation of constructs comprising the Company’s proprietary TriTAC or ProTriTAC technologies, as applicable, in conjunction with the soluble TCR or antibody sequences directed at the agreed upon targets of interest. The Company may not, including through any third party, develop or commercialize any competing product that binds to any of the included targets. As was the case under the Original Collaboration Agreement, following the discovery phase, AbbVie will be solely responsible, at its cost, for the development, manufacture and commercialization of the products that arise from the activities under the discovery plan. AbbVie is required to use commercially reasonable efforts to develop and commercialize one such product directed to each target for which the discovery activities were completed in each Major Market (as defined in the Restated Collaboration Agreement). In addition to the upfront payment of $ 17.0 million already paid under the Original Collaboration Agreement, the Company received an upfront payment of $ 20.0 million under the Restated Collaboration Agreement for AbbVie’s right to select two additional targets and an option to select up to four further targets. AbbVie will be required to make payments to the Company, upon target selection, of $ 10.0 million for each target, for up to four additional targets selected by AbbVie. For each of the up to eight targets selected, the Company is eligible to receive up to $ 300.0 million in the aggregate for the achievement of specified development, regulatory and commercial sales milestones for licensed products indicated for human therapeutic or prophylactic use. The Company will also be eligible to receive tiered royalties on net sales by AbbVie, its affiliates and sublicensees of licensed products at percentages in the mid-single digits, subject to specified offsets and reductions. Royalties will be payable under the First Amendment and Restated Collaboration Agreement on a product-by-product and country-by-country basis commencing on the date of first commercial sale of each product and ending on the later of expiration of all valid claims of specified licensed patents in such country, expiration of regulatory exclusivity in such country or ten years following first commercial sale of such product in such country. If licensed products are developed and commercialized for diagnostic or veterinary use, or certain screening or monitoring uses, the parties have agreed to negotiate an appropriate reduction in the economic terms applicable to such non-therapeutic and prophylactic applications. The Restated Collaboration Agreement will terminate upon the date of the expiration of all AbbVie’s royalty payment obligations in all countries. The Restated Collaboration Agreement may be terminated by either party immediately for the insolvency of the other party or on 90 days ’ written notice for an uncured material breach of such agreement by the other party. AbbVie may also terminate the Restated Collaboration Agreement in its entirety or on a target-by-target or country-by-country basis for any reason on 30 days ’ written notice to the Company. In addition, AbbVie may terminate the Restated Collaboration Agreement immediately in its entirety or on a target-by-target basis if AbbVie considers in good faith that there has been a failure of the discovery or development efforts with respect to such target, or that further development or commercialization of products directed to such target is not advisable as a result of a serious safety issue. The Company assessed the Original Collaboration Agreement and Restated Collaboration Agreement including the First Amendment in accordance with Topic 606 and concluded that AbbVie is a customer under all agreements. The Company concluded that there are multiple promises under the Original Collaboration Agreement and Restated Collaboration Agreement including the First Amendment which include (1) research and development activities; (2) regulatory documentation and know-how; and (3) the license to the related technology. The Company combined these promises into a single performance obligation, as the Company is obliged to render specialized services for the research program, and other promises have either no significant value or are not distinct. At the inception of the Original Collaboration Agreement, the Company determined that the transaction price was $ 17.0 million, which was all allocated to the two initial targets. The Company recognized the full $ 17.0 million upfront payment related to the initial two targets prior to 2022. At the inception of the Restated Collaboration Agreement, the Company determined that the transaction price included the $ 20.0 million upfront payment received in December 2019. The Company allocates $ 10.0 million to each additional target selected. The company estimates that the $ 20.0 million upfront payment under the Restated Collaboration Agreement will be recognized over a period in which ongoing research and development activities are incurred based on the projected activities to be performed over each reporting period relative to the total estimated performance period. Such estimates are reviewed by the Company on a periodic basis and, if necessary, the Company will adjust the measure of performance and related revenue recognition. As of September 30, 2023, the Company determined that a transaction price of $ 20.0 million was still appropriate and that the Company had completed the performance obligation for the two additional targets. As such, the entire $ 20.0 million was recognized. The Company did not recognize revenue for the three months ended September 30, 2023 and September 30, 2022, respectively. The Company recognized $ 11.6 million and zero revenue for the nine months ended September 30, 2023 and September 30, 2022, respectively. The Company determined that future contingent payments that may be received related to development and regulatory milestones under the Restated Collaboration Agreement are based on the performance of AbbVie and are constrained due to the fact that it was not probable that a significant reversal of cumulative revenue would not occur, as their achievement is highly dependent on the successful completion of the research activities. Accordingly, revenue for the achievement of these milestones will be recognized in the period that it is deemed probable that the milestone will be achieved. Any consideration related to commercialization and sales milestones, and sales-based royalties will be recognized when the related sales occur as they were determined to relate predominantly to the license granted to AbbVie and have been excluded from the transaction price. The Company will re-evaluate the transaction price in each reporting period as uncertain events are resolved or other changes in circumstances occur. As of September 30, 2023, the Company had no t recognized or earned any milestone payments under the Original Collaboration or Restated Collaboration Agreement including the First Amendment. The Company will recognize royalty revenue in the period of sale of the related products, based on the underlying contract terms. No such amounts were recognized for th e nine months ended September 30, 2023 and 2022. As of September 30, 2023, the Company had no deferred revenue balance under the Restated Collaboration Agreement. Collaboration and License Revenue For the three and nine months ended September 30, 2023 and September 30, 2022, collaboration and license revenue in the accompanying unaudited condensed statements of operations and comprehensive loss is comprised of the following: For the Three Months Ended September 30, For the Nine Months Ended September 30, Collaboration and License Revenue 2023 2022 2023 2022 (in thousands) (in thousands) AbbVie Restated Collaboration Agreement $ — $ 5,389 $ 11,599 $ 5,389 AbbVie Development and Option Agreement 4,448 8,228 21,653 22,437 Total collaboration and license revenue $ 4,448 $ 13,617 $ 33,252 $ 27,826 |
Restructuring and Impairment
Restructuring and Impairment | 9 Months Ended |
Sep. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Impairment | 8. Restructuring and Impairment In November 2022, the Company's Board approved a corporate restructuring. The restructuring resulted in a reduction in workforce designed to reduce operating expenses and focus the Company’s resources on its clinical programs. The restructuring was completed in June 2023. The costs associated with the restructuring have been realized as of June 30, 2023 and no further costs are anticipated. For the six months ended June 30, 2023 and the year ended December 31, 2022, the Company paid $ 1.4 million and $ 0.5 million, respectively, in employee termination benefits. As part of the restructuring plan, the Company initiated activities to reduce its corporate facilities footprint. In June 2023, the Company sublet the Cove Lease research labs and associated offices and relocated to offices at the Gateway Lease. The Company performed an analysis of the resulting net sublease cash flows and carrying value of the Cove Lease right-of-use assets and the leasehold improvements assets. For the three and nine months ended September 30, 2023, the Company recorded non-cash impairment charges of zero and $ 0.9 million to the Cove Lease right-of-use assets and $ 0.8 million to the Cove Lease leasehold improvements, respectively, reducing their carrying values to their fair values based on a discounted cash flow approach. This fair value measurement is based on significant inputs not observable in the market (i.e., a market participant discount rate) and, therefore, represents a Level 3 measurement. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Equity | 9. Equity Incentive Plans Stock Option Activity As of September 30, 2023, there were approximately 210,000 shares reserved by the Company to grant under its 2019 Equity Incentive Plan (the “2019 Plan”). The following summarizes awards activity under the Company’s 2019 Plan and 2015 Equity Incentive Plan (the “2015 Plan”): Weighted Weighted Number of Average Average Aggregate Outstanding Exercise Remaining Intrinsic Awards Price Contractual Life Value (in years) (in thousands) Balance as of December 31, 2022 643,095 $ 56.20 7.6 $ 306 Awards granted 261,332 7.79 $ 133 Awards released ( 18,188 ) 6.78 $ 123 Awards cancelled ( 170,990 ) 70.91 Balance as of September 30, 2023 715,249 $ 36.31 7.6 $ 126 Exercisable as of September 30, 2023 303,427 $ 61.86 5.6 $ — The aggregate intrinsic values of options outstanding, vested and exercisable, and vested and expected to vest were calculated as the difference between the exercise price of the options and the estimated fair value of the Company’s common stock. During the nine months ended September 30, 2023 and September 30, 2022, the estimated weighted-average grant-date fair value of the stock options vested was $ 18.72 and $ 53.10 per share, respectively, and the estimated weighted-average grant-date fair value of stock options granted was $ 0.16 and $ 30.60 per share, respectively. The fair value of employee and director stock option awards was estimated at the date of grant using a Black-Scholes option-pricing model with the following weighted-average assumptions: Nine Months Ended September 30, 2023 2022 Expected term (years) 5.85 5.95 Expected volatility 90.25 % 82.04 % Risk-free interest rate 3.64 % 2.00 % Expected dividend yield 0 % 0 % Total stock-based compensation was as follows: Three Months Ended September 30, 2023 2022 (in thousands) Operating Expenses Research and development $ 440 $ 1,014 General and administrative 478 766 Total stock-based compensation $ 918 $ 1,780 Stock-based compensation related to non-employee awards, which is included in the table above, was no t material for both three months ended September 30, 2023 and 2022. Restricted Stock Units A restricted stock unit award (“RSU”) is an agreement to issue shares of the Company’s common stock at the time of vesting. RSUs generally vest annually in equal installments over one to four years on approximately the anniversary of the grant date. No RSUs were granted to employees for nine months ended September 30, 2023. The Company granted an aggregate of 18,188 fully- vested RSUs to certain members of its board of directors with a weighted fair value of $ 6.78 per share in lieu of cash payment for services for the nine months ended September 30, 2023. 2019 Employee Stock Purchase Plan The Board adopted, and the Company’s stockholders approved, the 2019 Employee Stock Purchase Plan (the “2019 ESPP”) in January 2019, which became effective upon the closing of the Company’s IPO in February 2019. The 2019 ESPP initially reserved 25,000 shares of common stock for employee purchases under terms and provisions established by the Board. The 2019 ESPP evergreen provision provides that the number of shares reserved and available for issuance under the 2019 ESPP will automatically increase January 1 st of, each year for a period of up to ten years, commencing on January 1, 2020 and ending on (and including) January 1, 2029, in an amount equal to the lesser of (i) 1 % of the total number of shares of the Company's common stock outstanding on December 31 of the preceding calendar year, (ii) 75,000 shares of the Company's common stock or (iii) such lesser number of shares of common stock as determined by the Board. In January 2023, common stock available for issuance under the 2019 ESPP was increased by approximately 35,800 shares as a result of this evergreen provision. The Company issued 27,989 and 42,814 shares under the 2019 ESPP during the three and nine months ended September 30, 2023, respectively. The Company has approximately 64,700 shares reserved for future issuance as of September 30, 2023. Series A Preferred Stock and Series A Warrants On March 22, 2023, the Company entered into a Securities Purchase Agreement pursuant to which the Company agreed to sell and issue shares of the Series A Preferred Stock and Series A Warrants in a Private Placement transaction. At the closing of the Private Placement on March 22, 2023 (the “Closing”), the Company sold and issued (i) 25,000 shares of Series A Preferred Stock and (ii) Series A Warrants to purchase up to an aggregate of 748,576 shares of the Company’s common stock. The shares of Series A Preferred Stock and accompanying Series A Warrants were sold at a purchase price of $ 1,000 per share of Series A Preferred Stock. The Series A Warrants are exercisable immediately, will remain exercisable for a period of eight years following the date of issuance and have an exercise price of $ 9.78885 per share. As of September 30, 2023, there were 748,576 Series A Warrants, each exercisable for one share of common stock at price of $ 9.78885 per share, and no warrants had been exercised. The total gross proceeds to the Company from the sale of the Series A Preferred Stock and Series A Warrants in the Private Placement were $ 25.0 million, which excludes $ 1.3 million in offering costs and any proceeds that may be received upon exercise of the Series A Warrants. The Series A Preferred Stock is non-voting stock. Some of the holders of the Series A Preferred Stock are considered related parties which the disinterested members of the Board reviewed and approved in accordance with the Company's related-person transaction policy. Holders of Series A Preferred Stock shall be entitled to receive dividends that accrue on a day-to-day basis until paid at a rate of 8.000 % per year on the stated value of $ 1,000 per share of Series A Preferred Stock. Such dividends shall be payable when declared by the Board, or paid in connection with redemption or other relevant event regardless of whether a dividend has been declared by the Board. As of September 30, 2023 and through the issuance date of these accompanying unaudited condensed financial statements, the Board had not declared a dividend. The Company may, at its option, redeem shares of Series A Preferred Stock from time to time at the Redemption Price Per Share, which is equal to the sum of (i) the product of (a) the Stated Value of $ 1,000 and (b) a Return Factor equal to 3.5 until the 18-month anniversary of the Closing and 4.5 thereafter and (ii) any accrued and unpaid dividends. In addition, the Series A Preferred Stock is mandatorily redeemable by the Company out of funds legally available therefor, at the Redemption Price Per Share, upon (i) receipt by the Company of certain amounts in connection with any HPN217 licensing transaction of which the maximum number of then-outstanding shares of Series A Preferred Stock that may be redeemed using up to 50 % of the cash proceeds and fair market value of certain non-cash proceeds received by the Company, (ii) receipt by the Company of certain net proceeds in connection with certain strategic and licensing transactions and (iii) on the third anniversary of the Closing or Anniversary Based Redemption Date , unless extended by consent of the requisite holders. The Company is obligated to redeem all outstanding shares of Series A Preferred Stock at the Redemption Price Per Share on the third anniversary of the Closing, however that date may be extended up to an additional two years by consent of the requisite holders or for any period of time by consent of all holders. As described in Note 11 Subsequent Events , in connection with the October 2023 Financing, the requisite holders of the Series A Preferred Stock approved an extension of such the anniversary redemption date of the Series A Preferred Stock from March 23, 2026, or 3 years (the third anniversary of the original issuance date), to March 23, 2028, or 5 years , (the fifth anniversary of the original issuance date). Series A Mandatorily Redeemable Preferred Stock As of the Closing, the Company evaluated the redemption feature, Series A Warrant terms and cumulative preferred dividend rights related to sale of the Series A Preferred Stock and Series A Warrants. The Company determined that the Series A Preferred Stock was mandatorily redeemable and terms of the sale of Series A Preferred Stock and Series A Warrants contained an embedded redemption liability feature which required the application of fair value accounting. Accordingly, the proceeds received from the sale of the Series A Preferred Stock and Series A Warrants were attributed to each of the instruments. The Company recorded the Series A Preferred Stock at a value of $ 5.1 million, which was recorded as a non-current liability, net of $ 0.3 million allocated issuance costs, on the unaudited condensed balance sheets. The Company recorded the embedded redemption liability of $ 15.5 million as a non-current liability on the unaudited condensed balance sheets. The issuance costs of $ 0.7 million attributable to the embedded redemption liability was charged to other income (expense), net on the unaudited condensed statements of operations and comprehensive loss. Subsequent remeasurement of the embedded redemption liability is determined by probability-weighted cash flow approach each reporting period using fair value accounting Level 3 inputs such as the probability and timing of potential licensing transactions and a discount rate reflecting an estimated investor rate of return. The Company records the remeasurement change as other income (expense), net on the unaudited condensed statements of operations and comprehensive loss. The Company recorded a remeasurement change of $ 11.2 million as other income (expense), net for the three months ended September 30, 2023. As of September 30, 2023, the Company embedded redemption liability of the Series A Preferred Stock was $ 4.6 million. The Company's Series A Preferred Stock will be accreted to the estimated redemption value using the effective interest method through the Anniversary Based Redemption Date, as amended pursuant to the October 2023 Financing (See Note 11 Subsequent Events ), with the changes in the carrying amount, including the accrual of dividends, recorded as interest expense on the unaudited condensed statements of operations and comprehensive loss. Interest expense of $ 2.0 million and $ 3.7 million from the periodic accretion to the redemption value Series A Preferred Stock was recorded for the three and nine months ended September 30, 2023, respectively. Series A Warrants As of the Closing, the Comp any determined that the Series A Warrants were equity instruments and $ 4.1 million relative fair value was attributed to the Series A Warrants of the $ 25.0 million proceeds from the sale of the Series A Preferred Stock and Series A Warrants. The Series A Warrants value of $ 3.9 million was recorded as additional paid-in capital, net of $ 0.2 million of allocated issuance costs, on the unaudited condensed balance sheets. As of September 30, 2023, there were 748,576 Series A Warrants, each exercisable for one share of common stock at price of $ 9.78885 per share and no warrants had been exercised. Common Stock In March 2020, the Company entered into a Controlled Equity Offering SM Sales Agreement ("Sales Agreement"), with Cantor Fitzgerald & Co. ("Cantor Fitzgerald"), under which the Company may offer and sell, from time to time at its sole discretion through Cantor Fitzgerald, as its sales agent, shares of the Company's common stock having an aggregate offering price of up to $ 75.0 million. The Company filed a shelf registration statement on Form S-3 with the SEC, which will permit the offering, issuance and sale by the Company of up to a maximum aggregate offering price of $ 250.0 million of our securities. During the three and nine months ended September 30, 2023, the Company sold 283,525 and 487,287 shares under the Sales Agreement for total net proceeds of approximately $ 2.4 million and $ 4.2 million, respectively. The Company did no t sell any shares of common stock under the Sales Agreement during the three and nine months ended September 30, 2022. From inception of the agreement through September 30, 2023, the Company had sold a total of 775,720 shares of its common stock under the Sales Agreement, resulting in aggregate net proceeds of approximately $ 15.4 million. As of September 30, 2023, there was approximately $ 59.6 million remaining available under the terms of the Sales Agreement. |
Net Loss Per Share Attributable
Net Loss Per Share Attributable to Common Stockholders | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share Attributable to Common Stockholders | 10. Net Loss Per Share Attributable to Common Stockholders The Company calculates basic and diluted net loss per share attributable to common stockholders by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period. Basic and diluted net loss per share are the same for all periods presented. A reconciliation of the numerator and denominator used in the calculation of the basic and diluted net loss attributable to common stockholders per share is as follows (in thousands, except share and per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Numerator: Net loss attributable to common stockholders - basic and diluted $ ( 1,802 ) $ ( 11,640 ) $ ( 12,079 ) $ ( 49,312 ) Denominator: Weighted-average shares used in computing net loss per share, basic and diluted 3,947,995 3,306,215 3,807,955 3,299,357 Net loss attributable to common stockholders per share, basic and diluted $ ( 0.46 ) $ ( 3.52 ) $ ( 3.17 ) $ ( 14.95 ) The following outstanding potentially dilutive common stock equivalents have been excluded from the calculation of diluted net loss per share attributable to common stockholders for the periods presented due to their anti-dilutive effect: For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 Common stock options issued and outstanding 717,802 637,737 717,802 637,737 Warrants to purchase shares of common stock 748,576 — 748,576 — Total 1,466,378 637,737 1,466,378 637,737 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | 11. Subsequent Events October 2023 Financing On October 22, 2023, the Company, entered into a securities purchase agreement (the “Securities Purchase Agreement”) or the October 2023 Financing, with the institutional accredited investors named therein (the “Investors”), pursuant to which the Company agreed to issue and sell to the Investors in a private placement (the “Private Placement”) an aggregate of 12,805,350 shares (the “Shares”) of the Company’s common stock, par value $ 0.0001 per share, and to certain investors, in lieu of Shares, pre-funded warrants (the “October 2023 Pre-Funded Warrants) to purchase an aggregate of 4,362,000 shares of common stock. In each case, the Shares and the October 2023 Pre-Funded Warrants are accompanied by cash warrants (the “October 2023 Cash Warrants”) to purchase an aggregate of up to 8,583,675 additional shares of common stock. The purchase price per Share and accompanying October 2023 Cash Warrant to purchase half a share of common stock is $ 5.8345 (or $ 5.8344 per October 2023 Pre-Funded Warrant and accompanying October 2023 Cash Warrant, which represents the price of $ 5.8345 per share and accompanying October 2023 Cash Warrant sold in the October 2023 Financing, minus the $ 0.0001 per share exercise price of each such October 2023 Pre-Funded Warrant). The exercise price of each full October 2023 Cash Warrant is $ 5.8345 per share. The October 2023 Cash Warrants are exercisable at any time after their original issuance and expire three years after the closing date of the Private Placement. The October 2023 Pre-Funded Warrants are exercisable at any time after their original issuance and will not expire until exercised in full. The October 2023 Cash Warrants and the October 2023 Pre-Funded Warrants issued in the Private Placement will provide that holder will not have the right to exercise any portion of its October 2023 Cash Warrants or October 2023 Pre-Funded Warrants if such holder, together with its affiliates, would beneficially own in excess of 4.99%, 9.99% or 19.9%, as applicable, of the number of shares of the Company’s common stock outstanding immediately after giving effect to such exercise (the “Beneficial Ownership Limitation”). A holder may reset the Beneficial Ownership Limitation as to itself to a higher percentage (not to exceed 19.99%), effective 61 days after written notice to the Company. Related Party New Leaf Biopharma Opportunities II, L.P. and New Leaf Ventures III, L.P., both funds affiliated with Ron Hunt, a director of the Company, purchased Shares and Cash Warrants for an aggregate purchase price of approximately $ 9.0 million. The entities affiliated with a director of the Company are considered related parties which the disinterested members of the Board reviewed and approved in accordance with the Company's related-person transaction policy. Redemption Date Amendment In connection with the October 2023 Financing, the requisite holders of the Series A Preferred Stock approved an extension of the anniversary redemption date of the Series A Preferred Stock from March 23, 2026, or 3 years , (the third anniversary of the original issuance date) to March 23, 2028, or 5 years , (the fifth anniversary of the original issuance date). |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of SEC Regulation S-X for interim financial information. The accompanying unaudited condensed financial statements and notes should be read in conjunction with the audited annual financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on March 27, 2023 (the “2022 Annual Report on Form 10-K”). The Balance Sheet as of December 31, 2022 was derived from the audited annual financial statements as of the period then ended. Certain information and footnote disclosures typically included in the Company's audited annual financial statements have been condensed or omitted. The accompanying unaudited condensed financial statements reflect all adjustments that, in the opinion of management, are necessary for a fair statement of the results of the interim periods presented. All such adjustments are of a normal recurring nature except for the impacts of adopting new accounting standards discussed below. The accompanying unaudited condensed financial results are not necessarily indicative of results expected for the full fiscal year or for any subsequent interim period. Except where noted below, there were no material changes to the Company's significant accounting and financial reporting policies in the accompanying unaudited condensed financial statements from those reflected in the 2022 Annual Report on Form 10-K. For further information with regard to the Company’s Significant Accounting Policies, please refer to Note 2, “ Summary of Significant Accounting Policies ,” to the Company’s audited annual financial statements included in the 2022 Annual Report on Form 10-K which have been prepared in accordance with GAAP. |
Reverse Stock Split | Reverse Stock Split On June 22, 2023, at the Company’s 2023 annual meeting of stockholders, the stockholders approved the Reverse Stock Split (the “Reverse Stock Split”). On August 15, 2023, the Company’s board of directors approved the implementation of the reverse stock split at a ratio of 1 for 10 . The Reverse Stock Split became effective upon the filing of the Certificate of Amendment to its amended and restated certificate of incorporation, and the Company’s common stock began trading on a split-adjusted basis on September 1, 2023. The par value per share of the common stock remained unchanged. No fractional common shares were issued as a result of the Reverse Stock Split. Any stockholder who would have been entitled to receive a fractional share as a result of the Reverse Stock Split received cash payments in lieu of such fractional shares in an amount determined based on the closing price of the Company's common stock as of the effective date. All share and per share information included in the accompanying unaudited condensed financial statements has been retrospectively adjusted to reflect this Reverse Stock Split. |
Updates to Significant Accounting Policies | Updates to Significant Accounting Policies On January 1, 2023, the Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent amendments to the initial guidance: ASU 2018-19 and ASU 2019-04 (collectively, “2016-13”). There was no material impact to the Company’s financial statements upon adoption. |
Available-for-Sale Securities | Available-for-Sale Securities The Company is exposed to credit losses through its investments in available-for-sale securities ("AFS"). An investment is impaired if the fair value of the investment is less than its amortized cost basis. The Company reviews each impaired AFS security held in its portfolio to determine whether the decline in fair value below its amortized cost basis is the result of credit losses or other factors. An allowance for credit losses is to be recorded as a charge to net loss attributable to common stockholders in an amount equal to the difference between the impaired security’s amortized cost basis and the amount expected to be collected over the lifetime of security, limited by the amount that the fair value is less than its amortized cost basis. Any remaining difference between its amortized cost basis and fair value is deemed not to be due to expected credit losses and is recorded as a component of accumulated other comprehensive income (loss). The Company’s impairment review considers several factors to determine if an expected credit loss is present including the discounted present value of expected cash flows of the security, the capacity to hold a security or sell a security before recovery of the decline in amortized cost, the credit rating of the security and forecasted and historical factors that affect the value of the security. As of September 30, 2023, the Company did not identify indicators of a decline in credit quality for the AFS held. The Company's AFS held at December 31, 2022 matured during the nine months ended September 30, 2023 at full face value and all proceeds were received. |
Use of Estimates | Use of Estimates The preparation of unaudited condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the unaudited condensed financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates and assumptions made in the accompanying unaudited condensed financial statements include, but are not limited to, valuation of the Series A Preferred Stock, valuation of the derivative liabilities, allowance for credit losses, the fair value of stock options and warrants, the research period of the collaboration agreements with AbbVie Biotechnology Ltd. (“AbbVie”), operating lease asset and lease liabilities, income tax uncertainties and certain accruals. |
Segment Reporting | Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the Company’s Chief Operating Decision Maker in making decisions regarding resource allocation and assessing performance. To date, the Company has viewed its operations and manages its business as one segment operating primarily in the United States. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents. Cash equivalents consist primarily of amounts invested in money market accounts and are stated at fair value. There are no significant unrealized gains or losses on the money market funds for the periods presented. As of September 30, 2023 and December 31, 2022, the Company classified $ 0.2 million and $ 0.7 million, respectively, as restricted cash related to a letter of credit established for an operating lease entered into in August 2018 and as collateral related to a security deposit for an operating lease entered into in October 2021. The restricted cash is classified in “Other assets” in the unaudited condensed balance sheets. See Note 6 Commitments and Contingencies . The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the unaudited condensed balance sheets. As of September 30, 2023 December 31, 2022 (in thousands) Balance Sheets Cash and cash equivalents $ 17,738 $ 51,614 Restricted cash (included in other assets) 206 673 Total cash, cash equivalents and restricted cash $ 17,944 $ 52,287 |
Marketable Securities | Marketable Securities The Company generally invests its excess cash in money market funds and investment grade short-term to intermediate-term fixed income securities. Such investments are included in cash and cash equivalents, short-term marketable securities or long-term marketable securities on the unaudited condensed balance sheets. Marketable securities with a maturity date greater than 90 days and less than one year at each unaudited condensed balance sheet date are classified as short-term. Marketable securities with a maturity date greater than one year at each unaudited condensed balance sheet date are classified as long-term. All of the Company’s marketable securities are considered available-for-sale and are reported at fair value with unrealized gains and losses included as a component of stockholders’ equity. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity, which is included in interest income, net on the unaudited condensed statements of operations and comprehensive loss. Realized gains and losses, if any, on marketable securities are included in interest income, net on the unaudited condensed statements of operations and comprehensive loss. The cost of securities sold is determined using specific identification. The Company periodically evaluates its available-for-sale marketable debt securities for impairment. When the fair value of a marketable debt security is below its amortized cost, the amortized cost is reduced to its fair value if it is more likely than not that the Company is required to sell the impaired security before recovery of its amortized cost basis, or the Company has the intention to sell the security. If neither of these conditions are met, the Company determines whether the impairment is due to credit losses by comparing the present value of the expected cash flows of the security with its amortized cost basis. The amount of impairment recognized is limited to the excess of the amortized cost over the fair value of the security. An allowance for credit losses for the excess of amortized cost over the expected cash flows is recorded in other income (expense), net on the unaudited condensed statements of operations and comprehensive loss. Impairment losses that are not credit-related are included in accumulated other comprehensive income (loss) in stockholders’ equity. |
Concentration of Credit Risk | Concentration of Credit Risk The Company is subject to credit risk from its portfolio of cash equivalents and marketable securities. The Company invests in money market funds through a major U.S. bank and is exposed to credit risk in the event of default by the financial institution to the extent of amounts recorded on the unaudited condensed balance sheets. The Company invests in money market funds and investment grade short- to intermediate-term fixed income securities. Under its investment policy, the Company limits amounts invested in such securities by credit rating, maturity, industry group, investment type and issuer, except for securities issued by the U.S. government. The Company is not exposed to any significant concentrations of credit risk from these financial instruments. The goals of the Company’s investment policy, in order of priority, are as follows: preservation of principal, liquidity of investments, fiduciary control of cash and investments, prevention of inappropriate concentrations of investments, and obtaining the best yields. The Company minimizes the amount of credit exposure by investing cash that is not required for immediate operating needs in money market funds and marketable securities. |
Leases | Leases The Company evaluates arrangements at inception to determine if an arrangement is or contains a lease. Operating lease assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the commencement date of the lease based upon the present value of lease payments over the lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company uses an incremental borrowing rate that the Company would expect to incur for a fully collateralized loan over a similar term under similar economic conditions to determine the present value of the lease payments. The lease payments used to determine the Company’s operating lease assets may include lease incentives and stated rent increases and are recognized in the Company’s operating lease assets in the unaudited condensed balance sheets. Operating lease liabilities are accreted over the term of the lease using the incremental borrowing rate and the associated expense is recorded to operating expenses in the unaudited condensed statement of operations and comprehensive loss. The Company recognizes lease expenses on a straight-line basis over the lease term. Variable lease payments are recognized as the associated obligation is incurred. |
Fair Value Measurement | Fair Value Measurement Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, or an exit price, in the principal or most advantageous market for that asset or liability in an orderly transaction between market participants on the measurement date, and established a fair value hierarchy that requires an entity to maximize the use of observable inputs, where available, and minimize the use of unobservable inputs when measuring fair value. The Company measures fair value based on a three-level hierarchy of inputs, of which the first two are considered observable and the last unobservable. Unobservable inputs reflect the Company’s own assumptions about current market conditions. The three-level hierarchy of inputs is as follows: Level 1—Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and Level 3— Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The carrying amounts reflected in the accompanying unaudited condensed balance sheets for cash and cash equivalents, restricted cash, short-term marketable securities, prepaid expenses, other current assets, accounts payable, accrued expenses and other current liabilities approximate their fair values due to their short-term nature. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed on a straight-line basis over the estimated useful lives of the related assets, generally three to five years . Leasehold improvements are amortized using the straight-line method over the shorter of the assets’ estimated useful lives or the remaining term of the lease. Depreciation and amortization begin at the time the asset is placed in service. Maintenance and repairs are charged to operations as incurred. Upon sale or retirement of assets, the cost and related accumulated depreciation are removed from the unaudited condensed balance sheet and the resulting gain or loss is reflected in operations. There were no material gains or losses for the sales or retirement of assets for any of the periods presented. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company evaluates its long-lived assets, including property and equipment, for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets or group of assets may not be fully recoverable. If indicators of impairment exist and the undiscounted future cash flows that the assets are expected to generate are less than the carrying amount of the assets, the Company reduces the carrying amount of the assets through an impairment charge to their estimated fair values based on a discounted cash flow approach or, when available and appropriate, to comparable market values. For the three and nine months ended September 30, 2023, the Company recorded non-cash impairment charges of zero and $ 0.9 m illion to right-of-use assets associated with the Cove Lease and $ 0.8 million to leasehold improvements related to the Cove Lease to reduce their carrying values to their fair values using a discounted cash flow approach. |
Revenue Recognition | Revenue Recognition In accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“Topic 606”), the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which 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 Topic 606, the Company performs the following five steps: (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 in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods and services it transfers to the customer. At contract inception, the Company assesses the goods or services promised within each contract that falls under the scope of Topic 606, determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The Company enters into corporate collaborations under which it may obtain upfront license fees, research and development funding, and development, regulatory and commercial milestone payments and royalty payments. The Company’s performance obligations under these arrangements may include licenses of intellectual property, distribution rights, research and development services, delivery of manufactured product and/or participation on joint steering committees. Licenses of intellectual property: If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue from upfront license fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgement 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 proportional performance for purposes of recognizing revenue from non-refundable, up-front fees. The Company evaluates the measure of proportional performance each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The Company recognizes collaboration revenue by measuring the progress toward complete satisfaction of the performance obligation using an input measure. In order to recognize revenue over the research and development period, the Company measures actual costs incurred to date compared to the overall total expected costs to satisfy the performance obligation. Revenues are recognized as the program costs are incurred. The Company will re-evaluate the estimate of expected costs to satisfy the performance obligation each reporting period and make adjustments for any significant changes. Milestone payments: At the inception of each arrangement that includes development, regulatory or commercial milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price. Topic 606 suggests two alternatives to use when estimating the amount of variable consideration: the expected value method and the most likely amount method. Under the expected value method, an entity considers the sum of probability-weighted amounts in a range of possible consideration amounts. Under the most likely amount method, an entity considers the single most likely amount in a range of possible consideration amounts. Whichever method is used, it should be consistently applied throughout the life of the contract; however, it is not necessary for the Company to use the same approach for all contracts. The Company expects to use the most likely amount method for development and regulatory milestone payments. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s or the licensee’s control, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis. The Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability or achievement of each such milestone and any related constraint, and if necessary, adjusts its estimates of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment. Commercial milestones and royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and in which the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue when the related sales occur. To date, the Company has not recognized any royalty revenue resulting from its collaboration arrangements. Upfront payments and fees are recorded as deferred revenue upon receipt or when due and may require deferral of revenue recognition to a future period until the Company performs its obligations (i.e. research and development services) under these arrangements. Amounts due to the Company are recorded as accounts receivable when the Company’s right to consideration is unconditional. Amounts recognized as revenue prior to receipt are recorded as contract assets included in prepaid expenses and other current assets on the Company’s unaudited condensed balance sheet. If the Company expects to have an unconditional right to receive the consideration in the next twelve months, this will be classified in current assets. |
Research and Development Expenses and Accrued Research and Development Costs | Research and Development Expenses and Accrued Research and Development Costs The Company expenses research and development costs as incurred. Research and development expenses consist of personnel costs for the Company’s research and product development employees. Also included are non-personnel costs such as professional fees payable to third parties for preclinical studies, clinical trials, research services, production of materials for clinical trials, laboratory supplies and equipment maintenance and depreciation, intellectual property licenses and other consulting costs. The Company estimates preclinical and clinical study and research expenses based on the services performed, pursuant to contracts with research institutions that conduct and manage preclinical studies, clinical trials and research services and manufacturing organizations in connection with the production of materials for clinical trials on its behalf. The Company estimates these expenses based on discussions with internal management personnel and external service providers as to the progress or stage of completion of services and the contracted fees to be paid for such services. The Company records the estimated costs of research and development activities based upon the estimated amount of services provided but not yet invoiced and includes these costs in development expenses. The Company accrues for these costs based on factors such as estimates of the work completed and in accordance with agreements established with its third-party service provides under the service agreements. The Company makes significant judgments and estimates in determining the accrued liabilities balance in each reporting period. As actual costs become known, the Company adjusts its accrued liabilities. The Company has not experienced any material differences between accrued costs and actual costs incurred. However, the status and timing of actual services performed may vary from the Company’s estimates, resulting in adjustments to expense in future periods. Changes in these estimates that result in material changes to the Company’s accruals could materially affect the Company’s results of operations. Payments associated with licensing agreements to acquire exclusive license to develop, use, manufacture and commercialize products that have not reached technological feasibility and do not have alternate future use are expensed as incurred. Payments made to third parties under these arrangements in advance of the performance of the related services by the third parties are recorded as prepaid expenses until the services are rendered. Such payments are evaluated for current or long-term classification based on when such services are expected to be received. |
Stock-Based Compensation | Stock-Based Compensation The Company maintains a stock-based compensation plan as a long-term incentive for employees, consultants and members of the Company’s board of directors (the “Board”). The plan allows for the issuance of non-statutory options (“NSOs”), incentive stock options to employees, NSOs to non-employees and restricted stock units (RSUs). Share-based payments are measured using fair-value-based measurements and recognized as compensation expense over the service period in which the awards are expected to vest. The Company’s fair-value-based measurements of awards to employees, directors and consultants as of the grant date utilize the single-option award-valuation approach, and the Company uses the straight-line method for expense attribution. The fair-value-based measurements of options granted to non-employees are remeasured at each period end until the options vest and are amortized to expense as earned. The valuation model used for calculating the estimated fair value of stock awards is the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires the Company to make assumptions and judgments about the variables used in the calculations, including the expected term (weighted-average period of time that the options granted are expected to be outstanding), the expected volatility of the Company’s common stock, the related risk-free interest rate and the expected dividend yield. The Company has elected to recognize forfeitures of share-based payment awards as they occur. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates applied to taxable income in the years in which those temporary differences are expected to be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. Financial statement effects of uncertain tax positions are recognized when it is more-likely-than-not, based on the technical merits of the position, that it will be sustained upon examination. Interest and penalties related to unrecognized tax benefits are included as a component of Other expense, net. To date, there have been no interest or penalties charged in relation to the unrecognized tax benefits. The Company accounts for uncertain tax positions in accordance with ASC 740-10, Accounting for Uncertainty in Income Taxes . The Company assesses all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. Assessing an uncertain tax position begins with the initial determination of the position’s sustainability and is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed, and the Company will determine whether (i) the factors underlying the sustainability assertion have changed and (ii) the amount of the recognized tax benefit is still appropriate. The recognition and measurement of tax benefits requires significant judgment. Judgment concerning the recognition and measurement of a tax benefit might change as new information becomes available. The Company includes any penalties and interest expense related to income taxes as a component of the provision for income tax, as necessary. To date, there have been no interest or penalties charged in relation to the unrecognized tax benefits. |
Net loss Per Share Attributable to Common Stockholders | Net Loss Per Share Attributable to Common Stockholders Basic net loss per share attributable to common stockholders is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, without consideration of potentially dilutive securities. Diluted net loss per share attributable to common stockholders is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, without consideration of potentially dilutive securities. See Note 10 Net Loss Per Share Attributable to Common Stockholders . |
Comprehensive loss | Comprehensive Loss Comprehensive loss includes net loss attributable to common stockholders and certain changes in stockholders' equity that are excluded from net loss attributable to common stockholders, primarily unrealized gains or losses on the Company’s marketable securities. |
Emerging Growth Company Status | Emerging Growth Company Status The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that the Company (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, the accompanying unaudited condensed financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. |
Recent Accounting Pronouncements Adopted | Recent Accounting Pronouncements Adopted In June 2016, the Financial Accounting Standards Board (the FASB) issued ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which requires that expected credit losses relating to financial assets measured on an amortized cost basis and available-for-sale debt securities be recorded through an allowance for credit losses. ASU 2016-13 limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and requires the reversal of previously recognized credit losses if fair value increases. In April, May and November 2019, the FASB issued additional amendments to the new guidance related to transition and clarification. In November 2019, the FASB issued ASU 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates, which deferred the effective date of this standard for all entities except SEC filers that are not smaller reporting companies to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted ASU 2016-13 effective January 1, 2023 on a modified retrospective basis. The adoption of ASU 2016-13 did not have a material impact on the Company’s unaudited condensed financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Reconciliation of Cash and Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the unaudited condensed balance sheets. As of September 30, 2023 December 31, 2022 (in thousands) Balance Sheets Cash and cash equivalents $ 17,738 $ 51,614 Restricted cash (included in other assets) 206 673 Total cash, cash equivalents and restricted cash $ 17,944 $ 52,287 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Assets Measured at Fair Value and Fair Value Hierarchy of Valuation | The following table presents information about the Company’s financial assets that are measured at fair value and indicates the fair value hierarchy of the valuation: September 30, 2023 Total Level 1 Level 2 Level 3 (in thousands) Assets Cash equivalents: Money market funds $ 17,236 $ 17,236 $ — $ — Total cash equivalents 17,236 17,236 $ — $ — Short-term marketable securities: U.S. government securities 13,870 13,870 — — Total cash equivalents and marketable securities $ 31,106 $ 31,106 $ — $ — Liabilities Derivative liability $ 1,029 $ — $ — $ 1,029 Total liabilities $ 1,029 $ — $ — $ 1,029 December 31, 2022 Total Level 1 Level 2 Level 3 (in thousands) Assets Cash equivalents: Money market funds $ 45,963 $ 45,963 $ — $ — Short-term marketable securities: U.S. government securities 1,498 — 1,498 — Total cash equivalents and marketable securities $ 47,461 $ 45,963 $ 1,498 $ — |
Available-for-Sale Securities (
Available-for-Sale Securities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Available-for-Sale Securities at Fair Value | The amortized cost, gross unrealized holding gains or losses, and fair value of the Company’s marketable securities by major security type at each unaudited condensed balance sheets date are summarized in the tables below: September 30, 2023 Amortized Cost Gross Gross Allowance Fair Value (in thousands) Cash equivalents Money market funds $ 17,236 $ — $ — $ — $ 17,236 Total cash equivalents 17,236 — — — 17,236 Short-term marketable securities: U.S. government securities 13,869 1 — — 13,870 Total short-term marketable securities 13,869 1 — — 13,870 Total $ 31,105 $ 1 $ — $ — $ 31,106 December 31, 2022 Amortized Cost Gross Gross Fair Value (in thousands) Cash equivalents Money market funds $ 45,963 $ — $ — $ 45,963 Total cash equivalents 45,963 — — 45,963 Short-term marketable securities: U.S. government securities 1,501 — ( 3 ) 1,498 Total short-term marketable securities 1,501 — ( 3 ) 1,498 Total $ 47,464 $ — $ ( 3 ) $ 47,461 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Balance Sheet Related Disclosures [Abstract] | |
Property and Equipment, Net | Property and equipment, net consists of the following: September 30, December 31, 2023 2022 (in thousands) Leasehold improvements $ 3,626 $ 8,872 Computer equipment and software 91 91 Furniture and fixtures 137 585 Laboratory equipment — 6,232 3,854 15,780 Less: Accumulated depreciation and amortization ( 327 ) ( 8,543 ) Total property and equipment, net $ 3,527 $ 7,237 |
Accrued Liabilities | Accrued liabilities consist of the following: September 30, December 31, 2023 2022 (in thousands) Accrued research and development $ 8,519 $ 8,569 Accrued personnel costs 2,677 4,760 Accrued professional and consulting fees 444 896 Other 57 136 Total accrued liabilities $ 11,697 $ 14,361 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Operating Leases in Condensed Balance Sheets | The following table summarizes the presentation in the Company’s unaudited condensed balance sheets of its operating leases (in thousands): As of Assets: Operating lease right-of-use assets $ 8,857 Liabilities Operating lease liabilities $ 2,974 Operating lease liabilities, net of current portion 11,530 Total operating lease liabilities $ 14,504 |
Schedule of Future Minimum Lease Payments | Future minimum lease payments as of September 30, 2023 are as follows (in thousands): Operating Lease Remainder of 2023 $ 1,729 2024 4,233 2025 4,351 2026 4,494 2027 2,785 2028 and thereafter 384 Total future minimum lease payments 17,976 Less imputed interest 3,472 Total $ 14,504 |
Collaboration, License & Clin_2
Collaboration, License & Clinical Supply Agreements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Collaboration And License Agreements [Abstract] | |
Schedule of Collaboration and License Revenue | For the three and nine months ended September 30, 2023 and September 30, 2022, collaboration and license revenue in the accompanying unaudited condensed statements of operations and comprehensive loss is comprised of the following: For the Three Months Ended September 30, For the Nine Months Ended September 30, Collaboration and License Revenue 2023 2022 2023 2022 (in thousands) (in thousands) AbbVie Restated Collaboration Agreement $ — $ 5,389 $ 11,599 $ 5,389 AbbVie Development and Option Agreement 4,448 8,228 21,653 22,437 Total collaboration and license revenue $ 4,448 $ 13,617 $ 33,252 $ 27,826 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Summary of awards Activity Under Equity Incentive Plan | The following summarizes awards activity under the Company’s 2019 Plan and 2015 Equity Incentive Plan (the “2015 Plan”): Weighted Weighted Number of Average Average Aggregate Outstanding Exercise Remaining Intrinsic Awards Price Contractual Life Value (in years) (in thousands) Balance as of December 31, 2022 643,095 $ 56.20 7.6 $ 306 Awards granted 261,332 7.79 $ 133 Awards released ( 18,188 ) 6.78 $ 123 Awards cancelled ( 170,990 ) 70.91 Balance as of September 30, 2023 715,249 $ 36.31 7.6 $ 126 Exercisable as of September 30, 2023 303,427 $ 61.86 5.6 $ — |
Summary of Fair Value of Employee and Director Stock Option Awards Using a Black Scholes Option Pricing Model | The fair value of employee and director stock option awards was estimated at the date of grant using a Black-Scholes option-pricing model with the following weighted-average assumptions: Nine Months Ended September 30, 2023 2022 Expected term (years) 5.85 5.95 Expected volatility 90.25 % 82.04 % Risk-free interest rate 3.64 % 2.00 % Expected dividend yield 0 % 0 % |
Summary of Stock-based Compensation | Total stock-based compensation was as follows: Three Months Ended September 30, 2023 2022 (in thousands) Operating Expenses Research and development $ 440 $ 1,014 General and administrative 478 766 Total stock-based compensation $ 918 $ 1,780 |
Net Loss Per Share Attributab_2
Net Loss Per Share Attributable to Common Stockholders (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Computation of Numerators and Denominators Used in Basic and Diluted Net Income (Loss) Per Share Amounts | A reconciliation of the numerator and denominator used in the calculation of the basic and diluted net loss attributable to common stockholders per share is as follows (in thousands, except share and per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Numerator: Net loss attributable to common stockholders - basic and diluted $ ( 1,802 ) $ ( 11,640 ) $ ( 12,079 ) $ ( 49,312 ) Denominator: Weighted-average shares used in computing net loss per share, basic and diluted 3,947,995 3,306,215 3,807,955 3,299,357 Net loss attributable to common stockholders per share, basic and diluted $ ( 0.46 ) $ ( 3.52 ) $ ( 3.17 ) $ ( 14.95 ) |
Summary of Outstanding Potentially Dilutive Common Stock Equivalents Excluded from Calculation of Diluted Net Loss Per Share | The following outstanding potentially dilutive common stock equivalents have been excluded from the calculation of diluted net loss per share attributable to common stockholders for the periods presented due to their anti-dilutive effect: For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 Common stock options issued and outstanding 717,802 637,737 717,802 637,737 Warrants to purchase shares of common stock 748,576 — 748,576 — Total 1,466,378 637,737 1,466,378 637,737 |
Organization - Additional Infor
Organization - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Oct. 22, 2023 | Mar. 31, 2023 | Sep. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Month and year of incorporation | 2015-03 | ||||||
Accumulated deficit | $ (364,602) | $ (364,602) | $ (352,523) | ||||
Cash equivalents and short term marketable securities | $ 31,600 | $ 31,600 | |||||
Extended period of redemption of preferred stock | 2 years | ||||||
Common stock shares sold | 4,108,769 | 4,108,769 | 3,578,668 | ||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Number of common shares to issue on exercise of warrants | 0 | 0 | |||||
Aggregate net proceeds | $ 4,031 | $ 983 | |||||
Pre-Funded Warrants | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Number of common shares to issue on exercise of warrants | 4,362,000 | ||||||
Pre-Funded Warrants | Subsequent Event | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Warrants exercise price | $ 5.8344 | ||||||
Cash Warrants | Subsequent Event | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Proceeds from sale of preferred stock and warrants | $ 50,000 | ||||||
Warrants exercise price | $ 5.8345 | ||||||
Common Stock and Pre Funded Warrants | Subsequent Event | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Proceeds from sale of preferred stock and warrants | $ 100,000 | ||||||
Maximum | Subsequent Event | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Extended period of redemption of preferred stock | 5 years | ||||||
Minimum | Subsequent Event | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Extended period of redemption of preferred stock | 3 years | ||||||
Private Placement | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Number of common shares to issue on exercise of warrants | 748,576 | 748,576 | 748,576 | 748,576 | |||
Purchase price | $ 1,000 | $ 1,000 | $ 1,000 | $ 1,000 | |||
Proceeds from sale of preferred stock and warrants | $ 25,000 | $ 25,000 | |||||
Warrants exercise price | $ 9.78885 | $ 9.78885 | |||||
Private Placement | Common Stock | Subsequent Event | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Common stock shares sold | 12,805,350 | ||||||
Common stock, par value | $ 0.0001 | ||||||
At-the-market Offering Program | Common Stock | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Stock issued during period, shares, new issues | 283,525 | 487,287 | |||||
Aggregate net proceeds | $ 2,400 | $ 4,200 | |||||
Series A Preferred Stock | Private Placement | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Preferred stock - shares issued | 25,000 | 25,000 | 25,000 | 25,000 | |||
Temporary equity percentage of shares issued | 8% | ||||||
Temporary equity, preferred stock par value | $ 0.0001 | $ 0.0001 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 9 Months Ended | |||
Aug. 15, 2023 | Sep. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) Segment | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | |
Summary Of Significant Accounting Policy [Line Items] | |||||
Reserve stock split | 1 for 10 | ||||
Highly liquid investments purchased with maximum original maturities | 3 months | ||||
Restricted cash | $ 206,000 | $ 206,000 | $ 673,000 | ||
Interest or penalties charged related to unrecognized tax benefits | 0 | ||||
Retirement of assets | 0 | 0 | $ 0 | ||
Lease Right of Use | |||||
Summary Of Significant Accounting Policy [Line Items] | |||||
Non cash impairment charges | 0 | 900,000 | |||
Leasehold Improvements | |||||
Summary Of Significant Accounting Policy [Line Items] | |||||
Non cash impairment charges | $ 800,000 | 800,000 | |||
ASC 740-10 | |||||
Summary Of Significant Accounting Policy [Line Items] | |||||
Interest or penalties charged related to unrecognized tax benefits | $ 0 | ||||
United States | |||||
Summary Of Significant Accounting Policy [Line Items] | |||||
Number of operating segments | Segment | 1 | ||||
Minimum | |||||
Summary Of Significant Accounting Policy [Line Items] | |||||
Property and equipment, estimated useful life | 3 years | 3 years | |||
Maximum | |||||
Summary Of Significant Accounting Policy [Line Items] | |||||
Property and equipment, estimated useful life | 5 years | 5 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Reconciliation of Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 17,738 | $ 51,614 | ||
Restricted cash (included in other assets) | 206 | 673 | ||
Total cash, cash equivalents and restricted cash | $ 17,944 | $ 52,287 | $ 51,041 | $ 45,360 |
Fair Value Measurement - Summar
Fair Value Measurement - Summary of Financial Assets Measured at Fair Value and Fair Value Hierarchy of Valuation (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Assets | ||
Assets fair value | $ 31,106 | $ 47,461 |
Derivative liability | 1,029 | |
Liability fair value | 1,029 | |
Level 1 | ||
Assets | ||
Assets fair value | 31,106 | 45,963 |
Derivative liability | 0 | |
Liability fair value | 0 | |
Level 2 | ||
Assets | ||
Assets fair value | 0 | 1,498 |
Derivative liability | 0 | |
Liability fair value | 0 | |
Level 3 | ||
Assets | ||
Assets fair value | 0 | 0 |
Derivative liability | 1,029 | |
Liability fair value | 1,029 | |
Cash Equivalents | ||
Assets | ||
Assets fair value | 17,236 | |
Cash Equivalents | Money Market Funds | ||
Assets | ||
Assets fair value | 17,236 | 45,963 |
Cash Equivalents | Level 1 | ||
Assets | ||
Assets fair value | 17,236 | |
Cash Equivalents | Level 1 | Money Market Funds | ||
Assets | ||
Assets fair value | 17,236 | 45,963 |
Cash Equivalents | Level 2 | ||
Assets | ||
Assets fair value | 0 | |
Cash Equivalents | Level 2 | Money Market Funds | ||
Assets | ||
Assets fair value | 0 | 0 |
Cash Equivalents | Level 3 | ||
Assets | ||
Assets fair value | 0 | |
Cash Equivalents | Level 3 | Money Market Funds | ||
Assets | ||
Assets fair value | 0 | 0 |
Short-term marketable securities | U.S. government securities | ||
Assets | ||
Assets fair value | 13,870 | 1,498 |
Short-term marketable securities | U.S. government securities | Level 1 | ||
Assets | ||
Assets fair value | 13,870 | 0 |
Short-term marketable securities | U.S. government securities | Level 2 | ||
Assets | ||
Assets fair value | 0 | 1,498 |
Short-term marketable securities | U.S. government securities | Level 3 | ||
Assets | ||
Assets fair value | $ 0 | $ 0 |
Fair Value Measurement - Additi
Fair Value Measurement - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Fair value, assets, level 1 to level 2 transfers, amount | $ 0 | $ 0 | $ 0 |
Level 3 | Series A Preferred Stock [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Embedded redemption liability fair value charge | $ 11,200,000 | $ 11,000,000 | |
Embedded redemption liability percentage of estimated investor rate of return | 30% | 30% |
Available-for-Sale Securities -
Available-for-Sale Securities - Schedule of Available-for-Sale Securities at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | $ 31,105 | $ 47,464 |
Gross Unrealized Gain | 1 | 0 |
Gross Unrealized Loss | 0 | (3) |
Allowance for Credit Losses | 0 | |
Fair Value | 31,106 | 47,461 |
Money Market Funds | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 17,236 | 45,963 |
Gross Unrealized Gain | 0 | 0 |
Gross Unrealized Loss | 0 | 0 |
Allowance for Credit Losses | 0 | |
Fair Value | 17,236 | 45,963 |
Cash Equivalents | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 17,236 | 45,963 |
Gross Unrealized Gain | 0 | 0 |
Gross Unrealized Loss | 0 | 0 |
Allowance for Credit Losses | 0 | |
Fair Value | 17,236 | 45,963 |
Short-Term Marketable Securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 13,869 | 1,501 |
Gross Unrealized Gain | 1 | 0 |
Gross Unrealized Loss | 0 | (3) |
Allowance for Credit Losses | 0 | |
Fair Value | 13,870 | 1,498 |
Short-Term Marketable Securities | U.S. Government Securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 13,869 | 1,501 |
Gross Unrealized Gain | 1 | 0 |
Gross Unrealized Loss | 0 | (3) |
Allowance for Credit Losses | 0 | |
Fair Value | $ 13,870 | $ 1,498 |
Available-for-Sale Securities_2
Available-for-Sale Securities - Additional Information (Detail) $ in Millions | Sep. 30, 2023 USD ($) |
Schedule Of Available For Sale Securities [Line Items] | |
Accrued interest receivable | $ 0.1 |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Property Plant And Equipment [Line Items] | ||
Property and equipment | $ 3,854 | $ 15,780 |
Less: Accumulated depreciation and amortization | (327) | (8,543) |
Total property and equipment, net | 3,527 | 7,237 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment | 3,626 | 8,872 |
Computer Equipment and Software | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment | 91 | 91 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment | 137 | 585 |
Laboratory Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment | $ 0 | $ 6,232 |
Balance Sheet Components - Addi
Balance Sheet Components - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Balance Sheet Related Disclosures [Abstract] | ||||
Depreciation and amortization expense | $ 0.2 | $ 0.5 | $ 1.3 | $ 1.7 |
Loss on sale and disposal of fixed assets | $ 0 | $ 0.4 |
Balance Sheet Components - Accr
Balance Sheet Components - Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Balance Sheet Related Disclosures [Abstract] | ||
Accrued research and development | $ 8,519 | $ 8,569 |
Accrued personnel costs | 2,677 | 4,760 |
Accrued professional and consulting fees | 444 | 896 |
Other | 57 | 136 |
Total accrued liabilities | $ 11,697 | $ 14,361 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2021 | Aug. 31, 2018 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Commitments And Contingencies [Line Items] | ||||||
Sublease rental income | $ 0.6 | $ 0.6 | ||||
Variable lease costs | $ 0.2 | $ 0.2 | $ 0.7 | $ 0.6 | ||
Weighted average remaining lease term | 4 years | 4 years | ||||
Weighted average incremental borrowing rate | 9.32% | 9.32% | ||||
Noncancelable subleases | $ 9.4 | $ 9.4 | ||||
Land And Building | ||||||
Commitments And Contingencies [Line Items] | ||||||
Lease commencement date | Jul. 01, 2019 | |||||
Office Equipment | ||||||
Commitments And Contingencies [Line Items] | ||||||
Lease commencement date | Dec. 19, 2022 | |||||
Lease term option to extend period | 8 years | 8 years | ||||
Lessee operating lease, option to extend, description | The Cove Lease includes an option to renew, exercisable at the Company’s sole discretion, with a renewal term for an additional period of eight years |
Commitments and Contingencies_2
Commitments and Contingencies - Summary of Operating Leases in Condensed Balance Sheets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Assets | ||
Operating lease right-of-use assets | $ 8,857 | $ 10,854 |
Liabilities | ||
Operating lease liabilities | 2,974 | 2,423 |
Operating lease liabilities, net of current portion | 11,530 | $ 13,583 |
Total operating lease liabilities | $ 14,504 |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Future Minimum Lease Payments (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Remainder of 2023 | $ 1,729 |
2024 | 4,233 |
2025 | 4,351 |
2026 | 4,494 |
2027 | 2,785 |
2028 and thereafter | 384 |
Total future minimum lease payments | 17,976 |
Less imputed interest | 3,472 |
Total | $ 14,504 |
Collaboration, License & Clin_3
Collaboration, License & Clinical Supply Agreements - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2020 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2019 | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Deferred revenue | $ (33,251,000) | $ (27,826,000) | ||||
Abb Vie Restated Collaboration Agreement | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Deferred revenue | $ 0 | $ 0 | ||||
Collaborative Agreement | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Collaboration termination notice period | 90 days | |||||
AbbVie Inc. | Abb Vie Restated Collaboration Agreement | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Collaboration agreement upfront payment amount. | $ 20,000,000 | |||||
Transaction price | 20,000,000 | $ 20,000,000 | ||||
Performance obligation for the two additional targets recognized | 20,000,000 | 20,000,000 | ||||
Revenue recognized | 11,600,000 | 0 | ||||
Collaboration agreement additional payment for target selection | 10,000,000 | |||||
AbbVie Inc. | Phase 1/2 clininical trial of HPN217 | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Collaboration agreement upfront payment amount. | 30,000,000 | |||||
Deferred revenue | 4,400,000 | |||||
AbbVie Inc. | Phase 1/2 clininical trial of HPN217 | Inception of Agreement | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Up-front consideration received | 30,000,000 | |||||
Transaction price | 80,000,000 | 80,000,000 | ||||
Development milestone received | $ 50,000,000 | |||||
AbbVie Inc. | Phase 1/2 clininical trial of HPN217 | Maximum | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Milestone payments under collaboration agreement | 50,000,000 | |||||
AbbVie Inc. | Phase 1/2 clininical trial of HPN217 | Maximum | Inception of Agreement | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Development milestone to be received | 50,000,000 | |||||
AbbVie Inc. | Development, Regulatory, and Commercial Sale Milestones For Licensed Products | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Collaboration agreement upfront payment amount. | 300,000,000 | |||||
AbbVie Inc. | Collaborative Agreement | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Collaboration agreement upfront payment amount. | 17,000,000 | |||||
Revenue | 4,400,000 | $ 8,200,000 | 21,700,000 | 22,400,000 | ||
Deferred revenue | $ 0 | $ 0 | ||||
Collaboration termination notice period | 30 days | |||||
AbbVie Inc. | Collaborative Agreement | Abb Vie Restated Collaboration Agreement | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Transaction price | $ 17,000,000 | |||||
Collaborative Arrangements additional payments | 10,000,000 | |||||
Deferred revenue | $ 20,000,000 | |||||
Werewolf Therapeutics Inc | Collaborative Agreement | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Milestone payments under collaboration agreement | 0 | |||||
Recognize royalty revenue | $ 0 | $ 0 |
Collaboration, License & Clin_4
Collaboration, License & Clinical Supply Agreements - Schedule of Collaboration and License Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||
Collaboration and license revenue | $ 4,448 | $ 13,617 | $ 33,252 | $ 27,826 |
Collaboration and License | ||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||
Collaboration and license revenue | 4,448 | 13,617 | 33,252 | 27,826 |
Collaboration and License | Abb Vie Restated Collaboration Agreement | ||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||
Collaboration and license revenue | 0 | 5,389 | 11,599 | 5,389 |
Collaboration and License | AbbVie Development And Option Agreement | ||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||
Collaboration and license revenue | $ 4,448 | $ 8,228 | $ 21,653 | $ 22,437 |
Restructuring and Impairment -
Restructuring and Impairment - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | |
Corporate Restructuring Liability | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Termination benefits paid | $ 1.4 | $ 0.5 | ||
Lease Right of Use | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Non cash impairment charges | $ 0 | $ 0.9 | ||
Leasehold Improvements | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Non cash impairment charges | $ 0.8 | $ 0.8 |
Equity - Additional Information
Equity - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Oct. 22, 2023 | Mar. 31, 2020 | Sep. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2020 | Dec. 31, 2019 | Mar. 22, 2023 | |
Class Of Stock [Line Items] | ||||||||||
Stock-based compensation expense | $ 918,000 | $ 1,780,000 | ||||||||
Number of common shares to issue on exercise of warrants | 0 | 0 | ||||||||
Extended period of redemption of preferred stock | 2 years | |||||||||
Proceeds from issuance of common stock, net of issuance cost | $ 4,031,000 | $ 983,000 | ||||||||
Series A Preferred Stock | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Maximum percentage of cash proceeds and fair market value | 50% | |||||||||
Preferred stock value | $ 5,100,000 | $ 5,100,000 | ||||||||
Allocated issuance cost | 300,000 | |||||||||
Embedded redemption liability value | 4,600,000 | 4,600,000 | ||||||||
Issuance costs to embedded redemption liability | 700,000 | |||||||||
Remeasurement charge | 11,200,000 | |||||||||
Accretion of redemption value discount | 2,000,000 | 3,700,000 | ||||||||
Series A Preferred Stock | Non Current Liability | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Embedded redemption liability value | $ 15,500,000 | $ 15,500,000 | ||||||||
Private Placement | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Number of common shares to issue on exercise of warrants | 748,576 | 748,576 | 748,576 | |||||||
Private placement offering costs | $ 1,300,000 | $ 1,300,000 | ||||||||
Purchase price | $ 1,000 | $ 1,000 | $ 1,000 | |||||||
Warrants exercise price | $ 9.78885 | $ 9.78885 | ||||||||
Proceeds from sale of preferred stock and warrants | $ 25,000,000 | $ 25,000,000 | ||||||||
Terms on redemption of preferred stock | The Company may, at its option, redeem shares of Series A Preferred Stock from time to time at the Redemption Price Per Share, which is equal to the sum of (i) the product of (a) the Stated Value of $1,000 and (b) a Return Factor equal to 3.5 until the 18-month anniversary of the Closing and 4.5 thereafter and (ii) any accrued and unpaid dividends. In addition, the Series A Preferred Stock is mandatorily redeemable by the Company out of funds legally available therefor, at the Redemption Price Per Share, upon (i) receipt by the Company of certain amounts in connection with any HPN217 licensing transaction of which the maximum number of then-outstanding shares of Series A Preferred Stock that may be redeemed using up to 50% of the cash proceeds and fair market value of certain non-cash proceeds received by the Company, (ii) receipt by the Company of certain net proceeds in connection with certain strategic and licensing transactions and (iii) on the third anniversary of the Closing or Anniversary Based Redemption Date, unless extended by consent of the requisite holders. | |||||||||
Private Placement | Series A Preferred Stock | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Divident rate on preferred stock | 8% | |||||||||
Preferred stock - shares issued | 25,000 | 25,000 | 25,000 | |||||||
Dividends payable per share | $ 1,000 | $ 1,000 | $ 1,000 | |||||||
Maximum | Subsequent Event | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Extended period of redemption of preferred stock | 5 years | |||||||||
Minimum | Subsequent Event | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Extended period of redemption of preferred stock | 3 years | |||||||||
Non-employee awards | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Stock-based compensation expense | $ 0 | $ 0 | ||||||||
Restricted Stock Units | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Restricted stock units granted during period | 0 | |||||||||
Common Stock | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Aggregate offering price | $ 250,000,000 | |||||||||
Common Stock | Sales Agreement | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Stock issued during period, shares, new issues | 0 | 0 | 775,720 | |||||||
Aggregate offering price | $ 75,000,000 | |||||||||
Proceeds from issuance of common stock, net of issuance cost | $ 59,600,000 | $ 15,400,000 | ||||||||
Common Stock | At-the-market Offering Program | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Stock issued during period, shares, new issues | 283,525 | 487,287 | ||||||||
Proceeds from issuance of common stock, net of issuance cost | $ 2,400,000 | $ 4,200,000 | ||||||||
Warrants | Subsequent Event | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Warrants purchase price | $ 9,000,000 | |||||||||
Series A Warrants | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Fair value attributed to the warrants | 4,100,000 | |||||||||
Warrants value recorded as additional paid-in capital | 3,900,000 | |||||||||
Allocated issuance costs | $ 200,000 | |||||||||
Series A Warrants | Private Placement | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Number of common shares to issue on exercise of warrants | 748,576 | 748,576 | ||||||||
Warrant exercisable for each share of common stock | 748,576 | 748,576 | ||||||||
Warrants exercise price | $ 9.78885 | $ 9.78885 | ||||||||
2019 Equity Incentive Plan | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Shares reserved for future issuance | 210,000 | 210,000 | ||||||||
2019 Equity Incentive Plan | Employee Stock Option | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Weighted average grant date fair value of options vested | $ 18.72 | $ 53.1 | ||||||||
Weighted average grant date fair value of options granted | $ 0.16 | $ 30.6 | ||||||||
2019 Employee Stock Purchase Plan | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Shares reserved for future issuance | 64,700 | 64,700 | 75,000 | |||||||
Number of shares issued under the plan | 27,989 | 42,814 | ||||||||
Percentage of capital stock outstanding | 1% | |||||||||
Number of shares increased reserved for issuance under plan | 35,800 | |||||||||
2019 Employee Stock Purchase Plan | Maximum | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Shares reserved for future issuance | 25,000 | |||||||||
Board of Director | Restricted Stock Units | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Restricted stock units granted during period | 18,188 | |||||||||
Restricted stock units grants in period, weighted average grant date fair value | $ 6.78 |
Equity - Summary of Option Acti
Equity - Summary of Option Activity Under Equity Incentive Plan (Details) - 2019 Plan and 2015 Plan $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | |
Number of Outstanding Options | ||
Outstanding Awards, Beginning Balance | shares | 643,095 | |
Awards granted | shares | 261,332 | |
Awards released | shares | (18,188) | |
Awards cancelled | shares | (170,990) | |
Outstanding Awards, Ending Balance | shares | 715,249 | 643,095 |
Exercisable as of September 30, 2023 | shares | 303,427 | |
Weighted Average Exercise Price | ||
Outstanding Awards, Weighted Average Exercise Price | $ / shares | $ 56.2 | |
Awards granted, Weighted Average Exercise Price | $ / shares | 7.79 | |
Awards exercised, Weighted Average Exercise Price | $ / shares | 6.78 | |
Awards cancelled, Weighted Average Exercise Price | $ / shares | 70.91 | |
Outstanding Awards, Weighted Average Exercise Price | $ / shares | 36.31 | $ 56.2 |
Exercisable as of September 30, 2023 | $ / shares | $ 61.86 | |
Weighted Average Remaining Contractual Life (in years) | ||
Outstanding Awards, Weighted Average Remaining Contractual Life | 7 years 7 months 6 days | 7 years 7 months 6 days |
Exercisable as of September 30, 2023 | 5 years 7 months 6 days | |
Aggregate Intrinsic Value | ||
Outstanding Awards, Aggregate Intrinsic Value | $ | $ 126 | $ 306 |
Awards granted, Aggregate Intrinsic Value | $ | 133 | |
Awards released, Aggregate Intrinsic Value | $ | 123 | |
Exercisable as of September 30, 2023 | $ | $ 0 |
Equity - Summary of Fair Value
Equity - Summary of Fair Value of Employee and Director Stock Option Awards Using a Black Scholes Option Pricing Model (Details) - Employee Stock Option | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (years) | 5 years 10 months 6 days | 5 years 11 months 12 days |
Expected volatility | 90.25% | 82.04% |
Risk-free interest rate | 3.64% | 2% |
Expected dividend yield | 0% | 0% |
Equity - Summary of Stock-based
Equity - Summary of Stock-based Compensation (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation | $ 918 | $ 1,780 |
Research and development | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation | 440 | 1,014 |
General and administrative | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation | $ 478 | $ 766 |
Net Loss Per Share Attributab_3
Net Loss Per Share Attributable to Common Stockholders - Computation of Numerators and Denominators Used in Basic and Diluted Net Income (Loss) Per Share Amounts (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator: | ||||||||
Net loss attributable to common stockholders - basic and diluted | $ (1,802) | $ 1,061 | $ (11,338) | $ (11,640) | $ (17,351) | $ (20,321) | $ (12,079) | $ (49,312) |
Denominator: | ||||||||
Weighted-average shares used in computing net loss per share, basic | 3,947,995 | 3,306,215 | 3,807,955 | 3,299,357 | ||||
Weighted-average shares used in computing net loss per share, diluted | 3,947,995 | 3,306,215 | 3,807,955 | 3,299,357 | ||||
Net loss attributable to common stockholders per share, basic | $ (0.46) | $ (3.52) | $ (3.17) | $ (14.95) | ||||
Net loss attributable to common stockholders per share, diluted | $ (0.46) | $ (3.52) | $ (3.17) | $ (14.95) |
Net Loss Per Share Attributab_4
Net Loss Per Share Attributable to Common Stockholders - Summary of Outstanding Potentially Dilutive Common Stock Equivalents Excluded from Calculation of Diluted Net Loss Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Outstanding potentially dilutive common stock equivalents | 1,466,378 | 637,737 | 1,466,378 | 637,737 |
Common Stock Options Issued and Outstanding | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Outstanding potentially dilutive common stock equivalents | 717,802 | 637,737 | 717,802 | 637,737 |
Warrants to Purchase Shares of Common Stock | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Outstanding potentially dilutive common stock equivalents | 748,576 | 0 | 748,576 | 0 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | |||
Oct. 22, 2023 | Sep. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | |
Subsequent Event [Line Items] | ||||
Common stock shares sold | 4,108,769 | 3,578,668 | ||
Common stock, par value | $ 0.0001 | $ 0.0001 | ||
Number of common shares to issue on exercise of warrants | 0 | |||
Warrant , Reason for Issuance, Description | The October 2023 Cash Warrants and the October 2023 Pre-Funded Warrants issued in the Private Placement will provide that holder will not have the right to exercise any portion of its October 2023 Cash Warrants or October 2023 Pre-Funded Warrants if such holder, together with its affiliates, would beneficially own in excess of 4.99%, 9.99% or 19.9%, as applicable, of the number of shares of the Company’s common stock outstanding immediately after giving effect to such exercise (the “Beneficial Ownership Limitation”). A holder may reset the Beneficial Ownership Limitation as to itself to a higher percentage (not to exceed 19.99%), effective 61 days after written notice to the Company. | |||
Extended period of redemption of preferred stock | 2 years | |||
Private Placement | ||||
Subsequent Event [Line Items] | ||||
Number of common shares to issue on exercise of warrants | 748,576 | 748,576 | ||
Purchase price of common stock shares | $ 9.78885 | |||
Pre-Funded Warrants | ||||
Subsequent Event [Line Items] | ||||
Number of common shares to issue on exercise of warrants | 4,362,000 | |||
Subsequent Event | Minimum | ||||
Subsequent Event [Line Items] | ||||
Extended period of redemption of preferred stock | 3 years | |||
Subsequent Event | Maximum | ||||
Subsequent Event [Line Items] | ||||
Extended period of redemption of preferred stock | 5 years | |||
Subsequent Event | Common Stock | Private Placement | ||||
Subsequent Event [Line Items] | ||||
Common stock shares sold | 12,805,350 | |||
Common stock, par value | $ 0.0001 | |||
Subsequent Event | Warrants | ||||
Subsequent Event [Line Items] | ||||
Warrants purchase price | $ 9 | |||
Subsequent Event | Pre-Funded Warrants | ||||
Subsequent Event [Line Items] | ||||
Purchase price of common stock shares | $ 5.8344 | |||
Decrease in warrant exercise price | $ 0.0001 | |||
Subsequent Event | Pre-Funded Warrants | Private Placement | ||||
Subsequent Event [Line Items] | ||||
AdditionalCommonStockSharesIssued | 8,583,675 | |||
Subsequent Event | Cash Warrants | ||||
Subsequent Event [Line Items] | ||||
Purchase price of common stock shares | $ 5.8345 |