Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 10, 2022 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-39069 | |
Entity Registrant Name | Aprea Therapeutics, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 84-2246769 | |
Entity Address, Address Line One | 535 Boylston Street | |
Entity Address, City or Town | Boston | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02116 | |
City Area Code | 617 | |
Local Phone Number | 463-9385 | |
Title of 12(b) Security | Common stock, par value $0.001 per share | |
Trading Symbol | APRE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 23,401,846 | |
Entity Central Index Key | 0001781983 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 39,062,415 | $ 53,076,052 |
Prepaid expenses and other current assets | 1,400,837 | 3,508,358 |
Total current assets | 40,463,252 | 56,584,410 |
Property and equipment, net | 20,258 | 23,870 |
Right of use lease asset | 170,967 | 185,811 |
Other noncurrent assets | 29,359 | 29,372 |
Total assets | 40,683,836 | 56,823,463 |
Current liabilities: | ||
Accounts payable | 3,989,794 | 1,773,032 |
Accrued expenses | 3,505,287 | 5,352,996 |
Lease liability-current | 189,116 | 190,471 |
Total current liabilities | 7,684,197 | 7,316,499 |
Total liabilities | 7,684,197 | 7,316,499 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity: | ||
Common stock, $0.001 par value, 400,000,000 shares authorized, 23,401,846 and 21,859,413 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively. | 23,401 | 21,859 |
Additional paid-in capital | 261,795,121 | 240,978,439 |
Accumulated other comprehensive loss | (10,266,806) | (10,358,956) |
Accumulated deficit | (287,329,545) | (181,134,378) |
Total stockholders' equity (deficit) | (35,777,829) | 49,506,964 |
Total liabilities and stockholders' equity (deficit) | 40,683,836 | $ 56,823,463 |
Series A Preferred Stock | ||
Convertible preferred stock: | ||
Series A convertible preferred stock, $0.001 par value, 40,000,000 shares authorized; 2,949,630 and 0 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively. | $ 68,777,468 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2022 | Dec. 31, 2021 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 23,401,846 | 21,859,413 |
Common stock, shares outstanding | 23,401,846 | 21,859,413 |
Series A Preferred Stock | ||
Convertible preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Convertible preferred stock, shares authorized | 40,000,000 | 40,000,000 |
Convertible preferred stock, shares issued | 2,949,630 | 0 |
Convertible preferred stock, shares outstanding | 2,949,630 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Operating expenses: | ||||
Research and development | $ 6,811,609 | $ 6,654,257 | $ 10,901,186 | $ 13,418,105 |
General and administrative | 15,633,738 | 3,343,325 | 19,619,036 | 6,769,158 |
Acquired in-process research and development | 76,020,184 | 76,020,184 | ||
Total operating expenses | 98,465,531 | 9,997,582 | 106,540,406 | 20,187,263 |
Other income (expense): | ||||
Interest income (expense), net | 52,491 | (588) | 54,462 | (1,645) |
Foreign currency gain (loss) | 154,566 | (252,843) | 290,777 | 269,140 |
Total other income (loss) | 207,057 | (253,431) | 345,239 | 267,495 |
Net loss | (98,258,474) | (10,251,013) | (106,195,167) | (19,919,768) |
Other comprehensive loss: | ||||
Foreign currency translation | 157,655 | 193,020 | 92,150 | (209,830) |
Total comprehensive loss | $ (98,100,819) | $ (10,057,993) | $ (106,103,017) | $ (20,129,598) |
Net loss per share attributable to common stockholders, basic (in dollars per share) | $ (4.34) | $ (0.48) | $ (4.77) | $ (0.94) |
Net loss per share attributable to common stockholders, diluted (in dollars per share) | $ (4.34) | $ (0.48) | $ (4.77) | $ (0.94) |
Weighted-average common shares outstanding, basic (in shares) | 22,661,835 | 21,186,827 | 22,283,783 | 21,186,827 |
Weighted-average common shares outstanding, diluted (in shares) | 22,661,835 | 21,186,827 | 22,283,783 | 21,186,827 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Preferred Stock and Stockholders' Equity (Deficit) - USD ($) | Series A Preferred Stock Atrin Pharmaceuticals, Inc | Series A Preferred Stock | Common Stock Atrin Pharmaceuticals, Inc | Common Stock | Additional Paid-in capital Atrin Pharmaceuticals, Inc | Additional Paid-in capital | Other comprehensive loss | Accumulated deficit | Atrin Pharmaceuticals, Inc | Total |
Equity, beginning balance at Dec. 31, 2020 | $ 21,187 | $ 231,418,356 | $ (10,037,261) | $ (144,007,075) | $ 77,395,207 | |||||
Equity, beginning balance (in shares) at Dec. 31, 2020 | 21,186,827 | |||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Stock based compensation | 1,822,562 | 1,822,562 | ||||||||
Foreign currency translation | (402,850) | (402,850) | ||||||||
Net loss | (9,668,755) | (9,668,755) | ||||||||
Equity, ending balance at Mar. 31, 2021 | $ 21,187 | 233,240,918 | (10,440,111) | (153,675,830) | 69,146,164 | |||||
Equity, ending balance (in shares) at Mar. 31, 2021 | 21,186,827 | |||||||||
Equity, beginning balance at Dec. 31, 2020 | $ 21,187 | 231,418,356 | (10,037,261) | (144,007,075) | 77,395,207 | |||||
Equity, beginning balance (in shares) at Dec. 31, 2020 | 21,186,827 | |||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Foreign currency translation | (209,830) | |||||||||
Net loss | (19,919,768) | |||||||||
Equity, ending balance at Jun. 30, 2021 | $ 21,187 | 235,104,416 | (10,247,091) | (163,926,843) | 60,951,669 | |||||
Equity, ending balance (in shares) at Jun. 30, 2021 | 21,186,827 | |||||||||
Equity, beginning balance at Mar. 31, 2021 | $ 21,187 | 233,240,918 | (10,440,111) | (153,675,830) | 69,146,164 | |||||
Equity, beginning balance (in shares) at Mar. 31, 2021 | 21,186,827 | |||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Stock based compensation | 1,863,498 | 1,863,498 | ||||||||
Foreign currency translation | 193,020 | 193,020 | ||||||||
Net loss | (10,251,013) | (10,251,013) | ||||||||
Equity, ending balance at Jun. 30, 2021 | $ 21,187 | 235,104,416 | (10,247,091) | (163,926,843) | 60,951,669 | |||||
Equity, ending balance (in shares) at Jun. 30, 2021 | 21,186,827 | |||||||||
Temporary equity, beginning balance (in shares) at Dec. 31, 2021 | 0 | |||||||||
Equity, beginning balance at Dec. 31, 2021 | $ 21,859 | 240,978,439 | (10,358,956) | (181,134,378) | 49,506,964 | |||||
Equity, beginning balance (in shares) at Dec. 31, 2021 | 21,859,413 | |||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Vesting of restricted stock units | $ 115 | (115) | ||||||||
Vesting of restricted stock units (in shares) | 114,889 | |||||||||
Stock based compensation | 2,084,060 | 2,084,060 | ||||||||
Foreign currency translation | (65,505) | (65,505) | ||||||||
Net loss | (7,936,693) | (7,936,693) | ||||||||
Equity, ending balance at Mar. 31, 2022 | $ 21,974 | 243,062,384 | (10,424,461) | (189,071,071) | 43,588,826 | |||||
Equity, ending balance (in shares) at Mar. 31, 2022 | 21,974,302 | |||||||||
Temporary equity, beginning balance (in shares) at Dec. 31, 2021 | 0 | |||||||||
Temporary equity, ending balance (in shares) at Jun. 30, 2022 | 2,949,630 | |||||||||
Temporary equity, ending balance at Jun. 30, 2022 | $ 68,777,468 | |||||||||
Equity, beginning balance at Dec. 31, 2021 | $ 21,859 | 240,978,439 | (10,358,956) | (181,134,378) | 49,506,964 | |||||
Equity, beginning balance (in shares) at Dec. 31, 2021 | 21,859,413 | |||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Foreign currency translation | 92,150 | |||||||||
Net loss | (106,195,167) | |||||||||
Equity, ending balance at Jun. 30, 2022 | $ 23,401 | 261,795,121 | (10,266,806) | (287,329,545) | (35,777,829) | |||||
Equity, ending balance (in shares) at Jun. 30, 2022 | 23,401,846 | |||||||||
Increase (Decrease) in Temporary Equity | ||||||||||
Issuance of preferred stock upon acquisition of Atrin | $ 68,777,468 | |||||||||
Issuance of preferred stock upon acquisition of Atrin (in shares) | 2,949,630 | |||||||||
Temporary equity, ending balance (in shares) at Jun. 30, 2022 | 2,949,630 | |||||||||
Temporary equity, ending balance at Jun. 30, 2022 | $ 68,777,468 | |||||||||
Equity, beginning balance at Mar. 31, 2022 | $ 21,974 | 243,062,384 | (10,424,461) | (189,071,071) | 43,588,826 | |||||
Equity, beginning balance (in shares) at Mar. 31, 2022 | 21,974,302 | |||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Issuance of common stock upon acquisition of Atrin | $ 1,117 | $ 1,328,582 | $ 1,329,699 | |||||||
Issuance of common stock upon acquisition of Atrin (in shares) | 1,117,394 | |||||||||
Value of assumed stock options | 2,602,850 | 2,602,850 | ||||||||
Vesting of restricted stock units | $ 310 | (310) | ||||||||
Vesting of restricted stock units (in shares) | 310,150 | |||||||||
Stock based compensation | 14,801,615 | 14,801,615 | ||||||||
Foreign currency translation | 157,655 | 157,655 | ||||||||
Net loss | (98,258,474) | (98,258,474) | ||||||||
Equity, ending balance at Jun. 30, 2022 | $ 23,401 | $ 261,795,121 | $ (10,266,806) | $ (287,329,545) | $ (35,777,829) | |||||
Equity, ending balance (in shares) at Jun. 30, 2022 | 23,401,846 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (106,195,167) | $ (19,919,768) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Acquired in-process research and development | 72,523,293 | |
Depreciation and amortization | 6,666 | 6,724 |
Stockbased compensation | 16,885,675 | 3,686,060 |
Amortization of right of use lease asset | 120,795 | 129,518 |
Foreign currency (gain) loss | (290,777) | (269,140) |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | 2,126,847 | 1,904,566 |
Accounts payable | 2,288,527 | (2,142,301) |
Accrued expenses and other liabilities | (1,756,495) | (2,533,713) |
Lease liability | (107,306) | (135,934) |
Net cash used in operating activities | (14,397,942) | (19,273,988) |
Decrease in cash and cash equivalents | (14,397,942) | (19,273,988) |
Effect of exchange rate changes on cash | 384,305 | 60,148 |
Cash and cash equivalents-beginning of year | 53,076,052 | 89,017,686 |
Cash and cash equivalents-end of period | 39,062,415 | $ 69,803,846 |
Non-cash investing and financing activities: | ||
Operating lease liabilities arising from obtaining right-of-use assets | 123,786 | |
Issuance of convertible preferred stock and common stock in connection with acquisition | $ 70,107,167 |
Nature of business and basis of
Nature of business and basis of presentation | 6 Months Ended |
Jun. 30, 2022 | |
Nature of business and basis of presentation | |
Nature of business and basis of presentation | 1. Nature of business and basis of presentation Nature of business stage biopharmaceutical company focused on developing and commercializing novel cancer therapeutics targeting DNA damage response pathways. The Company began principal operations in 2006 and is headquartered in Boston, Massachusetts with research facilities in Doylestown, Pennsylvania. Prior to the acquisition of Atrin Pharmaceuticals Inc. (Atrin), the Company was engaged in the clinical development of cancer therapeutics that reactivate the mutant p53 tumor suppressor protein. In December 2020, the Company announced that its pivotal Phase 3 myelodysplastic syndromes trial failed to meet its predefined primary endpoint of complete remission (CR) rate. Given these results, FDA feedback and the costs of continuing the APR-246 development program, the Company has shifted primary focus of its activities to the assets acquired in the May 16, 2022 acquisition of Atrin (see Note 3). The Company’s lead product candidate, which was acquired in the Atrin acquisition, is ATRN-119, a Phase 1-ready small molecule ATR inhibitor being developed for solid tumor indications. Agreement and plan of merger Series A Preferred Stock Series A Preferred Stock Common Stock Issuable Upon Conversion (1) Outstanding shares issued in merger 2,949,630 29,496,300 (1) Each share of Series A Preferred Stock is convertible into 10 shares of common stock . The Company held a stockholders’ meeting on July 28, 2022 where approval of the conversion of the Series A Preferred Stock into shares of the Company’s common stock in accordance with Nasdaq Listing Rule 5635(a) was received. Basis of presentation and management plans Since its inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff, and raising capital, and has financed its operations through the issuance of convertible preferred stock and common stock. The Company is subject to risks common to companies in the biopharmaceutical industry. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be maintained, that any therapeutic products developed will obtain required regulatory approval or that any approved or consumer products will be commercially viable. Even if the Company’s development efforts are successful, it is uncertain when, if ever, the Company will generate significant product sales. The Company believes that the June 30, 2022 cash balance of approximately $39.1 million will be sufficient to fund the Company’s operations through the end of 2023. In the event that additional funds are not available thereafter, management would expect to significantly reduce expenditures to conserve cash, which would involve scaling back or curtailing new development activity. |
Summary of significant accounti
Summary of significant accounting policies | 6 Months Ended |
Jun. 30, 2022 | |
Summary of significant accounting policies | |
Summary of significant accounting policies | 2. Summary of significant accounting policies The Company's complete listing of significant accounting policies are described in Note 2 to the Company's audited consolidated financial statements as of December 31, 2021 included in its annual report on Form 10-K filed with the Securities and Exchange Commission (or the “SEC”). Principles of consolidation Unaudited interim consolidated financial statements The unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements, and in management’s opinion, include all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the financial information for the interim periods have been made. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the full fiscal year or any future period. Use of estimates Foreign currency and currency translation Cash and cash equivalents— Fair value of financial instruments measurement dates. ASC Topic 820, Fair Value Measurement (“ASC 820”), establishes a three-level valuation hierarchy for instruments measured at fair value. The hierarchy is based on the transparency of inputs to the valuation of an asset or liability as of the measurement date. The hierarchy defines three levels of valuation inputs, of which the first two are considered observable and the last is considered unobservable: ● Level 1 inputs: Quoted prices in active markets for identical assets or liabilities. ● Level 2 inputs: Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable, such as quoted market prices, interest rates and yield curves. ● Level 3 inputs: Unobservable inputs developed using estimates or assumptions developed by the Company, which reflect those that a market participant would use in pricing the asset or liability. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The Company’s financial instruments consist of cash and cash equivalents and accounts payable. The carrying amount of accounts payable is considered a reasonable estimate of fair value due to the short-term maturity. Accounting for leases package At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on specific facts and circumstances, the existence of an identified asset(s), if any, and the Company’s control over the use of the identified asset(s), if applicable. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of future lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes the incremental borrowing rate, which is the rate incurred 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 incremental borrowing rate ranged from approximately 3.0% to 4.3% based on the remaining lease term of the applicable leases. The Company has elected not to separate lease and non-lease components as a single component. Operating leases are recognized on the balance sheet as ROU lease assets, lease liabilities current and lease liabilities non-current. Fixed rents are included in the calculation of the lease balances while variable costs paid for certain operating and pass-through costs are excluded. Lease expense is recognized over the expected term on a straight-line basis. Stock-based compensation For stock-based awards granted to non-employees, compensation expense is recognized over the period during which services are rendered by such non-employees until completed in accordance with the FASB issued ASU No. 2018-07, Compensation Stock Compensation (Topic 718): Improvements to Nonemployee Share Based Payment Accounting. The new standard largely aligns the accounting for share based payment awards issued to employees and nonemployees by expanding the scope of ASC 718 to apply to nonemployee share based transactions, as long as the transaction is not effectively a form of financing. The Company estimates the fair value of each stock option grant on the date of grant using the Black Scholes option pricing model, which uses as inputs the fair value of the Company’s common stock and assumptions the Company makes for the volatility of its common stock, the expected term of its stock options, the risk-free interest rate for a period that approximates the expected term of its stock options and its expected dividend yield. The Company elects to account for forfeitures when they occur. The Company also awards restricted stock units (“RSUs”) to employees and directors. RSUs are generally subject to forfeiture if employment terminates prior to the completion of the vesting restrictions. The Company expenses the cost of the RSUs, which is determined to be the fair market value of the shares of common stock underlying the RSUs at the date of grant, ratably over the period during which the vesting restrictions lapse. Net loss per share The following table sets forth the potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to include them would be anti-dilutive (in common stock equivalent shares): Six months ended June 30, 2022 2021 Convertible preferred stock 2,949,630 — Options to purchase common stock 8,955,354 4,821,759 Unvested restricted stock units — 507,050 Total shares of common stock equivalents 11,904,984 5,328,809 Acquired in-process research and development— The Company measures and recognizes asset acquisitions that are not deemed to be business combinations based on the cost to acquire the assets, including transaction costs. In an asset acquisition, the cost allocated to acquire in-process research and development (“IPR&D) with no alternative future use is charged to expense at the acquisition date. Please see Note 3 – “Acquisition of Atrin” for additional information. Recently issued accounting pronouncements— From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that the Company adopts as of the specified effective date. Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on the accompanying financial statements. |
Acquisition of Atrin
Acquisition of Atrin | 6 Months Ended |
Jun. 30, 2022 | |
Acquisition of Atrin | |
Acquisition of Atrin | 3. Acquisition of Atrin On May 16, 2022, the Company completed its acquisition of Atrin in accordance with the terms of the Merger Agreement as described in Note 1 – “Nature of business and basis of presentation”. Under the terms of the Merger Agreement, the Company issued 1,117,394 shares of common stock and 2,949,630 shares of Series A Preferred Stock. Each share of Series A Preferred Stock is convertible into 10 shares of Common Stock. The Company concluded the Atrin acquisition was not the acquisition of a business, as substantially all of the fair value of the non-monetary assets acquired was concentrated in a single identifiable asset, ATRN-119. The Company determined that the cost to acquire the Atrin assets was $76.2 million, based on the fair value of the equity consideration issued [and including direct costs of the acquisition of $3.5 million. The net assets acquired in connection with the Atrin acquisition were recorded at their estimated fair values as of May 16, 2022, which is the date the Atrin acquisition was completed. The following table summarizes the net assets acquired based on their estimated fair values as of May 16, 2022: Acquired IPR&D $ 76,020,184 Cash and cash equivalents 2,489,745 Prepaid expenses and other assets 34,579 Accounts payable and accrued liabilities (2,336,462) Total Acquisition Value $ 76,208,046 The Atrin acquisition was accounted for as an asset acquisition as Atrin was not considered to be a business under ASC 805 or SEC Rule 11-01(d). In the estimation of fair value of the asset purchase consideration, the Company used the carrying value of the cash and cash equivalents, prepaid expenses, accounts payable, and accrued liabilities as the most reliable indicator of fair value based on the associated short-term nature of the balances. The remaining fair value was attributable to the acquired IPR&D. Since Atrin was in preclinical development and no clinical trials had commenced at the time of the acquisition, the cost attributable to the IPR&D was expensed in the Company’s consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2022 as the acquired IPR&D had no alternative future use, as determined by the Company in accordance with U.S. GAAP. As a result of the Atrin acquisition, the Company announced in May 2022 it was closing its research facility in Sweden and reducing its related workforce in Sweden. The closure of the Swedish research facility and the reduction in workforce resulted in total expenses for employee severance and employee benefits of approximately $1.1 million, of which was recorded in the three months ended June 30, 2022. As of June 30, 2022, the remaining liability is approximately In connection with the Atrin acquisition, a non-transferable contingent value right (a “CVR”) was distributed to the Aprea stockholders of record as of the close of business on May 13, 2022. Holders of the CVR will be entitled to receive certain stock and/or cash payments from proceeds received by the Company, if any, related to the disposition of its legacy assets in the 2 year period following the closing of the transaction. The CVR had a deminimus value as of May 16, 2022 and June 30, 2022. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2022 | |
Leases | |
Leases | 4. Leases The Company is party to operating leases for office and laboratory space. The Company’s finance leases are immaterial both individually and in the aggregate. The Company has elected to apply the short-term lease exception to all leases of one year or less. Rent expense for three and six months ended June 30, 2022 was $84,900 and $159,716, respectively. Rent expense for the three and six months ended June 30, 2021 was $84,401 and $176,087, respectively. The Company has an operating lease in Boston, Massachusetts for office space which was amended effective July 1, 2021. The lease will expire on December 31, 2022 and does not have any renewal options. The Company has an operating lease for office and laboratory space in Doylestown, Pennsylvania which expires on December 31, 2022. The Company also has an operating lease for office and laboratory space in Solna, Sweden which was extended effective January 1, 2022 and now expires on June 30, 2023. Quantitative information regarding the Company’s leases for the three months ended June 30, 2022 and 2021 is as follows: Three months ended June 30, Six months ended June 30, Lease Cost 2022 2021 2022 2021 Operating lease cost $ 60,679 $ 58,481 $ 120,795 $ 116,404 Other Information Operating cash flows paid for amounts included in the measurement of lease liabilities $ 64,057 $ 63,482 $ 128,113 $ 126,966 Operating lease liabilities arising from obtaining right‑of‑use assets $ — $ — $ 123,786 $ — Weighted average remaining lease term (years) 0.50-1.00 0.50-1.00 0.50-1.00 0.50-1.00 Weighted average discount rate 3.0 - 4.3% 3.0 - 4.3% 3.0 - 4.3% 3.0 - 4.3% Future lease payments under noncancelable leases are as follows at June 30, 2022: Operating Future Lease Payments Leases 2022 $ 128,163 2023 63,903 Total Lease Payments $ 192,066 Less: Imputed Interest (2,950) Total Lease Liabilities $ 189,116 As most of the Company’s leases do not provide an implicit rate, the Company used its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. |
Accrued expenses
Accrued expenses | 6 Months Ended |
Jun. 30, 2022 | |
Accrued expenses | |
Accrued expenses | 5. Accrued expenses Accrued expenses consist of the following: June 30, December 31, 2022 2021 Professional fees $ 196,674 $ 247,123 Compensation and benefits 1,679,863 1,418,309 Research and development 1,365,298 3,504,375 Other 263,452 183,189 Total accrued expenses $ 3,505,287 $ 5,352,996 |
Stockholders' equity
Stockholders' equity | 6 Months Ended |
Jun. 30, 2022 | |
Stockholders' equity | |
Stockholders' equity | 6. Stockholders’ equity The total number of shares of all classes of capital stock that the Company is authorized to issue is 440,000,000 shares, consisting of 400,000,000 shares of common stock, par value $0.001 per share and 40,000,000 shares of preferred stock, par value $0.001 per share. Common Stock The holders of common stock are entitled to one vote for each share of common stock. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, after the payment or provision for payment of all debts and liabilities of the Company, the holders of common stock shall be entitled to share in the remaining assets of the Company available for distribution, if any. Shelf Registration Statement On November 12, 2020, the Company filed a universal shelf registration statement with the SEC for the issuance of common stock, preferred stock, warrants, rights, debt securities and units up to an aggregate of $350.0 million. On November 30, 2020, the Shelf Registration Statement was declared effective by the SEC. The universal shelf registration statement includes an at-the-market (“ATM”) offering program for the sale of up to $50.0 million of shares of the Company’s common stock. The Company agreed to pay a commission of 3% of the gross proceeds of any common stock sold in connection with the ATM offering program. The Company did not sell any common stock under the ATM program during the three and six months ended June 30, 2022 or 2021. Stock-Based Compensation Expense The Company recorded stock-based compensation expense of $14,801,615, and $16,885,675 for the three and six months ended June 30, 2022, respectively. The company recorded compensation expense of $1,863,498 and $3,686,060 for the three and six months ended June 30, 2021, respectively. |
Income taxes
Income taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income taxes | |
Income Taxes | 7. Income Taxes The Company has no income tax expense due to operating losses incurred for the three and six months ended June 30, 2022 and 2021. The Company has provided a valuation allowance for the full amount of the net deferred tax assets as, based on all available evidence, it is considered more likely than not that all the recorded deferred tax assets will not be realized in a future period. Realization of the future tax benefits is dependent on may factors, including the Company’s ability to generate taxable income within the net operating loss carryforward period. Under the provisions of the U.S. Internal Revenue Code and Sweden tax law, certain substantial changes in the Company’s ownership, including a sale of the Company or significant changes in ownership due to sales of equity, may have limited, or may limit in the future, the amount of net operating loss carryforwards that could be used annually to offset future taxable income. For U.S. and Swedish income tax purposes, the Company has not completed a study to assess whether a change of control has occurred or whether there have been changes of control since the Company’s formation due to the complexity and cost associated with such study and because there could be additional changes of control in the future. As a result, the Company is not able to estimate the effect of the change in control, if any, on the Company’s ability to utilize U.S. or Swedish net operating losses or other tax attribute carryforwards in the future. For Swedish income tax purposes, the Company’s net operating losses may be subject to limitations in accordance with the country’s group contribution restriction laws. The Company files tax returns in Sweden, the United States and Massachusetts. Income tax returns prior to 2018 in the United States and Massachusetts are no longer subject to examination and income tax returns prior to 2015 are no longer subject to examination in Sweden. The Company is not currently under examination by the IRS or any other jurisdictions for any tax years. As tax law is complex and often subject to varied interpretations, it is uncertain whether some of the Company’s tax positions will be sustained upon examination. Tax liabilities associated with uncertain tax positions represent unrecognized tax benefits, which arise when the estimated benefit recorded in the Company’s financial statements differs from the amounts taken or expected to be taken in a tax return because of the uncertainties described above. Substantially all of these unrecognized tax benefits, if recognized, would benefit the Company’s effective income tax rate. As of June 30, 2022 and December 31, 2021, the Company had approximately $0.1 million of liabilities related to uncertain tax positions. As the Company’s uncertain tax positions can be offset by available net operating losses, the Company did not recognize interest and penalties for 2022 and 2021. |
Commitments and contingencies
Commitments and contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and contingencies. | |
Commitments and contingencies | 8. Commitments and contingencies The Company records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. As of June 30, 2022, the Company has not recorded a provision for any contingent losses. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Summary of significant accounting policies | |
Principles of consolidation | Principles of consolidation |
Unaudited interim consolidated financial statements | Unaudited interim consolidated financial statements The unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements, and in management’s opinion, include all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the financial information for the interim periods have been made. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the full fiscal year or any future period. |
Use of estimates | Use of estimates |
Foreign currency and currency translation | Foreign currency and currency translation |
Cash and cash equivalents | Cash and cash equivalents— |
Fair value of financial instruments | Fair value of financial instruments measurement dates. ASC Topic 820, Fair Value Measurement (“ASC 820”), establishes a three-level valuation hierarchy for instruments measured at fair value. The hierarchy is based on the transparency of inputs to the valuation of an asset or liability as of the measurement date. The hierarchy defines three levels of valuation inputs, of which the first two are considered observable and the last is considered unobservable: ● Level 1 inputs: Quoted prices in active markets for identical assets or liabilities. ● Level 2 inputs: Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable, such as quoted market prices, interest rates and yield curves. ● Level 3 inputs: Unobservable inputs developed using estimates or assumptions developed by the Company, which reflect those that a market participant would use in pricing the asset or liability. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The Company’s financial instruments consist of cash and cash equivalents and accounts payable. The carrying amount of accounts payable is considered a reasonable estimate of fair value due to the short-term maturity. |
Accounting for leases | Accounting for leases package At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on specific facts and circumstances, the existence of an identified asset(s), if any, and the Company’s control over the use of the identified asset(s), if applicable. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of future lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes the incremental borrowing rate, which is the rate incurred 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 incremental borrowing rate ranged from approximately 3.0% to 4.3% based on the remaining lease term of the applicable leases. The Company has elected not to separate lease and non-lease components as a single component. Operating leases are recognized on the balance sheet as ROU lease assets, lease liabilities current and lease liabilities non-current. Fixed rents are included in the calculation of the lease balances while variable costs paid for certain operating and pass-through costs are excluded. Lease expense is recognized over the expected term on a straight-line basis. |
Stock-based compensation | Stock-based compensation For stock-based awards granted to non-employees, compensation expense is recognized over the period during which services are rendered by such non-employees until completed in accordance with the FASB issued ASU No. 2018-07, Compensation Stock Compensation (Topic 718): Improvements to Nonemployee Share Based Payment Accounting. The new standard largely aligns the accounting for share based payment awards issued to employees and nonemployees by expanding the scope of ASC 718 to apply to nonemployee share based transactions, as long as the transaction is not effectively a form of financing. The Company estimates the fair value of each stock option grant on the date of grant using the Black Scholes option pricing model, which uses as inputs the fair value of the Company’s common stock and assumptions the Company makes for the volatility of its common stock, the expected term of its stock options, the risk-free interest rate for a period that approximates the expected term of its stock options and its expected dividend yield. The Company elects to account for forfeitures when they occur. The Company also awards restricted stock units (“RSUs”) to employees and directors. RSUs are generally subject to forfeiture if employment terminates prior to the completion of the vesting restrictions. The Company expenses the cost of the RSUs, which is determined to be the fair market value of the shares of common stock underlying the RSUs at the date of grant, ratably over the period during which the vesting restrictions lapse. |
Net loss per share | Net loss per share The following table sets forth the potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to include them would be anti-dilutive (in common stock equivalent shares): Six months ended June 30, 2022 2021 Convertible preferred stock 2,949,630 — Options to purchase common stock 8,955,354 4,821,759 Unvested restricted stock units — 507,050 Total shares of common stock equivalents 11,904,984 5,328,809 |
Acquired in-process research and development | Acquired in-process research and development— The Company measures and recognizes asset acquisitions that are not deemed to be business combinations based on the cost to acquire the assets, including transaction costs. In an asset acquisition, the cost allocated to acquire in-process research and development (“IPR&D) with no alternative future use is charged to expense at the acquisition date. Please see Note 3 – “Acquisition of Atrin” for additional information. |
Recently issued accounting pronouncements | Recently issued accounting pronouncements— From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that the Company adopts as of the specified effective date. Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on the accompanying financial statements. |
Nature of business and basis _2
Nature of business and basis of presentation (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Nature of business and basis of presentation | |
Schedule of issuance of Series A Preferred Stock | Series A Preferred Stock Common Stock Issuable Upon Conversion (1) Outstanding shares issued in merger 2,949,630 29,496,300 (1) Each share of Series A Preferred Stock is convertible into 10 shares of common stock . |
Summary of significant accoun_3
Summary of significant accounting policies (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Summary of significant accounting policies | |
Schedule of potentially dilutive securities excluded from calculation of diluted net loss per share | The following table sets forth the potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to include them would be anti-dilutive (in common stock equivalent shares): Six months ended June 30, 2022 2021 Convertible preferred stock 2,949,630 — Options to purchase common stock 8,955,354 4,821,759 Unvested restricted stock units — 507,050 Total shares of common stock equivalents 11,904,984 5,328,809 |
Acquisition of Atrin (Tables)
Acquisition of Atrin (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Acquisition of Atrin | |
Schedule of net assets acquired based on the estimated fair values | Acquired IPR&D $ 76,020,184 Cash and cash equivalents 2,489,745 Prepaid expenses and other assets 34,579 Accounts payable and accrued liabilities (2,336,462) Total Acquisition Value $ 76,208,046 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Leases | |
Summary of quantitative information regarding the Company's leases | Three months ended June 30, Six months ended June 30, Lease Cost 2022 2021 2022 2021 Operating lease cost $ 60,679 $ 58,481 $ 120,795 $ 116,404 Other Information Operating cash flows paid for amounts included in the measurement of lease liabilities $ 64,057 $ 63,482 $ 128,113 $ 126,966 Operating lease liabilities arising from obtaining right‑of‑use assets $ — $ — $ 123,786 $ — Weighted average remaining lease term (years) 0.50-1.00 0.50-1.00 0.50-1.00 0.50-1.00 Weighted average discount rate 3.0 - 4.3% 3.0 - 4.3% 3.0 - 4.3% 3.0 - 4.3% |
Schedule of future lease payments under noncancellable leases | Operating Future Lease Payments Leases 2022 $ 128,163 2023 63,903 Total Lease Payments $ 192,066 Less: Imputed Interest (2,950) Total Lease Liabilities $ 189,116 |
Accrued expenses (Tables)
Accrued expenses (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Accrued expenses | |
Schedule of accrued expenses | June 30, December 31, 2022 2021 Professional fees $ 196,674 $ 247,123 Compensation and benefits 1,679,863 1,418,309 Research and development 1,365,298 3,504,375 Other 263,452 183,189 Total accrued expenses $ 3,505,287 $ 5,352,996 |
Nature of business and basis _3
Nature of business and basis of presentation (Details) - USD ($) | 3 Months Ended | ||
May 16, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Cash | $ 39,100,000 | ||
Atrin Pharmaceuticals, Inc | |||
Number of shares to purchase under option | $ 3,275,149 | ||
Common Stock | Atrin Pharmaceuticals, Inc | |||
Issuance of common stock upon acquisition of Atrin (in shares) | 1,117,394 | ||
Common stock, par value (in dollars per share) | $ 0.001 | ||
Series A Preferred Stock | Atrin Pharmaceuticals, Inc | |||
Issuance of preferred stock upon acquisition of Atrin (in shares) | 2,949,630 | 2,949,630 | |
Conversion value of temporary equity | $ 68,800,000 |
Nature of business and basis _4
Nature of business and basis of presentation - Atrin Acquisition (Details) - Atrin Pharmaceuticals, Inc | 3 Months Ended | |
May 16, 2022 shares | Jun. 30, 2022 shares | |
Common stock issuable upon conversion outstanding shares issued in merger | 29,496,300 | |
Preferred stock conversion ratio | 10 | |
Series A Preferred Stock | ||
Series A preferred stock outstanding shares issued in merger | 2,949,630 | 2,949,630 |
Preferred stock conversion ratio | 10 |
Summary of significant accoun_4
Summary of significant accounting policies - Leases and Property and equipment (Details) | 6 Months Ended | |
Jun. 30, 2022 | Jan. 01, 2019 | |
Leases | ||
Leases, election of practical expedients package | true | |
Minimum | ||
Leases | ||
Incremental borrowing rate (as a percent) | 3% | |
Maximum | ||
Leases | ||
Incremental borrowing rate (as a percent) | 4.30% |
Summary of significant accoun_5
Summary of significant accounting policies - Net loss per share (Details) - shares | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Potentially dilutive securities | ||
Total shares of common stock equivalents | 11,904,984 | 5,328,809 |
Convertible preferred stock | ||
Potentially dilutive securities | ||
Total shares of common stock equivalents | 2,949,630 | |
Options to purchase common stock | ||
Potentially dilutive securities | ||
Total shares of common stock equivalents | 8,955,354 | 4,821,759 |
Restricted stock units | ||
Potentially dilutive securities | ||
Total shares of common stock equivalents | 507,050 |
Acquisition of Atrin (Details)
Acquisition of Atrin (Details) - Atrin Pharmaceuticals, Inc $ in Millions | 3 Months Ended | |
May 16, 2022 USD ($) shares | Jun. 30, 2022 shares | |
Acquisition of Atrin | ||
Preferred stock conversion ratio | 10 | |
Cost to acquire Atrin assets | $ | $ 76.2 | |
Direct costs of acquisition of Atrin assets | $ | $ 3.5 | |
Term of contingent value right | 2 years | |
Common Stock | ||
Acquisition of Atrin | ||
Issuance of common stock upon acquisition of Atrin (in shares) | shares | 1,117,394 | |
Series A Preferred Stock | ||
Acquisition of Atrin | ||
Issuance of preferred stock upon acquisition of Atrin (in shares) | shares | 2,949,630 | 2,949,630 |
Preferred stock conversion ratio | 10 |
Acquisition of Atrin - Summary
Acquisition of Atrin - Summary of net assets acquired (Details) - USD ($) | Jun. 30, 2022 | May 16, 2022 | Dec. 31, 2021 |
Acquisition of Atrin | |||
Cash and cash equivalents | $ 39,062,415 | $ 53,076,052 | |
Prepaid expenses and other assets | $ 1,400,837 | $ 3,508,358 | |
Atrin Pharmaceuticals, Inc | |||
Acquisition of Atrin | |||
Acquired IPR&D | $ 76,020,184 | ||
Cash and cash equivalents | 2,489,745 | ||
Prepaid expenses and other assets | 34,579 | ||
Accounts payable and accrued liabilities | (2,336,462) | ||
Total Acquisition Value | $ 76,208,046 |
Acquisition of Atrin - Addition
Acquisition of Atrin - Additional information (Details) - Atrin Pharmaceuticals, Inc - USD ($) $ in Millions | 3 Months Ended | |
May 16, 2022 | Jun. 30, 2022 | |
Acquisition of Atrin | ||
Employee severance | $ 1.1 | |
Employee severance liability | $ 0.8 | |
Asset Acquisition Contingent Value Right Term | 2 years |
Leases - Summary (Details)
Leases - Summary (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Leases | ||||
Rent expense | $ 84,900 | $ 84,401 | $ 159,716 | $ 176,087 |
Leases - Quantitative Informati
Leases - Quantitative Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Quantitative information regarding the Company's leases | ||||
Operating lease cost | $ 60,679 | $ 58,481 | $ 120,795 | $ 116,404 |
Other Information | ||||
Operating cash flows paid for amounts included in the measurement of lease liabilities | $ 64,057 | $ 63,482 | 128,113 | $ 126,966 |
Operating lease liabilities arising from obtaining right-of-use assets | $ 123,786 | |||
Minimum | ||||
Other Information | ||||
Weighted average remaining lease term (years) | 6 months | 6 months | 6 months | 6 months |
Weighted average discount rate | 3% | 3% | 3% | 3% |
Maximum | ||||
Other Information | ||||
Weighted average remaining lease term (years) | 1 year | 1 year | 1 year | 1 year |
Weighted average discount rate | 4.30% | 4.30% | 4.30% | 4.30% |
Leases - Future lease payments
Leases - Future lease payments (Details) | Jun. 30, 2022 USD ($) |
Future Lease Payments | |
2022 | $ 128,163 |
2023 | 63,903 |
Total Lease Payments | 192,066 |
Less: Imputed Interest | (2,950) |
Total Lease Liabilities | $ 189,116 |
Accrued expenses (Details)
Accrued expenses (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Accrued expenses | ||
Professional fees | $ 196,674 | $ 247,123 |
Compensation and benefits | 1,679,863 | 1,418,309 |
Research and development | 1,365,298 | 3,504,375 |
Other | 263,452 | 183,189 |
Total accrued expenses | $ 3,505,287 | $ 5,352,996 |
Stockholders' equity (Details)
Stockholders' equity (Details) | 3 Months Ended | 6 Months Ended | ||||
Nov. 12, 2020 USD ($) | Jun. 30, 2022 USD ($) $ / shares shares | Jun. 30, 2021 USD ($) shares | Jun. 30, 2022 USD ($) Vote $ / shares shares | Jun. 30, 2021 USD ($) shares | Dec. 31, 2021 $ / shares shares | |
Stockholders' equity | ||||||
Stock, shares authorized | 440,000,000 | 440,000,000 | ||||
Common stock, shares authorized | 400,000,000 | 400,000,000 | 400,000,000 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||
Preferred stock, shares authorized | 40,000,000 | 40,000,000 | ||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||||
Number of shares issued | 0 | 0 | 0 | 0 | ||
Commission payable as a percentage of gross proceeds from sale of common stock under ATM offering | 3% | |||||
Number of voting rights per common share | Vote | 1 | |||||
Stock based compensation expense | $ | $ 14,801,615 | $ 1,863,498 | $ 16,885,675 | $ 3,686,060 | ||
Shelf Registration Statement | ||||||
Maximum amount to be issued under universal shelf registration statement | $ | $ 350,000,000 | |||||
Maximum amount to be issued under at-the-market offering program | $ | $ 50,000,000 |
Income taxes - Narrative (Detai
Income taxes - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Income taxes | |||||
Income tax expense | $ 0 | $ 0 | $ 0 | $ 0 | |
Uncertain tax positions | $ 100,000 | $ 100,000 | $ 100,000 |
Commitments and contingencies (
Commitments and contingencies (Details) | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Commitments and contingencies. | |
Provision for contingent losses | $ 0 |