Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 31, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-39343 | |
Entity Registrant Name | AKOUOS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 81-1716654 | |
Entity Address, Address Line One | 645 Summer Street, Suite 200 | |
Entity Address, City or Town | Boston | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02210 | |
City Area Code | 857 | |
Local Phone Number | 410-1818 | |
Title of 12(b) Security | Common Stock, $0.0001 Par Value per Share | |
Trading Symbol | AKUS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 36,946,211 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001722271 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 75,413 | $ 121,907 |
Marketable securities | 93,915 | 110,545 |
Prepaid expenses and other current assets | 5,165 | 3,711 |
Total current assets | 174,493 | 236,163 |
Property and equipment, net | 28,981 | 19,803 |
Operating lease right-of-use assets | 19,558 | 20,341 |
Restricted cash | 2,449 | 2,448 |
Other assets | 28 | |
Total assets | 225,509 | 278,755 |
Current Liabilities | ||
Accounts payable | 562 | 1,280 |
Accrued expenses and other current liabilities | 8,740 | 14,850 |
Operating lease liabilities | 785 | 671 |
Total current liabilities | 10,087 | 16,801 |
Operating lease liabilities, net of current portion | 34,584 | 28,304 |
Total liabilities | 44,671 | 45,105 |
Commitments and contingencies (See Note 11) | ||
Stockholders' Equity | ||
Common stock, $0.0001 par value: Authorized: 200,000,000 shares at September 30, 2022 and December 31, 2021. Issued and outstanding: 36,932,597 and 34,498,443 shares at September 30, 2022 and December 31, 2021, respectively. | 4 | 3 |
Additional paid-in capital | 417,624 | 402,244 |
Accumulated other comprehensive loss | (742) | (202) |
Accumulated deficit | (236,048) | (168,395) |
Total stockholders' equity | 180,838 | 233,650 |
Total liabilities and stockholders' equity | $ 225,509 | $ 278,755 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Common stock, Par value | $ 0.0001 | $ 0.0001 |
Common stock, Shares authorized | 200,000,000 | 200,000,000 |
Common stock, Shares issued | 36,932,597 | 34,498,443 |
Common stock, Shares outstanding | 36,932,597 | 34,498,443 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Operating expenses: | ||||
Research and development | $ 13,937 | $ 17,399 | $ 48,643 | $ 45,776 |
General and administrative | 6,267 | 5,513 | 19,595 | 16,068 |
Total operating expenses | 20,204 | 22,912 | 68,238 | 61,844 |
Loss from operations | (20,204) | (22,912) | (68,238) | (61,844) |
Other income (expense): | ||||
Interest income | 522 | 483 | 1,074 | 1,546 |
Other expense, net | (157) | (477) | (489) | (1,434) |
Total other income, net | 365 | 6 | 585 | 112 |
Net loss | $ (19,839) | $ (22,906) | $ (67,653) | $ (61,732) |
Net loss per share attributable to common stockholders, basic | $ (0.54) | $ (0.67) | $ (1.89) | $ (1.80) |
Net loss per share attributable to common stockholders, diluted | $ (0.54) | $ (0.67) | $ (1.89) | $ (1.80) |
Weighted-average common shares outstanding, basic | 36,905,818 | 34,436,793 | 35,766,217 | 34,360,274 |
Weighted-average common shares outstanding, diluted | 36,905,818 | 34,436,793 | 35,766,217 | 34,360,274 |
Unrealized gain (loss) on marketable securities | $ 169 | $ (31) | $ (540) | $ (26) |
Total other comprehensive income (loss) | 169 | (31) | (540) | (26) |
Total comprehensive loss | $ (19,670) | $ (22,937) | $ (68,193) | $ (61,758) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Total |
Balances at beginning of period at Dec. 31, 2020 | $ 3 | $ 392,322 | $ 13 | $ (81,724) | $ 310,614 |
Balances at beginning of period (in shares) at Dec. 31, 2020 | 34,383,719 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock upon exercise of stock options | 225 | 225 | |||
Issuance of common stock upon exercise of stock options (in shares) | 62,197 | ||||
Vesting of restricted common stock from early-exercised stock options | 21 | 21 | |||
Stock-based compensation expense | 2,000 | 2,000 | |||
Net loss | (16,086) | (16,086) | |||
Unrealized gain (loss) on marketable securities | 28 | 28 | |||
Balances at end of period at Mar. 31, 2021 | $ 3 | 394,568 | 41 | (97,810) | 296,802 |
Balances at end of period (in shares) at Mar. 31, 2021 | 34,445,916 | ||||
Balances at beginning of period at Dec. 31, 2020 | $ 3 | 392,322 | 13 | (81,724) | 310,614 |
Balances at beginning of period (in shares) at Dec. 31, 2020 | 34,383,719 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (61,732) | ||||
Unrealized gain (loss) on marketable securities | (26) | ||||
Balances at end of period at Sep. 30, 2021 | $ 3 | 399,690 | (13) | (143,456) | 256,224 |
Balances at end of period (in shares) at Sep. 30, 2021 | 34,492,507 | ||||
Balances at beginning of period at Mar. 31, 2021 | $ 3 | 394,568 | 41 | (97,810) | 296,802 |
Balances at beginning of period (in shares) at Mar. 31, 2021 | 34,445,916 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock upon exercise of stock options | 28 | 28 | |||
Issuance of common stock upon exercise of stock options (in shares) | 7,323 | ||||
Vesting of restricted common stock from early-exercised stock options | 5 | 5 | |||
Stock-based compensation expense | 2,456 | 2,456 | |||
Net loss | (22,740) | (22,740) | |||
Unrealized gain (loss) on marketable securities | (23) | (23) | |||
Balances at end of period at Jun. 30, 2021 | $ 3 | 397,057 | 18 | (120,550) | 276,528 |
Balances at end of period (in shares) at Jun. 30, 2021 | 34,453,239 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock upon exercise of stock options | 140 | 140 | |||
Issuance of common stock upon exercise of stock options (in shares) | 39,268 | ||||
Vesting of restricted common stock from early-exercised stock options and sales of restricted common stock | 5 | 5 | |||
Stock-based compensation expense | 2,488 | 2,488 | |||
Net loss | (22,906) | (22,906) | |||
Unrealized gain (loss) on marketable securities | (31) | (31) | |||
Balances at end of period at Sep. 30, 2021 | $ 3 | 399,690 | (13) | (143,456) | 256,224 |
Balances at end of period (in shares) at Sep. 30, 2021 | 34,492,507 | ||||
Balances at beginning of period at Dec. 31, 2021 | $ 3 | 402,244 | (202) | (168,395) | 233,650 |
Balances at beginning of period (in shares) at Dec. 31, 2021 | 34,498,443 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock upon exercise of stock options | 220 | 220 | |||
Issuance of common stock upon exercise of stock options (in shares) | 107,060 | ||||
Vesting of restricted common stock from early-exercised stock options | 4 | 4 | |||
Stock-based compensation expense | 2,626 | 2,626 | |||
Net loss | (26,983) | (26,983) | |||
Unrealized gain (loss) on marketable securities | (533) | (533) | |||
Balances at end of period at Mar. 31, 2022 | $ 3 | 405,094 | (735) | (195,378) | 208,984 |
Balances at end of period (in shares) at Mar. 31, 2022 | 34,605,503 | ||||
Balances at beginning of period at Dec. 31, 2021 | $ 3 | 402,244 | (202) | (168,395) | 233,650 |
Balances at beginning of period (in shares) at Dec. 31, 2021 | 34,498,443 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (67,653) | ||||
Unrealized gain (loss) on marketable securities | (540) | ||||
Balances at end of period at Sep. 30, 2022 | $ 4 | 417,624 | (742) | (236,048) | 180,838 |
Balances at end of period (in shares) at Sep. 30, 2022 | 36,932,597 | ||||
Balances at beginning of period at Mar. 31, 2022 | $ 3 | 405,094 | (735) | (195,378) | 208,984 |
Balances at beginning of period (in shares) at Mar. 31, 2022 | 34,605,503 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock upon exercise of stock options | 21 | 21 | |||
Issuance of common stock upon exercise of stock options (in shares) | 21,095 | ||||
Vesting of restricted common stock from early-exercised stock options | 4 | 4 | |||
Stock-based compensation expense | 2,759 | 2,759 | |||
Issuance of common stock from at the market offering, net of issuance costs of $0.3 million | $ 1 | 7,188 | 7,189 | ||
Issuance of common stock from at the market offering, net of issuance costs of $0.3 million (in shares) | 2,272,727 | ||||
Net loss | (20,831) | (20,831) | |||
Unrealized gain (loss) on marketable securities | (176) | (176) | |||
Balances at end of period at Jun. 30, 2022 | $ 4 | 415,066 | (911) | (216,209) | 197,950 |
Balances at end of period (in shares) at Jun. 30, 2022 | 36,899,325 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock upon exercise of stock options | 56 | 56 | |||
Issuance of common stock upon exercise of stock options (in shares) | 33,272 | ||||
Vesting of restricted common stock from early-exercised stock options | 3 | 3 | |||
Stock-based compensation expense | 2,499 | 2,499 | |||
Net loss | (19,839) | (19,839) | |||
Unrealized gain (loss) on marketable securities | 169 | 169 | |||
Balances at end of period at Sep. 30, 2022 | $ 4 | $ 417,624 | $ (742) | $ (236,048) | $ 180,838 |
Balances at end of period (in shares) at Sep. 30, 2022 | 36,932,597 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) $ in Millions | 3 Months Ended |
Jun. 30, 2022 USD ($) | |
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | |
Adjustments to Additional Paid in Capital, Stock Issued, Issuance Costs | $ 0.3 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||||
Net loss | $ (19,839) | $ (22,906) | $ (67,653) | $ (61,732) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation and amortization expense | 800 | 700 | 2,281 | 1,842 |
Net amortization of premiums and accretion of discounts on marketable securities | 291 | 1,389 | ||
Amortization of operating lease right-of-use assets | 783 | 879 | ||
Stock-based compensation expense | 7,884 | 6,944 | ||
Loss on disposal of property and equipment | 200 | 73 | ||
Changes in operating assets and liabilities: | ||||
Prepaid expenses and other current assets | (1,454) | (2,219) | ||
Accounts payable | (718) | 172 | ||
Other assets | (28) | 35 | ||
Operating lease liabilities | 6,394 | 70 | ||
Accrued expenses and other current liabilities | (6,116) | 4,751 | ||
Net cash used in operating activities | (58,136) | (47,796) | ||
Cash flows from investing activities: | ||||
Purchases of property and equipment | (11,642) | (8,114) | ||
Purchases of marketable securities | (94,201) | (151,370) | ||
Proceeds from sales or maturities of marketable securities | 110,000 | 254,001 | ||
Net cash provided by investing activities | 4,157 | 94,517 | ||
Cash flows from financing activities: | ||||
Proceeds from at the market equity offering, net of issuance costs | 7,189 | |||
Payments of finance lease obligations | (189) | |||
Proceeds from exercise of stock options | 297 | 393 | ||
Payments of offering costs | (100) | |||
Net cash provided by financing activities | 7,486 | 104 | ||
Net increase (decrease) in cash, cash equivalents and restricted cash | (46,493) | 46,825 | ||
Cash, cash equivalents and restricted cash at beginning of period | 124,355 | 70,249 | ||
Cash, cash equivalents and restricted cash at end of period | 77,862 | 117,074 | 77,862 | 117,074 |
Supplemental cash flow information: | ||||
Cash paid for interest | 1 | |||
Supplemental disclosure of non-cash investing and financing information: | ||||
Purchases of property and equipment included in accounts payable and accrued expenses | 17 | |||
Deferred offering costs included in accounts payable and accrued expenses | 253 | |||
Operating lease liabilities arising from obtaining right-of-use assets | 9,946 | |||
Vesting of common stock subject to repurchase | 11 | 31 | ||
Remeasurement of operating lease right-of-use asset for lease modification | 5,592 | |||
Reconciliation of cash, cash equivalents and restricted cash: | ||||
Cash and cash equivalents | 75,413 | 114,626 | 75,413 | 114,626 |
Restricted cash | 2,449 | 2,448 | 2,449 | 2,448 |
Total cash, cash equivalents and restricted cash shown in the statement of cash flows | $ 77,862 | $ 117,074 | $ 77,862 | $ 117,074 |
Nature of the Business and Basi
Nature of the Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
Nature of the Business and Basis of Presentation | |
Nature of the Business and Basis of Presentation | 1. Nature of the Business and Basis of Presentation Akouos, Inc., together with its consolidated subsidiary (the “Company” or “Akouos”), is a precision genetic medicine company dedicated to its mission of developing gene therapies with the potential to restore, improve, and preserve high-acuity physiologic hearing for individuals who live with disabling hearing loss worldwide. The Company was formed as a limited liability corporation under the laws of the Commonwealth of Massachusetts in March 2016 under the name Akouos, LLC and converted into a corporation under the laws of the State of Delaware in November 2016 under the name Akouos, Inc. The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, the impact of the COVID-19 pandemic, and the ability to secure additional capital to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure, and extensive compliance-reporting capabilities. Even if the Company’s development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. In August 2021, the Company entered into a sales agreement (the “ATM Sales Agreement”) with Cowen and Company, LLC (“Cowen”) to issue and sell, from time to time at prevailing market prices, shares of the Company’s common stock having aggregate gross proceeds of up to $100.0 million. Sales of common stock under the ATM Sales Agreement may be made by any method that is deemed an “at the market” offering as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended. The Company agreed to pay Cowen a commission of 3.0% of the aggregate gross proceeds of any shares sold by Cowen under the ATM Sales Agreement. During the second quarter of 2022 the Company sold 2,272,727 shares of common stock under the ATM Sales Agreement for net proceeds of approximately $7.2 million. The accompanying condensed consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets, and the satisfaction of liabilities and commitments in the ordinary course of business. The Company has primarily funded its operations with proceeds from sales of convertible preferred stock and proceeds from the Company’s initial public offering of common stock. The Company has incurred losses and negative cash flows from operations since its inception. As of September 30, 2022, the Company had an accumulated deficit of $236.0 million. The Company expects that its operating losses and negative cash flows will continue for the foreseeable future. The Company expects that its existing cash, cash equivalents and marketable securities will be sufficient to fund its operating expenses and capital expenditure requirements for at least 12 months from the issuance date of the interim condensed consolidated financial statements. The Company expects to seek additional funding through public and private equity financings, debt financings, collaborations, licensing arrangements, and/or strategic alliances. The Company may not be able to obtain financing on acceptable terms, or at all, and the Company may not be able to enter into collaborations or other such arrangements. The terms of any financing may adversely affect the holdings or the rights of the Company’s stockholders. If the Company is unable to obtain funding, the Company could be forced to delay, reduce, or eliminate some or all of its research and development programs, product portfolio expansion, or commercialization efforts, which could adversely affect its business prospects. Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient funding on terms acceptable to the Company to fund continuing operations, if at all. Proposed Acquisition by Eli Lilly and Company On October 17, 2022, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Eli Lilly and Company, an Indiana corporation (“Parent”), and Kearny Acquisition Corporation, a Delaware corporation and wholly owned subsidiary of Parent (“Purchaser”), as disclosed in Note 13 to our condensed consolidated financial statements Impact of the COVID-19 Pandemic The COVID-19 pandemic has caused many governments to implement measures to slow the spread of the pandemic. The pandemic and government measures taken in response have had and will continue to have a significant impact, both direct and indirect, on businesses and commerce, as worker shortages have occurred, supply chains have been disrupted, and facilities and production have been suspended. The Company has experienced manufacturing delays at its third-party manufacturers, including delays related to the COVID-19 pandemic, and may experience additional delays in the future, including supply chain delays or shortages, which could further delay product development timelines. The future progression of the pandemic and its continued effects on the Company’s business and operations are uncertain. The COVID-19 pandemic may affect the Company’s ability to initiate and complete nonclinical studies, delay the initiation of its planned clinical trial or future clinical trials, disrupt regulatory activities, or have other adverse effects on its business and operations. In particular, the Company and its third-party manufacturers and contract research organizations may face additional disruptions that may affect the Company’s ability to initiate and complete nonclinical studies, obtain nonclinical and clinical supplies, and initiate clinical trial sites. The pandemic may cause significant disruptions in the financial markets, which could impact the Company’s ability to raise additional funds to support its operations. Moreover, the pandemic has significantly impacted economies worldwide, which could result in adverse effects on the Company’s business and operations. As described above, to date, the Company has experienced a business disruption at its third-party manufacturers, including delays related to the COVID-19 pandemic. The Company is continuing to monitor the impact of the COVID-19 pandemic on its business and financial statements. To date, the Company has not incurred impairment losses in the carrying values of its assets as a result of the pandemic and it is not aware of any specific related event or circumstance that would require it to revise its estimates reflected in these condensed consolidated financial statements. The extent to which the COVID-19 pandemic will continue to directly or indirectly impact the Company’s business, results of operations and financial condition, including planned and future clinical trials and research and development costs, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19, the actions taken to contain or treat it, and the duration and intensity of the related effects. Basis of Presentation The accompanying condensed consolidated financial statements reflect the operations of the Company and its wholly owned, domestic subsidiary. Intercompany balances and transactions have been eliminated in consolidation. The accompanying condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, the accrual of research and development expenses. The Company bases its estimates on historical experience, known trends, and other market specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates, as there are changes in circumstances, facts, and experience. Changes in estimates are recorded in the period in which they become known. Actual results may differ from those estimates or assumptions. Unaudited Interim Financial Information The accompanying condensed consolidated balance sheet as of September 30, 2022, the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2022 and 2021, the condensed consolidated statements of cash flows for the nine months ended September 30, 2022 and 2021 and the condensed consolidated statements of stockholders’ equity for the three and nine months ended September 30, 2022 and 2021 are unaudited. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of September 30, 2022 and the results of its operations for the three and nine months ended September 30, 2022 and 2021 and its cash flows for the nine months ended September 30, 2022 and 2021. The financial data and other information disclosed in these notes related to the three and nine months ended September 30, 2022 and 2021 are also unaudited. The results for the three and nine months ended September 30, 2022 and 2021 are not necessarily indicative of results to be expected for the year ending December 31, 2022, any other interim periods, or any future year or period. The accompanying balance sheet as of December 31, 2021 has been derived from the Company’s audited financial statements for the year ended December 31, 2021. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. The accompanying unaudited condensed consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and related notes for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 29, 2022 (the “Annual Report on Form 10-K”). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Summary of Significant Accounting Policies The significant accounting policies and estimates used in the preparation of the accompanying consolidated financial statements are described in the Company’s audited consolidated financial statements included in the Annual Report on Form 10-K. There have been no material changes in the Company’s significant accounting policies during the nine months ended September 30, 2022. Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU ”) Income Taxes Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard-setting bodies that the Company adopts as of the specified effective date. The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and has elected not to “opt out” of the extended transition period related to complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public and non-public companies, the Company can adopt the new or revised standard at the time non-public companies adopt the new or revised standard and can do so until such time that the Company either (i) irrevocably elects to “opt out” of such extended transition period or (ii) no longer qualifies as an emerging growth company. The Company may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for non-public companies. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Codification Improvements to Topic 326, Financial Instruments—Credit Losses Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Measurements | |
Fair Value Measurements | 3. Fair Value Measurements The following tables present the Company’s fair value hierarchy for its assets that are measured at fair value on a recurring basis and indicate the level within the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value: Fair Value Measurements at September 30, 2022 Using: (in thousands) Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 75,413 $ — $ — $ 75,413 Restricted cash: Money market funds 2,449 — — 2,449 Marketable securities: U.S. Treasury notes — 93,915 — 93,915 $ 77,862 $ 93,915 $ — $ 171,777 Fair Value Measurements at December 31, 2021 Using: (in thousands) Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 121,018 $ — $ — $ 121,018 Restricted cash: Money market funds 2,448 — — 2,448 Marketable securities: U.S. Treasury notes — 110,545 — 110,545 $ 123,466 $ 110,545 $ — $ 234,011 U.S. government money market funds were valued by the Company based on quoted market prices, which represent a Level 1 measurement within the fair value hierarchy. As of September 30, 2022, the Company’s marketable securities consisted of U.S. Treasury notes, which were valued based on Level 2 inputs. In determining the fair value of its U.S. Treasury notes, the Company relied on quoted prices for similar securities in active markets or other inputs that are observable or can be corroborated by observable market data. During the three and nine months ended September 30, 2022 and 2021, there were no transfers between Level 1, Level 2, and Level 3 of the fair value hierarchy. |
Marketable Securities
Marketable Securities | 9 Months Ended |
Sep. 30, 2022 | |
Marketable securities | |
Marketable securities | 4. Marketable Securities As of September 30, 2022 and December 31, 2021, the fair value of available-for-sale marketable debt securities by type of security was as follows: September 30, 2022 Gross Gross Amortized Unrealized Unrealized Fair (in thousands) Cost Gain Loss Value Assets Marketable securities: U.S. Treasury notes $ 94,657 $ — $ (742) $ 93,915 $ 94,657 $ — $ (742) $ 93,915 December 31, 2021 Gross Gross Amortized Unrealized Unrealized Fair (in thousands) Cost Gain Loss Value Assets Marketable securities: U.S. Treasury notes $ 110,747 $ — $ (202) $ 110,545 $ 110,747 $ — $ (202) $ 110,545 At September 30, 2022 and December 31, 2021, all available-for-sale marketable securities had contractual maturities of less than two years. |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2022 | |
Property and Equipment, Net | |
Property and Equipment, Net | 5. Property and Equipment, Net Property and equipment, net consisted of the following: (in thousands) September 30, 2022 December 31, 2021 Laboratory equipment $ 8,223 $ 7,595 Furniture and fixtures 622 600 Leasehold improvements 15,871 15,871 Construction in progress 11,240 516 35,956 24,582 Less: Accumulated depreciation and amortization (6,975) (4,779) $ 28,981 $ 19,803 Depreciation and amortization expense for the three and nine months ended September 30, 2022 was approximately $0.8 million and $2.3 million, respectively. Depreciation and amortization expense for the three and nine months ended September 30, 2021 was approximately $0.7 million and $1.8 million, respectively. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2022 | |
Accrued Expenses and Other Current Liabilities | |
Accrued Expenses and Other Current Liabilities | 6. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following: (in thousands) September 30, 2022 December 31, 2021 Accrued manufacturing expenses $ 2,221 $ 8,039 Accrued employee compensation and benefits 3,353 3,234 Accrued external research and development expenses 1,648 2,507 Accrued professional fees 1,274 983 Other 244 87 $ 8,740 $ 14,850 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity | |
Stockholders' Equity | 7. Stockholders’ Equity Common Stock As of September 30, 2022 and December 31, 2021, the Company’s certificate of incorporation, as amended and restated, authorized the Company to issue 200,000,000 shares of common stock, $0.0001 par value per share. In August 2021, the Company entered into the ATM Sales Agreement with Cowen to issue and sell from time to time at prevailing market prices, up to $100.0 million in shares of the Company’s common stock. During the second quarter of 2022 the Company sold 2,272,727 shares of common stock under the ATM Sales Agreement for net proceeds of approximately $7.2 million. Preferred Stock As of September 30, 2022 and December 31, 2021, the Company’s certificate of incorporation, as amended and restated, authorized the Company to issue 5,000,000 shares of preferred stock, $0.0001 par value per share. As of September 30, 2022 and December 31, 2021, no shares of preferred stock were issued or outstanding. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Stock-Based Compensation | |
Stock-Based Compensation | 8 2016 Stock Plan The Company’s 2016 Stock Plan (the “2016 Plan”) provides for the Company to grant incentive stock options or non-qualified stock options, restricted stock, restricted stock units, and other equity awards to employees, directors, and consultants of the Company. The 2016 Plan is administered by the board of directors or, at the discretion of the board of directors, by a committee of the board of directors. The board of directors may also delegate to one or more officers of the Company the power to grant awards to employees and certain officers of the Company. The exercise prices, vesting, and other restrictions are determined at the discretion of the board of directors, or its committee or any such officer if so delegated. Stock options granted under the 2016 Plan with service-based vesting conditions generally vest over four years and expire after ten years. As of September 30, 2022 and December 31, 2021, no shares remained available for future issuance under the 2016 Plan. 2020 Stock Plan On May 28, 2020, the Company’s board of directors adopted, and on June 17, 2020 its stockholders approved, the 2020 Stock Plan (the “2020 Plan”). The 2020 Plan provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock units, and other stock-based awards. The number of shares initially reserved for issuance under the 2020 Plan is the sum of 4,294,594, plus the number of shares (up to 3,622,691 shares) equal to the sum of (i) the number of shares remaining available for issuance under the 2016 Plan upon the effectiveness of the 2020 Plan and (ii) the number of shares of common stock subject to outstanding awards granted under the 2016 Plan that expire, terminate or are otherwise surrendered, cancelled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right. The number of shares of common stock that may be issued under the 2020 Plan will automatically increase on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2021 and continuing for each fiscal year until, and including, the fiscal year ending December 31, 2030, equal to the lowest of (i) 2,728,610 shares, (ii) 4% of the number of shares of common stock outstanding on such date, and (iii) an amount determined by the Company’s board of directors. On January 1, 2022, the number of shares reserved for issuance under the 2020 Plan increased, pursuant to the terms of the 2020 Plan, by an additional 1,379,937 shares, equal to 4% of the Company’s then outstanding common stock. The shares of common stock underlying any awards that are forfeited, cancelled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, repurchased or are otherwise terminated by the Company under the 2020 Plan will be added back to the shares of common stock available for issuance under the 2020 Plan. As of September 30, 2022, the total number of shares of common stock available for issuance under the 2020 Plan is 4,561,823 shares. 2020 Employee Stock Purchase Plan On May 28, 2020, the Company’s board of directors adopted, and on June 17, 2020 its stockholders approved, the 2020 Employee Stock Purchase Plan (the “2020 ESPP”). A total of 360,651 shares of common stock were initially reserved for issuance under this plan. The number of shares of common stock that may be issued under the 2020 ESPP will automatically increase on the first day of each fiscal year, beginning with the fiscal year commencing on January 1, 2021 and continuing for each fiscal year until, and including, the fiscal year commencing on January 1, 2031, equal to the lowest of (i) 640,630 shares, (ii) 1% of the number of shares of common stock outstanding on such date, and (iii) an amount determined by the Company’s board of directors. On January 1, 2022, the number of shares reserved for issuance under the 2020 ESPP increased, pursuant to the terms of the 2020 ESPP, by an additional 344,984 shares, equal to 1% of the Company’s then outstanding common stock. As of September 30, 2022, the total number of shares of common stock available for issuance under the 2020 ESPP is 1,049,472. Stock Option Valuation The fair value of stock option grants is estimated using the Black-Scholes option-pricing model. Expected stock price volatility is based on a weighted average of several peer public companies given the limited period the Company’s common stock has traded since the initial public offering. For purposes of identifying peer companies, the Company considered characteristics such as industry, length of trading history and similar vesting terms. For options with service-based vesting conditions, the expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. Stock Options The following table summarizes the Company’s stock option activity since December 31, 2021: Weighted ‑ Weighted ‑ Average Average Aggregate Number of Exercise Contractual Intrinsic Shares Price Term (in years) Value (in thousands) Outstanding as of December 31, 2021 4,392,836 $ 11.71 8.3 $ 6,801 Granted 1,885,975 $ 5.44 Exercised (161,427) $ 1.84 Forfeited and cancelled (404,117) $ 12.43 Outstanding as of September 30, 2022 5,713,267 $ 9.89 8.2 $ 5,408 Vested and expected to vest as of September 30, 2022 5,713,267 $ 9.89 8.2 $ 5,408 Options exercisable as of September 30, 2022 2,130,324 $ 10.79 7.3 $ 2,500 There were no stock options granted during the three months ended September 30, 2022. The weighted-average grant-date fair value of stock options granted during the three months ended September 30, 2021 was $8.24 per share. The weighted-average grant-date fair value of stock options outstanding during the nine months ended September 30, 2022 and 2021 was $3.86 per share and $11.12 per share, respectively. Early Exercise of Stock Options into Restricted Stock Certain option grants permit option holders to elect to exercise unvested options in exchange for unvested common stock. The options that are exercised prior to vesting will continue to vest according to the respective option agreement, and such unvested shares are subject to repurchase by the Company at the optionee’s original exercise price in the event the optionee’s service with the Company voluntarily or involuntarily terminates. A summary of the Company’s unvested common stock from option early exercises that is subject to repurchase by the Company is as follows: Shares Unvested restricted common stock as of December 31, 2021 14,070 Vested (9,927) Unvested restricted common stock as of September 30, 2022 4,143 Proceeds from the early exercise of options are recorded as a liability within accrued expenses and other current liabilities on the condensed consolidated balance sheet. The liability for unvested common stock subject to repurchase is then reclassified to additional paid-in capital as the Company’s repurchase right lapses. The shares purchased by the employees and directors pursuant to the early exercise of stock options are not deemed, for accounting purposes, to be outstanding until those shares have vested. As of September 30, 2022 and December 31, 2021, the liability related to the payments for unvested shares from early-exercised options was less than $0.1 million at each date. Restricted Common Stock Awards The Company has both (i) granted restricted stock awards, with the recipient not paying for the shares of common stock, and (ii) issued and sold restricted stock, with the recipient purchasing the common stock at its fair value per share. In both circumstances, the restricted shares of common stock have service-based vesting conditions and unvested shares are either subject to forfeiture by the employee or subject to repurchase by the Company, at the lesser of holder’s original purchase price or fair value, in the event the holder’s service with the Company voluntarily or involuntarily terminates. Service-based restricted stock awards generally vest over four years. Proceeds from the issuance and sale of restricted common stock are recorded as a liability within accrued expenses and other current liabilities on the condensed consolidated balance sheet. The liability for unvested common stock subject to repurchase is then reclassified to additional paid-in capital as the Company’s repurchase right lapses. Shares of restricted common stock granted or sold to employees and directors are not deemed, for accounting purposes, to be outstanding until those shares have vested. The Company did not grant or sell restricted common stock awards during 2021 or the nine months ended September 30, 2022. As of September 30, 2022, there was no remaining liability related to the payments received for shares of unvested restricted stock. As of December 31, 2021, the liability related to the payments received for shares of unvested restricted stock was less than $0.1 million. The following table summarizes the Company’s restricted common stock award activity for the nine months ended September 30, 2022: Weighted ‑ Average Grant ‑ Date Shares Fair Value Unvested restricted common stock as of December 31, 2021 770 $ 0.85 Vested (770) 0.85 Unvested restricted common stock as of September 30, 2022 — $ — No restricted common stock vested during the three months ended September 30, 2022. The total fair value of restricted common stock vested during the nine months ended September 30, 2022 was less than $0.1 million. Stock-Based Compensation The Company records compensation cost for all stock-based payment arrangements, including employee, director, and consultant stock options and restricted stock. The Company recorded stock-based compensation expense in the following expense categories of its consolidated statements of operations and comprehensive loss (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Research and development expenses $ 1,041 $ 1,031 $ 3,151 $ 3,216 General and administrative expenses 1,458 1,457 4,733 3,728 $ 2,499 $ 2,488 $ 7,884 $ 6,944 As of September 30, 2022, there was $22.2 million of unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of 2.6 years. |
License Agreements
License Agreements | 9 Months Ended |
Sep. 30, 2022 | |
License Agreements | |
License Agreements | 9. License Agreements License Agreement with Massachusetts Eye and Ear In October 2017, the Company entered into a license agreement with Massachusetts Eye and Ear Infirmary and the Schepens Eye Research Institute, Inc. (collectively referred to as “MEE”) (the “MEE License”). Under the MEE License, the Company received an exclusive, non-transferable, sublicensable, worldwide, royalty-bearing license to certain patent rights and know-how, including rights related to adeno-associated virus (“AAV”) ancestral technology, including AAVAnc80, to use, research, develop, manufacture, and commercialize licensed products in the treatment, diagnosis, and prevention of any and all balance disorders, including hearing disorders of the inner ear, in each case, with a total prevalence in the United States of less than 3,000 patients, and an exclusive, non-transferable, sublicensable right and license under MEE’s rights, title, and interest in certain patents co-owned by MEE and Children’s Medical Center Corporation to use, research, develop, manufacture, and commercialize licensed products. The Company is obligated to use commercially reasonable efforts to develop and commercialize the MEE licensed products, including filing an investigational new drug application (“IND”) in the United States or investigational medicinal product dossier (“IMPD”) in any country in the European Union or an equivalent application in any country within 18 months of completion of specified toxicology studies for a licensed product. Upon entering into the MEE License in 2017, the Company issued to MEE shares of the Company’s common stock then having a fair value of $0.1 million. The Company is obligated to make aggregate milestone payments to MEE of up to $17.7 million upon the achievement of specified development, regulatory, and sales milestones. The Company is also obligated to pay tiered royalties of a mid to high single-digit percentage based on annual net sales of licensed products by the Company and any of its affiliates and sublicensees. Royalties will be paid by the Company on a licensed product-by-licensed product and country-by-country basis beginning after the first commercial sale of an MEE licensed product and lasting until the later of (i) the expiration of the last valid claim in the licensed patents or (ii) ten years after the first commercial sale of such MEE licensed product (the “MEE Royalty Term”). The MEE License remains in effect until the last expiration date of the last to expire MEE Royalty Term, unless terminated earlier. The Company has the right to terminate the MEE License at will, with or without cause, by 90 days’ advance written notice to MEE or upon MEE’s material breach of the MEE License, provided that MEE does not cure such material breach within a specified period. MEE has the right to terminate the MEE License in its entirety if (i) the Company fails to make any payment due within a specified period after MEE notifies the Company of such failure, (ii) the Company or its affiliates challenge the validity of the licensed patent rights, (iii) the Company fails to maintain required insurance, or (iv) the Company becomes insolvent or bankrupt. MEE also has the right to terminate the Company’s rights to specific intellectual property rights it has licensed to the Company under the MEE License if the Company materially breaches certain diligence obligations and does not cure within a specified period after written notice from MEE. During the three and nine months ended September 30, 2022 and 2021, the Company did not make any payments to MEE or recognize any research and development expenses under the MEE License. Sublicense Agreement with Lonza Houston, Inc. In October 2017, the Company entered into a sublicense agreement with Lonza Houston, Inc. (“Lonza”), as amended in December 2018 (the “Lonza Sublicense”). Under the agreement, the Company received an exclusive, non-transferable, sublicensable, worldwide, royalty-bearing sublicense to certain patent rights and know-how related to AAV ancestral technology, including AAVAnc80, to use, research, develop, manufacture, and commercialize licensed products for the treatment, diagnosis, and prevention of any and all balance disorders or diseases pertaining to the inner ear and/or any and all hearing diseases or disorders, including hearing disorders of the inner ear, but excluding all such disorders or diseases with a total prevalence in the United States of less than 3,000 patients. The Company is obligated to use commercially reasonable efforts to develop and commercialize the Lonza sublicensed products, including filing an IND in the United States or IMPD in any country in the European Union or an equivalent application in any country within 18 months of completion of specified toxicology studies for a licensed product. Upon entering into the Lonza Sublicense in 2017, the Company issued to Lonza shares of the Company’s common stock then having a fair value of $0.1 million. The Company is obligated to make aggregate milestone payments to Lonza of up to $18.5 million upon the achievement of specified development, regulatory, and sales milestones. The Company is also obligated to pay tiered royalties of a mid to high single-digit percentage based on annual net sales of licensed products by the Company and any of its affiliates and sublicensees as denoted in the Lonza Sublicense. Royalties will be paid by the Company on a licensed product-by-licensed product and country-by-country basis beginning after the first commercial sale of a Lonza sublicensed product and lasting until the later of (i) the expiration of the last valid claim in the patent or (ii) ten years after the first commercial sale of such Lonza sublicensed product (the “Lonza Royalty Term”). The Lonza Sublicense remains in effect until the last expiration date of the last to expire Lonza Royalty Term, unless terminated earlier. The Company has the right to terminate the Lonza Sublicense at will, with or without cause, by 90 days’ advance written notice to Lonza or upon Lonza’s material breach of the Lonza Sublicense, provided that Lonza does not cure such material breach within a specified period. Lonza has the right to terminate the Lonza Sublicense in its entirety if (i) the Company fails to make any payment due within a specified period after Lonza notifies the Company of such failure, (ii) the Company or its affiliates challenge the validity of the sublicensed patent rights, (iii) the Company fails to maintain required insurance, or (iv) the Company becomes insolvent or bankrupt. Lonza also has the right to terminate the Company’s rights to specific intellectual property rights it has sublicensed to the Company under the Lonza Sublicense if the Company materially breaches certain diligence obligations and does not cure within a specified period after written notice from Lonza. During the three and nine months ended September 30, 2022 and 2021 the Company did not make any payments to Lonza or recognize any research and development expenses under the Lonza Sublicense. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases | |
Leases | 10. Leases The Company leases its office and laboratory facility in Boston, Massachusetts pursuant to a lease agreement entered into in December 2018 (the “2018 Lease”), which includes a lease incentive, fixed payment escalations, and a rent holiday. The 2018 Lease term commenced in May 2019, which was the point at which the Company obtained control of the leased premises, and expires in February 2028. Under the 2018 Lease, the Company is entitled to one option to extend the lease term for an additional five years. The option to extend the lease term was not included in the right-of-use asset and lease liability as it was not reasonably certain of being exercised. The Company classified the 2018 Lease as an operating lease under ASC 842, Leases The Company entered into an amendment in January 2021 to its 2018 Lease (the “Amended 2018 Lease”). Under the Amended 2018 Lease, the Company’s leased space expanded the 2018 leased premises to include an additional 37,500 square feet for a total of approximately 75,000 square feet and extended the term of the 2018 Lease for a new ten-year April 2021 is accounted for as an operating lease. The Amended 2018 Lease included a landlord-provided tenant improvement allowance of up to $7.1 million to be applied to the costs of the construction of leasehold improvements. The Company determined that it owns the leasehold improvements related to the Amended 2018 Lease and, as such, reflected the $7.1 million lease incentive as a reduction of the rental payments used to measure the operating lease liability, and, in turn, the operating lease right-of-use asset as of the commencement date of the expansion premises in April 2021 (the “Expansion Premises Commencement Date”). Between the Expansion Premises Commencement Date and September 30, 2022, the Company recorded increases of $6.2 million to the operating lease liability and to leasehold improvements as and when such leasehold improvements were paid for by the landlord. The components of the Company’s lease expense are as follows: Three Months Ended Nine Months Ended (in thousands) September 30, 2022 September 30, 2022 Operating lease cost $ 1,109 $ 3,334 Variable lease cost $ 193 $ 529 Supplemental disclosure of cash flow information related to leases was as follows: Three Months Ended Nine Months Ended (in thousands) September 30, 2022 September 30, 2022 Cash paid for amounts included in the measurement of operating lease liabilities (operating cash flows) $ 807 $ 2,406 The weighted-average remaining lease term and discount rate were as follows: September 30, 2022 December 31, 2021 Weighted‑average remaining lease term (in years) used for: Operating leases 9.25 10.00 Weighted‑average discount rate used for: Operating leases 10.00 % 10.00 % Because the interest rate implicit in the lease was not readily determinable, the borrowing rate was used to calculate the present value of the Amended 2018 Lease. In determining its incremental borrowing rate, the Company considered its credit quality and assessed interest rates available in the market for similar borrowings, adjusted for the impact of collateral over the term of the lease. Future annual lease payments under the Amended 2018 Lease as of September 30, 2022 were as follows (in thousands): Years Ending December 31, Operating Leases 2022 $ 807 2023 4,251 2024 5,611 2025 5,786 2026 5,959 Thereafter 34,419 Total future lease payments 56,833 Less: Imputed interest (21,464) Total lease liabilities $ 35,369 The following table presents lease assets and liabilities and their classification on the consolidated balance sheet (in thousands): September 30, December 31, Leases Consolidated Balance Sheet Classification (unaudited) 2022 2021 Assets: Operating lease assets Operating lease right‑of‑use assets $ 19,558 $ 20,341 Total lease assets $ 19,558 $ 20,341 Liabilities: Current: Operating lease liabilities Operating lease liabilities $ 785 $ 671 Non‑current: Operating lease liabilities Operating lease liabilities, net of current portion 34,584 28,304 Total lease liabilities $ 35,369 $ 28,975 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 11. Commitments and Contingencies 401(k) Plan The Company has a defined-contribution plan under Section 401(k) of the Internal Revenue Code of 1986 (the “401(k) Plan”). The 401(k) Plan covers all employees who meet defined minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. The Company has made contributions to the 401(k) Plan and recorded contribution expense of $0.2 million and $0.5 million for the three and nine months ended September 30, 2022, respectively. The Company did not make any contributions during the three and nine months ended September 30, 2021. Indemnification Agreements In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, contract research organizations, business partners, and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors and certain of its executive officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. The Company has not incurred any material costs as a result of such indemnifications and is not currently aware of any indemnification claims. Legal Proceedings The Company, from time to time, may be party to litigation arising in the ordinary course of its business. The Company was not subject to any material legal proceedings during the three and nine months ended September 30, 2022. On October 31, 2022, Ryan O’Dell, a purported stockholder of the Company, filed a complaint in the United States District Court for the Southern District of New York, captioned O’Dell v. Akouos, Inc., et al., Case No. 1:22-cv-9313 (the “O’Dell Complaint”). On November 10, 2022, Brian Dixon, a purported stockholder of the Company, filed a complaint in the United States District Court for the District of Delaware, captioned Dixon v. Akouos, et al., Case No. 1:22-cv-01479-UNA (the “Dixon Complaint” and, together with the O’Dell Complaint, the “Complaints”). The Complaints name as defendants the Company and each member of the Company Board. The Complaints allege, among other things, that the defendants violated Sections 14(d), 14(e), and 20(a) of the Exchange Act and Rule 14d-9 promulgated thereunder by omitting and/or misrepresenting certain material facts related to the transaction from the Schedule 14D-9 filed by the Company on October 31, 2022. The Complaints seek, among other relief, (i) injunctive relief preventing the consummation of the Merger, (ii) recission of the Merger Agreement or rescissory damages, (iii) other damages purportedly incurred on account of the alleged omissions or misstatements, and (iv) an award of plaintiff’s costs and disbursements of the action, including attorneys’ and expert fees and expenses. In addition, the Dixon Compliant seeks a declaration that the defendants violated Section 14(a) and/or 20(a) of the Exchange Act. The Company also received (a) one demand letter on November 3, 2022, sent on behalf of Alex Ciccotelli, a purported stockholder of the Company (the “Ciccotelli Demand”), (b) two demand letters on November 8, 2022, sent on behalf of Marc Waterman (the “Waterman Demand”) and Christopher Scott (the “Scott Demand”), each a purported stockholder of the Company, (c) two demand letters on November 9, 2022, sent on behalf of James Ayer (the “Ayer Demand”) and Tim Chase (the “Chase Demand”), each a purported stockholder of the Company, (d) two demand letters on November 10, 2022, sent on behalf of David Elliot (the “Elliot Demand”) and Miriam Nathan (the “Nathan Demand”), each a purported stockholder of the Company, and (e) one demand letter on November 11, 2022, sent on behalf of Sean Riley (the “Riley Demand”), a purported stockholder of the Company. Each of the Ciccotelli Demand, the Waterman Demand, the Scott Demand, the Ayer Demand, the Chase Demand, the Elliot Demand, the Nathan Demand and the Riley Demand alleges omissions of material information with respect to the transaction from the Schedule 14D-9 filed by the Company on October 31, 2022 and demands that the Company promptly provide stockholders with additional disclosure. In addition, each of the Ayer Demand and the Nathan Demand includes a draft complaint, which contains allegations and requests for relief substantially consistent with those set forth in the Complaints, and states an intention to file such complaint. The outcome of the matters described above cannot be predicted with certainty. However, the Company believes that the allegations in the Complaints, Ciccotelli Demand, the Waterman Demand, the Scott Demand, the Ayer Demand, the Chase Demand, the Elliot Demand, the Nathan Demand and the Riley Demand are without merit. Additional complaints may be filed against the Company, the Company Board, Parent and/or Purchaser in connection with the transactions contemplated by the Merger Agreement, the Schedule TO and the Schedule 14D-9. If such additional complaints are filed, absent new or different allegations that are material, the Company, Parent and/or Purchaser will not necessarily announce such additional complaints. |
Net Loss per Share
Net Loss per Share | 9 Months Ended |
Sep. 30, 2022 | |
Net Loss per Share | |
Net Loss per Share | 12. Net Loss per Share Net Loss per Share Basic and diluted net loss per share attributable to common stockholders was calculated as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except share and per share data) 2022 2021 2022 2021 Numerator: Net loss attributable to common stockholders $ (19,839) $ (22,906) $ (67,653) $ (61,732) Denominator: Weighted‑average common shares outstanding, basic and diluted 36,905,818 34,436,793 35,766,217 34,360,274 Net loss per share attributable to common stockholders, basic and diluted $ (0.54) $ (0.67) $ (1.89) $ (1.80) The Company’s potential dilutive securities have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect: September 30, 2022 2021 Unvested restricted common stock 4,143 28,340 Stock options to purchase common stock 5,713,267 4,497,750 5,717,410 4,526,090 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events | |
Subsequent Events | 13. Subsequent Events Proposed Acquisition by Eli Lilly and Company On October 17, 2022, the Company entered into the Merger Agreement with Parent and Purchaser. Pursuant to the Merger Agreement, and upon the terms and subject to the conditions thereof, on October 31, 2022, Purchaser commenced a tender offer (the “Offer”) to purchase all of the issued and outstanding shares (the “Shares”) of common stock, par value $0.0001 per share (the “Common Stock”), of the Company in exchange for (a) $12.50 per Share, net to the stockholder in cash, without interest and less any applicable tax withholding (the “Cash Consideration”), plus (b) one non-tradable contingent value right (each, a “CVR”), which represents the contractual right to receive contingent payments of up to $3.00 per CVR, net to the stockholder in cash, without interest and less any applicable tax withholding, upon the achievement of certain specified milestones in accordance with the terms and subject to the conditions of a contingent value rights agreement (the “CVR Agreement”) to be entered into with a rights agent selected by Parent and reasonably acceptable to the Company (the Cash Consideration plus one CVR, collectively, the “Offer Price”). Following the consummation of the Offer, and subject to the terms and conditions of the Merger Agreement, Purchaser will merge with and into the Company as provided in the Merger Agreement (the “Merger”), with the Company being the surviving corporation. The Merger Agreement contemplates that the Merger will be effected pursuant to Section 251(h) of the General Corporation Law of the State of Delaware (the “DGCL”), which permits completion of the Merger without a stockholder vote promptly following consummation of the Offer. At the effective time of the Merger (the “Effective Time”), each Share (other than (i) Shares held in the treasury of the Company or owned by Parent, Purchaser or any direct or indirect wholly owned subsidiary of Parent or Purchaser or (ii) Shares that are held by stockholders who are entitled to and properly demand appraisal for such Shares in accordance with Section 262 of the DGCL, but including each Share that is subject to vesting or forfeiture restrictions granted pursuant to a Company equity incentive plan, program or arrangement (“Company Restricted Stock”)) will be cancelled and converted into the right to receive the Offer Price from Purchaser. As a result of the Merger, the Company will cease to be a publicly traded company. The obligation of Parent and Purchaser to consummate the Offer is subject to the condition that there be validly tendered and not validly withdrawn prior to the expiration of the Offer a number of Shares that, together with the number of Shares, if any, then owned beneficially by Parent and Purchaser (together with their wholly owned subsidiaries) would represent a majority of the Shares outstanding as of the consummation of the Offer (the “Minimum Tender Condition”). The Minimum Tender Condition may not be waived by Purchaser without the prior written consent of the Company. The obligation of Purchaser to consummate the Offer is also subject to other customary conditions, including the expiration of the waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), and the absence of governmental injunctions or other legal restraints prohibiting the Merger or the Offer. In addition, the obligation of Purchaser to consummate the Offer is conditioned upon, among other things, the accuracy of the representations and warranties of the Company (subject to certain materiality exceptions), and material compliance by the Company with its covenants under the Merger Agreement. Consummation of the Offer is not subject to a financing condition. The Merger Agreement provides for the following treatment of the Company’s equity awards: ● at the Effective Time, each option to purchase Shares having an exercise price less than the Cash Consideration (each such option, a “Company Cash-Out Stock Option”) that is outstanding immediately prior to the Effective Time, whether or not vested, shall be canceled and converted into the right to receive (x) an amount in cash, without interest and less any applicable tax withholdings, equal to the product of (A) the total number of Shares subject to such Company Cash-Out Stock Option immediately prior to the Effective Time multiplied by (B) the excess, if any, of the Cash Consideration over the applicable exercise price per share under such Company Cash-Out Stock Option and (y) one ● effective as of five business days prior to the date on which the closing of the Merger occurs (the “Closing Date”), or such other date (in no event later than two business days prior to the Closing Date) occurring prior to the Closing Date as may be determined by the board of directors of the Company (the “Company Board”) in its reasonable discretion (such date, the “Acceleration Date”), each then-outstanding and unexercised option to purchase Shares having an exercise price equal to or greater than the Cash Consideration (each such option, a “Company Exercisable Pre-Close Stock Option”) shall vest in full and become exercisable up to and through the close of regular trading on the Nasdaq on the second business day following the Acceleration Date (such second business day, the “Last Exercise Date”) in accordance with the terms and conditions of such Company Exercisable Pre-Close Stock Option in effect on the date of the Merger Agreement, and such Company Exercisable Pre-Close Stock Options shall terminate and be of no further force or effect as of immediately prior to closing of the Merger if not exercised by the holder on or prior to the close of regular trading on the Last Exercise Date; and ● at the Effective Time, each Share of Company Restricted Stock that is outstanding immediately prior to the Effective Time will vest in full as of immediately prior to the Effective Time and will be treated in the same manner as all other Shares of Common Stock. The Merger Agreement includes customary representations, warranties and covenants of the Company, Parent and Purchaser. The Company has agreed, among other things, to use commercially reasonable efforts to operate its business in the ordinary course until the time at which the Purchaser irrevocably accepts for purchase all Shares validly tendered (and not validly withdrawn) pursuant to the Offer and not to engage in specified types of transactions during such period. The Company has also agreed to customary non-solicitation restrictions, including not to solicit, facilitate or engage in discussions with third parties regarding other proposals for alternative business combination transactions involving the Company or change the recommendation of the Company Board to the Company’s stockholders regarding the Offer, in each case, except as otherwise permitted by the Merger Agreement, including to enter into an alternative transaction that constitutes a Superior Proposal (as defined in the Merger Agreement) in compliance with the Company Board’s fiduciary duties under applicable law and subject to payment of a termination fee. Parent and Purchaser have agreed to use reasonable best efforts to take actions that may be required in order to obtain antitrust approval of the proposed transaction, subject to certain limitations. The Merger Agreement also includes customary termination provisions for both the Company and Parent, including, among others, the right of both parties to terminate for failure to consummate the Offer on or before February 14, 2023, which date shall be extended to April 15, 2023 if the closing condition regarding the expiration of the waiting period (and any extension thereof) under the HSR Act remains unsatisfied. If the Merger Agreement is terminated under certain circumstances specified in the Merger Agreement, the Company will be required to pay the Parent a termination fee of $17.5 million (including under specified circumstances in connection with the Company’s entry into an agreement with respect to a Superior Proposal or the Company Board’s change of recommendation in favor of the Offer). The parties to the Merger Agreement are also entitled to specifically enforce the terms and provisions of the Merger Agreement. For additional information related to the Merger Agreement, refer to the Company’s Solicitation/Recommendation Statement on Schedule 14D-9 filed with the SEC on October 31, 2022, together with the exhibits and annexes thereto and as amended or supplemented from time to time. Please also see “Item 1A. Risk Factors—Risks Related to Pending Transaction with Eli Lilly and Company” of this Quarterly Report on Form 10-Q. 13 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Summary of Significant Accounting Policies | |
Recently Adopted and Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU ”) Income Taxes Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard-setting bodies that the Company adopts as of the specified effective date. The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and has elected not to “opt out” of the extended transition period related to complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public and non-public companies, the Company can adopt the new or revised standard at the time non-public companies adopt the new or revised standard and can do so until such time that the Company either (i) irrevocably elects to “opt out” of such extended transition period or (ii) no longer qualifies as an emerging growth company. The Company may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for non-public companies. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Codification Improvements to Topic 326, Financial Instruments—Credit Losses Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Measurements | |
Schedule of fair value hierarchy for its assets and liabilities that are measured at fair value on a recurring basis | Fair Value Measurements at September 30, 2022 Using: (in thousands) Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 75,413 $ — $ — $ 75,413 Restricted cash: Money market funds 2,449 — — 2,449 Marketable securities: U.S. Treasury notes — 93,915 — 93,915 $ 77,862 $ 93,915 $ — $ 171,777 Fair Value Measurements at December 31, 2021 Using: (in thousands) Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 121,018 $ — $ — $ 121,018 Restricted cash: Money market funds 2,448 — — 2,448 Marketable securities: U.S. Treasury notes — 110,545 — 110,545 $ 123,466 $ 110,545 $ — $ 234,011 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Marketable securities | |
Schedule of the fair value of available-for-sale marketable debt securities by type of security | September 30, 2022 Gross Gross Amortized Unrealized Unrealized Fair (in thousands) Cost Gain Loss Value Assets Marketable securities: U.S. Treasury notes $ 94,657 $ — $ (742) $ 93,915 $ 94,657 $ — $ (742) $ 93,915 December 31, 2021 Gross Gross Amortized Unrealized Unrealized Fair (in thousands) Cost Gain Loss Value Assets Marketable securities: U.S. Treasury notes $ 110,747 $ — $ (202) $ 110,545 $ 110,747 $ — $ (202) $ 110,545 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property and Equipment, Net | |
Schedule of property and equipment, net | (in thousands) September 30, 2022 December 31, 2021 Laboratory equipment $ 8,223 $ 7,595 Furniture and fixtures 622 600 Leasehold improvements 15,871 15,871 Construction in progress 11,240 516 35,956 24,582 Less: Accumulated depreciation and amortization (6,975) (4,779) $ 28,981 $ 19,803 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accrued Expenses and Other Current Liabilities | |
Schedule of accrued expenses and other current liabilities | (in thousands) September 30, 2022 December 31, 2021 Accrued manufacturing expenses $ 2,221 $ 8,039 Accrued employee compensation and benefits 3,353 3,234 Accrued external research and development expenses 1,648 2,507 Accrued professional fees 1,274 983 Other 244 87 $ 8,740 $ 14,850 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Stock-Based Compensation | |
Schedule of stock option activity | Weighted ‑ Weighted ‑ Average Average Aggregate Number of Exercise Contractual Intrinsic Shares Price Term (in years) Value (in thousands) Outstanding as of December 31, 2021 4,392,836 $ 11.71 8.3 $ 6,801 Granted 1,885,975 $ 5.44 Exercised (161,427) $ 1.84 Forfeited and cancelled (404,117) $ 12.43 Outstanding as of September 30, 2022 5,713,267 $ 9.89 8.2 $ 5,408 Vested and expected to vest as of September 30, 2022 5,713,267 $ 9.89 8.2 $ 5,408 Options exercisable as of September 30, 2022 2,130,324 $ 10.79 7.3 $ 2,500 |
Schedule of unvested common stock from option early exercises | Shares Unvested restricted common stock as of December 31, 2021 14,070 Vested (9,927) Unvested restricted common stock as of September 30, 2022 4,143 |
Schedule of restricted common stock award activity | Weighted ‑ Average Grant ‑ Date Shares Fair Value Unvested restricted common stock as of December 31, 2021 770 $ 0.85 Vested (770) 0.85 Unvested restricted common stock as of September 30, 2022 — $ — |
Schedule of stock based compensation expense | The Company recorded stock-based compensation expense in the following expense categories of its consolidated statements of operations and comprehensive loss (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Research and development expenses $ 1,041 $ 1,031 $ 3,151 $ 3,216 General and administrative expenses 1,458 1,457 4,733 3,728 $ 2,499 $ 2,488 $ 7,884 $ 6,944 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases | |
Schedule of lease costs, supplemental disclosure, weighted average lease term and discount rate and lease classification | Three Months Ended Nine Months Ended (in thousands) September 30, 2022 September 30, 2022 Operating lease cost $ 1,109 $ 3,334 Variable lease cost $ 193 $ 529 Supplemental disclosure of cash flow information related to leases was as follows: Three Months Ended Nine Months Ended (in thousands) September 30, 2022 September 30, 2022 Cash paid for amounts included in the measurement of operating lease liabilities (operating cash flows) $ 807 $ 2,406 The weighted-average remaining lease term and discount rate were as follows: September 30, 2022 December 31, 2021 Weighted‑average remaining lease term (in years) used for: Operating leases 9.25 10.00 Weighted‑average discount rate used for: Operating leases 10.00 % 10.00 % |
Schedule of future annual payments under operating lease | Future annual lease payments under the Amended 2018 Lease as of September 30, 2022 were as follows (in thousands): Years Ending December 31, Operating Leases 2022 $ 807 2023 4,251 2024 5,611 2025 5,786 2026 5,959 Thereafter 34,419 Total future lease payments 56,833 Less: Imputed interest (21,464) Total lease liabilities $ 35,369 |
Schedule of lease assets and liabilities and their classification on the consolidated balance sheet | The following table presents lease assets and liabilities and their classification on the consolidated balance sheet (in thousands): September 30, December 31, Leases Consolidated Balance Sheet Classification (unaudited) 2022 2021 Assets: Operating lease assets Operating lease right‑of‑use assets $ 19,558 $ 20,341 Total lease assets $ 19,558 $ 20,341 Liabilities: Current: Operating lease liabilities Operating lease liabilities $ 785 $ 671 Non‑current: Operating lease liabilities Operating lease liabilities, net of current portion 34,584 28,304 Total lease liabilities $ 35,369 $ 28,975 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Net Loss per Share | |
Schedule of net loss per share | Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except share and per share data) 2022 2021 2022 2021 Numerator: Net loss attributable to common stockholders $ (19,839) $ (22,906) $ (67,653) $ (61,732) Denominator: Weighted‑average common shares outstanding, basic and diluted 36,905,818 34,436,793 35,766,217 34,360,274 Net loss per share attributable to common stockholders, basic and diluted $ (0.54) $ (0.67) $ (1.89) $ (1.80) |
Schedule of securities excluded from computation of net loss per share | September 30, 2022 2021 Unvested restricted common stock 4,143 28,340 Stock options to purchase common stock 5,713,267 4,497,750 5,717,410 4,526,090 |
Nature of the Business and Ba_2
Nature of the Business and Basis of Presentation (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |
Aug. 31, 2021 | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Temporary Equity [Line Items] | ||||
Accumulated deficit | $ (236,048) | $ (168,395) | ||
Net proceeds | $ 7,189 | |||
At The Market Sales Agreement [Member] | ||||
Temporary Equity [Line Items] | ||||
Issuance of common stock | 2,272,727 | |||
Net proceeds | $ 7,200 | |||
Scenario, Plan [Member] | ||||
Temporary Equity [Line Items] | ||||
Gross proceeds to be received from issuance of common stock | $ 100,000 | |||
Commission for sale of stock, per agreement, as a percent | 3% |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Assets: | ||
Assets | $ 171,777 | $ 234,011 |
Money market funds | ||
Assets: | ||
Cash equivalents | 75,413 | 121,018 |
Restricted cash | 2,449 | 2,448 |
U.S. Treasury notes | ||
Assets: | ||
Marketable securities | 93,915 | 110,545 |
Level 1 | ||
Assets: | ||
Assets | 77,862 | 123,466 |
Level 1 | Money market funds | ||
Assets: | ||
Cash equivalents | 75,413 | 121,018 |
Restricted cash | 2,449 | 2,448 |
Level 2 | ||
Assets: | ||
Assets | 93,915 | 110,545 |
Level 2 | U.S. Treasury notes | ||
Assets: | ||
Marketable securities | $ 93,915 | $ 110,545 |
Marketable Securities (Details)
Marketable Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||
Marketable securities, Amortized Cost | $ 94,657 | $ 110,747 |
Unrealized loss | (742) | (202) |
Fair market value | 93,915 | 110,545 |
U.S. Treasury notes | ||
Debt Securities, Available-for-sale [Line Items] | ||
Marketable securities, Amortized Cost | 94,657 | 110,747 |
Unrealized loss | (742) | (202) |
Fair market value | $ 93,915 | $ 110,545 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Property and Equipment | |||||
Property and equipment, Gross | $ 35,956 | $ 35,956 | $ 24,582 | ||
Less: Accumulated depreciation and amortization | (6,975) | (6,975) | (4,779) | ||
Property and Equipment, Net | 28,981 | 28,981 | 19,803 | ||
Depreciation and amortization expense | 800 | $ 700 | 2,281 | $ 1,842 | |
Laboratory equipment | |||||
Property and Equipment | |||||
Property and equipment, Gross | 8,223 | 8,223 | 7,595 | ||
Furniture and fixtures | |||||
Property and Equipment | |||||
Property and equipment, Gross | 622 | 622 | 600 | ||
Leasehold improvements | |||||
Property and Equipment | |||||
Property and equipment, Gross | 15,871 | 15,871 | 15,871 | ||
Construction in progress | |||||
Property and Equipment | |||||
Property and equipment, Gross | $ 11,240 | $ 11,240 | $ 516 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Accrued Expenses and Other Current Liabilities | ||
Accrued manufacturing expenses | $ 2,221 | $ 8,039 |
Accrued employee compensation and benefits | 3,353 | 3,234 |
Accrued external research and development expenses | 1,648 | 2,507 |
Accrued professional fees | 1,274 | 983 |
Other | 244 | 87 |
Total | $ 8,740 | $ 14,850 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Aug. 31, 2021 | |
Class of Stock [Line Items] | ||||
Common stock shares authorized | 200,000,000 | 200,000,000 | ||
Common stock, Par value | $ 0.0001 | $ 0.0001 | ||
Net proceeds | $ 7,189 | |||
Preferred stock, Shares authorized | 5,000,000 | 5,000,000 | ||
Preferred stock, Par value | $ 0.0001 | $ 0.0001 | ||
Preferred stock, Shares issued | 0 | 0 | ||
Preferred stock, Shares outstanding | 0 | 0 | ||
ATM Sales Agreement | ||||
Class of Stock [Line Items] | ||||
Issuance of common stock | 2,272,727 | |||
Net proceeds | $ 7,200 | |||
Scenario, Plan [Member] | ||||
Class of Stock [Line Items] | ||||
Gross proceeds to be received from issuance of common stock | $ 100,000 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - shares | 9 Months Ended | |||
Jan. 01, 2022 | Jun. 17, 2020 | Sep. 30, 2022 | Dec. 31, 2021 | |
2016 Plan | ||||
Stock-Based Compensation | ||||
Remaining shares available for issuance | 0 | 0 | ||
2016 Plan | Stock option | ||||
Stock-Based Compensation | ||||
Vesting period | 4 years | |||
Expiration period | 10 years | |||
2020 Stock Plan | ||||
Stock-Based Compensation | ||||
Remaining shares available for issuance | 4,561,823 | |||
Number of shares authorized, fixed portion | 4,294,594 | |||
Number of shares authorized, variable portion | 3,622,691 | |||
Annual increase in shares reserved for issuance | 2,728,610 | |||
Increase in shares reserved for issuance | 1,379,937 | |||
Annual increase in shares reserved for issuance, as a percent of stock outstanding | 4% | 4% | ||
2020 Employee Stock Purchase Plan | ||||
Stock-Based Compensation | ||||
Remaining shares available for issuance | 1,049,472 | |||
Number of shares authorized, fixed portion | 360,651 | |||
Annual increase in shares reserved for issuance | 640,630 | |||
Increase in shares reserved for issuance | 344,984 | |||
Annual increase in shares reserved for issuance, as a percent of stock outstanding | 1% | 1% |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock option activity (Details) - Stock option - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Number of Shares | |||||
Outstanding as at beginning of period (in shares) | 4,392,836 | ||||
Granted (in shares) | 0 | 1,885,975 | |||
Exercised (in shares) | (161,427) | ||||
Forfeited and cancelled (in shares) | (404,117) | ||||
Outstanding as at end of period (in shares) | 5,713,267 | 5,713,267 | 4,392,836 | ||
Vested and expected to vest as at end of period (in shares) | 5,713,267 | 5,713,267 | |||
Options exercisable as at end of period (in shares) | 2,130,324 | 2,130,324 | |||
Weighted Average Exercise Price | |||||
Weighted average exercise price outstanding as at beginning of period (in dollars per share) | $ 11.71 | ||||
Weighted average exercise price, Granted (in dollars per share) | 5.44 | ||||
Weighted average exercise price, Exercised (in dollars per share) | 1.84 | ||||
Weighted average exercise price, Forfeited and cancelled (in dollars per share) | 12.43 | ||||
Weighted average exercise price, Outstanding as at end of period (in dollars per share) | $ 9.89 | 9.89 | $ 11.71 | ||
Vested and expected to vest as at end of period (in dollars per share) | 9.89 | 9.89 | |||
Options exercisable as at end of period (in dollars per share) | $ 10.79 | $ 10.79 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||||
Contractual term, Outstanding (in years) | 8 years 2 months 12 days | 8 years 3 months 18 days | |||
Contractual term, Vested and expected to vest (in years) | 8 years 2 months 12 days | ||||
Contractual term, Options exercisable (in years) | 7 years 3 months 18 days | ||||
Average intrinsic value, Outstanding | $ 5,408 | $ 5,408 | $ 6,801 | ||
Average intrinsic value, Vested and expected to vest | 5,408 | 5,408 | |||
Average intrinsic value, Exercisable | $ 2,500 | $ 2,500 | |||
Weighted-average grant-date fair value of stock options granted | $ 8.24 | $ 3.86 | $ 11.12 |
Stock-Based Compensation - Earl
Stock-Based Compensation - Early exercise of stock options into restricted stock (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Maximum | ||
Stock-Based Compensation | ||
Liability for unvested shares | $ 0.1 | $ 0.1 |
Restricted stock from early exercise of options | ||
Stock-Based Compensation | ||
Unvested restricted common stock at beginning of period | 14,070 | |
Vested | (9,927) | |
Unvested restricted common stock at end of period | 4,143 | 14,070 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted common stock award activity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Restricted stock awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Liability for unvested awards | $ 0 | $ 0 | |
Shares | |||
Unvested restricted common stock at beginning of period | 770 | ||
Vested | (770) | ||
Unvested restricted common stock at end of period | 770 | ||
Weighted Average Grant Date Fair Value | |||
Unvested restricted common stock at beginning of period | $ 0.85 | ||
Vested | $ 0.85 | ||
Unvested restricted common stock at end of period | $ 0.85 | ||
Total fair value of restricted common stock vested | $ 0 | ||
Restricted stock awards | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Liability for unvested awards | $ 0.1 | ||
Weighted Average Grant Date Fair Value | |||
Total fair value of restricted common stock vested | $ 0.1 | ||
Service-based restricted stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 4 years | ||
Issued in period | 0 | 0 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock based compensation expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Stock-Based Compensation | ||||
Stock-based compensation expense | $ 2,499 | $ 2,488 | $ 7,884 | $ 6,944 |
Total unrecognized stock-based compensation expense related to the unvested stockbased awards | 22,200 | $ 22,200 | ||
Unrecognized stock-based compensation expense, weighted average period | 2 years 7 months 6 days | |||
Research and development expenses | ||||
Stock-Based Compensation | ||||
Stock-based compensation expense | 1,041 | 1,031 | $ 3,151 | 3,216 |
General and administrative expenses | ||||
Stock-Based Compensation | ||||
Stock-based compensation expense | $ 1,458 | $ 1,457 | $ 4,733 | $ 3,728 |
License Agreements (Details)
License Agreements (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2017 USD ($) | Sep. 30, 2022 USD ($) item | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) item | Sep. 30, 2021 USD ($) | |
License Agreements | |||||
Research and development | $ 13,937 | $ 17,399 | $ 48,643 | $ 45,776 | |
MEE License | |||||
License Agreements | |||||
Number of domestic patients | item | 3,000 | 3,000 | |||
IND filing period | 18 months | ||||
Fair value of stock | $ 100 | ||||
Period for start commercial sale of product | 10 years | ||||
Number of days for advance written notice | 90 days | ||||
Research and development | $ 0 | 0 | $ 0 | 0 | |
MEE License | Maximum | |||||
License Agreements | |||||
Milestone payment amount | $ 17,700 | $ 17,700 | |||
Lonza Sublicense | |||||
License Agreements | |||||
Number of domestic patients | item | 3,000 | 3,000 | |||
IND filing period | 18 months | ||||
Fair value of stock | $ 100 | ||||
Period for start commercial sale of product | 10 years | ||||
Number of days for advance written notice | 90 days | ||||
Research and development | $ 0 | $ 0 | $ 0 | $ 0 | |
Lonza Sublicense | Maximum | |||||
License Agreements | |||||
Milestone payment amount | $ 18,500 | $ 18,500 |
Leases (Details)
Leases (Details) $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Jan. 31, 2021 USD ($) ft² | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2019 USD ($) | Dec. 31, 2021 USD ($) | Apr. 30, 2021 USD ($) | Jan. 01, 2021 USD ($) | Dec. 31, 2018 USD ($) | |
Variable Interest Entity [Line Items] | ||||||||
Option to extend | true | |||||||
Lease extension period | 5 years | |||||||
Annual base rent | $ 2,300 | |||||||
Percentage of annual increase | 3% | |||||||
Amount of tenant lease improvement allowance | $ 7,100 | $ 6,600 | ||||||
Increase in area under lease | ft² | 37,500 | |||||||
Area under lease | ft² | 75,000 | |||||||
Lease term | 10 years | |||||||
Operating lease liabilities arising from obtaining right-of-use assets | $ 9,946 | $ 6,600 | ||||||
Operating Lease, Right-of-Use Asset | $ 11,500 | $ 19,558 | $ 20,341 | 9,900 | $ 5,900 | |||
Operating Lease, Liability | $ 18,700 | 35,369 | $ 9,900 | $ 13,100 | ||||
Increase in operating lease liability | 6,200 | |||||||
Asset Pledged as Collateral without Right [Member] | Letter of Credit [Member] | ||||||||
Variable Interest Entity [Line Items] | ||||||||
Letter of credit related to lease agreement | $ 1,300 |
Leases - Components of lease co
Leases - Components of lease cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Lease cost | ||
Operating lease cost | $ 1,109 | $ 3,334 |
Variable lease cost | $ 193 | $ 529 |
Leases - Supplemental disclosur
Leases - Supplemental disclosure of cash flow information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Cash flow information related to leases | ||
Cash paid for amounts included in the measurement of operating lease liabilities (operating cash flows) | $ 807 | $ 2,406 |
Leases - Weighted average infor
Leases - Weighted average information (Details) | Sep. 30, 2022 | Dec. 31, 2021 |
Leases | ||
Weighted-average remaining lease term (in years) used for: Operating Lease | 9 years 3 months | 10 years |
Weighted-average discount rate used for: Operating leases | 10% | 10% |
Leases - Future annual payments
Leases - Future annual payments (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Apr. 30, 2021 | Jan. 31, 2021 | Jan. 01, 2021 |
Operating lease | ||||
2022 | $ 807 | |||
2023 | 4,251 | |||
2024 | 5,611 | |||
2025 | 5,786 | |||
2026 | 5,959 | |||
Thereafter | 34,419 | |||
Total future lease payments | 56,833 | |||
Less: Imputed interest | (21,464) | |||
Total lease liabilities | $ 35,369 | $ 9,900 | $ 18,700 | $ 13,100 |
Leases - Assets and Liabilities
Leases - Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Apr. 30, 2021 | Jan. 31, 2021 | Jan. 01, 2021 |
Leases | |||||
Operating lease assets | $ 19,558 | $ 20,341 | $ 9,900 | $ 11,500 | $ 5,900 |
Total lease assets | 19,558 | 20,341 | |||
Current: | |||||
Operating lease liabilities | 785 | 671 | |||
Noncurrent: | |||||
Operating lease liabilities, net of current portion | 34,584 | 28,304 | |||
Total lease liabilities | $ 35,369 | $ 28,975 |
Commitments and Contingencies -
Commitments and Contingencies - 401(k) Plan (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Commitments and Contingencies | ||||
Contribution expense | $ 0.2 | $ 0 | $ 0.5 | $ 0 |
Net Loss per Share (Details)
Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Net Loss per Share | ||||||||
Net loss attributable to common stockholders | $ (19,839) | $ (20,831) | $ (26,983) | $ (22,906) | $ (22,740) | $ (16,086) | $ (67,653) | $ (61,732) |
Weighted-average common shares outstanding, basic | 36,905,818 | 34,436,793 | 35,766,217 | 34,360,274 | ||||
Weighted-average common shares outstanding, diluted | 36,905,818 | 34,436,793 | 35,766,217 | 34,360,274 | ||||
Net loss per share attributable to common stockholders, basic | $ (0.54) | $ (0.67) | $ (1.89) | $ (1.80) | ||||
Net loss per share attributable to common stockholders, diluted | $ (0.54) | $ (0.67) | $ (1.89) | $ (1.80) |
Net Loss per Share - Antidiluti
Net Loss per Share - Antidilutive securities (Details) - shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Net Loss per Share and Unaudited Pro Forma Net Loss per Share | ||
Securities excluded from computation of earnings per share amount | 5,717,410 | 4,526,090 |
Restricted stock awards | ||
Net Loss per Share and Unaudited Pro Forma Net Loss per Share | ||
Securities excluded from computation of earnings per share amount | 4,143 | 28,340 |
Stock option | ||
Net Loss per Share and Unaudited Pro Forma Net Loss per Share | ||
Securities excluded from computation of earnings per share amount | 5,713,267 | 4,497,750 |
Subsequent Events (Details)
Subsequent Events (Details) $ / shares in Units, $ in Millions | Oct. 31, 2022 USD ($) D $ / shares shares | Sep. 30, 2022 $ / shares | Dec. 31, 2021 $ / shares |
Subsequent Event [Line Items] | |||
Common stock, Par value | $ 0.0001 | $ 0.0001 | |
Subsequent event | Merger Agreement With Eli Lilly And Company | |||
Subsequent Event [Line Items] | |||
Common stock, Par value | $ 0.0001 | ||
Share price | $ 12.50 | ||
Contingent value right issued or issuable | shares | 1 | ||
Contingent value right price | $ 3 | ||
Option to purchase shares, conversion ratio | 1 | ||
Number of business days | D | 5 | ||
Termination fees payable | $ | $ 17.5 | ||
Subsequent event | Merger Agreement With Eli Lilly And Company | Minimum | |||
Subsequent Event [Line Items] | |||
Number of business days | D | 2 |