Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2023 | May 05, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
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, $0.0001 par value per share | |
Security Exchange Name | NASDAQ | |
Voting Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 19,480,729 | |
Non-voting Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 4,745,225 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 95,608 | $ 120,027 |
Prepaid expenses and other current assets | 5,299 | 4,100 |
Total current assets | 100,907 | 124,127 |
Property and equipment, net | 9,019 | 10,100 |
Right-of-use assets | 57,914 | 59,102 |
Restricted cash | 5,031 | 5,037 |
Long-term deposit and other assets | 706 | 725 |
Total assets | 173,577 | 199,091 |
Current liabilities: | ||
Accounts payable | 2,773 | 2,912 |
Accrued expenses and other current liabilities | 7,438 | 6,838 |
Operating lease liability, current portion | 3,836 | 3,681 |
Deferred revenue, current portion | 3,874 | |
Total current liabilities | 14,047 | 17,305 |
Operating lease liability, net of current portion | 51,972 | 53,013 |
Long-term debt and accrued interest | 29,504 | 29,290 |
Other long term liabilities | 36 | 49 |
Total liabilities | 95,559 | 99,657 |
Commitments and contingencies (Note 6) | ||
Stockholders' equity: | ||
Additional paid-in capital | 258,957 | 257,810 |
Accumulated deficit | (180,942) | (158,379) |
Total stockholders' equity | 78,018 | 99,434 |
Total liabilities and stockholders' equity | 173,577 | 199,091 |
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 | Mar. 31, 2023 | Dec. 31, 2022 |
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 | 19,480,729 | 19,082,820 |
Common stock, shares outstanding | 19,480,729 | 19,082,820 |
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 | 4,745,225 | 5,143,134 |
Common stock, shares outstanding | 4,745,225 | 5,143,134 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenue | ||
Collaboration and license revenue | $ 6,803 | $ 3,021 |
Revenue from Contract with Customer, Product and Service [Extensible Enumeration] | Collaboration and license revenue | Collaboration and license revenue |
Operating expenses: | ||
Research and development | $ 21,779 | $ 14,690 |
General and administrative | 7,767 | 4,494 |
Total operating expenses | 29,546 | 19,184 |
Loss from operations | (22,743) | (16,163) |
Other (expense) income: | ||
Interest and other income, net | 1,136 | 7 |
Interest expense | (956) | |
Total other income | 180 | 7 |
Net loss | $ (22,563) | $ (16,156) |
Net loss per share, basic | $ (0.93) | $ (0.67) |
Net loss per share, diluted | $ (0.93) | $ (0.67) |
Weighted average common shares outstanding-basic | 24,225,954 | 23,974,642 |
Weighted average common shares outstanding-diluted | 24,225,954 | 23,974,642 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Non-voting Common Stock | Common Stock | Common Stock Non-voting Common Stock | Additional Paid-In Capital | Accumulated Deficit |
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 | ||||
Exercise of stock options | 88 | 88 | ||||
Exercise of stock options, shares | 35,971 | |||||
Vesting of restricted common stock, shares | 87,651 | |||||
Stock-based compensation expense | 984 | 984 | ||||
Net loss | (16,156) | (16,156) | ||||
Balances at Mar. 31, 2022 | 145,694 | $ 2 | $ 1 | 254,005 | (108,314) | |
Balances, shares at Mar. 31, 2022 | 18,888,085 | 5,143,134 | ||||
Balances at Dec. 31, 2022 | 99,434 | $ 2 | $ 1 | 257,810 | (158,379) | |
Balances, shares at Dec. 31, 2022 | 5,143,134 | 19,082,820 | 5,143,134 | |||
Conversion of non-voting common stock to voting common stock | 397,909 | (397,909) | ||||
Stock-based compensation expense | 1,147 | 1,147 | ||||
Net loss | (22,563) | (22,563) | ||||
Balances at Mar. 31, 2023 | $ 78,018 | $ 2 | $ 1 | $ 258,957 | $ (180,942) | |
Balances, shares at Mar. 31, 2023 | 4,745,225 | 19,480,729 | 4,745,225 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (22,563) | $ (16,156) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation expense | 1,499 | 1,195 |
Non-cash interest expense related to note payable | 214 | |
Stock-based compensation | 1,147 | 984 |
Changes in current assets and liabilities: | ||
Prepaid expenses and other assets | (1,180) | (662) |
Prepaid rent | (1,444) | |
Right-of-use assets and lease liabilities, net | (62) | (31) |
Accounts payable | 495 | 824 |
Accrued expense and other liabilities | 737 | (2,796) |
Deferred revenue | (3,874) | (2,038) |
Net cash used in operating activities | (23,587) | (20,124) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (838) | (531) |
Net cash used in investing activities | (838) | (531) |
Cash flows from financing activities: | ||
Proceeds from exercise of stock options | 88 | |
Net cash provided by financing activities | 88 | |
Net decrease in cash, cash equivalents and restricted cash | (24,425) | (20,567) |
Cash, cash equivalents, and restricted cash - beginning of period | 125,064 | 166,436 |
Cash, cash equivalents, and restricted cash - end of period | 100,639 | 145,869 |
Summary of cash, cash equivalents and restricted cash reported within the consolidated balance sheets: | ||
Cash and cash equivalents | 95,608 | 140,838 |
Restricted cash | 5,031 | 5,031 |
Total cash, cash equivalents, and restricted cash | 100,639 | 145,869 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 743 | |
Supplemental disclosure of non-cash investing and financing activities: | ||
Purchase of property and equipment in accounts payable and accrued liabilities | $ 24 | $ 416 |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2023 | |
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 months ended March 31, 2023 are not necessarily indicative of results to be expected for the year ending December 31, 2023, 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 8, 2023. 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. 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 $ 22.6 million and $ 16.2 million for the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, the Company had an accumulated deficit of $ 180.9 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 March 31, 2023 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. 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies The accounting policies of the Company are set forth in Note 2 to the consolidated financial statements contained in the Company's 2022 Annual Report on Form 10-K, the accounting policies followed by the Company for interim financial reporting are consistent with the accounting policies therein. Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments, or ASU 2016-13 . The provisions of ASU 2016-13 modify the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology and require a consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses rather than as a direct write-down to the security. The Company adopted this standard on January 1, 2023. The adoption of ASU 2016-13 did not have a material impact on the Company’s condensed financial statements. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. Fair Value M easurements The following tables set forth by level, within the fair value hierarchy, the assets carried at fair value (in thousands): Fair value measurements at March 31, 2023 using Level 1 Level 2 Level 3 Total Cash Equivalents: Government securities $ 82,945 $ - $ - $ 82,945 Money market funds 6,239 - 6,239 Total financial assets $ 89,184 $ - $ - $ 89,184 Fair value measurements at December 31, 2022 using Level 1 Level 2 Level 3 Total Cash Equivalents: Money market funds $ 116,946 $ - $ - $ 116,946 Total financial assets $ 116,946 $ - $ - $ 116,946 Money market funds and government securities are valued by the Company based on quoted market prices, which represent a Level 1 measurement within the fair value hierarchy. There were no transfers among Level 1, Level 2, or Level 3 categories in the periods presented. The carrying value of cash, 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 | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | 4. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): March 31, December 31, 2023 2022 Accrued research and development $ 3,582 $ 1,322 Accrued employee compensation and benefits 2,482 4,357 Accrued consulting and professional services 586 636 Accrued legal services and license fee 353 92 Other 435 431 Total accrued expenses and other current liabilities $ 7,438 $ 6,838 |
Collaboration and License Agree
Collaboration and License Agreements | 3 Months Ended |
Mar. 31, 2023 | |
Collaboration And License Agreements [Abstract] | |
Collaboration and License Agreements | 5. 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 March 31, 2023 , 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 ended 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 coincided 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 recognized 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 were incurred, the Company recognized revenue over time. 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. At this time, the Company has recognized all consideration in the contract as the performance obligations were satisfied as of March 31, 2023 and the collaboration period ended. The Company will continue to assess the probability of milestone payments throughout the 180-day right of first negotiation period. The Company recognized $ 5.8 million and $ 3.0 million of revenue associated with the Novartis Agreement based on performance completed during that period for the three months ended March 31, 2023 and 2022, respectively. Additionally, the Company incurred $ 1.9 million and $ 1.0 million of costs associated with the Novartis Agreement that were recorded within research and development expenses in the statements of operations for the three months ended March 31, 2023 and 2022, respectively. Finally, as of March 31, 2023 , the Company had no deferred revenue as all performance obligations were satisfied. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 6. Commitments and Contingencies Leases The Company leases office space under non-cancelable operating lease agreements. There have been no material changes to the Company's leases during the three months ended March 31, 2023. 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. |
Loan and Security Agreement
Loan and Security Agreement | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Loan and Security Agreement | 7. 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 $ 1.0 million in interest expense for the three months ended March 31, 2023 . 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 March 31, 2023. Future principal debt payments of the convertible term loans funded as of March 31, 2023 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 ( 2,296 ) Long-term debt $ 29,504 |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 8. 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 March 31, 2023 2022 Numerator: Net loss $ ( 22,563 ) $ ( 16,156 ) Denominator: Weighted-average common shares outstanding, basic and diluted 24,225,954 23,974,642 Net loss per share, basic and diluted $ ( 0.93 ) $ ( 0.67 ) 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: March 31, 2023 2022 Options to purchase common stock 5,144,308 4,085,851 Common stock issuable upon conversion of Loan Agreement 2,160,918 - Unvested restricted common stock - 29,219 Total 7,305,226 4,115,070 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | 8. Subsequent Events On May 8, 2023, the Company entered into a Collaboration Agreement with Amgen Inc. (the Amgen Agreement) to identify antigens recognized by T cells in patients with Crohn’s disease utilizing the Company’s proprietary target discovery platform, TargetScan. Under the terms of the Agreement, Amgen will then evaluate a variety of modalities to create therapeutics based on targets discovered by TScan and will retain all global development and commercialization rights, as well as an option to expand the collaboration to include target discovery for ulcerative colitis, under certain pre-specified terms. Amgen will make an upfront payment of $ 30 million to TScan and the Company is eligible to earn success-based milestone payments of over $ 500 million, based upon the achievement of certain development and commercial milestones, as well as tiered single-digit royalty payments on net sales of products developed from the collaboration, subject to reductions set forth in the Agreement. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments, or ASU 2016-13 . The provisions of ASU 2016-13 modify the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology and require a consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses rather than as a direct write-down to the security. The Company adopted this standard on January 1, 2023. The adoption of ASU 2016-13 did not have a material impact on the Company’s condensed financial statements. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets Carried at Fair Value on a Hierarchy 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 March 31, 2023 using Level 1 Level 2 Level 3 Total Cash Equivalents: Government securities $ 82,945 $ - $ - $ 82,945 Money market funds 6,239 - 6,239 Total financial assets $ 89,184 $ - $ - $ 89,184 Fair value measurements at December 31, 2022 using Level 1 Level 2 Level 3 Total Cash Equivalents: Money market funds $ 116,946 $ - $ - $ 116,946 Total financial assets $ 116,946 $ - $ - $ 116,946 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands): March 31, December 31, 2023 2022 Accrued research and development $ 3,582 $ 1,322 Accrued employee compensation and benefits 2,482 4,357 Accrued consulting and professional services 586 636 Accrued legal services and license fee 353 92 Other 435 431 Total accrued expenses and other current liabilities $ 7,438 $ 6,838 |
Loan and Security Agreement (Ta
Loan and Security Agreement (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Future Principal Debt Payment | Future principal debt payments of the convertible term loans funded as of March 31, 2023 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 ( 2,296 ) Long-term debt $ 29,504 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted 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 March 31, 2023 2022 Numerator: Net loss $ ( 22,563 ) $ ( 16,156 ) Denominator: Weighted-average common shares outstanding, basic and diluted 24,225,954 23,974,642 Net loss per share, basic and diluted $ ( 0.93 ) $ ( 0.67 ) |
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: March 31, 2023 2022 Options to purchase common stock 5,144,308 4,085,851 Common stock issuable upon conversion of Loan Agreement 2,160,918 - Unvested restricted common stock - 29,219 Total 7,305,226 4,115,070 |
Nature of Business and Basis _2
Nature of Business and Basis of Presentation - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||
Date of incorporation | Apr. 17, 2018 | ||
Net losses | $ 22,563 | $ 16,156 | |
Accumulated deficit | $ 180,942 | $ 158,379 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets and Liabilities Carried at Fair Value on a Hierarchy Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Assets, Fair Value Disclosure [Abstract] | ||
Total financial assets | $ 89,184 | $ 116,946 |
Government Securities | ||
Assets, Fair Value Disclosure [Abstract] | ||
Cash and cash equivalents fair value disclosure | 82,945 | |
Money Market Funds | ||
Assets, Fair Value Disclosure [Abstract] | ||
Cash and cash equivalents fair value disclosure | 6,239 | 116,946 |
Level 1 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Total financial assets | 89,184 | 116,946 |
Level 1 | Government Securities | ||
Assets, Fair Value Disclosure [Abstract] | ||
Cash and cash equivalents fair value disclosure | 82,945 | |
Level 1 | Money Market Funds | ||
Assets, Fair Value Disclosure [Abstract] | ||
Cash and cash equivalents fair value disclosure | $ 6,239 | $ 116,946 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
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 | Mar. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued research and development | $ 3,582 | $ 1,322 |
Accrued employee compensation and benefits | 2,482 | 4,357 |
Accrued consulting and professional services | 586 | 636 |
Accrued legal services and license fee | 353 | 92 |
Other | 435 | 431 |
Total accrued expenses and other current liabilities | $ 7,438 | $ 6,838 |
Collaboration and License Agr_2
Collaboration and License Agreements - Additional Information (Details) | 1 Months Ended | 3 Months Ended | ||
Mar. 31, 2020 USD ($) Target | Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Collaboration And License Agreements [Line Items] | ||||
Collaboration and license revenue | $ 6,803,000 | $ 3,021,000 | ||
Incurred costs | $ 29,546,000 | 19,184,000 | ||
Deferred revenue, current portion | $ 3,874,000 | |||
Maximum | Novartis Agreement | ||||
Collaboration And License Agreements [Line Items] | ||||
Ownership Interest | 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 | |||
Collaboration and license revenue | $ 5,800,000 | 3,000,000 | ||
Incurred costs | 1,900,000 | $ 1,000,000 | ||
Deferred revenue | $ 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) | Jun. 30, 2018 |
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 | Mar. 31, 2023 | Sep. 30, 2022 | |
Debt Instrument [Line Items] | |||
Debt instrument drew | $ 30,000,000 | ||
Interest rate | 13.13% | ||
Default interest rate | 5% | ||
Interest expense | $ 1,000,000 | ||
K2 Health Ventures [Member] | |||
Debt Instrument [Line Items] | |||
Principal amount | $ 60,000,000 | ||
Facility fee | $ 400,000 | ||
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 |
Loan and Security Agreement - S
Loan and Security Agreement - Schedule of Future Principal Debt Payment (Details) $ in Thousands | Mar. 31, 2023 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 | (2,296) |
Long-Term Debt, Total | $ 29,504 |
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 | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (22,563) | $ (16,156) |
Weighted-average common shares outstanding, basic | 24,225,954 | 23,974,642 |
Weighted-average common shares outstanding, diluted | 24,225,954 | 23,974,642 |
Net loss per share, basic | $ (0.93) | $ (0.67) |
Net loss per share, diluted | $ (0.93) | $ (0.67) |
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 | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Total | 7,305,226 | 4,115,070 |
Unvested Restricted Common Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Total | 29,219 | |
Common stock issuable upon conversion of Loan Agreement | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Total | 2,160,918 | |
Options to Purchase Common Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Total | 5,144,308 | 4,085,851 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - Subsequent Event - Amgen Agreement - Amgen Inc. $ in Millions | May 08, 2023 USD ($) |
Subsequent Event [Line Items] | |
Upfront payment received | $ 30 |
Eligible to earn success-based milestone payments | $ 500 |