TScan Therapeutics (TCRX) 10-Q 9 Nov 22 2022 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2022	Nov. 04, 2022
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2022
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Trading Symbol	TCRX
Entity Registrant Name	TSCAN THERAPEUTICS, INC.
Entity Central Index Key	0001783328
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Shell Company	false
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	001-40603
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	82-5282075
Entity Address, Address Line One	830 Winter Street
Entity Address, State or Province	MA
Entity Address, City or Town	Waltham
Entity Address, Postal Zip Code	02451
City Area Code	857
Local Phone Number	399-9500
Title of 12(b) Security	Voting Common Stock, $0.0001 par value per share
Security Exchange Name	NASDAQ
Voting Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		18,936,440
Non-voting Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		5,143,134

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 137,306	$ 161,405
Prepaid expenses and other current assets	3,871	4,249
Total current assets	141,177	165,654
Property and equipment, net	10,334	11,765
Right-of-use assets	4,368	5,491
Prepaid rent	3,759
Restricted cash	5,037	5,031
Long-term deposits and other assets	779	166
Total assets	165,454	188,107
Current liabilities:
Accounts payable	2,708	1,765
Accrued expenses and other current liabilities	6,159	6,517
Operating lease liability, current portion	1,795	1,651
Deferred revenue, current portion	5,932	11,410
Total current liabilities	16,594	21,343
Deferred revenue, net of current portion	0	1,497
Operating lease liability, net of current portion	3,031	4,392
Long-term debt and accrued interest	29,074
Term loan, non-current	29,074
Other long term liabilities	97	97
Total liabilities	48,796	27,329
Commitments and contingencies (Note 5)
Stockholders' equity:
Additional paid-in capital	256,311	252,933
Accumulated deficit	(139,656)	(92,158)
Total stockholders' deficit	116,658	160,778
Total liabilities and stockholders' equity	165,454	188,107
Voting Common Stock
Stockholders' equity:
Common stock	2	2
Non-voting Common Stock
Stockholders' equity:
Common stock	$ 1	$ 1

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Voting Common Stock
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	18,931,793	18,881,333
Common stock, shares outstanding	18,931,793	18,764,463
Non-voting Common Stock
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	10,000,000	10,000,000
Common stock, shares issued	5,143,134	5,143,134
Common stock, shares outstanding	5,143,134	5,143,134

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenue
Collaboration and license revenue	$ 3,363	$ 2,412	$ 10,440	$ 7,287
Revenue from Contract with Customer, Products and Services [Extensible List]	http://www.tscan.com/#CollaborationAndLicenseRevenueMember	http://www.tscan.com/#CollaborationAndLicenseRevenueMember	http://www.tscan.com/#CollaborationAndLicenseRevenueMember	http://www.tscan.com/#CollaborationAndLicenseRevenueMember
Operating expenses:
Research and development	$ 15,031	$ 14,206	$ 44,215	$ 32,346
General and administrative	4,910	4,048	14,212	9,380
Total operating expenses	19,941	18,254	58,427	41,726
Loss from operations	(16,578)	(15,842)	(47,987)	(34,439)
Other income:
Interest and other income, net	534	3	690	14
Interest expense	(201)		(201)
Net loss	(16,245)	(15,839)	(47,498)	(34,425)
Net loss attributable to common stockholders	$ (16,245)	$ (15,839)	$ (47,498)	$ (34,425)
Net loss per share, basic	$ (0.67)	$ (0.80)	$ (1.98)	$ (4.55)
Net loss per share, diluted	$ (0.67)	$ (0.80)	$ (1.98)	$ (4.55)
Weighted average common shares outstanding-basic	24,073,935	19,875,428	24,038,257	7,562,436
Weighted average common shares outstanding-diluted	24,073,935	19,875,428	24,038,257	7,562,436

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) (Unaudited) - USD ($) $ in Thousands	Total	Initial Public Offering	Convertible Preferred Stock	Convertible Preferred Stock Initial Public Offering	Voting Common Stock	Non-voting Common Stock	Common Stock Voting Common Stock	Common Stock Voting Common Stock Initial Public Offering	Common Stock Non-voting Common Stock	Common Stock Non-voting Common Stock Initial Public Offering	Additional Paid-In Capital	Additional Paid-In Capital Initial Public Offering	Accumulated Deficit
Balances at Dec. 31, 2020	$ (42,462)						$ 1				$ 1,070		$ (43,533)
Balances, shares at Dec. 31, 2020			7,063,104
Balances at Dec. 31, 2020			$ 59,681
Balances, shares at Dec. 31, 2020							1,135,858
Issuance of Series C convertible preferred stock (net of issuance costs of $270)			$ 99,730
Issuance of Series C convertible preferred stock (net of issuance costs of $270), shares			8,553,168
Issuance of common stock, net of issuance costs of $10,400	89,647						$ 1				89,646
Issuance of common stock, net of issuance costs of $10,400 million, shares							6,666,667
Conversion of convertible preferred stock to common stock upon closing of initial public offering				$ (159,411)
Conversion of convertible preferred stock to common stock upon closing of initial public offering, shares				(15,616,272)
Conversion of convertible preferred stock to common stock upon closing of initial public offering		$ 159,411								$ 1		$ 159,410
Conversion of convertible preferred stock to common stock upon closing of initial public offering, shares								10,473,138		5,143,134
Exercise of stock options	171										171
Exercise of stock options, shares							108,657
Vesting of restricted common stock, shares							233,767
Stock-based compensation expense	1,732										1,732
Net loss	(34,425)												(34,425)
Balances at Sep. 30, 2021	174,074						$ 2		$ 1		252,029		(77,958)
Balances, shares at Sep. 30, 2021							18,618,087		5,143,134
Balances at Jun. 30, 2021	(60,030)						$ 1				2,088		(62,119)
Balances, shares at Jun. 30, 2021			15,616,272
Balances at Jun. 30, 2021			$ 159,411
Balances, shares at Jun. 30, 2021							1,419,819
Issuance of common stock, net of issuance costs of $10,400	89,647						$ 1				89,646
Issuance of common stock, net of issuance costs of $10,400 million, shares							6,666,667
Conversion of convertible preferred stock to common stock upon closing of initial public offering				$ (159,411)
Conversion of convertible preferred stock to common stock upon closing of initial public offering, shares				(15,616,272)
Conversion of convertible preferred stock to common stock upon closing of initial public offering		$ 159,411								$ 1		$ 159,410
Conversion of convertible preferred stock to common stock upon closing of initial public offering, shares								10,473,138		5,143,134
Vesting of restricted common stock, shares							58,463
Stock-based compensation expense	885										885
Net loss	(15,839)												(15,839)
Balances at Sep. 30, 2021	174,074						$ 2		$ 1		252,029		(77,958)
Balances, shares at Sep. 30, 2021							18,618,087		5,143,134
Balances at Dec. 31, 2021	160,778						$ 2		$ 1		252,933		(92,158)
Balances, shares at Dec. 31, 2021					18,764,463	5,143,134	18,764,463		5,143,134
Exercise of stock options	124										124
Exercise of stock options, shares							50,460
Vesting of restricted common stock, shares							116,870
Stock-based compensation expense	3,254										3,254
Net loss	(47,498)												(47,498)
Balances at Sep. 30, 2022	116,658						$ 2		$ 1		256,311		(139,656)
Balances, shares at Sep. 30, 2022					18,931,793	5,143,134	18,931,793		5,143,134
Balances at Jun. 30, 2022	131,652						$ 2		$ 1		255,060		(123,411)
Balances, shares at Jun. 30, 2022							18,929,834		5,143,134
Exercise of stock options	5										5
Exercise of stock options, shares							1,959
Stock-based compensation expense	1,246										1,246
Net loss	(16,245)												(16,245)
Balances at Sep. 30, 2022	$ 116,658						$ 2		$ 1		$ 256,311		$ (139,656)
Balances, shares at Sep. 30, 2022					18,931,793	5,143,134	18,931,793		5,143,134

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2021
Convertible Preferred Stock
Net issuance costs		$ 270
Voting Common Stock
Net issuance costs	$ 10,400	$ 10,400

Condensed Consolidated Statem_4

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities:
Net loss	$ (47,498)	$ (34,425)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense	3,653	2,186
Non-cash interest expense related to note payable	44	0
Stock-based compensation	3,254	1,732
Changes in current assets and liabilities:
Prepaid expenses and other assets	(235)	(3,037)
Prepaid rent	(2,165)	0
Right-of-use assets and lease liabilities, net	(94)	20
Accounts payable	114	2,472
Accrued expense and other liabilities	(591)	1,387
Deferred revenue	(6,975)	(4,632)
Net cash used in operating activities	(50,493)	(34,297)
Cash flows from investing activities:
Purchases of property and equipment	(2,848)	(7,730)
Net cash used in investing activities	(2,848)	(7,730)
Cash flows from financing activities:
Proceeds from issuance of convertible preferred stock, net of issuance costs	0	99,730
Proceeds from exercise of stock options	124	171
Proceeds from initial public offering, net of issuance costs	0	89,647
Proceeds from issuance of term loan, net of issuance costs paid to lender	29,354	0
Payments of debt issuance costs	(230)	0
Net cash provided by financing activities	29,248	189,548
Net (decrease) increase in cash, cash equivalents and restricted cash	(24,093)	147,521
Cash, cash equivalents, and restricted cash - beginning of period	166,436	35,386
Cash, cash equivalents, and restricted cash - end of period	142,343	182,907
Summary of cash, cash equivalents and restricted cash reported within the consolidated balance sheets:
Cash and cash equivalents	137,306	182,312
Restricted cash	5,037	595
Total cash, cash equivalents, and restricted cash	142,343	182,907
Supplemental cash flow information:
Purchase of property and equipment in accounts payable and accrued liabilities	572	1,427
Conversion of convertible preferred stock to common stock upon closing of initial public offering	0	159,411
Debt issuance costs not yet paid	$ 94	$ 0

Nature of Business and Basis of

Nature of Business and Basis of Presentation	9 Months Ended
	Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Business and Basis of Presentation	1. Nature of Business and Basis of Presentation Nature of Business TScan Therapeutics, Inc. and its wholly-owned subsidiary, TScan Securities Corporation (the Company), is a biotechnology company that was incorporated in Delaware on April 17, 2018 and has a principal place of business in Waltham, Massachusetts. The Company is a biopharmaceutical company focused on developing a pipeline of T cell receptor-engineered T cell (TCR-T) therapies for the treatment of patients with cancer. Basis of Presentation The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (US GAAP) and applicable rules and regulations of the Securities and Exchange Commission (the SEC) regarding interim financial reporting, and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. Management believes that the interim financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the Company’s financial position, results of its operations and cash flows. The condensed consolidated financial statements include the accounts of TScan Therapeutics, Inc. and its subsidiary, TScan Securities Corporation. All intercompany balances and transactions have been eliminated in consolidation. The results for the three and nine months ended September 30, 2022 are not necessarily indicative of results to be expected for the year ending December 31, 2022, any other interim periods, or any future year or period. The accompanying condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K, which was filed with the SEC on March 9, 2022. In the opinion of the Company’s management, all adjustments (consisting of normal and recurring adjustments) considered necessary for a fair statement of the results for the interim periods presented have been included. Recently adopted accounting pronouncement In August 2020, the FASB issued ASU No. 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 (“ASU 2020-06”) , which simplified the accounting for certain financial instruments with characteristics of liabilities and equity, including certain convertible instruments and contracts on an entity’s own equity. Specifically, the new standard removed the separation models required for convertible debt with cash conversion features and convertible instruments with beneficial conversion features. It also removed certain settlement conditions that are currently required for equity contracts to qualify for the derivative scope exception and simplified the diluted earnings per share calculation for convertible instruments. The Company adopted this new standard effective September 1, 2022. The adoption of ASU 2020-06 did not have a material impact on the Company’s condensed financial statements. Risks, Uncertainties and Going Concern The Company is subject to risks common to companies in the biotechnology industry, including, but not limited to, successful development of technology, obtaining additional funding, protection of proprietary technology, compliance with government regulations, risks of failure of preclinical studies and clinical trials, the need to obtain marketing approval for its product candidates and the ability to successfully market any products that receive approval, fluctuations in operating results, economic pressure impacting therapeutic pricing, dependence on key personnel, risks associated with changes in technologies, development by competitors of technological innovations and the ability to scale manufacturing to large scale production. Product candidates currently under development will require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance capabilities. Even if the Company’s development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from sales. The accompanying unaudited condensed consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the ordinary course of business. The Company has primarily funded its operations with proceeds from sales of capital stock, payments received under its license and collaboration agreements and issuance of a debt facility to K2 HealthVentures LLC. Since its inception, the Company has incurred recurring losses, including net losses of $ 47.5 million and $ 34.4 million for the nine months ended September 30, 2022 and 2021, respectively. As of September 30, 2022, the Company had an accumulated deficit of $ 139.7 million. The Company expects to continue to generate operating losses in the foreseeable future. The Company expects that its cash and cash equivalents as of September 30, 2022 will be sufficient to fund the Company’s operations for at least the next twelve months from the date of the issuance of these financial statements. Impact of COVID-19 In response to public health directives and orders and to help minimize the risk of the virus to employees, the Company has taken a series of actions aimed at safeguarding the Company’s employees and business associates, including implementing a flexible work-at-home policy. To date, the Company has not experienced material business disruptions, including with vendors, as a result of the health epidemics, including the evolving effects of the COVID-19 pandemic. However, disruptions and supply chain constraints arising from health epidemics, including COVID-19, could result in increased costs of execution of development plans or may negatively impact the quality, quantity, timing and regulatory usability of data that the Company would otherwise be able to collect. There continues to be uncertainty around the duration and impacts of these potential disruptions. Emerging Growth Company Status The Company qualifies as “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and has elected to “opt in” to the extended transition related to complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public and nonpublic companies, the Company will adopt the new or revised standard at the time nonpublic companies adopt the new or revised standard and will do so until such time that the Company either (i) irrevocably elects to “opt out” of such extended transition period or (ii) no longer qualifies as an emerging growth company. The Company may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for nonpublic companies.

Fair Value Measurements

Fair Value Measurements	9 Months Ended
	Sep. 30, 2022
Fair Value Disclosures [Abstract]
Fair Value Measurements	2. Fair Value Measurements The following tables set forth by level, within the fair value hierarchy, the assets carried at fair value (in thousands): Fair value measurements at September 30, 2022 using Level 1 Level 2 Level 3 Total Assets Cash equivalents – money market funds $ 135,129 $ - $ - $ 135,129 Total financial assets $ 135,129 $ - $ - $ 135,129 Fair value measurements at December 31, 2021 using Level 1 Level 2 Level 3 Total Assets Cash equivalents – money market funds $ 159,668 $ - $ - $ 159,668 Total financial assets $ 159,668 $ - $ - $ 159,668 The cash equivalents are comprised of funds held in an exchange traded money market fund and the fair value of the cash equivalents is determined based upon quoted market price for that fund. There were no transfers among Level 1, Level 2, or Level 3 categories in the periods presented. The carrying value of accounts payable and accrued expenses that are reported on the condensed consolidated balance sheets approximate their fair value due to the short-term nature of these assets and liabilities. The Company entered into new long-term debt in September 2022; given the recent issuance of that debt, the carrying value approximates fair value.

Accrued Expenses and Other Curr

Accrued Expenses and Other Current Liabilities	9 Months Ended
	Sep. 30, 2022
Payables and Accruals [Abstract]
Accrued Expenses and Other Current Liabilities	3. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): September 30, December 31, 2022 2021 Accrued employee compensation and benefits $ 2,952 $ 2,600 Accrued research and development 1,453 1,902 Accrued consulting and professional services 255 949 Accrued legal services and license fee 208 54 Other 1,291 1,012 Total accrued expenses and other current liabilities $ 6,159 $ 6,517

Collaboration and License Agree

Collaboration and License Agreements	9 Months Ended
	Sep. 30, 2022
Collaboration And License Agreements [Abstract]
Collaboration and License Agreements	4. Collaboration and License Agreements Novartis In March 2020 , the Company entered into a Collaboration and License Agreement (the Novartis Agreement) with Novartis Institutes For Biomedical Research, Inc. (Novartis) to collaborate on their research efforts to discover and develop novel TCR-T therapies. At the inception date of the Novartis Agreement, Novartis or its affiliates held an ownership interest of more than 10 % in the Company, and at September 30, 2022 , Novartis held less than 10 % of the common shares outstanding. Under the Novartis Agreement, the Company will identify and characterize TCRs in accordance with a research plan and transfer data arising from the research plan. Novartis will have the option to license and develop TCRs for up to three novel targets identified in performance of the collaboration during the collaboration period of the Novartis Agreement. Novartis will also have rights of first negotiation for certain additional targets and TCRs identified in performance of the collaboration during a defined collaboration period of the Novartis Agreement and for 180 days after such collaboration period ends (which collaboration period will end in March 2023). If during such 180-day right of first negotiation period, the Company notifies Novartis of the Company’s intent to grant a third party a license to a target or TCR identified in the collaboration, then Novartis may obtain the exclusive right to negotiate a license to such target or TCR for an additional 270 days by providing the Company with a term sheet to license such target or TCR within 90 days of the Company’s notice of such intent. The Novartis Agreement provides that the Company will pay an upfront fee of $ 20.0 million, research funding totaling $ 10.0 million and potential milestone payments contingent on clinical, regulatory and sales success. In addition to payments upon achievement of certain clinical and regulatory milestones, Novartis will pay the Company mid-single to low double-digit royalties on net sales for each product directed to a target licensed by Novartis. After the end of the collaboration period and the expiration of Novartis’ first right of negotiation, the Company is free to develop TCRs against targets not licensed by Novartis . The Company concluded that Novartis meets the definition of a customer, as the Company is delivering research and development activities and know-how rights. The Company identified performance obligations for research and development activities, data reporting and participation in joint steering and research committees. The Company determined there is a single performance obligation due to the services being highly interrelated and are therefore not distinct in the context of the contract. The Company combined the pre-option research services and data reporting into a single performance obligation. Novartis has an exclusive option to obtain a commercial license for up to three Targets (as defined in the Novartis Agreement) to pursue further development and commercialization of the respective Target. Pursuant to the Novartis Agreement, the option for Novartis to license, develop, and commercialize Targets is not a performance obligation at the outset of the Novartis Agreement as it is a customer option that does not represent a material right. The Company looked to the promises in the arrangement to determine the method of recognition that best coincides with the pattern of delivery. The Company concluded that the performance of the research services over the expected research term was the predominant promise within the performance obligation. The Company is recognizing the revenue associated with the performance obligation using the input method, according to the actual costs incurred as a percentage of total expected costs to complete the research services. As costs are incurred, the Company will recognize revenue over time. Any change in the estimated percentage complete due to a revised cost forecast will be adjusted in the period in which the change in estimate occurs and the revenue recognition will be updated accordingly. The Company expects the research term to last approximately three years , which is inclusive of the option to extend the arrangement. The Company determined that the $ 20.0 million upfront payment, together with the $ 10.0 million of estimated research costs to be reimbursed by Novartis, to be the entirety of the consideration to be included in the transaction price as of the outset of the arrangement. The potential milestone payments that the Company is eligible to receive were excluded from the transaction price, as all milestone amounts were fully constrained based on the assessed probability of achievement. The Company will re-evaluate the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur, and, if necessary, adjust the estimate of the transaction price. The Company recognized $ 10.4 million and $ 7.0 million of revenue associated with the Novartis Agreement based on performance completed during that period for the nine months ended September 30, 2022 and 2021, respectively. Additionally, the Company incurred $ 3.5 million and $ 2.3 million of costs associated with the Novartis Agreement that were recorded within research and development expenses in the statements of operations for the nine months ended September 30, 2022 and 2021, respectively. Finally, as of September 30, 2022, the Company had current deferred revenue of $ 5.9 million and no long-term deferred revenue due to the Novartis Agreement.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	5. Commitments and Contingencies Brigham and Women’s License Agreement The Company obtained the worldwide exclusive license to its foundational technology from The Brigham and Women’s Hospital, Inc. (or BWH). The license, as amended, grants worldwide exclusive use to the patent underlying the TargetScan technology in exchange for fees including development milestones and various royalties on product sales should they occur in the future. Royalty Agreement In June 2018, the Company amended and restated an existing royalty agreement with one of its founders. Under the amended and restated royalty agreement, the Company agreed to pay the founder an aggregate royalty of 1 % of net sales of any product sold by the Company or by any of its direct or indirect licensees for use in the treatment of any disease or disorder covered by a pending patent application or issued patent held or controlled by the Company as of the last date that the founder was providing services to the Company as a director or consultant under a written agreement in perpetuity. Royalties are payable with respect to each applicable product for a defined period of time set forth in the royalty agreement. The founder assigned his rights and obligations under the royalty agreement to one of his affiliated entities in January 2021. Lease On November 1, 2021, the Company entered a new lease for laboratory and office space. This lease will commence when the Company obtains possession of the underlying asset, which is expected to occur in the fourth quarter of 2022. The Company provided a letter of credit in the amount of $ 4.4 million as a security for the lease, which expires on November 30, 2022 , at which point the letter will automatically renew each calendar year up to but not beyond April 1, 2033. The cash securing the letter of credit is classified as restricted cash on the consolidated balance sheet. Annual fixed rent will start at $ 7.6 million increasing 3 % annually to $ 9.9 million through the original term of the lease, which is ten years and two months following the lease commencement date. As of September 30, 2022 , $ 3.8 million in payments relating to landlord-owned leasehold improvements were recorded to prepaid rent. On the lease commencement date, the Company will reclassify the prepayment to the right-of-use asset. The lease was not recorded on the condensed consolidated balance sheet as a component of the Company’s right-of-use asset and operating lease liabilities as the facility is under construction and the Company does not control the use of the facility at September 30, 2022.

Loan and Security Agreement

Loan and Security Agreement	9 Months Ended
	Sep. 30, 2022
Debt Disclosure [Abstract]
Loan and Security Agreement	6. Loan and Security Agreement On September 9, 2022 (the Closing Date), the Company entered into a Loan and Security Agreement (the Loan Agreement) with K2 HealthVentures LLC (K2HV), pursuant to which convertible term loans in an aggregate principal amount of up to $ 60 million is available to the Company in three tranches, subject to certain terms and conditions. The Company drew the first tranche of $ 30 million from K2HV on the Closing Date. The Company has the option to draw the second tranche of $ 10 million upon the achievement of certain financial and clinical milestones and an uncommitted third tranche of $ 20 million may be funded by joint agreement of the Company and K2HV. On the Closing Date, the Company paid a facility fee of $ 0.4 million to K2HV and is subject to an additional 1 % of the principal amount of any amount drawn on third tranche. The term loans mature on September 1, 2026 (the Maturity Date), and will be subject to interest only payments for 24 months, which can be extended to 36 months upon achievement of certain financial and clinical milestones, following which the term loans will amortize in equal monthly installments until maturity. The Company has the ability to repay the loan at any time either in cash or in shares, subject to applicable premiums as specified in the Loan Agreement. The term loans will accrue interest at a per annum rate equal to the greater of (i) 8.75 % and (ii) the sum of (A) the prime rate (as last quoted in The Wall Street Journal) and (B) 4.75 %, subject to a cap of 9.90 %. At September 30, 2022 the applicable interest rate is 9.90 %. The lenders may elect at any time following the closing prior to the payment in full of the term loans to convert any portion of the principal amount of the term loans then outstanding into shares of the Company's common stock. The first tranche of the loan is convertible at the option of K2HV at a conversion price of $ 4.785 per share and future tranches will be convertible as specified in the agreement, provided that, such price shall be subject to the applicable conversion price floor and other adjustments in accordance with the Loan Agreement. The embedded conversion option meets the derivative accounting scope exception since the embedded conversion option is indexed to the Company’s own common stock and qualifies for classification within stockholders’ equity. The Company has the option to prepay all, but not less than all, of the outstanding principal balance of the term loans under the Loan Agreement subject to a prepayment fee ranging from 4 % to 1 % depending upon when the prepayment occurs. The Company is obligated to pay a final fee equal to 6.00 % of the aggregate amount of the term loans funded (the Exit Fee), to occur upon the earliest of (i) the maturity date, (ii) the acceleration of the term loans, and (iii) the prepayment of the term loans. If, upon equity conversion, K2HV receives gross proceeds in an amount equal to at least 1.5 multiplied by the principal amount converted from the sale or other disposition of such Conversion Shares (as defined in the Loan Agreement), then as to such principal amount, the Exit Fee will be reduced to zero. The Company’s obligations under the Loan Agreement are secured by a first priority security interest in substantially all of its assets (other than intellectual property), subject to certain exceptions. The Loan Agreement contains customary representations and warranties, and also includes customary events of default, including payment default, breach of covenants, change of control, and material adverse effects. The Loan Agreement restricts certain activities, such as disposing of the Company’s business or certain assets, incurring additional debt or liens or making payments on other debt, making certain investments and declaring dividends, acquiring or merging with another entity, engaging in transactions with affiliates or encumbering intellectual property, among others. During the term of the Loan Agreement, the Company must maintain minimum unrestricted cash and cash equivalents equal to 5.0 times the average monthly cash burn measured over the trailing three-month period. Upon the occurrence of an event of default, a default interest rate of an additional 5 % per annum may be applied to the outstanding loan balances, and the Lender may declare all outstanding obligations immediately due and payable and exercise all of its rights and remedies as set forth in the Loan Agreement and under applicable law. The Company recorded $ 0.2 million in interest expense for the three and nine months ended September 30, 2022. The effective interest rate on the Loan Agreement, including the amortization of the debt discount and issuance costs, and accretion of the final payment, was 13.13 % at September 30, 2022. Future principal debt payments of the convertible term loans funded as of September 30, 2022 are as follows: 2024 $ 3,427 2025 14,588 2026 11,985 Total principal payments 30,000 Plus: Final payment fee 1,800 Less: unamortized debt discount and final fee ( 2,726 ) Long-term debt $ 29,074

Net Loss Per Share

Net Loss Per Share	9 Months Ended
	Sep. 30, 2022
Earnings Per Share [Abstract]
Net Loss Per Share	7. Net Loss Per Share Net Loss Per Share Basic and diluted net loss per share was calculated as follows (in thousands, except share and per share data): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Numerator: Net loss $ ( 16,245 ) $ ( 15,839 ) $ ( 47,498 ) $ ( 34,425 ) Denominator: Weighted-average common shares outstanding, basic and diluted 24,073,935 19,875,428 24,038,257 7,562,436 Net loss per share, basic and diluted $ ( 0.67 ) $ ( 0.80 ) $ ( 1.98 ) $ ( 4.55 ) The Company has two classes of common stock, each with identical participation rights to earnings and liquidation preferences, and therefore the calculation of net loss per share as described above is identical to the calculation under the two-class method. The Company excluded the following potential common shares from the computation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect: September 30, 2022 2021 Options to purchase common stock 5,258,027 3,090,849 Common stock issuable under outstanding loan 2,100,027 - Unvested restricted common stock - 204,513 Potential shares issuable under the ESPP 100,768 - Total 7,458,822 3,295,362

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	9 Months Ended
	Sep. 30, 2022
Fair Value Disclosures [Abstract]
Schedule of Assets and Liabilities Carried at Fair Value on a Heirarchy Basis	The following tables set forth by level, within the fair value hierarchy, the assets carried at fair value (in thousands): Fair value measurements at September 30, 2022 using Level 1 Level 2 Level 3 Total Assets Cash equivalents – money market funds $ 135,129 $ - $ - $ 135,129 Total financial assets $ 135,129 $ - $ - $ 135,129 Fair value measurements at December 31, 2021 using Level 1 Level 2 Level 3 Total Assets Cash equivalents – money market funds $ 159,668 $ - $ - $ 159,668 Total financial assets $ 159,668 $ - $ - $ 159,668

Accrued Expenses and Other Cu_2

Accrued Expenses and Other Current Liabilities (Tables)	9 Months Ended
	Sep. 30, 2022
Payables and Accruals [Abstract]
Schedule of Accrued Expenses and Other Current Liabilities	Accrued expenses and other current liabilities consisted of the following (in thousands): September 30, December 31, 2022 2021 Accrued employee compensation and benefits $ 2,952 $ 2,600 Accrued research and development 1,453 1,902 Accrued consulting and professional services 255 949 Accrued legal services and license fee 208 54 Other 1,291 1,012 Total accrued expenses and other current liabilities $ 6,159 $ 6,517

Loan and Security Agreement (Ta

Loan and Security Agreement (Tables)	9 Months Ended
	Sep. 30, 2022
Debt Disclosure [Abstract]
Schedule of Future Principal Debt Payment	Future principal debt payments of the convertible term loans funded as of September 30, 2022 are as follows: 2024 $ 3,427 2025 14,588 2026 11,985 Total principal payments 30,000 Plus: Final payment fee 1,800 Less: unamortized debt discount and final fee ( 2,726 ) Long-term debt $ 29,074

Net Loss Per Share (Tables)

Net Loss Per Share (Tables)	9 Months Ended
	Sep. 30, 2022
Earnings Per Share [Abstract]
Summary of Basic and Diluted Net Loss Per Share	Net Loss Per Share Basic and diluted net loss per share was calculated as follows (in thousands, except share and per share data): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Numerator: Net loss $ ( 16,245 ) $ ( 15,839 ) $ ( 47,498 ) $ ( 34,425 ) Denominator: Weighted-average common shares outstanding, basic and diluted 24,073,935 19,875,428 24,038,257 7,562,436 Net loss per share, basic and diluted $ ( 0.67 ) $ ( 0.80 ) $ ( 1.98 ) $ ( 4.55 )
Summary of Potential Common Shares Excluded from Computation of Diluted Net Loss per Share	The Company excluded the following potential common shares from the computation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect: September 30, 2022 2021 Options to purchase common stock 5,258,027 3,090,849 Common stock issuable under outstanding loan 2,100,027 - Unvested restricted common stock - 204,513 Potential shares issuable under the ESPP 100,768 - Total 7,458,822 3,295,362

Nature of Business and Basis _2

Nature of Business and Basis of Presentation - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Date of incorporation			Apr. 17, 2018
Net proceeds from issuance of shares			$ 0	$ 89,647
Net losses	$ 16,245	$ 15,839	47,498	$ 34,425
Accumulated deficit	$ 139,656		$ 139,656		$ 92,158

Fair Value Measurements - Sched

Fair Value Measurements - Schedule of Assets and Liabilities Carried at Fair Value on a Hierarchy Basis (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Assets, Fair Value Disclosure [Abstract]
Total financial assets	$ 135,129	$ 159,668
Cash Equivalents - Money Market Funds
Assets, Fair Value Disclosure [Abstract]
Cash and cash equivalents fair value disclosure	135,129	159,668
Level 1
Assets, Fair Value Disclosure [Abstract]
Total financial assets	135,129	159,668
Level 1 | Cash Equivalents - Money Market Funds
Assets, Fair Value Disclosure [Abstract]
Cash and cash equivalents fair value disclosure	$ 135,129	$ 159,668

Fair Value Measurements - Addit

Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Fair Value Disclosures [Abstract]
Fair value, assets, level 1 to level 2 transfers	$ 0	$ 0
Fair value, assets, level 2 to level 1 transfers	0	0
Fair value, assets, transfers into level 3	0	0
Fair value, assets, transfers out of level 3	$ 0	$ 0

Accrued Expenses and Other Cu_3

Accrued Expenses and Other Current Liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Payables and Accruals [Abstract]
Accrued employee compensation and benefits	$ 2,952	$ 2,600
Accrued research and development	1,453	1,902
Accrued consulting and professional services	255	949
Accrued legal services and license fee	208	54
Other	1,291	1,012
Total accrued expenses and other current liabilities	$ 6,159	$ 6,517

Collaboration and License Agr_2

Collaboration and License Agreements - Additional Information (Details)	1 Months Ended	3 Months Ended		9 Months Ended
	Mar. 31, 2020 USD ($) Target	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Dec. 31, 2021 USD ($)
Collaboration And License Agreements [Line Items]
Collaboration and license revenue		$ 3,363,000	$ 2,412,000	$ 10,440,000	$ 7,287,000
Incurred costs		19,941,000	$ 18,254,000	58,427,000	41,726,000
Deferred revenue, current portion		5,932,000		5,932,000		$ 11,410,000
Long-term deferred revenue		$ 0		$ 0		$ 1,497,000
Maximum | Novartis Agreement
Collaboration And License Agreements [Line Items]
Ownership Interest		10%		10%
Minimum | Novartis Agreement
Collaboration And License Agreements [Line Items]
Ownership Interest	10%
Novartis
Collaboration And License Agreements [Line Items]
License agreement date	Mar. 31, 2020
Upfront payment received	$ 20,000,000
Upfront payment receivable	$ 20,000,000
Negotiation period				180 days
Expects research term	3 years
Collaboration and license revenue				$ 10,400,000	7,000,000
Incurred costs				3,500,000	$ 2,300,000
Deferred revenue, current portion		$ 5,900,000		5,900,000
Long-term deferred revenue		$ 0		$ 0
Novartis | Maximum
Collaboration And License Agreements [Line Items]
Number of targets identified | Target	3
Novartis | Research Funding
Collaboration And License Agreements [Line Items]
Upfront payment received	$ 10,000,000
Upfront payment receivable	$ 10,000,000

Commitments and Contingencies -

Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Thousands			9 Months Ended
	Nov. 01, 2021	Jun. 30, 2018	Sep. 30, 2022	Dec. 31, 2021	Sep. 30, 2021
Commitments And Contingencies Disclosure [Line Items]
Lease security amount			$ 5,037	$ 5,031	$ 595
Annual fixed rent	$ 7,600
Percentage of increase in annual fixed rent	3%
Increase in annual fixed rent through original term of lease	$ 9,900
Original lease term	10 years 2 months
Payments to landlord-owned leasehold improvements that recorded to prepaid rent			$ 3,800
Letter of Credit
Commitments And Contingencies Disclosure [Line Items]
Lease security amount	$ 4,400
Lease expiration date	Nov. 30, 2022
Royalty Agreement
Commitments And Contingencies Disclosure [Line Items]
Percentage of aggregate royalty of net sales of any product sold		1%

Loan and Security Agreement - A

Loan and Security Agreement - Additional Information (Details) - USD ($)		3 Months Ended	9 Months Ended
	Sep. 09, 2022	Sep. 30, 2022	Sep. 30, 2022
Debt Instrument [Line Items]
Debt instrument drew		$ 30,000,000	$ 30,000,000
Interest rate			13.13%
Default interest rate	5%
Interest expense		200,000	$ 200,000
K2 Health Ventures [Member]
Debt Instrument [Line Items]
Principal amount	$ 60,000,000
Facility fee	$ 400
Additional principal amount percentage	1%
Term loan maturity date	Sep. 01, 2026
Interest only payment term	24 months
Interest only payment extended term	36 months
Contractual interest rate	8.75%
Interest rate	9.90%		9.90%
Conversion price	$ 4.785
Final fee	6%
Covenant terms			During the term of the Loan Agreement, the Company must maintain minimum unrestricted cash and cash equivalents equal to 5.0 times the average monthly cash burn measured over the trailing three-month period.
K2 Health Ventures [Member] | Prime Rate [Member]
Debt Instrument [Line Items]
Prime rate	4.75%
Tranche One [Member] | K2 Health Ventures [Member]
Debt Instrument [Line Items]
Debt instrument drew	$ 30,000,000
Tranche Two [Member] | K2 Health Ventures [Member]
Debt Instrument [Line Items]
Debt instrument remaining borrowing capacity	10,000,000
Tranche Three [Member] | K2 Health Ventures [Member]
Debt Instrument [Line Items]
Debt instrument remaining borrowing capacity	$ 20,000,000
Maximum [Member] | K2 Health Ventures [Member]
Debt Instrument [Line Items]
Prepayment fee range	4%
Minimum [Member] | K2 Health Ventures [Member]
Debt Instrument [Line Items]
Prepayment fee range	1%
Covenant Terms, Unrestricted Cash and Cash Equivalents		$ 5,000,000	$ 5,000,000

Loan and Security Agreement - S

Loan and Security Agreement - Schedule of Future Principal Debt Payment (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Debt Disclosure [Abstract]
2024	$ 3,427
2025	14,588
2026	11,985
Total principal payments	30,000
Plus: Final payment fee	1,800
Less: unamortized debt discount and final fee	(2,726)
Long-Term Debt, Total	$ 29,074

Net Loss Per Share - Summary of

Net Loss Per Share - Summary of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Earnings Per Share [Abstract]
Net loss	$ (16,245)	$ (15,839)	$ (47,498)	$ (34,425)
Weighted-average common shares outstanding, basic	24,073,935	19,875,428	24,038,257	7,562,436
Weighted-average common shares outstanding, diluted	24,073,935	19,875,428	24,038,257	7,562,436
Net loss per share, basic	$ (0.67)	$ (0.80)	$ (1.98)	$ (4.55)
Net loss per share, diluted	$ (0.67)	$ (0.80)	$ (1.98)	$ (4.55)

Net Loss Per Share - Summary _2

Net Loss Per Share - Summary of Potential Common Shares Excluded from Computation of Diluted Net Loss per Share (Details) - shares	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total	7,458,822	3,295,362
Unvested Restricted Common Stock
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total		204,513
Common Stock Issuable Under Outstanding Loan [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total	2,100,027
Potential shares issuable under the ESPP [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total	100,768
Options to Purchase Common Stock
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total	5,258,027	3,090,849