Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 03, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | 89bio, Inc. | ||
Entity Central Index Key | 0001785173 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Interactive Data Current | Yes | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Public Float | $ 30.4 | ||
Entity Common Stock, Shares Outstanding | 52,230,621 | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Title of 12(b) Security | Common stock, par value $0.001 per share | ||
Trading Symbol | ETNB | ||
Security Exchange Name | NASDAQ | ||
Entity File Number | 001-39122 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 36-4946844 | ||
Entity Address, Address Line One | 142 Sansome Street | ||
Entity Address Address Line Two | Second Floor | ||
Entity Address, City or Town | San Francisco | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94104 | ||
City Area Code | 415 | ||
Local Phone Number | 432-9270 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Documents Incorporated by Reference | Portions of the Registrant’s definitive proxy statement relating to its 2023 Annual Meeting of Stockholders, to be held on or about May 31, 2023, are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Such proxy statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates. | ||
Auditor Firm ID | 185 | ||
Auditor Name | KPMG LLP | ||
Auditor Location | San Francisco, California, USA |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 55,255 | $ 52,432 |
Restricted cash | 0 | 25 |
Short-term available-for-sale securities | 132,905 | 98,288 |
Prepaid and other current assets | 7,920 | 11,237 |
Total current assets | 196,080 | 161,982 |
Operating lease right-of-use asset | 363 | |
Property and equipment, net | 92 | 150 |
Other assets | 289 | 290 |
Total assets | 196,824 | 162,422 |
Current liabilities: | ||
Accounts payable | 12,502 | 6,843 |
Accrued expenses | 11,944 | 10,194 |
Operating lease liability, current | 168 | |
Term loan, current | 2,500 | |
Total current liabilities | 24,614 | 19,537 |
Operating lease liability, non-current | 186 | |
Term loan, non-current, net | 19,691 | 16,898 |
Other non-current liability | 501 | 30 |
Total liabilities | 44,992 | 36,465 |
Commitments and contingencies (Note 5) | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value, 10,000,000 shares authorized as of December 31, 2022 and 2021; no shares issued and outstanding as of December 31, 2022 and 2021 | ||
Common stock, $0.001 par value, 100,000,000 shares authorized as of December 31, 2022 and 2021; 50,560,590 and 20,317,204 shares issued and outstanding as of December 31, 2022 and 2021, respectively | 51 | 20 |
Additional paid-in capital | 467,374 | 339,218 |
Accumulated other comprehensive loss | (350) | (64) |
Accumulated deficit | (315,243) | (213,217) |
Total stockholders’ equity | 151,832 | 125,957 |
Total liabilities and stockholders’ equity | $ 196,824 | $ 162,422 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 50,560,590 | 20,317,204 |
Common stock, shares outstanding | 50,560,590 | 20,317,204 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating expenses: | ||
Research and development | $ 80,796 | $ 70,330 |
General and administrative | 21,453 | 19,413 |
Total operating expenses | 102,249 | 89,743 |
Loss from operations | (102,249) | (89,743) |
Interest expense | (1,922) | (674) |
Interest income and other, net | 2,164 | 148 |
Net loss before income tax | (102,007) | (90,269) |
Income tax (expense) benefit | (19) | 147 |
Net loss | (102,026) | (90,122) |
Other comprehensive (loss) income: | ||
Unrealized loss on available-for-sale securities | (299) | (71) |
Foreign currency translation adjustments | 13 | 17 |
Total other comprehensive loss | (286) | (54) |
Comprehensive loss | $ (102,312) | $ (90,176) |
Net loss per share, basic | $ (2.93) | $ (4.48) |
Net loss per share, diluted | $ (2.93) | $ (4.48) |
Weighted-average shares used to compute net loss per share, basic | 34,806,349 | 20,098,340 |
Weighted-average shares used to compute net loss per share, diluted | 34,806,349 | 20,098,340 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Total | A T M Facility | Public Offerings | Common Stock | Common Stock A T M Facility | Common Stock Public Offerings | Additional Paid-in Capital | Additional Paid-in Capital A T M Facility | Additional Paid-in Capital Public Offerings | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Beginning balance at Dec. 31, 2020 | $ 202,961 | $ 20 | $ 326,046 | $ (10) | $ (123,095) | ||||||
Beginning balance, shares at Dec. 31, 2020 | 19,931,660 | ||||||||||
Issuance of common stock | $ 3,289 | $ 3,289 | |||||||||
Issuance of common stock, shares | 186,546 | ||||||||||
Issuance of common stock upon exercise of stock options | 487 | 487 | |||||||||
Issuance of common stock upon exercise of stock options, shares | 188,286 | ||||||||||
Issuance of common stock upon ESPP purchase | 144 | 144 | |||||||||
Issuance of common stock upon ESPP purchase, Shares | 10,712 | ||||||||||
Issuance of common stock warrant in connection with term loan facility | 574 | 574 | |||||||||
Stock-based compensation | 8,678 | 8,678 | |||||||||
Net loss | (90,122) | (90,122) | |||||||||
Other comprehensive loss | (54) | (54) | |||||||||
Ending balance at Dec. 31, 2021 | 125,957 | $ 20 | 339,218 | (64) | (213,217) | ||||||
Ending balance, shares at Dec. 31, 2021 | 20,317,204 | ||||||||||
Issuance of common stock | $ 28,453 | $ 88,239 | $ 4 | $ 20 | $ 28,449 | $ 88,219 | |||||
Issuance of common stock, shares | 3,948,611 | 18,675,466 | |||||||||
Issuance of common stock upon cashless exercise of warrants | $ 3 | (3) | |||||||||
Issuance of common stock upon cashless exercise of warrants, shares | 3,143,682 | ||||||||||
Issuance of common stock upon exercise of warrants | 1,082 | $ 4 | 1,078 | ||||||||
Issuance of common stock upon exercise of warrants | 4,202,499 | ||||||||||
Issuance of common stock upon vesting of restricted stock units, net of withholding taxes | (298) | (298) | |||||||||
Issuance of common stock upon vesting of restricted stock units, net of withholding taxes, shares | 103,703 | ||||||||||
Issuance of common stock upon exercise of stock options | 305 | 305 | |||||||||
Issuance of common stock upon exercise of stock options, shares | 151,061 | ||||||||||
Issuance of common stock upon ESPP purchase | 50 | 50 | |||||||||
Issuance of common stock upon ESPP purchase, Shares | 18,364 | ||||||||||
Stock-based compensation | 10,356 | 10,356 | |||||||||
Net loss | (102,026) | (102,026) | |||||||||
Other comprehensive loss | (286) | (286) | |||||||||
Ending balance at Dec. 31, 2022 | $ 151,832 | $ 51 | $ 467,374 | $ (350) | $ (315,243) | ||||||
Ending balance, shares at Dec. 31, 2022 | 50,560,590 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (102,026) | $ (90,122) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation | 10,356 | 8,678 |
Net (accretion) amortization on available-for-sale securities | (980) | 865 |
Amortization of debt issuance costs and accretion of final payment fee | 764 | 617 |
Non-cash operating lease expense | 175 | |
Depreciation | 65 | 79 |
Deferred tax assets | 0 | (150) |
Changes in operating assets and liabilities: | ||
Prepaid and other current assets | 3,331 | (5,672) |
Accounts payable | 5,659 | 4,778 |
Accrued expenses | 1,750 | 4,146 |
Operating lease liability | (184) | |
Net cash used in operating activities | (81,090) | (76,781) |
Cash flows from investing activities: | ||
Proceeds from sales and maturities of available-for-sale securities | 118,760 | 148,422 |
Purchases of available-for-sale securities | (152,696) | (141,200) |
Purchases of property and equipment | (7) | (63) |
Net cash (used in) provided by investing activities | (33,943) | 7,159 |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock and warrants in public offering, net of issuance costs | 88,239 | |
Proceeds from issuance of common stock in at-the-market public offering, net of issuance costs | 28,453 | 3,289 |
Proceeds from issuance of common stock upon exercise of warrants | 1,082 | |
Proceeds from issuance of common stock upon exercise of stock options | 305 | 487 |
Proceeds from issuance of common stock upon ESPP purchases | 50 | 144 |
Payment of withholding taxes related to restricted stock units | (298) | |
Proceeds from term loan facility, net of issuance costs | 19,951 | |
Net cash provided by financing activities | 117,831 | 23,871 |
Net change in cash and cash equivalents, and restricted cash | 2,798 | (45,751) |
Cash and cash equivalents, and restricted cash at beginning of period | 52,457 | 98,208 |
Cash and cash equivalents, and restricted cash at end of period | 55,255 | 52,457 |
Components of cash and cash equivalents, and restricted cash: | ||
Cash and cash equivalents | 55,255 | 52,432 |
Restricted cash | 0 | 25 |
Total cash and cash equivalents, and restricted cash | 55,255 | 52,457 |
Supplemental disclosures of cash information: | ||
Cash paid for interest | 1,076 | 16 |
Cash paid for operating leases | 234 | |
Supplemental disclosures of noncash information: | ||
Remeasurement of lease liability and right of use asset in connection with lease modification | $ 338 | |
Issuance of common stock warrant in connection with term loan facility | $ 574 |
Organization and Basis of Prese
Organization and Basis of Presentation | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | 1. Organization and Basis of Presentation Description of Business 89bio, Inc. (“89bio” or the “Company”) is a clinical-stage biopharmaceutical company focused on the development and commercialization of innovative therapies for the treatment of liver and cardio-metabolic diseases. The Company’s lead product candidate, pegozafermin (previously BIO89-100), a specifically engineered glycoPEGylated analog of fibroblast growth factor 21, is currently being developed for the treatment of nonalcoholic steatohepatitis and for the treatment of severe hypertriglyceridemia. 89bio, Inc. was formed as a Delaware corporation in June 2019 to carry on the business of 89Bio Ltd., which was incorporated in Israel in January 2018. Liquidity The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. To date, the Company has not generated revenues from its activities and has incurred substantial operating losses. Management expects the Company to continue to generate substantial operating losses for the foreseeable future until it completes development of its products and seeks regulatory approvals to market such products. The Company had cash and cash equivalents and short-term available-for-sale securities of $ 188.2 million as of December 31, 2022. The Company expects that its cash and cash equivalents and short-term available-for-sale securities as of December 31, 2022 , together with proceeds received in January and February 2023 from its ATM Facility (see Note 7 and Note 11), and proceeds available from the 2023 Loan Agreement (see Note 6 and Note 11), will be sufficient to fund operating expenses and capital expenditure requirements for a period of at least one year from the date these audited consolidated financial statements are filed with the Securities and Exchange Commission. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policie s Basis of Presentation The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). Reclassification Certain prior year amounts in the Company’s consolidated statements of operations and comprehensive loss have been reclassified to conform to the current year presentation. Specifically, interest expense is disclosed separately on the Company’s consolidated statements of operations and comprehensive loss, which had no impact on reported net loss, comprehensive loss, or loss per share. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. Significant estimates and assumptions made in the accompanying consolidated financial statements include but are not limited to accrued research and development expenses and to the fair value of stock options. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ from those estimates. Foreign Currencies Certain transactions during the year ended December 31, 2022 and 2021 were denominated in currencies other than the U.S. dollar. Gains and losses from foreign currency transactions were not material for all periods presented and are reflected in the consolidated statements of operations and comprehensive loss as a component of interest income and other, net. The Company’s subsidiary in Lithuania uses the Euro as its functional currency for financial reporting. The re-measurement from Euros to U.S. dollars results in translation gain and loss adjustments, which are reflected as a component of comprehensive loss as foreign currency translation adjustments. Fair Value Measurements Financial assets and liabilities are recorded at fair value on a recurring basis in the consolidated balance sheets. The carrying values of Company’s financial assets and liabilities, including cash and cash equivalents, restricted cash, prepaid and other current assets, accounts payable, and accrued expenses approximate to their fair value due to the short-term nature of these instruments. The fair value of the Company’s term loan approximates its carrying value, or amortized cost, due to the prevailing market rates of interest rates it bears. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. Assets and liabilities recorded at fair value are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels are directly related to the amount of subjectivity with the inputs to the valuation of these assets or liabilities as follows: Level 1 —Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; Level 2 —Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable inputs for similar assets or liabilities. These include quoted prices for identical or similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and Level 3 —Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Concentrations of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents and short-term available-for-sale securities. Bank deposits are held by accredited financial institutions and these deposits may at times be in excess of insured limits. The Company limits its credit risk associated with cash and cash equivalents by placing them with financial institutions that it believes are of high quality. The Company has not experienced any losses on its deposits of cash or cash equivalents. The Company limits amounts invested in available-for-sale securities by credit rating, maturity, industry group, investment type and issuer, except for securities issued by the U.S. government. The Company is not exposed to any significant concentrations of credit risk from these financial instruments. Other Risks and Uncertainties The Company’s future results of operations involve a number of other risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, the Company’s early stages of clinical drug development; the Company’s ability to advance product candidates into, and successfully complete, clinical trials on the timelines it projects; the Company’s ability to adequately demonstrate sufficient safety and efficacy of its product candidates; the Company’s ability to enroll patients in its ongoing and future clinical trials; the Company’s ability to successfully manufacture and supply its product candidates for clinical trials; the Company’s ability to obtain additional capital to finance its operations; uncertainties related to the projections of the size of patient populations suffering from the diseases the Company is targeting; the Company’s ability to obtain, maintain, and protect its intellectual property rights; developments relating to the Company’s competitors and its industry, including competing product candidates and therapies; general economic and market conditions; and other risks and uncertainties. The Company’s product candidates will require approvals from the U.S. Food and Drug Administration and comparable foreign regulatory agencies prior to commercial sales in their respective jurisdictions. There can be no assurance that any product candidates will receive the necessary approvals. If the Company is denied approval, approval is delayed or the Company is unable to maintain approval for any product candidate, it could have a materially adverse impact on the Company. The ongoing COVID-19 pandemic has disrupted and may continue to disrupt the Company’s business and delay its preclinical and clinical programs and timelines. The extent to which the COVID-19 pandemic may impact the Company’s future operating results and financial condition is uncertain. Segment Reporting The Company has one operating segment. The Company’s chief operating decision maker, its Chief Executive Officer, manages the Company’s operations on a consolidated basis for the purposes of allocating resources and evaluating financial performance. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents. Cash equivalents consist primarily of amounts invested in money market funds and commercial paper that are stated at fair value. Investments Investments have been classified as available-for-sale and are carried at estimated fair value as determined based upon quoted market prices or pricing models for similar securities. Management determines the appropriate classification of its available-for-sale investments in debt securities at the time of purchase. Generally, investments with original maturities beyond three months at the date of purchase are classified as short-term because it is management’s intent to use the investments to fund current operations or to make them available for current operations. Unrealized gains and losses are excluded from net loss and are reported as a component of comprehensive loss. The Company periodically evaluates whether declines in fair values of its available-for-sale securities below their book value are other-than-temporary. This evaluation consists of several qualitative and quantitative factors regarding the severity and duration of the unrealized loss as well as the Company’s ability and intent to hold the available-for-sale security until a forecasted recovery occurs. Additionally, the Company assesses whether it has plans to sell the security or it is more likely than not it will be required to sell any available-for-sale securities before recovery of its amortized cost basis. Realized gains and losses and declines in fair value judged to be other than temporary, if any, on available-for-sale securities are included in interest income and other, net. The cost of investments sold is based on the specific-identification method. The Company has no t experienced any material realized gains or losses or other-than-temporary losses in the periods presented. Leases The Company is a lessee in noncancellable operating leases for office space. Beginning in 2022, the Company accounts for leases in accordance with Accounting Standards Update (“ASU”) 2016-02, Leases ( Topic 842 ). The Company determines if an arrangement is a lease or contains an embedded lease at inception. The Company accounts for a contract as a lease when it has the right to control the asset for a period of time while obtaining substantially all of the asset’s economic benefits. For arrangements that meet the definition of a lease, the Company determines the initial classification and measurement of its right-of-use (“ROU”) asset and lease liability at the lease commencement date and thereafter if modified. Operating lease ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make the contractual lease payments over the lease term. The ROU asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. The operating lease liability is initially measured at the present value of the unpaid lease payments at the lease commencement date. The lease liability is subsequently measured at amortized cost using the effective-interest method. The lease term includes any renewal options that the Company is reasonably assured to exercise. The present value of lease payments is determined by using the interest rate implicit in the lease, if that rate is readily determinable, otherwise, the Company uses its estimated collateralized incremental borrowing rate for the lease term. The Company has elected not to record leases with an original term of twelve months or less on its consolidated balance sheets and recognizes those lease payments in operating expenses in the consolidated statements of operations and comprehensive loss. The Company’s short-term lease is not material. In addition, the Company’s leases may require it to pay additional costs, such as utilities, maintenance, and other operating costs, which are generally referred to as non-lease components and vary based on future outcomes. The Company has elected to not separate lease and non-lease components. Only the fixed costs for lease components and their associated non-lease components are accounted for as a single lease component and recognized as part of a ROU asset and lease liability. Any variable expenses are recognized in operating expenses as incurred. Rent expense for an operating lease liability is recognized on a straight-line basis over the lease term and is included in operating expenses in the consolidated statements of operations and comprehensive loss. Property and Equipment, Net Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated on a straight-line basis over the estimated useful lives of the related assets, generally ranging from three to seven years . Leasehold improvements are amortized on a straight-line basis over the shorter of the assets’ estimated useful life or the remaining term of the lease. Upon retirement or sale of the assets, the cost and related accumulated depreciation and amortization are removed from the consolidated balance sheets and the resulting gains or losses are recorded in the consolidated statements of operations and comprehensive loss. Maintenance and repair costs are expensed as incurred. Impairment of Long-Lived Assets The Company periodically evaluates its long-lived assets, including property and equipment, for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets or group of assets may not be fully recoverable. If indicators of impairment exist and the undiscounted future cash flows that the assets are expected to generate are less than the carrying value of the assets, then the Company will reduce the carrying amount of the assets through an impairment charge, to their estimated fair values based on a discounted cash flow approach or, when available and appropriate, to comparable market values. There were no such indicators for the periods presented. Accrued Research and Development Expenses The Company estimates preclinical and clinical study and research expenses based on the services performed, pursuant to contracts with research institutions that conduct and manage preclinical and clinical studies and research services on its behalf. The Company records the costs of research and development activities based upon the estimated services provided but not yet invoiced and includes these costs in accrued expenses in the consolidated balance sheets. These costs are a component of the Company’s research and development expenses. The Company accrues for these costs based on factors such as estimates of the work completed in accordance with agreements established with its third-party service providers. The Company makes judgments and estimates in determining the accrued expenses balance. As actual costs become known, the Company adjusts its accrued expenses. The Company has not experienced any material differences between accrued costs and actual costs incurred. However, the status and timing of actual services performed may vary from the Company’s estimates, resulting in adjustments to expense in future periods. Changes in these estimates that result in material changes to the Company’s accrued expenses could materially affect the Company’s results of operations. Contingent milestone payments, if any, are expensed when the milestone results are probable and estimable, which is generally upon achievement of the milestone. Warrants to Purchase Common Stock The Company classifies warrants indexed to its common stock and meeting the requirements for equity classification within stockholders’ equity. This assessment is conducted at the time of warrant issuance and as of each reporting period that the warrants remain outstanding. Research and Development Expenses Research and development expenses consist primarily of costs incurred for the development of the Company’s lead product candidate, pegozafermin. Research and development expenses consist primarily of external costs related to preclinical and clinical development and related supplies and personnel costs. Personnel costs consist of salaries, employee benefits and stock-based compensation for individuals involved in research and development efforts. Payments associated with agreements to acquire licenses to develop, use, manufacture and commercialize products and purchases of pegozafermin from contract manufacturing organizations that have not reached technological feasibility and do not have alternate future commercial use are expensed as incurred. Stock-Based Compensation The Company provides equity awards in the form of stock options and restricted stock units. The Company measures its equity awards made to employees, directors, and non-employee service providers based on estimated fair values and recognizes stock-based compensation over the requisite service period. The Company accounts for forfeitures as they occur. The Company estimates the fair value of stock option awards on the date of grant using a Black-Scholes option pricing model. The Company recognizes compensation for the value of stock options awards, which have graded vesting, using the straight-line method over the requisite service period of each award. The Black-Scholes option pricing model requires a number of assumptions, of which the most significant are expected volatility, expected option term (the time from the grant date until the options are exercised or expire), risk-free rate, and expected dividend rate. These assumptions include: • Expected volatility—Since the Company has limited trading history for its common stock, expected volatility is estimated based on weighting the Company’s volatility and the volatility of comparable publicly traded biotechnology companies during the equivalent period of the calculated expected term of the options granted. The comparable companies were chosen based on their similar size, stage in the life cycle, or area of specialty. There is a degree of uncertainty in determining a comparable peer group as each of the peers are engaged in varied research and development activities, the timing and progress of which differ within the peer group. • Expected term—The expected term of options granted to employees and directors is determined using the “simplified” method. Under this approach, the expected term is presumed to be the midpoint between the weighted-average vesting term and the contractual term of the option. The simplified method makes the assumption that the employee will exercise stock options evenly over the period when the stock options are vested and ending on the date when the stock options would expire. The expected option term for options granted to non-employees is estimated on a grant-by-grant basis. • Risk-free interest rate—The risk-free interest rate is based on the U.S. Treasury zero coupon bonds in effect on the grant date for periods with an equivalent expected term as the option. • Expected dividend—The Company has never paid dividends and has no foreseeable plans to pay dividends on its shares of common stock. Therefore, an expected dividend of zero is used. The fair value of restricted stock units is based on the fair value of the Company’s common stock on the date of grant. The grant date fair value of restricted stock units with service vesting conditions is recognized over the requisite service period on a straight-line basis. For restricted stock units with performance vesting conditions, the Company evaluates the probability of achieving the performance condition at each reporting date and recognizes expense for such performance awards over the requisite service period using the accelerated attribution method. Income Taxes Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates applied to taxable income in the years in which those temporary differences are expected to be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or loss in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. Interest and penalties related to unrecognized tax benefits are included within the provision of income tax. Basic and Diluted Net Loss per Share Basic loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding together with the number of additional shares of common stock that would have been outstanding if all potentially dilutive shares of common stock had been issued. Since the Company is in a loss position for the periods presented, basic net loss per share is the same as diluted net loss per share since the effects of potentially dilutive securities are antidilutive. Shares of the Company’s common stock underlying pre-funded warrants exercisable for nominal consideration are included in the computation of basic and diluted net loss per share, even if antidilutive. Comprehensive Loss The Company’s comprehensive loss is comprised of net loss and changes in unrealized gains or losses on available-for-sale securities and foreign currency translation adjustments. Recently Adopted Accounting Standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases ( Topic 842 ), or Accounting Standards Codification (“ASC”) 842, which requires lessees to recognize leases on the balance sheet and disclose key information about leasing arrangements. ASC 842 establishes a ROU model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. On January 1, 2022 , the Company adopted ASC 842 using the modified retrospective transition method and elected the practical expedients to not reassess whether any expired or existing contracts are or contain leases, carry forward its historical lease classification and not reassess initial direct costs for existing leases. Upon adoption of ASC 842, the Company recorded an operating ROU asset of $ 0.2 million and an operating lease liability of $ 0.2 million on its consolidated balance sheet. There was no adjustment to the opening balance of accumulated deficit as a result of adoption. Results for the year ended December 31, 2022 are presented under ASC 842. Prior period amounts preceding January 1, 2022 continue to be reported in accordance with the Company’s historical accounting under the previous lease guidance, ASC 840. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326) : Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which replaces the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected. As an emerging growth company, ASU 2016-13 is effective for the Company for the year ending December 31, 2023 and interim periods within that fiscal year and must be adopted using a modified retrospective approach, with certain exceptions. The Company is evaluating the impact of this standard and does not expect the adoption of ASU 2016-13 to have a material impact on the Company’s consolidated financial statements and related disclosures. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. Fair Value Measurements The following table presents the Company’s financial assets measured at fair value on a recurring basis by level within the fair value hierarchy as of December 31, 2022 (in thousands): Valuation Amortized Unrealized Unrealized Fair Hierarchy Cost Gains Losses Value Money market funds Level 1 $ 18,224 $ — $ — $ 18,224 Commercial paper Level 2 104,279 1 ( 84 ) 104,196 U.S. government bonds Level 2 18,225 1 ( 109 ) 18,117 Agency bonds Level 2 13,986 — ( 78 ) 13,908 Corporate debt securities Level 2 10,488 — ( 62 ) 10,426 U.S. treasury bills Level 2 7,414 1 ( 21 ) 7,394 Agency discount securities Level 2 5,216 9 — 5,225 Non-U.S. debt securities Level 2 3,975 — ( 20 ) 3,955 Total cash equivalents and available-for- $ 181,807 $ 12 $ ( 374 ) $ 181,445 Classified as: Cash equivalents $ 48,540 Short-term available-for-sale securities 132,905 Total cash equivalents and available-for- $ 181,445 The following table summarizes the Company’s cash equivalents and available-for-sale securities by contractual maturity as of December 31, 2022 (in thousands): Within one year $ 175,243 After one year through two years 6,202 Total cash equivalents and available-for-sale securities $ 181,445 The following table presents the Company’s financial assets measured at fair value on a recurring basis by level within the fair value hierarchy as of December 31, 2021 (in thousands): Valuation Amortized Unrealized Unrealized Fair Hierarchy Cost Gains Losses Value Money market funds Level 1 $ 21,477 $ — $ — $ 21,477 Commercial paper Level 2 59,647 — ( 10 ) 59,637 U.S. government bonds Level 2 21,662 — ( 42 ) 21,620 Corporate debt securities Level 2 8,776 1 ( 1 ) 8,776 Agency bonds Level 2 7,747 1 ( 7 ) 7,741 Municipal bonds Level 2 4,251 — ( 4 ) 4,247 Non-U.S. debt securities Level 2 2,506 — ( 1 ) 2,505 Total cash equivalents and available-for- $ 126,066 $ 2 $ ( 65 ) $ 126,003 Classified as: Cash equivalents $ 27,715 Short-term available-for-sale securities 98,288 Total cash equivalents and available-for- $ 126,003 The following table summarizes the Company’s cash equivalents and available-for-sale securities by contractual maturity as of December 31, 2021 (in thousands): Within one year $ 120,726 After one year through two years 5,277 Total cash equivalents and available-for-sale securities $ 126,003 |
Consolidated Balance Sheet Comp
Consolidated Balance Sheet Components | 12 Months Ended |
Dec. 31, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
Consolidated Balance Sheet Components | 4. Consolidated Balance Sheet Components Prepaid and other current assets consist of the following as of the periods presented (in thousands): As of December 31, 2022 2021 Prepaid research and development $ 5,727 $ 7,895 Prepaid taxes 646 836 Prepaid other 1,547 2,506 Total prepaid and other current assets $ 7,920 $ 11,237 Accrued expenses consist of the following as of the periods presented (in thousands): As of December 31, 2022 2021 Accrued research and development expenses $ 6,499 $ 6,195 Accrued employee and related expenses 4,165 3,168 Accrued professional and legal fees 1,052 495 Accrued other expenses 228 336 Total accrued expenses $ 11,944 $ 10,194 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 5. Commitments and Contingencies Leases On January 1, 2022, the Company adopted ASC 842 (see Note 2), and the following disclosures as of and for the year ended December 31, 2022 are presented under ASC 842, while prior period amounts have not been adjusted and continue to be reported in accordance with the historical accounting under ASC 840. Upon adoption, the Company recorded an operating lease ROU asset and lease liability for its lease in San Francisco, which was due to expire in January 2023 . Effective August 31, 2022, the Company amended the lease to extend the expiration date of the lease to January 2025 , with one option to renew for an additional year that is not reasonably certain to be exercised. The amendment resulted in the remeasurement of the lease liability and ROU asset as of the modification date to reflect the extended term and the Company recorded an incremental ROU asset and lease liability of $ 0.3 million. For the year ended December 31, 2022, the Company incurred $ 0.2 million in rent expense. For the year ended December 31, 2022, variable lease payments and short-term lease costs were immaterial . As of December 31, 2022, the remaining lease term was 2.0 years and the Company’s incremental borrowing rate used to determine the operating lease liability was 6.5 % . As of December 31, 2022, the undiscounted future minimum lease payments due under the Company’s non-cancellable operating lease are as follows (in thousands): 2023 $ 185 2024 185 2025 7 Total undiscounted future minimum lease payments $ 377 Less: imputed interest ( 23 ) Present value of operating lease liability $ 354 In accordance with ASC 840, rent expense for the year ended December 31, 2021 was $ 0.3 million. The total future minimum annual payments for operating leases in effect as of December 31, 2021 were as follows (in thousands): 2022 $ 212 2023 7 Total future minimum annual payments $ 219 Asset Transfer and License Agreement with Teva Pharmaceutical Industries Ltd In April 2018, the Company concurrently entered into two Asset Transfer and License Agreements (the “Teva Agreements”) with Teva Pharmaceutical Industries Ltd (“Teva”) under which it acquired certain patents and intellectual property relating to two programs: (1) Teva’s glycoPEGylated FGF21 fibroblast growth factor 21 (“ FGF21”) program, including the compound TEV-47948 (pegozafermin), a glycoPEGylated long-acting FGF21 and (2) Teva’s development program of small molecule inhibitors of fatty acid synthase. Pursuant to the Teva Agreements, the Company paid Teva an initial nonrefundable upfront payment of $ 6.0 million and the Company could be obligated to pay Teva up to $ 67.5 million under each program, for a total of $ 135.0 million, upon the achievement of certain clinical development and commercial milestones. In addition, the Company is obligated to pay Teva tiered royalties at percentages in the low-to-mid single-digits on worldwide net sales on all products containing the Teva compounds. The Teva Agreements can be terminated (i) by the Company without cause upon 120 days ’ written notice to Teva, (ii) by either party, if the other party materially breaches any of its obligations under the Teva Agreements and fails to cure such breach within 60 days after receiving notice thereof, or (iii) by either party, if a bankruptcy petition is filed against the other party and is not dismissed within 60 days . In addition, Teva can also terminate the agreement related to the Company’s glycoPEGylated FGF21 program in the event the Company, or any of its affiliates or sublicensees, challenges any of the Teva patents licensed to the Company, and the challenge is not withdrawn within 30 days of written notice from Teva. During the year ended December 31, 2022 and 2021 , no ne of the development and commercial milestones were met and accordingly, there were no milestone payments related to the Teva Agreements. |
Term Loan
Term Loan | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Term Loan | 6. Term Loan Loan and Security Agreement In April 2020, the Company entered into a Loan and Security Agreement, (the “Loan Agreement”) with the lenders referred to therein, and Silicon Valley Bank (“SVB”), as collateral agent. The Loan Agreement provided for (i) a secured term A loan facility (the “Term A Loan Facility”) of up to $ 10.0 million and (ii) a secured term B loan facility (the “Term B Loan Facility”) of up to $ 5.0 million that became available upon the satisfaction of certain milestones, each of which was available to be drawn through May 31, 2021. The term loan is secured by certain assets of the Borrowers (as defined in the Loan Agreement), including substantially all of the assets of the Company, excluding the Company’s intellectual property. The term loan contains customary representations, warranties, affirmative covenants and also certain restrictive covenants. In April 2020, in connection with the execution of the Loan Agreement, the Company issued SVB a warrant to purchase 25,000 shares of the Company’s common stock with a warrant exercise price of $ 22.06 per share that is immediately exercisable and expires on June 30, 2025 , as amended. The fair value of the warrant at the issuance date was determined by using the Black-Scholes option-pricing model and the fair value allocated to the warrant of $ 0.6 million met the requirements for equity classification within additional paid-in capital. Additionally, the Company incurred $ 0.2 million in closing costs, which together with the value of the warrants, were recorded as debt issuance costs. In May 2021, the parties further amended the Loan Agreement (as amended, the “2021 Loan Agreement”). The 2021 Loan Agreement increased the Term A Loan Facility to up to $ 20.0 million, which was fully drawn as of December 2021. The Term B Loan Facility of up to $ 5.0 million was available to be drawn upon on achievement of certain additional milestones, on or before September 30, 2022, which expired unused. The 2021 Loan Agreement provided for interest-only payments until October 1, 2022, which could be extended to April 1, 2023, if on or before September 30, 2022, the Company received net cash proceeds of at least $ 75.0 million from the sale of its equity securities. In July 2022, the Company met the net cash proceeds requirement (see Note 7) and on September 1, 2022, the interest-only period was extended to April 1, 2023. Consecutive monthly payments of principal and interest commence on April 1, 2023 and continue through September 1, 2024 , the maturity date of the term loan. The term loan bears interest at the greater of (i) 4.25 % and (ii) the sum of (a) the Prime Rate as reported in The Wall Street Journal plus (b) 1.00 %. The interest rate on the term loan was 4.25 % at inception and 8.50 % as of December 31, 2022. In addition, a final payment fee of 5.0 % of the principal amount of the loan is due when the term loan becomes due or upon prepayment of the term loan. If the Company elects to prepay the loan, there is also a prepayment fee of between 1.0 % and 3.0 % of the principal amount of the term loan depending on the timing of prepayment. In May 2021, in connection with the execution of the 2021 Loan Agreement, the Company issued SVB a warrant to purchase 33,923 shares of the Company’s common stock with a warrant exercise price of $ 19.12 per share that is immediately exercisable and expires on May 28, 2031 . The Company determined the fair value of the warrant at the issuance date by using the Black-Scholes option-pricing model with the following assumptions: risk-free interest rate of 1.6 %, no dividends, expected volatility of 98.6 % and expected term of 10.0 years. Upon issuance, the fair value of the warrant of $ 0.6 million was recorded as a debt issuance cost and met the requirements for equity classification within additional paid-in capital in the consolidated balance sheets. In addition, closing costs incurred were not material. In connection with Term B Loan Facility, if funded, the Company was to issue an additional warrant to purchase 11,305 shares of the Company’s common stock with the exercise price at the Company’s stock price at the time of issuance. However, the Term Loan B Facility expired unused and therefore no additional warrant was issued. The 2021 Loan Agreement was accounted for as a modification to a credit facility. The related debt issuance costs incurred in May 2021, including the fair value of the warrant, together with the remaining unamortized debt issuance costs related to the Loan Agreement of $ 0.4 million were recorded as deferred assets and recognized on a straight-line basis as interest expense over the availability of the draw period. As of December 31, 2021, all amounts were drawn under the Term Loan A Facility such that all debt issuance costs were recorded as a debt discount. The carrying value of the debt discount, together with the final payment fee, are recognized using the effective interest method. In September 2022, the parties agreed the extension of the interest-only period was met as a result of the July 2022 public offering (see Note 7), which was accounted for as a debt modification. A new effective interest rate equating to the revised cash flows of the carrying amount of the original debt was applied prospectively. The Company did not incur any costs in relation to the extension. In January 2023, the Company executed a loan and security agreement with new lenders (the “2023 Loan Agreement ” ) and repaid its outstanding obligations under the 2021 Loan Agreement (see Note 11). As the Company had the intent and ability to refinance amounts due under the 2021 Loan Agreement pursuant to the terms of the 2023 Loan Agreement, as of December 31, 2022, the current portion of the outstanding principal obligation under the 2021 Loan Agreement was classified as long-term. As of December 31, 2022, the Company’s total obligations under the 2021 Loan Agreement were $ 19.7 million classified as term loan, non-current, net and $ 0.5 million classified as other non-current liability related to the final payment fee. The term loan, non-current, net is comprised of the outstanding principal amount of $ 20.0 million net of $ 0.3 million of unamortized debt discount. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | 7. Stockholders’ Equity As of December 31, 2022, the Company’s shares of common stock available for future issuance were as follows: Shares available for future grant under the equity incentive plan 241,635 Shares available for future issuance under the employee stock purchase plan 729,218 Shares available for future issuance upon the exercise of warrants and pre-funded warrants 13,966,283 Total available for future issuance 14,937,136 Public Offerings At-the-Market Offerings In March 2021, the Company entered into a sales agreement (as amended, the “Sales Agreement”) with SVB Securities LLC and Cantor Fitzgerald & Co. (the “Sales Agents”) pursuant to which the Company may offer and sell up to $ 75.0 million of shares of its common stock, from time to time, in “at-the-market” offerings (the “ATM Facility”). The Sales Agents are entitled to compensation at a commission equal to 3.0 % of the aggregate gross sales price per share sold under the Sales Agreement. Pursuant to the ATM Facility, in 2021, the Company received aggregate proceeds of $ 3.3 million, net of commissions and offering expenses from sales of 186,546 shares of its common stock and, in 2022, received aggregate proceeds of $ 28.5 million, net of commissions from the sales of 3,948,611 shares of its common stock. July 2022 Public Offering In July 2022, the Company completed an underwritten public offering of its common stock, warrants to purchase shares of its common stock and pre-funded warrants to purchase shares of its common stock. The Company sold 18,675,466 shares of its common stock with accompanying warrants to purchase up to 9,337,733 shares of its common stock at a combined public offering price of $ 3.55 per share. The Company also sold 7,944,252 pre-funded warrants to purchase shares of its common stock with accompanying warrants to purchase up to 3,972,126 shares of its common stock at a combined public offering price of $ 3.549 per pre-funded warrant, which represents the per share public offering price for the common stock less $ 0.001 per share, the exercise price for each pre-funded warrant. The Company raised net proceeds of $ 88.2 million, after deducting underwriting discounts and commissions of $ 5.7 million and other offering costs of $ 0.6 million. The exercise of the outstanding warrants is subject to a beneficial ownership limitation of 9.99 %, or at the election of the holder prior to the issuance of the warrant, 4.99 %. The exercise of the outstanding pre-funded warrants is subject to a beneficial ownership limitation of 9.99 %, or at the election of the holder prior to the issuance of the pre-funded warrant, 4.99 %, which a holder may increase or decrease from time to time but shall not exceed 19.99 %. The exercise price and number of shares of common stock issuable upon the exercise of the warrants and pre-funded warrants are subject to adjustment in the event of any stock dividends, stock splits, reverse stock split, recapitalization, or reorganization or similar transaction, as described in the agreements. Under certain circumstances, the warrants and pre-funded warrants may be exercisable on a “cashless” basis. The warrants and pre-funded warrants were classified as a component of stockholders’ equity and additional paid-in capital because such warrants and pre-funded warrants (i) are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, (ii) are immediately exercisable, (iii) do not embody an obligation for the Company to repurchase its shares, (iv) permit the holders to receive a fixed number of common shares upon exercise, (v) are indexed to the Company’s common stock and (vi) meet the equity classification criteria. In addition, the warrants and pre-funded warrants do not provide any guarantee of value or return. Common Stock Warrants As of December 31, 2022, the Company’s outstanding warrants to purchase shares of its common stock were as follows: Shares of Exercise Price Expiration Warrant issued with term loan 25,000 $ 22.06 June 30, 2025 Warrant issued with term loan 33,923 $ 19.12 May 28, 2031 Warrants issued in public offering 13,107,360 $ 5.325 July 1, 2024 Pre-funded warrants issued in public offering 800,000 $ 0.001 Do not expire Total outstanding 13,966,283 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 8 . Stock-Based Compensation Equity Incentive Plan In September 2019, the Company’s board of directors adopted the 2019 Equity Incentive Plan (the “2019 Plan”), which also became effective in September 2019. The Company initially reserved 2,844,193 shares of common stock for issuance under the 2019 Plan. In addition, the number of shares of common stock reserved for issuance under the 2019 Plan will automatically increase on the first day of January for a period of up to ten years in an amount equal to 4 % of the total number of shares of the Company’s capital stock outstanding on the immediately preceding December 31, or a lesser number of shares determined by the Company’s board of directors. The board of directors determines the period over which options become exercisable and options generally vest over a four-year period, with 25 % of options vesting on the first anniversary of employment, and thereafter, the remaining options vesting quarterly, over the following 36-month period. The options expire within ten years from the date of grant. The exercise price of awards granted will not be less than the estimated fair value of the shares on the date of grant. The 2019 Plan also permits the board of directors to grant restricted stock units, which are subject to continued service conditions. Employee Stock Purchase Plan In October 2019, the Company’s board of directors adopted the 2019 Employee Stock Purchase Plan (“ESPP”), which became effective in November 2019. The Company initially reserved 225,188 shares of common stock for purchase under the ESPP. The number of shares of common stock reserved for issuance under the ESPP will automatically increase on the first day of January for a period of up to ten years in an amount equal to 1 % of the total number of shares of the Company’s common stock outstanding on the immediately preceding December 31, or a lesser number of shares determined by the Company’s board of directors. Purchases are accomplished through the participation of discrete offering periods and each offering is expected to be six months in duration. For each offering period, ESPP participants will purchase shares of common stock at a price per share equal to 85 % of the lesser of the fair market value of the Company’s common stock on (1) the first trading day of the applicable offering period or (2) the last trading day of the applicable offering period. Stock Options The following table summarizes stock option activity for the year ended December 31, 2022: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Term Value (In years) (In thousands) Balance outstanding as of December 31, 2021 2,406,668 $ 16.46 8.1 $ 9,970 Granted 1,149,816 4.48 Exercised ( 151,061 ) 2.09 Cancelled and forfeited ( 243,506 ) 16.34 Balance outstanding as of December 31, 2022 3,161,917 $ 12.80 7.9 $ 16,612 Exercisable as of December 31, 2022 1,460,685 $ 14.60 7.0 $ 7,320 The fair value of stock options granted for the periods presented was estimated at the date of grant using a Black-Scholes option-pricing model with the following assumptions: Year Ended December 31, 2022 2021 Expected term (years) 5.5 - 6.3 5.5 - 6.1 Expected volatility 89.9 - 91.0 % 86.9 - 91.9 % Risk-free interest rate 1.6 - 3.9 % 0.7 - 1.3 % Expected dividend — — The weighted-average grant date fair value of stock options that were granted during the year ended December 31, 2022 and 2021 was $ 3.38 and $ 16.18 per share, respectively. As of December 31, 2022, there was $ 12.2 million of unrecognized stock-based compensation related to stock options granted under the 2019 Plan, which is expected to be recognized over a weighted-average period of 2.2 years. Restricted Stock Units (“RSUs”) The Company has granted certain employees service-based RSUs that generally vest annually over a two or three-year period. The restrictions lapse over time for these service-based RSUs. In the event of termination of the holder’s continuous service to the Company, any unvested portion of the service-based RSUs are cancelled. For the year ended December 31, 2022 and 2021, the Company recognized expense of $ 1.2 million and $ 0.3 million, respectively, related to the service-based RSUs. In February 2021, the Company granted performance-based RSUs that vest as to one-third on each one-year anniversary date, subject to achievement of a development milestone and continued service to the Company. In February 2022, a portion of the performance-based RSUs vested upon achievement of the development milestone and satisfaction of the continued service condition. In February and September 2022, the Company granted performance-based RSUs that vest during the applicable performance period, subject to the achievement of certain corporate or department targets and continued service to the Company. In September 2022, a portion of the performance-based RSUs that were granted in February 2022 vested upon achievement of specific targets and satisfaction of the continued service condition. As of December 31, 2022, it was probable that the remaining performance conditions would be met for the Company’s performance-based RSUs and expense was recognized using the accelerated attribution method. For the year ended December 31, 2022 and 2021, the Company recognized expense of $ 1.5 million and $ 0.8 million, respectively, related to performance-based RSUs. The following table summarizes RSU activity for the year ended December 31, 2022: Number of Weighted Average Balance outstanding as of December 31, 2021 106,394 $ 23.10 Granted 1,224,391 4.61 Vested / released ( 103,703 ) 8.61 Cancelled / forfeited ( 131,344 ) 5.53 Balance outstanding as of December 31, 2022 1,095,738 5.77 As of December 31, 2022, there was $ 3.9 million of total unrecognized expense related to RSUs, which is expected to be recognized over a weighted-average period of 1.4 years. The Company recorded stock-based compensation for the periods indicated as follows (in thousands): Year Ended December 31, 2022 2021 Research and development $ 4,094 $ 2,966 General and administrative 6,262 5,712 Total stock-based compensation $ 10,356 $ 8,678 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9 . Income Taxes Tax Rates Applicable to the Income of the Company and its Subsidiaries The Company is taxed according to U.S. federal and state tax laws and Israeli tax laws. The statutory tax rates applicable to the income of the Company and its subsidiaries for the periods presented are as follows: Year Ended December 31, 2022 2021 89bio, Inc. 21 % 21 % 89Bio Ltd. 23 % 23 % 89bio Management, Inc. 21 % 21 % UAB 89bio Lithuania 15 % 15 % The income tax (expense) benefit for the periods presented is comprised of (in thousands): Year Ended December 31, 2022 2021 Current: Federal — — State ( 3 ) ( 2 ) Foreign ( 16 ) ( 1 ) Total ( 19 ) ( 3 ) Deferred: Federal — 150 State — — Foreign — — Total — 150 Income tax (expense) benefit ( 19 ) 147 Deferred Income Taxes Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets for the periods presented are as follows (in thousands): As of December 31, 2022 2021 U.S. net operating loss carryforwards $ 45,002 $ 29,094 Research and development expenses 18,927 6,529 Israel net operating loss carryforwards 7,385 4,262 Stock-based compensation 4,328 1,969 Accrued expenses 317 220 Operating Lease Liability 98 — Other 244 191 Gross deferred tax assets 76,301 42,265 Less: valuation allowance ( 75,982 ) ( 42,046 ) Total deferred tax assets $ 319 $ 219 Operating lease right-of-use asset ( 100 ) — Total deferred tax liabilities ( 100 ) — Net deferred tax assets 219 219 As of December 31, 2022 and 2021, the Company recorded a valuation allowance of $ 76.0 million and $ 42.0 million, respectively, in respect of deferred tax assets resulting from tax loss carryforwards and other temporary differences. Realization of deferred tax assets is dependent upon future earnings, if any, the time and amount of which are uncertain. The Company regularly assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes based upon the weight of available evidence that it is more likely than not that all or a portion of deferred tax assets will not be realized, a valuation allowance is established through an adjustment to income tax expense. The valuation allowance increased by $ 34.0 million in 2022, which primarily relates to significant taxable losses. The Company continues to record a partial valuation allowance against the deferred tax assets in Israel due to achievement of recent profitability and the expectation of future profitability in the jurisdiction. Available Carryforward Tax Losses and Credits As of December 31, 2022, the Company had an accumulated tax loss carryforward of approximately $ 160.9 million , $ 169.8 million , and $ 32.1 million for Federal, State and Israeli tax purposes, respectively. As of December 31, 2021 , the Company had an accumulated tax loss carryforward of approximately $ 138.5 million and $ 18.5 million for U.S. and Israeli tax purposes, respectively. Federal net operating losses generated after 2017 can be carried forward indefinitely but utilization will be limited to 80 % of taxable income in the period that net operating losses are being utilized. Carryforward tax losses in California will begin to expire in 2041 . Carryforward tax losses in Israel have no expiration date. As of December 31, 2022 and 2021, the Company had federal research and development credit carryforwards of approximately $ 4.3 million and $ 2.1 million, respectively, which expire beginning in 2040 . As of December 31, 2022 and December 31, 2021, the Company had state research and development credit carryforwards of approximately $ 1.8 million and $ 1.1 million, respectively, which will carry forward indefinitely. Loss from Operations, Before Income Tax The Company recorded a loss from operations, before income tax for the periods presented as follows (in thousands): Year Ended December 31, 2022 2021 United States $ ( 101,938 ) $ ( 91,141 ) Lithuania ( 7 ) 10 Israel ( 62 ) 862 Net loss before income tax $ ( 102,007 ) $ ( 90,269 ) Reconciliation of Income Tax (Expense) Benefit The reconciliation of income tax (expense) benefit based on the statutory tax rate to the effective tax rate for the periods presented is as follows (in thousands): Year Ended December 31, 2022 2021 Income tax benefit computed at statutory rates $ 21,429 $ 18,757 Change in valuation allowance ( 33,936 ) ( 20,111 ) Foreign rate differential 1 ( 19 ) State income taxes, net of federal benefit 5,824 — State deferred tax true-up due to change in apportionment 6,517 — Change in Israel effective tax rate due to the 2019 reorganization — ( 2 ) Research and development credits, net of uncertain tax position 2,130 1,331 Other ( 1,984 ) 191 Income tax (expense) benefit $ ( 19 ) $ 147 Utilization of U.S. federal and state net operating losses and credit carryforwards may be subject to an annual limitation provided for in Section 382 of the Internal Revenue Code and similar state codes. Any annual limitation could result in a deferral of the utilization of the net operating loss and credit carryforwards. Unrecognized Tax Benefits A reconciliation of the unrecognized tax benefits for the year ended December 31, 2022 and 2021 is as follows (in thousands): As of December 31, 2022 2021 Balance beginning of year 851 329 Decrease related to prior year positions ( 19 ) ( 35 ) Increase related to current year positions 752 557 Balance end of year 1,584 851 During the year ended December 31, 2022 and 2021, the amount of gross unrecognized tax benefits increased by $ 0.7 million and $ 0.5 million , respectively. If the total amount of unrecognized tax benefits was recognized, it would no t have an impact to the effective tax rate as it would be offset by the reversal of related deferred tax assets which are subject to a full valuation allowance. The Company recognizes interest and penalties related to uncertain tax positions as part of the income tax provision. As of December 31, 2022 and 2021, such interest and penalties were not material. The Company is subject to taxation in the United States, California, Colorado, North Carolina and several foreign jurisdictions. To date, the Company has not been subject to any federal or state income tax audits. The Company is currently under examination by the Israeli tax authorities for 2018 and 2019. As of December 31, 2022, all tax years remain open to examination. On August 9, 2022 and August 16, 2022, the Creating Helpful Incentives to Produce Semiconductors (“CHIPS”) Act and the Inflation Reduction Act (“IRA”), respectively, were signed into law. The CHIPS Act and IRA contain among other things, some income tax provisions that establish a corporate alternative minimum tax and provide tax incentives for semiconductor manufacturing and research. The Company has evaluated the current legislation and at this time, does not anticipate either to have a material impact on its financial statements. The Tax Cuts and Jobs Act (“TCJA”) included a change in the treatment of research and development (“R&D”) expenditures for tax purposes under Section 174. Effective for tax years beginning after December 31, 2021, specified R&D expenditures must undergo a 5-year amortization period for domestic spend and a 15-year amortization period for foreign spend. Prior to the effective date (2021 tax year and prior), taxpayers were able to immediately expense R&D costs under Section 174(a) or had the option to capitalize and amortize R&D expenditures over a 5-year recovery period under Section 174(b). The Company has evaluated the current legislation at this time and prepared the provision by following the treatment of R&D expenditures for tax purposes under Section 174. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 10. Net Loss Per Share The following outstanding potentially dilutive common stock equivalents have been excluded from the calculation of diluted net loss per share for the periods indicated due to their anti-dilutive effect: Year Ended December 31, 2022 2021 Stock options to purchase common stock 3,161,917 2,406,668 Unvested restricted stock units 1,095,738 106,394 Warrants to purchase common stock 1 13,166,283 58,923 Total 17,423,938 2,571,985 1 The table above excludes pre-funded warrants issued in connection with the July 2022 public offering (see Note 7). |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | 11. Subsequent Events 2023 Loan Agreement In January 2023, the Company executed the 2023 Loan Agreement with the new lenders named therein. The 2023 Loan Agreement provides up to $ 100.0 million in aggregate principal in term loans, consisting of a first tranche of $ 25.0 million that was funded at closing, two subsequent tranches totaling $ 25.0 million that may be funded upon the achievement of certain time-based, clinical and regulatory milestones, and a fourth tranche of up to $ 50.0 million that may be funded upon discretionary approval by the lenders. The term loans under the 2023 Loan Agreement mature on January 1, 2027 . The maturity date may be extended to July 1, 2027 , provided that the second and third tranches are funded and the Company achieves certain other financing milestones. The term loans bear interest equal to the greater of (i) 8.45 % and (ii) the sum of (a) the Prime Rate as reported in The Wall Street Journal plus (b) 2.25 %. Consecutive monthly payments of interest commence in February 2023 and consecutive monthly payments of principal commence in February 2025, or February 2026 provided that certain extension milestones are achieved. 2021 Loan Agreement In January 2023, the first tranche of $ 25.0 million that was funded pursuant to the 2023 Loan Agreement was primarily used to repay the Company’s outstanding obligations under the 2021 Loan Agreement, including the total principal amount outstanding as of December 31, 2022 of $ 20.0 million, the final payment fee of $ 1.0 million and an early prepayment fee of $ 0.4 million (see Note 6). ATM Facility In January and February 2023, the Company received aggregate proceeds of $ 13.4 million, net of commissions from sales of 968,000 shares of its common stock pursuant to the ATM Facility (see Note 7). On February 15, 2023 , the Company entered into Amendment No. 1 to the Sales Agreement with the Sales Agent, pursuant to which the Company may offer and sell up to $ 150.0 million shares of its common stock, from time to time, through the ATM Facility (see Note 7). Banking Relationship with SVB The Company has a banking relationship with SVB. On March 10, 2023, SVB was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation ("FDIC") as receiver. On March 12, 2023, the Federal Reserve Board approved actions enabling the FDIC to complete its resolution of SVB in a manner that fully protects all depositors. Based on the foregoing and the Company’s analysis of the components of its relationship with SVB, the Company does not expect these events to have a material impact on the Company’s consolidated financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). |
Reclassification | Reclassification Certain prior year amounts in the Company’s consolidated statements of operations and comprehensive loss have been reclassified to conform to the current year presentation. Specifically, interest expense is disclosed separately on the Company’s consolidated statements of operations and comprehensive loss, which had no impact on reported net loss, comprehensive loss, or loss per share. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. Significant estimates and assumptions made in the accompanying consolidated financial statements include but are not limited to accrued research and development expenses and to the fair value of stock options. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ from those estimates. |
Foreign Currencies | Foreign Currencies Certain transactions during the year ended December 31, 2022 and 2021 were denominated in currencies other than the U.S. dollar. Gains and losses from foreign currency transactions were not material for all periods presented and are reflected in the consolidated statements of operations and comprehensive loss as a component of interest income and other, net. The Company’s subsidiary in Lithuania uses the Euro as its functional currency for financial reporting. The re-measurement from Euros to U.S. dollars results in translation gain and loss adjustments, which are reflected as a component of comprehensive loss as foreign currency translation adjustments. |
Fair Value Measurements | Fair Value Measurements Financial assets and liabilities are recorded at fair value on a recurring basis in the consolidated balance sheets. The carrying values of Company’s financial assets and liabilities, including cash and cash equivalents, restricted cash, prepaid and other current assets, accounts payable, and accrued expenses approximate to their fair value due to the short-term nature of these instruments. The fair value of the Company’s term loan approximates its carrying value, or amortized cost, due to the prevailing market rates of interest rates it bears. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. Assets and liabilities recorded at fair value are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels are directly related to the amount of subjectivity with the inputs to the valuation of these assets or liabilities as follows: Level 1 —Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; Level 2 —Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable inputs for similar assets or liabilities. These include quoted prices for identical or similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and Level 3 —Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents and short-term available-for-sale securities. Bank deposits are held by accredited financial institutions and these deposits may at times be in excess of insured limits. The Company limits its credit risk associated with cash and cash equivalents by placing them with financial institutions that it believes are of high quality. The Company has not experienced any losses on its deposits of cash or cash equivalents. The Company limits amounts invested in available-for-sale securities by credit rating, maturity, industry group, investment type and issuer, except for securities issued by the U.S. government. The Company is not exposed to any significant concentrations of credit risk from these financial instruments. |
Other Risks and Uncertainties | Other Risks and Uncertainties The Company’s future results of operations involve a number of other risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, the Company’s early stages of clinical drug development; the Company’s ability to advance product candidates into, and successfully complete, clinical trials on the timelines it projects; the Company’s ability to adequately demonstrate sufficient safety and efficacy of its product candidates; the Company’s ability to enroll patients in its ongoing and future clinical trials; the Company’s ability to successfully manufacture and supply its product candidates for clinical trials; the Company’s ability to obtain additional capital to finance its operations; uncertainties related to the projections of the size of patient populations suffering from the diseases the Company is targeting; the Company’s ability to obtain, maintain, and protect its intellectual property rights; developments relating to the Company’s competitors and its industry, including competing product candidates and therapies; general economic and market conditions; and other risks and uncertainties. The Company’s product candidates will require approvals from the U.S. Food and Drug Administration and comparable foreign regulatory agencies prior to commercial sales in their respective jurisdictions. There can be no assurance that any product candidates will receive the necessary approvals. If the Company is denied approval, approval is delayed or the Company is unable to maintain approval for any product candidate, it could have a materially adverse impact on the Company. The ongoing COVID-19 pandemic has disrupted and may continue to disrupt the Company’s business and delay its preclinical and clinical programs and timelines. The extent to which the COVID-19 pandemic may impact the Company’s future operating results and financial condition is uncertain. |
Segment Reporting | Segment Reporting The Company has one operating segment. The Company’s chief operating decision maker, its Chief Executive Officer, manages the Company’s operations on a consolidated basis for the purposes of allocating resources and evaluating financial performance. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents. Cash equivalents consist primarily of amounts invested in money market funds and commercial paper that are stated at fair value. |
Investments | Investments Investments have been classified as available-for-sale and are carried at estimated fair value as determined based upon quoted market prices or pricing models for similar securities. Management determines the appropriate classification of its available-for-sale investments in debt securities at the time of purchase. Generally, investments with original maturities beyond three months at the date of purchase are classified as short-term because it is management’s intent to use the investments to fund current operations or to make them available for current operations. Unrealized gains and losses are excluded from net loss and are reported as a component of comprehensive loss. The Company periodically evaluates whether declines in fair values of its available-for-sale securities below their book value are other-than-temporary. This evaluation consists of several qualitative and quantitative factors regarding the severity and duration of the unrealized loss as well as the Company’s ability and intent to hold the available-for-sale security until a forecasted recovery occurs. Additionally, the Company assesses whether it has plans to sell the security or it is more likely than not it will be required to sell any available-for-sale securities before recovery of its amortized cost basis. Realized gains and losses and declines in fair value judged to be other than temporary, if any, on available-for-sale securities are included in interest income and other, net. The cost of investments sold is based on the specific-identification method. The Company has no t experienced any material realized gains or losses or other-than-temporary losses in the periods presented. |
Leases | Leases The Company is a lessee in noncancellable operating leases for office space. Beginning in 2022, the Company accounts for leases in accordance with Accounting Standards Update (“ASU”) 2016-02, Leases ( Topic 842 ). The Company determines if an arrangement is a lease or contains an embedded lease at inception. The Company accounts for a contract as a lease when it has the right to control the asset for a period of time while obtaining substantially all of the asset’s economic benefits. For arrangements that meet the definition of a lease, the Company determines the initial classification and measurement of its right-of-use (“ROU”) asset and lease liability at the lease commencement date and thereafter if modified. Operating lease ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make the contractual lease payments over the lease term. The ROU asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. The operating lease liability is initially measured at the present value of the unpaid lease payments at the lease commencement date. The lease liability is subsequently measured at amortized cost using the effective-interest method. The lease term includes any renewal options that the Company is reasonably assured to exercise. The present value of lease payments is determined by using the interest rate implicit in the lease, if that rate is readily determinable, otherwise, the Company uses its estimated collateralized incremental borrowing rate for the lease term. The Company has elected not to record leases with an original term of twelve months or less on its consolidated balance sheets and recognizes those lease payments in operating expenses in the consolidated statements of operations and comprehensive loss. The Company’s short-term lease is not material. In addition, the Company’s leases may require it to pay additional costs, such as utilities, maintenance, and other operating costs, which are generally referred to as non-lease components and vary based on future outcomes. The Company has elected to not separate lease and non-lease components. Only the fixed costs for lease components and their associated non-lease components are accounted for as a single lease component and recognized as part of a ROU asset and lease liability. Any variable expenses are recognized in operating expenses as incurred. Rent expense for an operating lease liability is recognized on a straight-line basis over the lease term and is included in operating expenses in the consolidated statements of operations and comprehensive loss. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated on a straight-line basis over the estimated useful lives of the related assets, generally ranging from three to seven years . Leasehold improvements are amortized on a straight-line basis over the shorter of the assets’ estimated useful life or the remaining term of the lease. Upon retirement or sale of the assets, the cost and related accumulated depreciation and amortization are removed from the consolidated balance sheets and the resulting gains or losses are recorded in the consolidated statements of operations and comprehensive loss. Maintenance and repair costs are expensed as incurred. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company periodically evaluates its long-lived assets, including property and equipment, for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets or group of assets may not be fully recoverable. If indicators of impairment exist and the undiscounted future cash flows that the assets are expected to generate are less than the carrying value of the assets, then the Company will reduce the carrying amount of the assets through an impairment charge, to their estimated fair values based on a discounted cash flow approach or, when available and appropriate, to comparable market values. There were no such indicators for the periods presented. |
Accrued Research and Development Expenses | Accrued Research and Development Expenses The Company estimates preclinical and clinical study and research expenses based on the services performed, pursuant to contracts with research institutions that conduct and manage preclinical and clinical studies and research services on its behalf. The Company records the costs of research and development activities based upon the estimated services provided but not yet invoiced and includes these costs in accrued expenses in the consolidated balance sheets. These costs are a component of the Company’s research and development expenses. The Company accrues for these costs based on factors such as estimates of the work completed in accordance with agreements established with its third-party service providers. The Company makes judgments and estimates in determining the accrued expenses balance. As actual costs become known, the Company adjusts its accrued expenses. The Company has not experienced any material differences between accrued costs and actual costs incurred. However, the status and timing of actual services performed may vary from the Company’s estimates, resulting in adjustments to expense in future periods. Changes in these estimates that result in material changes to the Company’s accrued expenses could materially affect the Company’s results of operations. Contingent milestone payments, if any, are expensed when the milestone results are probable and estimable, which is generally upon achievement of the milestone. |
Warrants To Purchase Common Stock | Warrants to Purchase Common Stock The Company classifies warrants indexed to its common stock and meeting the requirements for equity classification within stockholders’ equity. This assessment is conducted at the time of warrant issuance and as of each reporting period that the warrants remain outstanding. |
Research and Development Expenses | Research and Development Expenses Research and development expenses consist primarily of costs incurred for the development of the Company’s lead product candidate, pegozafermin. Research and development expenses consist primarily of external costs related to preclinical and clinical development and related supplies and personnel costs. Personnel costs consist of salaries, employee benefits and stock-based compensation for individuals involved in research and development efforts. Payments associated with agreements to acquire licenses to develop, use, manufacture and commercialize products and purchases of pegozafermin from contract manufacturing organizations that have not reached technological feasibility and do not have alternate future commercial use are expensed as incurred. |
Stock-Based Compensation | Stock-Based Compensation The Company provides equity awards in the form of stock options and restricted stock units. The Company measures its equity awards made to employees, directors, and non-employee service providers based on estimated fair values and recognizes stock-based compensation over the requisite service period. The Company accounts for forfeitures as they occur. The Company estimates the fair value of stock option awards on the date of grant using a Black-Scholes option pricing model. The Company recognizes compensation for the value of stock options awards, which have graded vesting, using the straight-line method over the requisite service period of each award. The Black-Scholes option pricing model requires a number of assumptions, of which the most significant are expected volatility, expected option term (the time from the grant date until the options are exercised or expire), risk-free rate, and expected dividend rate. These assumptions include: • Expected volatility—Since the Company has limited trading history for its common stock, expected volatility is estimated based on weighting the Company’s volatility and the volatility of comparable publicly traded biotechnology companies during the equivalent period of the calculated expected term of the options granted. The comparable companies were chosen based on their similar size, stage in the life cycle, or area of specialty. There is a degree of uncertainty in determining a comparable peer group as each of the peers are engaged in varied research and development activities, the timing and progress of which differ within the peer group. • Expected term—The expected term of options granted to employees and directors is determined using the “simplified” method. Under this approach, the expected term is presumed to be the midpoint between the weighted-average vesting term and the contractual term of the option. The simplified method makes the assumption that the employee will exercise stock options evenly over the period when the stock options are vested and ending on the date when the stock options would expire. The expected option term for options granted to non-employees is estimated on a grant-by-grant basis. • Risk-free interest rate—The risk-free interest rate is based on the U.S. Treasury zero coupon bonds in effect on the grant date for periods with an equivalent expected term as the option. • Expected dividend—The Company has never paid dividends and has no foreseeable plans to pay dividends on its shares of common stock. Therefore, an expected dividend of zero is used. The fair value of restricted stock units is based on the fair value of the Company’s common stock on the date of grant. The grant date fair value of restricted stock units with service vesting conditions is recognized over the requisite service period on a straight-line basis. For restricted stock units with performance vesting conditions, the Company evaluates the probability of achieving the performance condition at each reporting date and recognizes expense for such performance awards over the requisite service period using the accelerated attribution method. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates applied to taxable income in the years in which those temporary differences are expected to be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or loss in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. Interest and penalties related to unrecognized tax benefits are included within the provision of income tax. |
Basic and Diluted Net Loss per Share | Basic and Diluted Net Loss per Share Basic loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding together with the number of additional shares of common stock that would have been outstanding if all potentially dilutive shares of common stock had been issued. Since the Company is in a loss position for the periods presented, basic net loss per share is the same as diluted net loss per share since the effects of potentially dilutive securities are antidilutive. Shares of the Company’s common stock underlying pre-funded warrants exercisable for nominal consideration are included in the computation of basic and diluted net loss per share, even if antidilutive. |
Comprehensive Loss | Comprehensive Loss The Company’s comprehensive loss is comprised of net loss and changes in unrealized gains or losses on available-for-sale securities and foreign currency translation adjustments. |
Recent Accounting Pronouncements | Recently Adopted Accounting Standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases ( Topic 842 ), or Accounting Standards Codification (“ASC”) 842, which requires lessees to recognize leases on the balance sheet and disclose key information about leasing arrangements. ASC 842 establishes a ROU model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. On January 1, 2022 , the Company adopted ASC 842 using the modified retrospective transition method and elected the practical expedients to not reassess whether any expired or existing contracts are or contain leases, carry forward its historical lease classification and not reassess initial direct costs for existing leases. Upon adoption of ASC 842, the Company recorded an operating ROU asset of $ 0.2 million and an operating lease liability of $ 0.2 million on its consolidated balance sheet. There was no adjustment to the opening balance of accumulated deficit as a result of adoption. Results for the year ended December 31, 2022 are presented under ASC 842. Prior period amounts preceding January 1, 2022 continue to be reported in accordance with the Company’s historical accounting under the previous lease guidance, ASC 840. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326) : Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which replaces the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected. As an emerging growth company, ASU 2016-13 is effective for the Company for the year ending December 31, 2023 and interim periods within that fiscal year and must be adopted using a modified retrospective approach, with certain exceptions. The Company is evaluating the impact of this standard and does not expect the adoption of ASU 2016-13 to have a material impact on the Company’s consolidated financial statements and related disclosures. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Assets Measured at Fair Value on Recurring Basis | The following table presents the Company’s financial assets measured at fair value on a recurring basis by level within the fair value hierarchy as of December 31, 2022 (in thousands): Valuation Amortized Unrealized Unrealized Fair Hierarchy Cost Gains Losses Value Money market funds Level 1 $ 18,224 $ — $ — $ 18,224 Commercial paper Level 2 104,279 1 ( 84 ) 104,196 U.S. government bonds Level 2 18,225 1 ( 109 ) 18,117 Agency bonds Level 2 13,986 — ( 78 ) 13,908 Corporate debt securities Level 2 10,488 — ( 62 ) 10,426 U.S. treasury bills Level 2 7,414 1 ( 21 ) 7,394 Agency discount securities Level 2 5,216 9 — 5,225 Non-U.S. debt securities Level 2 3,975 — ( 20 ) 3,955 Total cash equivalents and available-for- $ 181,807 $ 12 $ ( 374 ) $ 181,445 Classified as: Cash equivalents $ 48,540 Short-term available-for-sale securities 132,905 Total cash equivalents and available-for- $ 181,445 The following table presents the Company’s financial assets measured at fair value on a recurring basis by level within the fair value hierarchy as of December 31, 2021 (in thousands): Valuation Amortized Unrealized Unrealized Fair Hierarchy Cost Gains Losses Value Money market funds Level 1 $ 21,477 $ — $ — $ 21,477 Commercial paper Level 2 59,647 — ( 10 ) 59,637 U.S. government bonds Level 2 21,662 — ( 42 ) 21,620 Corporate debt securities Level 2 8,776 1 ( 1 ) 8,776 Agency bonds Level 2 7,747 1 ( 7 ) 7,741 Municipal bonds Level 2 4,251 — ( 4 ) 4,247 Non-U.S. debt securities Level 2 2,506 — ( 1 ) 2,505 Total cash equivalents and available-for- $ 126,066 $ 2 $ ( 65 ) $ 126,003 Classified as: Cash equivalents $ 27,715 Short-term available-for-sale securities 98,288 Total cash equivalents and available-for- $ 126,003 |
Schedule of Contractual Maturities of Cash Equivalents and Available-for-Sale Securities | The following table summarizes the Company’s cash equivalents and available-for-sale securities by contractual maturity as of December 31, 2022 (in thousands): Within one year $ 175,243 After one year through two years 6,202 Total cash equivalents and available-for-sale securities $ 181,445 The following table summarizes the Company’s cash equivalents and available-for-sale securities by contractual maturity as of December 31, 2021 (in thousands): Within one year $ 120,726 After one year through two years 5,277 Total cash equivalents and available-for-sale securities $ 126,003 |
Consolidated Balance Sheet Co_2
Consolidated Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Prepaid and Other Current Assets | Prepaid and other current assets consist of the following as of the periods presented (in thousands): As of December 31, 2022 2021 Prepaid research and development $ 5,727 $ 7,895 Prepaid taxes 646 836 Prepaid other 1,547 2,506 Total prepaid and other current assets $ 7,920 $ 11,237 |
Schedule of Accrued Expenses | Accrued expenses consist of the following as of the periods presented (in thousands): As of December 31, 2022 2021 Accrued research and development expenses $ 6,499 $ 6,195 Accrued employee and related expenses 4,165 3,168 Accrued professional and legal fees 1,052 495 Accrued other expenses 228 336 Total accrued expenses $ 11,944 $ 10,194 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments Under Non-cancellable Operating Lease Obligations | As of December 31, 2022, the undiscounted future minimum lease payments due under the Company’s non-cancellable operating lease are as follows (in thousands): 2023 $ 185 2024 185 2025 7 Total undiscounted future minimum lease payments $ 377 Less: imputed interest ( 23 ) Present value of operating lease liability $ 354 The total future minimum annual payments for operating leases in effect as of December 31, 2021 were as follows (in thousands): 2022 $ 212 2023 7 Total future minimum annual payments $ 219 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Stock Option Activity | The following table summarizes stock option activity for the year ended December 31, 2022: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Term Value (In years) (In thousands) Balance outstanding as of December 31, 2021 2,406,668 $ 16.46 8.1 $ 9,970 Granted 1,149,816 4.48 Exercised ( 151,061 ) 2.09 Cancelled and forfeited ( 243,506 ) 16.34 Balance outstanding as of December 31, 2022 3,161,917 $ 12.80 7.9 $ 16,612 Exercisable as of December 31, 2022 1,460,685 $ 14.60 7.0 $ 7,320 |
Summary of Estimated Fair Value of Stock Options Granted Using Black-Scholes Option-Pricing Model | The fair value of stock options granted for the periods presented was estimated at the date of grant using a Black-Scholes option-pricing model with the following assumptions: Year Ended December 31, 2022 2021 Expected term (years) 5.5 - 6.3 5.5 - 6.1 Expected volatility 89.9 - 91.0 % 86.9 - 91.9 % Risk-free interest rate 1.6 - 3.9 % 0.7 - 1.3 % Expected dividend — — |
Summary of Restricted Stock Unit Activity | The following table summarizes RSU activity for the year ended December 31, 2022: Number of Weighted Average Balance outstanding as of December 31, 2021 106,394 $ 23.10 Granted 1,224,391 4.61 Vested / released ( 103,703 ) 8.61 Cancelled / forfeited ( 131,344 ) 5.53 Balance outstanding as of December 31, 2022 1,095,738 5.77 |
Summary of Stock-Based Compensation | The Company recorded stock-based compensation for the periods indicated as follows (in thousands): Year Ended December 31, 2022 2021 Research and development $ 4,094 $ 2,966 General and administrative 6,262 5,712 Total stock-based compensation $ 10,356 $ 8,678 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Shares of Common Stock Available for Future Issuance | As of December 31, 2022, the Company’s shares of common stock available for future issuance were as follows: Shares available for future grant under the equity incentive plan 241,635 Shares available for future issuance under the employee stock purchase plan 729,218 Shares available for future issuance upon the exercise of warrants and pre-funded warrants 13,966,283 Total available for future issuance 14,937,136 |
Schedule of Outstanding Warrants to Purchase Shares of Common Stock | As of December 31, 2022, the Company’s outstanding warrants to purchase shares of its common stock were as follows: Shares of Exercise Price Expiration Warrant issued with term loan 25,000 $ 22.06 June 30, 2025 Warrant issued with term loan 33,923 $ 19.12 May 28, 2031 Warrants issued in public offering 13,107,360 $ 5.325 July 1, 2024 Pre-funded warrants issued in public offering 800,000 $ 0.001 Do not expire Total outstanding 13,966,283 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Summary of Statutory Tax Rates Applicable to Income of Company and Subsidiaries | The Company is taxed according to U.S. federal and state tax laws and Israeli tax laws. The statutory tax rates applicable to the income of the Company and its subsidiaries for the periods presented are as follows: Year Ended December 31, 2022 2021 89bio, Inc. 21 % 21 % 89Bio Ltd. 23 % 23 % 89bio Management, Inc. 21 % 21 % UAB 89bio Lithuania 15 % 15 % |
Summary of Income Tax (Expense) Benefit | The income tax (expense) benefit for the periods presented is comprised of (in thousands): Year Ended December 31, 2022 2021 Current: Federal — — State ( 3 ) ( 2 ) Foreign ( 16 ) ( 1 ) Total ( 19 ) ( 3 ) Deferred: Federal — 150 State — — Foreign — — Total — 150 Income tax (expense) benefit ( 19 ) 147 |
Summary of Components of Deferred Tax Assets | Significant components of the Company’s deferred tax assets for the periods presented are as follows (in thousands): As of December 31, 2022 2021 U.S. net operating loss carryforwards $ 45,002 $ 29,094 Research and development expenses 18,927 6,529 Israel net operating loss carryforwards 7,385 4,262 Stock-based compensation 4,328 1,969 Accrued expenses 317 220 Operating Lease Liability 98 — Other 244 191 Gross deferred tax assets 76,301 42,265 Less: valuation allowance ( 75,982 ) ( 42,046 ) Total deferred tax assets $ 319 $ 219 Operating lease right-of-use asset ( 100 ) — Total deferred tax liabilities ( 100 ) — Net deferred tax assets 219 219 |
Summary of Loss from Operations Before Taxes on Income | The Company recorded a loss from operations, before income tax for the periods presented as follows (in thousands): Year Ended December 31, 2022 2021 United States $ ( 101,938 ) $ ( 91,141 ) Lithuania ( 7 ) 10 Israel ( 62 ) 862 Net loss before income tax $ ( 102,007 ) $ ( 90,269 ) |
Summary of Reconciliation of Income Tax (Expense) Benefit Statutory Tax Rate to Effective Tax Rate | The reconciliation of income tax (expense) benefit based on the statutory tax rate to the effective tax rate for the periods presented is as follows (in thousands): Year Ended December 31, 2022 2021 Income tax benefit computed at statutory rates $ 21,429 $ 18,757 Change in valuation allowance ( 33,936 ) ( 20,111 ) Foreign rate differential 1 ( 19 ) State income taxes, net of federal benefit 5,824 — State deferred tax true-up due to change in apportionment 6,517 — Change in Israel effective tax rate due to the 2019 reorganization — ( 2 ) Research and development credits, net of uncertain tax position 2,130 1,331 Other ( 1,984 ) 191 Income tax (expense) benefit $ ( 19 ) $ 147 |
Summary of a Reconciliation of The Unrecognized Tax Benefits | A reconciliation of the unrecognized tax benefits for the year ended December 31, 2022 and 2021 is as follows (in thousands): As of December 31, 2022 2021 Balance beginning of year 851 329 Decrease related to prior year positions ( 19 ) ( 35 ) Increase related to current year positions 752 557 Balance end of year 1,584 851 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Outstanding Potentially Dilutive Securities Excluded From Calculation of Diluted Net Loss | The following outstanding potentially dilutive common stock equivalents have been excluded from the calculation of diluted net loss per share for the periods indicated due to their anti-dilutive effect: Year Ended December 31, 2022 2021 Stock options to purchase common stock 3,161,917 2,406,668 Unvested restricted stock units 1,095,738 106,394 Warrants to purchase common stock 1 13,166,283 58,923 Total 17,423,938 2,571,985 1 The table above excludes pre-funded warrants issued in connection with the July 2022 public offering (see Note 7). |
Organization and Basis of Pre_2
Organization and Basis of Presentation - Additional Information (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Subsidiary Sale Of Stock [Line Items] | |
Date of incorporation | Jun. 30, 2019 |
Cash and cash equivalents and short term available-for-sale securities | $ 188.2 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | |||
Dec. 31, 2022 USD ($) Segment | Aug. 31, 2022 USD ($) | Jan. 01, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | ||||
Number of operating segments | Segment | 1 | |||
Operating lease right-of-use asset | $ 363,000 | $ 300,000 | ||
Operating lease liability, current | 168,000 | $ 300,000 | ||
Accumulated deficit | (315,243,000) | $ (213,217,000) | ||
Other-than-temporary losses | 0 | |||
Realized gains or losses on investments | $ 0 | |||
ASC 842 | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Change in accounting principle, accounting standards update, adopted [true false] | true | |||
Change in accounting principle, accounting standards update, adoption date | Jan. 01, 2022 | |||
Operating lease right-of-use asset | $ 200,000 | |||
Operating lease liability, current | 200,000 | |||
Accumulated deficit | $ 0 | |||
Leasehold Improvements | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Leasehold improvements amortization, description | Leasehold improvements are amortized on a straight-line basis over the shorter of the assets’ estimated useful life or the remaining term of the lease. | |||
Minimum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment, estimated useful lives | 3 years | |||
Maximum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment, estimated useful lives | 7 years |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Assets Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Short-term investments, Aggregated Fair Value | $ 181,445 | $ 126,003 |
Recurring | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Short-term investments, Amortized Cost | 181,807 | 126,066 |
Short-term investments, Gross Unrealized Holding Gains | 12 | 2 |
Short-term investments, Gross Unrealized Holding Losses | (374) | (65) |
Short-term investments, Aggregated Fair Value | 181,445 | 126,003 |
Recurring | Cash equivalents | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Short-term investments, Aggregated Fair Value | 48,540 | 27,715 |
Recurring | Short-term available for sale securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Short-term investments, Aggregated Fair Value | 132,905 | 98,288 |
Recurring | Level 1 | Money Market Funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Short-term investments, Amortized Cost | 18,224 | 21,477 |
Short-term investments, Aggregated Fair Value | 18,224 | 21,477 |
Recurring | Level 2 | Commercial Paper | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Short-term investments, Amortized Cost | 104,279 | 59,647 |
Short-term investments, Gross Unrealized Holding Gains | 1 | |
Short-term investments, Gross Unrealized Holding Losses | (84) | (10) |
Short-term investments, Aggregated Fair Value | 104,196 | 59,637 |
Recurring | Level 2 | U.S. government bonds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Short-term investments, Amortized Cost | 18,225 | 21,662 |
Short-term investments, Gross Unrealized Holding Gains | 1 | |
Short-term investments, Gross Unrealized Holding Losses | (109) | (42) |
Short-term investments, Aggregated Fair Value | 18,117 | 21,620 |
Recurring | Level 2 | Corporate debt securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Short-term investments, Amortized Cost | 10,488 | 8,776 |
Short-term investments, Gross Unrealized Holding Gains | 1 | |
Short-term investments, Gross Unrealized Holding Losses | (62) | (1) |
Short-term investments, Aggregated Fair Value | 10,426 | 8,776 |
Recurring | Level 2 | Agency bonds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Short-term investments, Amortized Cost | 13,986 | 7,747 |
Short-term investments, Gross Unrealized Holding Gains | 1 | |
Short-term investments, Gross Unrealized Holding Losses | (78) | (7) |
Short-term investments, Aggregated Fair Value | 13,908 | 7,741 |
Recurring | Level 2 | U.S. treasury bills | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Short-term investments, Amortized Cost | 7,414 | |
Short-term investments, Gross Unrealized Holding Gains | 1 | |
Short-term investments, Gross Unrealized Holding Losses | (21) | |
Short-term investments, Aggregated Fair Value | 7,394 | |
Recurring | Level 2 | Non-US debt securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Short-term investments, Amortized Cost | 3,975 | 2,506 |
Short-term investments, Gross Unrealized Holding Losses | (20) | (1) |
Short-term investments, Aggregated Fair Value | 3,955 | 2,505 |
Recurring | Level 2 | Agency discount securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Short-term investments, Amortized Cost | 5,216 | |
Short-term investments, Gross Unrealized Holding Gains | 9 | |
Short-term investments, Aggregated Fair Value | $ 5,225 | |
Recurring | Level 2 | Municipal Bonds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Short-term investments, Amortized Cost | 4,251 | |
Short-term investments, Gross Unrealized Holding Losses | (4) | |
Short-term investments, Aggregated Fair Value | $ 4,247 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Contractual Maturities of Cash Equivalents and Available-for-Sale Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value Disclosures [Abstract] | ||
Within one year | $ 175,243 | $ 120,726 |
After one year through two years | 6,202 | 5,277 |
Total cash equivalents and available-for-sale securities | $ 181,445 | $ 126,003 |
Consolidated Balance Sheet Co_3
Consolidated Balance Sheet Components - Schedule of Prepaid and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Prepaid research and development | $ 5,727 | $ 7,895 |
Prepaid taxes | 646 | 836 |
Prepaid other | 1,547 | 2,506 |
Total prepaid and other current assets | $ 7,920 | $ 11,237 |
Consolidated Balance Sheet Co_4
Consolidated Balance Sheet Components - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accrued research and development expenses | $ 6,499 | $ 6,195 |
Accrued employee and related expenses | 4,165 | 3,168 |
Accrued professional and legal fees | 1,052 | 495 |
Accrued other expenses | 228 | 336 |
Total accrued expenses | $ 11,944 | $ 10,194 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Aug. 31, 2022 | Jan. 01, 2022 | Apr. 30, 2018 | Dec. 31, 2022 | Dec. 31, 2021 | |
Loss Contingencies [Line Items] | |||||
Operating lease right-of-use asset | $ 300,000 | $ 363,000 | |||
Operating lease liability, current | $ 300,000 | 168,000 | |||
Operating leases, rent expense | 200,000 | $ 300,000 | |||
Variable lease payments | 0 | ||||
Short-term lease costs | $ 0 | ||||
Remaining lease term | 2 years | ||||
Incremental borrowing rate used to determine operating lease liability | 6.50% | ||||
Teva Agreements | |||||
Loss Contingencies [Line Items] | |||||
Nonrefundable upfront payment | $ 6,000,000 | ||||
Payment upon achievement of certain clinical and commercial milestones | 135,000,000 | ||||
Asset transfer and license agreement, termination period after written notice | 120 days | ||||
Asset transfer and license agreement, termination period notice of breach | 60 days | ||||
Asset transfer and license agreement termination notice period if bankruptcy petition filed | 60 days | ||||
Milestone payments | $ 0 | 0 | |||
Teva Agreements | Research and Development Expenses | |||||
Loss Contingencies [Line Items] | |||||
Milestone payments | $ 0 | $ 0 | |||
Teva Agreements | Teva's GlycoPEGylated FGF21 Program | |||||
Loss Contingencies [Line Items] | |||||
Payment upon achievement of certain clinical and commercial milestones | 67,500,000 | ||||
Teva Agreements | Teva's Development Program | |||||
Loss Contingencies [Line Items] | |||||
Payment upon achievement of certain clinical and commercial milestones | $ 67,500,000 | ||||
San Francisco Office | |||||
Loss Contingencies [Line Items] | |||||
Operating lease expiration month and year | 2025-01 | 2023-01 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Future Minimum Lease Payments Under Non-cancellable Operating Lease Obligations (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2023 | $ 185 |
2024 | 185 |
2025 | 7 |
Total undiscounted future minimum lease payments | 377 |
Less: imputed interest | (23) |
Present value of operating lease liability | $ 354 |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Future Minimum Annual Payments for Operating Leases (Details) $ in Thousands | Dec. 31, 2021 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2022 | $ 212 |
2023 | 7 |
Total future minimum annual payments | $ 219 |
Term Loan - Additional Informat
Term Loan - Additional Information (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
May 31, 2021 USD ($) $ / shares shares | Apr. 30, 2020 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Debt Instrument [Line Items] | ||||
Percentage of fee on loan | 5% | |||
Deferred tax assets | $ 76,301 | $ 42,265 | ||
Term loan, non-current, net | 19,691 | 16,898 | ||
Other non-current liability | $ 501 | $ 30 | ||
Term A Loan Facility | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, description | As of December 31, 2021, all amounts were drawn under the Term Loan A Facility such that all debt issuance costs were recorded as a debt discount. | |||
Loan Agreement | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, description | In May 2021, the parties further amended the Loan Agreement (as amended, the “2021 Loan Agreement”). The 2021 Loan Agreement increased the Term A Loan Facility to up to $20.0 million, which was fully drawn as of December 2021. The Term B Loan Facility of up to $5.0 million was available to be drawn upon on achievement of certain additional milestones, on or before September 30, 2022, which expired unused. | In April 2020, the Company entered into a Loan and Security Agreement, (the “Loan Agreement”) with the lenders referred to therein, and Silicon Valley Bank (“SVB”), as collateral agent. The Loan Agreement provided for (i) a secured term A loan facility (the “Term A Loan Facility”) of up to $10.0 million and (ii) a secured term B loan facility (the “Term B Loan Facility”) of up to $5.0 million that became available upon the satisfaction of certain milestones, each of which was available to be drawn through May 31, 2021. The term loan is secured by certain assets of the Borrowers (as defined in the Loan Agreement), including substantially all of the assets of the Company, excluding the Company’s intellectual property. The term loan contains customary representations, warranties, affirmative covenants and also certain restrictive covenants. | ||
Warrants to purchase common stock | shares | 33,923 | |||
Warrant exercise price | $ / shares | $ 19.12 | |||
Warrant expiration date | May 28, 2031 | Jun. 30, 2025 | ||
Debt issuance costs, gross | $ 600 | $ 600 | ||
Proceeds from sale of available-for-sale securities, equity | $ 75,000 | |||
Debt instrument, interest rate | 4.25% | 8.50% | ||
Deferred tax assets | 400 | |||
Term loan, non-current, net | $ 19,700 | |||
Outstanding principal amount | 20,000 | |||
Unamortized debt discount | 300 | |||
Other non-current liability | $ 500 | |||
Loan Agreement | Measurement Input, Expected Dividend Payment | ||||
Debt Instrument [Line Items] | ||||
Fair value of warrant assumptions, dividends | $ 0 | |||
Loan Agreement | Valuation Technique, Option Pricing Model | Measurement Input, Risk Free Interest Rate | ||||
Debt Instrument [Line Items] | ||||
Fair measurement input | 0.016 | |||
Loan Agreement | Valuation Technique, Option Pricing Model | Measurement Input, Price Volatility | ||||
Debt Instrument [Line Items] | ||||
Fair measurement input | 0.986 | |||
Loan Agreement | Valuation Technique, Option Pricing Model | Measurement Input, Expected Term | ||||
Debt Instrument [Line Items] | ||||
Fair measurement input | 10 years | |||
Loan Agreement | Prime Rate | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread on variable rate | 1% | |||
Loan Agreement | Maximum | ||||
Debt Instrument [Line Items] | ||||
Prepayment fee percentage | 3% | |||
Loan Agreement | Minimum | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate | 4.25% | |||
Prepayment fee percentage | 1% | |||
Loan Agreement | Other Assets | ||||
Debt Instrument [Line Items] | ||||
Debt issuance costs, gross | $ 200 | |||
Loan Agreement | Term A Loan Facility | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 10,000 | |||
Line of credit facility fully drawn amount | $ 20,000 | |||
Warrants to purchase common stock | shares | 25,000 | |||
Warrant exercise price | $ / shares | $ 22.06 | |||
Credit facility maturity date | Sep. 01, 2024 | |||
Loan Agreement | Term B Loan Facility | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 5,000 | |||
Warrants to purchase common stock | shares | 11,305 | |||
Line of credit facility maximum borrowing capacity | $ 5,000 | |||
2023 Loan Agreement | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, description | In January 2023, the Company executed a loan and security agreement with new lenders (the “2023 Loan Agreement”) and repaid its outstanding obligations under the 2021 Loan Agreement (see Note 11). As the Company had the intent and ability to refinance amounts due under the 2021 Loan Agreement pursuant to the terms of the 2023 Loan Agreement, as of December 31, 2022, the current portion of the outstanding principal obligation under the 2021 Loan Agreement was classified as long-term. As of December 31, 2022, the Company’s total obligations under the 2021 Loan Agreement were $19.7 million classified as term loan, non-current, net and $0.5 million classified as other non-current liability related to the final payment fee. The term loan, non-current, net is comprised of the outstanding principal amount of $20.0 million net of $0.3 million of unamortized debt discount. |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Shares of Common Stock Available for Future Issuance (Details) | Dec. 31, 2022 shares |
Class Of Stock [Line Items] | |
Total available for future issuance | 14,937,136 |
Equity Incentive Plan | |
Class Of Stock [Line Items] | |
Total available for future issuance | 241,635 |
Employee Stock Purchase Plan | |
Class Of Stock [Line Items] | |
Total available for future issuance | 729,218 |
Exercise of Warrants and Pre-funded Warrants | |
Class Of Stock [Line Items] | |
Total available for future issuance | 13,966,283 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 2 Months Ended | 12 Months Ended | |||
Feb. 15, 2023 | Jul. 31, 2022 | Mar. 31, 2021 | Feb. 28, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Subsidiary Sale Of Stock [Line Items] | ||||||
Proceeds from issuance of common stock, net of commissions and offering expenses | $ 50 | $ 144 | ||||
Common stock, par value | $ 0.001 | $ 0.001 | ||||
Pre-funded Warrants | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Percentage of ownership limitation | 9.99% | |||||
Percentage of ownership prior to issuance | 4.99% | |||||
Warrants | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Percentage of ownership limitation | 9.99% | |||||
Percentage of ownership prior to issuance | 4.99% | |||||
Maximum | Pre-funded Warrants | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Percentage of ownership limitation | 19.99% | |||||
Maximum | Warrants | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Percentage of ownership limitation | 19.99% | |||||
A T M Facility | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Public offering description | In January and February 2023, the Company received aggregate proceeds of $13.4 million, net of commissions from sales of 968,000 shares of its common stock pursuant to the ATM Facility (see Note 7). | |||||
A T M Facility | Subsequent Event | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Proceeds from issuance of common stock, net of commissions and offering expenses | $ 13,400 | |||||
Shares issued and sold | 968,000 | |||||
Public Offerings | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Proceeds from issuance of common stock, net of commissions and offering expenses | $ 88,200 | |||||
Public offering description | In July 2022, the Company completed an underwritten public offering of its common stock, warrants to purchase shares of its common stock and pre-funded warrants to purchase shares of its common stock. The Company sold 18,675,466 shares of its common stock with accompanying warrants to purchase up to 9,337,733 shares of its common stock at a combined public offering price of $3.55 per share. The Company also sold 7,944,252 pre-funded warrants to purchase shares of its common stock with accompanying warrants to purchase up to 3,972,126 shares of its common stock at a combined public offering price of $3.549 per pre-funded warrant, which represents the per share public offering price for the common stock less $0.001 per share, the exercise price for each pre-funded warrant. The Company raised net proceeds of $88.2 million, after deducting underwriting discounts and commissions of $5.7 million and other offering costs of $0.6 million. | |||||
Shares issued and sold | 18,675,466 | |||||
Offering price per share | $ 3.55 | |||||
Underwriting discounts and commissions | $ 5,700 | |||||
Other offering costs | $ 600 | |||||
Common stock, par value | $ 0.001 | |||||
Public Offerings | Pre-funded Warrants | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Number of prefunded warrants issued during period | 7,944,252 | |||||
Combined price of prefunded and common stock warrant | $ 3.549 | |||||
Public Offerings | Maximum | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Warrants to purchase shares of common stock | 9,337,733 | |||||
Public Offerings | Maximum | Pre-funded Warrants | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Warrants to purchase shares of common stock | 3,972,126 | |||||
Public Offerings | A T M Facility | Maximum | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Maximum amount of equity shares issuable | $ 75,000 | |||||
Public Offerings | A T M Facility | Maximum | Subsequent Event | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Maximum amount of equity shares issuable | $ 150,000 | |||||
Public Offerings | SVB Leerink LLC | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Selling commission per shares sold percentage | 3% | |||||
Proceeds from issuance of common stock, net of commissions and offering expenses | $ 28,500 | $ 3,300 | ||||
Shares issued and sold | 3,948,611 | 186,546 |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Outstanding Warrants to Purchase Shares of Common Stock (Details) | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Class Of Warrant Or Right [Line Items] | |
Shares of Common Stock Underlying Warrants | 13,966,283 |
Warrants Term Loan | |
Class Of Warrant Or Right [Line Items] | |
Shares of Common Stock Underlying Warrants | 25,000 |
Warrant exercise price | $ / shares | $ 22.06 |
Warrant expiration date | Jun. 30, 2025 |
Warrants Term Loan | |
Class Of Warrant Or Right [Line Items] | |
Shares of Common Stock Underlying Warrants | 33,923 |
Warrant exercise price | $ / shares | $ 19.12 |
Warrant expiration date | May 28, 2031 |
Warrants Public Offerings | |
Class Of Warrant Or Right [Line Items] | |
Shares of Common Stock Underlying Warrants | 13,107,360 |
Warrant exercise price | $ / shares | $ 5.325 |
Warrant expiration date | Jul. 01, 2024 |
Pre-funded Warrants | |
Class Of Warrant Or Right [Line Items] | |
Shares of Common Stock Underlying Warrants | 800,000 |
Warrant exercise price | $ / shares | $ 0.001 |
Expiration Date | Do not expire |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 8 Months Ended | 12 Months Ended | |||
Feb. 28, 2021 | Oct. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Share base compensation expense | $ 10,356 | $ 8,678 | ||||
Service-based RSUs | Employee | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Share base compensation expense | $ 1,200 | 300 | ||||
Restricted Stock Units (RSUs) | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Unrecognized weighted average period | 1 year 4 months 24 days | |||||
Total Unrecognised expense | $ 3,900 | |||||
Performance RSUs | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Percentage of option vesting | 33.30% | |||||
RSUs description | In February 2021, the Company granted performance-based RSUs that vest as to one-third on each one-year anniversary date, subject to achievement of a development milestone and continued service to the Company. In February 2022, a portion of the performance-based RSUs vested upon achievement of the development milestone and satisfaction of the continued service condition. | In February and September 2022, the Company granted performance-based RSUs that vest during the applicable performance period, subject to the achievement of certain corporate or department targets and continued service to the Company. In September 2022, a portion of the performance-based RSUs that were granted in February 2022 vested upon achievement of specific targets and satisfaction of the continued service condition. | ||||
Performance RSUs | Employee | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Share base compensation expense | $ 1,500 | $ 800 | ||||
Performance RSUs | Executive Officer | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period | 1 year | |||||
Employee Stock Purchase Plan | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Number of common shares issuable under the plan (in shares) | 225,188 | |||||
Percentage of increase in number of shares of capital stock issued and outstanding | 1% | |||||
Percent of purchase shares of common stock | 85% | |||||
2019 Plan | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Number of common shares issuable under the plan (in shares) | 2,844,193 | |||||
Percentage of increase in number of shares of capital stock issued and outstanding | 4% | |||||
Vesting period | 4 years | |||||
Percentage of option vesting | 25% | |||||
Terms of award | The board of directors determines the period over which options become exercisable and options generally vest over a four-year period, with 25% of options vesting on the first anniversary of employment, and thereafter, the remaining options vesting quarterly, over the following 36-month period. The options expire within ten years from the date of grant. The exercise price of awards granted will not be less than the estimated fair value of the shares on the date of grant. The 2019 Plan also permits the board of directors to grant restricted stock units, which are subject to continued service conditions. | |||||
Remaining option vesting period | 36 months | |||||
Expiration period | 10 years | |||||
Unrecognized stock option granted under plan | $ 12,200 | |||||
Unrecognized weighted average period | 2 years 2 months 12 days | |||||
Cancelled shares | 243,506 | |||||
Outstanding | 3,161,917 | 2,406,668 | ||||
2020 Plan | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Weighted average fair value options granted | $ 3.38 | $ 16.18 | ||||
Maximum | Service-based RSUs | Employee | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period | 3 years | |||||
Maximum | Employee Stock Purchase Plan | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Period for increase in number of shares of common stock reserved for issuance | 10 years | |||||
Maximum | 2019 Plan | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Period for increase in number of shares of common stock reserved for issuance | 10 years | |||||
Minimum | Service-based RSUs | Employee | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period | 2 years |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Details) - 2019 Plan - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Options | ||
Outstanding, Beginning Balance | 2,406,668 | |
Granted | 1,149,816 | |
Exercised | (151,061) | |
Cancelled and forfeited | (243,506) | |
Outstanding, Ending Balance | 3,161,917 | 2,406,668 |
Exercisable as of December 31, 2022 | 1,460,685 | |
Weighted Average Exercise Price | ||
Weighted Average Exercise Price Outstanding, Beginning Balance | $ 16.46 | |
Weighted Average Exercise Price, Granted | 4.48 | |
Weighted Average Exercise Price, Exercised | 2.09 | |
Weighted Average Exercise Price, Cancelled and forfeited | 16.34 | |
Weighted Average Exercise Price Outstanding, Ending Balance | 12.80 | $ 16.46 |
Weighted Average Exercise Price, Exercisable as of December 31, 2022 | $ 14.60 | |
Weighted Average Remaining Contractual Term (In years) | ||
Weighted Average Remaining Contractual Term (In years), Outstanding | 7 years 10 months 24 days | 8 years 1 month 6 days |
Weighted Average Remaining Contractual Term (In years), Exercisable as of December 31, 2022 | 7 years | |
Aggregate Intrinsic Value | ||
Aggregate Intrinsic Value | $ 16,612 | $ 9,970 |
Aggregate Intrinsic Value, Exercisable as of December 31, 2022 | $ 7,320 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Estimated Fair Value of Stock Options Granted Using Black-Scholes Option-Pricing Model (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected volatility, minimum | 89.90% | 86.90% |
Expected volatility, maximum | 91% | 91.90% |
Risk-free interest rate, minimum | 1.60% | 0.70% |
Risk-free interest rate, maximum | 3.90% | 1.30% |
Minimum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (years) | 5 years 6 months | 5 years 6 months |
Maximum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (years) | 6 years 3 months 18 days | 6 years 1 month 6 days |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Restricted Stock Unit Activity (Details) - Restricted Stock Units (RSUs) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Outstanding, Beginning Balance | 106,394 | |
Granted | 1,224,391 | |
Vested / released | (103,703) | |
Cancelled / forfeited | (131,344) | |
Outstanding, Ending Balance | 1,095,738 | |
Weighted Average Grant Date Fair Value | ||
Weighted Average Grant Date Fair Value Outstanding, Beginning Balance | $ 5.77 | $ 23.10 |
Weighted Average Grant Date Fair Value Outstanding, Granted | 4.61 | |
Weighted Average Grant Date Fair Value Outstanding, Vested/Released | 8.61 | |
Weighted Average Grant Date Fair Value Outstanding, Cancelled/Forfeited | 5.53 | |
Weighted Average Grant Date Fair Value Outstanding, Ending Balance | $ 5.77 |
Stock-Based Compensation - Su_4
Stock-Based Compensation - Summary of Stock-Based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation | $ 10,356 | $ 8,678 |
Research and Development | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation | 4,094 | 2,966 |
General and Administrative | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation | $ 6,262 | $ 5,712 |
Income Taxes - Summary of Statu
Income Taxes - Summary of Statutory Tax Rates Applicable to Income of Company and Subsidiaries (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Line Items] | ||
Effective income tax rate | 21% | 21% |
89Bio Ltd | ||
Income Tax Disclosure [Line Items] | ||
Effective income tax rate | 23% | 23% |
89bio Management, Inc. | ||
Income Tax Disclosure [Line Items] | ||
Effective income tax rate | 21% | 21% |
UAB 89bio Lithuania | ||
Income Tax Disclosure [Line Items] | ||
Effective income tax rate | 15% | 15% |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Tax (Expense) Benefit (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Current: | ||
State | $ 3 | $ (2) |
Foreign | 16 | (1) |
Total | 19 | (3) |
Deferred: | ||
Federal | 150 | |
Total | 150 | |
Income tax (expense) benefit | $ (19) | $ 147 |
Income Taxes - Summary of Compo
Income Taxes - Summary of Components of Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Income Tax Disclosure [Line Items] | ||
Research and development expenses | $ 18,927 | $ 6,529 |
Stock-based compensation | 4,328 | 1,969 |
Accrued expenses | 317 | 220 |
Operating Lease Liability | 98 | |
Other | 244 | 191 |
Gross deferred tax assets | 76,301 | 42,265 |
Less: valuation allowance | (75,982) | (42,046) |
Total deferred tax assets | 319 | 219 |
Operating lease right-of-use asset | (100) | |
Total deferred tax liabilities | (100) | |
Net deferred tax assets | 219 | 219 |
United States | ||
Income Tax Disclosure [Line Items] | ||
Net operating loss carryforwards | 45,002 | 29,094 |
Israel | ||
Income Tax Disclosure [Line Items] | ||
Net operating loss carryforwards | $ 7,385 | $ 4,262 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Line Items] | ||
Deferred tax assets, valuation allowance | $ 75,982,000 | $ 42,046,000 |
Deferred tax assets, change in valuation allowance | $ 34,000,000 | |
Operating loss carryforwards limitations on use | Federal net operating losses generated after 2017 can be carried forward indefinitely but utilization will be limited to 80% of taxable income in the period that net operating losses are being utilized. | |
Taxable income utilization percentage | 80% | |
Federal research and development credit carryforwards | $ 4,300,000 | 2,100,000 |
State research and development credit carryforwards | 1,800,000 | 1,100,000 |
Increase in unrecognized tax benefits | 700,000 | 500,000 |
Unrecognized tax benefits impact effective tax rate | $ 0 | |
Research and Development Expenses | ||
Income Tax Disclosure [Line Items] | ||
Amortization period | 5 years | |
Federal | ||
Income Tax Disclosure [Line Items] | ||
Accumulated tax loss carryforward | $ 160,900,000 | |
Federal | Research and Development Credit Carryforwards | ||
Income Tax Disclosure [Line Items] | ||
Carryforward tax losses expiration year | 2040 | |
Federal | Research and Development Expenses | ||
Income Tax Disclosure [Line Items] | ||
Amortization period | 5 years | |
State | ||
Income Tax Disclosure [Line Items] | ||
Accumulated tax loss carryforward | $ 169,800,000 | |
Foreign | Research and Development Expenses | ||
Income Tax Disclosure [Line Items] | ||
Amortization period | 15 years | |
Israel | ||
Income Tax Disclosure [Line Items] | ||
Accumulated tax loss carryforward | $ 32,100,000 | 18,500,000 |
United States | ||
Income Tax Disclosure [Line Items] | ||
Accumulated tax loss carryforward | $ 138,500,000 | |
California | State | ||
Income Tax Disclosure [Line Items] | ||
Carryforward tax losses expiration year | 2041 |
Income Taxes - Summary of Loss
Income Taxes - Summary of Loss from Operations Before Taxes on Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Line Items] | ||
Net loss before income tax | $ (102,007) | $ (90,269) |
United States | ||
Income Tax Disclosure [Line Items] | ||
Net loss before income tax | (101,938) | (91,141) |
LITHUANIA | ||
Income Tax Disclosure [Line Items] | ||
Net loss before income tax | (7) | 10 |
Israel | ||
Income Tax Disclosure [Line Items] | ||
Net loss before income tax | $ (62) | $ 862 |
Income Taxes - Summary of Recon
Income Taxes - Summary of Reconciliation of Income Tax (Expense) Benefit Statutory Tax Rate to Effective Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefit computed at statutory rates | $ 21,429 | $ 18,757 |
Change in valuation allowance | (33,936) | (20,111) |
Foreign rate differential | 1 | (19) |
State income taxes, net of federal benefit | 5,824 | |
State deferred tax true-up due to change in apportionment | 6,517 | |
Change in Israel effective tax rate due to the 2019 reorganization | (2) | |
Research and development credits, net of uncertain tax position | 2,130 | 1,331 |
Other | (1,984) | 191 |
Income tax (expense) benefit | $ (19) | $ 147 |
Income Taxes - Summary of a Rec
Income Taxes - Summary of a Reconciliation of The Beginning And Ending Amount of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Balance, beginning of year | $ 851 | $ 329 |
Decrease related to prior year positions | (19) | (35) |
Increase related to current year positions | 752 | 557 |
Balance, end of year | $ 1,584 | $ 851 |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of Outstanding Potentially Dilutive Securities Excluded From Calculation of Diluted Net Loss (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive common stock equivalents excluded from calculation of diluted net loss per share | 17,423,938 | 2,571,985 |
Stock Options to Purchase Common Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive common stock equivalents excluded from calculation of diluted net loss per share | 3,161,917 | 2,406,668 |
Unvested Restricted Stock Units | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive common stock equivalents excluded from calculation of diluted net loss per share | 1,095,738 | 106,394 |
Warrants to Purchase Common Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive common stock equivalents excluded from calculation of diluted net loss per share | 13,166,283 | 58,923 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 12 Months Ended | ||||
Feb. 15, 2023 | Jan. 31, 2023 | Jul. 31, 2022 | Mar. 31, 2021 | Feb. 28, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Subsequent Event [Line Items] | |||||||
Proceeds from issuance of common stock, net of commissions and offering expenses | $ 50 | $ 144 | |||||
Public Offerings | |||||||
Subsequent Event [Line Items] | |||||||
ATM Facility description | In July 2022, the Company completed an underwritten public offering of its common stock, warrants to purchase shares of its common stock and pre-funded warrants to purchase shares of its common stock. The Company sold 18,675,466 shares of its common stock with accompanying warrants to purchase up to 9,337,733 shares of its common stock at a combined public offering price of $3.55 per share. The Company also sold 7,944,252 pre-funded warrants to purchase shares of its common stock with accompanying warrants to purchase up to 3,972,126 shares of its common stock at a combined public offering price of $3.549 per pre-funded warrant, which represents the per share public offering price for the common stock less $0.001 per share, the exercise price for each pre-funded warrant. The Company raised net proceeds of $88.2 million, after deducting underwriting discounts and commissions of $5.7 million and other offering costs of $0.6 million. | ||||||
Proceeds from issuance of common stock, net of commissions and offering expenses | $ 88,200 | ||||||
Shares issued and sold | 18,675,466 | ||||||
A T M Facility | |||||||
Subsequent Event [Line Items] | |||||||
ATM Facility description | In January and February 2023, the Company received aggregate proceeds of $13.4 million, net of commissions from sales of 968,000 shares of its common stock pursuant to the ATM Facility (see Note 7). | ||||||
A T M Facility | Public Offerings | Maximum | |||||||
Subsequent Event [Line Items] | |||||||
Maximum amount of equity shares issuable | $ 75,000 | ||||||
SVB Leerink LLC | Public Offerings | |||||||
Subsequent Event [Line Items] | |||||||
Proceeds from issuance of common stock, net of commissions and offering expenses | $ 28,500 | $ 3,300 | |||||
Shares issued and sold | 3,948,611 | 186,546 | |||||
Subsequent Event | 2023 Loan Agreement | |||||||
Subsequent Event [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 100,000 | ||||||
Debt instrument, maturity date, description | The term loans under the 2023 Loan Agreement mature on January 1, 2027. The maturity date may be extended to July 1, 2027, provided that the second and third tranches are funded and the Company achieves certain other financing milestones. | ||||||
Debt instrument, maturity date | Jan. 01, 2027 | ||||||
Debt instrument, interest rate | 8.45% | ||||||
Debt instrument, basis spread on variable rate | 2.25% | ||||||
Subsequent Event | 2021 Loan Agreement | |||||||
Subsequent Event [Line Items] | |||||||
Total principal amount outstanding | $ 20,000 | ||||||
Debt instrument, final payment fee | 1,000 | ||||||
Debt instrument, early prepayment fee | 400 | ||||||
Subsequent Event | A T M Facility | |||||||
Subsequent Event [Line Items] | |||||||
Proceeds from issuance of common stock, net of commissions and offering expenses | $ 13,400 | ||||||
Shares issued and sold | 968,000 | ||||||
Subsequent Event | A T M Facility | Public Offerings | |||||||
Subsequent Event [Line Items] | |||||||
Sales Agreement transaction date | Feb. 15, 2023 | ||||||
Subsequent Event | A T M Facility | Public Offerings | Maximum | |||||||
Subsequent Event [Line Items] | |||||||
Maximum amount of equity shares issuable | $ 150,000 | ||||||
Tranche one | Subsequent Event | 2023 Loan Agreement | |||||||
Subsequent Event [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | 25,000 | ||||||
Tranche one | Subsequent Event | 2021 Loan Agreement | |||||||
Subsequent Event [Line Items] | |||||||
Loan Agreement funded outstanding amount | 25,000 | ||||||
Tranche two and three | Subsequent Event | 2023 Loan Agreement | |||||||
Subsequent Event [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 25,000 | ||||||
Debt instrument, maturity date | Jul. 01, 2027 | ||||||
Tranche Four | Subsequent Event | 2023 Loan Agreement | |||||||
Subsequent Event [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 50,000 |