Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Mar. 09, 2022 | |
Cover [Abstract] | ||
Document Type | 10-K | |
Amendment Flag | false | |
Entity Central Index Key | 0001739410 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | FY | |
Document Period End Date | Dec. 31, 2021 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-40693 | |
Entity Registrant Name | RALLYBIO CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 85-1083789 | |
Entity Address, Address Line One | 234 Church Street | |
Entity Address, Address Line Two | Suite 1020 | |
Entity Address, City or Town | New Haven | |
Entity Address, State or Province | CT | |
Entity Address, Postal Zip Code | 06510 | |
City Area Code | 203 | |
Local Phone Number | 859-3820 | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | RLYB | |
Security Exchange Name | NASDAQ | |
Document Annual Report | true | |
Entity Well-known Seasoned Issuer | No | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Interactive Data Current | Yes | |
Document Transition Report | false | |
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 Public Float | $ 108,430,848 | |
Entity Common Stock, Shares Outstanding | 32,130,970 | |
ICFR Auditor Attestation Flag | false | |
Documents Incorporated by Reference [Text Block] | DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s Definitive Proxy Statement for its 2022 Annual Meeting of Stockholders scheduled to be held on May 24, 2022, which Definitive Proxy will be filed with the Securities and Exchange Commission not later than 120 days after the registrant’s fiscal year end of December 31, 2021 are incorporated by reference into Part II and Part III of this Annual Report on Form 10-K. | |
Auditor Firm ID | 34 | |
Auditor Name | Deloitte & Touche LLP | |
Auditor Location | Hartford, Connecticut |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 175,334 | $ 140,233 |
Prepaid expenses and other assets | 5,535 | 1,028 |
Total current assets | 180,869 | 141,261 |
Property and equipment, net | 511 | 287 |
Investment in joint venture | 805 | 310 |
Total assets | 182,185 | 141,858 |
Current liabilities: | ||
Accounts payable | 603 | 1,579 |
Accrued expenses | 5,948 | 4,264 |
Total current liabilities | 6,551 | 5,843 |
Accrued expenses long-term | 32 | 12 |
Total liabilities | 6,583 | 5,855 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity | ||
Common stock, value | 3 | 2 |
Preferred stock, value | 0 | 0 |
Additional paid-in capital | 269,626 | 183,015 |
Accumulated deficit | (94,027) | (47,014) |
Total stockholders' equity | 175,602 | 136,003 |
Total liabilities and stockholders' equity | $ 182,185 | $ 141,858 |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common Stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 32,129,970 | 23,410,348 |
Common stock, shares outstanding | 32,129,970 | 23,410,348 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating expenses: | ||
Research and development | $ 26,909 | $ 17,630 |
General and administrative | 18,739 | 7,673 |
Total operating expenses | 45,648 | 25,303 |
Loss from operations | (45,648) | (25,303) |
Other income (expenses): | ||
Interest income | 54 | 171 |
Interest expense | 10 | 49 |
Other income (expense) | 96 | 241 |
Total other income, net | 140 | 363 |
Loss before income taxes | (45,508) | (24,940) |
Income tax benefit | 0 | (15) |
Loss on investment in joint venture | 1,505 | 1,522 |
Net loss and comprehensive loss | $ (47,013) | $ (26,447) |
Net loss per common share, basic and diluted | $ (1.84) | $ (1.52) |
Weighted average common shares outstanding, basic and diluted | 25,519,114 | 17,388,239 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | IPO | Common Shares | Common SharesIPO | Additional Paid-In Capital | Additional Paid-In CapitalIPO | Accumulated Deficit |
Beginning Balance at Dec. 31, 2019 | $ 16,860 | $ 1 | $ 37,426 | $ (20,567) | |||
Beginning Balance (in shares) at Dec. 31, 2019 | 6,363,455 | ||||||
Issuance of common stock, net of offering costs (in shares) | 16,402,235 | ||||||
Issuance of common stock, net of offering costs | 144,886 | $ 1 | 144,885 | ||||
Issuance of restricted common stock | 644,658 | ||||||
Share-based compensation expense | 704 | 704 | |||||
Net loss | (26,447) | (26,447) | |||||
Ending Balance (in shares) at Dec. 31, 2020 | 23,410,348 | ||||||
Ending Balance at Dec. 31, 2020 | 136,003 | $ 2 | 183,015 | (47,014) | |||
Issuance of common stock, net of offering costs (in shares) | 7,130,000 | ||||||
Issuance of common stock, net of offering costs | $ 82,967 | $ 1 | $ 82,966 | ||||
Issuance of restricted common stock | 1,589,622 | ||||||
Share-based compensation expense | 3,645 | 3,645 | |||||
Net loss | (47,013) | $ (47,013) | (47,013) | ||||
Ending Balance (in shares) at Dec. 31, 2021 | 32,129,970 | ||||||
Ending Balance at Dec. 31, 2021 | $ 175,602 | $ 3 | $ 269,626 | $ (94,027) |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Offering costs | $ 319 | |
IPO | ||
Offering costs | $ 9,721 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (47,013) | $ (26,447) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 109 | 62 |
Stock-based compensation | 3,645 | 704 |
Loss on investment in joint venture | 1,505 | 1,522 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other assets | (4,507) | 434 |
Accounts payable | (976) | 723 |
Accrued expenses | 1,704 | 963 |
Net cash used in operating activities | (45,533) | (22,039) |
Cash Flows used in Investing Activities: | ||
Purchase of property and equipment | (333) | (137) |
Investment in joint venture | (2,000) | (1,935) |
Net cash used in investing activities | (2,333) | (2,072) |
Cash Flows from Financing Activities: | ||
Proceeds from the issuance of common stock upon completion of the initial public offering, net of underwriting commissions and discounts of $6,488 | 86,200 | 0 |
Proceeds from issuance of common stock | 0 | 145,205 |
Payments of offering costs | (3,233) | (319) |
Net cash provided by financing activities | 82,967 | 144,886 |
Net increase in cash and cash equivalents | 35,101 | 120,775 |
Cash and cash equivalents - beginning of year | 140,233 | 19,458 |
Cash and cash equivalents - end of year | $ 175,334 | $ 140,233 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Statement of Cash Flows [Abstract] | |
Underwriting commissions and discounts | $ 6,488 |
Business
Business | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business | 1. BUSINESS Rallybio Corporation and subsidiaries (the "Company", "we", "our", or "us") is a clinical-stage biotechnology company built around a team of seasoned industry experts with a shared purpose and a track record of success in discovering, developing, manufacturing, and delivering therapies to meaningfully improve the lives of patients suffering from severe and rare diseases. In August 2021, the Company completed its initial public offering ("IPO"), pursuant to which it issued and sold 7,130,000 shares of the Company’s common stock, inclusive of 930,000 shares sold pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $ 13.00 per share. The gross proceeds from the IPO, including the exercise of the underwriter's option to purchase additional shares were $ 92.7 million and the net proceeds were approximately $ 83.0 million, after deducting underwriting discounts and commissions and other offering costs. Prior to the IPO and Reorganization, the Company was a 100% owned subsidiary of Rallybio Holdings, LLC ("Rallybio Holdings"), a Delaware limited liability company which was incorporated in Delaware on March 22, 2018 and Rallybio Holdings held 100% of the outstanding membership units in five wholly-owned subsidiaries; Rallybio, LLC, Rallybio IPA, LLC, Rallybio IPB, LLC, Rallybio IPD, LLC, and IPC Research, LLC . On June 30, 2021, Rallybio Holdings completed a series of transactions pursuant to which (i) Rallybio IPD, LLC, a direct subsidiary of Rallybio Holdings that was formed in Delaware in May 2020, was converted from a Delaware limited liability company to a Delaware corporation and changed its name to Rallybio Corporation, and (ii) four direct subsidiaries of Rallybio Corporation, each a Delaware limited liability company (collectively the "Merger Subs"), each consummated a separate merger with one of Rallybio Holdings direct subsidiaries, other than Rallybio IPD, LLC (collectively the "Asset Subsidiaries"), with the Asset Subsidiaries surviving the mergers and Rallybio Holdings receiving common stock of the Company in exchange for its interest in each Asset Subsidiary, which resulted in the Asset Subsidiaries becoming subsidiaries of the Company and the Company becoming the only direct subsidiary of Rallybio Holdings. On July 28, 2021, immediately prior to the completion of the IPO, Rallybio Holdings liquidated and distributed 100% of the capital stock of the Company, consisting solely of common stock, to the unitholders of Rallybio Holdings. The liquidation of Rallybio Holdings and distribution of the capital stock of Rallybio Corporation to the unitholders of Rallybio Holdings is referred to as the “Liquidation” and these other transactions are collectively referred to as the “Reorganization.” As a result of the Reorganization and subsequent Liquidation, the unitholders of Rallybio Holdings became the holders of common stock of Rallybio Corporation, and the Company's consolidated financial statements are subsequently reported from Rallybio Corporation. See Note 2 for the basis of presentation of these financial statements after the Reorganization and Liquidation discussed herein. In March 2020, the World Health Organization characterized the novel coronavirus as a global pandemic. Although there is significant uncertainty as to the likely effects this disease may have in the future, to date there has not yet been a significant impact to the Company’s operations or financial statements. |
Summary of Significant Accounti
Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION IPO and Reorganization — As discussed in Note 1, in connection with the Reorganization, all of Rallybio Holdings' direct subsidiaries, other than Rallybio Corporation, became direct subsidiaries of the Company prior to the Liquidation of Rallybio Holdings. Prior to the completion of the Company's IPO, Rallybio Holdings liquidated and unitholders of Rallybio Holdings became the holders of common stock of Rallybio Corporation. Subsequent to the Reorganization and the Liquidation of Rallybio Holdings the consolidated financial statements are reported from Rallybio Corporation. The capital structure of Rallybio Holdings prior to the Liquidation consisted of four classes of membership units: common units; Series A-1 preferred units; Series A-2 preferred units; Series B preferred units; and incentive common units ("incentive units"). The number of shares of common stock that the holders of each class of units received in the Liquidation was based on the value of Rallybio Holdings prior to the Liquidation, determined by reference to the initial public offering price per share of $ 13.00 . The common stock of the Company was allocated to the holders of existing units in Rallybio Holdings as follows: • holders of 33,478,255 Series A-1 preferred units and Series A-2 preferred units of Rallybio Holdings received an aggregate of 5,257,590 shares of common stock of the Company; • holders of 104,442,965 Series B preferred units of Rallybio Holdings received an aggregate of 16,402,235 shares of common stock of the Company; • holders of 4,500,000 common units and 1,200,000 of performance based incentive common units of Rallybio Holdings received an aggregate of 706,701 and 188,454 , respectively, in shares of common stock of the Company. Shares of common stock issued in respect of unvested common units and performance based incentive common units as of the Liquidation are shares of restricted common stock and subject to vesting in accordance with the vesting schedule applicable to such units; and • holders of 20,869,704 incentive units in Rallybio Holdings received an aggregate of 2,444,990 shares of common stock of the Company. Shares of common stock issued in respect of unvested incentive units as of the Liquidation are shares of restricted common stock and continue to be subject to vesting in accordance with the vesting schedule applicable to such incentive units. As a result of the Liquidation, the holders of units in Rallybio Holdings collectively were issued an aggregate of 24,999,970 shares of common stock of the Company prior to the completion of the IPO. The Reorganization and subsequent Liquidation resulted in a change in reporting entity as described in ASC 250. In accordance with the guidance applicable to these circumstances, the equity structure has been adjusted in all comparative periods up to the Liquidation to reflect the number of shares of the Company’s common stock, issued to Rallybio Holdings unitholders' in connection with the Liquidation. As such, historical Rallybio Holdings convertible redeemable preferred units, common units, and incentive units have been retroactively adjusted in these financial statements to shares and earnings per share in accordance with the ratio of common shares received by each membership unit class. Rallybio Holdings' convertible redeemable preferred units previously classified as mezzanine equity, including the Series B Preferred Unit Agreement executed during the year 2020 with a total aggregate purchase price of $ 145.2 million, have been retroactively adjusted in these financial statements, converted into common stock, and reclassified to permanent as a result of the retrospective application of the Liquidation and change in reporting entity. Basis of Presentation— The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted (“GAAP”) in the United States. Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) promulgated by the Financial Accounting Standards Board (“FASB”). Principles of Consolidation— The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates —The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts and disclosures in the consolidated financial statements. While management believes that estimates and assumptions used in the preparation of the consolidated financial statements are appropriate, actual results could differ from those estimates. The most significant estimates are those used in the determination of the fair value of its common un its and incentive units awarded to employees prior to the Company's IPO, for purposes of recording stock-based incentive compensation, the fair value of stock options, as well as contracted research and development accruals. Liquidity and Ability to Continue as a Going Concern — The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. Management has evaluated whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements are issued. Since its inception, the Company has incurred net losses and negative cash flows from operations. During the years ended December 31, 2021 and 2020 , the Company incurred a net loss of $ 47.0 million and $ 26.4 million, respectively. In addition, as of December 31, 2021 , the Company had an accumulated deficit of $ 94.0 million. The Company expects to continue to generate operating losses and negative cash flows in the foreseeable future. The Company currently expects that cash and cash equivalents of $ 175.3 million at December 31, 2021 will be sufficient to fund its operating expenses and capital requirements for more than 12 months from the date the consolidated financial statements are issued. However, w e do not anticipate that the current cash and cash equivalents as of December 31, 2021 will be sufficient for us to fund any of our product candidates through regulatory approval, and we will need to raise substantial additional capital to complete the development and commercialization of our product candidates, if approved. We may satisfy our future cash needs through the sale of equity securities, debt financings, working capital lines of credit, corporate collaborations or license agreements, grant funding, interest income earned on invested cash balances or a combination of one or more of these sources. Variable Interest Entity —The Company evaluates its ownership, contractual, and other interests in entities to determine if it has any variable interest in a variable interest entity (“VIE”). These evaluations are complex, involve judgment, and the use of estimates and assumptions based on available historical information, among other factors. If the Company determines that an entity in which it holds a contractual, or ownership, interest is a VIE and that the Company is the primary beneficiary, the Company consolidates such entity in its consolidated financial statements. The primary beneficiary of a VIE is the party that meets both of the following criteria: (i) has the power to make decisions that most significantly affect the economic performance of the VIE; and (ii) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. Management performs ongoing reassessments of whether changes in the facts and circumstances regarding the Company’s involvement with a VIE will cause the consolidation conclusion to change. Changes in consolidation status are applied prospectively. The Company evaluated its investment in REV-I (defined in Note 7) and concluded that it represented a VIE and was not deemed the primary beneficiary. If the Company is not deemed to be the primary beneficiary in a VIE, the Company accounts for the investment or other variable interests in a VIE in accordance with the applicable GAAP (See Note 7). Equity Method Investments —The Company accounts for investments for which it does not have a controlling interest in accordance with ASC 323, Investments – Equity Method and Joint Ventures . The Company recognizes its pro-rata share of income and losses in “loss on investment in joint venture” on the consolidated statements of operations and comprehensive loss, with a corresponding change to the investment in joint venture asset on the consolidated balance sheets. Financial Instruments —The Company’s principal financial instruments are comprised of cash and cash equivalents, accounts payable, and accrued liabilities. The carrying value of all financial instruments approximates fair value. Concentrations of Credit Risk— Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents. Periodically, the Company may maintain deposits in financial institutions in excess of government insured limits. Management believes that the Company is not exposed to significant credit risk as the Company’s deposits are held at financial institutions that management believes to be of high credit quality, and the Company has not experienced any losses on these deposits. Cash and Cash Equivalents— The Company classifies amounts on deposit in banks and cash invested temporarily in various instruments, primarily money market funds, with original maturities of three months or less at the time of purchase as cash and cash equivale nts. The carrying amounts reported in the consolidated balance sheets represent the fair values of cash and cash equivalents. Property and Equipment —Property and equipment are recorded at cost and consists of computer and other equipment, capitalized software, furniture and fixtures and leasehold improvements. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, or for leasehold improvements, over the remaining term of the lease, if shorter. The estimated useful life for each major asset classification are as follows: Asset Classification Estimated Useful Life Computer and other equipment 3 years Capitalized software 3 years Furniture and fixtures 5 years Leasehold improvements lesser of lease life or useful life Maintenance and repairs which do not extend the lives of the assets are charged directly to expense as incurred. Upon retirement or disposal, cost and related accumulated depreciation are removed from the related accounts, and any resulting gain or loss is recognized as a component of income or loss in the consolidated statements of operations and comprehensive loss. Impairment of Long-Lived Assets —When indications of potential impairments are present, the Company evaluates the carrying value of long-lived assets. The Company adjusts the carrying value of the long-lived assets if the sum of undiscounted expected future cash flows is less than the carrying value. No such impairments were recorded during the years ended December 31, 2021 or 2020 . Income Taxes —The Company uses the asset and liability method of accounting for income taxes, as set forth in Accounting Standards Codification (ASC) 740, Accounting for Income Taxes . Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequence of temporary differences between the carrying amounts and the tax basis of assets and liabilities and net operating loss carry forwards, all calculated using presently enacted tax rates. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company evaluates whether deferred tax assets are more likely than not of being realized in determining whether a valuation allowance is necessary. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. As of December 31, 2021 or 2020 , the Company determined that it is more likely than not that deferred taxes will not be realized and as a result recorded a valuation allowance against its deferred tax assets. Following the Reorganization the Company files a consolidated U.S. federal income tax return and has elected to include all subsidiaries owned more than 80 %. Prior to the Reorganization, the LLCs owned 100 % by the Company have each elected to be treated as and taxed as a corporation and each filed a separate U.S. federal income tax return. Research and Development Expenses —Research and development expenses are comprised of costs incurred in performing research and development activities including personnel salaries, benefits, and equity-based compensation; external research and development expenses incurred under arrangements with third parties, such as contract research organization agreements, investigational sites, and consultants; the cost of developing and manufacturing clinical study materials, program regulatory costs, expenses associated with obligations under asset acquisitions, license agreements and other direct and indirect costs. Costs incurred in connection with research and development activities are expensed as incurred. Costs are considered incurred based on an evaluation of the progress to completion of each contract using information and data provided by the respective vendors, including the Company’s clinical sites. Depending upon the timing of invoicing by the service providers, the Company recognizes prepaid expenses or accrued expenses related to these costs. These prepaid expenses or accrued expenses are based on management’s estimates of the work performed under service agreements, milestones achieved, and experience with similar contracts. The Company monitors each of these factors and adjusts estimates accordingly. Deferred Offering Costs — The Company capitalizes incremental legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such equity financings are consummated. After consummation of the equity financing, these costs are recorded in stockholders' equity as a reduction of additional paid-in-capital generated as a result of the offering. Should the planned equity financing no longer be considered probable of being consummated, the offering costs are expensed immediately as a charge to operating expense. Upon completion of the Company's IPO in August 2021, $ 3.2 million of deferred offering costs were charged against additional paid-in-capital. As a result, the Company did no t have any deferred offering costs as of December 31, 2021 . Share-Based Compensation— The Company accounts for share-based compensation in accordance with ASC 718, Compensation—Stock Compensation (“ASC 718”). Generally, share-based compensation is measured at the grant date for all equity-based awards made to employees based on the fair value of the awards and is recognized over the requisite service period, which is generally the vesting period. Share-based compensation for awards with performance conditions are recognized over the service period when achievement of the performance condition is probable. The Company has elected to recognize the actual forfeitures by reducing the share-based compensation in the same period as the forfeitures occur. The Company classifies share-based compensation in its consolidated statements of operations and comprehensive loss in the same manner in which the award recipients’ payroll costs are classified. The Company estimates the fair value of options granted using the Black-Scholes option pricing model ("Black-Scholes") for stock option grants. The fair value of the Company’s common stock is used to determine the fair value of restricted stock awards. Black-Scholes requires inputs based on certain subjective assumptions, including the expected stock price volatility, the expected term of the award, the risk-free interest rate and expected dividends. Due to the lack of a public market for the Company’s common stock and lack of company-specific historical and implied volatility data, the Company has based its computation of expected volatility on the historical volatility of a representative group of public companies with similar characteristics to the Company. The historical volatility is calculated based on a period of time corresponding with expected term assumption. The Company uses the simplified method to calculate the expected term for options granted where the expected term equals the arithmetic average of the vesting term and the original contractual term of the options due to its lack of sufficient historical data. The risk-free interest rate is based on U.S. Treasury securities with a maturity date corresponding with the expected term of the associated award. The expected dividend yield is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock. Fair Value Measurements —ASC Topic 820, Fair Value Measurement (“ASC 820”), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the assets or liabilities and are developed based on the best information available in the circumstances. ASC 820 identifies fair value as the price that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tiered value hierarchy that distinguishes between the following: Level 1—Quoted market prices in active markets for identical assets or liabilities. Level 2—Inputs other than Level 1 inputs that are either directly or indirectly observable, such as quoted market prices, interest rates and yield curves. Level 3—Unobservable inputs for the asset or liability (i.e. supported by little or no market activity). Level 3 inputs include management’s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair values requires more judgement. Accordingly, the degree of judgement exercised by the Company in determining fair value is greatest for instruments categorized as Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as considers counterparty credit risk in its assessment of fair value. For the year ended December 31, 2021 and 2020 the Company held money market funds that are classified as cash and cash equivalents on the Company's consolidated balance sheets of $ 4.0 million and $ 2.5 million, respectively. These money market funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets. There were no securities transferred between Level 1, 2 and 3 during the year ended December 31, 2021 . Segment information —Operating segments are defined as components of an enterprise for which discrete financial information is regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing operating performance. The Company manages its operations as a single segment for the purposes of allocating resources, assessing performance, and making operating decisions. All tangible assets of the Company are held in the United States. Basic and Diluted Net Loss Per Share —The Company calculates basic net loss per share by dividing the net loss by the weighted average number of common shares outstanding during the period, without consideration of potential dilutive securities. Unvested restricted common shares as of December 31, 2021 and 2020 are not considered participating securities and as such are excluded from the weighted average number of shares used for calculating basic and diluted net loss per share. Diluted net loss per share is computed by dividing the net loss by the sum of the weighted average number of common shares outstanding during the period plus the dilutive effects of potentially dilutive securities outstanding during the period. Potentially dilutive securities include restricted common shares and stock options. The Company has generated a net loss for all periods presented, therefore diluted net loss per share is the same as basic net loss per share since the inclusion of potentially dilutive securities would be anti-dilutive. Recent Accounting Pronouncements — The Company qualifies as an emerging growth company ("EGC") as defined in the Jumpstart Our Business Startups Act of 2012 and has elected not to “opt out” of the extended transition 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 irrevocably elects to “opt out” of such extended transition period or 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. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial statements and disclosures. In February 2016, the FASB issued ASU 2016-02 " Leases" that requires lessees to recognize leases on-balance sheet and to make certain disclosures associated with their leasing arrangements. The new standard establishes a right-of-use ("ROU") model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than twelve months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The FASB issued an update that provided an additional transition option that allows companies to continue applying the guidance under the lease standard in effect at that time in the comparative periods presented in the consolidated financial statements. Companies that elect this option would record a cumulative-effect adjustment to the opening balance of retained earnings, if applicable, on the date of adoption, which the Company expects to elect. The Company also expects to elect the “package of practical expedients”, which permits the Company not to reassess under the new standard prior conclusions about lease identification, lease classification and initial direct costs. For the Company, as an EGC, ASU 2016-02, as amended, will be effective for annual reporting periods beginning after December 15, 2021 and interim periods within those fiscal years, with early adoption permitted. The Company is in the process of finalizing the assessment of the standard which includes lease calculations, including the Company's discount rate assumptions. The Company is also continuing to establish new processes and internal controls that may be required to comply with the new lease accounting and disclosure requirements set by the new standard. The Company expects the impact of this standard will increase assets and liabilities within the Company's consolidated balance sheets by approximately $ 0.7 million in right of use assets and related lease liabilities when adopting the standard in the first quarter of 2022. There were no changes to significant accounting policies of the Company during the year ended December 31, 2021 . |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 3. PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following as of December 31, 2021 and 2020: (in thousands) DECEMBER 31, DECEMBER 31, Computer and other equipment $ 154 $ 62 Capitalized software 89 86 Furniture and fixtures 151 52 Leasehold improvements 315 184 Construction in progress 8 — Less accumulated depreciation ( 206 ) ( 97 ) Property and equipment—net $ 511 $ 287 Depreciation expense totaled $ 109 and $ 62 thousand for the years ended December 31, 2021 and 2020 , respectively. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2021 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Expenses | 4. ACCRUED EXPENSES Accrued expenses consisted of the following as of December 31, 2021 and 2020: (in thousands) DECEMBER 31, DECEMBER 31, Research and development $ 1,937 $ 1,065 Employee expenses 2,955 1,912 Professional fees 539 185 Other 517 112 Asset purchase obligation — 990 $ 5,948 $ 4,264 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Stockholders' Equity | 5. STOCKHOLDERS' EQUITY In August 2021, the Company completed its IPO, pursuant to which it issued and sold 7,130,000 shares of the Company’s common stock, inclusive of 930,000 shares sold pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $ 13.00 per share. The gross proceeds from the IPO, including the exercise of the underwriter's option to purchase additional shares were $ 92.7 million and the net proceeds were approximately $ 83.0 million, after deducting underwriting discounts and commissions and other offering costs. See Note 2 for a summary of the Reorganization and Liquidation of Rallybio Holdings that was completed prior to the Company's IPO, which resulted in a change in reporting entity. In accordance with the applicable accounting guidance related to changes in reporting entities, the financial statements for all periods presented have been retrospectively adjusted giving effect to the Reorganization and Liquidation as applicable to all periods presented. The Company evaluated the liquidation of Rallybio Holdings units and subsequent issuance of common stock awards of the Company, discussed in Note 2, as a modification under ASC 718, Share Based Payments. Under ASC 718, a modification is a change in the terms or conditions of a stock-based compensation award. In assessing the modification, the Company considered the fair value, vesting conditions and classification as an equity or liability award before Liquidation and replacement, compared to the Company’s common stock received as of the Liquidation to determine whether modification accounting must be applied. As the number of shares of common stock of the Company that the unitholders of Rallybio Holdings received in the Liquidation was based on the fair value of those units in Rallybio Holdings immediately prior to the Liquidation, unvested units were replaced with restricted common shares with the same vesting terms as the initial awards, and the classification of the awards as equity awards did not change from this action, no incremental stock-based compensation expense resulted from the modification. Preferred Stock —The Company had 50,000,000 shares of preferred stock authorized as of December 31, 2021 and 2020, respectively, of which no shares were outstanding as of December 31, 2021 and 2020, respectively. Common Stock —The Company had 200,000,000 shares of common stock authorized as of December 31, 2021 and 2020 , respectively, of which 32,129,970 and 23,410,348 shares were issued and outstanding as of December 31, 2021 and 2020, respectively. Share-based Compensation — 2021 Equity Incentive Plan In connection with the Company's IPO, the board of directors adopted the Rallybio Corporation 2021 Equity Incentive Plan (the "2021 Plan"). The 2021 Plan reserves 5,440,344 for shares of the Company's common stock that have been issued in respect of outstanding equity awards granted prior to the registrant’s IPO and for future issuances of shares to employees, directors and consultants in the form of stock options, SARs, restricted and unrestricted stock and stock units, performance awards and other awards that are convertible into or otherwise based on the Company's common stock. Dividend equivalents may also be provided in connection with awards under the 2021 Plan. The share pool will automatically incr ease on January 1st of each year from 2022 to 2031 by the lesser of (i) five percent of the number of shares of the Company's common stock outstanding as of such date and (ii) the number of shares of the Company's common stock determined by the board of directors on or prior to such date. As of December 31, 2021 , the total number of shares of common stock that were issuable under the 2021 Plan was 3,054,421 shares, of which 1,694,637 shares remained available for future issuance. 2021 Employee Stock Purchase Plan In connection with the Company's IPO, t he board of directors adopted the Rallybio Corporation 2021 Employee Stock Purchase Plan, (the "2021 ESPP"), which reserves 291,324 shares of the Company's common stock for future issuances under this plan. During the year ended December 31, 2021 , there was no activity under the 2021 ESPP. Share-based compensation for stock options, restricted stock awards and restricted stock units is classified in the condensed consolidated statements of operations and comprehensive loss for the year ended December 31, 2021 and 2020 was as follows: FOR THE YEAR ENDED (in thousands) 2021 2020 Research and development $ 1,168 $ 219 General and administrative 2,477 485 $ 3,645 $ 704 The following table summarizes stock option activity for the year ended December 31, 2021 : Stock Options Number of Option Shares Weighted-Average Exercise Price Weighted-Average Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2020 — $ — Granted 1,357,784 $ 12.72 Exercised — $ — Forfeited — $ — Outstanding at December 31, 2021 1,357,784 $ 12.72 9.7 $ — Options exercisable at December 31, 2021 25,470 $ 12.80 9.7 $ — was $ 9.25 per share. There were no stock options granted during the year ended December 31, 2020. The aggregate fair value of stock options that vested during the year ended December 31, 2021 was $ 0.2 million. As of December 31, 2021 , there was unrecognized share-based compensation expense related to unvested stock options of $ 11.1 million, which the Company expects to recognize over a weighted-average period of approximately 3.5 years. The fair value of the stock options granted during the year ended December 31, 2021 was determined using the Black-Scholes option pricing model with the following assumptions: FOR THE YEAR ENDED 2021 Expected volatility 86.9 % - 87.9 % Expected term (years) 5.50 - 6.08 Risk free interest rate 0.79 % - 1.33 % Expected dividend yield — Exercise price $ 10.76 - $ 13.00 A summary of the status of the Company's nonvested restricted common stock awards at December 31, 2021 and changes during the year ended December 31, 2021 was as follows: Restricted Stock Awards Shares Weighted Average Grant Date Fair Value Per Share Nonvested restricted stock awards at December 31, 2020 1,184,252 $ 2.55 Shares granted 1,589,622 $ 3.65 Shares vested ( 501,167 ) $ 3.00 Outstanding nonvested restricted stock awards at December 31, 2021 2,272,707 $ 3.22 , there was unrecognized share-based compensation expense related to unvested restricted stock awards of $ 6.0 million, which the Company expects to recognize over a weighted-average period of approximately 3.1 years. The restricted common stock awards that were granted during the year ended December 31, 2021 resulted from the Liquidation pursuant to which holders of unvested profit interest incentive units of Rallybio Holdings that were granted during the year ended December 31, 2021 received restricted common stock, see Note 2. The assumptions that went into the option pricing models for determining the fair value of Rallybio Holdings incentive units granted during the years ended December 31, 2021 and 2020, prior to the Liquidation, were as follows and do not include the retrospective adjustments described in Note 2 : FOR THE YEAR ENDED 2021 2020 Expected volatility 71.7 % - 99.5 % 95.0 % Expected term (years) 0.58 - 1.00 1.50 Risk free interest rate 0.04 % - 0.10 % 0.16 % Expected dividend yield — — A summary of the status of the Company's nonvested restricted common stock units at December 31, 2021 and changes during the year ended December 31, 2021 was as follows: Restricted Stock Units Shares Weighted Average Grant Date Fair Value Per Share Nonvested restricted stock units at December 31, 2020 — $ — Shares granted 2,000 $ 10.76 Shares vested — $ — Outstanding nonvested restricted stock units at December 31, 2021 2,000 $ 10.76 , there was unrecognized share-based compensation expense related to unvested restricted stock units of $ 11 thousand, which the Company expects to recognize over a weighted-average period of approximately 0.5 years. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 6. INCOME TAXES The provision for income taxes of the Company is comprised of the following for the years ended December 31, 2021 and 2020: 2021 2020 Current: Federal $ — $ ( 15 ) Income tax benefit $ — $ ( 15 ) 74 thousand in federal net operating losses from the year ended December 31, 2019 to the year ended December 31, 2018. This produced a $ 15 thousand income tax benefit in the year ended December 31, 2020 when the carryback claims were filed. There were no tax benefits in the year ended December 31, 2021. The Company’s effective income tax rates are different from the federal statutory tax rates in 2021 and 2020 predominantly due to the valuation allowance, tax credits, state taxes, and the federal net operating loss carryback tax benefit described below: 2021 2020 U.S. federal statutory tax rate 21.0 % 21.0 % State income taxes, net of federal income tax benefit 6.7 % 4.9 % Tax credits 6.8 % 8.0 % Other ( 1.0 )% ( 0.2 )% Valuation allowance ( 33.5 )% ( 33.6 )% Effective Tax Rate 0.0 % 0.1 % Deferred income taxes represent the tax effect of transactions that are reported in different periods for financial and tax reporting purposes. The combined temporary differences and carryforwards of each tax paying component of the Company that give rise to a significant portion of the deferred income tax benefits and liabilities are as follows at December 31, 2021 and 2020: 2021 2020 Net operating loss carryforwards $ 22,789 $ 10,675 Amortization 1,685 1,823 Research and development credits 6,213 2,687 Other 474 135 Total deferred tax assets 31,161 15,320 Less valuation allowance ( 31,161 ) ( 15,320 ) Net deferred tax assets $ — $ — At December 31, 2021 , the Company has approximately $ 83.1 million of federal net operating loss carryforwards, which do not expire, and approximately $ 81.8 million of state net operating loss carryforwards, which begin expiring in 2038 . The Company has provided a valuation allowance against the Company’s deferred tax assets, since, in the opinion of management, based upon the history of losses by the Company and insufficient future federal and state taxable income; it is more likely than not that the benefits will not be realized. All or a portion of the remaining valuation allowance may be reduced in future years based on an assessment of earnings sufficient to fully utilize these potential tax benefits. Utilization of the U.S. federal and state net operating loss carryforwards and research and development tax credit carryforwards may be subject to an annual limitation under Section 382 and Section 383 of the Internal Revenue Code of 1986 ("Code"), and corresponding provisions of state law, due to ownership changes that may have occurred previously or that could occur in the future. These ownership changes may limit the amount of carryforwards that can be utilized annually to offset future taxable income and tax liabilities. In general, an ownership change, as defined by Section 382 of the Code, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 5 % over a three-year period. The Company is currently performing a study to assess whether a change of control has occurred. If the Company has experienced a change of control, as defined by Section 382 of the Code, at any time since inception, utilization of the net operating loss carryforwards or research and development tax credit carryforwards may be subject to an annual limitation, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term tax-exempt rate, and then could be subject to additional adjustments. Any limitation may result in expiration of a portion of the net operating loss carryforwards or research and development tax credit carryforwards before their utilization. ASC 740 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely that not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company has no material uncertain tax positions that qualify for either recognition or disclosure in consolidated financial statements. It is the Company’s policy to recognize interest and/or penalties related to income tax matters in income tax expense. As of December 31, 2021 and 2020 , the Company has accrued no interest and penalties related to uncertain tax positions. The Company does no t have any outstanding U.S. federal income tax or material state and local tax matters for periods through December 31, 2021 . There are no federal or state and local income tax returns currently under examination. The Company’s tax returns from inception to date are subject to examination by the taxing authorities. |
Investment In Joint Venture
Investment In Joint Venture | 12 Months Ended |
Dec. 31, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENT IN JOINT VENTURE | 7. INVESTMENT IN JOINT VENTURE The Company, through one of its wholly-owned subsidiaries, has a 50 % interest of the joint venture entity, RE Ventures I, LLC, a limited liability company (“REV-I”). For the year ended December 31, 2021 , the Company funded $ 2.0 million, associated with development costs to REV-I. For the year ended December 31, 2020 , the Company funded $ 1.9 million, associated with development costs, including $ 0.6 million related to the initial investment in REV-I, that was included in accrued expenses on the consolidated balance sheets as of December 31, 2019. The Company did not provide any additional financial support outside of capital contributions to REV-I during the years ended December 31, 2021 and 2020. The Company held a 50% interest in the joint venture as of December 31, 2021. As of December 31, 2021, based on management’s analysis, the Company is not the primary beneficiary of REV-1 and accordingly, the entity is not consolidated in the Company's financial statements. For each of the years ended December 31, 2021 and 2020 , the Company recorded its allocable share of REV-I’s losses, which totaled $ 1.5 million, respectively, as a loss on investment in joint venture within the consolidated statements of operations and comprehensive loss. After recognition of its share of losses for the period, the carrying value and maximum exposure to risk of the REV-I investment as of December 31, 2021 and 2020 was $ 0.8 million and $ 0.3 million, respectively, which was recorded in investment in joint venture in the accompanying consolidated balance sheets. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. COMMITMENTS AND CONTINGENCIES Purchase Commitments —The Company enters contracts in the normal course of business with contract research organizations and other third-party vendors for clinical trials and testing and manufacturing services. These contracts generally do not contain minimum purchase commitments and are cancellable by us upon written notice. Payments that may be due upon cancellation consist of payments for services provided or expenses incurred prior to cancellation. As of December 31, 2021 and 2020 there were no amounts accrued related to termination charges. Lease Commitments — In June 2019, the Company entered into a six-year lease to occupy office space located in New Haven, Connecticut, with the option to extend the initial term of the lease for one additional five year term. Pursuant to the lease the Company was obligated to pay for its share of costs related to the build-out of new space. All costs associated with the build-out of the new space have been capitalized as leasehold improvements and are being amortized over the life of the lease. In 2021, the Company leased an additional 4,500 square feet of office space in our New Haven, Connecticut location with terms that coincide with the original lease term expiration date. Rent expense was $ 133 and $ 88 thousand for the years ended December 31, 2021 and 2020, respectively. Future minimum annual lease payments are as follows: YEAR ENDING DECEMBER 31, (in thousands) 2022 $ 170 2023 195 2024 230 2025 176 Thereafter — $ 771 |
Net Loss Per Common Share
Net Loss Per Common Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net Loss Per Common Share | 9. NET LOSS PER COMMON SHARE Basic and diluted loss per common share were calculated as follows: FOR THE YEAR ENDED 2021 2020 Net loss $ ( 47,013 ) $ ( 26,447 ) Weighted average number of common shares 25,519,114 17,388,239 Net loss per common share, basic and diluted $ ( 1.84 ) $ ( 1.52 ) The weighted average number of common shares outstanding diluted for the year ended December 31, 2021 excludes approximately 3.6 million stock options and unvested restricted common shares, which were not dilutive and not included in the computation of net loss per common share. The weighted average number of common shares outstanding diluted for the year ended December 31, 2020 excludes approximately 1.2 million unvested restricted common shares, which were not dilutive and not included in the computation of net loss per common share. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
IPO and Reorganization | IPO and Reorganization — As discussed in Note 1, in connection with the Reorganization, all of Rallybio Holdings' direct subsidiaries, other than Rallybio Corporation, became direct subsidiaries of the Company prior to the Liquidation of Rallybio Holdings. Prior to the completion of the Company's IPO, Rallybio Holdings liquidated and unitholders of Rallybio Holdings became the holders of common stock of Rallybio Corporation. Subsequent to the Reorganization and the Liquidation of Rallybio Holdings the consolidated financial statements are reported from Rallybio Corporation. The capital structure of Rallybio Holdings prior to the Liquidation consisted of four classes of membership units: common units; Series A-1 preferred units; Series A-2 preferred units; Series B preferred units; and incentive common units ("incentive units"). The number of shares of common stock that the holders of each class of units received in the Liquidation was based on the value of Rallybio Holdings prior to the Liquidation, determined by reference to the initial public offering price per share of $ 13.00 . The common stock of the Company was allocated to the holders of existing units in Rallybio Holdings as follows: • holders of 33,478,255 Series A-1 preferred units and Series A-2 preferred units of Rallybio Holdings received an aggregate of 5,257,590 shares of common stock of the Company; • holders of 104,442,965 Series B preferred units of Rallybio Holdings received an aggregate of 16,402,235 shares of common stock of the Company; • holders of 4,500,000 common units and 1,200,000 of performance based incentive common units of Rallybio Holdings received an aggregate of 706,701 and 188,454 , respectively, in shares of common stock of the Company. Shares of common stock issued in respect of unvested common units and performance based incentive common units as of the Liquidation are shares of restricted common stock and subject to vesting in accordance with the vesting schedule applicable to such units; and • holders of 20,869,704 incentive units in Rallybio Holdings received an aggregate of 2,444,990 shares of common stock of the Company. Shares of common stock issued in respect of unvested incentive units as of the Liquidation are shares of restricted common stock and continue to be subject to vesting in accordance with the vesting schedule applicable to such incentive units. As a result of the Liquidation, the holders of units in Rallybio Holdings collectively were issued an aggregate of 24,999,970 shares of common stock of the Company prior to the completion of the IPO. The Reorganization and subsequent Liquidation resulted in a change in reporting entity as described in ASC 250. In accordance with the guidance applicable to these circumstances, the equity structure has been adjusted in all comparative periods up to the Liquidation to reflect the number of shares of the Company’s common stock, issued to Rallybio Holdings unitholders' in connection with the Liquidation. As such, historical Rallybio Holdings convertible redeemable preferred units, common units, and incentive units have been retroactively adjusted in these financial statements to shares and earnings per share in accordance with the ratio of common shares received by each membership unit class. Rallybio Holdings' convertible redeemable preferred units previously classified as mezzanine equity, including the Series B Preferred Unit Agreement executed during the year 2020 with a total aggregate purchase price of $ 145.2 million, have been retroactively adjusted in these financial statements, converted into common stock, and reclassified to permanent as a result of the retrospective application of the Liquidation and change in reporting entity. |
Basis of Presentation | Basis of Presentation— The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted (“GAAP”) in the United States. Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) promulgated by the Financial Accounting Standards Board (“FASB”). |
Principles of Consolidation | Principles of Consolidation— The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates —The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts and disclosures in the consolidated financial statements. While management believes that estimates and assumptions used in the preparation of the consolidated financial statements are appropriate, actual results could differ from those estimates. The most significant estimates are those used in the determination of the fair value of its common un its and incentive units awarded to employees prior to the Company's IPO, for purposes of recording stock-based incentive compensation, the fair value of stock options, as well as contracted research and development accruals. |
Liquidity and Ability to Continue as a Going Concern | Liquidity and Ability to Continue as a Going Concern — The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. Management has evaluated whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements are issued. Since its inception, the Company has incurred net losses and negative cash flows from operations. During the years ended December 31, 2021 and 2020 , the Company incurred a net loss of $ 47.0 million and $ 26.4 million, respectively. In addition, as of December 31, 2021 , the Company had an accumulated deficit of $ 94.0 million. The Company expects to continue to generate operating losses and negative cash flows in the foreseeable future. The Company currently expects that cash and cash equivalents of $ 175.3 million at December 31, 2021 will be sufficient to fund its operating expenses and capital requirements for more than 12 months from the date the consolidated financial statements are issued. However, w e do not anticipate that the current cash and cash equivalents as of December 31, 2021 will be sufficient for us to fund any of our product candidates through regulatory approval, and we will need to raise substantial additional capital to complete the development and commercialization of our product candidates, if approved. We may satisfy our future cash needs through the sale of equity securities, debt financings, working capital lines of credit, corporate collaborations or license agreements, grant funding, interest income earned on invested cash balances or a combination of one or more of these sources. |
Variable Interest Entity | Variable Interest Entity —The Company evaluates its ownership, contractual, and other interests in entities to determine if it has any variable interest in a variable interest entity (“VIE”). These evaluations are complex, involve judgment, and the use of estimates and assumptions based on available historical information, among other factors. If the Company determines that an entity in which it holds a contractual, or ownership, interest is a VIE and that the Company is the primary beneficiary, the Company consolidates such entity in its consolidated financial statements. The primary beneficiary of a VIE is the party that meets both of the following criteria: (i) has the power to make decisions that most significantly affect the economic performance of the VIE; and (ii) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. Management performs ongoing reassessments of whether changes in the facts and circumstances regarding the Company’s involvement with a VIE will cause the consolidation conclusion to change. Changes in consolidation status are applied prospectively. The Company evaluated its investment in REV-I (defined in Note 7) and concluded that it represented a VIE and was not deemed the primary beneficiary. If the Company is not deemed to be the primary beneficiary in a VIE, the Company accounts for the investment or other variable interests in a VIE in accordance with the applicable GAAP (See Note 7). |
Equity Method Investments | Equity Method Investments —The Company accounts for investments for which it does not have a controlling interest in accordance with ASC 323, Investments – Equity Method and Joint Ventures . The Company recognizes its pro-rata share of income and losses in “loss on investment in joint venture” on the consolidated statements of operations and comprehensive loss, with a corresponding change to the investment in joint venture asset on the consolidated balance sheets. |
Financial instruments | Financial Instruments —The Company’s principal financial instruments are comprised of cash and cash equivalents, accounts payable, and accrued liabilities. The carrying value of all financial instruments approximates fair value. |
Concentrations of credit risk | Concentrations of Credit Risk— Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents. Periodically, the Company may maintain deposits in financial institutions in excess of government insured limits. Management believes that the Company is not exposed to significant credit risk as the Company’s deposits are held at financial institutions that management believes to be of high credit quality, and the Company has not experienced any losses on these deposits. |
Cash and Cash Equivalents | Cash and Cash Equivalents— The Company classifies amounts on deposit in banks and cash invested temporarily in various instruments, primarily money market funds, with original maturities of three months or less at the time of purchase as cash and cash equivale nts. The carrying amounts reported in the consolidated balance sheets represent the fair values of cash and cash equivalents. |
Property and Equipment | Property and Equipment —Property and equipment are recorded at cost and consists of computer and other equipment, capitalized software, furniture and fixtures and leasehold improvements. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, or for leasehold improvements, over the remaining term of the lease, if shorter. The estimated useful life for each major asset classification are as follows: Asset Classification Estimated Useful Life Computer and other equipment 3 years Capitalized software 3 years Furniture and fixtures 5 years Leasehold improvements lesser of lease life or useful life Maintenance and repairs which do not extend the lives of the assets are charged directly to expense as incurred. Upon retirement or disposal, cost and related accumulated depreciation are removed from the related accounts, and any resulting gain or loss is recognized as a component of income or loss in the consolidated statements of operations and comprehensive loss. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets —When indications of potential impairments are present, the Company evaluates the carrying value of long-lived assets. The Company adjusts the carrying value of the long-lived assets if the sum of undiscounted expected future cash flows is less than the carrying value. No such impairments were recorded during the years ended December 31, 2021 or 2020 . |
Income Taxes | Income Taxes —The Company uses the asset and liability method of accounting for income taxes, as set forth in Accounting Standards Codification (ASC) 740, Accounting for Income Taxes . Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequence of temporary differences between the carrying amounts and the tax basis of assets and liabilities and net operating loss carry forwards, all calculated using presently enacted tax rates. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company evaluates whether deferred tax assets are more likely than not of being realized in determining whether a valuation allowance is necessary. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. As of December 31, 2021 or 2020 , the Company determined that it is more likely than not that deferred taxes will not be realized and as a result recorded a valuation allowance against its deferred tax assets. Following the Reorganization the Company files a consolidated U.S. federal income tax return and has elected to include all subsidiaries owned more than 80 %. Prior to the Reorganization, the LLCs owned 100 % by the Company have each elected to be treated as and taxed as a corporation and each filed a separate U.S. federal income tax return. |
Research and Development Expenses | Research and Development Expenses —Research and development expenses are comprised of costs incurred in performing research and development activities including personnel salaries, benefits, and equity-based compensation; external research and development expenses incurred under arrangements with third parties, such as contract research organization agreements, investigational sites, and consultants; the cost of developing and manufacturing clinical study materials, program regulatory costs, expenses associated with obligations under asset acquisitions, license agreements and other direct and indirect costs. Costs incurred in connection with research and development activities are expensed as incurred. Costs are considered incurred based on an evaluation of the progress to completion of each contract using information and data provided by the respective vendors, including the Company’s clinical sites. Depending upon the timing of invoicing by the service providers, the Company recognizes prepaid expenses or accrued expenses related to these costs. These prepaid expenses or accrued expenses are based on management’s estimates of the work performed under service agreements, milestones achieved, and experience with similar contracts. The Company monitors each of these factors and adjusts estimates accordingly. |
Deferred Offering Costs | Deferred Offering Costs — The Company capitalizes incremental legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such equity financings are consummated. After consummation of the equity financing, these costs are recorded in stockholders' equity as a reduction of additional paid-in-capital generated as a result of the offering. Should the planned equity financing no longer be considered probable of being consummated, the offering costs are expensed immediately as a charge to operating expense. Upon completion of the Company's IPO in August 2021, $ 3.2 million of deferred offering costs were charged against additional paid-in-capital. As a result, the Company did no t have any deferred offering costs as of December 31, 2021 . |
Equity-Based Compensation | Share-Based Compensation— The Company accounts for share-based compensation in accordance with ASC 718, Compensation—Stock Compensation (“ASC 718”). Generally, share-based compensation is measured at the grant date for all equity-based awards made to employees based on the fair value of the awards and is recognized over the requisite service period, which is generally the vesting period. Share-based compensation for awards with performance conditions are recognized over the service period when achievement of the performance condition is probable. The Company has elected to recognize the actual forfeitures by reducing the share-based compensation in the same period as the forfeitures occur. The Company classifies share-based compensation in its consolidated statements of operations and comprehensive loss in the same manner in which the award recipients’ payroll costs are classified. The Company estimates the fair value of options granted using the Black-Scholes option pricing model ("Black-Scholes") for stock option grants. The fair value of the Company’s common stock is used to determine the fair value of restricted stock awards. Black-Scholes requires inputs based on certain subjective assumptions, including the expected stock price volatility, the expected term of the award, the risk-free interest rate and expected dividends. Due to the lack of a public market for the Company’s common stock and lack of company-specific historical and implied volatility data, the Company has based its computation of expected volatility on the historical volatility of a representative group of public companies with similar characteristics to the Company. The historical volatility is calculated based on a period of time corresponding with expected term assumption. The Company uses the simplified method to calculate the expected term for options granted where the expected term equals the arithmetic average of the vesting term and the original contractual term of the options due to its lack of sufficient historical data. The risk-free interest rate is based on U.S. Treasury securities with a maturity date corresponding with the expected term of the associated award. The expected dividend yield is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock. |
Fair Value Measurements | Fair Value Measurements —ASC Topic 820, Fair Value Measurement (“ASC 820”), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the assets or liabilities and are developed based on the best information available in the circumstances. ASC 820 identifies fair value as the price that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tiered value hierarchy that distinguishes between the following: Level 1—Quoted market prices in active markets for identical assets or liabilities. Level 2—Inputs other than Level 1 inputs that are either directly or indirectly observable, such as quoted market prices, interest rates and yield curves. Level 3—Unobservable inputs for the asset or liability (i.e. supported by little or no market activity). Level 3 inputs include management’s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair values requires more judgement. Accordingly, the degree of judgement exercised by the Company in determining fair value is greatest for instruments categorized as Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as considers counterparty credit risk in its assessment of fair value. For the year ended December 31, 2021 and 2020 the Company held money market funds that are classified as cash and cash equivalents on the Company's consolidated balance sheets of $ 4.0 million and $ 2.5 million, respectively. These money market funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets. There were no securities transferred between Level 1, 2 and 3 during the year ended December 31, 2021 . |
Segment information | Segment information —Operating segments are defined as components of an enterprise for which discrete financial information is regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing operating performance. The Company manages its operations as a single segment for the purposes of allocating resources, assessing performance, and making operating decisions. All tangible assets of the Company are held in the United States. |
Basic and Diluted Net Loss Per Share | Basic and Diluted Net Loss Per Share —The Company calculates basic net loss per share by dividing the net loss by the weighted average number of common shares outstanding during the period, without consideration of potential dilutive securities. Unvested restricted common shares as of December 31, 2021 and 2020 are not considered participating securities and as such are excluded from the weighted average number of shares used for calculating basic and diluted net loss per share. Diluted net loss per share is computed by dividing the net loss by the sum of the weighted average number of common shares outstanding during the period plus the dilutive effects of potentially dilutive securities outstanding during the period. Potentially dilutive securities include restricted common shares and stock options. The Company has generated a net loss for all periods presented, therefore diluted net loss per share is the same as basic net loss per share since the inclusion of potentially dilutive securities would be anti-dilutive. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements — The Company qualifies as an emerging growth company ("EGC") as defined in the Jumpstart Our Business Startups Act of 2012 and has elected not to “opt out” of the extended transition 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 irrevocably elects to “opt out” of such extended transition period or 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. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial statements and disclosures. In February 2016, the FASB issued ASU 2016-02 " Leases" that requires lessees to recognize leases on-balance sheet and to make certain disclosures associated with their leasing arrangements. The new standard establishes a right-of-use ("ROU") model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than twelve months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The FASB issued an update that provided an additional transition option that allows companies to continue applying the guidance under the lease standard in effect at that time in the comparative periods presented in the consolidated financial statements. Companies that elect this option would record a cumulative-effect adjustment to the opening balance of retained earnings, if applicable, on the date of adoption, which the Company expects to elect. The Company also expects to elect the “package of practical expedients”, which permits the Company not to reassess under the new standard prior conclusions about lease identification, lease classification and initial direct costs. For the Company, as an EGC, ASU 2016-02, as amended, will be effective for annual reporting periods beginning after December 15, 2021 and interim periods within those fiscal years, with early adoption permitted. The Company is in the process of finalizing the assessment of the standard which includes lease calculations, including the Company's discount rate assumptions. The Company is also continuing to establish new processes and internal controls that may be required to comply with the new lease accounting and disclosure requirements set by the new standard. The Company expects the impact of this standard will increase assets and liabilities within the Company's consolidated balance sheets by approximately $ 0.7 million in right of use assets and related lease liabilities when adopting the standard in the first quarter of 2022. There were no changes to significant accounting policies of the Company during the year ended December 31, 2021 . |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Property Plant and Equipment Useful Lives | The estimated useful life for each major asset classification are as follows: Asset Classification Estimated Useful Life Computer and other equipment 3 years Capitalized software 3 years Furniture and fixtures 5 years Leasehold improvements lesser of lease life or useful life |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment, Net | Property and equipment consisted of the following as of December 31, 2021 and 2020: (in thousands) DECEMBER 31, DECEMBER 31, Computer and other equipment $ 154 $ 62 Capitalized software 89 86 Furniture and fixtures 151 52 Leasehold improvements 315 184 Construction in progress 8 — Less accumulated depreciation ( 206 ) ( 97 ) Property and equipment—net $ 511 $ 287 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following as of December 31, 2021 and 2020: (in thousands) DECEMBER 31, DECEMBER 31, Research and development $ 1,937 $ 1,065 Employee expenses 2,955 1,912 Professional fees 539 185 Other 517 112 Asset purchase obligation — 990 $ 5,948 $ 4,264 |
Stockholder's Equity (Tables)
Stockholder's Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Share-based compensation for stock options, restricted stock awards and restricted stock units | Share-based compensation for stock options, restricted stock awards and restricted stock units is classified in the condensed consolidated statements of operations and comprehensive loss for the year ended December 31, 2021 and 2020 was as follows: FOR THE YEAR ENDED (in thousands) 2021 2020 Research and development $ 1,168 $ 219 General and administrative 2,477 485 $ 3,645 $ 704 |
Summary of stock option activity | The following table summarizes stock option activity for the year ended December 31, 2021 : Stock Options Number of Option Shares Weighted-Average Exercise Price Weighted-Average Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2020 — $ — Granted 1,357,784 $ 12.72 Exercised — $ — Forfeited — $ — Outstanding at December 31, 2021 1,357,784 $ 12.72 9.7 $ — Options exercisable at December 31, 2021 25,470 $ 12.80 9.7 $ — |
Summary of Assumptions of Fair Value of Option Pricing Granted | The fair value of the stock options granted during the year ended December 31, 2021 was determined using the Black-Scholes option pricing model with the following assumptions: FOR THE YEAR ENDED 2021 Expected volatility 86.9 % - 87.9 % Expected term (years) 5.50 - 6.08 Risk free interest rate 0.79 % - 1.33 % Expected dividend yield — Exercise price $ 10.76 - $ 13.00 |
Summary of Nonvested Restricted Common Stock Awards | A summary of the status of the Company's nonvested restricted common stock awards at December 31, 2021 and changes during the year ended December 31, 2021 was as follows: Restricted Stock Awards Shares Weighted Average Grant Date Fair Value Per Share Nonvested restricted stock awards at December 31, 2020 1,184,252 $ 2.55 Shares granted 1,589,622 $ 3.65 Shares vested ( 501,167 ) $ 3.00 Outstanding nonvested restricted stock awards at December 31, 2021 2,272,707 $ 3.22 |
Summary of Assumptions of Fair Value of Restricted Common Shares Pricing Granted | The assumptions that went into the option pricing models for determining the fair value of Rallybio Holdings incentive units granted during the years ended December 31, 2021 and 2020, prior to the Liquidation, were as follows and do not include the retrospective adjustments described in Note 2 : FOR THE YEAR ENDED 2021 2020 Expected volatility 71.7 % - 99.5 % 95.0 % Expected term (years) 0.58 - 1.00 1.50 Risk free interest rate 0.04 % - 0.10 % 0.16 % Expected dividend yield — — |
Summary of Nonvested Restricted Common Stock Units | A summary of the status of the Company's nonvested restricted common stock units at December 31, 2021 and changes during the year ended December 31, 2021 was as follows: Restricted Stock Units Shares Weighted Average Grant Date Fair Value Per Share Nonvested restricted stock units at December 31, 2020 — $ — Shares granted 2,000 $ 10.76 Shares vested — $ — Outstanding nonvested restricted stock units at December 31, 2021 2,000 $ 10.76 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes | The provision for income taxes of the Company is comprised of the following for the years ended December 31, 2021 and 2020: 2021 2020 Current: Federal $ — $ ( 15 ) Income tax benefit $ — $ ( 15 ) |
Schedule of Effective Income Tax Rates | The Company’s effective income tax rates are different from the federal statutory tax rates in 2021 and 2020 predominantly due to the valuation allowance, tax credits, state taxes, and the federal net operating loss carryback tax benefit described below: 2021 2020 U.S. federal statutory tax rate 21.0 % 21.0 % State income taxes, net of federal income tax benefit 6.7 % 4.9 % Tax credits 6.8 % 8.0 % Other ( 1.0 )% ( 0.2 )% Valuation allowance ( 33.5 )% ( 33.6 )% Effective Tax Rate 0.0 % 0.1 % |
Schedule of Deferred Income Tax Benefits and Liabilities | The combined temporary differences and carryforwards of each tax paying component of the Company that give rise to a significant portion of the deferred income tax benefits and liabilities are as follows at December 31, 2021 and 2020: 2021 2020 Net operating loss carryforwards $ 22,789 $ 10,675 Amortization 1,685 1,823 Research and development credits 6,213 2,687 Other 474 135 Total deferred tax assets 31,161 15,320 Less valuation allowance ( 31,161 ) ( 15,320 ) Net deferred tax assets $ — $ — |
Commitments and Contigencies (T
Commitments and Contigencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Annual Lease Payments | Future minimum annual lease payments are as follows: YEAR ENDING DECEMBER 31, (in thousands) 2022 $ 170 2023 195 2024 230 2025 176 Thereafter — $ 771 |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted Loss Per Common Share | Basic and diluted loss per common share were calculated as follows: FOR THE YEAR ENDED 2021 2020 Net loss $ ( 47,013 ) $ ( 26,447 ) Weighted average number of common shares 25,519,114 17,388,239 Net loss per common share, basic and diluted $ ( 1.84 ) $ ( 1.52 ) |
Business - Additional Informati
Business - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |
Aug. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Proceeds from issuance of common stock | $ 0 | $ 145,205 | |
IPO | |||
Stock issued during period, shares, new issues | 7,130,000 | ||
Shares issued price per share | $ 13 | ||
Proceeds from issuance of common stock | $ 92,700 | ||
Net proceeds | $ 83,000 | ||
Over-Allotment Option [Member] | |||
Stock issued during period, shares, new issues | 930,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation (Additional Information) (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |
Aug. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Common stock, shares issued | 32,129,970 | 23,410,348 | |
Common stock, shares issued on liquidation | 24,999,970 | ||
Deferred offering costs | $ 0 | ||
Adjustment to additional paid in capital | $ 3,200 | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Assets, Current | ||
Operating lease right of use assets | $ 700 | ||
Impairment of long-lived assets | $ 0 | $ 0 | |
Ownership percentage by parent | 100.00% | ||
Net loss | $ (47,013) | (26,447) | |
Accumulated deficit | 94,027 | 47,014 | |
Cash and cash equivalents | $ 175,334 | $ 140,233 | |
Common stock shares outstanding | 32,129,970 | 23,410,348 | |
Transfers of securities between fair value levels | $ 0 | ||
Domestic Tax Authority [Member] | |||
Subsidiaries, ownership percentage | 80.00% | ||
Money Market Funds Member | Fair Value, Inputs, Level 1 [Member] | |||
Cash and cash equivalents | $ 4,000 | $ 2,500 | |
Series B Redeemable Convertible Preferred Unit [Member] | |||
Aggregate purchase price of common stock | $ 145,200 | ||
Common Stock Allocated to Series A-1 And Series A-2 Preferred Unit Holders [Member] | |||
Stock issued during period, shares, new issues | 5,257,590 | ||
Common Stock Allocated To SeriesB Preferred Units Holders [Member] | |||
Stock issued during period, shares, new issues | 16,402,235 | ||
Common Stock Allocated to Common Unit Holders [Member] | |||
Stock issued during period, shares, new issues | 706,701 | ||
Common Stock Allocated To Performance Based Incentive Common Unit Holders Member | |||
Stock issued during period, shares, new issues | 188,454 | ||
Common Stock Allocated To Incentive Units Holders [Member] | |||
Stock issued during period, shares, new issues | 2,444,990 | ||
IPO [Member] | |||
Stock issued during period, shares, new issues | 7,130,000 | ||
Common stock, shares issued | 7,130,000 | ||
Shares issued price per share | $ 13 | ||
Prior to IPO [Member] | Series A-1 and A-2 Redeemable Convertible Preferred Unit [Member] | |||
Common stock shares outstanding | 33,478,255 | ||
Prior to IPO [Member] | Series B Redeemable Convertible Preferred Unit [Member] | |||
Common stock shares outstanding | 104,442,965 | ||
Prior to IPO [Member] | Common Units [Member] | |||
Common stock shares outstanding | 4,500,000 | ||
Prior to IPO [Member] | Performance Based Incentive Common Units [Member] | |||
Common stock shares outstanding | 1,200,000 | ||
Prior to IPO [Member] | Incentive units [Member] | |||
Common stock shares outstanding | 20,869,704 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation - Summary of Property Plant and Equipment Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Computer and Other Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful lives | 3 years |
Capitalized software | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful lives | 3 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful lives | 5 years |
Property and Equipment, Net - S
Property and Equipment, Net - Summary of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Less accumulated depreciation | $ (206) | $ (97) |
Property and equipment, net | 511 | 287 |
Computer and Other Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 154 | 62 |
Capitalized software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 89 | 86 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 151 | 52 |
Leashold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 315 | 184 |
Construction In Progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 8 | $ 0 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 109 | $ 62 |
Accrued Expenses - Schedule Of
Accrued Expenses - Schedule Of Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Accrued Liabilities, Current [Abstract] | ||
Research and development | $ 1,937 | $ 1,065 |
Employee expenses | 2,955 | 1,912 |
Professional fees | 539 | 185 |
Other | 517 | 112 |
Asset purchase obligation | 0 | 990 |
Accrued expenses | $ 5,948 | $ 4,264 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |
Aug. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Class of Stock [Line Items] | |||
Common stock, shares issued | 32,129,970 | 23,410,348 | |
Proceeds from issuance of common stock, gross including exercise of the underwriter's option to purchase additional shares | $ 0 | $ 145,205 | |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 | |
Preferred stock, shares outstanding | 0 | 0 | |
Common Stock, shares authorized | 200,000,000 | 200,000,000 | |
Common stock, shares outstanding | 32,129,970 | 23,410,348 | |
Fair value of underlying shares | $ 9.25 | ||
Granted | 1,357,784 | 0 | |
Fair value of stock options vested | $ 200 | ||
Unrecognized share-based compensation expense | $ 11,100 | ||
Options exercisable, end of period - weighted average remaining contractual term (years) | 9 years 8 months 12 days | ||
Total unrecognized compensation cost, period for recognition | 3 years 6 months | ||
Restricted Stock Awards [Member] | |||
Class of Stock [Line Items] | |||
Unrecognized share-based compensation expense | $ 6,000 | ||
Options exercisable, end of period - weighted average remaining contractual term (years) | 3 years 1 month 6 days | ||
Restricted Stock Units (RSUs) [Member] | |||
Class of Stock [Line Items] | |||
Unrecognized share-based compensation expense, Restricted stock units | $ 11 | ||
Total unrecognized compensation cost, period for recognition | 6 months | ||
2021 Equity Incentive Plan | |||
Class of Stock [Line Items] | |||
Common stock issuable | 3,054,421 | ||
Common shares reserved for issuance | 5,440,344 | ||
Common shares remained for issuance | 1,694,637 | ||
2021 Employee Stock Purchase Plan | |||
Class of Stock [Line Items] | |||
Common shares reserved for issuance | 291,324 | ||
IPO [Member] | |||
Class of Stock [Line Items] | |||
Common stock, shares issued | 7,130,000 | ||
Stock issued during period, shares, new issues | 7,130,000 | ||
Shares issued price per share | $ 13 | ||
Proceeds from issuance of common stock, gross including exercise of the underwriter's option to purchase additional shares | $ 92,700 | ||
Net proceeds | $ 83,000 | ||
Over-Allotment Option [Member] | |||
Class of Stock [Line Items] | |||
Stock issued during period, shares, new issues | 930,000 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Equity-based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation | $ 3,645 | $ 704 |
Research and Development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation | 1,168 | 219 |
General and Administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation | $ 2,477 | $ 485 |
Stockholder's Equity - Summary
Stockholder's Equity - Summary of stock option activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance | 0 | |
Granted | 1,357,784 | 0 |
Options Exercised - Shares | 0 | |
Options Forfeited | 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance | 1,357,784 | 0 |
Options exercisable, end of period (in shares) | 25,470 | |
Options outstanding, beginning of period - weighted average exercise price per share | $ 0 | |
Weighted-Average Exercise Price Granted | 12.72 | |
Options exercised - weighted average exercise price per share | 0 | |
Options forfeited - weighted average exercise price per share | 0 | |
Options outstanding, end of period - weighted average exercise price per share | 12.72 | $ 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 12.80 | |
Options outstanding, end of period - weighted average remaining contractual term (years) | 9 years 8 months 12 days | |
Options exercisable, end of period - weighted average remaining contractual term (years) | 9 years 8 months 12 days | |
Options outstanding, end of period - aggregate intrinsic value | $ 0 | |
Options exercisable, end of period - aggregate intrinsic value | $ 0 |
Stockholder's Equity - Summar_2
Stockholder's Equity - Summary of Assumptions of Fair Value of Option Pricing Granted (Details) - Two Thousand and Twenty One Equity Incentive Plan [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Employee Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility, minimum | 86.90% | |
Expected volatility, maximum | 87.90% | |
Risk-free interest rate, minimum | 0.79% | |
Risk-free interest rate, maximum | 1.33% | |
Employee Stock Options | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (years) | 6 years 29 days | |
Exercise Price | $ 13 | |
Employee Stock Options | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (years) | 5 years 6 months | |
Exercise Price | $ 10.76 | |
Restricted Stock Awards Granted Prior To IPO And Liquidation [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility, minimum | 71.70% | |
Expected volatility, maximum | 99.50% | |
Expected term (years) | 1 year 6 months | |
Risk-free interest rate, minimum | 0.04% | |
Risk-free interest rate, maximum | 0.10% | |
Expected volatility | 95.00% | |
Risk-free interest rate | 0.16% | |
Restricted Stock Awards Granted Prior To IPO And Liquidation [Member] | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (years) | 1 year | |
Restricted Stock Awards Granted Prior To IPO And Liquidation [Member] | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (years) | 6 months 29 days |
Stockholder's Equity - Summar_3
Stockholder's Equity - Summary of Nonvested Restricted Common Stock Awards (Details) - Restricted Stock Awards | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares | $ 2.55 |
Weighted average grant date fair value, shares granted | $ / shares | 3.65 |
Weighted average grant date fair value, shares vested | $ / shares | 3 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value, Ending Balance | $ / shares | $ 3.22 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding, beginning balance | shares | 1,184,252 |
Shares granted | shares | 1,589,622 |
Shares vested | shares | (501,167) |
Outstanding, ending balance | shares | 2,272,707 |
Stockholder's Equity - Summar_4
Stockholder's Equity - Summary of Nonvested Restricted Common Stock Units (Details) - Restricted Stock Units | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares granted | shares | 2,000 |
Outstanding, ending balance | shares | 2,000 |
Weighted average fair value of restricted common shares | $ / shares | $ 10.76 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value, Ending Balance | $ / shares | $ 10.76 |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Federal | $ 0 | $ (15) |
Current Income Tax Expense (Benefit), Total | $ 0 | $ (15) |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rates (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
U.S. federal statutory tax rate | 21.00% | 21.00% |
State income taxes, net of federal income tax benefit | 6.70% | 4.90% |
Tax Credits | 6.80% | 8.00% |
Other | (1.00%) | (0.20%) |
Valuation allowance | (33.50%) | (33.60%) |
Effective Tax Rate | 0.00% | 0.10% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Federal net operating loss carried back | $ 74 | ||
Income tax benefit | $ 0 | $ (15) | |
Federal net operating loss carry forwards | 83,100 | ||
State net operating loss carry forwards | $ 81,800 | ||
Net state operating loss carryforwards expiration year | 2038 | ||
Increasing Ownership Percent | 5.00% | ||
Income tax penalties and interest accrued | $ 0 | $ 0 | |
Outstanding U.S federal income tax or material state and local tax | $ 0 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Income Tax Benefits and Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 22,789 | $ 10,675 |
Amortization | 1,685 | 1,823 |
Research and development credits | 6,213 | 2,687 |
Other | 474 | 135 |
Total deferred tax assets | 31,161 | 15,320 |
Less valuation allowance | (31,161) | (15,320) |
Net deferred tax assets | $ 0 | $ 0 |
Investment In Joint Venture - A
Investment In Joint Venture - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | |||
Joint venture investment payments | $ 2,000 | $ 1,900 | |
Allocable share of losses recorded | (1,505) | (1,522) | |
Investment in joint venture | $ 805 | 310 | |
RE Ventures I, LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Percentage of interest of joint venture entity | 50.00% | ||
Allocable share of losses recorded | $ 1,500 | 1,500 | |
Investment in joint venture | $ 800 | 300 | |
RE Ventures I, LLC | Accrued Expenses | |||
Schedule of Equity Method Investments [Line Items] | |||
Joint venture investment payments | $ 600 | $ 600 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2021USD ($)ft² | Dec. 31, 2020USD ($) | Dec. 31, 2019 | |
Other Commitments [Line Items] | |||
Termination charges | $ 0 | $ 0 | |
Lessee, operating lease, option to extend | In June 2019, the Company entered into a six-year lease to occupy office space located in New Haven, Connecticut, with the option to extend the initial term of the lease for one additional five year term. Pursuant to the lease the Company was obligated to pay for its share of costs related to the build-out of new space. All costs associated with the build-out of the new space have been capitalized as leasehold improvements and are being amortized over the life of the lease. In 2021, the Company leased an additional 4,500 square feet of office space in our New Haven, Connecticut location with terms that coincide with the original lease term expiration date. | ||
Additional leased space | ft² | 4,500 | ||
Payments for Rent | $ 133,000 | $ 88,000 | |
Lease Commitments [Member] | |||
Other Commitments [Line Items] | |||
Lessee, operating lease, renewal term | 5 years | ||
Office Building [Member] | |||
Other Commitments [Line Items] | |||
Lessee, operating lease, term of contract | 6 years |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Future Minimum Annual Lease Payments (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2022 | $ 170 |
2023 | 195 |
2024 | 230 |
2025 | 176 |
Total | $ 771 |
Net Loss Per Common Share - Sum
Net Loss Per Common Share - Summary of Basic and diluted loss per common share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (47,013) | $ (26,447) |
Weighted average common shares outstanding, basic and diluted | 25,519,114 | 17,388,239 |
Net loss per common share | $ (1.84) | $ (1.52) |
Net Loss Per Common Share - Add
Net Loss Per Common Share - Additional Information (Details) - shares shares in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Unvested Restricted Common Shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 1.2 | |
Stock Options And Unvested Restricted Common Shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 3.6 |