Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 04, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | ARCT | ||
Entity Registrant Name | ARCTURUS THERAPEUTICS HOLDINGS INC. | ||
Entity Central Index Key | 0001768224 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction | false | ||
Entity Shell Company | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Interactive Data Current | Yes | ||
Title of 12(b) Security | Common Stock, par value $0.001 per share | ||
Security Exchange Name | NASDAQ | ||
Entity File Number | 001-38942 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 32-0595345 | ||
Entity Address, Address Line One | 10628 Science Center Drive | ||
Entity Address, Address Line Two | Suite 250 | ||
Entity Address, City or Town | San Diego | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92121 | ||
City Area Code | 858 | ||
Local Phone Number | 900-2660 | ||
Entity Common Stock, Shares Outstanding | 26,915,243 | ||
Entity Public Float | $ 692.4 | ||
Document Transition Report | false | ||
Document Annual Report | true | ||
Documents incorporated by reference | Certain portions of the registrant’s definitive Proxy Statement for its 2024 Annual Meeting of Stockholders are incorporated by reference into Items 10, 11, 12, 13 and 14 of Part III of this Annual Report on Form 10-K. | ||
Auditor Firm ID | 42 | ||
Auditor Name | Ernst & Young, LLP | ||
Auditor Location | San Diego, California |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 292,005 | $ 391,883 |
Restricted cash | 55,000 | |
Accounts receivable | 32,064 | 2,764 |
Prepaid expenses and other current assets | 7,521 | 8,686 |
Total current assets | 386,590 | 403,333 |
Property and equipment, net | 12,427 | 12,415 |
Operating lease right-of-use asset, net | 28,500 | 32,545 |
Non-current restricted cash | 1,885 | 2,094 |
Total assets | 429,402 | 450,387 |
Current liabilities: | ||
Accounts payable | 5,279 | 7,449 |
Accrued liabilities | 31,881 | 30,232 |
Current portion of long-term debt | 60,655 | |
Deferred revenue | 44,829 | 28,648 |
Total current liabilities | 81,989 | 126,984 |
Deferred revenue, net of current portion | 42,496 | 20,071 |
Operating lease liability, net of current portion | 25,907 | 30,216 |
Other non-current liabilities | 497 | 2,804 |
Total liabilities | 150,889 | 180,075 |
Stockholders’ equity: | ||
Common stock: $0.001 par value; 60,000 shares authorized; issued and outstanding shares were 26,828 at December 31, 2023 and 26,555 at December 31, 2022 | 27 | 27 |
Additional paid-in capital | 646,352 | 608,426 |
Accumulated deficit | (367,866) | (338,141) |
Total stockholders’ equity | 278,513 | 270,312 |
Total liabilities and stockholders’ equity | $ 429,402 | $ 450,387 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, shares issued | 26,828,000 | 26,555,000 |
Common stock, shares outstanding | 26,828,000 | 26,555,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue: | |||
Total revenue | $ 166,799 | $ 205,999 | $ 12,359 |
Operating expenses: | |||
Research and development, net | 192,133 | 147,751 | 173,760 |
General and administrative | 52,871 | 46,071 | 41,451 |
Total operating expenses | 245,004 | 193,822 | 215,211 |
(Loss) income from operations | (78,205) | 12,177 | (202,852) |
(Loss) gain from equity-method investment | (515) | 515 | |
(Loss) gain from foreign currency | (229) | (598) | 584 |
Finance income (expense), net | 16,591 | (420) | (1,921) |
Gain on debt extinguishment | 33,953 | ||
Net (loss) income before income taxes | (27,890) | 10,644 | (203,674) |
Provision for income taxes | 1,835 | 1,295 | |
Net (loss) income | $ (29,725) | $ 9,349 | $ (203,674) |
(Loss) earnings per share: | |||
Basic | $ (1.12) | $ 0.35 | $ (7.74) |
Diluted | $ (1.12) | $ 0.35 | $ (7.74) |
Weighted-average shares used in calculation of (loss) earnings per share: | |||
Basic | 26,628 | 26,445 | 26,317 |
Diluted | 26,628 | 27,093 | 26,317 |
Comprehensive (loss) income: | |||
Net (loss) income | $ (29,725) | $ 9,349 | $ (203,674) |
Comprehensive (loss) income | (29,725) | 9,349 | (203,674) |
Collaboration Revenue [Member] | |||
Revenue: | |||
Total revenue | 157,748 | 205,755 | $ 12,359 |
Grant Revenue [Member] | |||
Revenue: | |||
Total revenue | $ 9,051 | $ 244 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] |
Balance at Dec. 31, 2020 | $ 396,553 | $ 26 | $ 540,343 | $ (143,816) |
Balance (in shares) at Dec. 31, 2020 | 26,192,000 | |||
Share-based compensation | 28,915 | 28,915 | ||
Issuance of common stock related to acquired in-process research and development | 5,000 | 5,000 | ||
Issuance of common stock related to acquired in-process research and development (in shares) | 75,000 | |||
Issuance of common stock upon exercise of stock options | 902 | 902 | ||
Issuance of common stock upon exercise of stock options (in shares) | 92,000 | |||
Issuance of common stock under equity plans | 515 | 515 | ||
Issuance of common stock under equity plans (in shares) | 13,000 | |||
Net Income (Loss) | (203,674) | (203,674) | ||
Balance at Dec. 31, 2021 | 228,211 | $ 26 | 575,675 | (347,490) |
Balance (in shares) at Dec. 31, 2021 | 26,372,000 | |||
Share-based compensation | 30,611 | 30,611 | ||
Issuance of common stock upon exercise of stock options | 1,730 | $ 1 | 1,729 | |
Issuance of common stock upon exercise of stock options (in shares) | 161,000 | |||
Issuance of common stock under equity plans | 411 | 411 | ||
Issuance of common stock under equity plans (in shares) | 22,000 | |||
Net Income (Loss) | 9,349 | |||
Balance at Dec. 31, 2022 | 270,312 | $ 27 | 608,426 | (338,141) |
Balance (in shares) at Dec. 31, 2022 | 26,555,000 | |||
Share-based compensation | 34,649 | 34,649 | ||
Issuance of common stock upon exercise of stock options | $ 2,668 | 2,668 | ||
Issuance of common stock upon exercise of stock options (in shares) | 237,820 | 238,000 | ||
Issuance of common stock under equity plans | $ 609 | 609 | ||
Issuance of common stock under equity plans (in shares) | 35,000 | |||
Net Income (Loss) | (29,725) | (29,725) | ||
Balance at Dec. 31, 2023 | $ 278,513 | $ 27 | $ 646,352 | $ (367,866) |
Balance (in shares) at Dec. 31, 2023 | 26,828,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating activities | |||
Net Income (Loss) | $ (29,725) | $ 9,349 | $ (203,674) |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||
Depreciation and amortization | 2,957 | 1,527 | 1,193 |
Share-based compensation expense | 34,649 | 30,611 | 28,915 |
Acquired in-process research and development expense | 5,000 | ||
Loss (gain) from equity-method investment | 515 | (515) | |
Gain on debt extinguishment | (33,953) | ||
Foreign currency transaction loss (gain) | 90 | 375 | (577) |
Other non-cash expenses | 502 | 2,173 | 1,990 |
Changes in assets and liabilities: | |||
Accounts receivable | (29,300) | 603 | (1,242) |
Prepaid expenses and other current assets | 1,165 | (3,584) | (2,333) |
Right-of-use assets | 4,045 | 3,264 | 1,392 |
Accounts payable | (2,238) | (3,112) | (769) |
Accrued liabilities | (588) | 9,443 | 4,134 |
Deferred revenue | 38,606 | (14,694) | 32,794 |
Lease liabilities | (4,309) | (4,477) | (1,351) |
Net cash (used in) provided by operating activities | (18,099) | 31,993 | (135,043) |
Investing activities | |||
Acquisition of property and equipment | (2,901) | (7,726) | (3,406) |
Net cash used in investing activities | (2,901) | (7,726) | (3,406) |
Financing activities | |||
Proceeds from debt | 20,000 | 46,599 | |
Proceeds from exercise of stock options | 2,668 | 1,730 | 902 |
Proceeds from issuance of common stock under equity plans | 609 | 411 | 515 |
Payments on debt obligations | (47,364) | (5,000) | |
Net cash (used in) provided by financing activities | (24,087) | (2,859) | 48,016 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (45,087) | 21,408 | (90,433) |
Cash, cash equivalents and restricted cash, beginning of year | 393,977 | 372,569 | 463,002 |
Cash, cash equivalents and restricted cash, end of year | 348,890 | 393,977 | 372,569 |
Supplemental disclosure of cash flow information | |||
Cash paid for interest | 2,127 | 813 | 684 |
Non-cash investing activities | |||
Right-of-use assets acquired through operating leases | 30,191 | 1,828 | |
Acquisition of in-process research and development through issuance of common stock | 5,000 | ||
Purchase of property and equipment in accounts payable and accrued expenses | $ 68 | $ 573 | $ 53 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net Income (Loss) | $ (29,725) | $ 9,349 | $ (203,674) |
Insider Trading Arrangements
Insider Trading Arrangements | 12 Months Ended |
Dec. 31, 2023 shares | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | Rule 10b5-1 Trading Plans For the year ended December 31, 2023, none of our directors or officers adopted or terminated a "Rule 10b5-1 trading arrangement" (as defined in Item 408 of Regulation S-K of the Exchange Act) intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act, other than as follows: • Dr. Padmanabh Chivukula , Chief Scientific Officer and Chief Operating Officer , cancelled an existing Rule 10b5-1trading arrangement on November 18, 2023. Dr. Chivukula's trading arrangement provided for the sale of up to an aggregate of 100,000 shares of common stock. Subsequent to this, Dr. Chivukula entered into a new Rule 10b5-1 trading arrangement on December 14, 2023 . The new trading arrangement provides for the sale of up to an aggregate of 152,000 shares, until September 15, 2025 . • Keith C. Kummerfeld , Senior Vice President, Corporate Controller and Principal Accounting Officer , modified an existing Rule 10b5-1trading arrangement on August 24, 2023. Mr. Kummerfeld's trading arrangement provides for the exercise of up to an aggregate of 36,064 options to purchase common stock and subsequent sale of such underlying shares of common stock, until August 23, 2024 . On February 20, 2024, Mr. Kummerfeld, informed the Company that he will resign from his position, effective March 15, 2024, to pursue another opportunity. There were no "non-Rule 10b5-1 trading arrangements" (as defined in Item 408 of Regulation S-K of the Exchange Act) adopted or terminated during the year ended December 31, 2023 by our directors and officers. |
Dr. Padmanabh Chivukula [Member] | |
Trading Arrangements, by Individual | |
Name | Dr. Padmanabh Chivukula |
Title | Chief Scientific Officer and Chief Operating Officer |
Adoption Date | December 14, 2023 |
Aggregate Available | 152,000 |
Expiration Date | September 15, 2025 |
Keith C. Kummerfeld [Member] | |
Trading Arrangements, by Individual | |
Name | Keith C. Kummerfeld |
Title | Senior Vice President, Corporate Controller and Principal Accounting Officer |
Aggregate Available | 36,064 |
Expiration Date | August 23, 2024 |
Directors or Officers Except Chief Scientific Officer, COO, SVP, CC and PAO [Member] | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Organization
Organization | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Note 1. Organization Description of Business Arcturus Therapeutics Holdings Inc. (the “Company” or "Arcturus") is a clinical messenger RNA medicines company focused on the development of infectious disease vaccines and significant opportunities within liver and respiratory rare diseases. The Company became a clinical stage company during 2020 when it announced that its Investigational New Drug (“IND”) application for ornithine transcarbamylase (“OTC”) deficiency and its Clinical Trial Application (“CTA”) for candidate LUNAR-COV19 were approved by applicable health authorities. Recent Developments See “Note 3 Revenue – CSL Seqirus” for further information on the agreement with Seqirus, Inc. ("CSL Seqirus"), whereby CSL Seqirus and the Company continue to collaborate on research and development, manufacturing and global commercialization of vaccines. Liquidity The Company has incurred significant operating losses since its inception. As of December 31, 2023 and 2022, the Company had an accumulated deficit of $ 367.9 million and $ 338.1 million, respectively. The Company’s activities since inception have consisted principally of research and development activities, general and administrative activities, and raising capital. The Company’s activities are subject to significant risks and uncertainties, including failing to secure additional funding before the Company achieves sustainable revenues and profit from operations. From the Company’s inception through the year ended December 31, 2023 , the Company has funded its operations principally with the proceeds from revenues earned through collaboration agreements, including the $ 200.0 million upfront payment received from CSL Seqirus during 2022, the sale of capital stock and proceeds from long-term debt. During fiscal year 2023, the Company received milestone payments totalin g $ 147.9 million f rom CSL Seqirus . Additionally, the Company received milestone payments of $ 23.8 million from CSL Seqirus subsequent to December 31, 2023. At December 31, 2023 , the Company’s balance of cash and cash equivalents, including restricted cash, was $ 348.9 million. Management believes that it has sufficient working capital on hand to fund operations through at least the next twelve months from the date these consolidated financial statements were available to be issued. There can be no assurance that the Company will be successful in acquiring additional funding, that the Company’s projections of its future working capital needs will prove accurate, or that any additional funding would be sufficient to continue operations in future years. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements include the accounts of Arcturus Therapeutics Holdings Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States (U.S. GAAP), which requires management to make estimates and assumptions regarding the valuation of certain debt and equity instruments, the equity method investment, share-based compensation, accruals for liabilities, income taxes, revenue and deferred revenue, leases, expense accruals, and other matters that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management’s knowledge of current events and actions the Company may undertake in the future, actual results could materially differ from those estimates. Segment Information Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company and its chief operating decision-maker view the Company’s operations and manage its business in one operating segment which is the research and development of medical applications for the Company’s nucleic acid-focused technology. Cash and Cash Equivalents Cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less at the date of purchase. Restricted cash Restricted cash includes collateral pledged and held at the Company’s securities accounts pursuant to a security agreement with Wells Fargo Bank, National Association (“Wells Fargo”) (Note 7). At December 31, 2023, such collateral amounted to $ 55.0 million. Restricted cash also includes cash required to be set aside as security for lease payments and to maintain a letter of credit for the benefit of the landlord for the Company’s offices. At December 31, 2023 and 2022, the Company had restricted cash of $ 1.9 million and $ 2.1 million in conjunction with property leases in San Diego, California, and such restriction is expected to be removed at the end of the lease term. Fair Value Measurements Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available under the circumstances. The hierarchy consists of three levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounts Receivable Accounts receivable are recorded at the net invoice value and are non-interest bearing. The Company considers receivables past due based on the contractual payment terms. The Company reserves for specific receivables if collectability is no longer reasonably assured. Estimates for allowances for doubtful accounts are determined based on existing contractual obligations, historical payment patterns, and individual customer circumstances. The Company reevaluates such reserves on a regular basis and adjusts its reserves as needed. Once a receivable is deemed to be uncollectible, such balance is charged against the reserve. No reserves have been recorded as of December 31, 2023 or 2022 . Concentration of Credit Risk and Significant Customers Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash and cash equivalents. The Company limits its exposure to credit loss by placing its cash and cash equivalents with high credit quality financial institutions in instruments with short maturities. There were two customers that comprised 100 % of the total accounts receivable balance at December 31, 2023 and 2022. For the year ended December 31, 2023, the Company’s top three customers collectively represented 99 % of the Company’s total revenue. For the year ended December 31, 2022, the Company's top five customers collectively represented 99 % of the Company’s total revenue. For the year ended December 31, 2021, there were four customers that collectively represented 99 % of the Company’s total revenue. Joint Ventures, Equity Method Investments and Variable Interest Entities Investments for which the Company exercises significant influence, but does not have control are accounted for under the equity method. Equity method investment activity is related to the Company's joint venture in ARCALIS, Inc. with Axcelead, Inc. The Company’s share of the investees’ results is presented as either income or loss from equity method investees in the accompanying consolidated statements of operations and comprehensive income (loss). Property and Equipment, net Property and equipment are stated at cost, net of accumulated depreciation and amortization. The cost of property and equipment is depreciated or amortized using the straight-line method over the respective useful lives of the assets, ranging from three to five years . Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. Long-lived assets, including property and equipment are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable. The determinants used for this evaluation include management’s estimate of an asset’s ability to generate positive income from operations and positive cash flow in future periods, as well as the strategic significance of the assets to the Company’s business objectives. The Company did no t recognize any impairment losses for the years ended December 31, 2023, 2022 or 2021. Comprehensive Income/Loss Comprehensive income/loss is defined as the change in stockholders’ equity during a period from transactions and other events and circumstances from non-owner sources. There was no other comprehensive loss in the years ended December 31, 2023, 2022 or 2021. There was no income tax effect related to unrealized losses for the years ended December 31, 2023, 2022 , or 2021. Revenue Recognition At contract inception, the Company analyzes its collaboration arrangements to assess whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities and therefore within the scope of ASC Topic 808, Collaborative Arrangements (ASC 808). For collaboration arrangements within the scope of ASC 808 that contain multiple elements, the Company first determines which elements of the collaboration reflect a vendor-customer relationship and are therefore within the scope of ASC 606. The Company determines revenue recognition for arrangements within the scope of Topic 606 by performing the following five steps: (i) identify the contract; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when, or as, the company satisfies a performance obligation. The terms of the Company’s revenue agreements include license fees, upfront payments, milestone payments, reimbursement for research and development activities, option exercise fees, consulting and related technology transfer fees and royalties on sales of commercialized products. The event-based milestone payments represent variable consideration, and the Company uses the most likely amount method to estimate this variable consideration because the Company will either receive the milestone payment or will not, which makes the potential milestone payment a binary event. The most likely amount method requires the Company to determine the likelihood of earning the milestone payment. Given the high degree of uncertainty around achievement of these milestones, the Company determines the milestone amounts to be fully constrained and does not recognize revenue until the uncertainty associated with these payments is resolved. The Company will recognize revenue from sales-based royalty payments when or as the sales occur. The Company will re-evaluate the transaction price in each reporting period as uncertain events are resolved and other changes in circumstances occur. A performance obligation is a promise in a contract to transfer a distinct good or service to the collaborative partner and is the unit of account in Topic 606. A contract’s transaction price is allocated to each distinct performance obligation based on relative standalone selling price and recognized as revenue when, or as, the performance obligation is satisfied. For performance obligations that are recognized over time, the Company measures the progress using an input method. The input methods used are based on the effort expended or costs incurred toward the satisfaction of the performance obligation. The Company estimates the amount of effort expended, including the time estimated it will take to complete the activities, or costs incurred in a given period, relative to the estimated total effort or costs to satisfy the performance obligation. This approach requires the Company to make numerous estimates and use significant judgment. If estimates or judgments change over the course of the collaboration, a cumulative catch up of revenue is recognized in the period such changes are identified. See “Note 3, Revenue” for specific details surrounding the Company’s arrangements. Leases The Company determines if an arrangement is a lease at inception. Lease right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. For operating leases with an initial term greater than 12 months, the Company recognizes operating lease right-of-use assets and operating lease liabilities based on the present value of lease payments over the lease term at the commencement date. Operating lease right-of-use assets are comprised of the lease liability plus any lease payments made and excludes lease incentives. Lease terms include options to renew or terminate the lease when the Company is reasonably certain that the renewal option will be exercised or when it is reasonably certain that the termination option will not be exercised. For the Company's operating leases, if the interest rate used to determine the present value of future lease payments is not readily determinable, the Company estimates its incremental borrowing rate as the discount rate for the lease. The Company's incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in similar economic environments. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has elected the practical expedient to not separate lease and non-lease components. See “Note 11, Commitments and Contingencies” for specific details surrounding the Company’s leases. Research and Development Costs, net All research and development costs are expensed as incurred. Research and development costs consist primarily of salaries, employee benefits, costs associated with preclinical studies and clinical trials (including amounts paid to clinical research organizations and other professional services), in process research and development expenses and license agreement expenses, net of any grants and prelaunch inventory. Payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods are received or the services are performed. The Company records accruals for estimated research and development costs, comprising payments for work performed by third party contractors, laboratories, participating clinical trial sites, and others. Some of these contractors bill monthly based on actual services performed, while others bill periodically based upon achieving certain contractual milestones. For the latter, the Company accrues the expenses as goods or services are used or rendered. Clinical trial activities performed by third parties are accrued and expensed based upon estimates of the proportion of work completed over the life of the individual clinical trial and patient enrollment rates in accordance with agreements established with Clinical Research Organizations ("CROs") and clinical trial sites. Estimates are determined by reviewing contracts, vendor agreements and purchase orders, and through discussions with internal clinical personnel and external service providers as to the progress or stage of completion of trials or services and the agreed-upon fee to be paid for such services. Pre-Launch Inventory Prior to obtaining initial regulatory approval for an investigational product candidate, the Company expenses costs relating to production of inventory as research and development expense in its consolidated statements of operations and comprehensive income (loss), in the period incurred. When the Company believes regulatory approval and subsequent commercialization of an investigational product candidate is probable, and the Company also expects future economic benefit from the sales of the investigational product candidate to be realized, it will then capitalize the costs of production as inventory. Share-Based Compensation The Company recognizes share-based compensation for equity awards granted to employees, consultants, officers and directors as an expense on the statements of operations and comprehensive income (loss). Share-based compensation is recognized over the requisite service period of the individual awards using the straight-line attribution method, which generally equals the vesting period. Employees and officers’ stock options have a ten-year life and generally vest 25 % on the first anniversary of the grant and in 1/36 th equal installments on each monthly anniversary thereafter, such that options are fully vested on the four-year anniversary of the date of grant. The exercisability and vesting periods of options granted to consultants and directors vary. The fair value of stock options is estimated using a Black-Scholes valuation model on the date of grant. This method requires certain assumptions be used as inputs, such as the fair value of the underlying common stock, expected term of the option before exercise, expected volatility of the Company’s common stock, expected dividend yield, and a risk-free interest rate. The Company has limited historical stock option activity and therefore estimates the expected term of stock options granted using the simplified method, which represents the average of the contractual term of the stock option and its weighted-average vesting period. The expected volatility of stock options is based upon the historical volatility of a peer group of publicly traded companies. The Company has not declared or paid any dividends and does not currently expect to do so in the foreseeable future. The risk-free interest rates used are based on the implied yield currently available in United States Treasury securities at maturity with a term equivalent to the expected term of the stock options. The effect of forfeited awards is recorded when the forfeiture occurs. Statement of Cash Flows The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets to the total of such amounts shown in the consolidated statement of cash flows: As of December 31, (in thousands) 2023 2022 2021 Cash and cash equivalents $ 292,005 $ 391,883 $ 370,492 Restricted cash - current 55,000 — — Non-current Restricted cash 1,885 2,094 2,077 Total cash, cash equivalents and restricted cash $ 348,890 $ 393,977 $ 372,569 Income Tax Expense Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities at the applicable tax rates, along with net operating loss and tax credit carryovers. The Company records a valuation allowance against its deferred tax assets to reduce the net carrying value to an amount that it believes is more likely than not to be realized. Management has considered estimated taxable income and ongoing prudent and feasible tax planning strategies in assessing the amount of the valuation allowance. Based upon the weight of available evidence, which includes the Company’s historical operating performance and limited potential to utilize tax credit carryforwards, the Company has determined that total deferred tax assets should be fully offset by a valuation allowance. When the Company establishes or reduces the valuation allowance against its deferred tax assets, its provision for income taxes will increase or decrease, respectively, in the period such determination is made. The Company is required to file federal and state income tax returns in the United States and various other state jurisdictions. The Company also files income tax returns in the foreign countries in which it operates. The preparation of these income tax returns requires the Company to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by the Company. Additionally, the Company follows an accounting standard addressing the accounting for uncertainty in income taxes that prescribes rules for recognition, measurement, and classification in the consolidated financial statements of tax positions taken or expected to be taken in a tax return. Net Income (Loss) per Share Basic net income (loss) per share is calculated by dividing the net income (loss) by the weighted-average number of shares of common stock outstanding for the period, without consideration for common stock equivalents. Diluted net income (loss) per share is calculated by dividing the net income (loss) by the weighted-average number of shares of common stock and dilutive common stock equivalents outstanding for the period determined using the treasury-stock method. Dilutive shares of common stock for the year ended December 31, 2023 were comprised of stock options and restricted stock units. Dilutive shares of stock for the years ended December 31, 2022 and 2021 were comprised of stock options. No dividends were declared or paid during the reporting periods. Recently Issued Accounting Standards Not Yet Adopted 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. The Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on the consolidated financial statements and disclosures. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | NOTE 3. Revenue The Company has entered into license agreements and collaborative research and development arrangements with pharmaceutical and biotechnology companies, as well as consulting, related technology transfer and product revenue agreements. Under these arrangements, the Company is entitled to receive license fees, consulting fees, product fees, technological transfer fees, upfront payments, milestone payments if and when certain research and development milestones, technology transfer milestones or success-based milestones are achieved, royalties on approved product sales and reimbursement for research and development activities. The Company’s costs of performing these services are included within research and development expenses. The Company’s milestone payments are typically defined by achievement of certain preclinical, clinical, and commercial success criteria. Preclinical milestones may include in vivo proof of concept in disease animal models, lead candidate identification, and completion of IND-enabling toxicology studies. Clinical milestones may, for example, include successful enrollment of the first patient in or completion of Phase 1, 2 and 3 clinical trials, and commercial milestones are often tiered based on net or aggregate sale amounts. The Company cannot guarantee the achievement of these milestones due to risks associated with preclinical and clinical activities required for development of nucleic acid medicine-based therapeutics and vaccines. The following table presents changes in the balances of receivables and contract liabilities related to strategic collaboration agreements during the year ended December 31, 2023: (in thousands) December 31, 2022 Additions Deductions December 31, 2023 Contract Assets: Accounts receivable $ 2,764 $ 205,746 $ ( 176,446 ) $ 32,064 Contract Liabilities: Deferred revenue $ 48,719 $ 205,405 $ ( 166,799 ) $ 87,325 The following table summarizes the Company’s revenue for the periods indicated. Approximately $ 154.9 million, $ 192.7 million and $ 5.0 million of total revenue represents revenue derived from foreign countries for the years ended December 31, 2023, 2022 and 2021, respectively. For the Year Ended December 31, (in thousands) 2023 2022 2021 Collaboration revenue: CSL Seqirus $ 154,264 $ 154,425 $ — Vinbiocare — 24,571 4,364 Janssen 660 9,201 3,129 Ultragenyx 1,837 3,739 3,700 Israel Ministry of Health — 12,500 — Other 987 1,319 1,166 Total collaboration revenue $ 157,748 $ 205,755 $ 12,359 Grant revenue: BARDA $ 9,051 $ 244 $ — Total grant revenue $ 9,051 $ 244 $ — The following paragraphs provide information regarding the nature and purpose of the Company’s most significant revenue arrangements. CSL Seqirus On November 1, 2022, the Company entered into a Collaboration and License Agreement (as amended, the “CSL Collaboration Agreement”) with Seqirus, Inc., a part of CSL Limited (“CSL Severus”), for the global exclusive rights to research, develop, manufacture, and commercialize vaccines. Under the terms of the CSL Collaboration Agreement, the Company provides CSL Seqirus with an exclusive global license to its mRNA technology (including STARR ® ) and LUNAR ® lipid-mediated delivery, along with mRNA drug substance and drug product manufacturing process. CSL Seqirus will lead development and commercialization of vaccines under the collaboration. The collaboration plans to advance vaccines against SARS-CoV-2 (COVID-19), influenza, pandemic preparedness as well as three other respiratory infectious diseases. The Company received a $ 200.0 million upfront payment and is eligible to receive over $ 1.3 billion in development milestones if all products are registered in the licensed fields and entitled to potentially receive up to $ 3.0 billion in commercial milestones based on “net sale” of vaccines in the various fields. In addition, the Company is eligible to receive a 40 % net profit share for COVID-19 vaccine products and up to low double-digit royalties for vaccines against flu, pandemic preparedness and three other respiratory pathogens. During 2023, the Company achieve d $ 154.2 million o f development milestones and a conditional payment related to the CSL Collaboration Agreement, of which $ 23.8 million was included in accounts receivable as of December 31, 2023. In evaluating the CSL Collaboration Agreement in accordance with Accounting Standards Codification (“ASC”) Topic 606, the Company concluded that CSL Seqirus is a customer. The Company identified all promised goods/services within the CSL Collaboration Agreement, and when combining certain promised goods/services, the Company concluded that there are five distinct performance obligations. The nature of the performance obligations consists of delivery of the vaccine license, research and development services for COVID and non-COVID vaccines and regulatory activities for COVID vaccines. For each performance obligation, the Company estimated the standalone selling price based on 1) in the case of the license, the fair value using costs to recreate plus margin method and 2) in the case of research and development services and regulatory activities, cost plus margin for estimated full-time equivalent (“FTE”) costs, direct costs including laboratory supplies, contractors, and other out-of-pocket expenses for research and development services and regulatory activities. As of December 31, 2023, the transaction price consisted of upfront consideration received and milestones achieved in 2023. Additional variable consideration was not included in the transaction price at December 31, 2023 because the Company could not conclude that it is probable that including the variable consideration will not result in a significant revenue reversal. The Company allocated the transaction price to the performance obligations in proportion to their standalone selling price. The vaccine license was recognized at the point in time it was transferred in 2022. The research and development and regulatory activities performance obligations are recognized over a period of time based on the percentage of services rendered using the input method, meaning actual costs incurred divided by total costs budgeted to satisfy the performance obligation. Any consideration related to sales-based royalties will be recognized when the amounts are probable of non-reversal, provided that the reported sales are reliably measurable and the Company has no remaining promised goods/services, as they are constrained and therefore have also been excluded from the transaction price. The revenue recognized in 2023 and 2022 relates to the license delivered, milestones achieved and services performed through December 31, 2023. T otal deferred revenue as of December 31, 2023 and 2022 for the CSL Collaboration Agreement was $ 87.1 million and $ 45.6 million, respectively. During 2023, the Company also received an advance payment of $ 23.6 million for the manufacturing and supply of ARCT-154 drug product. The advance payment was for specified manufacturing runs of ARCT-154 which include the drug substance utilized, as well as the reservation fees and related manufacturing requirements. The Company concluded that the promise to manufacture and supply ARCT-154 drug product is a customer option as part of the CSL Collaboration Agreement and is accounted for as a separate contract. The advance payment is included in deferred revenue as of December 31, 2023 and will be recognized as revenue when the drug product is transferred to CSL Seqirus. During 2023, the Company entered into an amendment to the CSL Collaboration Agreement, pursuant to which the Company agreed to sponsor and conduct a Phase I clinical study in the influenza field. As part of the amendment, the Company received $ 17.5 million from CSL Seqirus. The amendment also provides for up to $ 1.5 million in additional payments which are achievable upon meeting certain clinical milestones relating to the Phase I clinical study in the influenza field. The Company previously concluded that the expansion of research and development support services under the CSL Collaboration Agreement represented an option that was not a material right. Therefore the Company concluded the promise to sponsor and conduct the Phase I clinical study is a separate contract and the sole performance obligation under the new arrangement. During the year ended December 31, 2023, the Company recognized $ 2.4 million related to the performance obligation and the remaining amount of $ 15.1 million is included in deferred revenue. In December 2023, the Company also received an advance payment of $ 5.3 million from CSL Seqirus for manufacturing activities related to COVID-19 vaccine product. The Company concluded that the promise to perform manufacturing activities is a customer option as part of the CSL Collaboration Agreement and is accounted for as a separate contract. The advance payment is included in deferred revenue as of December 31, 2023 and will be recognized as revenue when the vaccine product is transferred to CSL Seqirus. Vinbiocare During 2021 the Company entered into certain agreements with Vinbiocare, a member of Vingroup Joint Stock Company, whereby the Company would provide technical expertise and support services to Vinbiocare to assist in the build out of a mRNA drug product manufacturing facility in Vietnam. The Company received an upfront payment in aggregate of $ 40.0 million as part of the Vinbiocare Agreement. In October 2022, the Company and Vinbiocare executed a letter agreement terminating the Technology License and Technical Support Agreement and the Framework Drug Substance Supply Agreement (collectively, the “License & Supply Agreements”). The Company incurred no financial penalties in connection with the termination of the License & Supply Agreements and has no further financial obligations to Vinbiocare under these terminated agreements. In October 2022, in association with the termination of the License & Supply Agreements, the Company signed the Study Support Agreement with Vinbiocare which provides that Vinbiocare shall continue to serve as the regulatory and financial sponsor of clinical studies conducted in Vietnam of ARCT-154 pursuant to the Company’s arrangements with Vinbiocare (the “Study Support Agreement”). To support the continuing activities of these studies, the Study Support Agreement further provides for the Company to conduct certain services and to compensate Vinbiocare to help achieve the objectives of these studies. In February 2023, the Company agreed to provide additional financial support in the amount of approximately $ 2.1 million to allow Vinbiocare to provide additional study support duties related to the ARCT-154 clinical study. As a result, the Company reserved $ 11.8 million of the original upfront payment to be paid to Vinbiocare over the future periods pursuant to the Study Support Agreement by reclassifying a portion of the upfront payment received from Vinbiocare pursuant to the License & Supply Agreements, from deferred revenue to short-term and long-term liabilities, based on the anticipated timing of the payments to Vinbiocare, and removed that portion of the upfront payment from the transaction price of the modified arrangement. The transaction price was not adjusted for payments that are contingent upon the occurrence of future regulatory or sales-related events based on the information currently available to the Company. The Company has concluded that it has no remaining performance obligations under its prior arrangements with Vinbiocare as summarized above as of December 31, 2023. As of December 31, 2023, the Company has accrued liabilities related to this arrangement of $ 2.5 million in current liabilities and $ 0.5 million in non-current liabilities that will be paid upon the occurrence of specified events through the first quarter of 2025. Vinbiocare is also eligible to receive a single digit percentage of amounts from net sales, if any, of ARCT-154 (or next-generation COVID vaccine) up to a capped amount of low single digit millions. The Company had no remaining deferred revenue as of December 31, 2023 or 2022. BARDA Grant In August 2022, the Company entered into a cost reimbursement contract with the Biomedical Advanced Research and Development Authority ("BARDA"), a division of the Office of the Assistant Secretary for Preparedness and Response (ASPR) within the U.S. Department of Health and Human Services (HHS) for an award of up to $ 63.2 million for the development of a pandemic influenza vaccine using the Company's STARR ® self-amplifying mRNA vaccine platform technology. The Company earns grant revenue for performing tasks under the agreement. The Company determined that the agreement with BARDA is not in the scope of ASC 808 or ASC 606. Applying International Accounting Standards No. 20 ("IAS 20"), Accounting for Government Grants and Disclosure of Government Assistance, by analogy, the Company recognizes grant revenue from the reimbursement of direct out-of-pocket expenses, overhead allocations and fringe benefits for research costs associated with the grant. The costs associated with these reimbursements are reflected as a component of research and development expense in the Company’s consolidated statements of operations and comprehensive income (loss). The Company recognized $ 9.1 million and $ 0.2 million of grant revenue during the years ended December 31, 2023 and 2022, respectively. which is included in revenue on the Company's consolidated statements of operations. As of December 31, 2023, the remaining available funding net of revenue earned was $ 54.1 million. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE 4. Fair Value Measurements The Company establishes the fair value of its assets and liabilities using the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company established a fair value hierarchy based on the inputs used to measure fair value. The three levels of the fair value hierarchy are as follows: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. Level 3: Unobservable inputs in which little or no market data exists and are therefore determined using estimates and assumptions developed by the Company, which reflect those that a market participant would use. The carrying value of cash, restricted cash, accounts receivable, accounts payable, accrued liabilities and the Singapore loan approximate their respective fair values due to their relative short maturities. The carrying amounts of long-term debt for the amount drawn on the Company’s debt facility approximates fair value as the interest rate is variable and reflects current market rates. The Company's assets measured at fair value on a recurring basis consisted of money market funds. As of December 31, 2023 , the Company's had money market funds with a fair value of $ 256.1 million, which were classified within Level 1 of the fair value hierarchy. The fair value of these financial instruments was measured based on quoted prices |
Accrued Liabilities Detail
Accrued Liabilities Detail | 12 Months Ended |
Dec. 31, 2023 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Liabilities Detail | NOTE 5. Accrued Liabilities Detail Accrued liabilities consisted of the following: December 31, (in thousands) 2023 2022 Accrued compensation $ 5,918 $ 4,038 Cystic Fibrosis Foundation liability 7,633 — Income tax payable 641 1,295 Current portion of operating lease liability 4,309 3,884 Clinical trial accruals 2,333 4,531 Vinbiocare contractual liabilities 2,514 7,468 Other accrued research and development expenses 8,533 9,016 Total $ 31,881 $ 30,232 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | NOTE 6. Property and Equipment, Net Property and equipment, net consisted of the following: December 31, (in thousands) 2023 2022 Research equipment $ 16,046 $ 10,251 Computers and software 1,275 1,154 Office equipment and furniture 958 958 Leasehold improvements 2,655 2,491 Construction in progress 233 3,344 Total $ 21,167 $ 18,198 Less accumulated depreciation and amortization ( 8,740 ) ( 5,783 ) Property and equipment, net $ 12,427 $ 12,415 Depreciation and amortization expense was $ 3.0 million, $ 1.5 million and $ 1.2 million for the years ended December 31, 2023, 2022 and 2021, respectively. Construction in progress is primarily comprised of research equipment not yet placed in service. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 7. Debt Wells Fargo Credit Agreement On April 21, 2023, the Company’s wholly-owned subsidiary, Arcturus Therapeutics, Inc. entered into a credit agreement with Wells Fargo whereby Wells Fargo will make a $ 50.0 million revolving credit line available to the Company (the “Loan”) and each Loan evidenced by a revolving line of credit note (the “Note”). Borrowings under the agreement will bear interest at a rate of 1.00 % above either the Daily Simple SOFR or Term SOFR (as such terms are defined in the Note), with “SOFR” being the rate per annum equal to the secured overnight financing rate as administered by the Federal Reserve Bank of New York. If an Event of Default (as defined in the agreement) occurs, then all Loans shall bear interest at a rate equal to 2.00 % above the interest rate applicable immediately prior to the occurrence of the Event of Default. The term of the agreement is two years , with an option for one-year renewals subject to Wells Fargo approval and the Company furnishing to Wells Fargo a non-refundable commitment fee equal to 0.25 % of the Loan amount for each such renewal. There is no penalty for terminating the facility prior to the maturity date of the Note. As collateral, the Company has agreed to pledge $ 55.0 million in cash to be held at the Company’s securities accounts with Wells Fargo Securities, LLC, an affiliate of Wells Fargo, pursuant to a security agreement. No amounts were outstanding as of December 31, 2023. Manufacturing Supply Agreement On November 7, 2020, the Company’s wholly-owned subsidiary, Arcturus Therapeutics, Inc., entered into a Manufacturing Support Agreement (the “Support Agreement”) with the Economic Development Board of the Republic of Singapore (the “EDB”). Pursuant to the Support Agreement, the EDB agreed to make a term loan (the “Singapore Loan”) of S$ 62.1 million to the Company, subject to the satisfaction of customary deliveries, to support the manufacture of the LUNAR-COV19 vaccine candidate (ARCT-021). The Singapore Loan accrues interest at a rate of 4.5 % per annum calculated on a daily basis. The Company elected to borrow the full amount available under the Support Agreement of S$ 62.1 million ($ 46.6 million) on January 29, 2021. During the first quarter of 2023, the EDB agreed to an extension of the reconciliation period to March 22, 2023, with unused funds not utilized for the manufacture of ARCT-021 as of such date returned to the EDB. As of December 31, 2022, the outstanding balance of the Singapore Loan, which includes accrued interest, was $ 50.4 million of which the Company paid S$ 22.8 million ($ 17.1 million) in March 2023. During the first quarter of 2023, the remaining principal portion of the Singapore Loan plus accrued interest, totaling $ 34.0 million, was forgiven and recorded as a gain on debt extinguishment in the consolidated statement of operations and comprehensive loss. Total interest expenses related to the Singapore Loan was $ 0.5 million, $ 2.1 million and $ 1.9 million for the year ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, the Company no longer had debt or interest related to this agreement. Termination of Agreement with Western Alliance Bank On March 14, 2023, the Loan and Security Agreement, dated as of October 12, 2018 (as amended and supplemented, the “Western Alliance Agreement”) with Western Alliance Bank, an Arizona corporation (“Western Alliance”), was terminated (the “Termination”) upon the receipt by Western Alliance of a payoff amount of approximately $ 7.4 million from the Company. The Western Alliance Agreement provided for a collateralized term loan in the aggregate principal amount of up to $ 15.0 million, with interest at a floating rate ranging from 1.25 % to 2.75 % above the prime rate and a maturity date of October 30, 2023 . The payoff amount was made by the Company to Western Alliance from available cash on hand, pursuant to a payoff letter, and included payment of (i) approximately $ 7.0 million in principal and interest, (ii) $ 0.3 million fee payable upon prepayment as a result of prior FDA approval of an IND and (iii) de minimis amounts in prepayment charges and various operational fees. The Company was released from all liens under the Western Alliance Agreement. For the years ended December 31, 2023, 2022 and 2021, the Company recorded interest expense of $ 0.3 million, $ 0.9 million and $ 0.8 million, respectively. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | NOTE 8. Stockholders’ Equity Earnings Per Share Potentially dilutive securities that were not included in the calculation of diluted net loss per share for the year ended December 31, 2023 as they were anti-dilutive totaled 0.8 million. Potent ially dilutive securities that were not included in the calculation of diluted earnings per share for the year ended December 31, 2022 as they were anti-dilutive totaled 3.7 million. Potentially dilutive securities that were not included in the calculation of diluted net loss per share for the year ended December 31, 2021 as they were anti-dilutive totaled 1.3 million. Alexion Pharmaceuticals License Agreement On February 17, 2021, the Company entered into an exclusive license agreement with Alexion Pharmaceuticals, Inc. (“Alexion”) pursuant to which Alexion granted to the Company an exclusive, worldwide license to exploit certain specified Alexion patent applications. In accordance with the terms of the license agreement, and in exchange for the license, the Company issued 74,713 shares of its common stock to Alexion on February 19, 2021 valued at approximately $ 5.0 million. The number of shares issued under the agreement was calculated by dividing (i) five million dollars ($5.0 million) by (ii) the volume-weighted average price per share of the Company’s common stock on the Nasdaq Global Market for the thirty (30) trading days immediately preceding the Effective Date (rounded to the nearest whole share). The Company recorded the transaction as an asset purchase as management concluded that all of the value received was related to a single identifiable asset. Further, the Company concluded that there was no alternative future use for the asset and recorded a charge at the closing of the transaction for the full $ 5.0 million value assigned to the shares issued in connection with the license agreement. This non-cash charge was recorded as acquired in-process research and development expense in the statements of operations and comprehensive income (loss). |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | NOTE 9. Share-Based Compensation In June 2022 at the Company’s 2022 Annual Meeting of Stockholders (the "2022 Annual Meeting"), the stockholders of the Company approved an amendment to the Company’s 2019 Omnibus Equity Incentive Plan (as amended, the “2019 Plan”) which, among other things, increases the aggregate number of shares authorized for use in making awards to eligible persons under the 2019 Plan by 3,750,000 shares, for a total of up to 8,750,000 shares available for issuance. As of December 31, 2023, a total of 193,642 shares remain available for future issuance under the 2019 Plan, subject to the terms of the 2019 Plan. In October 2021, the Company adopted the 2021 Inducement Equity Incentive Plan which covers the award of up to 1,000,000 shares of common stock (the “2021 Plan”) effective as of October 15, 2021. Approval of the Company’s stockholders will not be required as a condition to the effectiveness of the 2021 Plan for so long as the plan is in compliance with Nasdaq inducement plan rules. In April 2022, the compensation committee of the Company’s board of directors approved a proposal to reduce the total number of shares available for future issuance under the 2021 Plan to 130,000 . As of December 31, 2023, a total of 119,952 shares remain available for future issuance under the 2021 Plan, subject to the terms of the 2021 Plan. Share Options The following table presents the weighted-average assumptions used in the Black-Scholes valuation model by the Company in calculating the fair value of stock options granted: For the Year Ended December 31, 2023 2022 2021 Expected life (in years) 6.04 6.05 6.03 Expected volatility 76.1 % 82.1 % 73.7 % Expected dividend yield — % — % — % Risk-free interest rate 3.91 % 2.93 % 1.13 % Grant date weighted average fair value $ 18.87 $ 15.56 $ 26.71 The following table summarizes the Company’s stock option activity for the year ended December 31, 2023: Number of Weighted- Weighted- Aggregate Outstanding – December 31, 2022 6,622,740 $ 34.78 8.2 years $ 10,721 Granted 2,140,206 $ 27.38 Exercised ( 237,820 ) $ 11.26 Forfeited/cancelled ( 553,999 ) $ 34.31 Outstanding – December 31, 2023 7,971,127 $ 33.55 7.9 years $ 53,295 Exercisable – December 31, 2023 3,700,692 $ 38.04 6.6 years $ 31,142 Exercisable and expected to vest – 7,971,127 $ 33.55 7.9 years $ 53,295 At December 31, 2023 , the total unrecognized compensation cost of $ 78.8 million will be recognized over the weighted-average remaining service period of approximately 3.0 years. The fair value of the options vested during the years ended December 31, 2023 , 2022 and 2021 wa s $ 35.3 million, $ 39.2 million and $ 28.4 million, respectively. The total intrinsic value of options exercised during the years ended December 31, 2023, 2022 and 2021was $ 4.3 million, $ 1.6 million and $ 3.6 million, respectively. In August 2023, the Company granted 18,786 restricted stock units to its board of directors, when the fair value of the Company's common stock was $ 34.92 per share. These restricted stock units will vest at the Company's 2024 annual stockholders' meeting. Share-based compensation expenses included in the Company’s statements of operations and comprehensive income (loss) for the years ended December 31, 2023, 2022 and 2021 were: For the Year Ended December 31, (in thousands) 2023 2022 2021 Research and development $ 14,950 $ 14,081 $ 14,101 General and administrative 19,699 16,530 14,814 Total $ 34,649 $ 30,611 $ 28,915 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 10. Income Taxes A reconciliation of (loss) income before income taxes for domestic and foreign locations is as follows: For the Year Ended December 31, (In thousands) 2023 2022 2021 United States $ ( 27,890 ) $ 10,644 $ ( 203,674 ) Foreign — — — Total (loss) income before income taxes $ ( 27,890 ) $ 10,644 $ ( 203,674 ) A reconciliation of income tax expense for the years ended December 31, 2023, 2022 and 2021 is as follows: For the Year Ended December 31, 2023 2022 2021 Current: Federal $ 1,246 $ 1,121 $ — State 589 174 — Foreign — — — Total current income tax expense $ 1,835 $ 1,295 $ — Deferred: Federal $ — $ — $ — State — — — Foreign — — — Total deferred income tax expense — — — Total income tax expense $ 1,835 $ 1,295 $ — A reconciliation of the federal statutory income tax rate to the Company’s effective income tax rate is as follows: For the Year Ended December 31, 2023 2022 2021 Federal statutory income tax rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit 1.9 % 7.2 % 6.2 % Stock-based compensation ( 2.5 %) 16.1 % ( 0.4 %) Officers compensation ( 7.4 %) 21.8 % ( 1.1 %) Research and development credits 20.0 % ( 40.3 %) 2.9 % Uncertain tax positions ( 2.4 %) 9.0 % ( 0.4 %) Change in tax rate 0.2 % ( 12.6 %) ( 1.7 %) Change in valuation allowance ( 36.5 %) ( 9.4 %) ( 26.7 %) Other ( 0.3 %) ( 1.0 %) 0.2 % Permanent differences ( 0.7 %) 0.4 % — % Provision for income taxes ( 6.7 )% 12.2 % ( 0.0 )% The significant components of deferred income taxes are as follows: December 31, (in thousands) 2023 2022 Deferred tax assets: Net operating loss $ 19,147 $ 47,866 Tax credits 10,723 10,460 Accrued liabilities 943 1,420 Deferred revenue 7,014 611 Inventory 15,961 9,016 Basis difference in equity investments 2,202 2,212 Depreciation and amortization — — Capitalized R&D 41,971 19,938 Right-of-use lease liability 7,233 8,200 Share-based compensation 11,618 7,201 Total gross deferred tax assets 116,812 106,924 Deferred tax liabilities: Depreciation and amortization ( 1,184 ) ( 475 ) Right-of-use asset ( 6,822 ) ( 7,826 ) Total gross deferred tax liabilities ( 8,006 ) ( 8,301 ) Valuation allowance ( 108,806 ) ( 98,623 ) Net deferred tax asset $ — $ — In assessing the realization of the deferred tax assets, the Company considers whether it is more likely than not that some portion of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Due to lack of available sources of taxable income, the Company recorded a full valuation allowance against its net deferred tax assets as sufficient uncertainty exists regarding the future realization of these assets. As of December 31, 2023 and 2022, the Co mpany recorded a valuation allowance of $ 108.8 million and $ 98.6 million, respectively. The valuation allowance changed by $ 10.2 million and ($ 1.0 ) million for the years ended December 31, 2023 and 2022, respectively. At December 31, 2023, the Company has federal and state net operating losses, or NOL, carryforwards of approximately $ 27.9 million and $ 193.7 million, respectively. The federal net operating loss carryover includes $ 27.9 million of net operating losses generated in 2018 and after which can be carried forward indefinitely. The Company's state net operating losses start to expire 2039 . At December 31, 2023, the Company has federal and state research and development credit carryforwards of approximately $ 6.3 million and $ 6.6 million, respectively. The federal credit carryforwards begin to expire in 2037 , and the state credits carry forward indefinitely. Additionally, the Company has an Orphan Drug Credit of $ 2.3 million as of December 31, 2023 which will begin to expire in 2042 unless previously utilized. Pursuant to Internal Revenue Code (IRC) Sections 382 and 383, annual use of the Company’s federal and California net operating loss and research and development credit carryforwards may be limited in the event a cumulative change in ownership of more than 50 % occurs within a three-year period. The Company has completed an IRC Section 382 analysis through December 31, 2023 regarding the limitation of net operating loss carryforwards and other tax attributes. The Company experienced ownership changes in 2018 and 2020; however, the Company estimates that all tax attributes can be utilized. There is a risk that additional ownership changes may occur in the future. If a change in ownership occurs, the NOL carryforwards and other tax attributes could be limited or restricted. The company accounts for income taxes in accordance with ASC 740-10, Accounting for Uncertainty in Income Taxes . The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain tax position will not be recognized if it has less than 50 % likelihood of being sustained. A reconciliation of unrecognized tax benefits is as follows (in millions): December 31, 2023 2022 Beginning balance of unrecognized tax benefits $ 2.9 $ 2.4 Settlement of prior period tax positions — — Decrease for prior period tax positions 0.1 ( 0.5 ) Increase for current period tax positions 0.6 1.0 Ending balance of unrecognized tax benefits $ 3.6 $ 2.9 Amounts in the summary rollforward would no t impact the effective tax rate as the Company maintains a full valuation on its net deferred tax assets. The Company is subject to taxation and files income tax returns in the United States, various U.S. states and foreign jurisdictions. The Company’s tax years from 2014 to date are subject to examination by the U.S., and state taxing authorities due to the carryforward of unutilized net operating losses and research and development credits. The Company’s policy is to recognize interest expense and penalties related to income tax matters as income tax expense. There was no tax related interest or penalties recognized for the years ended December 31, 2023, 2022 and 2021. The Company does not anticipate any material changes to its unrecognized tax benefits within the next twelve months. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 11. Commitments and Contingencies Cystic Fibrosis Foundation Therapeutics Funding agreement On September 25, 2023, the Company amended its Development Program Letter Agreement, dated May 16, 2017 and as amended July 13, 2018 and August 1, 2019, with the Cystic Fibrosis Foundation (“CFF”). Pursuant to the amendment, (i) CFF increased the amount it will award to advance LUNAR-CF to $ 24.6 million from approximately $ 15.6 million, (ii) the Company agreed to incur at least $ 15.0 million toward activities under the research plan. During the fourth quarter of 2023, the Company received the full payment from CFF related to the amendment. For the years ended December 31, 2023, 2022 and 2021, the Company recognized contra expense of $ 1.4 million, $ 5.2 million and $ 3.8 million, respectively. As of December 31, 2023, $ 7.6 million remained in accrued liabilities. Leases In October 2017, the Company entered into a non-cancellable operating lease agreement for office space adjacent to its previously occupied headquarters. The commencement of the lease began in March 2018 and the lease extends for approximately 84 months from the commencement date with a remaining lease term through March 2025. Monthly rental payments are due under the lease and there are escalating rent payments during the term of the lease. The Company is also responsible for its proportional share of operating expenses of the building and common areas. In conjunction with the new lease, the Company received free rent for four months and received a tenant improvement allowance of $ 0.1 million. The lease may be extended for one five-year period at the then current market rate with annual escalations ; however, the Company deemed the extension option not reasonably certain to be exercised and therefore excluded the option from the lease terms. The Company entered into an irrevocable standby letter of credit with the landlord for a security deposit of $ 0.1 million upon executing the lease which is included (along with additional funds required to secure the letter of credit) in the balance of non-current restricted cash. In February 2020, the Company entered into a second non-cancellable operating lease agreement for office space near its current headquarters. The lease extended for 13 months from the commencement date and included a right to extend the lease for one twelve-month period. In February 2021, the Company opted to extend the lease through March 2025 to coincide with the lease term of the Company’s headquarters . In September 2021, the Company entered into a fourth non-cancellable lease agreement for office, research and development, engineering and laboratory space near its current headquarters and lease term commenced during the second quarter of 2022. The initial term of the lease will extend ten years and eight months from the date of possession, and the Company will have the right to extend the term of the lease for an additional five-year period . When the lease term was determined for the operating lease right-of-use assets and lease liabilities, the extension option for the lease was not included. The lease has a monthly base rent ranging from $ 0.3 million to $ 0.4 million which escalates over the lease term. The Company received a free rent period of four months and also pays for various operating costs, including utilities and real property taxes. The Company entered into an irrevocable standby letter of credit with the landlord for a security deposit of $ 2.0 million upon executing the lease which is included (along with additional funds required to secure the letter of credit) in the balance of non-current restricted cash. Operating lease right-of-use asset and liability on the consolidated balance sheets represent the present value of remaining lease payments over the remaining lease terms. The Company does not allocate lease payments to non-lease components; therefore, payments for common-area-maintenance and administrative services are not included in the operating lease right-of-use asset and liability. The Company uses its incremental borrowing rate to calculate the present value of the lease payments, as the implicit rate in the lease is not readily determinable. As of December 31, 2023, the remaining payments of the operating lease liability were as follows: (in thousands) Remaining Lease 2024 $ 5,646 2025 4,019 2026 3,603 2027 3,711 Thereafter 19,572 Total remaining lease payments 36,551 Less: imputed interest ( 6,335 ) Total operating lease liabilities $ 30,216 Weighted-average remaining lease term 8.2 Weighted-average discount rate 4.8 % Operating lease costs consist of the fixed lease payments included in operating lease liability and are recorded on a straight-line basis over the lease terms. Operating lease costs were $ 5.6 million, $ 4.7 million and $ 1.9 million for the years ended December 31, 2023, 2022 and 2021, respectively. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 12. Related Party Transactions On December 13, 2022, Vallon Pharmaceuticals, Inc. (“Vallon”) entered into an agreement with GRI Bio, Inc. (“GRI Bio”) pursuant to which GRI Bio was to merge with a wholly-owned subsidiary of Vallon in an all-stock transaction. The transaction closed in April 2023 and the Company's executive resigned from the board of directors of Vallon. Following the closing of the merger, the combined company now operates under the name “GRI Bio, Inc.” and will focus on the development of GRI Bio’s pipeline and trade on the Nasdaq under the ticker symbol “GRI”. Following the closing of the merger, the Company holds 28,125 shares in GRI Bio, or approximately 1 %. Upon the closing of the merger, the Company determined that it did not have the ability to exercise significant influence over operating and financial policies of GRI Bio. As such, the Company discontinued the equity method of accounting for its investment in GRI Bio. See “Note 2, Joint Ventures, Equity Method Investments and Variable Interest Entities” for specific details surrounding the Company’s agreement with Axcelead to form the joint venture entity, ARCALIS, Inc. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 13. Subsequent Events None. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements include the accounts of Arcturus Therapeutics Holdings Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States (U.S. GAAP), which requires management to make estimates and assumptions regarding the valuation of certain debt and equity instruments, the equity method investment, share-based compensation, accruals for liabilities, income taxes, revenue and deferred revenue, leases, expense accruals, and other matters that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management’s knowledge of current events and actions the Company may undertake in the future, actual results could materially differ from those estimates. |
Segment Information | Segment Information Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company and its chief operating decision-maker view the Company’s operations and manage its business in one operating segment which is the research and development of medical applications for the Company’s nucleic acid-focused technology. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less at the date of purchase. |
Restricted Cash | Restricted cash Restricted cash includes collateral pledged and held at the Company’s securities accounts pursuant to a security agreement with Wells Fargo Bank, National Association (“Wells Fargo”) (Note 7). At December 31, 2023, such collateral amounted to $ 55.0 million. Restricted cash also includes cash required to be set aside as security for lease payments and to maintain a letter of credit for the benefit of the landlord for the Company’s offices. At December 31, 2023 and 2022, the Company had restricted cash of $ 1.9 million and $ 2.1 million in conjunction with property leases in San Diego, California, and such restriction is expected to be removed at the end of the lease term. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available under the circumstances. The hierarchy consists of three levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded at the net invoice value and are non-interest bearing. The Company considers receivables past due based on the contractual payment terms. The Company reserves for specific receivables if collectability is no longer reasonably assured. Estimates for allowances for doubtful accounts are determined based on existing contractual obligations, historical payment patterns, and individual customer circumstances. The Company reevaluates such reserves on a regular basis and adjusts its reserves as needed. Once a receivable is deemed to be uncollectible, such balance is charged against the reserve. No reserves have been recorded as of December 31, 2023 or 2022 . |
Concentration of Credit Risk and Significant Customers | Concentration of Credit Risk and Significant Customers Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash and cash equivalents. The Company limits its exposure to credit loss by placing its cash and cash equivalents with high credit quality financial institutions in instruments with short maturities. There were two customers that comprised 100 % of the total accounts receivable balance at December 31, 2023 and 2022. For the year ended December 31, 2023, the Company’s top three customers collectively represented 99 % of the Company’s total revenue. For the year ended December 31, 2022, the Company's top five customers collectively represented 99 % of the Company’s total revenue. For the year ended December 31, 2021, there were four customers that collectively represented 99 % of the Company’s total revenue. |
Joint Ventures, Equity Method Investments and Variable Interest Entities | Joint Ventures, Equity Method Investments and Variable Interest Entities Investments for which the Company exercises significant influence, but does not have control are accounted for under the equity method. Equity method investment activity is related to the Company's joint venture in ARCALIS, Inc. with Axcelead, Inc. The Company’s share of the investees’ results is presented as either income or loss from equity method investees in the accompanying consolidated statements of operations and comprehensive income (loss). |
Property and Equipment, net | Property and Equipment, net Property and equipment are stated at cost, net of accumulated depreciation and amortization. The cost of property and equipment is depreciated or amortized using the straight-line method over the respective useful lives of the assets, ranging from three to five years . Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. Long-lived assets, including property and equipment are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable. The determinants used for this evaluation include management’s estimate of an asset’s ability to generate positive income from operations and positive cash flow in future periods, as well as the strategic significance of the assets to the Company’s business objectives. The Company did no t recognize any impairment losses for the years ended December 31, 2023, 2022 or 2021. |
Comprehensive Income/Loss | Comprehensive Income/Loss Comprehensive income/loss is defined as the change in stockholders’ equity during a period from transactions and other events and circumstances from non-owner sources. There was no other comprehensive loss in the years ended December 31, 2023, 2022 or 2021. There was no income tax effect related to unrealized losses for the years ended December 31, 2023, 2022 , or 2021. |
Revenue Recognition | Revenue Recognition At contract inception, the Company analyzes its collaboration arrangements to assess whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities and therefore within the scope of ASC Topic 808, Collaborative Arrangements (ASC 808). For collaboration arrangements within the scope of ASC 808 that contain multiple elements, the Company first determines which elements of the collaboration reflect a vendor-customer relationship and are therefore within the scope of ASC 606. The Company determines revenue recognition for arrangements within the scope of Topic 606 by performing the following five steps: (i) identify the contract; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when, or as, the company satisfies a performance obligation. The terms of the Company’s revenue agreements include license fees, upfront payments, milestone payments, reimbursement for research and development activities, option exercise fees, consulting and related technology transfer fees and royalties on sales of commercialized products. The event-based milestone payments represent variable consideration, and the Company uses the most likely amount method to estimate this variable consideration because the Company will either receive the milestone payment or will not, which makes the potential milestone payment a binary event. The most likely amount method requires the Company to determine the likelihood of earning the milestone payment. Given the high degree of uncertainty around achievement of these milestones, the Company determines the milestone amounts to be fully constrained and does not recognize revenue until the uncertainty associated with these payments is resolved. The Company will recognize revenue from sales-based royalty payments when or as the sales occur. The Company will re-evaluate the transaction price in each reporting period as uncertain events are resolved and other changes in circumstances occur. A performance obligation is a promise in a contract to transfer a distinct good or service to the collaborative partner and is the unit of account in Topic 606. A contract’s transaction price is allocated to each distinct performance obligation based on relative standalone selling price and recognized as revenue when, or as, the performance obligation is satisfied. For performance obligations that are recognized over time, the Company measures the progress using an input method. The input methods used are based on the effort expended or costs incurred toward the satisfaction of the performance obligation. The Company estimates the amount of effort expended, including the time estimated it will take to complete the activities, or costs incurred in a given period, relative to the estimated total effort or costs to satisfy the performance obligation. This approach requires the Company to make numerous estimates and use significant judgment. If estimates or judgments change over the course of the collaboration, a cumulative catch up of revenue is recognized in the period such changes are identified. See “Note 3, Revenue” for specific details surrounding the Company’s arrangements. |
Leases | Leases The Company determines if an arrangement is a lease at inception. Lease right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. For operating leases with an initial term greater than 12 months, the Company recognizes operating lease right-of-use assets and operating lease liabilities based on the present value of lease payments over the lease term at the commencement date. Operating lease right-of-use assets are comprised of the lease liability plus any lease payments made and excludes lease incentives. Lease terms include options to renew or terminate the lease when the Company is reasonably certain that the renewal option will be exercised or when it is reasonably certain that the termination option will not be exercised. For the Company's operating leases, if the interest rate used to determine the present value of future lease payments is not readily determinable, the Company estimates its incremental borrowing rate as the discount rate for the lease. The Company's incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in similar economic environments. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has elected the practical expedient to not separate lease and non-lease components. See “Note 11, Commitments and Contingencies” for specific details surrounding the Company’s leases. |
Research and Development Costs, net | Research and Development Costs, net All research and development costs are expensed as incurred. Research and development costs consist primarily of salaries, employee benefits, costs associated with preclinical studies and clinical trials (including amounts paid to clinical research organizations and other professional services), in process research and development expenses and license agreement expenses, net of any grants and prelaunch inventory. Payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods are received or the services are performed. The Company records accruals for estimated research and development costs, comprising payments for work performed by third party contractors, laboratories, participating clinical trial sites, and others. Some of these contractors bill monthly based on actual services performed, while others bill periodically based upon achieving certain contractual milestones. For the latter, the Company accrues the expenses as goods or services are used or rendered. Clinical trial activities performed by third parties are accrued and expensed based upon estimates of the proportion of work completed over the life of the individual clinical trial and patient enrollment rates in accordance with agreements established with Clinical Research Organizations ("CROs") and clinical trial sites. Estimates are determined by reviewing contracts, vendor agreements and purchase orders, and through discussions with internal clinical personnel and external service providers as to the progress or stage of completion of trials or services and the agreed-upon fee to be paid for such services. |
Pre-Launch Inventory | Pre-Launch Inventory Prior to obtaining initial regulatory approval for an investigational product candidate, the Company expenses costs relating to production of inventory as research and development expense in its consolidated statements of operations and comprehensive income (loss), in the period incurred. When the Company believes regulatory approval and subsequent commercialization of an investigational product candidate is probable, and the Company also expects future economic benefit from the sales of the investigational product candidate to be realized, it will then capitalize the costs of production as inventory. |
Share-Based Compensation | Share-Based Compensation The Company recognizes share-based compensation for equity awards granted to employees, consultants, officers and directors as an expense on the statements of operations and comprehensive income (loss). Share-based compensation is recognized over the requisite service period of the individual awards using the straight-line attribution method, which generally equals the vesting period. Employees and officers’ stock options have a ten-year life and generally vest 25 % on the first anniversary of the grant and in 1/36 th equal installments on each monthly anniversary thereafter, such that options are fully vested on the four-year anniversary of the date of grant. The exercisability and vesting periods of options granted to consultants and directors vary. The fair value of stock options is estimated using a Black-Scholes valuation model on the date of grant. This method requires certain assumptions be used as inputs, such as the fair value of the underlying common stock, expected term of the option before exercise, expected volatility of the Company’s common stock, expected dividend yield, and a risk-free interest rate. The Company has limited historical stock option activity and therefore estimates the expected term of stock options granted using the simplified method, which represents the average of the contractual term of the stock option and its weighted-average vesting period. The expected volatility of stock options is based upon the historical volatility of a peer group of publicly traded companies. The Company has not declared or paid any dividends and does not currently expect to do so in the foreseeable future. The risk-free interest rates used are based on the implied yield currently available in United States Treasury securities at maturity with a term equivalent to the expected term of the stock options. The effect of forfeited awards is recorded when the forfeiture occurs. |
Statement of Cash Flows | Statement of Cash Flows The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets to the total of such amounts shown in the consolidated statement of cash flows: As of December 31, (in thousands) 2023 2022 2021 Cash and cash equivalents $ 292,005 $ 391,883 $ 370,492 Restricted cash - current 55,000 — — Non-current Restricted cash 1,885 2,094 2,077 Total cash, cash equivalents and restricted cash $ 348,890 $ 393,977 $ 372,569 |
Income Tax Expense | Income Tax Expense Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities at the applicable tax rates, along with net operating loss and tax credit carryovers. The Company records a valuation allowance against its deferred tax assets to reduce the net carrying value to an amount that it believes is more likely than not to be realized. Management has considered estimated taxable income and ongoing prudent and feasible tax planning strategies in assessing the amount of the valuation allowance. Based upon the weight of available evidence, which includes the Company’s historical operating performance and limited potential to utilize tax credit carryforwards, the Company has determined that total deferred tax assets should be fully offset by a valuation allowance. When the Company establishes or reduces the valuation allowance against its deferred tax assets, its provision for income taxes will increase or decrease, respectively, in the period such determination is made. The Company is required to file federal and state income tax returns in the United States and various other state jurisdictions. The Company also files income tax returns in the foreign countries in which it operates. The preparation of these income tax returns requires the Company to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by the Company. Additionally, the Company follows an accounting standard addressing the accounting for uncertainty in income taxes that prescribes rules for recognition, measurement, and classification in the consolidated financial statements of tax positions taken or expected to be taken in a tax return. |
Net Income (Loss) per Share | Net Income (Loss) per Share Basic net income (loss) per share is calculated by dividing the net income (loss) by the weighted-average number of shares of common stock outstanding for the period, without consideration for common stock equivalents. Diluted net income (loss) per share is calculated by dividing the net income (loss) by the weighted-average number of shares of common stock and dilutive common stock equivalents outstanding for the period determined using the treasury-stock method. Dilutive shares of common stock for the year ended December 31, 2023 were comprised of stock options and restricted stock units. Dilutive shares of stock for the years ended December 31, 2022 and 2021 were comprised of stock options. No dividends were declared or paid during the reporting periods. |
Recently Issued Accounting Standards Not Yet Adopted | Recently Issued Accounting Standards Not Yet Adopted 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. The Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on the consolidated financial statements and disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets to the total of such amounts shown in the consolidated statement of cash flows: As of December 31, (in thousands) 2023 2022 2021 Cash and cash equivalents $ 292,005 $ 391,883 $ 370,492 Restricted cash - current 55,000 — — Non-current Restricted cash 1,885 2,094 2,077 Total cash, cash equivalents and restricted cash $ 348,890 $ 393,977 $ 372,569 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Changes in Balances of Receivables and Contract Liability | The following table presents changes in the balances of receivables and contract liabilities related to strategic collaboration agreements during the year ended December 31, 2023: (in thousands) December 31, 2022 Additions Deductions December 31, 2023 Contract Assets: Accounts receivable $ 2,764 $ 205,746 $ ( 176,446 ) $ 32,064 Contract Liabilities: Deferred revenue $ 48,719 $ 205,405 $ ( 166,799 ) $ 87,325 |
Schedule of Revenue | The following table summarizes the Company’s revenue for the periods indicated. Approximately $ 154.9 million, $ 192.7 million and $ 5.0 million of total revenue represents revenue derived from foreign countries for the years ended December 31, 2023, 2022 and 2021, respectively. For the Year Ended December 31, (in thousands) 2023 2022 2021 Collaboration revenue: CSL Seqirus $ 154,264 $ 154,425 $ — Vinbiocare — 24,571 4,364 Janssen 660 9,201 3,129 Ultragenyx 1,837 3,739 3,700 Israel Ministry of Health — 12,500 — Other 987 1,319 1,166 Total collaboration revenue $ 157,748 $ 205,755 $ 12,359 Grant revenue: BARDA $ 9,051 $ 244 $ — Total grant revenue $ 9,051 $ 244 $ — |
Accrued Liabilities Detail (Tab
Accrued Liabilities Detail (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following: December 31, (in thousands) 2023 2022 Accrued compensation $ 5,918 $ 4,038 Cystic Fibrosis Foundation liability 7,633 — Income tax payable 641 1,295 Current portion of operating lease liability 4,309 3,884 Clinical trial accruals 2,333 4,531 Vinbiocare contractual liabilities 2,514 7,468 Other accrued research and development expenses 8,533 9,016 Total $ 31,881 $ 30,232 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Summary of Components of Property and Equipment, Net | Property and equipment, net consisted of the following: December 31, (in thousands) 2023 2022 Research equipment $ 16,046 $ 10,251 Computers and software 1,275 1,154 Office equipment and furniture 958 958 Leasehold improvements 2,655 2,491 Construction in progress 233 3,344 Total $ 21,167 $ 18,198 Less accumulated depreciation and amortization ( 8,740 ) ( 5,783 ) Property and equipment, net $ 12,427 $ 12,415 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Weighted Average Assumptions Used in Black -Scholes Valuation Model | The following table presents the weighted-average assumptions used in the Black-Scholes valuation model by the Company in calculating the fair value of stock options granted: For the Year Ended December 31, 2023 2022 2021 Expected life (in years) 6.04 6.05 6.03 Expected volatility 76.1 % 82.1 % 73.7 % Expected dividend yield — % — % — % Risk-free interest rate 3.91 % 2.93 % 1.13 % Grant date weighted average fair value $ 18.87 $ 15.56 $ 26.71 |
Summary of Share Option Activity | The following table summarizes the Company’s stock option activity for the year ended December 31, 2023: Number of Weighted- Weighted- Aggregate Outstanding – December 31, 2022 6,622,740 $ 34.78 8.2 years $ 10,721 Granted 2,140,206 $ 27.38 Exercised ( 237,820 ) $ 11.26 Forfeited/cancelled ( 553,999 ) $ 34.31 Outstanding – December 31, 2023 7,971,127 $ 33.55 7.9 years $ 53,295 Exercisable – December 31, 2023 3,700,692 $ 38.04 6.6 years $ 31,142 Exercisable and expected to vest – 7,971,127 $ 33.55 7.9 years $ 53,295 |
Schedule of Share-based Compensation Expenses | Share-based compensation expenses included in the Company’s statements of operations and comprehensive income (loss) for the years ended December 31, 2023, 2022 and 2021 were: For the Year Ended December 31, (in thousands) 2023 2022 2021 Research and development $ 14,950 $ 14,081 $ 14,101 General and administrative 19,699 16,530 14,814 Total $ 34,649 $ 30,611 $ 28,915 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Summary of Reconciliation of (Loss) Income Before Income Taxes for Domestic and Foreign Locations | A reconciliation of (loss) income before income taxes for domestic and foreign locations is as follows: For the Year Ended December 31, (In thousands) 2023 2022 2021 United States $ ( 27,890 ) $ 10,644 $ ( 203,674 ) Foreign — — — Total (loss) income before income taxes $ ( 27,890 ) $ 10,644 $ ( 203,674 ) |
Summary of Reconciliation of Income Tax Expense | A reconciliation of income tax expense for the years ended December 31, 2023, 2022 and 2021 is as follows: For the Year Ended December 31, 2023 2022 2021 Current: Federal $ 1,246 $ 1,121 $ — State 589 174 — Foreign — — — Total current income tax expense $ 1,835 $ 1,295 $ — Deferred: Federal $ — $ — $ — State — — — Foreign — — — Total deferred income tax expense — — — Total income tax expense $ 1,835 $ 1,295 $ — |
Reconciliation of Federal Statutory Income Tax Rate to Company's Effective Income Tax Rate | A reconciliation of the federal statutory income tax rate to the Company’s effective income tax rate is as follows: For the Year Ended December 31, 2023 2022 2021 Federal statutory income tax rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit 1.9 % 7.2 % 6.2 % Stock-based compensation ( 2.5 %) 16.1 % ( 0.4 %) Officers compensation ( 7.4 %) 21.8 % ( 1.1 %) Research and development credits 20.0 % ( 40.3 %) 2.9 % Uncertain tax positions ( 2.4 %) 9.0 % ( 0.4 %) Change in tax rate 0.2 % ( 12.6 %) ( 1.7 %) Change in valuation allowance ( 36.5 %) ( 9.4 %) ( 26.7 %) Other ( 0.3 %) ( 1.0 %) 0.2 % Permanent differences ( 0.7 %) 0.4 % — % Provision for income taxes ( 6.7 )% 12.2 % ( 0.0 )% |
Significant Components of Deferred Income Taxes | The significant components of deferred income taxes are as follows: December 31, (in thousands) 2023 2022 Deferred tax assets: Net operating loss $ 19,147 $ 47,866 Tax credits 10,723 10,460 Accrued liabilities 943 1,420 Deferred revenue 7,014 611 Inventory 15,961 9,016 Basis difference in equity investments 2,202 2,212 Depreciation and amortization — — Capitalized R&D 41,971 19,938 Right-of-use lease liability 7,233 8,200 Share-based compensation 11,618 7,201 Total gross deferred tax assets 116,812 106,924 Deferred tax liabilities: Depreciation and amortization ( 1,184 ) ( 475 ) Right-of-use asset ( 6,822 ) ( 7,826 ) Total gross deferred tax liabilities ( 8,006 ) ( 8,301 ) Valuation allowance ( 108,806 ) ( 98,623 ) Net deferred tax asset $ — $ — |
Summary of Reconciliation of Unrecognized Tax Benefits | A reconciliation of unrecognized tax benefits is as follows (in millions): December 31, 2023 2022 Beginning balance of unrecognized tax benefits $ 2.9 $ 2.4 Settlement of prior period tax positions — — Decrease for prior period tax positions 0.1 ( 0.5 ) Increase for current period tax positions 0.6 1.0 Ending balance of unrecognized tax benefits $ 3.6 $ 2.9 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Payments of Operating Lease Liability | As of December 31, 2023, the remaining payments of the operating lease liability were as follows: (in thousands) Remaining Lease 2024 $ 5,646 2025 4,019 2026 3,603 2027 3,711 Thereafter 19,572 Total remaining lease payments 36,551 Less: imputed interest ( 6,335 ) Total operating lease liabilities $ 30,216 Weighted-average remaining lease term 8.2 Weighted-average discount rate 4.8 % |
Organization (Details Textual)
Organization (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Organization And Significant Accounting Policies [Line Items] | ||||
Accumulated deficit | $ 367,866 | $ 338,141 | ||
Collaboration revenue | 166,799 | 205,999 | $ 12,359 | |
Cash and cash equivalents, including restricted cash | 348,890 | $ 393,977 | $ 372,569 | $ 463,002 |
Seqirus Inc [Member] | ||||
Organization And Significant Accounting Policies [Line Items] | ||||
Upfront payment received | 200,000 | |||
Collaboration revenue | 147,900 | |||
Additional milestone payments received | $ 23,800 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Textual) | 12 Months Ended | |||
Dec. 31, 2023 USD ($) Segment Customer | Dec. 31, 2022 USD ($) Customer | Dec. 31, 2021 USD ($) Customer | Apr. 21, 2023 USD ($) | |
Summary Of Significant Accounting Policy [Line Items] | ||||
Number of operating segments for research and development | Segment | 1 | |||
Non-current restricted cash | $ 1,885,000 | $ 2,094,000 | $ 2,077,000 | |
Allowance for Doubtful Accounts Receivable | 0 | 0 | ||
Impairment losses | 0 | 0 | 0 | |
Other comprehensive loss | 0 | 0 | 0 | |
Income tax effect related to unrealized losses on marketable securities | 0 | 0 | $ 0 | |
Dividends declared or paid | 0 | $ 0 | ||
Wells Fargo Credit Agreement [Member] | ||||
Summary Of Significant Accounting Policy [Line Items] | ||||
Debt instrument, collateral amount | $ 55,000,000 | $ 55,000,000 | ||
Employees and Officers [Member] | ||||
Summary Of Significant Accounting Policy [Line Items] | ||||
Share options expiration period | 10 years | |||
Vesting period | 4 years | |||
Vesting description | Share-based compensation is recognized over the requisite service period of the individual awards using the straight-line attribution method, which generally equals the vesting period. Employees and officers’ stock options have a ten-year life and generally vest 25% on the first anniversary of the grant and in 1/36th equal installments on each monthly anniversary thereafter, such that options are fully vested on the four-year anniversary of the date of grant. The exercisability and vesting periods of options granted to consultants and directors vary. | |||
First Year Anniversary of the Grant [Member] | Employees and Officers [Member] | ||||
Summary Of Significant Accounting Policy [Line Items] | ||||
Vesting percentage | 25% | |||
Maximum [Member] | ||||
Summary Of Significant Accounting Policy [Line Items] | ||||
Property and equipment, useful lives | 5 years | |||
Minimum [Member] | ||||
Summary Of Significant Accounting Policy [Line Items] | ||||
Property and equipment, useful lives | 3 years | |||
Credit Risk [Member] | Accounts Receivable [Member] | ||||
Summary Of Significant Accounting Policy [Line Items] | ||||
Number of customers | Customer | 2 | 2 | ||
Concentration risk, percentage | 100% | 100% | ||
Customer Concentration Risk [Member] | Revenue [Member] | ||||
Summary Of Significant Accounting Policy [Line Items] | ||||
Number of customers | Customer | 3 | 5 | 4 | |
Customer Concentration Risk [Member] | Revenue [Member] | Top Three Customers [Member] | ||||
Summary Of Significant Accounting Policy [Line Items] | ||||
Concentration risk, percentage | 99% | |||
Customer Concentration Risk [Member] | Revenue [Member] | Top Five Customers [Member] | ||||
Summary Of Significant Accounting Policy [Line Items] | ||||
Concentration risk, percentage | 99% | |||
Customer Concentration Risk [Member] | Revenue [Member] | Top Four Customers [Member] | ||||
Summary Of Significant Accounting Policy [Line Items] | ||||
Concentration risk, percentage | 99% |
Schedule of Cash and Cash Equiv
Schedule of Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 292,005 | $ 391,883 | $ 370,492 | |
Restricted cash - current | 55,000 | |||
Non-current Restricted cash | 1,885 | 2,094 | 2,077 | |
Total cash, cash equivalents and restricted cash shown in the statement of cash flows | $ 348,890 | $ 393,977 | $ 372,569 | $ 463,002 |
Revenue - Summary of Changes in
Revenue - Summary of Changes in Balances of Receivables and Contract Liability (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Accounts receivable, Balance | $ 2,764 |
Additions | 205,746 |
Deductions. | (176,446) |
Accounts receivable, Balance | 32,064 |
Deferred revenue, Balance | 48,719 |
Additions | 205,405 |
Deductions | (166,799) |
Deferred revenue, Balance | $ 87,325 |
Revenue (Details Textual)
Revenue (Details Textual) - USD ($) shares in Thousands | 1 Months Ended | 12 Months Ended | ||||
Nov. 01, 2022 | Feb. 28, 2023 | Aug. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue [Line Items] | ||||||
Collaboration revenue | $ 166,799,000 | $ 205,999,000 | $ 12,359,000 | |||
Deferred revenue | $ 87,325,000 | $ 48,719,000 | ||||
Purchase of common stock, shares | 26,828 | 26,555 | ||||
Revenue recognized | $ (166,799,000) | |||||
Seqirus Inc [Member] | ||||||
Revenue [Line Items] | ||||||
Collaboration revenue | 147,900,000 | |||||
Upfront payment received | 200,000,000 | |||||
BARDA [Member] | ||||||
Revenue [Line Items] | ||||||
Revenue recognized | 9,100,000 | $ 200,000 | ||||
Total grant revenue | $ 63,200,000 | |||||
Grant revenue outstanding | 54,100,000 | |||||
ASC 606 [Member] | Vinbiocare [Member] | ||||||
Revenue [Line Items] | ||||||
Deferred revenue | 0 | |||||
Remaining performance obligation | 0 | |||||
Foreign Countries [Member] | ||||||
Revenue [Line Items] | ||||||
Collaboration revenue | 154,900,000 | 192,700,000 | 5,000,000 | |||
Research Collaboration And License Agreement [Member] | Seqirus Inc [Member] | ||||||
Revenue [Line Items] | ||||||
Upfront payment received | $ 200,000,000 | |||||
Research Collaboration And License Agreement [Member] | Seqirus Inc [Member] | COVID-19 Vaccine [Member] | ||||||
Revenue [Line Items] | ||||||
Development milestones received advance payment | 5,300,000 | |||||
Net profits percentage | 40% | |||||
Research Collaboration And License Agreement [Member] | Seqirus Inc [Member] | Manufacturing and Supply of ARCT-154 Drug Product [Member] | ||||||
Revenue [Line Items] | ||||||
Development milestones received advance payment | 23,600,000 | |||||
Research Collaboration And License Agreement [Member] | Maximum [Member] | Seqirus Inc [Member] | ||||||
Revenue [Line Items] | ||||||
Eligible to receive development milestone payment | $ 1,300,000,000 | |||||
Eligible to receive commercial milestone payment | $ 3,000,000,000 | |||||
Vinbiocare Agreement [Member] | ||||||
Revenue [Line Items] | ||||||
Upfront payment received | $ 40,000,000 | |||||
Reserved upfront payment | 11,800,000 | |||||
Additional financial support | $ 2,100,000 | |||||
Vinbiocare Agreement [Member] | ASC 606 [Member] | Vinbiocare [Member] | ||||||
Revenue [Line Items] | ||||||
Deferred revenue | 0 | |||||
CSL Collaboration Agreement [Member] | ||||||
Revenue [Line Items] | ||||||
Development milestones achieved | 154,200,000 | |||||
Achieved development milestone included accounts receivable | 23,800,000 | |||||
Deferred revenue | 87,100,000 | $ 45,600,000 | ||||
CSL Collaboration Agreement [Member] | Phase I Clinical Study [Member] | ||||||
Revenue [Line Items] | ||||||
Deferred revenue | 15,100,000 | |||||
Milestone payments | 17,500,000 | |||||
Remaining performance obligation | 2,400,000 | |||||
CSL Collaboration Agreement [Member] | Maximum [Member] | Phase I Clinical Study [Member] | ||||||
Revenue [Line Items] | ||||||
Additional payments upon meeting certain clinical milestones | 1,500,000 | |||||
Study Support Agreement [Member] | ASC 606 [Member] | Vinbiocare [Member] | Short-Term Contract with Customer [Member] | ||||||
Revenue [Line Items] | ||||||
Accrued liabilities paid upon occurrence of specified events | 2,500,000 | |||||
Study Support Agreement [Member] | ASC 606 [Member] | Vinbiocare [Member] | Long-Term Contract with Customer [Member] | ||||||
Revenue [Line Items] | ||||||
Accrued liabilities paid upon occurrence of specified events | $ 500,000 |
Revenue - Summary of Revenues (
Revenue - Summary of Revenues (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation Of Revenue [Line Items] | |||
Total revenue | $ 166,799 | $ 205,999 | $ 12,359 |
Collaboration Revenue [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenue | 157,748 | 205,755 | 12,359 |
Grant Revenue [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenue | 9,051 | 244 | |
CSL Seqirus [Member] | Collaboration Revenue [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenue | 154,264 | 154,425 | |
Vinbiocare [Member] | Collaboration Revenue [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenue | 24,571 | 4,364 | |
Janssen [Member] | Collaboration Revenue [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenue | 660 | 9,201 | 3,129 |
Ultragenyx [Member] | Collaboration Revenue [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenue | 1,837 | 3,739 | 3,700 |
Israel Ministry of Health [Member] | Collaboration Revenue [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenue | 12,500 | ||
Other [Member] | Collaboration Revenue [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenue | 987 | 1,319 | $ 1,166 |
BARDA [Member] | Grant Revenue [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenue | $ 9,051 | $ 244 |
Fair Value Measurements (Detail
Fair Value Measurements (Details Textual) $ in Millions | Dec. 31, 2023 USD ($) |
Recurring [Member] | Money Market Funds [Member] | Level 1 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Assets, fair value | $ 256.1 |
Accrued Liabilities Detail - Sc
Accrued Liabilities Detail - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Accrued Liabilities, Current [Abstract] | ||
Accrued compensation | $ 5,918 | $ 4,038 |
Cystic Fibrosis Foundation liability | 7,633 | |
Income tax payable | 641 | 1,295 |
Current portion of operating lease liability | $ 4,309 | $ 3,884 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Total | Total |
Clinical trial accruals | $ 2,333 | $ 4,531 |
Vinbiocare contractual liabilities | 2,514 | 7,468 |
Other accrued research and development expenses | 8,533 | 9,016 |
Total | $ 31,881 | $ 30,232 |
Property and Equipment, Net - S
Property and Equipment, Net - Summary of Components of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 21,167 | $ 18,198 |
Less accumulated depreciation and amortization | (8,740) | (5,783) |
Property and equipment, net | 12,427 | 12,415 |
Research equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 16,046 | 10,251 |
Computer and software [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 1,275 | 1,154 |
Office equipment and furniture [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 958 | 958 |
Leasehold improvements [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 2,655 | 2,491 |
Construction in progress [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 233 | $ 3,344 |
Property and Equipment, Net (De
Property and Equipment, Net (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization | $ 2,957 | $ 1,527 | $ 1,193 |
Debt (Details Textual)
Debt (Details Textual) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||
Apr. 21, 2023 USD ($) | Mar. 14, 2023 USD ($) | Mar. 31, 2023 USD ($) | Mar. 31, 2023 SGD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jan. 29, 2021 USD ($) | Jan. 29, 2021 SGD ($) | Nov. 07, 2020 SGD ($) | |
Western Alliance Bank [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest expense related to long-term debt | $ 300,000 | $ 900,000 | $ 800,000 | ||||||||
Loan and Security Agreement [Member] | Western Alliance Bank [Member] | Long-term Debt [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Term loan | $ 15,000,000 | ||||||||||
Repayment of term loan | 7,400,000 | ||||||||||
Repayament of principal and interest on collateralized term loan | $ 7,000,000 | ||||||||||
Loan maturity date | Oct. 30, 2023 | ||||||||||
Fee payable | $ 300,000 | ||||||||||
Loan and Security Agreement [Member] | Western Alliance Bank [Member] | Long-term Debt [Member] | Minimum [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest of the prime rate plus | 1.25% | ||||||||||
Loan and Security Agreement [Member] | Western Alliance Bank [Member] | Long-term Debt [Member] | Maximum [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest of the prime rate plus | 2.75% | ||||||||||
Wells Fargo Credit Agreement [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Revolving credit line available | $ 50,000,000 | ||||||||||
Loans interest rate, percentage | 2% | ||||||||||
Term of agreement | 2 years | ||||||||||
Option for renewal term | 1 year | ||||||||||
Non-refundable commitment fee, percentage | 0.25% | ||||||||||
Long-term debt | 0 | ||||||||||
Debt instrument, collateral amount | $ 55,000,000 | 55,000,000 | |||||||||
Wells Fargo Credit Agreement [Member] | SOFR [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Loan accrues interest rate per annum, percentage | 1% | ||||||||||
Singapore Economic Development Board [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Term loan | $ 62,100,000 | ||||||||||
Term loan draw down | $ 46,600,000 | $ 62,100,000 | |||||||||
Repayment of term loan | $ 17,100,000 | $ 22,800,000 | |||||||||
Loan accrues interest rate per annum, percentage | 4.50% | ||||||||||
Long-term debt | 50,400,000 | ||||||||||
Remaining loan including accrued interest forgiveable | $ 34,000,000 | ||||||||||
Interest expense related to long-term debt | $ 500,000 | $ 2,100,000 | $ 1,900,000 |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |||
Feb. 19, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Class Of Stock [Line Items] | ||||
Non-cash charge recorded in acquired in-process research and development expense | $ 5,000 | |||
Antidilutive securities excluded from computation of earnings per share | 800,000 | 3,700,000 | 1,300,000 | |
Alexion [Member] | ||||
Class Of Stock [Line Items] | ||||
Issuance of common stock | 74,713 | |||
Common stock issued, value | $ 5,000 | |||
Non-cash charge recorded in acquired in-process research and development expense | $ 5,000 |
Share-Based Compensation (Detai
Share-Based Compensation (Details Textual) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | |||||
Aug. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2022 | Apr. 30, 2022 | Oct. 15, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Compensation cost not yet recognized | $ 78.8 | ||||||
Weighted-average remaining service period | 3 years | ||||||
Fair value of options vested | $ 35.3 | $ 39.2 | $ 28.4 | ||||
The total intrinsic value of options exercised | $ 4.3 | $ 1.6 | $ 3.6 | ||||
Fair value of common stock | $ 34.92 | ||||||
Restricted Stock Units [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Restricted stock units granted | 18,786 | ||||||
2019 Omnibus Equity Incentive Plan [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Share-based compensation number of shares authorized | 3,750,000 | ||||||
2019 Omnibus Equity Incentive Plan [Member] | Maximum [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Share-based compensation number of shares authorized | 8,750,000 | ||||||
2019 Omnibus Equity Incentive Plan [Member] | Employee Stock Option | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Common stock reserved for future issuance | 193,642 | ||||||
2021 Inducement Equity Incentive Plan [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Reduction in number of common stock shares available for future issuance | 130,000 | ||||||
2021 Inducement Equity Incentive Plan [Member] | Maximum [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Number of shares available | 1,000,000 | ||||||
2021 Inducement Equity Incentive Plan [Member] | Employee Stock Option | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Common stock reserved for future issuance | 119,952 |
Share-Based Compensation (Det_2
Share-Based Compensation (Details) - Employee Stock Option - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Expected life (in years) | 6 years 14 days | 6 years 18 days | 6 years 10 days |
Expected volatility | 76.10% | 82.10% | 73.70% |
Risk-free interest rate | 3.91% | 2.93% | 1.13% |
Grant date weighted average fair value | $ 18.87 | $ 15.56 | $ 26.71 |
Share-Based Compensation (Det_3
Share-Based Compensation (Details 1) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||
Number of Shares, Outstanding | 6,622,740 | |
Number of Shares, Granted | 2,140,206 | |
Number of Shares, Exercised | (237,820) | |
Number of Shares, Forfeited/cancelled | (553,999) | |
Number of Shares, Outstanding | 7,971,127 | 6,622,740 |
Number of Shares, Exercisable December 31, 2023 | 3,700,692 | |
Number of Shares, Exercisable and expected to vest December 31, 2023 | 7,971,127 | |
Weighted-Average Exercise Price, Outstanding | $ 34.78 | |
Weighted-Average Exercise Price, Granted | 27.38 | |
Weighted-Average Exercise Price, Exercised | 11.26 | |
Weighted-Average Exercise Price, Forfeited/cancelled | 34.31 | |
Weighted-Average Exercise Price, Outstanding | 33.55 | $ 34.78 |
Weighted-Average Exercise Price, Exercisable - December 31, 2023 | 38.04 | |
Weighted-Average Exercise Price, Exercisable and expected to vest -December 31, 2023 | $ 33.55 | |
Weighted-Average Remaining Contractual Term (Years), Outstanding | 7 years 10 months 24 days | 8 years 2 months 12 days |
Weighted-Average Remaining Contractual Term (Years), Exercisable - December 31, 2023 | 6 years 7 months 6 days | |
Weighted-Average Remaining Contractual Term (Years), Exercisable and expected to vest - December 31, 2023 | 7 years 10 months 24 days | |
Aggregate Intrinsic Value, Outstanding | $ 53,295 | $ 10,721 |
Aggregate Intrinsic Value, Exercisable - December 31, 2023 | 31,142 | |
Aggregate Intrinsic Value, Exercisable and expected to vest - December 31, 2023 | $ 53,295 |
Share-Based Compensation (Det_4
Share-Based Compensation (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based compensation expenses | $ 34,649 | $ 30,611 | $ 28,915 |
Research and Development [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based compensation expenses | 14,950 | 14,081 | 14,101 |
General and Administrative [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based compensation expenses | $ 19,699 | $ 16,530 | $ 14,814 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (27,890) | $ 10,644 | $ (203,674) |
Total (loss) income before income taxes | $ (27,890) | $ 10,644 | $ (203,674) |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Current: | ||
Federal | $ 1,246 | $ 1,121 |
State | 589 | 174 |
Total current income tax expense | 1,835 | 1,295 |
Deferred: | ||
Total income tax expense | $ 1,835 | $ 1,295 |
Income Taxes (Details 3)
Income Taxes (Details 3) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory income tax rate | 21% | 21% | 21% |
State income taxes, net of federal benefit | 1.90% | 7.20% | 6.20% |
Share-based compensation | (2.50%) | 16.10% | (0.40%) |
Officers compensation | (7.40%) | 21.80% | (1.10%) |
Research and development credits | 20% | (40.30%) | 2.90% |
Uncertain tax position | (2.40%) | 9% | (0.40%) |
Change in tax rate | 0.20% | (12.60%) | (1.70%) |
Change in valuation allowance | (36.50%) | (9.40%) | (26.70%) |
Other | (0.30%) | (1.00%) | 0.20% |
Permanent differences | (0.70%) | 0.40% | |
Provision for income taxes | (6.70%) | 12.20% | 0% |
Income Taxes (Details 4)
Income Taxes (Details 4) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets: | ||
Net operating loss | $ 19,147 | $ 47,866 |
Tax credits | 10,723 | 10,460 |
Accrued liabilities | 943 | 1,420 |
Deferred revenue | 7,014 | 611 |
Inventory | 15,961 | 9,016 |
Basis difference in equity investments | 2,202 | 2,212 |
Capitalized R&D | 41,971 | 19,938 |
Right-of-use lease liability | 7,233 | 8,200 |
Share-based compensation | 11,618 | 7,201 |
Total gross deferred tax assets | 116,812 | 106,924 |
Deferred tax liabilities: | ||
Depreciation and amortization | (1,184) | (475) |
Right-of-use asset | (6,822) | (7,826) |
Total gross deferred tax liabilities | (8,006) | (8,301) |
Valuation allowance | $ (108,806) | $ (98,623) |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2018 | |
Income Taxes [Line Items] | ||||
Valuation allowance | $ 108,806,000 | $ 98,623,000 | ||
Valuation allowance change | $ 10,200,000 | 1,000,000 | ||
Maximum percentage of likelihood of uncertain tax position recognized to be sustained | 50% | |||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | $ 0 | $ 0 | $ 0 | |
Unrecognized tax benefits impacting effective tax rate | $ 0 | |||
Net Operating Loss and Research and Development Credit Carryforwards Limitations On Cumulative Change In Ownership Minimum Percentage | 50% | |||
Net Operating Loss and Research and Development Credit Carryforwards Limitations on Cumulative Change In Ownership Period | 3 years | |||
Orphan Drug Credit [Member] | ||||
Income Taxes [Line Items] | ||||
Credit Carryforward Amount | $ 2,300,000 | |||
Credit Carryforward Expiration Year | 2042 | |||
Federal [Member] | ||||
Income Taxes [Line Items] | ||||
Operating Loss Carryforwards | $ 27,900,000 | $ 27,900,000 | ||
Federal [Member] | Research Tax Credit Carryforward [Member] | ||||
Income Taxes [Line Items] | ||||
Credit Carryforward Amount | $ 6,300,000 | |||
Credit Carryforward Expiration Year | 2037 | |||
State [Member] | ||||
Income Taxes [Line Items] | ||||
Operating Loss Carryforwards | $ 193,700,000 | |||
Operating Loss Carryforwards Expiration Year | 2039 | |||
State [Member] | Research Tax Credit Carryforward [Member] | ||||
Income Taxes [Line Items] | ||||
Credit Carryforward Amount | $ 6,600,000 |
Income Taxes (Details 5)
Income Taxes (Details 5) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning balance of unrecognized tax benefits | $ 2.9 | $ 2.4 |
Decrease for prior period tax positions | 0.1 | (0.5) |
Increase for current period tax positions | 0.6 | 1 |
Ending balance of unrecognized tax benefits | $ 3.6 | $ 2.9 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Textual) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | 50 Months Ended | |||||
Aug. 01, 2019 | Sep. 30, 2021 | Oct. 31, 2017 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Sep. 25, 2023 | Feb. 29, 2020 | |
Commitment And Contingencies [Line Items] | ||||||||
Operating lease costs | $ 5.6 | $ 4.7 | $ 1.9 | |||||
February 2020 Lease Agreement [Member] | ||||||||
Commitment And Contingencies [Line Items] | ||||||||
Operating lease extended additional term | 13 months | |||||||
Lessee, operating leases, option to extend | the lease for one twelve-month period. In February 2021, the Company opted to extend the lease through March 2025 to coincide with the lease term of the Company’s headquarters | |||||||
September 2021 Lease Agreement [Member] | ||||||||
Commitment And Contingencies [Line Items] | ||||||||
Operating lease extended additional term | 10 years 8 months | |||||||
Lessee, operating leases, option to extend | the Company will have the right to extend the term of the lease for an additional five-year period | |||||||
Security deposit | $ 2 | |||||||
Underlying Agreement [Member] | Cystic Fibrosis Foundation [Member] | ||||||||
Commitment And Contingencies [Line Items] | ||||||||
Contra expense remaining amount included in accrued expenses | $ 7.6 | |||||||
Contra expense included in research and development expense | $ 1.4 | $ 5.2 | $ 3.8 | |||||
Minimum amount agreed to incur under research plan | $ 15 | |||||||
Underlying Agreement [Member] | LUNAR-CF [Member] | Cystic Fibrosis Foundation [Member] | ||||||||
Commitment And Contingencies [Line Items] | ||||||||
Payments for advance | $ 15.6 | $ 24.6 | ||||||
October 2017 Lease Amendment [Member] | ||||||||
Commitment And Contingencies [Line Items] | ||||||||
Operating lease extended additional term | 84 months | |||||||
Lessee, operating lease, term of contract | 4 months | |||||||
Tenant improvement allowance | $ 0.1 | |||||||
Lessee, operating leases, option to extend | The lease may be extended for one five-year period at the then current market rate with annual escalations | |||||||
Security deposit | $ 0.1 | |||||||
Maximum [Member] | September 2021 Lease Agreement [Member] | ||||||||
Commitment And Contingencies [Line Items] | ||||||||
Monthly base rent | 0.4 | |||||||
Minimum [Member] | September 2021 Lease Agreement [Member] | ||||||||
Commitment And Contingencies [Line Items] | ||||||||
Monthly base rent | $ 0.3 |
Commitments and Contingencies -
Commitments and Contingencies - Payments of Operating Lease Liability (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Leases [Abstract] | |
2024 | $ 5,646 |
2025 | 4,019 |
2026 | 3,603 |
2027 | 3,711 |
Thereafter | 19,572 |
Total remaining lease payments | 36,551 |
Less: imputed interest | (6,335) |
Total operating lease liabilities | $ 30,216 |
Weighted-average remaining lease term | 8 years 2 months 12 days |
Weighted-average discount rate | 4.80% |
Related Party Transactions - Eq
Related Party Transactions - Equity-Method Investment (Details Textual) - GRI Bio [Member] | Apr. 30, 2023 shares |
Related Party Transaction [Line Items] | |
Number of shares owned | 28,125 |
Percentage of owned shares | 1% |