Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 27, 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 | ||
Entity Registrant Name | ELIEM THERAPEUTICS, INC. | ||
Entity Central Index Key | 0001768446 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Shell Company | false | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity File Number | 001-4078 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 83-2273741 | ||
Entity Address, Address Line One | PMB #117 | ||
Entity Address, Address Line Two | 2801 Centerville Road 1st Floor | ||
Entity Address, City or Town | Wilmington | ||
Entity Address, State or Province | DE | ||
Entity Address, Postal Zip Code | 19808-1609 | ||
City Area Code | 1-877 | ||
Local Phone Number | 354-3689 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Title of 12(b) Security | Common Stock, par value $0.0001 per share | ||
Trading Symbol | ELYM | ||
Security Exchange Name | NASDAQ | ||
Entity Common Stock, Shares Outstanding | 27,719,409 | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
ICFR Auditor Attestation Flag | false | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s definitive proxy statement for its 2024 Annual Meeting of Stockholders, which the registrant intends to file pursuant to Regulation 14A with the Securities and Exchange Commission not later than 120 days after the registrant’s fiscal year ended December 31, 2023, are incorporated by reference into Part III of this Annual Report on Form 10-K. | ||
Auditor Name | PricewaterhouseCoopers LLP | ||
Auditor Location | Seattle, Washington | ||
Auditor Firm ID | 238 | ||
Entity Public Float | $ 13.2 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Cash and cash equivalents | $ 93,112 | $ 43,585 |
Short-term marketable securities | 13,686 | 79,981 |
Prepaid expenses and other current assets | 3,457 | 10,827 |
Total current assets | 110,255 | 134,393 |
Operating lease right-of-use assets | 199 | 471 |
Other long term assets | 15 | 128 |
Total assets | 110,469 | 134,992 |
Current liabilities: | ||
Accounts payable | 66 | 750 |
Accrued expenses and other current liabilities | 2,433 | 5,047 |
Operating lease liabilities | 334 | 300 |
Total current liabilities | 2,833 | 6,097 |
Other long-term liabilities | 22 | 0 |
Operating lease liabilities, net of current portion | 15 | 180 |
Total liabilities | 2,870 | 6,277 |
Commitments and contingencies (Note 5) | ||
Stockholders' equity | ||
Common stock, $0.0001 par value per share, 250,000,000 shares authorized; 27,697,076 and 26,567,681 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively | 3 | 3 |
Additional paid-in capital | 263,577 | 249,930 |
Accumulated other comprehensive loss | (2) | (358) |
Accumulated deficit | (155,979) | (120,860) |
Total stockholders’ deficit | 107,599 | 128,715 |
Total liabilities and stockholders' equity | $ 110,469 | $ 134,992 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 27,699,446 | 26,567,681 |
Common stock, shares outstanding | 27,699,446 | 26,567,681 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating expenses: | ||
Research and development | $ 15,411 | $ 26,214 |
General and administrative | 24,864 | 18,921 |
Total operating expenses | 40,275 | 45,135 |
Loss from operations | (40,275) | (45,135) |
Other income (expense): | ||
Foreign currency gain (loss) | 536 | (1,484) |
Interest Income, Net | 4,620 | 1,375 |
Total other income (expense) | 5,156 | (109) |
Net loss | $ (35,119) | $ (45,244) |
Net loss per share attributable to common stockholders, diluted | $ (1.3) | $ (1.72) |
Net loss per share attributable to common stockholders, basic | $ (1.3) | $ (1.72) |
Weighted-average shares used in computing net loss per share attributable to common stockholders diluted | 26,987,122 | 26,311,554 |
Weighted-average shares used in computing net loss per share attributable to common stockholders basic | 26,987,122 | 26,311,554 |
Comprehensive loss: | ||
Net loss | $ (35,119) | $ (45,244) |
Other comprehensive loss: | ||
Unrealized gain (loss) on investments, net of tax of $0 | 356 | (235) |
Comprehensive loss | $ (34,763) | $ (45,479) |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Statement [Abstract] | ||
Income tax | $ 0 | $ 0 |
Consolidated Statements of Rede
Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' (Deficit) Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income [Member] | Accumulated Deficit [Member] |
Beginning balance at Dec. 31, 2021 | $ 167,203 | $ 3 | $ 242,939 | $ (123) | $ (75,616) |
Beginning balance, (in shares) at Dec. 31, 2021 | 26,235,317 | ||||
Vesting of restricted stock awards, shares | 154,869 | ||||
Stock-based compensation | 6,991 | 6,991 | |||
Other Comprehensive Income (Loss), Net of Tax | (235) | (235) | |||
Net loss | (45,244) | (45,244) | |||
Ending balance at Dec. 31, 2022 | 128,715 | $ 3 | 249,930 | (358) | (120,860) |
Ending balance (in shares) at Dec. 31, 2022 | 26,390,186 | ||||
Vesting of restricted stock awards, shares | 124,737 | ||||
Exercise of stock options | $ 841 | 841 | |||
Exercise of stock options, Shares | 1,111,512 | 1,111,512 | |||
Stock-based compensation | $ 12,806 | 12,806 | |||
Other Comprehensive Income (Loss), Net of Tax | 356 | 356 | |||
Net loss | (35,119) | (35,119) | |||
Ending balance at Dec. 31, 2023 | $ 107,599 | $ 3 | $ 263,577 | $ (2) | $ (155,979) |
Ending balance (in shares) at Dec. 31, 2023 | 27,626,435 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities | ||
Net loss | $ (35,119) | $ (45,244) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation | 12,806 | 6,991 |
Right-of-use asset impairment | 180 | 0 |
Non-cash operating lease expense | 405 | 443 |
Accretion of discounts and amortization of premiums on investments, net | (2,331) | (177) |
Foreign currency loss (gain) from remeasurement | (304) | 408 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other assets | 7,370 | 945 |
Long term assets | 115 | (60) |
Accounts payable | (686) | (653) |
Accrued expenses and other liabilities | (2,613) | 425 |
Long-term liabilities | 22 | 0 |
Operating lease liabilities | (444) | (447) |
Net cash used in operating activities | (20,599) | (37,369) |
Cash flows from investing activities: | ||
Purchase of marketable securities | (58,449) | (87,963) |
Proceeds from maturities of marketable securities | 127,430 | 122,403 |
Net cash provided by (used in) investing activities | 68,981 | 34,440 |
Cash flows from financing activities: | ||
Proceeds from exercise of stock options | 841 | 0 |
Net cash provided by financing activities | 841 | 0 |
Effect of exchange rate changes on cash | 304 | (408) |
Net change in cash and cash equivalents | 49,527 | (3,337) |
Cash and cash equivalents at beginning of period | 43,585 | 46,922 |
Cash and cash equivalents at end of period | 93,112 | 43,585 |
Supplemental disclosure of cash flow information: | ||
Cash paid for leases included in operating cash outflows | 507 | 462 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Right-of-use assets obtained in exchange for lease liabilities | $ 313 | $ 915 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Basis of Presentation | Note 1. Nature of Operations and Basis of Presentation Organization Eliem Therapeutics, Inc. (the Company) is a biotechnology company focused on developing novel therapies for neuronal excitability disorders to address unmet needs in psychiatry, epilepsy, chronic pain, and other disorders of the peripheral and central nervous systems. The Company was incorporated on October 18, 2018 as a Delaware corporation and is headquartered in Delaware. On February 7, 2023, the Company’s board of directors approved a restructuring plan (the Restructuring Plan) to conserve financial resources and better align the Company’s workforce with current business needs, as a result of the decision to pause development of ETX-155 and focus on the Company’s preclinical Kv7 program. As part of the Restructuring Plan, the Company's workforce was reduced by approximately 55 %, with substantially all of the reduction in personnel completed in the first half of 2023. On July 20, 2023, the Company announced that it made the determination to pause further development of its Kv7 program and to conduct a comprehensive exploration of strategic alternatives focused on maximizing stockholder value. As part of that effort, the Company is exploring a variety of options, including seeking a partner for further development of both Kv7 and ETX-155. The Company further reduced its workforce by 10 employees in October 2023. Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements of the Company and its wholly owned subsidiary have been prepared in conformity with accounting principles generally accepted in the United States (U.S. GAAP). All intercompany transactions and balances have been eliminated in consolidation. Liquidity Since inception, the Company has experienced recurring losses from operations and generated negative cash flows from operations. The Company has an accumulated deficit of $ 156.0 million and expects to incur additional losses from operations in the future. The Company estimates the available cash, cash equivalents and marketable securities of $ 106.8 million as of December 31, 2023 will be sufficient to meet its projected operating requirements for at least the next twelve months from the filing date of these consolidated financial statements and the Company anticipates that it will need to raise substantial financing in the future to fund its operations. The Company may finance future cash needs through the sale of equity, debt financings, or other capital sources, which could include income from collaborations, strategic partnerships or other strategic arrangements. There are no assurances that the Company will be able to raise sufficient amounts of funding in the future on acceptable terms, or at all. |
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 A summary of the significant accounting policies followed by the Company in the preparation of the accompanying consolidated financial statements follows: Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Estimates include those related to the accrual of research and development expenses, recoverable research and development tax credits, and the valuation of stock-based awards. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ from those estimates . Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and marketable securities. The Company’s cash is held by two financial institutions in the U.S. and two financial institutions in the U.K. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. The Company’s deposits held in the U.S. and U.K. may exceed the Federal Depository Insurance Corporation and Financial Services Compensation Scheme, respectively, insured limits. As of December 31, 2023, the Company has investments in money market funds, U.S. Treasury securities, and government agency debt securities, which are held in a segregated account at a third-party custodian. The Company has established guidelines relative to credit ratings and maturities intended to safeguard principal balances and maintain liquidity. Through December 31, 2023, and the date of this filing, the Company has not experienced any losses on such deposits. Comprehensive Loss Comprehensive loss consists of net loss and unrealized gains or losses on available-for-sale investments. The Company presents comprehensive loss and its components as part of the statements of operations and comprehensive loss. Risks and Uncertainties The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, protection of proprietary technology, dependence on key personnel, reliance on single-source vendors and collaborators, availability of raw materials, patentability of the Company’s products and processes and clinical efficacy and safety of any product the Company may develop, compliance with government regulations and the need to obtain additional financing to fund operations. Any product candidates the Company may develop in the future will require significant additional research and development efforts, including extensive preclinical studies, clinical trials, and regulatory approval, prior to commercialization. These efforts will require significant amounts of additional capital, adequate personnel infrastructure and extensive compliance and reporting. There can be no assurance that any future research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained or maintained, that any products developed will obtain necessary government regulatory approval or that any approved products will be commercially viable. Even if any future product development efforts are successful, it is uncertain when, if ever, the Company will generate revenue from product sales. The Company operates in an environment of rapid technological change and substantial competition from other pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees, consultants and other third parties. Segments 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 (the CODM). The Company’s CODM is its executive chairman who reviews financial information together with certain operating metrics principally to make decisions about how to allocate resources and to measure the Company’s performance. Management has determined that the Company operates as a single operating and reportable segment. The Company’s CODM evaluates financial information on a consolidated basis. As the Company operates as one operating segment, all required segment financial information is found in the consolidated financial statements. Fair Value Measurement Assets and liabilities recorded at fair value on a recurring basis in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The Company measures fair value based on a three-tier hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows: Level 1 —Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 —Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the assets or liabilities. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3 —Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. In determining fair value, the Company utilizes quoted market prices, or valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value. There were no transfers into or out of Level 3 for any of the periods presented. The Company’s fair value measurements as of December 31, 2023 and 2022 were as follows (in thousands): December 31, 2023 Level 1 Level 2 Balance Assets: Cash equivalents: Money market funds $ 89,197 $ — $ 89,197 Marketable securities: U.S. Treasury securities 8,962 — 8,962 U.S. government agency debt securities — 4,724 4,724 Total marketable securities 8,962 4,724 13,686 Total assets $ 98,159 $ 4,724 $ 102,883 December 31, 2022 Level 1 Level 2 Balance Assets: Cash equivalents: Money market funds $ 27,472 $ — $ 27,472 Marketable securities: U.S. Treasury securities 30,451 — 30,451 Commercial paper — 29,543 29,543 Corporate bonds — 16,626 16,626 U.S. government agency debt securities — 3,361 3,361 Total marketable securities 30,451 49,530 79,981 Total assets $ 57,923 $ 49,530 $ 107,453 Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents. As of December 31, 2023 and 2022, the Company's cash equivalents consisted of money market funds. Investments in Marketable Securities Marketable securities are classified as available-for-sale, primarily consisting of U.S. Treasury and government agency debt securities, commercial paper, and corporate bonds, and are reported at fair value. Unrealized holding gains and losses are reflected as a separate component of stockholders' equity in accumulated other comprehensive loss until realized. The cost of debt securities is adjusted for amortization of purchase premiums and accretion of discounts to maturity. Such amortization and accretion is included in interest income, net in the statements of operations and comprehensive loss. Realized gains and losses on the sale of these securities are recognized in interest income, net in the consolidated statement of operations and comprehensive loss. The cost of marketable securities sold is based on the specific identification method. The Company periodically reviews its available-for-sale securities to assess for credit losses. Some of the factors considered in assessing whether an allowance for credit losses is necessary include the extent to which the fair value is less than the amortized cost basis, adverse conditions related to the security, an industry or geographic area, changes to security rating or sector credit ratings, and other relevant market data. Research and Development Expenses Research and development expenses consist of research and development services and personnel-related expenses such as salaries, bonuses, benefits, stock-based compensation, termination benefits, professional service fees, and other related costs such as facility rent, partially offset by fully refundable U.K. research and development tax credits. Research and development expenses include estimates of the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs. Management estimates accrued expenses as of each balance sheet date in the consolidated financial statements based on facts and circumstances known at that time. Examples of estimated accrued research and development expenses include those related to fees paid to: • vendors in connection with preclinical development activities; • contract research organizations (CROs) in connection with preclinical studies and clinical trials; and • contract development and manufacturing organizations (CDMOs) in connection with the production of preclinical and clinical trial materials. All research and development costs are expensed in the period incurred, based on the estimates of the services received and efforts expended considering a number of factors, including, progress towards completion of the research, development and manufacturing activities, invoicing to date under the contracts, communication from the CROs, CDMOs and other companies of any actual costs incurred during the period that have not yet been invoiced and the costs included in the contracts and purchase orders. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which advance payments are made or payments made to vendors will exceed the level of services provided and result in a prepayment of the expense . Research and Development Tax Credits The Company receives tax credits from the U.K. government based on claims made under the Small Medium Enterprises (SME) research and development tax relief program. Qualifying expenditures largely relate to research and development activities performed by third parties on our behalf, as well as employment costs for research staff and consumables incurred. The research and development tax credits are recognized when the qualifying expenditure has been incurred and there is reasonable assurance that the reimbursement will be received. Each reporting period, the Company evaluates its eligibility for the SME program based on criteria established by HM Revenue and Customs (HMRC) and records a reduction to research and development expense for the amount of the credit estimated to be claimed based on qualifying expenses and information available at that time. The Company qualified for tax credits under the SME program for the year ended December 31, 2022 and expects to qualify for the year ending December 31, 2023. The following table outlines the changes to the research and development tax credit receivable, including amount recognized as an offset to research and development expense, during the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Balance at beginning of period $ 6,492 $ 6,523 Recognition of credit claims 1,971 6,683 Receipt of credit claims ( 7,125 ) ( 5,462 ) Foreign currency gain (loss) 686 ( 1,252 ) Balance at end of period $ 2,024 $ 6,492 As of December 31, 2023 and 2022, the tax credit receivable was $ 2.0 million and $ 6.5 million respectively, all of which is classified within the prepaid expenses and other current assets line item in the consolidated balance sheets. General and Administrative Expenses Our general and administrative expenses consist primarily of personnel-related expenses such as salaries, bonuses, benefits, stock-based compensation, and termination benefits, for our personnel in executive, finance and accounting, human resources, business development and other administrative functions. Other significant general and administrative expenses include legal fees relating to intellectual property and corporate matters, professional fees for accounting, audit, regulatory, tax and consulting services, insurance costs, as well as investor and public relations costs. General and administrative costs are expensed as incurred. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist primarily of receivables f rom refundable research and development tax credits from the U.K. government and operating expenses paid in advance. Leases The Company determines if a contract is or contains a lease at the inception of the contract, and classifies that lease as a finance lease if it meets certain criteria or as an operating lease when it does not. The Company reassesses if a contract is or contains a lease upon modification of the contract. The Company leases office space in the U.S. and the U.K. under non-cancelable operating leases. Operating lease right-of-use (ROU) 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. Operating lease ROU assets and liabilities are recognized based on the present value of lease payments over the lease term at the commencement date of the lease. ROU assets also include any initial direct costs incurred and any lease payments made at or before the lease commencement date, less any lease incentive received. The Company uses the rate implicit in the lease in determining the present value of lease payments and, if that rate is not readily determinable, the Company uses its incremental borrowing rate commensurate with the lease term based on the information available at the date of lease commencement. The incremental borrowing rate reflects the rate of interest that a lessee would have to pay to borrow, on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company does not have material short-term lease costs. Lease expense for lease payments is recognized on a straight-line basis over the lease term. For real estate leases, the Company does not separate lease and non-lease components. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company’s non-lease components are primarily related to property taxes, insurance, and common area maintenance, which vary based on future outcomes, and are recognized as rent expense when incurred. As discussed further in Note 5 to the consolidated financial statements Commitments and Contingencies, the Company entered into a non-cancellable sublease agreement for the Bellevue office space in July 2023. Sublease income is presented as a reduction of rent expense in the consolidated statement of operations and comprehensive loss. Stock-Based Compensation The Company measures its stock-based awards granted to employees, non-employee directors, consultants and independent advisors based on the estimated grant-date fair value of the awards. For awards with only service conditions, including stock options, restricted stock awards, and restricted stock units, compensation expense is recognized over the requisite service period using the straight-line method. The Company uses the Black-Scholes option pricing model to estimate the fair value of its stock option awards. The Black-Scholes option pricing model requires the Company to make assumptions and judgments about the variables used in the calculations, including the expected term, expected volatility of the Company’s common stock, risk-free interest rate and expected dividend yield. As the stock-based compensation is based on awards ultimately expected to vest, it is reduced by forfeitures, which the Company accounts for as they occur. Income Taxes Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts or existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period of enactment. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The Company recognizes the tax benefit from an uncertain tax position if it is more likely than not that the tax position will be sustained upon examination by the tax authorities, based on the merits of the position. The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense or benefit. To date, there have been no interest or penalties charged in relation to the unrecognized tax benefits. Foreign Currency The Company’s reporting currency is the U.S. dollar. The functional currency of the Company and its subsidiary is the U.S. dollar. Monetary assets and liabilities resulting from transactions denominated in currencies other than the functional currency are remeasured in the functional currency at exchange rates prevailing at the balance sheet date, and income items and expenses are translated into U.S. dollars at the average exchange rate in effect during the period. Exchange gains and losses resulting from remeasurement and foreign currency transactions are included in the determination of net loss. Net Loss Per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, adjusted for outstanding shares that are subject to repurchase. Diluted net loss per share is computed by giving effect to all potentially dilutive securities outstanding for the period using the treasury stock method or the if-converted method based on the nature of such securities. For periods in which the Company reports net losses, diluted net loss per share is the same as basic net loss per share, because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. Emerging Growth Company Status The Company is an emerging growth company (EGC), as defined in the Jumpstart Our Business Startups Act of 2012 (JOBS Act). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued after the enactment of the JOBS Act until those standards apply to private companies. The Company has elected to avail itself of this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The standard changes how entities measure credit losses for most financial assets, including accounts and notes receivables. The standard replaces today’s “incurred loss” approach with an “expected loss” model, under which companies recognize allowances based on expected rather than incurred losses. Entities are required to apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. Based on the Company's status as an EGC, the Company follows the adoption calendar for non-public companies and as such, the effective date of this update is for fiscal years beginning after December 15, 2022 and interim periods therein. The Company adopted ASU 2016-13 on January 1, 2023, which did not have a material impact on its consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging —Contracts in Entity’s Own Equity (Subtopic 815-40)—Accounting For Convertible Instruments and Contracts in an Entity’s Own Equity . The standard simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The standard also simplifies the diluted net income per share calculation in certain areas. The effective date of this update for non-public companies is for fiscal years beginning after December 15, 2023, including interim periods therein. Early adoption is permitted for fiscal years beginning after December 15, 2020 and interim periods therein. The Company estimates that adoption will not have a material impact on its consolidated financial statements. In November 2023, the FASB issued ASU No. 2023-07 (ASU 2023-07), Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures which requires, among other things, the following: (i) enhanced disclosures about significant segment expenses that are regularly provided to the CODM and included in a segment's reported measure of profit or loss; (ii) disclosure of the amount and description of the composition of other segment items, as defined in ASU 2023-07, by reportable segment; and (iii) reporting the disclosures about each reportable segment's profit or loss and assets on an annual and interim basis. The provisions of ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024; early adoption is permitted. The Company expects ASU 2023-07 to require additional disclosures in the notes to its consolidated financial statements. In December 2023, the FASB issued ASU No. 2023-09 (ASU 2023-09), Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which requires, among other things, the following for public business entities: (i) enhanced disclosures of specific categories of reconciling items included in the rate reconciliation, as well as additional information for any of these items meeting certain qualitative and quantitative thresholds; (ii) disclosure of the nature, effect and underlying causes of each individual reconciling item disclosed in the rate reconciliation and the judgment used in categorizing them if not otherwise evident; and (iii) enhanced disclosures for income taxes paid, which includes federal, state, and foreign taxes, as well as for individual jurisdictions over a certain quantitative threshold. The amendments in ASU 2023-09 eliminate the requirement to disclose the nature and estimate of the range of the reasonably possible change in unrecognized tax benefits for the 12 months after the balance sheet date. The effective date of this update for non-public companies is for fiscal years beginning after December 15, 2025; early adoption is permitted. The Company expects ASU 2023-09 to require additional disclosures in the notes to its consolidated financial statements. There were no other significant updates to the recently issued accounting standards other than as disclosed herewith for the year ended December 31, 2023. Although there are several other new accounting pronouncements issued or proposed by the FASB, the Company does not believe any of those accounting pronouncements have had or will have a material impact on its financial position or operating results. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2023 | |
Investments [Abstract] | |
Investments | Note 3. Investments Investments consists of available-for-sale securities as follows (in thousands): December 31, 2023 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Short-term marketable securities: U.S. Treasury securities $ 8,962 $ — $ — $ 8,962 U.S. government agency debt securities 4,726 — ( 2 ) 4,724 Total short-term marketable securities $ 13,688 $ — $ ( 2 ) $ 13,686 December 31, 2022 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Short-term marketable securities: U.S. Treasury securities $ 30,628 $ — $ ( 177 ) $ 30,451 Commercial paper 29,543 — — 29,543 Corporate bonds 16,815 — ( 189 ) 16,626 U.S. government agency debt securities 3,353 8 — 3,361 Total short-term marketable securities $ 80,339 $ 8 $ ( 366 ) $ 79,981 All the commercial paper, U.S. Treasury and government agency debt securities, and corporate bonds designated as short-term marketable securities have a contractual maturity date that is equal to or less than one year from the respective balance sheet date. Prior to 2023, the Company followed the guidance in Accounting Standards Codification (ASC) 320, Investments—Debt and Equity Securities in determining whether unrealized losses were other than temporary. The Company adopted ASC 326 on January 1, 2023, and now considers whether unrealized losses have resulted from a credit loss or other factors. The unrealized losses on the Company’s available-for-sale securities as of December 31, 2023 and December 31, 2022 were caused by fluctuations in market value and interest rates as a result of the economic environment. The Company concluded that an allowance for credit losses was unnecessary as of December 31, 2023 and that there were no impairments as of December 31, 2022 considered as other-than-temporary because the decline in the market value was attributable to changes in market conditions and not credit quality, and that it is neither management’s intention to sell nor is it more likely than not that the Company will be required to sell these investments prior to recovery of their cost basis or recovery of fair value. There was no material realized gain or loss on available-for-sale securities in the periods presented. The Company elected the practical expedient to exclude accrued interest from both the fair value and the amortized cost basis of the available-for-sale debt securities for the purposes of identifying and measuring an impairment and to not measure an allowance for expected credit losses for accrued interest receivables. Accrued interest receivable is written off through net realized investment gains (losses) at the time the issuer of the bond defaults or is expected to default on payment. The Company made an accounting policy election to present the accrued interest receivable balance as part of prepaid expenses and other current assets in the condensed consolidated balance sheets. Accrued interest receivable related to marketable securities was $ 0.4 million and $ 0.1 million as of December 31, 2023 and December 31, 2022, respectively. Investments in a continual unrealized loss position for less than 12 months consist of the following (in thousands): December 31, 2023 December 31, 2022 Fair Value Fair Value U.S. Treasury securities $ 5,967 $ 26,506 U.S. government agency debt securities 2,234 — Corporate bonds — 1,977 Total available-for-sale securities $ 8,201 $ 28,483 Investments in a continual unrealized loss position for greater than 12 months consist of the following (in thousands): December 31, 2022 Fair Value Corporate bonds $ 14,649 U.S. Treasury securities 3,945 Total available-for-sale securities $ 18,594 The Company did not have any investments in a continual unrealized loss position for greater than 12 months as of December 31, 2023. |
Certain Balance Sheet Accounts
Certain Balance Sheet Accounts | 12 Months Ended |
Dec. 31, 2023 | |
Balance Sheet Related Disclosures [Abstract] | |
Certain Balance Sheet Accounts | 4. Certain Balance Sheet Accounts Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following (in thousands): December 31, 2023 December 31, 2022 Recoverable research and development tax credits $ 2,024 $ 6,492 Prepaid expenses 847 1,330 Other assets 552 456 Research and development expenses 34 2,549 Total prepaid expenses and other current assets $ 3,457 $ 10,827 Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following (in thousands): December 31 2023 December 31, 2022 Accrued payroll expenses $ 1,111 $ 2,900 Accrued restructuring expenses 1,066 — Other current liabilities 138 — Other accrued expenses 90 245 Accrued research and development expense 28 1,902 Total accrued expenses and other current liabilities $ 2,433 $ 5,047 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 5. Commitments and Contingencies Operating Leases The Company leases office space in the U.S. and U.K. under non-cancelable operating leases. In May 2021, the Company entered into an agreement for office space in Cambridge, U.K. The term of this lease is for a period of 24 months, which commenced on July 1, 2021. In March 2023, the Company agreed to extend this lease until June 30, 2024 . This extension was accounted for as a lease modification under ASC 842, Leases and the ROU asset and lease liability were remeasured at the modification date. The remeasurement of the lease resulted in an increase in both the operating right-of-use asset and the operating lease liability of approximately $ 0.3 million. In November 2021, the Company agreed to lease approximately 5,000 square feet of office space in Bellevue, Washington. The term of this lease is 39 months, which commenced on November 1, 2021. The lease contains rent escalation clauses and an option to extend the term of the lease for an additional 3-year period at a market rate determined according to the lease. At the lease's inception and as of December 31, 2023, the Company does not expect that it will exercise its option to extend the lease, and therefore the period covered by this option is not included in the lease term. In July 2023, the Company entered into a non-cancellable sublease agreement for the Bellevue office space, under the terms of which the Company is entitled to receive $ 0.2 million in lease payments over the term of the sublease, which commenced in July 2023 and ends concurrently with the original lease in January 2025. In advance of the sublease, the Company ceased use of and vacated the Bellevue office space in June 2023. The Company considered these circumstances to be an indicator of impairment and recorded an ROU asset impairment loss during the second quarter of 2023 of $ 0.2 million, which was the amount by which the carrying value of the lease ROU asset exceeded the fair value. The fair value is based on the discounted cash flows of anticipated net rental income for the office space subleased. The ROU asset impairment loss is included in general and administrative expense in the consolidated statements of operations and comprehensive loss. As of December 31, 2023, the remaining weighted-average lease term was 0.8 years. The weighted-average incremental borrowing rate used to determine the operating lease liability was 7.5 %. The Company incurred $ 0.4 million and $ 0.5 million in rent expense for the years ended December 31, 2023 and 2022, respectively. Sublease income was $ 48,000 for the year ended December 31, 2023, which was classified as a reduction in rent expense. As of December 31, 2023, the annual future minimum lease payments due under the Company's non-cancelable operating leases are as follows (in thousands): Operating Lease Sublease Net Operating Year Ending December 31, Payments Income Lease Payments 2024 $ 343 ( 132 ) 211 2025 15 ( 11 ) 4 Total undiscounted lease payments $ 358 $ ( 143 ) $ 215 Present value adjustment ( 9 ) Total operating lease liabilities $ 349 Legal Proceedings From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made and that such expenditures can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount. As of the date of these consolidated financial statements, the Company is not party to any material legal matters or claims. Indemnification In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless, and defend an indemnified party for losses suffered or incurred by the indemnified party. Some of the provisions will limit losses to those arising from third-party actions. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. The Company has never incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. The Company intends to enter into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by Delaware corporate law. The Company currently has directors’ and officers’ insurance coverage that reduces its exposure and enables the Company to recover a portion of any future amounts paid. The Company believes the estimated fair value of these indemnification agreements in excess of applicable insurance coverage is immaterial. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Note 6. Stock-Based Compensation 2019 Plan In 2019, the Company adopted the 2019 Equity Incentive Plan (the 2019 Plan). The 2019 Plan provides for the Company to grant qualified stock options, non-qualified stock options, and restricted stock awards to employees, non-employee directors and consultants of the Company under terms and provisions established by the Company's board of directors. Under the terms of the 2019 Plan, options are granted at an exercise price no less than fair value of the Company’s common stock on the grant date, except in certain cases related to employees outside of the U.S. Option awards granted typically have 10-year terms measured from the option grant date. While no shares are available for future issuance under the 2019 Plan, it continues to govern outstanding equity awards granted thereunder. 2021 Plan and ESPP The compensation committee of the Company's board of directors adopted and the Company's stockholders approved the 2021 Equity Incentive Plan (the 2021 Plan) and the 2021 Employee Stock Purchase Plan (the ESPP), which became effective immediately prior to the effectiveness of the Company's initial public offering (IPO). The 2021 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units, stock appreciation rights and other stock-based awards. The Company's employees, officers, directors and consultants are eligible to receive awards under the 2021 Plan. Under the terms of the 2021 Plan, options are granted at an exercise price no less than fair value of the Company’s common stock on the grant date, except in certain cases related to significant corporate transactions. Option awards granted typically have 10-year terms measured from the option grant date. As of December 31, 2023, the total number of shares authorized for issuance under the 2021 Plan was 5,368,077 . Any shares that are returned under the 2019 Plan as a result of cancellation or forfeiture become available under the 2021 Plan. Further, the number of shares of common stock reserved for issuance under the 2021 Plan automatically increases on January 1 o f each year, beginning on January 1, 2022, and continuing through and including January 1, 2031, by 5 % of the total number of shares of common stock outstanding on December 31 of the immediately preceding calendar year, or a lesser number of shares determined by the Company's board of directors prior to the applicable January 1st. The ESPP allows employees, including executive officers, to contribute up to 15 % of their earnings, subject to certain limitations, for the purchase of the Company's common stock at a price per share equal to the lower of (a) 85 % of the fair market value of a share of common stock on the first day of the offering period, or (b) 85 % of the fair market value of a share of common stock on the last day of the offering period. As of December 31, 2023, there were 787,231 shares of common stock reserved for future issuance under the ESPP. The number of shares of common stock reserved for issuance under the ESPP automatically increases on January 1 of each calendar year, beginning on January 1, 2022 and continuing through and including January 1, 2031, by the lesser of (1) 1 % of the total number of shares of the Company's common stock outstanding on December 31 of the preceding calendar year or (2) a number of shares determined by the Company's board of directors. Shares subject to purchase rights granted under the ESPP that terminate without having been exercised in full will not reduce the number of shares available for issuance under the ESPP. As of December 31, 2023, no shares have been granted or purchased under the ESPP. Stock Options Awards with vesting conditions under both plans typically include either: (i) vesting 25 % on the first anniversary of the grant date with the remainder vesting monthly over the following three years or (ii) monthly vesting over four years . The activity for stock options is as follows: Weighted Average Weighted Remaining Aggregate Average Contract Intrinsic Options Exercise Terms Values Outstanding Price (in years) (in thousands) Balance as of December 31, 2022 5,988,271 $ 4.70 8.83 $ 5,699 Options granted 50,000 3.00 Options cancelled and forfeited ( 340,283 ) 7.93 Options exercised ( 1,111,512 ) 0.76 2,282 Balance as of December 31, 2023 4,586,476 $ 5.40 2.28 $ 1,060 Vested and expected to vest, December 31, 2023 4,586,476 $ 5.40 2.28 $ 1,060 Options exercisable as of December 31, 2023 4,036,926 $ 5.46 1.45 $ 885 The aggregate intrinsic value disclosed in the above table is based on the difference between the exercise price of the stock option and the fair value of the Company’s common stock as of the respective period-end dates. The weighted-average grant-date fair value of stock options granted during the years ended December 31, 2023 and 2022 was $ 2.25 per share and $ 4.00 per share, respectively. The Black-Scholes option pricing model for employee and nonemployee stock options incorporates the following assumptions: • Fair Value of Common Stock — The fair value of each share of common stock is based on the closing price of the Company's common stock on the date of grant as reported on the Nasdaq Global Market. • Volatility — The expected stock price volatilities are estimated based on the historical and implied volatilities of comparable publicly traded companies as the Company does not have sufficient history of trading its common stock. • Risk-free Interest Rate — The risk-free interest rates are based on US Treasury yields in effect at the grant date for notes with comparable terms as the awards. • Expected Term — The expected term represents the period that the Company’s stock options are expected to be outstanding and is determined using the simplified method (based on the mid-point between the vesting date and the end of the contractual term). • Dividend Yield — The expected dividend yield assumption is based on the Company’s current expectations about its anticipated dividend policy. The fair value of the Company’s stock option awards was estimated at the date of grant using a Black-Scholes option pricing model with the following assumptions for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Expected term (in years) 5.50 5.50 - 6.50 Expected volatility 92.90 % 77.33 % - 91.74 % Risk-free interest rate 3.69 % 1.69 % - 4.22 % Expected dividend yield 0.00 % 0.00 % Restricted Stock The Company has: (i) restricted stock awards with service conditions that vest 25 % on the first anniversary of the grant date and the remainder vesting monthly over the following three years and (ii) restricted stock units that vest quarterly over a two and a half year period. The restricted stock awards are subject to repurchase by the Company at the original purchase price in the event that the award recipient’s employment or relationship is terminated prior to the shares vesting. The activity for restricted stock awards and units is as follows: Weighted-Average Number of Shares Value Unvested at December 31, 2022 177,495 $ 8.32 Granted 113,333 3.64 Vested ( 124,737 ) 6.85 Forfeited ( 16,116 ) 8.11 Unvested at December 31, 2023 149,975 $ 6.03 The fair value of restricted stock awards and units vested during the years ended December 31, 2023 and 2022 was approximately $ 0.4 million and $ 0.6 million, respectively. Modifications & Accelerations Certain equity awards are subject to provisions in which the vesting of these awards is automatically accelerated upon the occurrence of events such as an involuntary termination in connection with a reduction in force. Further, in connection with the Restructuring Plan and workforce reduction in October 2023, the Company modified the terms of certain equity awards for impacted employees including partial or full acceleration of vesting of stock options and restricted stock awards upon separation and extension of exercise periods for stock options post-separation. As a result of: (i) the contractual acceleration and (ii) the discretionary modification of equity awards in connection with the Restructuring Plan and workforce reduction in October 2023, the Company recorded incremental stock-based compensation expense of $ 9.6 million for the year ended December 31 2023, of which $ 0.9 million and $ 8.7 million is included in research and development expense and general and administrative expense in the consolidated statement of operations and comprehensive loss, respectively. Stock-Based Compensation The following table shows stock-based compensation for stock options, restricted stock awards, and restricted stock units included in the Company’s consolidated statements of operations and comprehensive loss (in thousands): Year Ended December 31, 2023 2022 Research and development expense $ 2,778 $ 2,538 General and administrative expense 10,028 4,453 Total stock-based compensation expense $ 12,806 $ 6,991 As of December 31, 2023, there was $ 1.8 million of unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted average period of 1.91 years. Further, there was $ 0.9 million of unrecognized compensation cost related to unvested restricted stock awards and units, which is expected to be recognized over a weighted average period of 1.4 years. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Note 7. Net Loss Per Share The following table shows the computation of basic and diluted net loss per share (in thousands, except share and per share data): Year Ended December 31, 2023 2022 Net loss $ ( 35,119 ) $ ( 45,244 ) Weighted-average number of shares used to compute net loss per share, basic and diluted 26,987,122 26,311,554 Net loss per share, basic and diluted $ ( 1.30 ) $ ( 1.72 ) The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share for the periods presented because their effect would have been anti-dilutive: Year Ended December 31, 2023 2022 Common stock options 4,586,476 5,988,271 Unvested restricted stock awards and units 149,975 177,495 Total potentially dilutive shares 4,736,451 6,165,766 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 8. Income Taxes The components of net loss before tax provision from income taxes are as follows (in thousands): Year Ended December 31, 2023 2022 United States $ ( 17,768 ) $ ( 6,272 ) United Kingdom ( 17,351 ) ( 38,972 ) Total $ ( 35,119 ) $ ( 45,244 ) The following table presents a reconciliation of the Company’s expected tax computed at the U.S. statutory federal income tax rate to the total provision for income taxes (in thousands): Year Ended December 31, 2023 2022 U.S. federal taxes at statutory rate $ ( 7,375 ) $ ( 9,497 ) State taxes, net of federal benefit 1 1 Foreign rate differential ( 232 ) 471 Non-deductible officer compensation 713 — Other non-deductible expenses 1 1 Research credit addback 1,729 4,220 Refundable tax credit ( 414 ) ( 1,407 ) Return to provision and other adjustments 1,049 ( 2 ) Stock-based compensation 510 742 Tax credits ( 69 ) ( 110 ) U.K. tax rate change impact on deferred income taxes — ( 1,390 ) Change in valuation allowance 4,087 6,971 Total $ — $ — The significant components of the Company's deferred tax assets and liabilities are presented below (in thousands): Year Ended December 31, 2023 2022 Deferred tax assets: Stock-based compensation, including 162m limitations $ 1,147 $ 1,105 Intangible asset 1,843 2,374 Accrued compensation and benefits 84 334 Operating lease liabilities 38 70 Net operating losses 17,137 12,413 Research credits 612 531 Total gross deferred tax assets 20,861 16,827 Deferred tax liabilities: Unrealized gain or loss 3 20 Operating lease right-of-use assets ( 8 ) ( 65 ) Other — ( 23 ) Total gross deferred tax liabilities ( 5 ) ( 68 ) Valuation allowance ( 20,856 ) ( 16,759 ) Net deferred tax liabilities $ — $ — In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all 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 those temporary differences become deductible. Due to the uncertainty of the business in which the Company operates, projections of future profitability are difficult and past profitability is not necessarily indicative of future profitability. The Company does not believe it is more likely than not that the deferred tax assets will be realized, and accordingly, the Company recorded a valuation allowance of $ 20.9 million and $ 16.8 million for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, the Company had net operating loss carryforward of approximately $ 13.1 million for federal income tax purposes, $ 55.5 million for foreign income tax purposes and $ 8.3 million for state income tax purposes. These may be used to offset future taxable income. The federal net operating loss carryforward can be carried forward indefinitely while the state net operating loss carryforward will begin to expire in varying amounts in 2038 . The Company also has research and development credits of approximately $ 0.5 million and $ 0.1 million for federal and state income taxes purposes, respectively. The federal credits may be used to offset future taxable income and will begin to expire in varying amounts in 2039 . The state credits may be used to offset future taxable income and will begin to expire in varying amounts in 2035 . The Company is subject to taxation in the U.S. (federal and various states) and the U.K. Currently, no historical years are under examination. The Company’s tax years starting in December 31, 2018 are open and subject to examination by the U.S. (federal and various states) and the U.K. taxing authorities due to the carryforward of utilized net operating losses and research and development credits. Uncertain tax positions are recorded when it is more likely than not that a given tax position would not be sustained upon examination by taxing authorities. The Company’s policy for recording interest and penalties related to income taxes, including uncertain tax positions, is to record such items as a component of the provision for income taxes. As of December 31, 2023 and 2022, the Company does no t have any uncertain tax positions. The Company has not completed a Section 382 study to assess whether an ownership change has occurred or whether there have been multiple ownership changes since the Company’s formation. Pursuant to Internal Revenue Code Sections 382 and 383, annual use of the Company’s net operating loss and research and development tax credit carryforwards may be limited in the event a cumulative change in ownership of more than 50 % occurs within a three-year period. If eliminated, the related asset would be removed from the deferred tax asset schedule with a corresponding reduction in the valuation allowance. Due to the existence of the valuation allowance, limitations created by future ownership changes, if any, will not impact the Company’s effective tax rate. |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Defined Contribution Plan | Note 9. Defined Contribution Plan The Company has a 401(k) defined contribution plan. Participation in the plan is available to substantially all US-based employees. Company contributions to the plan are discretionary. The Company made matching contributions of up to 4 % of each participating employee’s eligible compensation. For each of the years ended December 31, 2023 and 2022, total expense recognized from the 401(k) matching contributions was approximately $ 0.1 million. The Company also has a workplace pension contribution scheme for U.K.-based employees. For the years ended December 31, 2023 and 2022, the Company made contributions to the pension scheme of approximately $ 0.3 million and $ 0.2 million, respectively. |
Restructuring Costs
Restructuring Costs | 12 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Costs | Note 10. Restructuring Costs On February 7, 2023, the Company's board of directors approved a restructuring plan to conserve financial resources and better align the Company's workforce with current business needs. As part of the Restructuring Plan, the Company's workforce was reduced by approximately 55 %, with substantially all of the reduction in personnel completed in the first half of 2023. The Company further reduced its workforce by 10 employees in October 2023. The Company incurred additional restructuring costs of $ 2.0 million in the fourth quarter of 2023 associated with this reduction. During the year ended December 31, 2023, the Company recorded restructuring costs of $ 18.8 million. These costs are primarily related to severance payments, healthcare benefits and stock-based compensation. A summary of the restructuring costs recorded in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2023 is as follows (in thousands): Year Ended December 31, 2023 ROU Asset Impairment Severance and Benefits Costs Stock-based Compensation Total Restructuring Cost Recorded General and administrative expense $ 180 $ 6,089 8,707 $ 14,976 Research and development expense — 2,894 939 3,833 Total restructuring costs $ 180 $ 8,983 $ 9,646 $ 18,809 Employees affected by the reduction in workforce under the Restructuring Plan obtained involuntary termination benefits that are provided pursuant to a one-time benefit arrangement. For employees who were notified of their termination in February 2023 and had no requirement to provide future service beyond a minimum retention period, the Company recognized the liability for the full termination benefits at fair value in the first quarter of 2023. For employees who are required to provide services beyond a minimum retention period to receive their termination benefits, the Company recognizes the termination benefits ratably over their future service periods. The service periods began in February 2023 and the majority ended at various dates during the third quarter of 2023. The remaining termination benefits are expected to be recognized through March 2024. Employees who were notified of their termination in October had no requirement to provide future service beyond a minimum retention period, and therefore the Company recognized the liability for the full termination benefits at fair value in the fourth quarter of 2023. The activity in the restructuring liability during the year ended December 31, 2023 is as follows (in thousands): Restructuring Liability 2023 Restructuring liability as of December 31, 2022 $ — Severance costs incurred during the period 8,983 Severance costs paid during the period ( 7,906 ) Restructuring liability as of December 31, 2023 $ 1,077 The Company expects to incur aggregate restructuring costs of approximately $ 18.9 million. The remaining accrued restructuring liability is subject to assumptions, and actual amounts may differ. The Company may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the Restructuring Plan. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Organization | Organization Eliem Therapeutics, Inc. (the Company) is a biotechnology company focused on developing novel therapies for neuronal excitability disorders to address unmet needs in psychiatry, epilepsy, chronic pain, and other disorders of the peripheral and central nervous systems. The Company was incorporated on October 18, 2018 as a Delaware corporation and is headquartered in Delaware. On February 7, 2023, the Company’s board of directors approved a restructuring plan (the Restructuring Plan) to conserve financial resources and better align the Company’s workforce with current business needs, as a result of the decision to pause development of ETX-155 and focus on the Company’s preclinical Kv7 program. As part of the Restructuring Plan, the Company's workforce was reduced by approximately 55 %, with substantially all of the reduction in personnel completed in the first half of 2023. On July 20, 2023, the Company announced that it made the determination to pause further development of its Kv7 program and to conduct a comprehensive exploration of strategic alternatives focused on maximizing stockholder value. As part of that effort, the Company is exploring a variety of options, including seeking a partner for further development of both Kv7 and ETX-155. The Company further reduced its workforce by 10 employees in October 2023. |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements of the Company and its wholly owned subsidiary have been prepared in conformity with accounting principles generally accepted in the United States (U.S. GAAP). All intercompany transactions and balances have been eliminated in consolidation. |
Liquidity | Liquidity Since inception, the Company has experienced recurring losses from operations and generated negative cash flows from operations. The Company has an accumulated deficit of $ 156.0 million and expects to incur additional losses from operations in the future. The Company estimates the available cash, cash equivalents and marketable securities of $ 106.8 million as of December 31, 2023 will be sufficient to meet its projected operating requirements for at least the next twelve months from the filing date of these consolidated financial statements and the Company anticipates that it will need to raise substantial financing in the future to fund its operations. The Company may finance future cash needs through the sale of equity, debt financings, or other capital sources, which could include income from collaborations, strategic partnerships or other strategic arrangements. There are no assurances that the Company will be able to raise sufficient amounts of funding in the future on acceptable terms, or at all. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Estimates include those related to the accrual of research and development expenses, recoverable research and development tax credits, and the valuation of stock-based awards. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ from those estimates |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and marketable securities. The Company’s cash is held by two financial institutions in the U.S. and two financial institutions in the U.K. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. The Company’s deposits held in the U.S. and U.K. may exceed the Federal Depository Insurance Corporation and Financial Services Compensation Scheme, respectively, insured limits. As of December 31, 2023, the Company has investments in money market funds, U.S. Treasury securities, and government agency debt securities, which are held in a segregated account at a third-party custodian. The Company has established guidelines relative to credit ratings and maturities intended to safeguard principal balances and maintain liquidity. Through December 31, 2023, and the date of this filing, the Company has not experienced any losses on such deposits. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss consists of net loss and unrealized gains or losses on available-for-sale investments. The Company presents comprehensive loss and its components as part of the statements of operations and comprehensive loss. |
Risks And Uncertainties | Risks and Uncertainties The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, protection of proprietary technology, dependence on key personnel, reliance on single-source vendors and collaborators, availability of raw materials, patentability of the Company’s products and processes and clinical efficacy and safety of any product the Company may develop, compliance with government regulations and the need to obtain additional financing to fund operations. Any product candidates the Company may develop in the future will require significant additional research and development efforts, including extensive preclinical studies, clinical trials, and regulatory approval, prior to commercialization. These efforts will require significant amounts of additional capital, adequate personnel infrastructure and extensive compliance and reporting. There can be no assurance that any future research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained or maintained, that any products developed will obtain necessary government regulatory approval or that any approved products will be commercially viable. Even if any future product development efforts are successful, it is uncertain when, if ever, the Company will generate revenue from product sales. The Company operates in an environment of rapid technological change and substantial competition from other pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees, consultants and other third parties. |
Segments | Segments 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 (the CODM). The Company’s CODM is its executive chairman who reviews financial information together with certain operating metrics principally to make decisions about how to allocate resources and to measure the Company’s performance. Management has determined that the Company operates as a single operating and reportable segment. The Company’s CODM evaluates financial information on a consolidated basis. As the Company operates as one operating segment, all required segment financial information is found in the consolidated financial statements. |
Fair Value Measurement | Fair Value Measurement Assets and liabilities recorded at fair value on a recurring basis in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The Company measures fair value based on a three-tier hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows: Level 1 —Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 —Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the assets or liabilities. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3 —Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. In determining fair value, the Company utilizes quoted market prices, or valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value. There were no transfers into or out of Level 3 for any of the periods presented. The Company’s fair value measurements as of December 31, 2023 and 2022 were as follows (in thousands): December 31, 2023 Level 1 Level 2 Balance Assets: Cash equivalents: Money market funds $ 89,197 $ — $ 89,197 Marketable securities: U.S. Treasury securities 8,962 — 8,962 U.S. government agency debt securities — 4,724 4,724 Total marketable securities 8,962 4,724 13,686 Total assets $ 98,159 $ 4,724 $ 102,883 December 31, 2022 Level 1 Level 2 Balance Assets: Cash equivalents: Money market funds $ 27,472 $ — $ 27,472 Marketable securities: U.S. Treasury securities 30,451 — 30,451 Commercial paper — 29,543 29,543 Corporate bonds — 16,626 16,626 U.S. government agency debt securities — 3,361 3,361 Total marketable securities 30,451 49,530 79,981 Total assets $ 57,923 $ 49,530 $ 107,453 |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents. As of December 31, 2023 and 2022, the Company's cash equivalents consisted of money market funds. |
Investment In Marketable Securities | Investments in Marketable Securities Marketable securities are classified as available-for-sale, primarily consisting of U.S. Treasury and government agency debt securities, commercial paper, and corporate bonds, and are reported at fair value. Unrealized holding gains and losses are reflected as a separate component of stockholders' equity in accumulated other comprehensive loss until realized. The cost of debt securities is adjusted for amortization of purchase premiums and accretion of discounts to maturity. Such amortization and accretion is included in interest income, net in the statements of operations and comprehensive loss. Realized gains and losses on the sale of these securities are recognized in interest income, net in the consolidated statement of operations and comprehensive loss. The cost of marketable securities sold is based on the specific identification method. The Company periodically reviews its available-for-sale securities to assess for credit losses. Some of the factors considered in assessing whether an allowance for credit losses is necessary include the extent to which the fair value is less than the amortized cost basis, adverse conditions related to the security, an industry or geographic area, changes to security rating or sector credit ratings, and other relevant market data. |
Research and Development Expenses | Research and Development Expenses Research and development expenses consist of research and development services and personnel-related expenses such as salaries, bonuses, benefits, stock-based compensation, termination benefits, professional service fees, and other related costs such as facility rent, partially offset by fully refundable U.K. research and development tax credits. Research and development expenses include estimates of the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs. Management estimates accrued expenses as of each balance sheet date in the consolidated financial statements based on facts and circumstances known at that time. Examples of estimated accrued research and development expenses include those related to fees paid to: • vendors in connection with preclinical development activities; • contract research organizations (CROs) in connection with preclinical studies and clinical trials; and • contract development and manufacturing organizations (CDMOs) in connection with the production of preclinical and clinical trial materials. All research and development costs are expensed in the period incurred, based on the estimates of the services received and efforts expended considering a number of factors, including, progress towards completion of the research, development and manufacturing activities, invoicing to date under the contracts, communication from the CROs, CDMOs and other companies of any actual costs incurred during the period that have not yet been invoiced and the costs included in the contracts and purchase orders. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which advance payments are made or payments made to vendors will exceed the level of services provided and result in a prepayment of the expense |
Research and Development Tax Credits | Research and Development Tax Credits The Company receives tax credits from the U.K. government based on claims made under the Small Medium Enterprises (SME) research and development tax relief program. Qualifying expenditures largely relate to research and development activities performed by third parties on our behalf, as well as employment costs for research staff and consumables incurred. The research and development tax credits are recognized when the qualifying expenditure has been incurred and there is reasonable assurance that the reimbursement will be received. Each reporting period, the Company evaluates its eligibility for the SME program based on criteria established by HM Revenue and Customs (HMRC) and records a reduction to research and development expense for the amount of the credit estimated to be claimed based on qualifying expenses and information available at that time. The Company qualified for tax credits under the SME program for the year ended December 31, 2022 and expects to qualify for the year ending December 31, 2023. The following table outlines the changes to the research and development tax credit receivable, including amount recognized as an offset to research and development expense, during the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Balance at beginning of period $ 6,492 $ 6,523 Recognition of credit claims 1,971 6,683 Receipt of credit claims ( 7,125 ) ( 5,462 ) Foreign currency gain (loss) 686 ( 1,252 ) Balance at end of period $ 2,024 $ 6,492 As of December 31, 2023 and 2022, the tax credit receivable was $ 2.0 million and $ 6.5 million respectively, all of which is classified within the prepaid expenses and other current assets line item in the consolidated balance sheets. |
General And Administrative Expenses | General and Administrative Expenses Our general and administrative expenses consist primarily of personnel-related expenses such as salaries, bonuses, benefits, stock-based compensation, and termination benefits, for our personnel in executive, finance and accounting, human resources, business development and other administrative functions. Other significant general and administrative expenses include legal fees relating to intellectual property and corporate matters, professional fees for accounting, audit, regulatory, tax and consulting services, insurance costs, as well as investor and public relations costs. General and administrative costs are expensed as incurred. |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist primarily of receivables f rom refundable research and development tax credits from the U.K. government and operating expenses paid in advance. |
Leases | Leases The Company determines if a contract is or contains a lease at the inception of the contract, and classifies that lease as a finance lease if it meets certain criteria or as an operating lease when it does not. The Company reassesses if a contract is or contains a lease upon modification of the contract. The Company leases office space in the U.S. and the U.K. under non-cancelable operating leases. Operating lease right-of-use (ROU) 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. Operating lease ROU assets and liabilities are recognized based on the present value of lease payments over the lease term at the commencement date of the lease. ROU assets also include any initial direct costs incurred and any lease payments made at or before the lease commencement date, less any lease incentive received. The Company uses the rate implicit in the lease in determining the present value of lease payments and, if that rate is not readily determinable, the Company uses its incremental borrowing rate commensurate with the lease term based on the information available at the date of lease commencement. The incremental borrowing rate reflects the rate of interest that a lessee would have to pay to borrow, on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company does not have material short-term lease costs. Lease expense for lease payments is recognized on a straight-line basis over the lease term. For real estate leases, the Company does not separate lease and non-lease components. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company’s non-lease components are primarily related to property taxes, insurance, and common area maintenance, which vary based on future outcomes, and are recognized as rent expense when incurred. As discussed further in Note 5 to the consolidated financial statements Commitments and Contingencies, the Company entered into a non-cancellable sublease agreement for the Bellevue office space in July 2023. Sublease income is presented as a reduction of rent expense in the consolidated statement of operations and comprehensive loss. |
Stock-Based Compensation | Stock-Based Compensation The Company measures its stock-based awards granted to employees, non-employee directors, consultants and independent advisors based on the estimated grant-date fair value of the awards. For awards with only service conditions, including stock options, restricted stock awards, and restricted stock units, compensation expense is recognized over the requisite service period using the straight-line method. The Company uses the Black-Scholes option pricing model to estimate the fair value of its stock option awards. The Black-Scholes option pricing model requires the Company to make assumptions and judgments about the variables used in the calculations, including the expected term, expected volatility of the Company’s common stock, risk-free interest rate and expected dividend yield. As the stock-based compensation is based on awards ultimately expected to vest, it is reduced by forfeitures, which the Company accounts for as they occur. |
Income Taxes | Income Taxes Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts or existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period of enactment. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The Company recognizes the tax benefit from an uncertain tax position if it is more likely than not that the tax position will be sustained upon examination by the tax authorities, based on the merits of the position. The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense or benefit. To date, there have been no interest or penalties charged in relation to the unrecognized tax benefits. |
Foreign Currency | Foreign Currency The Company’s reporting currency is the U.S. dollar. The functional currency of the Company and its subsidiary is the U.S. dollar. Monetary assets and liabilities resulting from transactions denominated in currencies other than the functional currency are remeasured in the functional currency at exchange rates prevailing at the balance sheet date, and income items and expenses are translated into U.S. dollars at the average exchange rate in effect during the period. Exchange gains and losses resulting from remeasurement and foreign currency transactions are included in the determination of net loss. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, adjusted for outstanding shares that are subject to repurchase. Diluted net loss per share is computed by giving effect to all potentially dilutive securities outstanding for the period using the treasury stock method or the if-converted method based on the nature of such securities. For periods in which the Company reports net losses, diluted net loss per share is the same as basic net loss per share, because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. |
Emerging Growth Company Status | Emerging Growth Company Status The Company is an emerging growth company (EGC), as defined in the Jumpstart Our Business Startups Act of 2012 (JOBS Act). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued after the enactment of the JOBS Act until those standards apply to private companies. The Company has elected to avail itself of this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The standard changes how entities measure credit losses for most financial assets, including accounts and notes receivables. The standard replaces today’s “incurred loss” approach with an “expected loss” model, under which companies recognize allowances based on expected rather than incurred losses. Entities are required to apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. Based on the Company's status as an EGC, the Company follows the adoption calendar for non-public companies and as such, the effective date of this update is for fiscal years beginning after December 15, 2022 and interim periods therein. The Company adopted ASU 2016-13 on January 1, 2023, which did not have a material impact on its consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging —Contracts in Entity’s Own Equity (Subtopic 815-40)—Accounting For Convertible Instruments and Contracts in an Entity’s Own Equity . The standard simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The standard also simplifies the diluted net income per share calculation in certain areas. The effective date of this update for non-public companies is for fiscal years beginning after December 15, 2023, including interim periods therein. Early adoption is permitted for fiscal years beginning after December 15, 2020 and interim periods therein. The Company estimates that adoption will not have a material impact on its consolidated financial statements. In November 2023, the FASB issued ASU No. 2023-07 (ASU 2023-07), Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures which requires, among other things, the following: (i) enhanced disclosures about significant segment expenses that are regularly provided to the CODM and included in a segment's reported measure of profit or loss; (ii) disclosure of the amount and description of the composition of other segment items, as defined in ASU 2023-07, by reportable segment; and (iii) reporting the disclosures about each reportable segment's profit or loss and assets on an annual and interim basis. The provisions of ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024; early adoption is permitted. The Company expects ASU 2023-07 to require additional disclosures in the notes to its consolidated financial statements. In December 2023, the FASB issued ASU No. 2023-09 (ASU 2023-09), Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which requires, among other things, the following for public business entities: (i) enhanced disclosures of specific categories of reconciling items included in the rate reconciliation, as well as additional information for any of these items meeting certain qualitative and quantitative thresholds; (ii) disclosure of the nature, effect and underlying causes of each individual reconciling item disclosed in the rate reconciliation and the judgment used in categorizing them if not otherwise evident; and (iii) enhanced disclosures for income taxes paid, which includes federal, state, and foreign taxes, as well as for individual jurisdictions over a certain quantitative threshold. The amendments in ASU 2023-09 eliminate the requirement to disclose the nature and estimate of the range of the reasonably possible change in unrecognized tax benefits for the 12 months after the balance sheet date. The effective date of this update for non-public companies is for fiscal years beginning after December 15, 2025; early adoption is permitted. The Company expects ASU 2023-09 to require additional disclosures in the notes to its consolidated financial statements. There were no other significant updates to the recently issued accounting standards other than as disclosed herewith for the year ended December 31, 2023. Although there are several other new accounting pronouncements issued or proposed by the FASB, the Company does not believe any of those accounting pronouncements have had or will have a material impact on its financial position or operating results. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Fair Value Measurements | The Company’s fair value measurements as of December 31, 2023 and 2022 were as follows (in thousands): December 31, 2023 Level 1 Level 2 Balance Assets: Cash equivalents: Money market funds $ 89,197 $ — $ 89,197 Marketable securities: U.S. Treasury securities 8,962 — 8,962 U.S. government agency debt securities — 4,724 4,724 Total marketable securities 8,962 4,724 13,686 Total assets $ 98,159 $ 4,724 $ 102,883 December 31, 2022 Level 1 Level 2 Balance Assets: Cash equivalents: Money market funds $ 27,472 $ — $ 27,472 Marketable securities: U.S. Treasury securities 30,451 — 30,451 Commercial paper — 29,543 29,543 Corporate bonds — 16,626 16,626 U.S. government agency debt securities — 3,361 3,361 Total marketable securities 30,451 49,530 79,981 Total assets $ 57,923 $ 49,530 $ 107,453 |
Schedule Of Tax Credit Carry forwards | The following table outlines the changes to the research and development tax credit receivable, including amount recognized as an offset to research and development expense, during the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Balance at beginning of period $ 6,492 $ 6,523 Recognition of credit claims 1,971 6,683 Receipt of credit claims ( 7,125 ) ( 5,462 ) Foreign currency gain (loss) 686 ( 1,252 ) Balance at end of period $ 2,024 $ 6,492 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Investments [Abstract] | |
Investments consists of available-for-sale securities | Investments consists of available-for-sale securities as follows (in thousands): December 31, 2023 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Short-term marketable securities: U.S. Treasury securities $ 8,962 $ — $ — $ 8,962 U.S. government agency debt securities 4,726 — ( 2 ) 4,724 Total short-term marketable securities $ 13,688 $ — $ ( 2 ) $ 13,686 December 31, 2022 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Short-term marketable securities: U.S. Treasury securities $ 30,628 $ — $ ( 177 ) $ 30,451 Commercial paper 29,543 — — 29,543 Corporate bonds 16,815 — ( 189 ) 16,626 U.S. government agency debt securities 3,353 8 — 3,361 Total short-term marketable securities $ 80,339 $ 8 $ ( 366 ) $ 79,981 |
Investments in a continual unrealized loss position | Investments in a continual unrealized loss position for less than 12 months consist of the following (in thousands): December 31, 2023 December 31, 2022 Fair Value Fair Value U.S. Treasury securities $ 5,967 $ 26,506 U.S. government agency debt securities 2,234 — Corporate bonds — 1,977 Total available-for-sale securities $ 8,201 $ 28,483 Investments in a continual unrealized loss position for greater than 12 months consist of the following (in thousands): December 31, 2022 Fair Value Corporate bonds $ 14,649 U.S. Treasury securities 3,945 Total available-for-sale securities $ 18,594 |
Certain Balance Sheet Accounts
Certain Balance Sheet Accounts (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Balance Sheet Related Disclosures [Abstract] | |
Summary of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of the following (in thousands): December 31, 2023 December 31, 2022 Recoverable research and development tax credits $ 2,024 $ 6,492 Prepaid expenses 847 1,330 Other assets 552 456 Research and development expenses 34 2,549 Total prepaid expenses and other current assets $ 3,457 $ 10,827 |
Summary of Accrued Expenses | Accrued expenses and other current liabilities consist of the following (in thousands): December 31 2023 December 31, 2022 Accrued payroll expenses $ 1,111 $ 2,900 Accrued restructuring expenses 1,066 — Other current liabilities 138 — Other accrued expenses 90 245 Accrued research and development expense 28 1,902 Total accrued expenses and other current liabilities $ 2,433 $ 5,047 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Future Minimum Lease Payments Under Non-Cancelable Operating Leases | As of December 31, 2023, the annual future minimum lease payments due under the Company's non-cancelable operating leases are as follows (in thousands): Operating Lease Sublease Net Operating Year Ending December 31, Payments Income Lease Payments 2024 $ 343 ( 132 ) 211 2025 15 ( 11 ) 4 Total undiscounted lease payments $ 358 $ ( 143 ) $ 215 Present value adjustment ( 9 ) Total operating lease liabilities $ 349 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Stock Option Activities | The activity for stock options is as follows: Weighted Average Weighted Remaining Aggregate Average Contract Intrinsic Options Exercise Terms Values Outstanding Price (in years) (in thousands) Balance as of December 31, 2022 5,988,271 $ 4.70 8.83 $ 5,699 Options granted 50,000 3.00 Options cancelled and forfeited ( 340,283 ) 7.93 Options exercised ( 1,111,512 ) 0.76 2,282 Balance as of December 31, 2023 4,586,476 $ 5.40 2.28 $ 1,060 Vested and expected to vest, December 31, 2023 4,586,476 $ 5.40 2.28 $ 1,060 Options exercisable as of December 31, 2023 4,036,926 $ 5.46 1.45 $ 885 |
Schedule Of Share Based Payment Award Stock Options Valuation Assumptions Table Text Block | The fair value of the Company’s stock option awards was estimated at the date of grant using a Black-Scholes option pricing model with the following assumptions for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Expected term (in years) 5.50 5.50 - 6.50 Expected volatility 92.90 % 77.33 % - 91.74 % Risk-free interest rate 3.69 % 1.69 % - 4.22 % Expected dividend yield 0.00 % 0.00 % |
Summary of Restricted Stock Awards | The activity for restricted stock awards and units is as follows: Weighted-Average Number of Shares Value Unvested at December 31, 2022 177,495 $ 8.32 Granted 113,333 3.64 Vested ( 124,737 ) 6.85 Forfeited ( 16,116 ) 8.11 Unvested at December 31, 2023 149,975 $ 6.03 |
Summary of Share-based Compensation Expense | The following table shows stock-based compensation for stock options, restricted stock awards, and restricted stock units included in the Company’s consolidated statements of operations and comprehensive loss (in thousands): Year Ended December 31, 2023 2022 Research and development expense $ 2,778 $ 2,538 General and administrative expense 10,028 4,453 Total stock-based compensation expense $ 12,806 $ 6,991 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Loss Per Share | The following table shows the computation of basic and diluted net loss per share (in thousands, except share and per share data): Year Ended December 31, 2023 2022 Net loss $ ( 35,119 ) $ ( 45,244 ) Weighted-average number of shares used to compute net loss per share, basic and diluted 26,987,122 26,311,554 Net loss per share, basic and diluted $ ( 1.30 ) $ ( 1.72 ) |
Schedule of Antidilutive Securities Excluded from Computation of Net Loss Per Share Attributable To Common Stockholders | The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share for the periods presented because their effect would have been anti-dilutive: Year Ended December 31, 2023 2022 Common stock options 4,586,476 5,988,271 Unvested restricted stock awards and units 149,975 177,495 Total potentially dilutive shares 4,736,451 6,165,766 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Components of Net Loss Before Tax Provision from Income Taxes | The components of net loss before tax provision from income taxes are as follows (in thousands): Year Ended December 31, 2023 2022 United States $ ( 17,768 ) $ ( 6,272 ) United Kingdom ( 17,351 ) ( 38,972 ) Total $ ( 35,119 ) $ ( 45,244 ) |
Schedule of Reconciliation of Statutory Federal Income Tax Rate to Provision for Income Taxes | The following table presents a reconciliation of the Company’s expected tax computed at the U.S. statutory federal income tax rate to the total provision for income taxes (in thousands): Year Ended December 31, 2023 2022 U.S. federal taxes at statutory rate $ ( 7,375 ) $ ( 9,497 ) State taxes, net of federal benefit 1 1 Foreign rate differential ( 232 ) 471 Non-deductible officer compensation 713 — Other non-deductible expenses 1 1 Research credit addback 1,729 4,220 Refundable tax credit ( 414 ) ( 1,407 ) Return to provision and other adjustments 1,049 ( 2 ) Stock-based compensation 510 742 Tax credits ( 69 ) ( 110 ) U.K. tax rate change impact on deferred income taxes — ( 1,390 ) Change in valuation allowance 4,087 6,971 Total $ — $ — |
Schedule of Deferred Tax Assets and Liabilities | The significant components of the Company's deferred tax assets and liabilities are presented below (in thousands): Year Ended December 31, 2023 2022 Deferred tax assets: Stock-based compensation, including 162m limitations $ 1,147 $ 1,105 Intangible asset 1,843 2,374 Accrued compensation and benefits 84 334 Operating lease liabilities 38 70 Net operating losses 17,137 12,413 Research credits 612 531 Total gross deferred tax assets 20,861 16,827 Deferred tax liabilities: Unrealized gain or loss 3 20 Operating lease right-of-use assets ( 8 ) ( 65 ) Other — ( 23 ) Total gross deferred tax liabilities ( 5 ) ( 68 ) Valuation allowance ( 20,856 ) ( 16,759 ) Net deferred tax liabilities $ — $ — |
Restructuring Costs (Tables)
Restructuring Costs (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Summary of restructuring costs | A summary of the restructuring costs recorded in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2023 is as follows (in thousands): Year Ended December 31, 2023 ROU Asset Impairment Severance and Benefits Costs Stock-based Compensation Total Restructuring Cost Recorded General and administrative expense $ 180 $ 6,089 8,707 $ 14,976 Research and development expense — 2,894 939 3,833 Total restructuring costs $ 180 $ 8,983 $ 9,646 $ 18,809 |
Schedule of restructuring liability | The activity in the restructuring liability during the year ended December 31, 2023 is as follows (in thousands): Restructuring Liability 2023 Restructuring liability as of December 31, 2022 $ — Severance costs incurred during the period 8,983 Severance costs paid during the period ( 7,906 ) Restructuring liability as of December 31, 2023 $ 1,077 |
Nature of Operations and Basi_2
Nature of Operations and Basis of Presentation - Additional Information (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 USD ($) | Oct. 31, 2023 Employee | Feb. 07, 2023 | Dec. 31, 2022 USD ($) | |
Subsidiary Sale Of Stock [Line Items] | ||||
Accumulated deficit | $ 155,979 | $ 120,860 | ||
Workforce reduction number of employees | Employee | 10 | |||
Percentage of Workforce Reduction | 55% | |||
Eliem Therapeutics [Member] | ||||
Subsidiary Sale Of Stock [Line Items] | ||||
Entity incorporation date | Oct. 18, 2018 | |||
Accumulated deficit | $ (156,000) | |||
Cash, Cash Equivalents, and Short-term Investments | $ 106,800 | |||
Workforce reduction number of employees | Employee | 10 | |||
Percentage of Workforce Reduction | 55% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Schedule of Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Assets: | ||
Assets Fair Value Disclosure | $ 102,883 | $ 107,453 |
Level 1 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 98,159 | 57,923 |
Level 2 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 4,724 | 49,530 |
Money Market Funds [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 89,197 | 27,472 |
Money Market Funds [Member] | Level 1 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 89,197 | 27,472 |
Money Market Funds [Member] | Level 2 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 0 | 0 |
US Government Debt Securities [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 8,962 | 30,451 |
US Government Debt Securities [Member] | Level 1 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 8,962 | 30,451 |
US Government Debt Securities [Member] | Level 2 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 0 | |
Commercial Paper [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 29,543 | |
Commercial Paper [Member] | Level 1 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 0 | |
Commercial Paper [Member] | Level 2 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 29,543 | |
Corporate Bond Securities [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 16,626 | |
Corporate Bond Securities [Member] | Level 1 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 0 | |
Corporate Bond Securities [Member] | Level 2 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 16,626 | |
U.S. government agency debt securities [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 4,724 | 3,361 |
U.S. government agency debt securities [Member] | Level 1 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 0 | |
U.S. government agency debt securities [Member] | Level 2 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 4,724 | 3,361 |
Total Marketable Securities [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 13,686 | 79,981 |
Total Marketable Securities [Member] | Level 1 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 8,962 | 30,451 |
Total Marketable Securities [Member] | Level 2 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | $ 4,724 | $ 49,530 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Research and development tax credit receivable (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | ||
Balance at beginning of period | $ 6,492 | $ 6,523 |
Recognition of credit claims | 1,971 | 6,683 |
Receipt of credit claims | (7,125) | (5,462) |
Foreign currency gain (loss) | 686 | (1,252) |
Balance at end of period | $ 2,024 | $ 6,492 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 USD ($) Segments | Dec. 31, 2022 USD ($) | |
Subsidiary Sale Of Stock [Line Items] | ||
Number of Operating Segments | Segments | 1 | |
Tax Credits receivable | $ 2,000 | $ 6,500 |
Interest and penalties | 0 | |
Fair Value, Inputs, Level 1, 2 and 3 [Member] | ||
Subsidiary Sale Of Stock [Line Items] | ||
Fair value transfer amount | $ 0 | $ 0 |
Investments - Investments consi
Investments - Investments consists of available-for-sale securities (Details) - Short Term Marketable Securities [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | $ 13,688 | $ 80,339 |
Unrealized Gain | 0 | 8 |
Unrealized Loss | (2) | (366) |
Estimated Fair Value | 13,686 | 79,981 |
Commercial Paper [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 29,543 | |
Unrealized Gain | 0 | |
Unrealized Loss | 0 | |
Estimated Fair Value | 29,543 | |
U.S. Treasury securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 8,962 | 30,628 |
Unrealized Gain | 0 | 0 |
Unrealized Loss | 0 | 177 |
Estimated Fair Value | 8,962 | 30,451 |
Corporate Bond [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 16,815 | |
Unrealized Gain | 0 | |
Unrealized Loss | (189) | |
Estimated Fair Value | 16,626 | |
U.S. government agency debt securities [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 4,726 | 3,353 |
Unrealized Gain | 0 | 8 |
Unrealized Loss | (2) | 0 |
Estimated Fair Value | $ 4,724 | $ 3,361 |
Investments - Additional Inform
Investments - Additional Information (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Prepaid Expenses and Other Current Assets | ||
Summary Of Investment Holdings [Line Items] | ||
Accrued interest receivable | $ 0.4 | $ 0.1 |
Investments - Investments in a
Investments - Investments in a continual unrealized loss position (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-Sale [Line Items] | ||
Continuous unrealized loss position, less than 12 months | $ 8,201 | $ 28,483 |
Continuous unrealized loss position, 12 months or longer | 18,594 | |
US Treasury Securities [Member] | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Continuous unrealized loss position, less than 12 months | 5,967 | 26,506 |
Continuous unrealized loss position, 12 months or longer | 3,945 | |
U.S. government agency debt securities [Member] | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Continuous unrealized loss position, less than 12 months | 2,234 | 0 |
Corporate Bond Securities [Member] | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Continuous unrealized loss position, less than 12 months | $ 0 | 1,977 |
Continuous unrealized loss position, 12 months or longer | $ 14,649 |
Certain Balance Sheet Account_2
Certain Balance Sheet Accounts - Summary of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Balance Sheet Related Disclosures [Abstract] | ||
Recoverable research and development tax credits | $ 2,024 | $ 6,492 |
Prepaid expenses | 847 | 1,330 |
Other assets | 552 | 456 |
Prepaid research and development expenses | 34 | 2,549 |
Total prepaid expenses and other current assets | $ 3,457 | $ 10,827 |
Certain Balance Sheet Account_3
Certain Balance Sheet Accounts - Summary of Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Balance Sheet Related Disclosures [Abstract] | ||
Accrued payroll expenses | $ 1,111 | $ 2,900 |
Accrued restructuring expenses | 1,066 | 0 |
Other current liabilities | 138 | 0 |
Other accrued expenses | 90 | 245 |
Accrued research and development expenses | 28 | 1,902 |
Total accrued expenses and other current liabilities | $ 2,433 | $ 5,047 |
Redeemable Convertible Preferre
Redeemable Convertible Preferred Stock - Additional Information (Details) - shares | Dec. 31, 2023 | Dec. 31, 2022 |
Temporary Equity [Line Items] | ||
Common stock, shares issued | 27,699,446 | 26,567,681 |
Redeemable Convertible Prefer_2
Redeemable Convertible Preferred Stock Tranche Liability - Schedule of Valuation of The Redeemable Convertible Preferred Stock Tranche Liability (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Temporary Equity [Line Items] | |
Expected volatility | 92.90% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Nov. 30, 2021 SquareFeet | Mar. 31, 2023 | Jun. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Jul. 31, 2023 USD ($) | May 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |||||||
Rent expense | $ 400,000 | $ 500,000 | |||||
Sublease income | 48,000 | ||||||
Operating lease, total space of the office | SquareFeet | 5,000 | ||||||
Operating lease, term of contract | 39 months | 24 months | |||||
Addional operating lease, term of contract | 3 years | ||||||
Operating lease sublease payment | $ 200,000 | ||||||
Right of use asset impairment loss | $ 200,000 | ||||||
Lease expiration date | Jun. 30, 2024 | ||||||
Operating right-of-use asset | $ 300,000 | ||||||
Operating lease, weighted average remaining lease term | 9 months 18 days | ||||||
Operating lease, weighted average discount rate | 7.50% |
Commitments and Contingencies_2
Commitments and Contingencies - Future Minimum Lease Payments Under Non-Cancelable Operating Leases (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Gross Operating Lease Payments [Member] | |
Operating Lease Payments: | |
2024 | $ 343 |
2025 | 15 |
Total undiscounted lease payments | 358 |
Present value adjustment | (9) |
Total operating lease liabilities | 349 |
Sublease Income [Member] | |
Sublease Income: | |
2024 | (132) |
2025 | (11) |
Total undiscounted sublease income | (143) |
Net Operating Lease Payments [Member] | |
Operating Lease Payments: | |
2024 | 211 |
2025 | 4 |
Total undiscounted lease payments | $ 215 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Employees Including Executive Officers Earning Contribution | 15% | ||
Percentage of fair market value, common stock | 85% | ||
Share-based payment award, option vesting period | 3 years | ||
Stock Options [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based payment award, award vesting rights, percentage | 25% | ||
Share-based payment award, option vesting period | 4 years | ||
Options grants in period, weighted average grant date fair value | $ 2.25 | $ 4 | |
Unrecognized compensation cost | $ 1.8 | ||
Incremental Share based compensation expense | $ 9.6 | ||
Unrecognized compensation, weighted average amortization period | 1 year 10 months 28 days | ||
Restricted Stock [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based payment award, award vesting rights, percentage | 25% | ||
Number of shares, Granted | 113,333 | ||
Unrecognized compensation cost | $ 0.9 | ||
Fair value of restricted stock vested | 0.4 | $ 0.6 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | $ 0.4 | $ 0.6 | |
Unvested restricted stock awards [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Unrecognized compensation, weighted average amortization period | 1 year 4 months 24 days | ||
Research and Development Expense | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Incremental Share based compensation expense | $ 0.9 | ||
General and Administrative Expense | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Incremental Share based compensation expense | $ 8.7 | ||
2019 Equity Incentive Plan [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based payment award, description | Under the terms of the 2019 Plan, options are granted at an exercise price no less than fair value of the Company’s common stock on the grant date, except in certain cases related to employees outside of the U.S. Option awards granted typically have 10-year terms measured from the option grant date. While no shares are available for future issuance under the 2019 Plan, it continues to govern outstanding equity awards granted thereunder. | ||
Share-based payment award, expiration period | 10 years | ||
2021 Equity Incentive Plan [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based payment award, description | The compensation committee of the Company's board of directors adopted and the Company's stockholders approved the 2021 Equity Incentive Plan (the 2021 Plan) and the 2021 Employee Stock Purchase Plan (the ESPP), which became effective immediately prior to the effectiveness of the Company's initial public offering (IPO). The 2021 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units, stock appreciation rights and other stock-based awards. The Company's employees, officers, directors and consultants are eligible to receive awards under the 2021 Plan. Under the terms of the 2021 Plan, options are granted at an exercise price no less than fair value of the Company’s common stock on the grant date, except in certain cases related to significant corporate transactions. Option awards granted typically have 10-year terms measured from the option grant date. As of December 31, 2023, the total number of shares authorized for issuance under the 2021 Plan was 5,368,077. Any shares that are returned under the 2019 Plan as a result of cancellation or forfeiture become available under the 2021 Plan. Further, the number of shares of common stock reserved for issuance under the 2021 Plan automatically increases on January 1 of each year, beginning on January 1, 2022, and continuing through and including January 1, 2031, by 5% of the total number of shares of common stock outstanding on December 31 of the immediately preceding calendar year, or a lesser number of shares determined by the Company's board of directors prior to the applicable January 1st. | ||
Share-based payment award, expiration period | 10 years | ||
Share-based payment award, number of shares authorized | 5,368,077 | ||
Number of shares of common stock outstanding percentage | 5% | ||
ESPP [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based payment award, description | The ESPP allows employees, including executive officers, to contribute up to 15% of their earnings, subject to certain limitations, for the purchase of the Company's common stock at a price per share equal to the lower of (a) 85% of the fair market value of a share of common stock on the first day of the offering period, or (b) 85% of the fair market value of a share of common stock on the last day of the offering period. As of December 31, 2023, there were 787,231 shares of common stock reserved for future issuance under the ESPP. The number of shares of common stock reserved for issuance under the ESPP automatically increases on January 1 of each calendar year, beginning on January 1, 2022 and continuing through and including January 1, 2031, by the lesser of (1) 1% of the total number of shares of the Company's common stock outstanding on December 31 of the preceding calendar year or (2) a number of shares determined by the Company's board of directors. Shares subject to purchase rights granted under the ESPP that terminate without having been exercised in full will not reduce the number of shares available for issuance under the ESPP.As of December 31, 2023, no shares have been granted or purchased under the ESPP. | ||
Number of shares of common stock outstanding percentage | 1% | ||
Common stock reserved for future issuance | 787,231 | ||
Number of shares, Granted | 0 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activities (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||
Number of options outstanding, beginning of period | 5,988,271 | |
Number of options granted | 50,000 | |
Number of options, forfeited | (340,283) | |
Number of options exercised | (1,111,512) | |
Number of options outstanding, ending of period | 4,586,476 | 5,988,271 |
Number of options, vested and expected to vest | 4,586,476 | |
Number of options exercisable, end of period | 4,036,926 | |
Weighted average exercise price outstanding, beginning of period | $ 4.7 | |
Weighted average exercise price, options granted | 3 | |
Weighted average exercise price, options cancelled and forfeited | 7.93 | |
Weighted average exercise price, options exercised | 0.76 | |
Weighted average exercise price outstanding, end of period | 5.4 | $ 4.7 |
Weighted average exercise price, options vested and expected to vest | 5.4 | |
Weighted average exercise price, options exercisable | $ 5.46 | |
Weighted average remaining contracted terms (in years) outstanding, beginning of period | 2 years 3 months 10 days | |
Weighted average remaining contracted terms (in years) outstanding, end of period | 8 years 9 months 29 days | |
Weighted average remaining contracted terms (in years), vested and expected to vest | 2 years 3 months 10 days | |
Weighted average remaining contracted terms (in years), exercisable at end of period | 1 year 5 months 12 days | |
Aggregate intrinsic value options exercised | $ 5,699 | |
Aggregate intrinsic value options exercised | 2,282 | |
Aggregate intrinsic value outstanding, end of period | 1,060 | $ 5,699 |
Aggregate intrinsic value options vested and expected to vest | 1,060 | |
Aggregate intrinsic value options exercisable | $ 885 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Assumptions Used in Black-Scholes Model (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (in years) | 5 years 6 months | |
Expected volatility | 92.90% | |
Expected volatility, Minimum | 77.33% | |
Expected volatility, Maximum | 91.74% | |
Risk free interest rate | 3.69% | |
Risk-free interest rate, Minimum | 1.69% | |
Risk-free interest rate, Maximum | 4.22% | |
Dividend yield | 0% | 0% |
Minimum [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (in years) | 5 years 6 months | |
Maximum [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (in years) | 6 years 6 months |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Restricted Stock Awards (Details) - Restricted Stock [Member] | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of shares, Unvested | shares | 177,495 |
Number of shares, Granted | shares | 113,333 |
Number of shares, Vested | shares | (124,737) |
Number of shares, Forfeited | shares | (16,116) |
Number of shares, Unvested | shares | 149,975 |
Unvested, weighted average grant date fair value per share, beginning balance | $ / shares | $ 8.32 |
Granted, weighted average grant date fair value | $ / shares | 3.64 |
Vested, weighted average grant date fair value per share | $ / shares | 6.85 |
Forfeited, weighted average grant date fair value per share | $ / shares | 8.11 |
Unvested, weighted average grant date fair value per share, ending balance | $ / shares | $ 6.03 |
Stock-Based Compensation - Su_4
Stock-Based Compensation - Summary of Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 12,806 | $ 6,991 |
Research and Development Expense | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | 2,778 | 2,538 |
General and Administrative Expense | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 10,028 | $ 4,453 |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (35,119) | $ (45,244) |
Weighted-average number of shares used to compute net loss per share, basic | 26,987,122 | 26,311,554 |
Weighted-average number of shares used to compute net loss per share, diluted | 26,987,122 | 26,311,554 |
Net loss per share, diluted | $ (1.3) | $ (1.72) |
Net loss per share, basic | $ (1.3) | $ (1.72) |
Net Loss Per Share - Schedule_2
Net Loss Per Share - Schedule of Antidilutive Securities Excluded from Computation of Net Loss Per Share Attributable To Common Stockholders (Details) - shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Redeemable convertible preferred stock | 4,736,451 | 6,165,766 |
Common stock options [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Redeemable convertible preferred stock | 4,586,476 | 5,988,271 |
Unvested restricted stock awards [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Redeemable convertible preferred stock | 149,975 | 177,495 |
Income Taxes - Additional infor
Income Taxes - Additional information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating Loss Carryforwards [Line Items] | ||
Valuation Allowance | $ (20,856) | $ (16,759) |
Research and development credits | 612 | 531 |
Uncertain tax positions | $ 0 | $ 0 |
Cumulative change in ownership percentage | 50% | |
Earliest Tax Year | ||
Operating Loss Carryforwards [Line Items] | ||
Taxable years | Dec. 31, 2018 | |
Federal [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforward | $ 13,100 | |
Research and development credits | $ 500 | |
Tax credit carryforward expiration year | 2039 | |
State [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforward | $ 8,300 | |
Net operating loss carryforward expiration year | 2038 | |
Research and development credits | $ 100 | |
Tax credit carryforward expiration year | 2035 | |
Foreign [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforward | $ 55,500 |
Income Taxes - Components of Ne
Income Taxes - Components of Net Loss Before Tax Provision from Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating Loss Carryforwards [Line Items] | ||
Net loss | $ (35,119) | $ (45,244) |
United States | ||
Operating Loss Carryforwards [Line Items] | ||
Net loss | (17,768) | (6,272) |
United Kingdom | ||
Operating Loss Carryforwards [Line Items] | ||
Net loss | $ (17,351) | $ (38,972) |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Statutory Federal Income Tax Rate to Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
U.S. federal taxes at statutory rate | $ (7,375) | $ (9,497) |
State taxes, net of federal benefit | 1 | 1 |
Foreign rate differential | (232) | 471 |
Non-deductible officer compensation | 713 | 0 |
Other non-deductible expenses | 1 | 1 |
Research credit addback | 1,729 | 4,220 |
Refundable tax credit | (414) | (1,407) |
Return to provision and other adjustments | 1,049 | (2) |
Stock-based compensation | 510 | 742 |
Tax credits | (69) | (110) |
U.K. tax rate change impact on deferred income taxes | 0 | (1,390) |
Change in valuation allowance | 4,087 | 6,971 |
Total | $ 0 | $ 0 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets: | ||
Stock-based compensation, including 162m limitations | $ 1,147 | $ 1,105 |
Intangible asset | 1,843 | 2,374 |
Accrued compensation and benefits | 84 | 334 |
Operating lease liabilities | 38 | 70 |
Net operating losses | 17,137 | 12,413 |
Research credits | 612 | 531 |
Total gross deferred tax assets | 20,861 | 16,827 |
Deferred tax liabilities: | ||
Unrealized gain or loss | 3 | 20 |
Operating lease right-of-use assets | (8) | (65) |
Other | 0 | (23) |
Total gross deferred tax liabilities | (5) | (68) |
Valuation Allowance | (20,856) | (16,759) |
Net deferred tax liabilities | $ 0 | $ 0 |
Asset Acquisitions with Related
Asset Acquisitions with Related Parties - Additional Information (Details) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Asset Acquisition [Line Items] | ||
Common stock, shares issued | 27,699,446 | 26,567,681 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Defined Contribution Plan - Add
Defined Contribution Plan - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Total expense recognized from matching contributions | $ 0.1 | $ 0.1 |
Defined Contribution Plan Employer Contribution Amount | $ 0.3 | $ 0.2 |
Maximum [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined contribution plan, employer matching contribution, percentage of employee's eligilble compensation | 4% |
Restructuring Costs (Additional
Restructuring Costs (Additional Information) (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | Oct. 31, 2023 Employee | Feb. 07, 2023 | |
Restructuring Cost and Reserve [Line Items] | ||||
Percentage of Workforce Reduction | 55% | |||
Restructuring and related cost expected cost | $ 18.9 | $ 18.9 | ||
Workforce reduction number of employees | Employee | 10 | |||
Restructuring costs | $ 2 | |||
Restructuring Costs [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | $ 18.8 |
Restructuring Costs - Summary o
Restructuring Costs - Summary of restructuring costs in statement of operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||
General and administrative expense | $ 24,864 | $ 18,921 |
Research and development expense | 15,411 | $ 26,214 |
ROU Asset Impairment [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
General and administrative expense | 180 | |
Research and development expense | 0 | |
Restructuring costs | 180 | |
Severance and Benefits Costs Member | ||
Restructuring Cost and Reserve [Line Items] | ||
General and administrative expense | 6,089 | |
Research and development expense | 2,894 | |
Restructuring costs | 8,983 | |
Stock-based Compensation Member | ||
Restructuring Cost and Reserve [Line Items] | ||
General and administrative expense | 8,707 | |
Research and development expense | 939 | |
Restructuring costs | 9,646 | |
Total Restructuring Cost Recorded [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
General and administrative expense | 14,976 | |
Research and development expense | 3,833 | |
Restructuring costs | $ 18,809 |
Restructuring Costs - Schedule
Restructuring Costs - Schedule of restructuring liability (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Restructuring and Related Activities [Abstract] | |
Restructuring Reserve, Beginning Balance | $ 0 |
Severance costs incurred during the period | $ 8,983 |
Restructuring, Incurred Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | General and Administrative Expense |
Severance costs paid during the period | $ (7,906) |
Restructuring Reserve, Ending Balance | $ 1,077 |
Subsequent events - Additional
Subsequent events - Additional Information (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Restructuring Cost and Reserve [Line Items] | |
Restructuring and related cost expected cost | $ 18.9 |