Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2024 | May 10, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-39186 | |
Entity Registrant Name | ARCUTIS BIOTHERAPEUTICS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 81-2974255 | |
Entity Address, Address Line One | 3027 Townsgate Road | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | Westlake Village | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 91361 | |
City Area Code | 805 | |
Local Phone Number | 418-5006 | |
Title of 12(b) Security | Common Stock, par value $0.0001 | |
Trading Symbol | ARQT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 115,764,164 | |
Entity Central Index Key | 0001787306 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 190,097 | $ 88,398 |
Restricted cash | 617 | 925 |
Marketable securities | 213,769 | 183,463 |
Trade receivables, net | 37,154 | 25,807 |
Inventories | 13,247 | 13,134 |
Prepaid expenses and other current assets | 13,178 | 18,704 |
Total current assets | 468,062 | 330,431 |
Property, plant, and equipment, net | 1,369 | 1,539 |
Intangible assets, net | 6,250 | 6,438 |
Operating lease right-of-use asset | 2,264 | 2,361 |
Other assets | 596 | 596 |
Total assets | 478,541 | 341,365 |
Current liabilities: | ||
Accounts payable | 12,969 | 11,992 |
Accrued liabilities | 33,584 | 33,941 |
Operating lease liability | 756 | 735 |
Total current liabilities | 47,309 | 46,668 |
Operating lease liability, noncurrent | 3,181 | 3,382 |
Long-term debt, net | 202,803 | 201,799 |
Other long-term liabilities | 306 | 849 |
Total liabilities | 253,599 | 252,698 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.0001 par value; 10,000,000 shares authorized at March 31, 2024 and December 31, 2023; no shares issued and outstanding at March 31, 2024 and December 31, 2023 | 0 | 0 |
Common stock, $0.0001 par value; 300,000,000 shares authorized at March 31, 2024 and December 31, 2023; 115,505,437 and 96,787,343 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively | 12 | 9 |
Additional paid-in capital | 1,242,349 | 1,070,558 |
Accumulated other comprehensive loss | (133) | 4 |
Accumulated deficit | (1,017,286) | (981,904) |
Total stockholders’ equity | 224,942 | 88,667 |
Total liabilities and stockholders’ equity | $ 478,541 | $ 341,365 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares, issued (in shares) | 115,505,437 | 96,787,343 |
Common stock, shares outstanding (in shares) | 115,505,437 | 96,787,343 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenues: | ||
Total revenues | $ 21,569 | $ 2,781 |
Other revenue | 28,000 | 0 |
Total revenues | 49,569 | 2,781 |
Operating expenses: | ||
Cost of sales | 3,256 | 783 |
Research and development | 23,141 | 35,345 |
Selling, general, and administrative | 54,794 | 42,918 |
Total operating expenses | 81,191 | 79,046 |
Loss from operations | (31,622) | (76,265) |
Other income (expense): | ||
Other income, net | 4,044 | 3,207 |
Interest expense | (7,480) | (7,042) |
Loss before income taxes | (35,058) | (80,100) |
Provision for income taxes | 324 | 0 |
Net loss | (35,382) | (80,100) |
Other comprehensive income (loss): | ||
Unrealized income (loss) on marketable securities | (116) | 724 |
Foreign currency translation adjustment | (21) | (52) |
Total other comprehensive income (loss) | (137) | 672 |
Comprehensive loss | $ (35,519) | $ (79,428) |
Per share information: | ||
Net loss per share, basic (in USD per share) | $ (0.32) | $ (1.31) |
Net loss per share, diluted (in USD per share) | $ (0.32) | $ (1.31) |
Weighted-average shares used in computing net loss per share, basic (in shares) | 111,048,525 | 61,169,089 |
Weighted-average shares used in computing net loss per share, diluted (in shares) | 111,048,525 | 61,169,089 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders’ Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2022 | 61,037,403 | ||||
Beginning balance at Dec. 31, 2022 | $ 209,581 | $ 6 | $ 930,425 | $ (1,086) | $ (719,764) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock upon the exercise of stock options (in shares) | 31,497 | ||||
Issuance of common stock upon the exercise of stock options | 63 | 63 | |||
Issuance of common stock upon the vesting of restricted stock units (in shares) | 285,314 | ||||
Lapse of repurchase rights related to common stock issued pursuant to early exercises (in shares) | 3,718 | ||||
Lapse of repurchase rights related to common stock issued pursuant to early exercises | 37 | 37 | |||
Stock-based compensation expense | 9,479 | 9,479 | |||
Unrealized gain (loss) on marketable securities | 724 | 724 | |||
Foreign currency translation adjustment | (52) | (52) | |||
Net loss | (80,100) | (80,100) | |||
Ending balance (in shares) at Mar. 31, 2023 | 61,357,932 | ||||
Ending Balance at Mar. 31, 2023 | 139,732 | $ 6 | 940,004 | (414) | (799,864) |
Beginning balance (in shares) at Dec. 31, 2023 | 96,787,349 | ||||
Beginning balance at Dec. 31, 2023 | 88,667 | $ 9 | 1,070,558 | 4 | (981,904) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of shares of common stock net of discount and issuance costs of $10,820 (in shares) | 18,157,895 | ||||
Issuance of shares of common stock net of discount and issuance costs of $10,820 | $ 161,682 | $ 3 | 161,679 | ||
Issuance of common stock upon the exercise of stock options (in shares) | 21,863 | 21,863 | |||
Issuance of common stock upon the exercise of stock options | $ 82 | 82 | |||
Issuance of common stock upon the vesting of restricted stock units (in shares) | 538,330 | ||||
Stock-based compensation expense | 10,030 | 10,030 | |||
Unrealized gain (loss) on marketable securities | (116) | (116) | |||
Foreign currency translation adjustment | (21) | (21) | |||
Net loss | (35,382) | (35,382) | |||
Ending balance (in shares) at Mar. 31, 2024 | 115,505,437 | ||||
Ending Balance at Mar. 31, 2024 | $ 224,942 | $ 12 | $ 1,242,349 | $ (133) | $ (1,017,286) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Parenthetical) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Stock issuance costs | $ 10,820 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (35,382,000) | $ (80,100,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 170,000 | 175,000 |
Non-cash lease expense | 97,000 | 87,000 |
Amortization of intangible assets | 188,000 | 188,000 |
Net accretion on marketable securities | (1,725,000) | (2,161,000) |
Non-cash interest expense | 1,004,000 | 994,000 |
Stock-based compensation expense | 10,030,000 | 9,479,000 |
Changes in fair value of embedded derivative instrument | (543,000) | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (11,347,000) | (4,311,000) |
Inventories | (113,000) | (1,037,000) |
Prepaid expenses and other current assets | 5,538,000 | (2,415,000) |
Accounts payable | 992,000 | 3,376,000 |
Accrued liabilities | (332,000) | (4,459,000) |
Operating lease liabilities | (180,000) | (160,000) |
Net cash used in operating activities | (31,603,000) | (80,344,000) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of marketable securities | (105,952,000) | (39,667,000) |
Proceeds from maturities of marketable securities | 77,255,000 | 147,500,000 |
Purchases of property and equipment | 0 | (82,000) |
Net cash provided by (used in) investing activities | (28,697,000) | 107,751,000 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of common stock upon exercise of stock options | 82,000 | 100,000 |
Proceeds from issuance of common stock, net of issuance costs | 161,682,000 | 0 |
Net cash provided by financing activities | 161,764,000 | 100,000 |
Effect of exchange rate changes on cash | (73,000) | (52,000) |
Net increase in cash, cash equivalents, and restricted cash | 101,391,000 | 27,455,000 |
Cash, cash equivalents, and restricted cash at beginning of period | 89,323,000 | 54,875,000 |
Cash, cash equivalents, and restricted cash at end of period | 190,714,000 | 82,330,000 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING INFORMATION: | ||
Interest expense paid in cash | $ 6,512,000 | $ 5,999,000 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business Arcutis Biotherapeutics, Inc., or the Company, is a commercial-stage biopharmaceutical company focused on developing and commercializing treatments for dermatological diseases with high unmet medical needs. The Company’s strategy is to focus on validated biological targets and to use its drug development platform and deep dermatology expertise to develop differentiated products that have the potential to address the major shortcomings of existing therapies in its targeted indications. The Company received U.S. Food and Drug Administration ("FDA") approval of its first product, ZORYVE ® (roflumilast) cream 0.3% ("ZORYVE cream"), on July 29, 2022, for the treatment of plaque psoriasis, including intertriginous psoriasis, in individuals 12 years of age and older (subsequently approved down to 6 years old), and began U.S. commercialization in August 2022. The Company also received Health Canada approval of ZORYVE cream in plaque psoriasis on April 28, 2023 and began Canadian commercialization in June 2023. The Company received FDA approval of ZORYVE ® (roflumilast) topical foam 0.3% ("ZORYVE foam"), on December 15, 2023, for the treatment of seborrheic dermatitis in individuals 9 years of age and older, and began U.S. commercialization in late January 2024. Initial Public Offering and Follow-On Financings On February 4, 2020, the Company closed an initial public offering ("IPO") issuing and selling shares of its common stock receiving aggregate net proceeds of approximately $167.2 million. The company completed subsequent public sales of its common stock in October 2020, February 2021, August 2022 and October 2023, receiving aggregate net proceeds of $93.4 million, $207.5 million, $161.6 million and $95.8 million, respectively. In addition to the sale of common stock, the offering completed in October 2023 consisted of prefunded warrants to purchase 7,500,000 shares of the Company's common stock at $2.4999 per underlying share of common stock. The exercise price of the warrants is $0.0001 per underlying share of common stock. The prefunded warrants are exercisable at any time on or after their original issuance, and were not exercised as of March 31, 2024. On February 28, 2024, the Company completed an offering relating to the sale of 15,789,474 shares of the Company's common stock at $9.50 per share. The Company also granted the underwriters an option to purchase up to an additional 2,368,421 shares at $9.50 per share, which the underwriters exercised in full on February 29, 2024. The aggregate net proceeds to the Company was $161.7 million after deducting underwriting discounts, commissions, and estimated offering expenses payable by the Company. At-the-Market ("ATM") Offerings On May 6, 2021, the Company entered into a sales agreement ("Sales Agreement") with Cowen and Company, LLC ("Cowen"), under which the Company may from time to time issue and sell shares of its common stock through ATM offerings for an aggregate offering price of up to $100.0 million. Cowen will act as the Company's sales agent for the ATM program and is entitled to compensation for its services equal to 3% of the gross proceeds of any shares of common stock sold under the Sales Agreement. In March 2022, the Company sold 882,353 shares under the ATM for $17.00 per share and received $14.5 million in net proceeds. In December 2023, the Company sold 1,250,000 shares under the ATM for $2.60 per share and received $3.1 million in net proceeds. In January 2024, the Company amended and restated its Sales Agreement with Cowen, to reset the shares available for sale, from time to time, through the Company's ATM equity offering program to such number of shares as would generate aggregate gross sales proceeds of up to $100.0 million. All terms are substantially the same as the original Sales Agreement entered into in May 2021. The Company has not yet issued or sold any common stock under the amended and restated Sales Agreement. Liquidity The Company has incurred significant losses and negative cash flows from operations since its inception and had an accumulated deficit of $1,017.3 million and $981.9 million as of March 31, 2024 and December 31, 2023, respectively. Management expects to continue to incur operating losses. The Company had cash, cash equivalents, restricted cash, and marketable securities of $404.5 million and $272.8 million as of March 31, 2024 and December 31, 2023, respectively. The Company has $200.0 million outstanding under the Loan Agreement as of March 31, 2024. See Note 7. The Company believes that its existing capital resources will be sufficient to meet the projected operating requirements for at least 12 months from the date of issuance of its financial statements. If the Company's available cash and marketable securities and anticipated future cash flows from operations are insufficient to satisfy its liquidity requirements, the Company may need to raise additional capital to fund its operations. No assurance can be given as to whether additional needed financing will be available on terms acceptable to the Company, if at all. If sufficient funds on acceptable terms are not available when needed, the Company may be required to curtail certain planned activities. Failure to manage discretionary spending or raise additional financing, as needed, may adversely impact the Company’s ability to achieve its intended business objectives and have an adverse effect on its results of operations and future prospects. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The Company’s condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP"). The condensed consolidated financial statements include the Company's wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, management evaluates such estimates and assumptions for continued reasonableness. In particular, management makes estimates with respect to revenue recognition, accruals for research and development activities, stock-based compensation expense, and income taxes. Appropriate adjustments, if any, to the estimates used are made prospectively based upon such periodic evaluation. Actual results could differ from those estimates. Unaudited Interim Condensed Consolidated Financial Statements The interim condensed consolidated balance sheet as of March 31, 2024, the interim condensed consolidated statements of operations and comprehensive loss, and the condensed consolidated changes in convertible preferred stock and stockholders’ equity (deficit) and cash flows for the three months ended March 31, 2024 and 2023 are unaudited. These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the Company’s audited annual financial statements and, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair statement of the Company’s financial information. The financial data and the other financial information disclosed in these notes to the condensed consolidated financial statements related to the three month periods are also unaudited. The condensed consolidated results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any other future annual or interim period. The condensed consolidated balance sheet as of December 31, 2023 included herein was derived from the audited financial statements as of that date. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Therefore, these unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2023. Significant Accounting Policies There have been no significant changes to the accounting policies during the three months ended March 31, 2024, as compared to the significant accounting policies described in Note 2 Company’s audited financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2023. Restricted Cash As of March 31, 2024 and December 31, 2023, the Company held $0.6 million and $0.9 million, respectively, of restricted cash as collateral for a letter of credit related to the Company's amended office space lease. Concentration of Credit Risk and Other Risks and Uncertainties Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, marketable securities, and accounts receivable. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company is exposed to credit risk in the event of a default by either the financial institutions holding its cash or by its customers owing trade receivables to the extent recorded on the condensed consolidated balance sheets. To manage accounts receivable credit risk, the Company continuously evaluates the creditworthiness of its customers and the need for an allowance for potential credit losses. Fair Value Measurement The Company’s financial instruments, in addition to those presented in Note 4, include cash equivalents, accounts receivable, accounts payable, accrued liabilities, and long-term debt. The carrying amount of cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate their fair values due to their short maturities. As the long-term debt is subject to variable interest rates that are based on market rates which regularly reset, the Company believes that the carrying value of the long-term debt approximates its fair value. Assets and liabilities recorded at fair value on a recurring basis on the condensed consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows: Level 1—Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Recently Adopted Accounting Pronouncements In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07 , Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which requires public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2023-07. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Revenues are recognized under guidance within ASC 606, Revenue from Contracts with Customers. The following table presents the Company's disaggregated revenue for the periods presented (in thousands): Three Months Ended March 31, 2024 2023 ZORYVE cream $ 15,026 $ 2,781 ZORYVE foam 6,543 — Total product revenue, net 21,569 2,781 Other revenue 28,000 — Total revenues $ 49,569 $ 2,781 Other revenue relates to the Sato and Huadong licensing agreements. See Note 6. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands): March 31, 2024 Level 1 Level 2 Level 3 Total Assets: Money market funds (1) $ 169,927 $ — $ — $ 169,927 Commercial paper — 6,958 — 6,958 Corporate debt securities — 96,400 — 96,400 U.S. Treasury securities 130,581 — — 130,581 Total assets $ 300,508 $ 103,358 $ — $ 403,866 ______________ (1) This balance includes cash requirements settled on a nightly basis. December 31, 2023 Level 1 Level 2 Level 3 Total Assets: Money market funds (1) $ 73,544 $ — $ — $ 73,544 Commercial paper — 11,806 — 11,806 Corporate debt securities — 59,954 — 59,954 U.S. Treasury securities 126,557 — — 126,557 Total assets $ 200,101 $ 71,760 $ — $ 271,861 ______________ (1) This balance includes cash requirements settled on a nightly basis. Money market funds and U.S. Treasury securities are valued based on quoted market prices in active markets, with no valuation adjustment. Commercial paper and corporate debt securities are valued taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities; issuer credit spreads; benchmark securities; prepayment/default projections based on historical data; and other observable inputs. The following table summarizes the estimated value of the Company’s cash, cash equivalents and marketable securities, and the gross unrealized holding gains and losses (in thousands): March 31, 2024 Amortized Unrealized Unrealized Estimated Cash and cash equivalents: Money market funds (1) $ 169,927 $ — $ — $ 169,927 Corporate debt securities 10,276 — — 10,276 U.S. Treasury securities 9,894 — — 9,894 Total cash and cash equivalents $ 190,097 $ — $ — $ 190,097 Marketable securities: Commercial paper $ 6,962 $ — $ (4) $ 6,958 Corporate debt securities 86,131 18 (25) 86,124 U.S. Treasury securities 120,692 7 (12) 120,687 Total marketable securities $ 213,785 $ 25 $ (41) $ 213,769 ______________ (1) This balance includes cash requirements settled on a nightly basis. December 31, 2023 Amortized Unrealized Unrealized Estimated Cash and cash equivalents: Money market funds (1) $ 73,544 $ — $ — $ 73,544 Corporate debt securities 14,851 3 — 14,854 Total cash and cash equivalents $ 88,395 $ 3 $ — $ 88,398 Marketable securities: Commercial paper $ 11,817 $ 1 $ (12) $ 11,806 Corporate debt securities 45,056 45 (1) 45,100 U.S. Treasury securities 126,492 82 (17) 126,557 Total marketable securities $ 183,365 $ 128 $ (30) $ 183,463 ______________ (1) This balance includes cash requirements settled on a nightly basis. Realized gains or losses on investments for the three months ended March 31, 2024 and 2023 were not material. As of March 31, 2024, it was determined that no credit losses exist, because the change in market value of those securities resulted from fluctuations in market interest rates since the time of purchase, rather than a deterioration of the credit worthiness of the issuers. As of March 31, 2024 and December 31, 2023, all securities have a maturity of 18 months or less and all securities with gross unrealized losses have been in a continuous loss position for less than one year. The Company generally holds its marketable securities until maturity and does not intend to sell, and is not required to sell, the investments that are in an unrealized loss position before the recovery of their amortized cost basis. The following table summarizes the change in the fair value of the embedded derivative instrument for the three months ended March 31, 2024 (in thousands). There was no activity for the three months ended March 31, 2023. March 31, 2024 Beginning balance $ 849 Gain from changes in fair value (543) Ending balance $ 306 |
Balance Sheet Components
Balance Sheet Components | 3 Months Ended |
Mar. 31, 2024 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Components | Balance Sheet Components Inventories The components of inventory are summarized as follows (in thousands): March 31, 2024 December 31, 2023 Raw materials $ 8,202 $ 9,951 Work in progress 2,303 486 Finished goods 2,742 2,697 Total inventories $ 13,247 $ 13,134 Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following (in thousands): March 31, 2024 December 31, 2023 Prepaid insurance $ 1,953 $ 864 Prepaid clinical trial costs 1,533 1,024 Prepaid co-pay assistance program — 8,608 Other prepaid expenses and current assets 9,692 8,208 Total prepaid expenses and other current assets $ 13,178 $ 18,704 Accrued Liabilities Accrued liabilities consist of the following (in thousands): March 31, 2024 December 31, 2023 Accrued sales deductions $ 16,651 $ 11,578 Accrued compensation 7,476 14,872 Clinical trial accruals 3,425 4,192 Accrued expenses and other current liabilities 6,032 3,299 Total accrued liabilities $ 33,584 $ 33,941 |
License Agreements & Acquisitio
License Agreements & Acquisition | 3 Months Ended |
Mar. 31, 2024 | |
License Agreements And Acquisition Disclosure [Abstract] | |
License Agreements & Acquisition | License Agreements & Acquisition Sato License Agreement On February 27, 2024, the Company entered into a License Agreement with Sato Pharmaceutical Co., Ltd. (“Sato”). Pursuant to the terms of the License Agreement, the Company grants to Sato an exclusive, sublicensable (under certain circumstances) license under certain patent rights and know-how controlled by the Company for Sato to develop, conduct medical affairs activities for, manufacture, commercialize, and otherwise exploit roflumilast formulations (the “Licensed Products”) for all therapeutic uses for certain dermatological indications in humans (the “Field”) in Japan (the "Territory"). The License Agreement sets forth each party’s respective obligations with respect to the development, medical affairs activities, manufacture and supply, and commercialization of the Licensed Products. Pursuant to the terms of the License Agreement, Sato will, at its expense, develop, obtain regulatory approval for, commercialize, and conduct medical affairs activities related to the Licensed Products in the Field in Japan, subject to certain of the Company’s approval and oversight rights. Pursuant to the terms of the License Agreement, the Company received an upfront payment of $25.0 million and will potentially receive additional payments (i) up to an aggregate amount of $10.0 million upon the achievement of certain regulatory milestones and (ii) up to an aggregate amount of $30.0 million upon the achievement of certain sales milestones. In addition, on a Licensed Product-by-Licensed Product basis, commencing from the first commercial sale of such Licensed Product in Japan until the latest of (i) the expiration of the last valid claim in the intellectual property rights licensed by the Company to Sato under the License Agreement covering such Licensed Product in Japan, (ii) the expiration of regulatory exclusivity for such Licensed Product in Japan, or (iii) ten years after the first commercial sale of such Licensed Product in Japan, the Company will receive low double-digit to mid-teen double-digit percentage royalties on Sato’s, its affiliates’ and sublicensees’ total annual net sales of all Licensed Products, subject to certain royalty reductions. The term of the License Agreement continues until, on a Licensed Product-by-Licensed Product basis, the expiration of the Royalty Term. The License Agreement may be terminated by either party in its entirety if the other party commits a material breach, subject to a cure period, or if the other party becomes insolvent. Sato may terminate the License Agreement at-will in its entirety upon 90 days’ written notice. Unless unenforceable under applicable law, the Company may terminate the License Agreement in its entirety if Sato, its affiliate or sublicensee contests or assists a third party in contesting the scope, validity or enforceability of any patent or patent application licensed by the Company to Sato. The Company may also terminate the License Agreement if Sato or any director, officers, employee, agent, affiliate, sublicensee, or subcontractor is charged by a governmental authority for a violation of any anti-corruption, anti-money laundering, sanctions or export or import control laws or regulations, or, subject to the terms of the License Agreement, if Sato, its affiliates and sublicensees do not conduct any material development or commercialization activities of a Licensed Product in Japan for a certain period of time. Other revenue under the Sato agreement was $25.0 million for the three months ended March 31, 2024. Huadong License and Collaboration Agreement In August 2023, the Company entered into a license and collaboration agreement with Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd (“Huadong”), a wholly owned subsidiary of Huadong Medicine Co., Ltd. Pursuant to the terms of the agreement, the Company granted to Huadong an exclusive, sublicensable (under certain circumstances) license under certain patent rights and know-how controlled by the Company for Huadong to develop, conduct medical affairs activities for, manufacture, commercialize, and otherwise exploit both cream and foam topical roflumilast for all therapeutic uses for certain dermatological indications ("Huadong Licensed Products") in Greater China (mainland China, Hong Kong, Macau, and Taiwan) and Southeast Asia (Indonesia, Singapore, The Philippines, Thailand, Myanmar, Brunei, Cambodia, Laos, Malaysia, and Vietnam) ("Huadong Territories"). Huadong will, at its expense, develop, obtain regulatory approval for, commercialize, and conduct medical affairs activities for the Huadong Licensed Products, subject to certain of the Company’s approval and oversight rights. The Company will retain exclusive rights for the development, manufacture and commercialization of topical roflumilast outside the Huadong Territories. As consideration for the rights granted under the Huadong Agreement, Huadong paid the Company a non-refundable upfront fee pursuant to the terms of the agreement, upon closing in September 2023. The Company received a net payment of $27.0 million, which consisted of a $30.0 million upfront payment less the applicable tax withholding obligation in China of $3.0 million. In addition, the Company received a payment of $3.0 million in March 2024 related to the achievement of a development and regulatory milestone. The Company may also potentially receive additional payments: (i) up to an aggregate amount of $21.0 million upon the achievement of certain development and regulatory milestones, (ii) up to an aggregate amount of $40.3 million upon the achievement of certain sales milestones, and (iii) low double-digit to high-teen double-digit tiered percentage royalties on net sales of the Huadong Licensed Products. The term of the Huadong Agreement continues on a Licensed Product-by-Licensed Product and country or region-by-country or region basis, until the expiration of the Royalty Term, which is: (i) the date of expiration of the last valid patent claim related to the Huadong Licensed Products, (ii) ten years after the first commercial sale of a the Huadong Licensed Product and (iii) the expiration of any regulatory exclusivity as to a Huadong Licensed Product. The License Agreement may be terminated by both parties under certain circumstances. |
Long-term debt
Long-term debt | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Long-term debt | Long-term debt On December 22, 2021, the Company entered into a loan and security agreement, or Loan Agreement, with SLR Investment Corp. ("SLR") and the lenders party thereto. The Loan Agreement was amended and restated on January 10, 2023 to include Arcutis Canada, Inc. as a borrower and party to the Loan Agreement. The lenders agreed to extend term loans to the Company in an aggregate principal amount of up to $225.0 million, comprised of (i) a tranche A term loan of $75.0 million, (ii) a tranche B-1 term loan of $50.0 million, (iii) a tranche B-2 term loan of up to $75.0 million, available in minimum increments of $15.0 million, and (iv) a tranche C term loan of up to $25.0 million (Term Loans). As security for the obligations under the Loan Agreement, the Company granted SLR, for the benefit of the lenders, a continuing security interest in substantially all of the Company's assets, including its intellectual property, subject to certain exceptions. On November 1, 2023, the Company entered into an amendment to the Loan Agreement with SLR. Pursuant to the amendment, the terms of the Loan Agreement were revised to, among others, (i) eliminate the undrawn tranche C term loan of up to $25.0 million, (ii) modify the financial covenant relating to minimum net product revenue, and (iii) include an additional minimum financing covenant. The tranche A term loan under the Loan Agreement was funded on December 22, 2021 in the amount of $75.0 million. With the approval of ZORYVE cream on July 29, 2022, the tranche B term loans were funded and the Company received $125.0 million on August 2, 2022. The amended Loan Agreement provides for term loans to the Company in aggregate principal amount of up to $200.0 million, which amounts were fully drawn as of December 31, 2023. Principal amounts outstanding under the Term Loans will accrue interest at a floating rate equal to the applicable rate in effect from time to time, as determined by SLR on the third business day prior to the funding date of the applicable Term Loan and on the first business day of the month prior to each payment date of each Term Loan. The applicable rate is a per annum interest rate equal to 7.45% plus the greater of (a) 0.10% and (b) the per annum rate published by the Intercontinental Exchange Benchmark Administration Ltd. (or on any successor or substitute published rate) for a term of one month, subject to a replacement with an alternate benchmark rate and spread in certain circumstances. Starting in July 2023, the Secured Overnight Financing Rate (SOFR) for a term of one month was substituted for the benchmark rate. On March 31, 2024, the rate was 12.87%. The maturity date for each term loan is January 1, 2027. Commencing on February 1, 2022, interest payments are payable monthly following the funding of any Term Loan. Any principal amounts outstanding under the Term Loans, if not repaid sooner, are due and payable on January 1, 2027, or the Maturity Date. The Company may voluntarily prepay principal amounts outstanding under the Term Loans in minimum increments of $5.0 million, subject to a prepayment premium of 1.0% of the principal amount of such Term Loan so prepaid after December 22, 2023 and prior to December 22, 2025. If the Term Loans are accelerated due to, among others, the occurrence of a bankruptcy or insolvency event, the Company is required to make mandatory prepayments of (i) all principal amounts outstanding under the Term Loans, plus accrued and unpaid interest thereon through the prepayment date, (ii) any fees applicable by reason of such prepayment, (iii) the prepayment premiums set forth in the paragraph above, plus (iv) all other obligations that are due and payable, including expenses and interest at the Default Rate (as defined below) with respect to any past due amounts. The Loan Agreement contains customary representations and warranties and customary affirmative and negative covenants, including, among others, requirements as to financial reporting and insurance and restrictions on the Company’s ability to dispose of its business or property, to change its line of business, to liquidate or dissolve, to enter into any change in control transaction, to merge or consolidate with any other entity or to acquire all or substantially all the capital stock or property of another entity, to incur additional indebtedness, to incur liens on its property, to pay any dividends or other distributions on capital stock other than dividends payable solely in capital stock or to redeem capital stock. The Company also agreed to a financial covenant whereby, beginning with the month ending December 31, 2023, the Company must generate net product revenue in excess of specified amounts for applicable measuring periods pursuant to the Loan Agreement. In addition, the Loan Agreement contains customary events of default that entitle the lenders to cause any indebtedness under the Loan Agreement to become immediately due and payable, and to exercise remedies against the Company and the collateral securing the Term Loans. Under the Loan Agreement, an event of default will occur if, among other things, the Company fails to make payments under the Loan Agreement, the Company breaches any of the covenants under the Loan Agreement, subject to specified cure periods with respect to certain breaches, the lenders determine that a material adverse change has occurred, or the Company or the Company's assets become subject to certain legal proceedings, such as bankruptcy proceedings. Upon the occurrence and for the duration of an event of default, an additional default interest rate, or the Default Rate, equal to 4.0% per annum will apply to all obligations owed under the Loan Agreement. The prepayment upon default and other potential additional interest provisions under the Loan Agreement were determined to be a compound embedded derivative instrument to be bifurcated from the loan and accounted for as a separate liability for accounting purposes under the guidance in ASC 815, Derivatives and Hedging . At the inception of the Loan Agreement, the fair value of the embedded derivative was determined to be immaterial. The embedded derivative instrument is remeasured at fair value each reporting period with any future changes in fair value reported in Other income, net in the condensed consolidated statement of operations and comprehensive loss. During the three months ended March 31, 2024, the Company recognized $0.5 million gain in Other income, net related to the change in fair value of the embedded derivative instrument. The fair value of the embedded derivative instrument as of March 31, 2024 and December 31, 2023 was a liability of $0.3 million and $0.8 million, respectively, and is included in Other-long term liabilities in the accompanying condensed consolidated balance sheets. See Note 4. I n connection with the Loan Agreement, the Company paid a closing fee of $1.0 million on December 22, 2021, and is further obligated to pay (i) a final fee equal to 6.95% of the aggregate original principal amount of the Term Loans funded upon the earliest to occur of the Maturity Date, the acceleration of any Term Loan and the prepayment, refinancing, substitution, or replacement of any Term Loan and (ii) a certain amount of lenders’ expenses incurred in connection with the execution of the Loan Agreement. Additionally, in connection with the Loan Agreement, the Company entered into an Exit Fee Agreement, whereby the Company agreed to pay an exit fee in the amount of 3.0% of each Term Loan funded upon (i) any change of control transaction or (ii) a revenue milestone, calculated on a trailing six month basis. Notwithstanding the prepayment or termination of the Term Loan, the exit fee will expire 10 years from the date of the Loan Agreement. Pursuant to the amendment, the modified financial covenant requires the Company to generate a minimum net product revenue equal to 75% of its projected net product revenue as set forth in the Company's annual plan for the respective period, tested on a trailing 12 month basis for the month ending December 31, 2023 and then tested on a trailing six month basis, as of the end of each month, for the month ending January 31, 2024 and each month thereafter. Pursuant to the amendment, each annual plan shall be approved by the Company’s board of directors and SLR, in its capacity as collateral agent, in its reasonable discretion. Any failure by the Company to deliver such annual plan on or before December 15 of the prior year shall be an immediate event of default. In addition, the Company agreed to raise at least $31.0 million in net cash proceeds, during the period commencing on November 1, 2023 and ending on April 1, 2024, from (a) the sale or issuance of the Company’s equity interests, (b) business development or collaboration agreements (including upfront, milestone, royalty, and other payments), or (c) subordinated debt, in each case as permitted pursuant to the terms of the Loan Agreement. The Company raised the required capital during the first quarter of 2024 and was in compliance with all financing covenants under the Loan Agreement as of March 31, 2024. The debt issuance costs have been recorded as a debt discount which are being accreted to interest expense through the maturity date of the term loan. Interest expense is calculated using the effective interest method, and is inclusive of non-cash amortization of debt issuance costs. The final maturity payment of $13.7 million is recognized over the life of the term loan through interest expense. At March 31, 2024 and December 31, 2023, the effective interest rate was 14.79% and 13.79%, respectively. Interest expense relating to the term loan for the three months ended March 31, 2024 and 2023 was $7.5 million and $7.0 million, respectively. The following summarizes additional information related to the Company's long-term debt (in thousands): March 31, 2024 December 31, 2023 Long-term debt, gross $ 200,000 $ 200,000 Accrued final fee 5,625 4,876 Unamortized debt issuance costs (2,822) (3,077) Long-term debt, net $ 202,803 $ 201,799 Upon the contractual maturity of the Company's long term debt, a payment of principal and final fees of $213.9 million is due on January 1, 2027. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Stock Option Exchange Program On January 16, 2024, the Company commenced an offer to certain eligible employees and consultants to exchange certain outstanding eligible options to purchase shares of the Company’s common stock for a lesser number of RSUs pursuant to an option exchange program (the “Option Exchange”). The Option Exchange expired on February 12, 2024. Pursuant to the Option Exchange, eligible option holders elected to exchange, and the Company accepted for cancellation, eligible options to purchase an aggregate of 5,059,129 shares of the Company’s common stock, representing approximately 98% of the total shares of common stock underlying the eligible options. On February 13, 2024, immediately following the expiration of the Option Exchange, the Company granted 2,129,594 shares of Replacement RSU Awards, pursuant to the terms of the Option Exchange. The Replacement RSU Awards will vest based on continued service with the Company over a period of either 1, 2 or 3 years, depending on the grant date of the exchanged options. The exchange of stock options was treated as a modification for accounting purposes, which requires an incremental expense of $8.6 million to be recognized for the Replacement RSU Awards over their new service periods (1 - 3 years). In addition, any unamortized expense remaining on the exchanged options as of the modification will be recognized over their original remaining service period. Stock Option Activity The following summarizes option activity: Number of Options Weighted- Average Exercise Price Remaining Contractual Term (Years) Aggregate Intrinsic Value ($, in thousands) Balance—December 31, 2023 7,919,699 $ 18.52 7.35 $ 1,435 Granted 2,904,500 3.84 Exercised (21,863) 3.82 Forfeited (1) (5,157,144) 23.15 Expired (171,428) 23.21 Balance—March 31, 2024 5,473,764 $ 6.28 8.08 $ 28,716 Exercisable—March 31, 2024 (2) 1,936,138 $ 9.39 5.20 $ 8,798 ______________ (1) The number of stock options forfeited includes those exchanged in the Option Exchange as described above. (2) Options exercisable includes early exercisable options. The aggregate intrinsic value is calculated as the difference between the exercise price of the options and the fair value of the Company’s common stock as of March 31, 2024. The intrinsic value of options exercised for the three months ended March 31, 2024 and 2023 was $0.1 million and $0.4 million, respectively. The total grant-date fair value of the options vested during the three months ended March 31, 2024 and 2023 was $0.5 million and $6.2 million, respectively. The weighted-average grant-date fair value of employee options granted during the three months ended March 31, 2024 and 2023 was $2.71 and $10.93, respectively. Restricted Stock Unit Activity The following table summarizes information regarding the Company's RSUs: Number of Units Weighted-Average Balance—December 31, 2023 2,929,602 $ 15.24 Granted (1) 4,715,094 4.03 Vested (538,955) 17.71 Forfeited (292,235) 11.08 Unvested Balance—March 31, 2024 6,813,506 $ 7.46 ______________ (1) The number of RSU's granted includes those in association with the Option Exchange as described above. The grant date fair value of an RSU equals the closing price of the Company's common stock on the grant date. RSUs generally vest equally over four years. Stock-Based Compensation Expense Stock-based compensation expense included in the condensed consolidated statements of operations and comprehensive loss was as follows (in thousands): Three Months Ended March 31, 2024 2023 Research and development $ 3,657 $ 3,688 Selling, general, and administrative 6,373 5,791 Total stock-based compensation expense $ 10,030 $ 9,479 As of March 31, 2024, there was $37.3 million of total unrecognized compensation cost related to unvested options that are expected to vest, which is expected to be recognized over a weighted-average period of 2.4 years. As of March 31, 2024, there was $45.8 million of total unrecognized compensation cost related to RSUs that is expected to vest, which is expected to be recognized over a weighted-average period of 2.7 years. The fair value of stock option awards granted was estimated at the date of grant using a Black-Scholes option-pricing model with the following assumptions: Three Months Ended March 31, 2024 Year Ended Expected term (in years) 6.0 – 6.1 5.0 – 6.1 Expected volatility 79.1 – 80.8% 75.2 – 78.4% Risk-free interest rate 3.9 – 4.2% 3.5 – 4.7% Dividend yield —% —% |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average common shares outstanding. Pre-funded warrants to purchase 7,500,000 shares of the Company's stock were included in the weighted-average common shares outstanding used in calculating net loss per share for the three months ended March 31, 2024. The following outstanding potentially dilutive shares have been excluded from the calculation of diluted net loss per share for the periods presented due to their anti-dilutive effect: As of March 31, 2024 2023 Stock options to purchase common stock 5,473,764 8,343,760 Early exercised options subject to future vesting — 11,135 RSUs subject to future vesting 6,813,506 2,807,215 ESPP shares subject to future issuance 359,184 98,670 Total 12,646,454 11,260,780 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net loss | $ (35,382) | $ (80,100) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP"). The condensed consolidated financial statements include the Company's wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, management evaluates such estimates and assumptions for continued reasonableness. In particular, management makes estimates with respect to revenue recognition, accruals for research and development activities, stock-based compensation expense, and income taxes. Appropriate adjustments, if any, to the estimates used are made prospectively based upon such periodic evaluation. Actual results could differ from those estimates. |
Unaudited Interim Condensed Consolidated Financial Statements | Unaudited Interim Condensed Consolidated Financial Statements The interim condensed consolidated balance sheet as of March 31, 2024, the interim condensed consolidated statements of operations and comprehensive loss, and the condensed consolidated changes in convertible preferred stock and stockholders’ equity (deficit) and cash flows for the three months ended March 31, 2024 and 2023 are unaudited. These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the Company’s audited annual financial statements and, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair statement of the Company’s financial information. The financial data and the other financial information disclosed in these notes to the condensed consolidated financial statements related to the three month periods are also unaudited. The condensed consolidated results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any other future annual or interim period. The condensed consolidated balance sheet as of December 31, 2023 included herein was derived from the audited financial statements as of that date. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Therefore, these unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2023. |
Restricted Cash | Restricted Cash As of March 31, 2024 and December 31, 2023, the Company held $0.6 million and $0.9 million, respectively, of restricted cash as collateral for a letter of credit related to the Company's amended office space lease. |
Concentration of Credit Risk and Other Risks and Uncertainties | Concentration of Credit Risk and Other Risks and Uncertainties Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, marketable securities, and accounts receivable. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company is exposed to credit risk in the event of a default by either the financial institutions holding its cash or by its customers owing trade receivables to the extent recorded on the condensed consolidated |
Fair Value Measurement | Fair Value Measurement The Company’s financial instruments, in addition to those presented in Note 4, include cash equivalents, accounts receivable, accounts payable, accrued liabilities, and long-term debt. The carrying amount of cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate their fair values due to their short maturities. As the long-term debt is subject to variable interest rates that are based on market rates which regularly reset, the Company believes that the carrying value of the long-term debt approximates its fair value. Assets and liabilities recorded at fair value on a recurring basis on the condensed consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows: Level 1—Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07 , Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which requires public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2023-07. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table presents the Company's disaggregated revenue for the periods presented (in thousands): Three Months Ended March 31, 2024 2023 ZORYVE cream $ 15,026 $ 2,781 ZORYVE foam 6,543 — Total product revenue, net 21,569 2,781 Other revenue 28,000 — Total revenues $ 49,569 $ 2,781 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Assets Measured on a Recurring Basis | The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands): March 31, 2024 Level 1 Level 2 Level 3 Total Assets: Money market funds (1) $ 169,927 $ — $ — $ 169,927 Commercial paper — 6,958 — 6,958 Corporate debt securities — 96,400 — 96,400 U.S. Treasury securities 130,581 — — 130,581 Total assets $ 300,508 $ 103,358 $ — $ 403,866 ______________ (1) This balance includes cash requirements settled on a nightly basis. December 31, 2023 Level 1 Level 2 Level 3 Total Assets: Money market funds (1) $ 73,544 $ — $ — $ 73,544 Commercial paper — 11,806 — 11,806 Corporate debt securities — 59,954 — 59,954 U.S. Treasury securities 126,557 — — 126,557 Total assets $ 200,101 $ 71,760 $ — $ 271,861 ______________ (1) This balance includes cash requirements settled on a nightly basis. |
Schedule of Cash and Cash Equivalents | The following table summarizes the estimated value of the Company’s cash, cash equivalents and marketable securities, and the gross unrealized holding gains and losses (in thousands): March 31, 2024 Amortized Unrealized Unrealized Estimated Cash and cash equivalents: Money market funds (1) $ 169,927 $ — $ — $ 169,927 Corporate debt securities 10,276 — — 10,276 U.S. Treasury securities 9,894 — — 9,894 Total cash and cash equivalents $ 190,097 $ — $ — $ 190,097 Marketable securities: Commercial paper $ 6,962 $ — $ (4) $ 6,958 Corporate debt securities 86,131 18 (25) 86,124 U.S. Treasury securities 120,692 7 (12) 120,687 Total marketable securities $ 213,785 $ 25 $ (41) $ 213,769 ______________ (1) This balance includes cash requirements settled on a nightly basis. December 31, 2023 Amortized Unrealized Unrealized Estimated Cash and cash equivalents: Money market funds (1) $ 73,544 $ — $ — $ 73,544 Corporate debt securities 14,851 3 — 14,854 Total cash and cash equivalents $ 88,395 $ 3 $ — $ 88,398 Marketable securities: Commercial paper $ 11,817 $ 1 $ (12) $ 11,806 Corporate debt securities 45,056 45 (1) 45,100 U.S. Treasury securities 126,492 82 (17) 126,557 Total marketable securities $ 183,365 $ 128 $ (30) $ 183,463 ______________ (1) This balance includes cash requirements settled on a nightly basis. |
Schedule of Marketable Securities | The following table summarizes the estimated value of the Company’s cash, cash equivalents and marketable securities, and the gross unrealized holding gains and losses (in thousands): March 31, 2024 Amortized Unrealized Unrealized Estimated Cash and cash equivalents: Money market funds (1) $ 169,927 $ — $ — $ 169,927 Corporate debt securities 10,276 — — 10,276 U.S. Treasury securities 9,894 — — 9,894 Total cash and cash equivalents $ 190,097 $ — $ — $ 190,097 Marketable securities: Commercial paper $ 6,962 $ — $ (4) $ 6,958 Corporate debt securities 86,131 18 (25) 86,124 U.S. Treasury securities 120,692 7 (12) 120,687 Total marketable securities $ 213,785 $ 25 $ (41) $ 213,769 ______________ (1) This balance includes cash requirements settled on a nightly basis. December 31, 2023 Amortized Unrealized Unrealized Estimated Cash and cash equivalents: Money market funds (1) $ 73,544 $ — $ — $ 73,544 Corporate debt securities 14,851 3 — 14,854 Total cash and cash equivalents $ 88,395 $ 3 $ — $ 88,398 Marketable securities: Commercial paper $ 11,817 $ 1 $ (12) $ 11,806 Corporate debt securities 45,056 45 (1) 45,100 U.S. Treasury securities 126,492 82 (17) 126,557 Total marketable securities $ 183,365 $ 128 $ (30) $ 183,463 ______________ (1) This balance includes cash requirements settled on a nightly basis. |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following table summarizes the change in the fair value of the embedded derivative instrument for the three months ended March 31, 2024 (in thousands). There was no activity for the three months ended March 31, 2023. March 31, 2024 Beginning balance $ 849 Gain from changes in fair value (543) Ending balance $ 306 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Inventories | The components of inventory are summarized as follows (in thousands): March 31, 2024 December 31, 2023 Raw materials $ 8,202 $ 9,951 Work in progress 2,303 486 Finished goods 2,742 2,697 Total inventories $ 13,247 $ 13,134 |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of the following (in thousands): March 31, 2024 December 31, 2023 Prepaid insurance $ 1,953 $ 864 Prepaid clinical trial costs 1,533 1,024 Prepaid co-pay assistance program — 8,608 Other prepaid expenses and current assets 9,692 8,208 Total prepaid expenses and other current assets $ 13,178 $ 18,704 |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following (in thousands): March 31, 2024 December 31, 2023 Accrued sales deductions $ 16,651 $ 11,578 Accrued compensation 7,476 14,872 Clinical trial accruals 3,425 4,192 Accrued expenses and other current liabilities 6,032 3,299 Total accrued liabilities $ 33,584 $ 33,941 |
Long-term debt (Tables)
Long-term debt (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | The following summarizes additional information related to the Company's long-term debt (in thousands): March 31, 2024 December 31, 2023 Long-term debt, gross $ 200,000 $ 200,000 Accrued final fee 5,625 4,876 Unamortized debt issuance costs (2,822) (3,077) Long-term debt, net $ 202,803 $ 201,799 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity | The following summarizes option activity: Number of Options Weighted- Average Exercise Price Remaining Contractual Term (Years) Aggregate Intrinsic Value ($, in thousands) Balance—December 31, 2023 7,919,699 $ 18.52 7.35 $ 1,435 Granted 2,904,500 3.84 Exercised (21,863) 3.82 Forfeited (1) (5,157,144) 23.15 Expired (171,428) 23.21 Balance—March 31, 2024 5,473,764 $ 6.28 8.08 $ 28,716 Exercisable—March 31, 2024 (2) 1,936,138 $ 9.39 5.20 $ 8,798 ______________ (1) The number of stock options forfeited includes those exchanged in the Option Exchange as described above. (2) Options exercisable includes early exercisable options. |
Schedule of Restricted Stock Unit Activity | The following table summarizes information regarding the Company's RSUs: Number of Units Weighted-Average Balance—December 31, 2023 2,929,602 $ 15.24 Granted (1) 4,715,094 4.03 Vested (538,955) 17.71 Forfeited (292,235) 11.08 Unvested Balance—March 31, 2024 6,813,506 $ 7.46 ______________ (1) The number of RSU's granted includes those in association with the Option Exchange as described above. |
Schedule of Stock-Based Compensation Expense | Stock-based compensation expense included in the condensed consolidated statements of operations and comprehensive loss was as follows (in thousands): Three Months Ended March 31, 2024 2023 Research and development $ 3,657 $ 3,688 Selling, general, and administrative 6,373 5,791 Total stock-based compensation expense $ 10,030 $ 9,479 |
Schedule of Assumptions in Calculating Stock Option Awards | The fair value of stock option awards granted was estimated at the date of grant using a Black-Scholes option-pricing model with the following assumptions: Three Months Ended March 31, 2024 Year Ended Expected term (in years) 6.0 – 6.1 5.0 – 6.1 Expected volatility 79.1 – 80.8% 75.2 – 78.4% Risk-free interest rate 3.9 – 4.2% 3.5 – 4.7% Dividend yield —% —% |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Potentially Antidilutive Shares Excluded | The following outstanding potentially dilutive shares have been excluded from the calculation of diluted net loss per share for the periods presented due to their anti-dilutive effect: As of March 31, 2024 2023 Stock options to purchase common stock 5,473,764 8,343,760 Early exercised options subject to future vesting — 11,135 RSUs subject to future vesting 6,813,506 2,807,215 ESPP shares subject to future issuance 359,184 98,670 Total 12,646,454 11,260,780 |
Organization and Description _2
Organization and Description of Business (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | ||||||||||
Feb. 28, 2024 USD ($) $ / shares shares | May 06, 2021 USD ($) | Feb. 04, 2020 USD ($) | Jan. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) $ / shares shares | Oct. 31, 2023 USD ($) $ / shares shares | Aug. 31, 2022 USD ($) | Mar. 31, 2022 USD ($) $ / shares shares | Feb. 28, 2021 USD ($) | Oct. 31, 2020 USD ($) | Mar. 31, 2024 USD ($) shares | Mar. 31, 2023 USD ($) | |
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Proceeds from issuance of common stock | $ 161,700 | $ 161,682 | $ 0 | |||||||||
Stock price (in USD per share) | $ / shares | $ 9.50 | |||||||||||
Number of shares issued in transaction (in shares) | shares | 15,789,474 | |||||||||||
Accumulated deficit | $ 981,904 | 1,017,286 | ||||||||||
Cash, cash equivalents, restricted cash and marketable securities | 272,800 | 404,500 | ||||||||||
Long-term debt | 201,799 | 202,803 | ||||||||||
Loan agreement | Secured debt | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Long-term debt | $ 200,000 | |||||||||||
Prefunded Warrant | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Warrants to acquire shares of common stock (in shares) | shares | 7,500,000 | 7,500,000 | ||||||||||
Stock price (in USD per share) | $ / shares | $ 2.4999 | |||||||||||
Exercise price (in USD per share) | $ / shares | $ 0.0001 | |||||||||||
IPO | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Proceeds from issuance initial public offering | $ 167,200 | |||||||||||
Secondary Equity Public Offering | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Proceeds from issuance of common stock | $ 93,400 | |||||||||||
Third Equity Public Offering | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Proceeds from issuance of common stock | $ 207,500 | |||||||||||
Fourth Equity Public Offering | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Proceeds from issuance of common stock | $ 161,600 | |||||||||||
Fifth Equity Public Offering | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Proceeds from issuance of common stock | $ 95,800 | |||||||||||
Underwriters' option | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Stock price (in USD per share) | $ / shares | $ 9.50 | |||||||||||
Potential number of shares to be issued (in shares) | shares | 2,368,421 | |||||||||||
At-The-Market | Cowen | Common Stock | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Proceeds from issuance of common stock | $ 3,100 | $ 14,500 | ||||||||||
Stock price (in USD per share) | $ / shares | $ 2.60 | $ 17 | ||||||||||
Number of shares issued in transaction (in shares) | shares | 1,250,000 | 882,353 | ||||||||||
Issuance of shares of common stock for sales agreement | $ 100,000 | $ 100,000 | ||||||||||
Share sales agreement, percentage of gross sales price | 0.03 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Accounting Policies [Abstract] | ||
Restricted cash | $ 617 | $ 925 |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 21,569 | $ 2,781 |
Other revenue | 28,000 | 0 |
Total revenues | 49,569 | 2,781 |
ZORYVE cream | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 15,026 | 2,781 |
ZORYVE foam | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 6,543 | $ 0 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value of Assets Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | $ 190,097 | $ 88,398 |
Total assets | 403,866 | 271,861 |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents and debt securities, available for sale | 6,958 | 11,806 |
Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents and debt securities, available for sale | 96,400 | 59,954 |
U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents and debt securities, available for sale | 130,581 | 126,557 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 169,927 | 73,544 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 300,508 | 200,101 |
Level 1 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents and debt securities, available for sale | 0 | 0 |
Level 1 | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents and debt securities, available for sale | 0 | 0 |
Level 1 | U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents and debt securities, available for sale | 130,581 | 126,557 |
Level 1 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 169,927 | 73,544 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 103,358 | 71,760 |
Level 2 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents and debt securities, available for sale | 6,958 | 11,806 |
Level 2 | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents and debt securities, available for sale | 96,400 | 59,954 |
Level 2 | U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents and debt securities, available for sale | 0 | 0 |
Level 2 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
Level 3 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents and debt securities, available for sale | 0 | 0 |
Level 3 | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents and debt securities, available for sale | 0 | 0 |
Level 3 | U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents and debt securities, available for sale | 0 | 0 |
Level 3 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | $ 0 | $ 0 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Estimated Value of Cash and Cash Equivalents and Marketable Securities (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Cash and Cash Equivalents [Line Items] | |||
Amortized cost | $ 190,097,000 | $ 88,395,000 | |
Unrealized gains | 0 | 3,000 | |
Estimated fair value | 190,097,000 | 88,398,000 | |
Debt Securities, Available-for-sale [Line Items] | |||
Amortized cost | 213,785,000 | 183,365,000 | |
Unrealized gains | 25,000 | 128,000 | |
Unrealized losses | (41,000) | (30,000) | |
Estimated fair value | 213,769,000 | $ 183,463,000 | |
Realized gains (losses) on investments | $ 0 | $ 0 | |
Debt securities, available-for-sale, term | 18 months | 18 months | |
Commercial paper | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized cost | $ 6,962,000 | $ 11,817,000 | |
Unrealized gains | 0 | 1,000 | |
Unrealized losses | (4,000) | (12,000) | |
Estimated fair value | 6,958,000 | 11,806,000 | |
Corporate debt securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized cost | 86,131,000 | 45,056,000 | |
Unrealized gains | 18,000 | 45,000 | |
Unrealized losses | (25,000) | (1,000) | |
Estimated fair value | 86,124,000 | 45,100,000 | |
U.S. Treasury securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized cost | 120,692,000 | 126,492,000 | |
Unrealized gains | 7,000 | 82,000 | |
Unrealized losses | (12,000) | (17,000) | |
Estimated fair value | 120,687,000 | 126,557,000 | |
Money market funds | |||
Cash and Cash Equivalents [Line Items] | |||
Amortized cost | 169,927,000 | 73,544,000 | |
Unrealized gains | 0 | 0 | |
Estimated fair value | 169,927,000 | 73,544,000 | |
Corporate debt securities | |||
Cash and Cash Equivalents [Line Items] | |||
Amortized cost | 10,276,000 | 14,851,000 | |
Unrealized gains | 0 | 3,000 | |
Estimated fair value | 10,276,000 | $ 14,854,000 | |
U.S. Treasury securities | |||
Cash and Cash Equivalents [Line Items] | |||
Amortized cost | 9,894,000 | ||
Unrealized gains | 0 | ||
Estimated fair value | $ 9,894,000 |
Fair Value Measurements - Chang
Fair Value Measurements - Change In The Fair Value Of The Embedded Derivative Instrument (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Embedded Derivative [Roll Forward] | ||
Beginning balance | $ 849,000 | |
Gain from changes in fair value | (543,000) | $ 0 |
Ending balance | $ 306,000 |
Balance Sheet Components - Sche
Balance Sheet Components - Schedule of Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Balance Sheet Related Disclosures [Abstract] | ||
Raw materials | $ 8,202 | $ 9,951 |
Work in progress | 2,303 | 486 |
Finished goods | 2,742 | 2,697 |
Total inventories | $ 13,247 | $ 13,134 |
Balance Sheet Components - Sc_2
Balance Sheet Components - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Balance Sheet Related Disclosures [Abstract] | ||
Prepaid insurance | $ 1,953 | $ 864 |
Prepaid clinical trial costs | 1,533 | 1,024 |
Prepaid co-pay assistance program | 0 | 8,608 |
Other prepaid expenses and current assets | 9,692 | 8,208 |
Total prepaid expenses and other current assets | $ 13,178 | $ 18,704 |
Balance Sheet Components - Sc_3
Balance Sheet Components - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Balance Sheet Related Disclosures [Abstract] | ||
Accrued sales deductions | $ 16,651 | $ 11,578 |
Accrued compensation | 7,476 | 14,872 |
Clinical trial accruals | 3,425 | 4,192 |
Accrued expenses and other current liabilities | 6,032 | 3,299 |
Total accrued liabilities | $ 33,584 | $ 33,941 |
License Agreements & Acquisit_2
License Agreements & Acquisition - Sato License Agreement (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Feb. 27, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Other revenue | $ 28,000 | $ 0 | |
Sato | |||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Upfront payment received before taxes | $ 25,000 | ||
Potential additional payments to be received | 10,000 | ||
Aggregate amount to be received upon achievement of sales milestones | 30,000 | ||
Other revenue | $ 25,000 | ||
Number of years after first commercial sale to receive royalties | 10 years | ||
Number of days for written notice | 90 days |
License Agreements & Acquisit_3
License Agreements & Acquisition - Huadong (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Sep. 30, 2023 | Aug. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||
Other revenue | $ 28,000 | $ 0 | ||
Huadong | ||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||
Upfront payment received before taxes | $ 27,000 | |||
Other revenue | 30,000 | 3,000 | ||
Upfront payment tax withholding obligation | $ 3,000 | 300 | ||
Potential additional payments to be received | 21,000 | |||
Aggregate amount to be received upon achievement of sales milestones | $ 40,300 | |||
Term | 10 years |
Long-term debt - Narrative (Det
Long-term debt - Narrative (Details) - USD ($) | 3 Months Ended | |||||
Aug. 02, 2022 | Dec. 22, 2021 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Nov. 01, 2023 | |
Debt Instrument [Line Items] | ||||||
Embedded derivative, gain (loss) on embedded derivative, net | $ 543,000 | $ 0 | ||||
Embedded derivative, fair value of embedded derivative liability | 300,000 | $ 800,000 | ||||
Maturity, due 2027 | $ 213,900,000 | |||||
Secured debt | Loan agreement | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 225,000,000 | $ 200,000,000 | ||||
Stated interest rate | 7.45% | |||||
Basis spread on variable rate | 0.10% | |||||
Interest rate at end of period | 12.87% | |||||
Default rate | 4% | |||||
Payments of debt issuance costs | $ 1,000,000 | |||||
Final fee | 6.95% | |||||
Exit fee | 3% | |||||
Milestone period | 6 months | |||||
Exit fee expiration period | 10 years | |||||
Minimum net product revenue as a percentage of projected monthly net revenue | 75% | |||||
Net cash proceeds agreed to raise | $ 31,000,000 | |||||
Deferred final fee | $ 13,700,000 | |||||
Effective interest rate | 14.79% | 13.79% | ||||
Interest expense | $ 7,500,000 | $ 7,000,000 | ||||
Secured debt | Loan agreement | Tranche A term loan | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | 75,000,000 | |||||
Proceeds from issuance of debt | 75,000,000 | |||||
Secured debt | Loan agreement | Tranche B-1 term loan | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | 50,000,000 | |||||
Secured debt | Loan agreement | Tranche B-2 term loan | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | 75,000,000 | |||||
Incremental amount available for borrowing | 15,000,000 | |||||
Secured debt | Loan agreement | Tranche C term loan | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 25,000,000 | $ 25,000,000 | ||||
Secured debt | Loan agreement | Tranche B term loan | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from issuance of debt | $ 125,000,000 | |||||
Secured debt | Loan agreement | After December 22, 2023 and prior to December 22, 2025 | ||||||
Debt Instrument [Line Items] | ||||||
Prepayment premium | 1% | |||||
Secured debt | Loan agreement | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Periodic principal payment | $ 5,000,000 |
Long-term debt - Schedule of Lo
Long-term debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Debt Disclosure [Abstract] | ||
Long-term debt, gross | $ 200,000 | $ 200,000 |
Accrued final fee | 5,625 | 4,876 |
Unamortized debt issuance costs | (2,822) | (3,077) |
Long-term debt, net | $ 202,803 | $ 201,799 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |||
Feb. 13, 2024 | Jan. 16, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Forfeited (in shares) | 5,157,144 | |||
Intrinsic value of options exercised during the period | $ 0.1 | $ 0.4 | ||
Grant date fair value of options vested during the period | $ 0.5 | $ 6.2 | ||
Grant date fair value of options vested during the period (in USD per share) | $ 2.71 | $ 10.93 | ||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation cost | $ 37.3 | |||
Recognition period for unrecognized compensation costs related to unvested options expected to vest | 2 years 4 months 24 days | |||
RSUs subject to future vesting | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in shares) | 4,715,094 | |||
Vesting period of stock-based awards granted | 4 years | |||
Unrecognized compensation cost | $ 45.8 | |||
Recognition period for unrecognized compensation costs related to unvested options expected to vest | 2 years 8 months 12 days | |||
Stock Option Exchange | Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of eligible options exchanged | 98% | |||
Stock Option Exchange | Stock Options | Common Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Forfeited (in shares) | 5,059,129 | |||
Stock Option Exchange | RSUs subject to future vesting | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Incremental cost of plan modification | $ 8.6 | |||
Stock Option Exchange | RSUs subject to future vesting | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award requisite service period (in years) | 1 year | |||
Stock Option Exchange | RSUs subject to future vesting | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award requisite service period (in years) | 3 years | |||
Stock Option Exchange | RSUs subject to future vesting | First Grant Date | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period of stock-based awards granted | 1 year | |||
Stock Option Exchange | RSUs subject to future vesting | Second Grant Date | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period of stock-based awards granted | 2 years | |||
Stock Option Exchange | RSUs subject to future vesting | Third Grant Date | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period of stock-based awards granted | 3 years | |||
Stock Option Exchange | RSUs subject to future vesting | Common Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in shares) | 2,129,594 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Number of Options | ||
Beginning balance, number of options (in shares) | 7,919,699 | |
Granted (in shares) | 2,904,500 | |
Exercised (in shares) | (21,863) | |
Forfeited (in shares) | (5,157,144) | |
Expired (in shares) | (171,428) | |
Ending balance, number of options (in shares) | 5,473,764 | 7,919,699 |
Weighted- Average Exercise Price | ||
Beginning balance, weighted-average exercise price (in USD per share) | $ 18.52 | |
Granted (in USD per share) | 3.84 | |
Exercised (in USD per share) | 3.82 | |
Forfeited (in USD per share) | 23.15 | |
Expired (in USD per share) | 23.21 | |
Ending balance, weighted-average exercise price (in USD per share) | $ 6.28 | $ 18.52 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Exercisable (in shares) | 1,936,138 | |
Exercisable, Weighted-Average Exercise Price (in USD per share) | $ 9.39 | |
Remaining Contractual Term (Years) | 8 years 29 days | 7 years 4 months 6 days |
Remaining contractual term, exercisable (years) | 5 years 2 months 12 days | |
Aggregate Intrinsic Value ($, in thousands) | $ 28,716 | $ 1,435 |
Intrinsic value, exercisable | $ 8,798 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Restricted Stock Unit Activity (Details) - RSUs subject to future vesting | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Number of Units | |
Beginning balance (in shares) | shares | 2,929,602 |
Granted (in shares) | shares | 4,715,094 |
Vested (in shares) | shares | (538,955) |
Forfeited (in shares) | shares | (292,235) |
Ending balance (in shares) | shares | 6,813,506 |
Weighted-Average Grant Date Fair Value | |
Beginning balance (in USD per share) | $ / shares | $ 15.24 |
Granted (in USD per share) | $ / shares | 4.03 |
Vested (in USD per share) | $ / shares | 17.71 |
Forfeited (in USD per share) | $ / shares | 11.08 |
Ending balance (in USD per share) | $ / shares | $ 7.46 |
Stock-Based Compensation - Sc_3
Stock-Based Compensation - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 10,030 | $ 9,479 |
Research and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 3,657 | 3,688 |
Selling, general, and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 6,373 | $ 5,791 |
Stock-Based Compensation - Sc_4
Stock-Based Compensation - Schedule of Assumptions in Calculating Stock Option Awards (Details) - Stock Options | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility, minimum | 79.10% | 75.20% |
Expected volatility, maximum | 80.80% | 78.40% |
Risk-free interest rate, minimum | 3.90% | 3.50% |
Risk-free interest rate, maximum | 4.20% | 4.70% |
Dividend yield | 0% | 0% |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 6 years | 5 years |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 6 years 1 month 6 days | 6 years 1 month 6 days |
Net Loss Per Share - Narrative
Net Loss Per Share - Narrative (Details) - shares | Mar. 31, 2024 | Oct. 31, 2023 |
Prefunded Warrant | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Warrants to acquire shares of common stock (in shares) | 7,500,000 | 7,500,000 |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of Potentially Antidilutive Shares Excluded from the Calculation of Diluted Net Loss Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially antidilutive shares excluded from the calculation of net loss per share (in shares) | 12,646,454 | 11,260,780 |
Stock options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially antidilutive shares excluded from the calculation of net loss per share (in shares) | 5,473,764 | 8,343,760 |
Early exercised options subject to future vesting | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially antidilutive shares excluded from the calculation of net loss per share (in shares) | 0 | 11,135 |
RSUs subject to future vesting | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially antidilutive shares excluded from the calculation of net loss per share (in shares) | 6,813,506 | 2,807,215 |
ESPP shares subject to future issuance | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially antidilutive shares excluded from the calculation of net loss per share (in shares) | 359,184 | 98,670 |