Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 01, 2022 | Jun. 30, 2021 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Transition Report | false | ||
Entity File Number | 001-40869 | ||
Entity Registrant Name | Theseus Pharmaceuticals, Inc. | ||
Entity Tax Identification Number | 83-0712806 | ||
Entity Address State Or Province | MA | ||
Entity Address, Address Line One | 245 Main Street | ||
Entity Address, City or Town | Cambridge | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Postal Zip Code | 02142 | ||
City Area Code | 857 | ||
Local Phone Number | 400-9491 | ||
Title of 12(b) Security | Common stock, par value $0.0001 per share | ||
Trading Symbol | THRX | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding | 38,702,650 | ||
Entity Central Index Key | 0001745020 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
ICFR Auditor Attestation Flag | false | ||
Auditor Name | Ernst & Young LLP | ||
Auditor Firm ID | 42 | ||
Auditor Location | Boston, Massachusetts |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 244,662 | $ 8,457 |
Prepaid expenses and other current assets | 3,309 | 113 |
Total current assets | 247,971 | 8,570 |
Property and equipment, net | 11 | 1 |
Other assets | 2,947 | 43 |
Total assets | 250,929 | 8,614 |
Current liabilities: | ||
Accounts payable | 1,002 | 1,132 |
Accrued expenses and other current liabilities | 2,678 | 463 |
Total current liabilities | 3,680 | 1,595 |
Restricted stock liability, net of current portion | 815 | |
Total liabilities | 4,495 | 1,595 |
Commitments and contingencies (Note 8) | ||
Redeemable convertible preferred stock: | ||
Redeemable convertible preferred stock (Series A and B), $0.0001 par value; 0 and 22,136,987 shares authorized as of December 31, 2021 and December 31, 2020, respectively; 0 and 16,734,179 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively; preference in liquidation of $0 as of December 31, 2021 | 41,289 | |
Stockholders' equity (deficit): | ||
Common stock, $0.0001 par value; 500,000,000 and 29,054,797 shares authorized as of December 31, 2021 and December 31, 2020, respectively; 38,702,650 and 1,708,625 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | 4 | |
Additional paid-in capital | 308,008 | |
Accumulated deficit | (61,578) | (34,270) |
Total stockholders' equity (deficit) | 246,434 | (34,270) |
Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit) | $ 250,929 | $ 8,614 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Consolidated Balance Sheets | ||
Redeemable convertible preferred stock, par value | $ 0.0001 | $ 0.0001 |
Redeemable convertible preferred stock, shares authorized | 0 | 22,136,987 |
Redeemable convertible preferred stock, shares issued | 0 | 16,734,179 |
Redeemable convertible preferred stock, shares outstanding | 0 | 16,734,179 |
Redeemable convertible preferred stock, preference in liquidation | $ 0 | |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 500,000,000 | 29,054,797 |
Common stock, shares issued | 38,702,650 | 1,708,625 |
Common stock, shares outstanding | 38,702,650 | 1,708,625 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 50,000,000 | 0 |
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 | $ 18,328 | $ 5,958 |
General and administrative | 9,008 | 878 |
Total operating expenses | 27,336 | 6,836 |
Loss from operations | (27,336) | (6,836) |
Other income (expense), net: | ||
Change in fair value of preferred stock tranche rights | (3,968) | |
Change in fair value of anti-dilution rights | (1,190) | |
Other income, net | 28 | |
Other (expense), net | (3) | |
Total other income (expense), net | 28 | (5,161) |
Net loss | (27,308) | (11,997) |
Comprehensive loss | (27,308) | (11,997) |
Net loss attributable to common stockholders-basic (Note 13) | (27,308) | (11,997) |
Net loss attributable to common stockholders- diluted (Note 13) | $ (27,308) | $ (11,997) |
Net loss per share attributable to common stockholders-basic | $ (2.84) | $ (21.10) |
Net loss per share attributable to common stockholders- diluted | $ (2.84) | $ (21.10) |
Weighted-average common stock outstanding-basic | 9,631,818 | 568,467 |
Weighted-average common stock outstanding- diluted | 9,631,818 | 568,467 |
Consolidated Statements of Rede
Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) - USD ($) $ in Thousands | SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCKADDITIONAL PAID-IN CAPITAL | SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCKACCUMULATED DEFICIT | SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK | SERIES B REDEEMABLE CONVERTIBLE PREFERRED STOCK | COMMON STOCK | ADDITIONAL PAID-IN CAPITAL | ACCUMULATED DEFICIT | Total |
Beginning balance at Dec. 31, 2019 | $ 6,857 | |||||||
Beginning balance, shares at Dec. 31, 2019 | 6,668,818 | |||||||
Increase (Decrease) in Temporary Equity | ||||||||
Issuance of redeemable convertible preferred stock, net of issuance costs | $ 34,432 | |||||||
Issuance of redeemable convertible preferred stock, net of issuance costs, shares | 10,065,361 | |||||||
Ending balance at Dec. 31, 2020 | $ 41,289 | $ 41,289 | ||||||
Ending balance, shares at Dec. 31, 2020 | 16,734,179 | 16,734,179 | ||||||
Beginning balance at Dec. 31, 2019 | $ 813 | $ (10,220) | $ (9,407) | |||||
Beginning balance, shares at Dec. 31, 2019 | 288,568 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Issuance of common stock upon closing of initial public offering, net of issuance costs | $ (1,865) | $ (12,053) | $ (13,918) | |||||
Vesting of restricted stock, shares | 594,221 | |||||||
Stock-based compensation | 1,052 | 1,052 | ||||||
Net loss | (11,997) | (11,997) | ||||||
Ending balance at Dec. 31, 2020 | (34,270) | $ (34,270) | ||||||
Ending balance, shares at Dec. 31, 2020 | 882,789 | |||||||
Increase (Decrease) in Temporary Equity | ||||||||
Issuance of redeemable convertible preferred stock, net of issuance costs | $ 99,892 | |||||||
Issuance of redeemable convertible preferred stock, net of issuance costs, shares | 8,741,726 | |||||||
Conversion of redeemable convertible preferred stock into common stock | $ (41,289) | $ (99,892) | ||||||
Conversion of redeemable convertible preferred stock into common stock (in shares) | (16,734,179) | (8,741,726) | ||||||
Ending balance, shares at Dec. 31, 2021 | 0 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Conversion of redeemable convertible preferred stock into common stock | $ 3 | 141,178 | $ 141,181 | |||||
Conversion of redeemable convertible preferred stock into common stock (in shares) | 25,475,905 | |||||||
Issuance of common stock upon closing of initial public offering, net of issuance costs | $ 1 | 162,469 | 162,470 | |||||
Issuance of common stock upon closing of initial public offering, net of issuance costs (in shares) | 11,172,190 | |||||||
Vesting of restricted stock, shares | 341,720 | |||||||
Stock-based compensation | 4,361 | 4,361 | ||||||
Net loss | (27,308) | (27,308) | ||||||
Ending balance at Dec. 31, 2021 | $ 4 | $ 308,008 | $ (61,578) | $ 246,434 | ||||
Ending balance, shares at Dec. 31, 2021 | 37,872,604 |
Consolidated Statements of Re_2
Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Payment of issuance costs | $ 16,285 |
SERIES B REDEEMABLE CONVERTIBLE PREFERRED STOCK | |
Issuance costs | $ 208 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (27,308,000) | $ (11,997,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation expense | 2,000 | 2,000 |
Stock-based compensation expense | 4,361,000 | 1,052,000 |
Change in fair value of preferred stock tranche rights | 3,968,000 | |
Change in fair value of anti-dilution rights | 1,190,000 | |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | (3,196,000) | (49,000) |
Accounts payable | (150,000) | 849,000 |
Accrued expenses and other current liabilities | 1,623,000 | 133,000 |
Other assets | (2,525,000) | |
Net cash used in operating activities | (27,193,000) | (4,852,000) |
Cash flows from financing activities: | ||
Proceeds from initial public offering, net of underwriting discounts and commissions of $12,513 | 166,242,000 | |
Payment of initial public offering costs | (3,752,000) | |
Proceeds from early exercise of options | 1,395,000 | |
Net cash provided by financing activities | 263,777,000 | 11,992,000 |
Net increase in cash and cash equivalents | 236,584,000 | 7,140,000 |
Cash and cash equivalents at beginning of year | 8,457,000 | 1,317,000 |
Cash and cash equivalents at end of period | 245,041,000 | 8,457,000 |
Supplemental disclosure of cash flows: | ||
Conversion of redeemable convertible preferred stock into common stock | 141,181,000 | |
Purchases of property and equipment in accounts payable | 12,000 | |
Deferred financing costs in accounts payable | 19,000 | |
Fair value of preferred stock tranche rights recognized as series A redeemable convertible preferred stock upon issuance of milestone shares | (6,188,000) | |
Fair value of anti-dilution rights recognized as series A redeemable convertible preferred stock upon issuance of anti-dilution shares | (2,332,000) | |
SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK | ||
Cash flows from financing activities: | ||
Proceeds from issuance redeemable convertible preferred stock, net of issuance costs | $ 11,992,000 | |
SERIES B REDEEMABLE CONVERTIBLE PREFERRED STOCK | ||
Cash flows from financing activities: | ||
Proceeds from issuance redeemable convertible preferred stock, net of issuance costs | $ 99,892,000 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash, cash equivalents, and restricted cash balances: | ||
Cash and cash equivalents | $ 244,662 | $ 8,457 |
Restricted cash (included in other assets) | 379 | |
Total cash, cash equivalents, and restricted cash | 245,041 | 8,457 |
Net of underwriting discounts and commissions | 12,513 | |
SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK | ||
Cash, cash equivalents, and restricted cash balances: | ||
Issuance costs | $ 8 | |
SERIES B REDEEMABLE CONVERTIBLE PREFERRED STOCK | ||
Cash, cash equivalents, and restricted cash balances: | ||
Issuance costs | $ 208 |
Nature of the Business
Nature of the Business | 12 Months Ended |
Dec. 31, 2021 | |
Nature of the Business | |
Nature of the Business | 1. Nature of the Business Theseus Pharmaceuticals, Inc. (“Theseus” or the “Company”) is a clinical biopharmaceutical company focused on improving the lives of cancer patients through the discovery, development and commercialization of transformative targeted therapies. The Company was incorporated in December 2017 under the laws of the State of Delaware, and its principal offices are in Cambridge, Massachusetts. Reverse Stock Split On September 27, 2021, the Company effected a one-for-1.32286 reverse stock split of shares of the Company’s common stock and convertible preferred stock. All of the share and per share amounts included in the accompanying consolidated financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to this reverse stock split, including reclassifying an amount equal to the reduction in par value of common stock to additional paid-in capital. Shares of common stock underlying outstanding stock options were proportionately reduced and the respective exercise prices, if applicable, were proportionately increased in accordance with the terms of the appropriate securities agreements. Stockholders entitled to fractional shares as a result of the reverse stock split received a cash payment in lieu of receiving fractional shares. Initial Public Offering On October 12, 2021, the Company closed the initial public offering (“IPO”), in which it sold 10,000,200 shares of common stock at a public offering price of $16.00 per share. On October 25, 2021, the underwriters partially exercised their option to purchase an additional 1,171,990 shares of common stock at the public offering price of $16.00 per share. After deducting underwriting discounts, commissions and offering expenses, the aggregate net offering proceeds raised in the IPO were approximately $162.5 million. Upon the closing of the IPO, all of the Company’s outstanding shares of redeemable convertible preferred stock automatically converted into an aggregate of 25,475,905 shares of common stock. In connection with the closing of the IPO, the Company amended and restated its certificate of incorporation to among other things: (a) authorize 500,000,000 shares of voting common stock; (b) eliminate all references to the previously existing series of redeemable convertible preferred stock; and (c) authorize 50,000,000 shares of preferred stock that may be issued from time to time by the Company’s board of directors (the “Board”) in one or more series. Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the ASC and as amended by Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). Liquidity The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. The Company’s development programs will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Because of the numerous risks and uncertainties associated with product development, the Company is unable to predict the timing or amount of increased expenses or when or if the Company will be able to achieve or maintain profitability. Even if the Company is able to generate revenue from product sales, the Company may not become profitable. If the Company fails to become profitable or is unable to sustain profitability on a continuing basis, then the Company may be unable to continue its operations at planned levels and be forced to reduce or terminate its operations. The Company expects to incur substantial operating losses and negative cash flows from operations for the foreseeable future. In accordance with Accounting Standards Codification (“ASC”) 205-40, Going Concern |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements include the accounts of Theseus Pharmaceuticals, Inc. and Theseus Securities Corporation, which is a Massachusetts subsidiary. All intercompany transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting periods. Estimates and judgments are based on historical information and other market-specific or various relevant assumptions, including in certain circumstances, future projections, that management believes to be reasonable under the circumstances. Actual results could differ materially from estimates. Significant estimates and assumptions are used for, but not limited to, the accruals for research and development expenses, the determination of fair value of equity instruments, and the fair value of the preferred stock tranche rights and the anti-dilution right, and for periods prior to the completion of the IPO stock-based compensation expense. Concentration of Credit Risk Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents. Periodically, the Company maintains deposits in accredited financial institutions in excess of federally insured limits. The Company deposits its cash in financial institutions that it believes have high credit quality and have not experienced any losses on such accounts and does not believe it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships. Such deposits have and will continue to exceed federally insured limits. The Company has not experienced any losses on its cash deposits. Fair Value of Financial Instruments The Company categorizes its assets and liabilities measured at fair value in accordance with ASC Topic 820, Fair Value Measurement measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: ● Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; ● Level 2—Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; or ● Level 3—Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). Cash and Cash Equivalents Cash includes cash in readily available checking accounts. Cash is carried at cost, which approximates its fair value. The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Cash equivalents are carried at fair market value based on quoted prices for identical assets. Restricted Cash Restricted cash consists of a restricted cash deposit of $0.4 million which serves as collateral for a letter of credit issued to the landlord of the Company’s leased facility for a security deposit upon entering into the lease in September 2021. The Company classified this amount as restricted cash in the accompanying consolidated balance sheet within other assets as of December 31, 2021. As of December 31, 2020, the Company held no restricted cash. Property and Equipment, net Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Computer equipment and software are depreciated over three years. When an item is sold or retired, the costs and related accumulated depreciation are eliminated, and the resulting gain or loss, if any, is credited or charged to income in the consolidated statement of operations. Repairs and maintenance costs are expensed as incurred. Leases Prior to January 1, 2021, the Company accounted for leases in accordance with FASB Accounting Standards Codification (“ASC”) ASC 840, Leases Effective on January 1, 2021, the Company accounts for leases in accordance with ASC Topic 842, Leases (“ASC 842”). In accordance with ASC 842, the Company determines whether an arrangement is or contains a lease at inception. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company classifies leases at the lease commencement date, when control of the underlying asset is transferred from the lessor to the Company, as operating or finance leases and records a right-of-use (“ROU”) asset and a lease liability on the consolidated balance sheet for all real estate leases with an initial lease term of greater than 12 months. Leases with a lease term of 12 months or less are not recorded in the balance sheet, but payments are recognized as expense on a straight-line basis over the lease term. A lease qualifies as a finance lease if any of the following criteria are met at the inception of the lease: (i) there is a transfer of ownership of the leased asset to the Company by the end of the lease term, (ii) the Company holds an option to purchase the leased asset that it is reasonably certain to exercise, (iii) the lease term is for a major part of the remaining economic life of the leased asset, (iv) the present value of the sum of lease payments equals or exceeds substantially all of the fair value of the leased asset, or (v) the nature of the leased asset is specialized to the point that it is expected to provide the lessor no alternative use at the end of the lease term. All other leases are recorded as operating leases. The Company enters into contracts that contain both lease and non-lease components. Non-lease components may include maintenance, utilities, and other operating costs. For all real estate asset classes, the Company combines the lease and non-lease components of fixed costs in its lease arrangements as a single lease component. Variable costs, such as utilities or maintenance costs, are not included in the measurement of right-of-use assets and lease liabilities, but rather are expensed when the event determining the amount of variable consideration to be paid occurs. Finance and operating lease assets and liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term using the discount rate implicit in the lease. If the rate implicit is not readily determinable, the Company utilizes an estimate of its incremental borrowing rate based upon the available information at the lease commencement date. ROU assets are further adjusted for initial direct costs, prepaid rent, or incentives received. Operating lease payments are expensed using the straight-line method as an operating expense over the lease term. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Finance lease assets are amortized to depreciation expense using the straight-line method over the shorter of the useful life of the related asset or the lease term. Finance lease payments are bifurcated into (i) a portion that is recorded as interest expense and (ii) a portion that reduces the finance liability associated with the lease. Impairment of Long-lived Assets Long-lived assets consist of property and equipment. The Company reviews the recoverability of its long-lived assets, including the related useful lives, whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset might not be recoverable, based on undiscounted cash flows. If such assets are considered to be impaired, an impairment loss is recognized and is measured as the amount by which the carrying amount of the assets exceed their estimated fair value, which is measured based on the projected discounted future net cash flows arising from the assets. There were no impairments for the years ended December 31, 2021 and 2020. Accrued Research and Development Costs The Company records accrued liabilities for estimated costs of research and development activities conducted by service providers for sponsored research, preclinical studies and contract manufacturing activities. The Company records the estimated costs of research and development activities based upon the estimated amount of services provided but not yet invoiced and includes these costs in accrued expenses in the accompanying consolidated balance sheets and within research and development expense in the accompanying statements of operations. The Company accrues for these costs based on factors such as estimates of the work completed and in accordance with agreements established with service providers. The Company makes judgments and estimates in determining the accrued liabilities balance in each reporting period. As actual costs become known, the Company adjusts its accrued liabilities. The Company has not experienced any material differences between accrued costs and actual costs incurred since its inception. Deferred Issuance Costs The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred issuance costs until such financings are consummated. After consummation of such an equity financing, these costs are recorded as a reduction of the proceeds generated as a result of the offering. Should the planned equity financing be abandoned, the deferred issuance costs, currently recorded within other assets, will be expensed immediately as a charge to operating expenses in the statements of operations and comprehensive loss. On October 6, 2021, the Company completed its IPO. Accordingly, the Company recognized deferred issuance costs of $3.8 million as a reduction from the gross proceeds associated with the closing of the IPO through additional paid-in capital in the accompanying consolidated balance sheet as of December 31, 2021. The Company recorded no deferred issuance costs as of December 31, 2020. Research and Development Costs Research and development costs are expensed as incurred. Research and development costs consist of direct and indirect internal costs related to specific projects as well as fees paid to other entities that conduct certain research and development activities on the Company’s behalf. Patent Costs The Company expenses all costs as incurred in connection with patent applications, including direct application fees, and the legal and consulting expenses related to making such applications, and such costs are included in general and administrative expenses within the Company’s statements of operations. Stock-based Compensation The Company’s stock-based compensation program grants awards that may include stock options, restricted stock awards, restricted stock units, and other stock-based awards. The fair values of stock option grants are estimated as of the date of grant using a Black-Scholes option valuation model. The fair values of restricted stock awards and restricted stock units are based on the fair value of the Company’s common stock on the date of grant. The estimated fair values of the awards are expensed over the requisite service period, which is generally the vesting period of the award. The Company uses the simplified method to estimate the expected life assumption. For service-based awards that are subject to graded vesting, the Company has elected to recognize compensation expense for these awards on a straight-line basis. The Company has performance-based vesting conditions in some of its awards, and all performance-based milestones have been met or waived as of December 31, 2021. The Company accounts for forfeitures as they occur. The Company classifies stock-based compensation expense in its statements of operations and comprehensive loss in the same manner in which the award recipient’s salary and related costs are classified or in which the award recipient’s service payments are classified. The Company accounts for awards granted to non-employees using the same treatment as awards granted to employees. Upon exercise of stock options, the Company issues the grantee the respective number of shares of common stock from the available common stock shares approved for issuance by the Board. Prior to the Company’s IPO, the estimated fair value of its common stock was determined by the Board of Directors as of the date of each option grant, with input from management, considering the most recently available third-party valuations of common stock and the Board’s assessment of additional objective and subjective factors that it believed were relevant and which may have changed from the date of the most recent valuation through the date of the grant. Historically, these independent third-party valuations of the Company’s equity instruments were performed contemporaneously with identified value inflection points. These third-party valuations were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation available methods for allocating the enterprise value across classes of series of capital stock in determining the fair value of the Company’s common stock at each valuation date. Following the Company’s IPO, in connection with the accounting for granted stock options and other awards the Company may grant, the fair value of the Company’s common stock is determined based on the quoted market price of its common stock. Management also considered whether adjustments to the quoted market price or the expected volatility of the price of the underlying share for the expected term of an award when it is in possession of material non-public information for purposes of determining the fair value of the Company’s stock. The Company’s equity incentive plan allows for the issuance of restricted stock awards to employees and non-employees that may be subject to vesting. The unvested shares of any restricted stock awards are held in escrow as the stock award vests or until award holder termination, whichever occurs first. In the event of a termination, the Company has the right of repurchase, at its option, the portion of unvested stock awards from the terminated award holder at their original issuance price. For all unvested stock option awards for which the award recipient has transferred cash to the Company prior to the vesting date, a liability is established related to the cash received for the unvested portion of the stock awards, which represents the Company’s obligation if all award holders were to be terminated. As of December 31, 2021, 345,930 options to purchase common stock were exercised early and they continue to vest as restricted stock awards over the requisite service period. The Company has recognized the early exercise proceeds received of $1.4 million as a liability as of December 31, 2021. As of December 31, 2020, no early exercises had occurred. Net Loss Per Share The Company follows the two-class method when computing net loss allocable to common securities per share as the Company has issued shares that meet the definition of participating securities, see Note 13 for additional information. During periods of loss, there is no allocation required under the two-class method since the participating securities do not have a contractual obligation to fund the losses of the Company. Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock and potentially dilutive securities outstanding during the period determined using the treasury-stock and if-converted methods. For purposes of the diluted net loss per share calculation, diluted net loss per share attributable to common stockholders is calculated by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding after giving consideration to the dilutive effect of convertible preferred stock, restricted common stock, restricted stock units and stock options that are outstanding during the period. The Company has generated a net loss in all periods presented, therefore the basic and diluted net loss per share attributable to common stockholders are the same as the inclusion of the potentially dilutive securities would be anti-dilutive. Redeemable Convertible Preferred Stock The Company’s redeemable convertible preferred stock is classified as temporary equity in the accompanying consolidated balance sheets and excluded from stockholders’ equity (deficit) as the potential redemption of such stock is outside the Company’s control. The carrying value of the redeemable convertible preferred stock is not adjusted to the redemption value until the contingent redemption events are considered to be probable of occurring. Upon the completion of the Company’s IPO on October 6, 2021, all outstanding shares of the Company’s redeemable convertible preferred stock converted into shares of the Company’s common stock. Income Taxes Income taxes for the Company are recorded in accordance with ASC Topic 740, Income Taxes The Company provides reserves for potential payments of tax to various tax authorities related to uncertain tax positions. The tax benefits recorded are based on a determination of whether and how much of a tax benefit taken by the Company in its tax filings or positions is “more likely than not” to be realized following resolution of any uncertainty related to the tax benefit, assuming that the matter in question will be raised by the tax authorities. The Company’s policy is to recognize interest and penalties accrued on any uncertain tax positions, if any, as a component of income tax expense in its statements of operations and comprehensive loss. Comprehensive Loss Comprehensive loss includes net loss as well as other changes in stockholders’ equity (deficit) that result from transactions and economic events other than those with stockholders. For the years ended December 31, 2021 and 2020, there were no differences between net loss and comprehensive loss. Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the chief operating decision maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its chief executive officer. The Company has determined it operates in a single operating segment and has one reportable segment. All long-lived assets of the Company reside in the United States. Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. 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 consolidated financial statements and disclosures. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326)—Measurement of Credit Losses on Financial Instruments Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases for both parties to a contract (i.e., lessees and lessors), and replaces the existing guidance in ASC 840, Leases The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine the recognition pattern of lease expense over the term of the lease. In addition, a lessee is required to record (i) a right-of-use asset and a lease liability on its balance sheet for all leases with accounting lease terms of more than 12 months regardless of whether it is an operating or financing lease and (ii) lease expense in its consolidated statement of operations and comprehensive loss for operating leases and amortization and interest expense in its consolidated statement of operations and comprehensive loss for financing leases. Leases with a term of 12 months or less may be accounted for similar to existing guidance for operating leases under ASC 840. In July 2018, the FASB issued ASU No. 2018-11, Leases The Company adopted ASC 842 during the quarter and fiscal year ended December 31, 2021, with an effective date of January 1, 2021, using the modified retrospective transition approach which uses the effective date as the date of initial application. As a result, prior periods are presented in accordance with the previous guidance in ASC 840. The Company has elected to apply the package of practical expedients requiring no reassessment of whether any expired or existing contracts are or contain leases, the lease classification of any expired or existing leases, or the capitalization of initial direct costs for any existing leases. Upon its adoption of ASC 842, the Company’s existing lease had a term of less than twelve months with no anticipated renewal, and as such was not capitalized on the accompanying consolidated balance sheets, consistent with our lease policy. The adoption of ASC 842 did not have a material impact on the Company’s consolidated balance sheets, statements of operations and comprehensive loss or statements of cash flows. |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value of Financial Assets and Liabilities | |
Fair Value of Financial Assets and Liabilities | 3. Fair Value of Financial Assets and Liabilities There were no assets or liabilities measured at fair value as of December 31, 2021 and 2020. There have been no transfers between fair value levels during the years ended December 31, 2021 and 2020. The carrying values of other current assets, accounts payable and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities. Tranche Rights The Company determined that its obligations to issue, and the Company’s investors’ obligation to purchase, additional shares of Series A at a fixed price (i.e. the issuance price) in three subsequent tranches following the initial closing of the Series A financing represented freestanding financial instruments (the “Tranche Rights”). The Company issued 2,267,813 and 3,779,688 shares in January 2020 and July 2020, respectively, pursuant to these rights, at a purchase price of $1.32 per share. The final tranche was cancelled upon termination of the Series A preferred stock purchase agreement (“Series A Agreement”) in December 2020. The Tranche Rights were classified as a liability on the Company’s consolidated balance sheets and initially recorded at fair value. The Tranche Rights were subsequently revalued until the tranches were settled, with changes in fair value for each reporting period recognized in other expense, net in the consolidated statement of operations and comprehensive loss. Upon the purchase of the Tranche Right shares, the fair value of the related Tranche Right was recognized as Series A redeemable convertible preferred stock. The obligation was fully satisfied in December 2020 when the Series A Agreement was terminated, with the remaining value recognized in the consolidated statement of operations and comprehensive loss. As such, the Company does not have a Tranche Right liability recorded as of December 31, 2021 or 2020. The fair value of Tranche Rights was based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. A change in the assumptions related to the valuation of the Tranche Rights could have a significant impact on the value of the obligation. Each tranche obligation was valued as a forward contract. The values were determined using a probability-weighted present value calculation. In determining the fair values of the tranche obligations, estimates and assumptions impacting fair value included the estimated future values of the Company’s Series A, discount rates, estimated time to tranche closing, and probability of each tranche closing. The Company determined the per share future value of the Series A preferred stock by back-solving to the initial proceeds of the Series A financing. The Company remeasured each tranche obligation at each reporting period and prior to settlement. Anti-dilution Right In accordance with a license agreement between the Company and ARIAD Pharmaceuticals, Inc. (“ARIAD”), the Company was obligated to issue to ARIAD additional Series A shares for no consideration upon the issuance of certain Milestone Shares (see Note 9) to certain investors (“Anti-dilution Right”). The Company determined that the Anti-dilution Right is a freestanding financial instrument. The freestanding financial instrument was classified as an asset or liability on the Company’s consolidated balance sheets and initially recorded at fair value. The fair value of the Anti-dilution Right is based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. A change in the assumptions related to the valuation of the Anti-dilution Rights could have a significant impact on the value of the obligation. The Anti-dilution Right was valued as a forward contract. The value was determined using a probability-weighted present value calculation. In determining the fair values of the obligation, estimates and assumptions impacting fair value included the estimated future values of the Company’s Series A, discount rates, estimated time to share issuance and probability of each share issuance. The Company determined the per share future value of the Series A by back-solving to the initial proceeds of the Series A financing. The Anti-dilution Right was subsequently revalued until anti-dilution shares were issued or the Anti-dilution Right was terminated, with changes in fair value for each reporting period recognized in other income (expense), net in the statements of operations and comprehensive loss. Upon issuance of the Anti-dilution shares, the fair value of the Anti-dilution Right was recognized as Series A redeemable convertible preferred stock. In accordance with the Anti-dilution Right, the Company issued ARIAD 372,791 and 621,318 additional Series A shares in January 2020 and July 2020, respectively, upon the issuance of Milestone Shares to its investors. The obligation was fully satisfied in December 2020 in conjunction with the termination of the Series A Agreement. ARIAD did not receive additional Series A shares upon the termination of the Series A Agreement. The Company remeasured the Tranche Rights and the Anti-dilution Right at each reporting period and prior to settlement. The following reflects the ranges of significant quantitative inputs used in the valuation of the Tranche Rights and the Anti-dilution Right during 2020: DECEMBER 31, 2020 Stand-alone Series A Preferred Stock price (spot price) $1.84 - $5.93 Risk-free rate 1.6% Discount factor 0.9923 - 1.0 Time to milestone event (years) 0.0 years - 0.5 years Probability of tranche closing 0% - 100% The following table provides a rollforward of the aggregate fair value of the Company’s Tranche Rights and Anti-dilution Right (in thousands): PREFERRED STOCK ANTI-DILUTION TRANCHE RIGHTS RIGHT Balance as of January 1, 2020 $ 2,220 $ 1,142 Change in fair value 3,968 1,190 Fair value recognized as Series A upon settlement of right (6,188) (2,332) Balance as of December 31, 2020 $ — $ — |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2021 | |
Property and Equipment, net | |
Property and Equipment, net | 4. Property and Equipment, net Property and equipment, net consisted of the following as of December 31, 2021 and 2020 (in thousands): DECEMBER 31, 2021 2020 Computer equipment $ 12 $ 6 Less: accumulated depreciation (1) (5) Property and equipment, net $ 11 $ 1 Depreciation expense for each of the years ended December 31, 2021 and 2020 was approximately $2,000. There were no impairments recorded to date. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2021 | |
Accrued Expenses | |
Accrued Expenses | 5. Accrued Expenses Accrued expenses consisted of the following as of December 31, 2021 and 2020 (in thousands): DECEMBER 31, 2021 2020 Accrued research and development $ 233 $ 310 Accrued legal 199 143 Accrued compensation and benefits 1,353 2 Accrued other 313 8 Restricted stock liability, current 580 — Total accrued expenses and other current liabilities $ 2,678 $ 463 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases | |
Leases | 6. Leases The Company recognized short-term lease cost of $0.2 million for the fiscal year ended December 31, 2021. On July 19, 2021, the Company entered into a lease agreement for office space in Cambridge, Massachusetts, on a month-to-month basis, which was determined to be a short-term lease as the Company was not reasonably certain to extend the lease beyond twelve months. The Company recognizes lease payments on a straight-line basis over the lease term. On September 16, 2021, the Company entered into an agreement to lease 7,351 square feet of office space in Cambridge, Massachusetts. The initial lease term is seven years , with a one -time option right to extend the term five additional years. The lease is expected to commence in the first half of 2022, after construction is complete and the Company obtains control of the leased premises. At lease commencement, the classification and measurement of the lease will be determined and recognized on the balance sheet. The annual base rent under the lease is approximately $0.8 million for the first lease year, expected to begin in the first half of 2022, and is subject to annual increases of 3% thereafter. The Company provided a security deposit in the form of a letter of credit in the amount of approximately $0.4 million upon signing, pursuant to the terms of the lease which is recognized as restricted cash within other assets. The future minimum payments required under the lease as of December 31, 2021 are as follows (in thousands): Year Ending December 31, 2022 $ 757 2023 780 2024 803 2025 827 Thereafter 2,635 Total minimum lease payments $ 5,802 |
License Agreement
License Agreement | 12 Months Ended |
Dec. 31, 2021 | |
License Agreement | |
License Agreement | 7. License Agreement Agreement Description In June 2018, the Company entered into a license agreement with ARIAD, for an exclusive, transferable (subject to certain restrictions), sublicensable (subject to certain conditions), worldwide license, under certain of ARIAD’s patent rights, know-how and compounds and a certain ARIAD chemical library, to develop, use, manufacture, market and commercialize certain compounds, and products that contain such compounds, that are therapeutically useful for the treatment of diseases and disorders in humans, including with respect to c-KIT, a type of receptor tyrosine kinase and tumor marker (also known as CD117 and stem cell factor receptor). Pursuant to the license agreement, in exchange for an exclusive license, a non-exclusive license, and certain laboratory equipment, the Company issued to ARIAD 621,318 shares of Series A and a non-exclusive license to certain intellectual property. In addition, the Company provided to ARIAD the Anti-dilution Right described in Note 3. The non-exclusive licenses were granted to the parties in order to administratively facilitate the flow of data between the parties without infringement on existing patents; all of the economic value of the agreement is concentrated in the exclusive license. The laboratory equipment the Company acquired was not material. The Company accounted for the agreement as an asset acquisition. The transaction price was measured as the fair value of the 621,318 shares of Series A issued to ARIAD and the fair value of the Anti-Dilution right (as described in Note 3), or approximately $1.4 million. The Company determined that the licensed intellectual property represented in-process research and development assets with no alternative future use. As a result, the cost to license the intellectual property of $1.4 million was recognized as research and development expense on the Company’s statements of operations in the year-ended December 31, 2018. The Company is required to pay ARIAD tiered royalty payments that are low- to mid-single digits of the Company’s future net sales and those of its sublicensees of each product comprising a licensed ARIAD compound in each country. The Company is also responsible for costs relating to the prosecution and maintenance of the licensed patents. The agreement contains anti-stacking and generic competition provisions on the royalties whereby the Company may deduct a percentage of the amounts due for royalties from its payments if the Company enters into a third-party license agreement, and may reduce the rates in the event a generic product is being marketed and sold by a third party and the average net sales as measured over a specified period of time are at least a certain percentage lower than the average net sales during a specified period of time immediately prior to the launch of the generic product. The term of the agreement commenced in June 2018 and unless earlier terminated as provided in the agreement for breach of terms by either party or for convenience by the Company with advanced written notice, shall continue in full force and effect, on a country-by-country and product-by-product basis until the date on which the royalty term in such country with respect to such product expires. The royalty term is the period from the first commercial sale of such product in such country until the later of (a) the expiry of all patents that cover the product in such country or (b) ten years after the first commercial sale. The license agreement terminates, on a product-by-product and country-by-country basis, on expiration of the royalty term for such product for the applicable country. Thereafter, the licenses from ARIAD to the Company with respect to such product for such country will convert to a fully paid, royalty-free, irrevocable and perpetual license. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 8. Commitments and Contingencies Legal Proceedings The Company may, from time to time, be party to litigation arising in the ordinary course of business. The Company was not subject to any material legal proceedings during the years ended December 31, 2021 and 2020, and no material legal proceedings are currently pending or, to the best of the Company’s knowledge, threatened. Indemnification Agreements The Company enters into standard indemnification agreements in the ordinary course of business. Pursuant to the indemnification agreements, the Company agrees to indemnify, hold harmless, and to reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company’s business partners, in connection with any U.S. patent or any copyright or other intellectual property infringement claim by any third-party with respect to the Company’s products. The term of these indemnification agreements is generally perpetual any time after execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. 401(k) Plan The Company maintains a defined-contribution plan under Section 401(k) of the Internal Revenue Code of 1986 (the “401(k) Plan”). The 401(k) Plan covers all employees who meet defined minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. Matching contributions to the 401(k) Plan may be made at the discretion of management. The Company is not required to make, and to date has not made, any matching contributions to the 401(k) Plan through December 31, 2021 or 2020. |
Redeemable Convertible Preferre
Redeemable Convertible Preferred Stock | 12 Months Ended |
Dec. 31, 2021 | |
Redeemable Convertible Preferred Stock | |
Redeemable Convertible Preferred Stock | 9. Redeemable Convertible Preferred Stock In June 2018, the Company entered into the Series A Agreement, under which it agreed to issue up to 13,203,025 shares of Series A in an initial closing and three subsequent milestone-based tranches, inclusive of the Anti-dilution Right. Under the Series A Agreement, the Company initially issued 3,779,688 shares to certain investors at a price of $1.32 per share for proceeds of $4.7 million, net of issuance costs of $0.3 million. The Series A Agreement provided for three additional tranche closings based on the achievement of three defined milestones (the “Tranche Rights”), pursuant to which certain investors were required to purchase, and the Company to sell, up to 7,559,376 additional shares of Series A at a price of $1.32 per share upon the achievement or waiver of the defined milestone. All Series A shares issued as a result of the achievement or waiver of a milestone are referred to as Milestone Shares. The Company concluded that the obligation and right to make future issuances of Series A under the Tranche Rights met the definition of a freestanding financial instrument, as the rights were legally detachable from the Series A (see Note 3). In January 2020 and July 2020, the Company sold 2,267,813 and 3,779,688 Milestone Shares, respectively, to certain investors at a price of $1.32 per share for proceeds of $8.0 million as a result of the achievement of two milestones. The requirement to purchase the remaining Milestone Shares was cancelled in December 2020 upon the determination by the Company that the program would be cancelled. In conjunction with the Series A shares issued to certain investors, the Company issued shares to ARIAD pursuant to the ARIAD Agreement (Note 7). The Company issued 621,318 shares to ARIAD as part of the initial Series A closing in June 2018 in exchange for access to ARIAD’s intellectual property. Upon the issuance of Milestone Shares to certain investors in January 2020 and July 2020, the Company issued 372,791 and 621,318 Series A shares, respectively, to ARIAD as part of ARIAD’s Anti-dilution Right (see Note 3). The Company concluded that the Anti-dilution Right that represented the obligation to make future issuances of Series A to ARIAD met the definition of a freestanding financial instrument, as the rights were separately exercisable and legally detachable from the underlying license rights. In August 2019, the Series A Agreement was amended to authorize the sale of 2,267,812 additional shares to a certain majority stockholder of the Company in the form of an operating cash closing. These shares were sold for $1.32 per share, for gross proceeds of $3.0 million and recognized at their fair value of $2.6 million. In December 2020, the Series A Agreement was further amended to authorize the sale of 3,023,751 additional shares of Series A to the same investor in the form of a second operating cash closing. These shares were sold for a purchase price of $1.32 per share, for gross proceeds of $4.0 million and recognized at their fair value of $17.9 million. Immediately after the second operating cash closing in December 2020, the Series A Agreement was terminated; as such, as of December 31, 2020, no additional Series A shares were authorized to be issued. No terms of the existing Series A shares were amended in conjunction with these transactions, and the operating cash closes were intended to provide for a certain investor to be able to purchase additional preferred stock shares outside of those issued in conjunction with milestone achievement and to provide the Company with cash to cover operating expenses. In January 2021, the Company entered into the Series B Preferred Stock Purchase Agreement (“Series B Agreement”) whereby the Company issued and sold 8,741,726 shares of Series B redeemable convertible preferred stock (“Series B”) at $11.45 per share to designated investors for gross proceeds of $100.1 million. The certificate of incorporation was amended and restated in connection with the execution of the Series B Agreement and authorized the new Series B shares. In connection with the closing of the Company’s IPO on October 6, 2021, all 25,475,905 shares outstanding As of December 31, 2020, the Series A redeemable convertible preferred stock (“preferred stock”) consisted of the following (in thousands, except share amounts): DECEMBER 31, 2020 PREFERRED PREFERRED STOCK COMMON STOCK STOCK ISSUED AND CARRYING LIQUIDATION ISSUABLE UPON AUTHORIZED OUTSTANDING VALUE VALUE CONVERSION Series A 22,136,987 16,734,179 $ 41,289 $ 22,137 16,734,179 The holders of Series A and Series B shares had the following rights and preferences: Voting Rights The holder of each share of preferred stock shall have the right to one vote for each share of common stock into which such preferred stock could then be converted, and with respect to such vote, such holder shall have full voting rights and powers equal to the voting rights and powers of the holders of common stock, and shall be entitled, notwithstanding any provision hereof, to notice of any stockholders’ meeting in accordance with the bylaws of this corporation. Dividends The holders of shares of preferred stock are entitled to receive dividends, out of any assets legally available therefor, prior and in preference to any declaration or payment of any dividend on the common stock by the Company at a rate of 8.0% of the original issue price per annum, payable when, as and if declared by the Company’s board of directors (the “Board”). Such dividends shall not be cumulative. After payment of such dividends, any additional dividends or distributions shall be distributed among all holders of common stock and preferred stock in proportion to the number of shares of common stock that would be held by each such holder if all shares of preferred stock were converted to common stock at the then effective conversion rate. Liquidation Rights In the event of any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, asset transfer, merger or acquisition (a “Liquidation Event”), the holders of preferred stock shall be entitled to receive out of the proceeds or assets of this corporation available for distribution to its stockholders, prior and in preference to any distribution of the proceeds of such liquidation event to the holders of common stock by reason of their ownership thereof, an amount per share equal to the sum of the applicable original issue price. Conversion Each share of preferred stock shall automatically be converted into shares of common stock at the conversion rate at the time in effect for such series of preferred stock immediately upon the earlier of: (i) the closing of the Company’s sale of its common stock in a firm commitment underwritten public offering pursuant to an effective registration statement on Form S-1 under the Securities Act of 1933, as amended, that results in at least $30 million of gross proceeds and in connection with such offering the common stock is listed for trading on the Nasdaq Stock Market’s National Market, the New York Stock Exchange or another exchange or marketplace approved by the Board; or, (ii) the date, or the occurrence of an event, specified by vote or written consent or agreement of the holders of a majority of the then outstanding shares of preferred stock. The conversion price of the preferred stock will be subject to a broad-based weighted average anti-dilution adjustment in the event that the Company issues additional equity securities (other than the issuance of shares reserved under any employee incentive plan and certain other customary exceptions) at a purchase price less than the applicable conversion price. Redemption The preferred stock is not redeemable at the option of the holder thereof except for in the event of a Liquidation Event if the corporation does not effect a dissolution under the general corporation law within 90 days after such Liquidation Event. |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2021 | |
Common Stock. | |
Common Stock | 10. Common Stock The Company was authorized to issue 500,000,000 and 29,054,797 shares of $0.0001 par value common stock as of December 31, 2021 and 2020, respectively. The voting, dividend and liquidation rights of the holders of the Company’s common stock are subject to and qualified by the rights, powers and preference of the holders of the preferred stock of any series as may be designated by the Board upon any issuance of the preferred stock of any series. Voting Rights Each share of common stock entitles the holder to one vote, together with the holders of preferred stock, on all matters submitted to the stockholders for a vote. Dividends Holders of common stock shall be entitled to receive dividends if and when they are declared by the Board and after all holders of preferred stock have been paid according to their rights. As of December 31, 2021, no cash dividends have been declared or paid. Liquidation Rights After payment to the holders of preferred stock of their liquidation preferences, the remaining assets of the Company are distributed to the holders of common stock. Restricted Stock The Company issued restricted common stock to its founders in May 2018, which vest monthly over five years through 2023. At issuance, these shares also contained certain performance-based vesting criteria which were associated with the milestone events for the Series A shares, two of which were achieved in 2020 (see Note 9). In December 2020 in conjunction with the Series A termination, the final performance-based vesting criteria was waived, leaving only service-based vesting criteria remaining as of December 31, 2021 and 2020. As of December 31, 2021 and 2020, the Company has reserved the following shares of common stock for potential conversion of outstanding preferred stock, the vesting of restricted stock and the exercise of stock options: DECEMBER 31, 2021 2020 Preferred Stock — 16,734,179 Unvested restricted stock 830,046 825,836 Options to purchase common stock 5,163,643 1,852,141 Total 5,993,689 19,412,156 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Stock-Based Compensation | |
Stock-Based Compensation | 11. Stock-Based Compensation Equity Incentive Plans In June 2018, the Company adopted the 2018 Stock Incentive Plan (the “2018 Plan”) for the issuance of stock options and other stock-based awards. In September 2021, the Company’s board of directors adopted, and its stockholders approved, the Theseus Pharmaceuticals, Inc. 2021 Equity Incentive Plan (the “2021 Plan”), which became effective on October 6, 2021 upon the Company’s IPO, and replaced the 2018 Plan, (collectively referred to as, the “Plans”). As of the effective date of the 2021 Plan, no further awards will be made under the 2018 Plan. Any options or awards outstanding under the 2018 Plan remain outstanding and effective and are governed by their existing terms. As of December 31, 2021 and 2020, the number of shares reserved for issuance upon the exercise of outstanding options was 9,094,083 and 2,474,920, respectively. Of those shares reserved for issuance, there were 3,930,440 and 622,779 shares available for future grant as of December 31, 2021 and 2020, respectively. The 2021 Plan is administered by the Board and provides for the grant of stock options, restricted shares, restricted stock units, and other types of equity awards. The exercise prices, vesting and other restrictions are determined at the discretion of the Board, except that the exercise price per share of stock options may not be less than 100% of the fair market value of the common stock on the date of grant. Stock options awarded under the 2021 Plan expire ten years after the grant date unless the Board sets a shorter term. The expected term of our stock options granted to employees and non-employees has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. Vesting periods for awards under the plans are determined at the discretion of the Board. Stock options granted to employees and nonemployees typically vest over four years . Shares of restricted stock awards granted to employees, officers, members of the Board, advisors, and consultants of the Company typically vest over five years . Certain executives who are option holders are able to early exercise stock option awards, even prior to full vesting conditions being met. If and when this occurs, the stock option becomes outstanding restricted stock, and remains restricted until the remaining vesting terms are met. The Company can repurchase these early unvested exercised options. During the year ended December 31, 2021, 345,930 options to purchase common stock were exercised early and they continue to vest as restricted stock awards over the requisite service period. The Company has recognized the proceeds received of $1.4 million as a liability as of December 31, 2021. The aggregate number of shares of common stock reserved for issuance under the 2021 Plan is equal to the sum of (a) 4,395,080 shares of common stock, plus (b) up to 4,699,003 shares of common stock subject to awards granted under the 2018 Plan that are subsequently forfeited, repurchased by the Company, expire, or lapse unexercised or unsettled and (c) the additional annual increase in shares of common stock reserved for issuance under the 2021 Plan. On the first day of each fiscal year of the Company during the term of the 2021 Plan, commencing on January 1, 2023 and concluding on (and including) January 1, 2031, the aggregate number of shares of common stock reserved for issuance under the 2021 Plan shall automatically increase by a number equal to the lesser of (a) five percent (5%) of the total number of shares of common stock actually issued and outstanding on the last day of the preceding fiscal year or (b) a number of shares of common stock determined by the Company’s board of directors. The Company shall reserve and keep available such number of shares of common stock as will be sufficient to satisfy the requirements of the 2021 Plan. Employee Stock Purchase Plan In September 2021, the Company’s board of directors adopted, and its stockholders approved, the Theseus Pharmaceuticals, Inc. 2021 Employee Stock Purchase Plan (the “ESPP”), which became effective on October 6, 2021. The ESPP is administered by the Company’s board of directors or by one or more committees to which the Company’s board of directors delegates such administration. The number of shares of common stock reserved for issuance under the ESPP is 400,000, plus the additional annual increase in shares of common stock reserved for issuance under the ESPP. On the first day of each fiscal year of the Company during the term of the ESPP, commencing on January 1, 2023 and concluding on January 1, 2041, the aggregate number of shares of common stock reserved for issuance under the ESPP shall automatically increase by a number equal to the lesser of (i) one percent (1%) of the total number of shares of common stock actually issued and outstanding on the last day of the preceding fiscal year, and (ii) a number of shares of common stock determined by the Company’s board of directors. Shares of common stock issued pursuant to the ESPP may be authorized but unissued shares or treasury shares. Stock Option Valuation The assumptions that the Company used in Black-Scholes option-pricing model to determine the grant-date fair value of stock options granted for the years ended December 31, 2021 and 2020 are as follows: DECEMBER 31, 2021 2020 Risk-free interest rate 1.07% 0.51% Expected term (in years) 5.2 - 6.1 5.97 - 6.00 Expected volatility 75.58% - 83.56% 98.17% - 98.21% Expected dividend yield 0.00% 0.00% A summary of option activity under the Plans during the years ended December 31, 2021 and 2020 is as follows (in thousands except share, per share data and contractual terms): WEIGHTED-AVERAGE WEIGHTED-AVERAGE PER-SHARE REMAINING AGGREGATE SHARES EXERCISE PRICE CONTRACTUAL TERM INTRINSIC VALUE Outstanding as of December 31, 2020 1,852,141 $ 0.32 9.98 $ 6,566 Granted 3,664,965 6.31 Exercised (345,930) 4.03 569 Cancelled or forfeited (7,533) 4.03 Outstanding as of December 31, 2021 5,163,643 $ 4.31 9.29 44,463 Options vested and exercisable as of December 31, 2021 662,770 $ 1.26 9.07 $ 7,584 There were no options vested as of December 31, 2020. The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock. The weighted-average grant date fair value of options granted during the year ended December 31, 2021 was $5.32. Stock-based compensation expense for options granted of $4.0 million was recorded as of December 31, 2021. As of December 31, 2021, there was $20.7 million of unrecognized stock-based compensation expense related to unvested stock options. The unrecognized stock-based compensation expense is estimated to be recognized over a period of 3.2 years as of December 31, 2021. The total fair value of options vested as of December 31, 2021 and 2020 was $2.4 million and $0.1 million, respectively. Shares of Restricted Common Stock The Company has granted shares of restricted common stock with the number of shares that vest based on the lesser of the time-based vesting over five years or the achievement of certain milestones. A summary of restricted stock activity under the Plan during the years ended December 31, 2021 and 2020 is as follows: WEIGHTED-AVERAGE PER-SHARE GRANT-DATE SHARES FAIR VALUE Unvested shares at December 31, 2020 825,836 $ 0.83 Vested (341,720) 0.83 Unvested shares issued as a result of early option exercise 345,930 2.36 Unvested shares at December 31, 2021 830,046 $ 2.85 In 2019, the restricted common stock awards were modified to add a new performance condition for the operating cash closing of the Series A, which was ultimately achieved in 2019. In 2020, the restricted common stock awards were modified to waive the final requirement to achieve a certain milestone. As a result, as of December 31, 2021, all of the unvested restricted common stock awards are only subject to time-based vesting through the end of the requisite service period. As of December 31, 2021 and 2020, respectively, there was $2.4 million and $0.2 million of unrecognized stock-based compensation expense related to unvested restricted stock. The unrecognized stock-based compensation expense is estimated to be recognized over a period of 1.4 years as of December 31, 2021. The total fair value of restricted stock vested during the years ended December 31, 2021 and 2020 was $3.7 million and $1.9 million, respectively. The Company recorded stock-based compensation expense for restricted stock of $0.4 million and $0.8 million during the years ended December 31, 2021 and 2020, respectively. Stock-based Compensation Expense Total stock-based compensation expense recorded as research and development and general and administrative expenses, respectively, for employees, directors and non-employees during the years ended December 31, 2021 and 2020 was as follows (in thousands): YEAR ENDED DECEMBER 31, 2021 2020 Research and development $ 2,250 $ 825 General and administrative 2,111 227 $ 4,361 $ 1,052 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Income Taxes | 12. Income Taxes The Company has not recorded a current or deferred tax provision for the years ended December 31, 2021 and 2020. The effective income tax rate differed from the amount computed by applying the federal statutory rate to the Company’s loss before income taxes as follows: YEAR ENDED DECEMBER 31, 2021 2020 Tax effected at statutory rate 21.0 % 21.0 % State taxes, net of federal benefit 5.3 3.7 Stock compensation (3.0) (1.8) Non-deductible expenses — (7.0) Research and development credits 3.3 — 26.6 15.9 Change in valuation allowance (26.6) (15.9) Total — % — % Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets and liabilities consist of the following at December 31, 2021 and 2020 (in thousands): DECEMBER 31, 2021 2020 Deferred Tax Assets Net operating loss carryforwards $ 9,420 $ 3,499 Research and development credits 916 10 Stock-based compensation expense 116 — Accruals and reserves 367 — Intangible assets 702 755 Fixed assets — 1 Gross deferred tax assets 11,521 4,265 Deferred Tax Liabilities Depreciation $ (3) $ — Gross deferred tax liabilities (3) — Net deferred tax assets before valuation allowance 11,518 4,265 Valuation allowance (11,518) (4,265) Net deferred tax asset $ — $ — As required by ASC 740, the Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets, which is composed principally of net operating loss carryforwards. The Company has determined that it is more likely than not that the Company will not realize the benefits of its federal and state deferred tax assets, and, as a result, a valuation allowance of $11.5 million and $4.3 million has been established at 2021 and 2020, respectively. The change in the valuation allowance was $7.3 million and $1.9 million for the years ended December 31, 2021 and 2020. The Company has incurred NOLs from inception. At December 31, 2021, the Company had federal and state NOL carryforwards of approximately $34.6 million and $34.1 million, respectively, available to reduce future taxable income, with all of the $34.6 million of the federal NOLs having an unlimited carryover life. The state NOL carryforwards begin to expire in 2037. As of December 31, 2021, the Company also had federal and state research and development tax credit carryforwards of approximately $0.5 million and $0.5 million, respectively, to offset future income taxes, which will begin to expire beginning in 2035. Under the provisions of the Code, the NOLs and tax credit carryforwards are subject to review and possible adjustment by the IRS and state tax authorities. NOLs and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50 percentage points, as defined under Sections 382 and 383 of the Code, respectively, as well as similar state provisions. This could limit the amount of tax attributes that can be utilized annually to offset future tax liabilities. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. The Company has completed numerous financings since its inception, which may have resulted in a change in control as defined by Sections 382 and 383 of the Code, or could result in a change in control in the future. In addition, at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed. The Company follows the provisions of ASC 740-10, “ Accounting for Uncertainty in Income Taxes,” reserves for uncertain tax positions should be classified on the consolidated balance sheets; and provides transition and interim period guidance, among other provisions. As of December 31, 2021 and 2020, the Company had no unrecognized tax benefits. The Company’s policy is to recognize interest and penalties accrued on any uncertain tax positions as a component of income tax expense, if any, in its consolidated statements of operations. For the years ended December 31, 2021 and 2020, no estimated interest or penalties were recognized on uncertain tax positions. The Company does not expect any significant change in its uncertain tax positions in the next 12 months. The Company files U.S. federal and state income tax returns and is generally subject to income tax examinations by these authorities for all tax years after December 31, 2017. Currently, no federal or state income tax returns are under examination by the respective income tax authorities. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2021 | |
Net Loss Per Share | |
Net Loss Per Share | 13. Net Loss Per Share Basic and diluted loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average common shares outstanding (in thousands, except share and per share data): YEAR ENDED DECEMBER 31, 2021 2020 Numerator: Net loss $ (27,308) $ (11,997) Net loss attributable to common stockholders - basic and diluted $ (27,308) $ (11,997) Denominator: Weighted-average common stock outstanding - basic and diluted 9,631,818 568,467 Net loss per share attributable to common stockholders - basic and diluted $ (2.84) $ (21.10) The Company’s potentially dilutive securities, which include preferred stock, unvested restricted stock and stock options, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average number of shares of common stock outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. The Company excluded the following from the computation of diluted net loss per share attributable to common stockholders at December 31, 2021 and 2020 because including them would have had an anti-dilutive effect: DECEMBER 31, 2021 2020 Preferred Stock — 16,734,179 Unvested restricted stock 830,046 825,836 Options to purchase common stock 5,163,643 1,852,141 5,993,689 19,412,156 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions | |
Related Party Transactions | 14. Related Party Transactions Iain Dukes is a founding member of the Company and has served as a member of the Board since June 2018. From June 2018 until April 2021, Dr. Dukes served as the Company’s Chief Executive Officer under a consulting agreement, and from April 2021 until September 2021, Dr. Dukes served as the Executive Chairman. On September 15, 2021, Dr. Dukes transitioned into his role as Chairman of the Board. During the year ended December 31, 2021, Dr. Dukes earned compensation of $0.3 million, of which $54,000 was payable as of year-end. As of December 31, 2021, Dr. Dukes owned 388,324 shares of the Company’s common stock, and held options to purchase an additional 464,637 shares of common stock. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Theseus Pharmaceuticals, Inc. and Theseus Securities Corporation, which is a Massachusetts subsidiary. All intercompany transactions and balances have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting periods. Estimates and judgments are based on historical information and other market-specific or various relevant assumptions, including in certain circumstances, future projections, that management believes to be reasonable under the circumstances. Actual results could differ materially from estimates. Significant estimates and assumptions are used for, but not limited to, the accruals for research and development expenses, the determination of fair value of equity instruments, and the fair value of the preferred stock tranche rights and the anti-dilution right, and for periods prior to the completion of the IPO stock-based compensation expense. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents. Periodically, the Company maintains deposits in accredited financial institutions in excess of federally insured limits. The Company deposits its cash in financial institutions that it believes have high credit quality and have not experienced any losses on such accounts and does not believe it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships. Such deposits have and will continue to exceed federally insured limits. The Company has not experienced any losses on its cash deposits. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company categorizes its assets and liabilities measured at fair value in accordance with ASC Topic 820, Fair Value Measurement measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: ● Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; ● Level 2—Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; or ● Level 3—Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash includes cash in readily available checking accounts. Cash is carried at cost, which approximates its fair value. The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Cash equivalents are carried at fair market value based on quoted prices for identical assets. |
Restricted Cash | Restricted Cash Restricted cash consists of a restricted cash deposit of $0.4 million which serves as collateral for a letter of credit issued to the landlord of the Company’s leased facility for a security deposit upon entering into the lease in September 2021. The Company classified this amount as restricted cash in the accompanying consolidated balance sheet within other assets as of December 31, 2021. As of December 31, 2020, the Company held no restricted cash. |
Property and Equipment, net | Property and Equipment, net Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Computer equipment and software are depreciated over three years. When an item is sold or retired, the costs and related accumulated depreciation are eliminated, and the resulting gain or loss, if any, is credited or charged to income in the consolidated statement of operations. Repairs and maintenance costs are expensed as incurred. |
Leases | Leases Prior to January 1, 2021, the Company accounted for leases in accordance with FASB Accounting Standards Codification (“ASC”) ASC 840, Leases Effective on January 1, 2021, the Company accounts for leases in accordance with ASC Topic 842, Leases (“ASC 842”). In accordance with ASC 842, the Company determines whether an arrangement is or contains a lease at inception. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company classifies leases at the lease commencement date, when control of the underlying asset is transferred from the lessor to the Company, as operating or finance leases and records a right-of-use (“ROU”) asset and a lease liability on the consolidated balance sheet for all real estate leases with an initial lease term of greater than 12 months. Leases with a lease term of 12 months or less are not recorded in the balance sheet, but payments are recognized as expense on a straight-line basis over the lease term. A lease qualifies as a finance lease if any of the following criteria are met at the inception of the lease: (i) there is a transfer of ownership of the leased asset to the Company by the end of the lease term, (ii) the Company holds an option to purchase the leased asset that it is reasonably certain to exercise, (iii) the lease term is for a major part of the remaining economic life of the leased asset, (iv) the present value of the sum of lease payments equals or exceeds substantially all of the fair value of the leased asset, or (v) the nature of the leased asset is specialized to the point that it is expected to provide the lessor no alternative use at the end of the lease term. All other leases are recorded as operating leases. The Company enters into contracts that contain both lease and non-lease components. Non-lease components may include maintenance, utilities, and other operating costs. For all real estate asset classes, the Company combines the lease and non-lease components of fixed costs in its lease arrangements as a single lease component. Variable costs, such as utilities or maintenance costs, are not included in the measurement of right-of-use assets and lease liabilities, but rather are expensed when the event determining the amount of variable consideration to be paid occurs. Finance and operating lease assets and liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term using the discount rate implicit in the lease. If the rate implicit is not readily determinable, the Company utilizes an estimate of its incremental borrowing rate based upon the available information at the lease commencement date. ROU assets are further adjusted for initial direct costs, prepaid rent, or incentives received. Operating lease payments are expensed using the straight-line method as an operating expense over the lease term. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Finance lease assets are amortized to depreciation expense using the straight-line method over the shorter of the useful life of the related asset or the lease term. Finance lease payments are bifurcated into (i) a portion that is recorded as interest expense and (ii) a portion that reduces the finance liability associated with the lease. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets Long-lived assets consist of property and equipment. The Company reviews the recoverability of its long-lived assets, including the related useful lives, whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset might not be recoverable, based on undiscounted cash flows. If such assets are considered to be impaired, an impairment loss is recognized and is measured as the amount by which the carrying amount of the assets exceed their estimated fair value, which is measured based on the projected discounted future net cash flows arising from the assets. There were no impairments for the years ended December 31, 2021 and 2020. |
Accrued Research and Development Costs | Accrued Research and Development Costs The Company records accrued liabilities for estimated costs of research and development activities conducted by service providers for sponsored research, preclinical studies and contract manufacturing activities. The Company records the estimated costs of research and development activities based upon the estimated amount of services provided but not yet invoiced and includes these costs in accrued expenses in the accompanying consolidated balance sheets and within research and development expense in the accompanying statements of operations. The Company accrues for these costs based on factors such as estimates of the work completed and in accordance with agreements established with service providers. The Company makes judgments and estimates in determining the accrued liabilities balance in each reporting period. As actual costs become known, the Company adjusts its accrued liabilities. The Company has not experienced any material differences between accrued costs and actual costs incurred since its inception. |
Deferred Issuance Costs | Deferred Issuance Costs The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred issuance costs until such financings are consummated. After consummation of such an equity financing, these costs are recorded as a reduction of the proceeds generated as a result of the offering. Should the planned equity financing be abandoned, the deferred issuance costs, currently recorded within other assets, will be expensed immediately as a charge to operating expenses in the statements of operations and comprehensive loss. On October 6, 2021, the Company completed its IPO. Accordingly, the Company recognized deferred issuance costs of $3.8 million as a reduction from the gross proceeds associated with the closing of the IPO through additional paid-in capital in the accompanying consolidated balance sheet as of December 31, 2021. The Company recorded no deferred issuance costs as of December 31, 2020. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred. Research and development costs consist of direct and indirect internal costs related to specific projects as well as fees paid to other entities that conduct certain research and development activities on the Company’s behalf. |
Patent Costs | Patent Costs The Company expenses all costs as incurred in connection with patent applications, including direct application fees, and the legal and consulting expenses related to making such applications, and such costs are included in general and administrative expenses within the Company’s statements of operations. |
Stock-based Compensation | Stock-based Compensation The Company’s stock-based compensation program grants awards that may include stock options, restricted stock awards, restricted stock units, and other stock-based awards. The fair values of stock option grants are estimated as of the date of grant using a Black-Scholes option valuation model. The fair values of restricted stock awards and restricted stock units are based on the fair value of the Company’s common stock on the date of grant. The estimated fair values of the awards are expensed over the requisite service period, which is generally the vesting period of the award. The Company uses the simplified method to estimate the expected life assumption. For service-based awards that are subject to graded vesting, the Company has elected to recognize compensation expense for these awards on a straight-line basis. The Company has performance-based vesting conditions in some of its awards, and all performance-based milestones have been met or waived as of December 31, 2021. The Company accounts for forfeitures as they occur. The Company classifies stock-based compensation expense in its statements of operations and comprehensive loss in the same manner in which the award recipient’s salary and related costs are classified or in which the award recipient’s service payments are classified. The Company accounts for awards granted to non-employees using the same treatment as awards granted to employees. Upon exercise of stock options, the Company issues the grantee the respective number of shares of common stock from the available common stock shares approved for issuance by the Board. Prior to the Company’s IPO, the estimated fair value of its common stock was determined by the Board of Directors as of the date of each option grant, with input from management, considering the most recently available third-party valuations of common stock and the Board’s assessment of additional objective and subjective factors that it believed were relevant and which may have changed from the date of the most recent valuation through the date of the grant. Historically, these independent third-party valuations of the Company’s equity instruments were performed contemporaneously with identified value inflection points. These third-party valuations were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation available methods for allocating the enterprise value across classes of series of capital stock in determining the fair value of the Company’s common stock at each valuation date. Following the Company’s IPO, in connection with the accounting for granted stock options and other awards the Company may grant, the fair value of the Company’s common stock is determined based on the quoted market price of its common stock. Management also considered whether adjustments to the quoted market price or the expected volatility of the price of the underlying share for the expected term of an award when it is in possession of material non-public information for purposes of determining the fair value of the Company’s stock. The Company’s equity incentive plan allows for the issuance of restricted stock awards to employees and non-employees that may be subject to vesting. The unvested shares of any restricted stock awards are held in escrow as the stock award vests or until award holder termination, whichever occurs first. In the event of a termination, the Company has the right of repurchase, at its option, the portion of unvested stock awards from the terminated award holder at their original issuance price. For all unvested stock option awards for which the award recipient has transferred cash to the Company prior to the vesting date, a liability is established related to the cash received for the unvested portion of the stock awards, which represents the Company’s obligation if all award holders were to be terminated. As of December 31, 2021, 345,930 options to purchase common stock were exercised early and they continue to vest as restricted stock awards over the requisite service period. The Company has recognized the early exercise proceeds received of $1.4 million as a liability as of December 31, 2021. As of December 31, 2020, no early exercises had occurred. |
Net Loss Per Share | Net Loss Per Share The Company follows the two-class method when computing net loss allocable to common securities per share as the Company has issued shares that meet the definition of participating securities, see Note 13 for additional information. During periods of loss, there is no allocation required under the two-class method since the participating securities do not have a contractual obligation to fund the losses of the Company. Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock and potentially dilutive securities outstanding during the period determined using the treasury-stock and if-converted methods. For purposes of the diluted net loss per share calculation, diluted net loss per share attributable to common stockholders is calculated by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding after giving consideration to the dilutive effect of convertible preferred stock, restricted common stock, restricted stock units and stock options that are outstanding during the period. The Company has generated a net loss in all periods presented, therefore the basic and diluted net loss per share attributable to common stockholders are the same as the inclusion of the potentially dilutive securities would be anti-dilutive. |
Redeemable Convertible Preferred Stock | Redeemable Convertible Preferred Stock The Company’s redeemable convertible preferred stock is classified as temporary equity in the accompanying consolidated balance sheets and excluded from stockholders’ equity (deficit) as the potential redemption of such stock is outside the Company’s control. The carrying value of the redeemable convertible preferred stock is not adjusted to the redemption value until the contingent redemption events are considered to be probable of occurring. Upon the completion of the Company’s IPO on October 6, 2021, all outstanding shares of the Company’s redeemable convertible preferred stock converted into shares of the Company’s common stock. |
Income Taxes | Income Taxes Income taxes for the Company are recorded in accordance with ASC Topic 740, Income Taxes The Company provides reserves for potential payments of tax to various tax authorities related to uncertain tax positions. The tax benefits recorded are based on a determination of whether and how much of a tax benefit taken by the Company in its tax filings or positions is “more likely than not” to be realized following resolution of any uncertainty related to the tax benefit, assuming that the matter in question will be raised by the tax authorities. The Company’s policy is to recognize interest and penalties accrued on any uncertain tax positions, if any, as a component of income tax expense in its statements of operations and comprehensive loss. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss includes net loss as well as other changes in stockholders’ equity (deficit) that result from transactions and economic events other than those with stockholders. For the years ended December 31, 2021 and 2020, there were no differences between net loss and comprehensive loss. |
Segments | Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the chief operating decision maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its chief executive officer. The Company has determined it operates in a single operating segment and has one reportable segment. All long-lived assets of the Company reside in the United States. |
Recently Issued and Adopted Accounting Pronouncements | Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. 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 consolidated financial statements and disclosures. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326)—Measurement of Credit Losses on Financial Instruments Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases for both parties to a contract (i.e., lessees and lessors), and replaces the existing guidance in ASC 840, Leases The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine the recognition pattern of lease expense over the term of the lease. In addition, a lessee is required to record (i) a right-of-use asset and a lease liability on its balance sheet for all leases with accounting lease terms of more than 12 months regardless of whether it is an operating or financing lease and (ii) lease expense in its consolidated statement of operations and comprehensive loss for operating leases and amortization and interest expense in its consolidated statement of operations and comprehensive loss for financing leases. Leases with a term of 12 months or less may be accounted for similar to existing guidance for operating leases under ASC 840. In July 2018, the FASB issued ASU No. 2018-11, Leases The Company adopted ASC 842 during the quarter and fiscal year ended December 31, 2021, with an effective date of January 1, 2021, using the modified retrospective transition approach which uses the effective date as the date of initial application. As a result, prior periods are presented in accordance with the previous guidance in ASC 840. The Company has elected to apply the package of practical expedients requiring no reassessment of whether any expired or existing contracts are or contain leases, the lease classification of any expired or existing leases, or the capitalization of initial direct costs for any existing leases. Upon its adoption of ASC 842, the Company’s existing lease had a term of less than twelve months with no anticipated renewal, and as such was not capitalized on the accompanying consolidated balance sheets, consistent with our lease policy. The adoption of ASC 842 did not have a material impact on the Company’s consolidated balance sheets, statements of operations and comprehensive loss or statements of cash flows. |
Fair Value of Financial Asset_2
Fair Value of Financial Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value of Financial Assets and Liabilities | |
Schedule of significant quantitative inputs used in the valuation of the Tranche Rights and the Anti-dilution Right | DECEMBER 31, 2020 Stand-alone Series A Preferred Stock price (spot price) $1.84 - $5.93 Risk-free rate 1.6% Discount factor 0.9923 - 1.0 Time to milestone event (years) 0.0 years - 0.5 years Probability of tranche closing 0% - 100% |
Schedule of of the aggregate fair value of the company's tranche rights and anti-dilution right | The following table provides a rollforward of the aggregate fair value of the Company’s Tranche Rights and Anti-dilution Right (in thousands): PREFERRED STOCK ANTI-DILUTION TRANCHE RIGHTS RIGHT Balance as of January 1, 2020 $ 2,220 $ 1,142 Change in fair value 3,968 1,190 Fair value recognized as Series A upon settlement of right (6,188) (2,332) Balance as of December 31, 2020 $ — $ — |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property and Equipment, net | |
Schedule of property and equipment, net | Property and equipment, net consisted of the following as of December 31, 2021 and 2020 (in thousands): DECEMBER 31, 2021 2020 Computer equipment $ 12 $ 6 Less: accumulated depreciation (1) (5) Property and equipment, net $ 11 $ 1 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accrued Expenses | |
Schedule of accrued expenses | Accrued expenses consisted of the following as of December 31, 2021 and 2020 (in thousands): DECEMBER 31, 2021 2020 Accrued research and development $ 233 $ 310 Accrued legal 199 143 Accrued compensation and benefits 1,353 2 Accrued other 313 8 Restricted stock liability, current 580 — Total accrued expenses and other current liabilities $ 2,678 $ 463 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases | |
Schedule of future minimum payments required under the lease | The future minimum payments required under the lease as of December 31, 2021 are as follows (in thousands): Year Ending December 31, 2022 $ 757 2023 780 2024 803 2025 827 Thereafter 2,635 Total minimum lease payments $ 5,802 |
Redeemable Convertible Prefer_2
Redeemable Convertible Preferred Stock (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Redeemable Convertible Preferred Stock | |
Schedule of redeemable convertible preferred stock | As of December 31, 2020, the Series A redeemable convertible preferred stock (“preferred stock”) consisted of the following (in thousands, except share amounts): DECEMBER 31, 2020 PREFERRED PREFERRED STOCK COMMON STOCK STOCK ISSUED AND CARRYING LIQUIDATION ISSUABLE UPON AUTHORIZED OUTSTANDING VALUE VALUE CONVERSION Series A 22,136,987 16,734,179 $ 41,289 $ 22,137 16,734,179 |
Common Stock (Tables)
Common Stock (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Common Stock. | |
Schedule of common reserved shares of common stock for issuance | DECEMBER 31, 2021 2020 Preferred Stock — 16,734,179 Unvested restricted stock 830,046 825,836 Options to purchase common stock 5,163,643 1,852,141 Total 5,993,689 19,412,156 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Stock-Based Compensation | |
Schedule of stock option valuation assumptions | DECEMBER 31, 2021 2020 Risk-free interest rate 1.07% 0.51% Expected term (in years) 5.2 - 6.1 5.97 - 6.00 Expected volatility 75.58% - 83.56% 98.17% - 98.21% Expected dividend yield 0.00% 0.00% |
Schedule of summary of option activity | A summary of option activity under the Plans during the years ended December 31, 2021 and 2020 is as follows (in thousands except share, per share data and contractual terms): WEIGHTED-AVERAGE WEIGHTED-AVERAGE PER-SHARE REMAINING AGGREGATE SHARES EXERCISE PRICE CONTRACTUAL TERM INTRINSIC VALUE Outstanding as of December 31, 2020 1,852,141 $ 0.32 9.98 $ 6,566 Granted 3,664,965 6.31 Exercised (345,930) 4.03 569 Cancelled or forfeited (7,533) 4.03 Outstanding as of December 31, 2021 5,163,643 $ 4.31 9.29 44,463 Options vested and exercisable as of December 31, 2021 662,770 $ 1.26 9.07 $ 7,584 |
Schedule of restricted stock activity | WEIGHTED-AVERAGE PER-SHARE GRANT-DATE SHARES FAIR VALUE Unvested shares at December 31, 2020 825,836 $ 0.83 Vested (341,720) 0.83 Unvested shares issued as a result of early option exercise 345,930 2.36 Unvested shares at December 31, 2021 830,046 $ 2.85 |
Schedule of stock-based compensation expense | Total stock-based compensation expense recorded as research and development and general and administrative expenses, respectively, for employees, directors and non-employees during the years ended December 31, 2021 and 2020 was as follows (in thousands): YEAR ENDED DECEMBER 31, 2021 2020 Research and development $ 2,250 $ 825 General and administrative 2,111 227 $ 4,361 $ 1,052 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Schedule of effective income tax rate differed from federal statutory rate | YEAR ENDED DECEMBER 31, 2021 2020 Tax effected at statutory rate 21.0 % 21.0 % State taxes, net of federal benefit 5.3 3.7 Stock compensation (3.0) (1.8) Non-deductible expenses — (7.0) Research and development credits 3.3 — 26.6 15.9 Change in valuation allowance (26.6) (15.9) Total — % — % |
Schedule of deferred tax assets | Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets and liabilities consist of the following at December 31, 2021 and 2020 (in thousands): DECEMBER 31, 2021 2020 Deferred Tax Assets Net operating loss carryforwards $ 9,420 $ 3,499 Research and development credits 916 10 Stock-based compensation expense 116 — Accruals and reserves 367 — Intangible assets 702 755 Fixed assets — 1 Gross deferred tax assets 11,521 4,265 Deferred Tax Liabilities Depreciation $ (3) $ — Gross deferred tax liabilities (3) — Net deferred tax assets before valuation allowance 11,518 4,265 Valuation allowance (11,518) (4,265) Net deferred tax asset $ — $ — |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Net Loss Per Share | |
Schedule of basic and diluted loss per share | Basic and diluted loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average common shares outstanding (in thousands, except share and per share data): YEAR ENDED DECEMBER 31, 2021 2020 Numerator: Net loss $ (27,308) $ (11,997) Net loss attributable to common stockholders - basic and diluted $ (27,308) $ (11,997) Denominator: Weighted-average common stock outstanding - basic and diluted 9,631,818 568,467 Net loss per share attributable to common stockholders - basic and diluted $ (2.84) $ (21.10) |
Schedule of antidilutive securities excluded from computation of diluted net loss per share | DECEMBER 31, 2021 2020 Preferred Stock — 16,734,179 Unvested restricted stock 830,046 825,836 Options to purchase common stock 5,163,643 1,852,141 5,993,689 19,412,156 |
Nature of the Business (Details
Nature of the Business (Details) $ / shares in Units, $ in Thousands | Oct. 25, 2021USD ($)$ / sharesshares | Oct. 12, 2021$ / sharesshares | Oct. 06, 2021shares | Sep. 27, 2021 | Dec. 31, 2021USD ($)shares | Dec. 31, 2020USD ($)shares |
Reverse split | 1.32286 | |||||
Common stock, shares authorized | shares | 500,000,000 | 500,000,000 | 29,054,797 | |||
Redeemable convertible preferred stock, shares authorized | shares | 50,000,000 | 0 | 22,136,987 | |||
Accumulated deficit | $ | $ (61,578) | $ (34,270) | ||||
Net loss | $ | (27,308) | (11,997) | ||||
Net cash used in operations | $ | (27,193) | (4,852) | ||||
Cash and cash equivalents | $ | $ 244,662 | $ 8,457 | ||||
IPO | ||||||
Shares issued | shares | 10,000,200 | |||||
Share price per share | $ / shares | $ 16 | |||||
Aggregate net offering proceeds | $ | $ 162,500 | |||||
Shares converted to common stock | shares | 25,475,905 | |||||
Over-Allotment Option | ||||||
Share price per share | $ / shares | $ 16 | |||||
Number of shares | shares | 1,171,990 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 12 Months Ended | ||
Dec. 31, 2021USD ($)segmentshares | Dec. 31, 2020USD ($)shares | Sep. 30, 2021USD ($) | |
Property, Plant and Equipment [Line Items] | |||
Restricted cash deposit | $ 0 | $ 400,000 | |
Impairments | $ 0 | 0 | |
Deferred issuance costs | 3,800,000 | $ 0 | |
Options to purchase common stock, exercised | shares | 0 | ||
Proceeds from early exercise of options | $ 1,395,000 | ||
Number of reportable segment | segment | 1 | ||
2021 Plan | |||
Property, Plant and Equipment [Line Items] | |||
Options to purchase common stock, exercised | shares | 345,930 | ||
Proceeds from early exercise of options | $ 1,400,000 | ||
Computed equipment and software | |||
Property, Plant and Equipment [Line Items] | |||
Useful life (in years) | 3 years |
Fair Value of Financial Asset_3
Fair Value of Financial Assets and Liabilities - Recurring basis (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Total financial assets | $ 0 | |
Liabilities measured at fair value | 0 | |
Transfer of assets from level 1 to level 2 | $ 0 | 0 |
Transfer of assets from level 2 to level 1 | 0 | 0 |
Transfer of liabilities from level 1 to level 2 | 0 | 0 |
Transfer of liabilities from level 2 to level 1 | $ 0 | $ 0 |
Fair Value of Financial Asset_4
Fair Value of Financial Assets and Liabilities - Narrative (Details) - SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2020$ / sharesshares | Jan. 31, 2020$ / sharesshares | Jun. 30, 2018tranche$ / sharesshares | Dec. 31, 2020shares | |
Fair Value of Financial Assets and Liabilities | ||||
Number of subsequent milestone-based tranches | tranche | 3 | |||
Number of shares issued | 10,065,361 | |||
Certain investors | ||||
Fair Value of Financial Assets and Liabilities | ||||
Number of shares issued | 3,779,688 | 2,267,813 | 3,779,688 | |
Share price per share | $ / shares | $ 1.32 | $ 1.32 | $ 1.32 | |
ARIAD Pharmaceuticals, Inc | ||||
Fair Value of Financial Assets and Liabilities | ||||
Number of shares issued | 621,318 | 372,791 | 621,318 |
Fair Value of Financial Asset_5
Fair Value of Financial Assets and Liabilities - Significant quantitative inputs used in the valuation (Details) | Dec. 31, 2020$ / sharesY |
Stand-alone Series A Preferred Stock price (spot price) | Minimum | |
Fair Value of Financial Assets and Liabilities | |
Tranche rights and the anti-dilution right measurement input | $ / shares | 1.84 |
Stand-alone Series A Preferred Stock price (spot price) | Maximum | |
Fair Value of Financial Assets and Liabilities | |
Tranche rights and the anti-dilution right measurement input | $ / shares | 5.93 |
Risk-free rate | |
Fair Value of Financial Assets and Liabilities | |
Tranche rights and the anti-dilution right measurement input | 1.6 |
Discount factor | Minimum | |
Fair Value of Financial Assets and Liabilities | |
Tranche rights and the anti-dilution right measurement input | 0.9923 |
Discount factor | Maximum | |
Fair Value of Financial Assets and Liabilities | |
Tranche rights and the anti-dilution right measurement input | 1 |
Time to milestone event (years) | Minimum | |
Fair Value of Financial Assets and Liabilities | |
Tranche rights and the anti-dilution right measurement input | Y | 0 |
Time to milestone event (years) | Maximum | |
Fair Value of Financial Assets and Liabilities | |
Tranche rights and the anti-dilution right measurement input | Y | 0.5 |
Probability of tranche closing | Minimum | |
Fair Value of Financial Assets and Liabilities | |
Tranche rights and the anti-dilution right measurement input | 0 |
Probability of tranche closing | Maximum | |
Fair Value of Financial Assets and Liabilities | |
Tranche rights and the anti-dilution right measurement input | 100 |
Fair Value of Financial Asset_6
Fair Value of Financial Assets and Liabilities - Aggregate fair value of the company's tranche rights and anti-dilution right (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Preferred stock tranche rights | |
Roll-forward of the aggregate fair value of the company | |
Beginning Balance | $ 2,220 |
Change in fair value | 3,968 |
Fair value recognized as Series A upon settlement of right | (6,188) |
Anti-dilution right | |
Roll-forward of the aggregate fair value of the company | |
Beginning Balance | 1,142 |
Change in fair value | 1,190 |
Fair value recognized as Series A upon settlement of right | $ (2,332) |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Property and Equipment, net | ||
Less: accumulated depreciation | $ (1) | $ (5) |
Property and equipment, net | 11 | 1 |
Computer equipment | ||
Property and Equipment, net | ||
Computer equipment | $ 12 | $ 6 |
Property and Equipment, net - A
Property and Equipment, net - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property and Equipment, net | ||
Depreciation expense | $ 2,000 | $ 2,000 |
Impairments recorded to date | $ 0 | $ 0 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Accrued Expenses | ||
Accrued research and development | $ 233 | $ 310 |
Accrued legal | 199 | 143 |
Accrued compensation and benefits | 1,353 | 2 |
Accrued other | 313 | 8 |
Restricted stock liability, current | 580 | |
Total accrued expenses and other current liabilities | $ 2,678 | $ 463 |
Leases - Additional Information
Leases - Additional Information (Details) $ in Millions | Sep. 16, 2021USD ($)ft² | Dec. 31, 2021USD ($) |
Leases | ||
Short-term lease cost | $ 0.2 | |
Office space leased | ft² | 7,351 | |
Lease term | 7 years | |
Option to extend | true | |
Renewal term | 5 years | |
Lease expense for the first year | $ 0.8 | |
Lease subject to annual increase (as percentage) | 3.00% | |
Security deposit in the form of line of credit | $ 0.4 |
Leases - Future minimum payment
Leases - Future minimum payments (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Leases | |
2022 | $ 757 |
2023 | 780 |
2024 | 803 |
2025 | 827 |
Thereafter | 2,635 |
Total minimum lease payments | $ 5,802 |
License Agreement (Details)
License Agreement (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2018 | |
License Agreements [Line Items] | |||
Cost of license included in research and development expense | $ 18,328 | $ 5,958 | |
SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK | |||
License Agreements [Line Items] | |||
Number of shares issued | 10,065,361 | ||
License agreement with ARIAD | |||
License Agreements [Line Items] | |||
Transaction price | $ 1,400 | ||
Cost of license included in research and development expense | $ 1,400 | ||
Minimum threshold period of royalty term | 10 years | ||
License agreement with ARIAD | SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK | |||
License Agreements [Line Items] | |||
Number of shares issued | 621,318 |
Redeemable Convertible Prefer_3
Redeemable Convertible Preferred Stock (Details) $ / shares in Units, $ in Thousands | Oct. 06, 2021shares | Jan. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Jul. 31, 2020USD ($)Milestone$ / sharesshares | Jan. 31, 2020USD ($)Milestone$ / sharesshares | Aug. 31, 2019USD ($)$ / sharesshares | Jun. 30, 2018USD ($)tranche$ / sharesshares | Dec. 31, 2021USD ($)shares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019shares |
Redeemable Convertible Preferred Stock | ||||||||||
Redeemable convertible preferred stock, shares issued | 16,734,179 | 0 | 16,734,179 | |||||||
Redeemable convertible preferred stock, shares outstanding | 16,734,179 | 0 | 16,734,179 | |||||||
IPO | ||||||||||
Redeemable Convertible Preferred Stock | ||||||||||
Redeemable convertible preferred stock, shares issued | 25,475,905 | |||||||||
Redeemable convertible preferred stock, shares outstanding | 25,475,905 | |||||||||
Shares converted to common stock | 25,475,905 | |||||||||
SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK | ||||||||||
Redeemable Convertible Preferred Stock | ||||||||||
Shares authorized for issuance | 13,203,025 | |||||||||
Number of subsequent milestone-based tranches | tranche | 3 | |||||||||
Number of shares issued | 10,065,361 | |||||||||
Proceeds from issuance | $ | $ 11,992 | |||||||||
Redeemable convertible preferred stock, shares issued | 16,734,179 | 16,734,179 | ||||||||
Redeemable convertible preferred stock, shares outstanding | 16,734,179 | 16,734,179 | 6,668,818 | |||||||
SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK | Certain investors | ||||||||||
Redeemable Convertible Preferred Stock | ||||||||||
Number of shares issued | 3,779,688 | 2,267,813 | 3,779,688 | |||||||
Share price per share | $ / shares | $ 1.32 | $ 1.32 | $ 1.32 | |||||||
Proceeds from issuance | $ | $ 8,000 | $ 8,000 | $ 4,700 | |||||||
Issuance costs | $ | $ 300 | |||||||||
Number of additional tranches closings based on achievement | tranche | 3 | |||||||||
Number of defined milestone | tranche | 3 | |||||||||
Number of additional shares issued | 7,559,376 | |||||||||
Number of milestones achieved | Milestone | 2 | 2 | ||||||||
SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK | Majority shareholders | ||||||||||
Redeemable Convertible Preferred Stock | ||||||||||
Shares authorized for issuance | 2,267,812 | 0 | ||||||||
Share price per share | $ / shares | $ 1.32 | $ 1.32 | $ 1.32 | |||||||
Number of additional shares issued | 3,023,751 | 3,023,751 | ||||||||
Gross proceeds | $ | $ 4,000 | $ 3,000 | ||||||||
Fair value | $ | $ 17,900 | $ 2,600 | $ 17,900 | |||||||
SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK | ARIAD Pharmaceuticals, Inc | ||||||||||
Redeemable Convertible Preferred Stock | ||||||||||
Number of shares issued | 621,318 | 372,791 | 621,318 | |||||||
SERIES B REDEEMABLE CONVERTIBLE PREFERRED STOCK | ||||||||||
Redeemable Convertible Preferred Stock | ||||||||||
Number of shares issued | 8,741,726 | |||||||||
Proceeds from issuance | $ | $ 99,892 | |||||||||
SERIES B REDEEMABLE CONVERTIBLE PREFERRED STOCK | Designated investors | ||||||||||
Redeemable Convertible Preferred Stock | ||||||||||
Number of shares issued | 8,741,726 | |||||||||
Share price per share | $ / shares | $ 11.45 | |||||||||
Gross proceeds | $ | $ 100,100 |
Redeemable Convertible Prefer_4
Redeemable Convertible Preferred Stock - Classifications (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Oct. 12, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Redeemable Convertible Preferred Stock | ||||
PREFERRED STOCK AUTHORIZED | 0 | 50,000,000 | 22,136,987 | |
PREFERRED STOCK ISSUED | 0 | 16,734,179 | ||
PREFERRED STOCK OUTSTANDING | 0 | 16,734,179 | ||
CARRYING VALUE | $ 41,289 | |||
LIQUIDATION VALUE | $ 0 | |||
SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK | ||||
Redeemable Convertible Preferred Stock | ||||
PREFERRED STOCK AUTHORIZED | 22,136,987 | |||
PREFERRED STOCK ISSUED | 16,734,179 | |||
PREFERRED STOCK OUTSTANDING | 16,734,179 | 6,668,818 | ||
CARRYING VALUE | $ 41,289 | $ 6,857 | ||
LIQUIDATION VALUE | $ 22,137 | |||
COMMON STOCK ISSUABLE UPON CONVERSION | 16,734,179 |
Redeemable Convertible Prefer_5
Redeemable Convertible Preferred Stock - Rights and preferences (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($)Vote | |
Redeemable Convertible Preferred Stock | |
Voting rights per share | Vote | 1 |
Dividends rate | 8.00% |
Minimum gross proceeds | $ | $ 30 |
Common Stock (Details)
Common Stock (Details) | 12 Months Ended | ||
Dec. 31, 2021USD ($)Vote$ / sharesshares | Oct. 12, 2021shares | Dec. 31, 2020Milestone$ / sharesshares | |
Common stock, authorized | shares | 500,000,000 | 500,000,000 | 29,054,797 |
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | |
Number of votes per common stock | Vote | 1 | ||
Common stock, cash dividend | $ | $ 0 | ||
Restricted Common Stock | |||
Vesting period | 5 years | ||
Number of milestone events achieved | Milestone | 2 |
Common Stock - Reserve for futu
Common Stock - Reserve for future issuance (Details) - shares | Dec. 31, 2021 | Dec. 31, 2020 |
Common Stock. | ||
Preferred Stock | 0 | 16,734,179 |
Unvested restricted stock | 830,046 | 825,836 |
Options to purchase common stock | 5,163,643 | 1,852,141 |
Total | 5,993,689 | 19,412,156 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Stock-Based Compensation | ||
Shares reserved under the Plan | 5,993,689 | 19,412,156 |
Options to purchase common stock, exercised | 0 | |
Proceeds from options exercised | $ 1,395 | |
Options to purchase common stock | ||
Stock-Based Compensation | ||
Options to purchase common stock, exercised | 345,930 | |
Restricted Common Stock | ||
Stock-Based Compensation | ||
Vesting period | 5 years | |
2021 Plan | ||
Stock-Based Compensation | ||
Shares reserved under the Plan | 9,094,083 | 2,474,920 |
Shares available for future grant under the Plan | 3,930,440 | 622,779 |
Threshold percentage of exercise price | 100.00% | |
Expiration period | 10 years | |
Options to purchase common stock, exercised | 345,930 | |
Proceeds from options exercised | $ 1,400 | |
Common stock reserved for issuance | 4,395,080 | |
Common stock subject to awards granted under the 2018 Plan | 4,699,003 | |
Percentage increase of common stock reserved for issuance | 5.00% | |
2021 Plan | Options to purchase common stock | ||
Stock-Based Compensation | ||
Vesting period | 4 years | |
2021 Plan | Restricted Common Stock | ||
Stock-Based Compensation | ||
Vesting period | 5 years | |
2021 ESPP | ||
Stock-Based Compensation | ||
Common stock reserved for issuance | 400,000 | |
Percentage increase of common stock reserved for issuance | 1.00% |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Valuation (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Stock-Based Compensation | ||
Risk-free interest rate | 1.07% | 0.51% |
Expected volatility, Minimum | 75.58% | 98.17% |
Expected volatility, Maximum | 83.56% | 98.21% |
Expected dividend yield | 0.00% | 0.00% |
Minimum | ||
Stock-Based Compensation | ||
Expected term (in years) | 5 years 2 months 12 days | 5 years 11 months 19 days |
Maximum | ||
Stock-Based Compensation | ||
Expected term (in years) | 6 years 1 month 6 days | 6 years |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of option activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Shares | ||
Outstanding as of beginning of period (in shares) | 1,852,141 | |
Exercised (in shares) | 0 | |
Outstanding as of end of period (in shares) | 5,163,643 | 1,852,141 |
Options to purchase common stock | ||
Shares | ||
Outstanding as of beginning of period (in shares) | 1,852,141 | |
Granted (in shares) | 3,664,965 | |
Exercised (in shares) | (345,930) | |
Cancelled or forfeited (in shares) | (7,533) | |
Outstanding as of end of period (in shares) | 5,163,643 | 1,852,141 |
Options vested and exercisable (in shares) | 662,770 | |
Weighted-average per-share exercise price | ||
Outstanding as of beginning of period (in per share) | $ 0.32 | |
Granted (in per share) | 6.31 | |
Exercised (in per share) | 4.03 | |
Cancelled or forfeited (in per share) | 4.03 | |
Outstanding as of end of period (in per share) | 4.31 | $ 0.32 |
Options vested and exercisable (in per share) | $ 1.26 | |
Additional Disclosures | ||
Weighted-average remaining contractual term | 9 years 3 months 14 days | 9 years 11 months 23 days |
Weighted-average remaining contractual term, vested and exercisable | 9 years 25 days | |
Aggregate intrinsic value | $ 44,463 | $ 6,566 |
Aggregate intrinsic value, Exercised | 569 | |
Aggregate intrinsic value, vested and exercisable | $ 7,584 | |
Options vested | 0 | |
Weighted-average per share grant date fair value of options granted | $ 5.32 | |
Stock-based compensation expense | $ 4,000 | |
Unrecognized stock-based compensation expense related to unvested stock options | $ 20,700 | |
Recognition period | 3 years 2 months 12 days | |
Total fair value of options vested | $ 2,400 | $ 100 |
Stock-Based Compensation - Shar
Stock-Based Compensation - Shares of Restricted Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Shares | ||
Unvested shares, Beginning balance (in shares) | 825,836 | |
Unvested shares, Ending balance (in shares) | 830,046 | 825,836 |
Weighted-average per-share grant-date fair value | ||
Stock-based compensation expense | $ 4,361 | $ 1,052 |
Restricted Common Stock | ||
Stock-Based Compensation | ||
Vesting period | 5 years | |
Shares | ||
Unvested shares, Beginning balance (in shares) | 825,836 | |
Vested (in shares) | (341,720) | |
Unvested shares issued as a result of early option exercise (in shares) | 345,930 | |
Unvested shares, Ending balance (in shares) | 830,046 | 825,836 |
Weighted-average per-share grant-date fair value | ||
Unvested shares, Beginning balance (in per share) | $ 0.83 | |
Vested (in per share) | 0.83 | |
Unvested shares issued as a result of early option exercise (in per share) | 2.36 | |
Unvested shares, Ending balance (in per share) | $ 2.85 | $ 0.83 |
Unrecognized stock-based compensation expense related to unvested restricted stock | $ 2,400 | $ 200 |
Recognition period | 1 year 4 months 24 days | |
Total fair value of restricted stock vested | $ 3,700 | 1,900 |
Stock-based compensation expense | $ 400 | $ 800 |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Stock-Based Compensation | ||
Stock-based compensation expense | $ 4,361 | $ 1,052 |
Research and development | ||
Stock-Based Compensation | ||
Stock-based compensation expense | 2,250 | 825 |
General and administrative | ||
Stock-Based Compensation | ||
Stock-based compensation expense | $ 2,111 | $ 227 |
Income Taxes - Schedule of effe
Income Taxes - Schedule of effective income tax rate differed from federal statutory rate (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | ||
Tax effected at statutory rate | 21.00% | 21.00% |
State taxes, net of federal benefit | 5.30% | 3.70% |
Stock compensation | (3.00%) | (1.80%) |
Non-deductible expenses | (7.00%) | |
Research and development credits | 3.30% | |
Other | 26.60% | 15.90% |
Change in valuation allowance | (26.60%) | (15.90%) |
Income Taxes - Schedule of defe
Income Taxes - Schedule of deferred tax assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets | ||
Net operating loss carryforward | $ 9,420 | $ 3,499 |
Research and development credit carryforwards | 916 | 10 |
Intangible assets | 702 | 755 |
Accruals and reserves | 367 | |
Fixed assets | 1 | |
Gross deferred tax assets | 11,521 | 4,265 |
Stock-based compensation | 116 | |
Depreciation | (3) | |
Gross deferred tax liabilities | 3 | |
Net deferred tax assets before valuation allowance | 11,518 | 4,265 |
Valuation allowance | $ (11,518) | $ (4,265) |
Income Taxes - Additional infor
Income Taxes - Additional information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | ||
Valuation allowance | $ (11,518) | $ (4,265) |
Change in valuation allowance | 7,300 | 1,900 |
State research and development credit carryforwards | 34,600 | |
Research and development credit carryforwards | 916 | $ 10 |
Federal | ||
Operating Loss Carryforwards [Line Items] | ||
State research and development credit carryforwards yet to expire | 34,600 | |
Research and development credit carryforwards | 500 | |
State | ||
Operating Loss Carryforwards [Line Items] | ||
State research and development credit carryforwards yet to expire | 34,100 | |
Research and development credit carryforwards | $ 500 |
Net Loss Per Share - Basic and
Net Loss Per Share - Basic and diluted loss per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | ||
Net loss | $ (27,308) | $ (11,997) |
Net loss attributable to common stockholders - basic | (27,308) | (11,997) |
Net loss attributable to common stockholders - diluted | $ (27,308) | $ (11,997) |
Denominator: | ||
Weighted-average common stock outstanding-basic | 9,631,818 | 568,467 |
Weighted-average common stock outstanding- diluted | 9,631,818 | 568,467 |
Net loss per share attributable to common stockholders-basic | $ (2.84) | $ (21.10) |
Net loss per share attributable to common stockholders- diluted | $ (2.84) | $ (21.10) |
Net Loss Per Share - Antidiluti
Net Loss Per Share - Antidilutive securities (Details) - shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Anti-dilutive Effect | ||
Shares excluded since there inclusion would be anti-dilutive | 5,993,689 | 19,412,156 |
Preferred Stock | ||
Anti-dilutive Effect | ||
Shares excluded since there inclusion would be anti-dilutive | 16,734,179 | |
Unvested restricted stock | ||
Anti-dilutive Effect | ||
Shares excluded since there inclusion would be anti-dilutive | 830,046 | 825,836 |
Options to purchase common stock | ||
Anti-dilutive Effect | ||
Shares excluded since there inclusion would be anti-dilutive | 5,163,643 | 1,852,141 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transactions | ||
Common stock, shares issued | 38,702,650 | 1,708,625 |
Chief Executive Officer | ||
Related Party Transactions | ||
Amount of earned compensation | $ 300,000 | |
Amount of earned compensation payable | $ 54,000 | |
Common stock, shares issued | 388,324 | |
Options to purchase additional shares of common stock (in shares) | 464,637 |