Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 28, 2023 | Jun. 30, 2022 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | eFFECTOR Therapeutics, Inc. | ||
Entity Central Index Key | 0001828522 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Interactive Data Current | Yes | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Public Float | $ 47.7 | ||
Entity Common Stock, Shares Outstanding | 42,401,219 | ||
Entity Shell Company | false | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity File Number | 001-39866 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 85-3306396 | ||
Entity Address, Address Line One | 142 North Cedros Avenue | ||
Entity Address, Address Line Two | Suite B | ||
Entity Address, City or Town | Solana Beach | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92075 | ||
City Area Code | 858 | ||
Local Phone Number | 925-8215 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Auditor Name | Ernst & Young LLP | ||
Auditor Location | San Diego, California | ||
Auditor Firm ID | 42 | ||
Common Stock [Member] | |||
Document Information [Line Items] | |||
Trading Symbol | EFTR | ||
Title of 12(b) Security | Common stock, $0.0001 par value per share | ||
Security Exchange Name | NASDAQ | ||
Warrant [Member] | |||
Document Information [Line Items] | |||
Trading Symbol | EFTRW | ||
Title of 12(b) Security | Warrants to purchase common stock | ||
Security Exchange Name | NASDAQ |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 8,708 | $ 49,702 |
Short-term investments | 17,602 | 0 |
Prepaid expenses and other current assets | 1,704 | 3,194 |
Total current assets | 28,014 | 52,896 |
Property and equipment, net | 241 | 91 |
Operating lease right-of-use assets | 111 | 166 |
Other assets | 711 | 903 |
Total assets | 29,077 | 54,056 |
Current liabilities: | ||
Accounts payable | 1,486 | 516 |
Accrued expenses | 3,368 | 3,418 |
Current term loans, net | 19,061 | 0 |
Accrued final payment on term loans, current | 1,100 | 0 |
Lease liabilities, current portion | 60 | 44 |
Total current liabilities | 25,075 | 3,978 |
Earn-out liability | 6 | 12,130 |
Non-current term loans, net | 0 | 18,760 |
Accrued final payment on term loans, non-current | 0 | 1,100 |
Non-current warrant liability | 40 | 678 |
Non-current lease liabilities | 60 | 126 |
Total liabilities | 25,181 | 36,772 |
Commitments and contingencies | ||
Stockholders' equity (deficit): | ||
Preferred stock, $0.0001 par value; 100,000,000 and zero shares authorised at December 31, 2022 and December 31, 2021, respectively; zero shares issued and outstanding as of December 31, 2022 and December 31,2021 | 0 | 0 |
Common stock, $0.0001 par value; 1,000,000,000 shares authorized at December 31, 2022 and December 31, 2021; 41,990,383 shares issued and 41,690,383 shares issued and outstanding as of December 31, 2022; 40,689,975 shares issued and 40,3389,975 shares issued and outstanding as of December 31, 2021 | 4 | 4 |
Additional paid-in capital | 147,476 | 138,181 |
Accumulated other comprehensive loss | (18) | 0 |
Accumulated deficit | (143,566) | (120,901) |
Total stockholders' equity (deficit) | 3,896 | 17,284 |
Total liabilities, convertible preferred stock, and stockholders' deficit | $ 29,077 | $ 54,056 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 100,000,000 | 0 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock price per share | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 41,990,383 | 40,689,975 |
Common stock, shares outstanding | 41,690,383 | 40,389,975 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Grant revenue | $ 3,553 | $ 1,430 |
Operating expenses: | ||
Research and development | 23,313 | 19,956 |
General and administrative | 12,643 | 13,371 |
Total operating expenses | 35,956 | 33,327 |
Operating (loss) income | (32,403) | (31,897) |
Other income (expense) | ||
Interest income | 439 | 6 |
Interest expense | (2,251) | (1,764) |
Other income (expense), net | (574) | 1,035 |
Change in fair value of earn-out liability | 12,124 | 48,910 |
Loss on debt extinguishment | 0 | (492) |
Total other income (expense) | 9,738 | 47,695 |
Net income (loss) | (22,665) | 15,798 |
Comprehensive income (loss): | ||
Net income (loss) | (22,665) | 15,798 |
Other comprehensive loss | (18) | 0 |
Comprehensive income (loss): | $ (22,683) | $ 15,798 |
Net income (loss) per share attributable to common shareholders: | ||
Net income per share - Basic | $ (0.55) | $ 1.05 |
Net income per share - diluted | $ (0.55) | $ 0.44 |
Weighted-average common shares outstanding: | ||
Weighted average common shares outstanding - basic | 41,179,741 | 15,105,851 |
Weighted average common shares outstanding - diluted | 41,179,741 | 36,004,063 |
Consolidated Statements of Conv
Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Series A Preferred Stock [Member] | Series B Preferred Stock [Member] | Series C Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income [Member] | Accumulated Deficit [Member] |
Balance at Dec. 31, 2020 | $ (132,245) | $ 0 | $ 4,454 | $ 0 | $ (136,699) | |||
Temporary Equity, Balance, shares at Dec. 31, 2020 | 11,563,819 | 10,154,819 | 6,734,590 | |||||
Temporary Equity, Balance at Dec. 31, 2020 | $ 46,567 | $ 51,084 | $ 35,573 | |||||
Balance, shares at Dec. 31, 2020 | 1,445,065 | |||||||
Recapitalization transaction, net of transaction costs (refer to Note 3) | 51,974 | $ 1 | 51,973 | |||||
Recapitalization transaction, net of transaction costs (refer to Note 3), share | 10,347,611 | |||||||
Conversion of preferred stock into common stock upon completion of the Business Combination (refer to Note 3) | 133,224 | $ (46,567) | $ (51,084) | $ (35,573) | $ 3 | 133,221 | ||
Conversion of preferred stock into common stock upon completion of the Business Combination (refer to Note 3), Share | (11,563,819) | (10,154,819) | (6,734,590) | 28,453,228 | ||||
Contingently issuable Earn-Out Shares | (61,040) | (61,040) | ||||||
Stock option exercises, net | 56 | 56 | ||||||
Stock option exercises, net, shares | 93,542 | |||||||
Cashless exercise of warrants | 857 | 857 | ||||||
Cashless exercise of warrants, share | 50,529 | |||||||
Stock-based compensation expense | 8,660 | 8,660 | ||||||
Net income (loss) | 15,798 | 15,798 | ||||||
Balance at Dec. 31, 2021 | $ 17,284 | $ 4 | 138,181 | 0 | (120,901) | |||
Temporary Equity, Balance, shares at Dec. 31, 2021 | 0 | 0 | 0 | |||||
Temporary Equity, Balance at Dec. 31, 2021 | $ 0 | $ 0 | $ 0 | |||||
Balance, shares at Dec. 31, 2021 | 40,389,975 | 40,389,975 | ||||||
Stock option exercises, net | $ 3 | 3 | ||||||
Stock option exercises, net, shares | 4,828 | 4,828 | ||||||
Issuance of common stock | $ 3,958 | 3,958 | ||||||
Issuance of common stock, shares | 1,295,580 | |||||||
Stock-based compensation expense | 5,334 | 5,334 | ||||||
Unrealized loss on short-term investments | (18) | (18) | ||||||
Net income (loss) | (22,665) | (22,665) | ||||||
Balance at Dec. 31, 2022 | $ 3,896 | $ 4 | $ 147,476 | $ (18) | $ (143,566) | |||
Temporary Equity, Balance, shares at Dec. 31, 2022 | 0 | 0 | 0 | |||||
Temporary Equity, Balance at Dec. 31, 2022 | $ 0 | $ 0 | $ 0 | |||||
Balance, shares at Dec. 31, 2022 | 41,690,383 | 41,690,383 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating activities: | ||
Net income (loss) | $ (22,665) | $ 15,798 |
Adjustments to reconcile net income (loss) to cash used in operating activities: | ||
Depreciation and amortization expense | 53 | 24 |
Accretion of discount and amortization of premium on investments, net | (37) | 0 |
Stock-based compensation | 5,334 | 8,660 |
Loss on disposal of assets | 1 | 0 |
Loss on debt extinguishment | 0 | 492 |
Gain on change in fair value of warrant liability | (638) | (1,031) |
Gain on change in fair value of earn-out liability | (12,124) | (48,910) |
Other expense related to the equity purchase agreement | 1,161 | 0 |
Non-cash interest expense | 339 | 317 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | 1,575 | (1,270) |
Other non-current assets | 192 | (903) |
Accounts payable | 958 | 155 |
Accrued expenses | (52) | 1,791 |
Operating lease right-of-use assets and liabilities, net | 4 | (11) |
Net cash used in operating activities | (25,899) | (24,888) |
Investing activities: | ||
Proceeds from sale of fixed assets | 0 | 607 |
Purchases of fixed assets | (192) | (42) |
Maturities of short-term investments | 34,750 | 0 |
Purchases of short-term investments | (52,418) | 0 |
Net cash provided by (used in) investing activities | (17,860) | 565 |
Financing activities: | ||
Payment of debt issuance costs | (37) | 0 |
Proceeds from exercise of common stock options and warrants, net | 3 | 56 |
Proceeds from issuance of common stock including ESPP, net of issuance costs | 2,799 | 0 |
Issuance of term loans, net of issuance costs | 0 | 19,835 |
Repayment of term loans | 0 | (13,940) |
Proceeds from Business Combination, net of offering costs paid (see Note 3) | 0 | 52,858 |
Net cash provided by financing activities | 2,765 | 58,809 |
Net increase (decrease) in cash and cash equivalents | (40,994) | 34,486 |
Cash and cash equivalents at beginning of period | 49,702 | 15,216 |
Cash and cash equivalents at end of period | 8,708 | 49,702 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 1,823 | 1,340 |
Operating lease liabilities arising from obtaining right-of-use assets | 0 | 179 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Issuance of commitment shares | 862 | 0 |
Accrued issuance costs | 2 | 0 |
Conversion of preferred stock into common stock | 0 | 133,224 |
Cashless Warrant Exercise | 0 | 857 |
Purchases of fixed assets included in accounts payable and accrued expenses | $ 12 | $ 38 |
Organization and Basis of Prese
Organization and Basis of Presentation | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | 1. Organization and Basis of Presentation Description of Business Locust Walk Acquisition Corp. ("LWAC”) was initially formed on October 2, 2020 as a Delaware corporation formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business transaction with one or more operating businesses. On May 26, 2021, LWAC entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Locust Walk Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of LWAC (“Merger Sub”), and eFFECTOR Therapeutics, Inc., a Delaware corporation (“Old eFFECTOR”). Pursuant to the terms of the Merger Agreement, a business combination between LWAC and Old eFFECTOR was effected through the merger of the Merger Sub with and into Old eFFECTOR, with Old eFFECTOR becoming the surviving company and a wholly-owned subsidiary of LWAC with the name of eFFECTOR Therapeutics Operations, Inc. On August 25, 2021, and in connection with the closing of the business combination (the "Business Combination"), LWAC was renamed eFFECTOR Therapeutics, Inc. ("eFFECTOR" or the "Company"). All outstanding preferred shares of Old eFFECTOR converted into common shares of Old eFFECTOR on a 1:1 basis, which were then converted, along with all outstanding common shares of Old eFFECTOR, into common shares of the surviving eFFECTOR company through application of an exchange ratio of approximately 0.09657 (the "Exchange Ratio"). The Company is a clinical-stage biopharmaceutical company focused on pioneering the discovery and development of a new class of oncology drugs the Company refers to as selective translation regulator inhibitors ("STRIs"). The Company’s principal operations are in the United States, with its headquarters in Solana Beach, California. The Company has devoted substantially all of its resources to raising capital, identifying potential product candidates, establishing its intellectual property portfolio, conducting preclinical studies and clinical trials, establishing arrangements with third parties for the manufacture of its product candidates and related raw materials, and providing general and administrative support for these operations. The Company has not generated revenues from its principal operations, other than from licensing and grant revenue, through December 31, 2022. Basis of Presentation The Company’s consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). All intercompany balances and transactions have been eliminated in consolidation. The Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, LWAC was treated as the “acquired” company and eFFECTOR is treated as the acquirer for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Old eFFECTOR issuing stock for the net assets of LWAC, accompanied by a recapitalization. The net assets of LWAC are stated at historical cost, with no goodwill or other intangible assets recorded. Old eFFECTOR was determined to be the accounting acquirer based on the following predominant factors: • Old eFFECTOR’s shareholders have a majority of the voting power of the combined company; • the Board and Management are primarily composed of individuals associated with Old eFFECTOR; and • Old eFFECTOR comprises all of the ongoing operations of the combined company. The consolidated assets, liabilities and results of operations prior to the Business Combination are those of Old eFFECTOR. Liquidity The Company has a limited operating history and the sales and income potential of the Company’s business and market are unproven. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classification of liabilities that may result from the outcome of this uncertainty. Management is required to perform a two-step analysis over its ability to continue as a going concern. Management must first evaluate whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern (step 1). If management concludes that substantial doubt is raised, management is also required to consider whether its plans alleviate that doubt (step 2). The Company has experienced net losses and negative cash flows from operating activities since its inception, aside from the years ended December 31, 2021 and December 31, 2020 when net income was realized as a result of a gain in fair value recognized associated with the earn-out liability and non-recurring revenue in connection with the Research Collaboration and License Agreement with Pfizer, respectively. The Company has an accumulated deficit of $ 143.6 million at December 31, 2022. For the year ended December 31, 2022, the Company used $ 25.9 million in cash for operations. At December 31, 2022, the Company had cash and cash equivalents and short-term investments of $ 26.3 million. The Company anticipates that its expenses will increase significantly in connection with its ongoing activities to support its research and development efforts, and it expects to incur substantial operating losses and negative cash flows from operations for the foreseeable future. Management has prepared cash flow forecasts which indicate that based on the Company’s expected operating losses and negative cash flows, there is substantial doubt about the Company’s ability to continue as a going concern within twelve months from the date that these financial statements for the year ended December 31, 2022 are issued. The principal payments due under the Oxford Loans (as defined below), and the related accrued final payment, have been classified as current liabilities as of December 31, 2022, due to the considerations discussed above and the assessment that the material adverse change clause under the Oxford Loans is not within the Company’s control. The Company has not been notified of an event of default by the lender as of the date of issuance of these financial statements. The Company’s ability to continue as a going concern is dependent upon its ability to receive additional capital. Management intends to raise additional capital through equity offerings or other capital sources, including potential additional collaborations, licenses and other similar arrangements. Additionally, the Company may receive additional milestone payments from the Research Collaboration and License Agreement with Pfizer (described in Note 12), through the issuance of common stock under the equity purchase agreement with Lincoln Park Capital Fund, LLC (described in Note 9) or through the issuance of common stock under the at-the-market offering program (described in Note 9) with Cantor Fitzgerald & Co. However, the Company may not be able to secure additional financing in a timely manner or on favorable terms, if at all, and may not receive any milestone payments. Without additional capital, the Company may be forced to delay, scale back or eliminate some of its research and development activities, or other operations and potentially delay product development in an effort to provide sufficient funds to continue its operations, or may be required to pursue merger or acquisition strategies, all of which could adversely affect the holdings or the rights of its stockholders. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Use of Estimates The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of the Company’s consolidated financial statements requires it to make estimates and assumptions that impact the reported amounts of assets, liabilities and expenses and the disclosure of contingent liabilities in the Company’s consolidated financial statements and accompanying notes. The most significant estimate in the Company’s consolidated financial statements relates to its clinical trial expense accruals. Management evaluates its estimates on an ongoing basis. Although these estimates are based on the Company’s historical experience, knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions. Cash, Cash Equivalen ts and Short-term Investments Cash and Cash Equivalents The Company considers all highly liquid investments with insignificant interest rate risk and an original maturity of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents consist of money market funds with an original maturity of less than three months at the date of purchase. Short-term Investments Short-term investments consist of U.S. Treasury securities, classified as available-for-sale securities and have maturities of greater than three months but less than one year. The Company has classified all of its available-for-sale securities as current assets on the balance sheets because these are considered highly liquid securities and are available for use in current operations. The Company carries these securities at fair value, and reports unrealized gains and losses as a separate component of accumulated other comprehensive loss. Amortization and accretion of any purchase premiums or discounts is included in interest income in the consolidated statements of operations and comprehensive income (loss). Fair Value of Financial Instruments The carrying amounts of all cash equivalents, prepaid expenses and other assets, accounts payable and accrued liabilities are reasonable estimates of their fair value because of the short-term nature of these items. Based on the borrowing rates currently available to the Company for loans with similar terms, the Company believes the fair value of the term loans approximate their carrying value (see Note 7). Concentration of Credit Risk and Other Risks and Uncertainties Financial instruments, which potentially subject the Company to significant concentration of credit risk, consist primarily of cash and cash equivalents and short-term investments. The Company maintains deposits in a federally insured major financial institution in excess of federally insured limits. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institution in which those deposits are held. The Company is subject to a number of risks similar to other biopharmaceutical companies, including, but not limited to, the need to obtain adequate additional funding, possible failure of current or future preclinical studies or clinical trials, reliance on third parties or partners to conduct its clinical trials, the need to obtain regulatory and marketing approvals for its drug candidates or to rely on partners to do so, competitors developing new technological innovations, the need to successfully commercialize and gain market acceptance of its drug candidates, the right to develop and commercialize drug candidates pursuant to the terms and conditions of the licenses granted to the Company, protection of proprietary technology, the ability to make milestone, royalty or other payments due under any license or collaboration agreements, and the need to secure and maintain adequate manufacturing arrangements with third parties. If the Company does not successfully commercialize or partner any of its drug candidates, it will be unable to generate product revenue or achieve profitability. Property and Equipment Property and equipment are recorded at cost and depreciated or amortized using the straight-line method over the estimated useful lives of the assets (generally three to five years , or the remaining term of the lease for leasehold improvements, whichever is shorter) and generally consist of laboratory equipment, computer and office equipment, furniture and fixtures, and leasehold improvements. Repairs and maintenance costs are charged to expense as incurred. Long-Lived Assets The Company regularly reviews the carrying value and estimated lives of all of its long-lived assets, including property and equipment to determine whether indicators of impairment may exist which warrant adjustments to carrying values or estimated useful lives. Should an impairment exist, the impairment loss would be measured based on the excess over the carrying amount of the asset’s fair value. The Company has no t recognized any impairment losses from inception through December 31, 2022. Leases At the inception of a contractual arrangement, the Company determines whether the contract contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. If both criteria are met, the Company records the associated lease liability and corresponding right-of-use asset upon commencement of the lease using the implicit rate or a discount rate based on a credit-adjusted secured borrowing rate commensurate with the term of the lease. The Company additionally evaluates leases at their inception to determine if they are to be accounted for as an operating lease or a finance lease. A lease is accounted for as a finance lease if it meets one of the following five criteria: the lease has a purchase option that is reasonably certain of being exercised, the present value of the future cash flows is substantially all of the fair market value of the underlying asset, the lease term is for a significant portion of the remaining economic life of the underlying asset, the title to the underlying asset transfers at the end of the lease term, or if the underlying asset is of such a specialized nature that it is expected to have no alternative uses to the lessor at the end of the term. Leases that do not meet the finance lease criteria are accounted for as an operating lease. Operating lease assets represent a right to use an underlying asset for the lease term and operating lease liabilities represent an obligation to make lease payments arising from the lease. Operating lease liabilities with a term greater than one year and their corresponding right-of-use assets are recognized on the balance sheet at the commencement date of the lease based on the present value of lease payments over the expected lease term. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. As the Company’s leases do not typically provide an implicit rate, the Company utilizes the appropriate incremental borrowing rate, determined as the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and in a similar economic environment. Lease cost is recognized on a straight-line basis over the lease term and variable lease payments are recognized as operating expenses in the period in which the obligation for those payments is incurred. Variable lease payments primarily include common area maintenance, utilities, real estate taxes, insurance, and other operating costs that are passed on from the lessor in proportion to the space leased by the Company. The Company has elected the practical expedient to not separate between lease and non-lease components. Grant Revenue The Company’s grant revenues were derived from a grant with the Defense Advanced Research Projects Agency (“DARPA”) through the University of California, San Francisco (“UCSF”). The Company recognizes DARPA grant revenue as reimbursable grant costs are incurred up to pre-approved award limits within the budget period. The costs associated with these reimbursements are reflected as a component of research and development expense in the accompanying consolidated statements of operations and comprehensive income (loss). Billings in excess of receipts are included as a receivable recorded within prepaid expenses and other current assets on the consolidated balance sheets. Research and Development Costs Research and development expenses primarily consist of costs associated with the preclinical and clinical development of the Company’s product candidates. Research and development costs are expensed as incurred. Clinical Trial Accruals and Preclinical Studies The Company records expenses resulting from our obligations under contracts with vendors and consultants, CROs and clinical sites in connection with conducting clinical trials and preclinical studies. The financial terms of these contracts are subject to negotiations which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. The Company reflects clinical trial and preclinical study expenses in the financial statements by matching those expenses with the period in which services and efforts are expended. The Company accounts for these expenses according to the progress of the clinical trial or preclinical study as measured by the timing of various aspects of the clinical trial, preclinical study, or related activities. The Company determines accrual estimates based on the underlying contracts, correspondence with clinical and other key personnel and third-party service providers as to the progress of the clinical trials, preclinical studies, or other services being conducted, and amounts invoiced or paid to date. During the course of a clinical trial or preclinical study, the Company adjusts the rate of expense recognition if actual results differ from estimates. Patent Costs Costs related to filing and pursuing patent applications are recorded as general and administrative expense and expensed as incurred since recoverability of such expenditures is uncertain. Revenue Recognition The Company evaluates collaboration arrangements to determine whether units of account within the collaboration arrangement exhibit the characteristics of a vendor and customer relationship. For arrangements and units of account where a customer relationship exists, the Company applies the revenue recognition guidance. The Company recognizes revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. To determine revenue recognition for contracts with customers the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies the performance obligations. At contract inception, the Company assesses the goods or services promised within each contract and assesses whether each promised good or service is distinct and determines those that are performance obligations. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, upfront fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other performance obligations, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition on a prospective basis. For research and development services performed under a collaboration agreement in which the performance obligation is satisfied over time, the Company measures the progress of the activities using an input method. The input methods used are based on the effort expended or costs incurred toward the satisfaction of the related performance obligation. The Company estimates the amount of effort expended, including the time the Company estimates it will take to complete the activities, or costs incurred in a given period, relative to the estimated total effort or costs to satisfy the performance obligation. This results in a percentage that is multiplied by the consideration allocated to the research and development services to determine the amount of revenue recognized each period. This approach requires estimates and the use of significant judgement. If the estimates or judgements change over the course of the collaboration, they may affect the timing and amount of revenue recognized in the current and future periods. Milestones At the inception of each arrangement that includes milestone payments (variable consideration), the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company or the Company’s collaboration partner’s control, such as regulatory approvals, are generally not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such milestones and any related constraint, and if necessary, adjusts the Company’s estimate of the overall transaction price. Any such adjustments are allocated on a cumulative catch-up basis to satisfied and partially satisfied performance obligations, with the consideration allocated to an ongoing performance obligation being recognized over the period of performance. Royalties For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and for which the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any royalty revenue from any collaborative arrangement. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the consolidated financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. As of December 31, 2022 and 2021, the Company maintained valuation allowances against its deferred tax assets as the Company concluded it had not met the “more likely than not” to be realized threshold. Changes in the valuation allowance when they are recognized in the provision for income taxes may result in a change in the estimated annual effective tax rate. The Company records uncertain tax positions on the basis of a two-step process whereby (1) management determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more likely than not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Any accrued interest and penalties are included within the related tax liability. Comprehen sive Loss Comprehensive loss consists of net loss and unrealized gains or losses on available-for-sale investments. The Company presents comprehensive loss and its components as part of the consolidated statements of operations and comprehensive income (loss). Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company and its chief operating decision-maker view the Company’s operations and manage its business in one operating segment. Stock-Based Compensation Expense Stock-based compensation expense represents the cost of the grant date fair value of employee stock option grants recognized over the requisite service period of the awards (usually the vesting period) on a straight- line basis. The Company estimates the fair value of stock option grants using the Black-Scholes option-pricing model. The Company accounts for stock options granted to non-employees using the fair value approach. The Black-Scholes option-pricing model requires the use of subjective assumptions, including the risk- free interest rate, the expected stock price volatility, the expected term of stock options, and the expected dividend yield. The Company has limited historical stock option activity and therefore estimates the expected term of stock options granted using the simplified method, which represents the average of the contractual term of the stock option and its weighted-average vesting period. The fair value of the underlying common stock used within the Black-Scholes option-pricing model is based on the closing price of common stock on the date of grant. Public and Private Placement Warrants Upon completion of the Business Combination, the Company assumed public and private placement warrants that were issued by LWAC in connection with their initial public offering in January 2021 whereby holders of the public and private placement warrants are entitled to acquire common stock of the Company. The Company has concluded that the public warrants are equity-classified. Since the settlement value of the private placement warrants is dependent, in part, on who holds the warrants at the time of settlement, they are not considered indexed to the Company's stock and are therefore recorded as liabilities. Warrants classified as liabilities are recorded at their estimated fair value on the date of issuance and are revalued at each subsequent balance sheet date, with fair value changes recognized in other income (expense), net in the accompanying consolidated statements of operations and comprehensive income (loss). The Company estimates the fair value of these warrants using the Black-Scholes option pricing model. Earn-out Shares In accordance with the Merger Agreement, 5,000,000 shares ("Earn-Out Shares") are contingently issuable to Old eFFECTOR stockholders and option holders upon the occurrence of the Triggering Event (see Note 3), defined within the Merger Agreement as the date on which the common stock price equals or exceeds $ 20.00 over at least 20 trading days out of a 30 consecutive trading day period during the two-year period following the close date of the Business Combination. The estimated fair value of the Earn-Out Shares was determined using a Monte Carlo simulation valuation model using a distribution of potential outcomes on a monthly basis over the earn-out period using the most reliable information available. The Company has determined that the contingent obligation to issue Earn-Out Shares to existing Old eFFECTOR shareholders is not indexed to the Company's stock under ASC 815-40 and therefore equity treatment is precluded. The Triggering Event that determines the issuance of the Earn-Out Shares includes terms that are not solely indexed to our common stock , and as such liability classification is required. Equity-linked instruments classified as liabilities are recorded at their estimated fair value on the date of issuance and are revalued at each subsequent balance sheet date, with fair value changes recognized in other income (expense), net in the accompanying consolidated statements of operations and comprehensive income (loss). The Company has determined that the contingent obligation to issue Earn-Out Shares to existing Old eFFECTOR option holders falls within the scope of ASC 718, Share-based Compensation, because the option holders are required to continue providing service until the occurrence of the Triggering Event. The fair value of the option holder Earn-Out Shares is recorded as share-based compensation over the derived service period of the Monte Carlo simulation valuation model, recognized in research and development and general and administrative expense in the consolidated statements of operations and comprehensive income (loss). Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes, based on their preliminary assessment, that the impact of recently issued standards that are not yet effective will not have a material impact on their financial position or results of operations upon adoption. In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) , which addresses the complexity associated with applying generally accepted accounting principles for certain financial instruments with characteristics of liabilities and equity. The amendments in this ASU reduce the number of accounting models for convertible debt instruments and convertible preferred stock, as well as amend the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusion. In addition, this ASU improves and amends the related earnings per share guidance. The amendments in this ASU are effective for the Company on January 1, 2024, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Adoption is either a modified retrospective method or a fully retrospective method of transition. The Company adopted this standard as of January 1, 2022 under the modified retrospective transition method, and it did not have a material impact on the consolidated financial statements or the related disclosures. Net Incom e (Loss) Per Share The Company computes net income (loss) per share in accordance with the FASB guidance for Earnings Per Share, which established standards regarding the computation of earnings per share by companies that have issued securities other than common stock that contractually entitle the holder to participate in earnings and dividends. The guidance requires earnings available to common shareholders for the period, after deduction of preferred stock preferences, to be allocated between the common and preferred shareholders based on their respective rights to receive dividends. The Company is not required to present basic and diluted net income per share for securities other than common stock; therefore, the net income (loss) per share amounts only pertain to the Company’s common stock. Basic net income (loss) per share is calculated by dividing income (loss) allocable to common shareholders (net income after reduction for any required returns to preferred stock shareholders prior to paying dividends to the common shareholders, assuming current income for the period had been distributed) by the weighted-average number of common shares outstanding, during the period. The Company calculates diluted net income per share using the more dilutive of the 1) treasury stock method, if-converted method, or contingently issuable share method, as applicable, or 2) the two-class method. Due to the Company recording net loss for the year ended December 31, 2022, and none of the outstanding securities being dilutive for this period, basic and diluted loss per share are the same for the year ended December 31, 2022. The Company has used the treasury stock method to calculate diluted net income per share for the year ended December 31, 2021, as there were no participating securities as of December 31, 2021 (and there were no participating securities in the period of net income during 2021). Diluted net income per share for the year ended December 31, 2021 also reflects the assumed exercise of options outstanding during the period using the treasury stock method, to the extent dilutive. Warrants were included in the calculation of diluted net income per share for the year ended December 31, 2021 to the extent the warrants were dilutive. The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands, except share and per share data): For the Year Ended December 31, 2022 2021 Basic Net Income (Loss) per share Net income (loss) $ ( 22,665 ) $ 15,798 Weighted average common shares outstanding - basic 41,179,741 15,105,851 Net income (loss) per share - basic $ ( 0.55 ) $ 1.05 Diluted Net Income (Loss) per share Net income (loss) attributable to common shareholders $ ( 22,665 ) $ 15,798 Weighted average common shares outstanding - basic 41,179,741 15,105,851 Weighted average effect of dilutive securities: Convertible preferred stock — 18,556,453 Stock options — 2,341,759 Weighted average common shares outstanding - diluted 41,179,741 36,004,063 Net income (loss) per share - diluted $ ( 0.55 ) $ 0.44 Potentially dilutive securities as of December 31, 2022 and 2021 are as follows (in common stock equivalent shares): For the Year Ended December 31, 2022 2021 Public warrants 5,833,323 5,833,333 Private placement warrants 181,667 181,667 Earn-Out Shares 5,000,000 5,000,000 Unvested sponsor shares 300,000 300,000 Stock options outstanding 8,738,880 403,278 Total 20,053,870 11,718,278 |
Business Combination
Business Combination | 12 Months Ended |
Dec. 31, 2022 | |
Business Combinations [Abstract] | |
Business Combination | 3. Business Combination As discussed in Note 1, on August 25, 2021, the Company completed the Business Combination pursuant to the Merger Agreement. Upon closing of the Business Combination, the combined company was renamed eFFECTOR Therapeutics, Inc. As a result of the Business Combination, each share of Old eFFECTOR preferred stock and common stock was converted into the right to receive approximately 0.09657 shares of the Company's common stock for an aggregate of 30,021,762 shares of common stock issued in the Business Combination. Former holders of shares of Old eFFECTOR common stock (including shares received as a result of the conversion of Old eFFECTOR preferred stock and the exercise of Old eFFECTOR warrants) and former holders of options to purchase shares of Old eFFECTOR will also be entitled to receive their pro rata share of up to 5,000,000 Earn-Out Shares of common stock if, on or prior to August 26, 2023, the closing share price of shares of common stock equals or exceeds $ 20.00 over at least 20 trading days within a 30 -day trading period (the “Triggering Event”) and, in respect of each former holder of Old eFFECTOR stock options, such holder continues to provide services to the Company or one of its subsidiaries at the time of such Triggering Event. The Earn-Out Shares will also be earned and issuable in the event of a change in control of the Company on or prior to August 26, 2023 that results in the holders of common stock receiving a per-share price equal to or in excess of $20.00. Pursuant to subscription agreements entered into in connection with the Merger Agreement (collectively, the “Subscription Agreements”), certain investors agreed to subscribe for an aggregate of 6,070,003 newly-issued shares of common stock at a purchase price of $ 10.00 per share for an aggregate purchase price of $ 60.7 million (the “PIPE Financing”). At the closing, we consummated the PIPE Financing. A total of 10,347,611 shares of common stock were issued in connection with the close of the Business Combination, inclusive of the PIPE Financing shares and shares held by LWAC sponsor and public investors. In connection with the closing of the Business Combination, the LWAC sponsor received 4,056,250 shares of eFFECTOR common stock, of which 300,000 shares were subject to vesting if, on or prior to August 25, 2024, the price of shares of common stock equals or exceeds $ 15.00 per share for a period of at least 20 trading days out of 30 consecutive trading days ending on the trading day immediately prior to the date of determination (the "Sponsor Shares"). The 300,000 sponsor shares subject to vesting meet the criteria for equity classification, but are not considered outstanding from an accounting perspective. These shares are considered issued but not outstanding as of December 31, 2022 and December 31, 2021, and have been excluded from outstanding shares in the calculation of income (loss) per share for the years ended December 31, 2022 and 2021. After giving effect to the Business Combination, and the consummation of the PIPE Financing, there were 40,669,373 shares of common stock issued and 40,369,373 shares of common stock issued and outstanding. In connection with the closing of the Business Combination, options to purchase shares of Old eFFECTOR common stock were converted, at an exchange ratio of approximately 0.09657 , into options to purchase an aggregate of 3,920,657 shares of common stock, with a weighted-average exercise price of $ 1.56 per share. Pursuant to the terms of the Merger Agreement, the Company’s shareholders exchanged their interests in the Company for shares of common stock of eFFECTOR. In addition, awards under the Company’s existing equity incentive plans, including the 2013 Plan, continue in full force and effect on the same terms and conditions as were previously applicable to such awards, subject to adjustments to the exercise price and number of shares of common stock issuable upon exercise based on the final exchange ratio of approximately 0.09657 . Gross proceeds from this transaction totaled approximately $ 67.0 million, which included funds held in LWAC’s trust and operating accounts and the completion of a concurrent sale of 6,070,003 shares of common stock at a purchase price of $ 10.00 per share in the PIPE Financing. The transaction was accounted for as a “reverse recapitalization” in accordance with GAAP. Under the reverse recapitalization model, the Business Combination was treated as eFFECTOR issuing equity for the net assets of LWAC, with no goodwill or intangible assets recorded. Under this method of accounting, LWAC was treated as the “acquired” company for financial reporting purposes. This determination is primarily based on the fact that subsequent to the Business Combination, eFFECTOR stockholders have a majority of the voting power of the combined company, comprise all of the ongoing operations of the combined entity, comprise a majority of the governing body of the combined company, and eFFECTOR senior management comprise all of the senior management of the combined company. In connection with the Business Combination, the Company raised $ 52.9 million of net proceeds. This amount was comprised of $ 6.3 million of cash held in LWAC’s trust and operating accounts from its initial public offering and $ 60.7 million of cash in connection with the PIPE Financing, less LWAC’s transaction costs and underwriters’ fees of $ 11.1 million. Old eFFECTOR incurred $ 3.0 million of transaction costs, consisting of banking, legal, and other professional fees which were recorded as a reduction to additional paid-in capital. In addition to the net proceeds disclosed above, the Company also assumed $ 0.9 million of net liabilities of LWAC upon closing of the Business Combination. The following summarizes the common stock outstanding following the consummation of the Business Combination, PIPE Financing and the automatic cashless exercise of Old eFFECTOR warrants: Shares % Old eFFECTOR Stockholders 30,021,762 74.4 % LWAC Stockholders 521,358 1.3 % LWAC Founders (1) 3,756,250 9.3 % PIPE Investors 6,070,003 15.0 % Total 40,369,373 100.0 % (1) Excludes 300,000 Sponsor Shares subject to vesting that are not considered outstanding from an accounting perspective. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 4. Fair Value Measurements The accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2: Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported by little or no market activity). The Company’s cash equivalents are classified using Level 1 inputs within the fair value hierarchy because they are valued using quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. None of the Company’s non-financial assets or liabilities are recorded at fair value on a non-recurring ba sis. No transfers between levels have occurred during the periods presented. The Company estimates the fair value of its warrant liabilities at the time of issuance and subsequent remeasurement using the Black-Scholes option pricing model at each reporting date, if required, based on the following inputs: the risk-free interest rates; the expected dividend rates; the remaining contractual life of the warrants; the fair value of the underlying stock; and the expected volatility of the price of the underlying stock. The estimates are based, in part, on subjective assumptions and could differ materially in the future. Changes to these assumptions as well as the fair value of the Company’s stock on the reporting date can have a significant impact on the fair value of the warrant liability. The following table summarizes the Company’s assets and liabilities that require fair value measurements on a recurring basis and their respective input levels based on the fair value hierarchy as of December 31, 2022 and December 31, 2021 (in thousands): Fair Value Measurements Using December 31, Quoted Prices Significant Significant 2022 Level 1 Level 2 Level 3 Assets Cash equivalents: Money market funds $ 8,708 $ 8,708 $ — $ — Short-term investments: U.S. Treasury securities 17,602 — $ 17,602 — Total assets $ 26,310 $ 8,708 $ 17,602 $ — Liabilities Private placement warrant liability $ 40 $ — $ — $ 40 Earn-out liability 6 — — 6 Total liabilities $ 46 $ — $ — $ 46 Fair Value Measurements Using December 31, Quoted Prices Significant Significant 2021 Level 1 Level 2 Level 3 Assets Money market funds $ 49,702 $ 49,702 $ — $ — Total assets $ 49,702 $ 49,702 $ — $ — Liabilities Private placement warrant liability $ 678 $ — $ — $ 678 Earn-out liability 12,130 — — 12,130 Total liabilities $ 12,808 $ — $ — $ 12,808 Cash Equivalents and Short-Term Investments Financial assets measured at fair value on a recurring basis consist of the Company’s cash equivalents and short-term investments. Cash equivalents consisted of money market funds and short-term investments consisted of U.S. Treasury securities. The Company obtains pricing information from its investment manager and generally determines the fair value of investment securities using standard observable inputs, including reported trades, broker/dealer quotes, and bids and/or offers. Investments are classified as Level 1 within the fair value hierarchy if their quoted prices are available in active markets for identical securities. Investments in money market funds of $ 8.7 million and $ 49.7 million as of December 31, 2022 and December 31, 2021, respectively, were classified as Level 1 instruments and were included in cash and cash equivalents. Investments in marketable securities are valued using Level 2 inputs. Level 2 securities are initially valued at the transaction price and subsequently valued and reported upon utilizing inputs other than quoted prices that are observable either directly or indirectly, such as quotes from third-party pricing vendors. Fair values determined by Level 2 inputs, which utilize data points that are observable such as quoted prices, interest rates and yield curves, require the exercise of judgment and use of estimates, that if changed, could significantly affect the Company’s financial position and results of operations. The marketable securities of $ 17.6 million as of December 31, 2022 were classified as Level 2 instruments, all of which are included in short-term investments. There were no marketable securities as of December 31, 2021. Accrued interest receivable related to short-term investments was $ 27,000 as of December 31, 2022, and included as part of prepaid expenses and other current assets in the condensed balance sheets. The following tables summarize the Company’s short-term investments accounted for as available-for-sale securities as of December 31, 2022 (in thousands): December 31, 2022 Maturity Amortized Unrealized Unrealized Estimated (in years) Cost Gains Losses Fair Value U.S. Treasury securities 1 year or less $ 17,620 $ 1 $ ( 19 ) $ 17,602 $ 17,620 $ 1 $ ( 19 ) $ 17,602 Preferred Stock Warrant Liability The preferred stock warrant liability was measured at fair value, using a combination of observable and unobservable inputs. The change in fair value of preferred stock warrant liabilities were recorded in Other income (expense) on the statement of operations and comprehensive income (loss). All outstanding preferred stock warrants were cashless exercised as a result of the Business Combination on August 25, 2021 (See Note 8). The preferred stock warrants were remeasured to fair value on the date of cashless exercise based on the net shares issued and fair value of common stock on the settlement date, which was the close date of the Business Combination on August 25, 2021. The following table presents activity for the preferred stock warrant liability measured at fair value using significant unobservable Level 3 inputs during th e year ended December 31, 2021 (in thousands): Series C Preferred Stock Warrant Liability Balance at December 31, 2020 $ 433 Issuance of new warrants 271 Change in fair value 153 Warrant exercises ( 857 ) Balance at December 31, 2021 $ — Private Placement Warrant Liability In connection with the Business Combination, the Company assumed the public and private placement warrants described in Note 2. The private placement warrants are p recluded from equity treatment and are recorded as liabilities as they are not considered indexed to the Company's common stock. The private placement warrant liability is measured at fair value, using a combination of observable and unobservable inputs. The change in fair value of the private placement warrant liability is recorded in other income (expense) on the statement of operations and comprehensive income (loss). The following key assumptions were used in determining the fair value of the private placement warrant liability valued using the Black-Scholes option pricing model as of December 31, 2022 and December 31, 2021: December 31, December 31, Common stock price $ 0.43 $ 8.28 Expected volatility 125.0 % 65.0 % Risk-free interest rate 4.2 % 1.3 % Expected term (in years) 3.7 4.7 Expected dividend yield — — The following table presents activity for the private placement warrant liability measured at fair value using significant unobservable Level 3 inputs during the year ended December 31, 2022 (in thousands): Private Placement Warrant Liability Private Placement Warrants liability - August 25, 2021 (closing date) $ 1,862 Change in fair value - Closing Date through December 31, 2021 ( 1,184 ) Balance at December 31, 2021 678 Change in fair value ( 638 ) Balance at December 31, 2022 $ 40 Earn-Out Liability Former holders of shares of Old eFFECTOR common stock were allocated Earn-Out Shares in connection with the completion of the Business Combination wi th LWAC which are accounted for as liabilities. Please refer to Note 10 for additional details surrounding the valuation methodology for these Earn-Out Shares. |
Property and Equipment , net
Property and Equipment , net | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment , net | 5. Property and Equipment, net Property and equipment, net consists of the following (in thousands): December 31, December 31, Lab equipment $ 30 $ 30 Computer and office equipment 149 127 Furniture and fixtures 61 64 Leasehold improvements 188 — Construction in process 29 74 457 295 Less accumulated depreciation and amortization ( 216 ) ( 204 ) $ 241 $ 91 The Company recorded depreciation and amortization expense of $ 53,000 and $ 24,000 for the years ended December 31, 2022 and 2021, respectively. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | 6. Accrued Expenses Accrued expenses consist of the following (in thousands): December 31, December 31, Employee compensation $ 1,385 $ 1,343 Research and development 1,206 1,115 Professional and outside services 112 452 Interest 197 133 Income taxes payable 463 351 Other 5 24 $ 3,368 $ 3,418 |
Term Loans
Term Loans | 12 Months Ended |
Dec. 31, 2022 | |
Notes and Loans Payable, by Type, Current and Noncurrent [Abstract] | |
Term Loans | 7. Term Loans Oxford Term Loans In March 2021, Old eFFECTOR entered into a Loan and Security Agreement (“Oxford LSA”) with Oxford Finance LLC (“Oxford”), pursuant to which the Company may borrow up to $ 30.0 million, issuable in two separate tranches of $ 20.0 million (“Term A Loans”) and $ 10.0 million (“Term B Loans”), collectively referred to as the Oxford Loans. The Term A Loans became available to the Company at the effective date of the Oxford LSA on March 19, 2021 and $ 12.5 million of the proceeds were used to pay off the outstanding SVB Term Loans. The remaining net proceeds from Term A Loans of $ 7.4 million, after taking into effect specified issuance and legal fees designated within the distribution letter, were distributed to the Company in March 2021. The Company is required to make a final payment equal to 5.5 % of each funded tranche at maturity, which has been recorded as a debt discount for the Term A Loans and is being amortized over the term of the debt arrangements. In connection with the Oxford LSA, the Company issued warrants to purchase a total of 37,575 shares of Series C Preferred Stock at an exercise price of $ 5.33 per share. The warrants were automatically exercised on a cashless basis on August 25, 2021, in connection with the completion of the Business Combination, for 17,575 shares of common stock. On February 22, 2022, the Company entered into an amendment to the Oxford LSA whereby the interest only period for the Term A Loans will end on March 1, 2024 , instead of May 1, 2023. In connection with the amendment, the maturity of the Term A Loans was extended from March 18, 2026 to February 1, 2027. Additionally, Term B Loans would have become available to the Company after January 1, 2023 upon achievement of certain clinical development milestones, until the earlier of (i) June 30, 2023 , (ii) 45 days after the achievement of certain clinical development milestones (the "Phase II Milestones"), and (iii) the occurrence of an event of default. As a result of the discontinuation of one of the cohorts in the KICKSTART trial, which was previously announced in January 2023, the Company does not expect to achieve the clinical development milestones by June 30, 2023 and therefore does not expect to have access to the additional $ 10.0 million under the Term B Loans. The Oxford Loans carry a variable interest rate equal to the greater of (i) 7.7 % and (ii) the sum of the prime rate plus 4.45 %. The Company has the option to prepay all, but not less than all, of the borrowed amounts, provided that the Company will be obligated to pay a prepayment fee equal to (i) 3.0 % of the outstanding principal balance of the applicable Oxford Loans if prepayment is made prior to the first anniversary of the effective date of the Oxford LSA, (ii) 2.0 % of the outstanding principal balance of the applicable Oxford Loans if prepayment is made after the first anniversary of the effective date of the Oxford LSA but before the second anniversary, and (iii) 1.0 % of the outstanding principal balance of the applicable Oxford Loans if prepayment is made after the second anniversary of the effective date of the Oxford LSA but before the third anniversary. No prepayment fee will apply for a prepayment made after the third anniversary of the effective date of the Oxford LSA and prior to the maturity date. The Company’s obligations under the Oxford LSA are secured by a first priority security interest in substantially all of its current and future assets, other than its owned intellectual property. The Company is also obligated to comply with various other customary covenants, including restrictions on its ability to encumber intellectual property assets without consent. The Company recorded a debt discount of $ 1.6 million for the estimated fair value of warrant s, debt issuance costs, and final payment to be made, which is being amortized to interest expense over the term of the loan using the effective-interest method. As of December 31, 2022 , the Company had $ 20.0 million of outstanding principal under the Term A Loans of which $ 19.1 million is reflected on the balance sheet net of debt discounts. Interest expense, including amortization of debt discount related to the Oxford Term A Loans, totaled $ 2.2 million for the year ended December 31, 2022. The Company is in compliance with all covenants under the Oxford LSA as of December 31, 2022. The Term A Loans include customary events of default, including instances of a material adverse change in our operations, that may require prepayment of the outstanding Term A Loans. The principal payments due under the Oxford Loans, and the related accrued final payment, have been classified as current liabilities as of December 31, 2022, due to the considerations discussed in Liquidity section of Note 1. The Company has not been notified of an event of default by the lender as of the date of issuance of these financial statements. Based on the outstanding principal amounts for the Company’s Term A Loans, the following table sets forth by year the Company’s required future principal payments as of December 31, 2022 (in thousands): As of December 31, 2022 2024 $ 5,555 2025 6,667 2026 6,667 2027 1,111 Required future principal payments $ 20,000 Unamortized debt discount ( 939 ) Current term loans, net as of December 31, 2022 $ 19,061 SVB Term Loans On August 31, 2018, Old eFFECTOR entered into a Loan and Security Agreement (“LSA”) with Silicon Valley Bank (“SVB”), pursuant to which the Company borrowed $ 15 million. In March 2021, Old eFFECTOR repaid the SVB loan using the proceeds from Oxford Term A Loans (defined above). The outstanding principal balance of the SVB loan was $ 11.5 million at the date of repayment. The Company paid the entire outstanding principal balance, along with a final payment in the amount of $ 0.8 million (equal to 5.5 % of the original aggregate principal amount), a prepayment fee of $ 0.1 million (equal to 1 % of the original aggregate principal amount), and $ 37,000 of accrued interest. The Company recorded a loss on debt extinguishment in the amount of $ 0.5 million in connection with the transaction, which has been recorded in Loss on debt extinguishment on the consolidated statement of operations and other comprehensive income (loss) for the period. The loss on debt extinguishment includes the unamortized debt discount and final payment associated with the SVB loan at the time of extinguishment along with the $ 0.1 million prepayment fee. |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2022 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrants | 8. Warrants Preferred Stock Warrants The Company accounted for its warrants to purchase shares of convertible preferred stock as a liability. The Company adjusted the liability for changes in fair value of these warrants up until the closing date of the Business Combination. Upon consummation of the Business Combination on August 25, 2021, the outstanding warrants were cashless exercised and 50,529 total net shares were issued. Assumed Public Warrants and Private Placement Warrants Following the consummation of the Business Combination, holders of the public warrants and private placement warrants are entitled to acquire common stock of the Company. The warrants became exercisable on January 12, 2022, which is 12 months from the closing of the LWAC's initial public offering. Each warrant entitles the registered holder to purchase one share of common stock at an exercise price of $ 11.50 per share. The public warrants and private placement warrants will expire on August 25, 2026, which is five years after the completion of the Business Combination. Once the public warrants and private placement warrants became exercisable, the Company has the right to redeem the outstanding warrants in whole and not in part at a price of $ 0.01 per warrant upon a minimum of 30 days’ prior written notice of redemption, if and only if the last sale price of the common stock equals or exceeds $ 18.00 per share for any 20 trading days within a 30 -trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. The private placement warrants are identical to the public warrants except that, so long as they are held by the Sponsor or its permitted transferees: (i) they will not be redeemable by the Company; (ii) they may be exercised by the holders on a cashless basis; and (iii) they are subject to registration rights. Private placement warrants are liability-classified (See Note 4) and the public warrants are equity-classified. The following table summarizes the number of outstanding public warrants and private placement warrants and the corresponding exercise price as of December 31, 2022 and December 31, 2021: December 31, December 31, Exercise Price Expiration Date Public warrants 5,833,323 5,833,333 $ 11.50 August 24, 2026 Private placement warrants 181,667 181,667 $ 11.50 August 24, 2026 During the year ended December 31, 2022, warrants to purchase ten shares of common stock were exercised for gross proceeds of less than $ 1 thousand. No warrants were exercised in the year ended December 31, 2021. |
Preferred Stock and Stockholder
Preferred Stock and Stockholders' Equity (Deficit) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Preferred Stock and Stockholders' Deficit | 9. Preferred Stock and Stockholders’ Equity Equity Purchase Agreement On January 24, 2022, the Company entered into an equity purchase agreement (the “Purchase Agreement”) and a registration rights agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park” or “Investor”) which provides for the sale to Lincoln Park up to $ 50.0 million of shares (the “Purchase Shares”) of the Company's common stock over the thirty-six ( 36 ) month term of the Purchase Agreement. In connection with the Purchase Agreement, Lincoln Park made an initial purchase of $ 3.0 million of shares of common stock (the "Initial Purchase"), which equated to 557,610 shares of common stock, and the Company issued 142,939 shares of common stock to Lincoln Park as a commitment fee in connection with entering into the Purchase Agreement. The Company recognized $ 0.8 million of other expense relating to the commitment fee share issuance. For the year ended December 31, 2022, an additional 30,000 shares of common stock were sold at an average price per share of $ 1.74 for gross proceeds of $ 52 thousand. Under the Purchase Agreement, the Company has sole discretion, subject to certain conditions, on any business day selected by the Company to require Lincoln Park to purchase up to 30,000 shares of common stock (the “Regular Purchase Amount”) at the Purchase Price (as defined below) per purchase notice (each such purchase, a “Regular Purchase”). The Regular Purchase Amount may be increased as follows: to up to 50,000 shares if the closing price is not below $5.00, and up to 75,000 shares if the closing price is not below $10.00 . Lincoln Park’s committed obligation under each Regular Purchase is capped at $ 2,500,000 , unless the Parties agree otherwise. The purchase price for Regular Purchases (the “Purchase Price”) shall be equal to the lesser of: (i) the lowest sale price of the common shares during the Purchase Date, or (ii) the average of the three (3) lowest closing sale prices of the common shares during the ten (10) business days prior to the Purchase Date. In addition to Regular Purchases and subject to certain conditions and limitations, the Company in its sole discretion may require Lincoln Park on each Purchase Date to purchase on the following business day up to the lesser of (i) three (3) times the number of shares purchased pursuant to such Regular Purchase or (ii) 25 % of the trading volume on the Accelerated Purchase Date (the “Accelerated Purchase”) (unless the Parties agree otherwise) at a purchase price equal to the lesser of 97 % of (i) the closing sale price on the Accelerated Purchase Date, or (ii) the Accelerated Purchase Date’s volume weighted average price (the “Accelerated Purchase Price”). The Company has the sole right to set a minimum price threshold for each Accelerated Purchase in the notice provided with respect to such Accelerated Purchase and under certain circumstances and in accordance with the Purchase Agreement the Company may direct multiple Accelerated Purchases in a day. The aggregate number of shares that the Company can sell to Lincoln Park under the Purchase Agreement may not exceed 8,133,926 shares of the Common Shares (which is equal to approximately 19.99 % of the shares of the Common Shares outstanding immediately prior to the execution of the Purchase Agreement) (the “Exchange Cap”), unless (i) shareholder approval is obtained to issue Purchase Shares above the Exchange Cap, in which the Exchange Cap will no longer apply, or (ii) the average price of all applicable sales of Common Shares to Lincoln Park under the Purchase Agreement equals or exceeds $ 6.42 per share; provided that at no time may Lincoln Park (together with its affiliates) beneficially own more than 4.99 % of the Company’s issued and outstanding Common Shares. The Purchase Agreement contains customary representations, warranties, covenants, closing conditions, indemnification and termination provisions. The Purchase Agreement may be terminated by the Company at any time, at its sole discretion, without any cost or penalty, by giving one business day notice to Lincoln Park. Further, Lincoln Park has covenanted not to engage in any direct or indirect short selling or hedging of the Common Shares. There are no limitations on the use of proceeds, financial or business covenants, restrictions on future financings (other than restrictions on the Company’s ability to enter into a similar type of agreement or Equity Line of Credit during the Term, excluding an At-The-Market transaction with a registered broker-dealer), rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement. At-the-Market Offering Program In September 2022, the Company entered into a Controlled Equity Offering Sales Agreement (the "Sales Agreement") with Cantor Fitzgerald & Co (the "Agent", or "Cantor"), under which the Company may, from time to time, sell shares of the Company’s common stock having an aggregate offering price of up to $ 15.0 million in “at the market” offerings (the "ATM Offering Program") through Cantor. Sales of the shares of common stock will be made at prevailing market prices at the time of sale, or as otherwise agreed with Cantor. Cantor will receive a commission from the Company of 3.0 % of the gross proceeds of any shares of common stock sold under the Sales Agreement. During the year ended December 31, 2022, the Company sold an aggregate of 478,964 shares of common stock at a weighted-average price of $ 0.60 per share for gross proceeds of approximately $ 0.3 million under the ATM Offering Program. Offering costs, including commissions, of approximately $ 0.2 million were recorded as an offset to gross proceeds within additional paid-in capital. Preferred Stock Upon closing of the Business Combination transaction, pursuant to the terms of the Amended and Restated Certificate of Incorporation, 100,000,000 shares of preferred stock with a par value of $ 0.0001 per share were authorized. eFFECTOR's board of directors has the authority, without further action by the stockholders to issue such shares of preferred stock in one or more series, to establish from time to time the number of shares to be included in each such series, and to fix the dividend, voting, and other rights, preferences and privileges of the shares. There were no issued and outstanding shares of preferred stock immediately after the closing of the Business Combination. In connection with the closing of the Business Combination on August 25, 2021, all Old eFFECTOR convertible preferred stock was converted into common stock of eFFECTOR at an Exchange Ratio of 0.09657 . 28,453,228 total shares of Old eFFECTOR convertible preferred stock (as adjusted for the Exchange Ratio), composed of 11,563,819 shares of Old eFFECTOR Series A convertible preferred stock, 10,154,819 shares of Old eFFECTOR Series B convertible preferred stock, and 6,734,590 shares of Old eFFECTOR Series C convertible preferred stock, were converted into 28,453,228 shares of eFFECTOR common stock. Employee Stock Purchase Plan The ESPP provides for six-month offering periods, and at the end of each offering period, employees are able to purchase shares at 85 % of the lower of the fair market value of the Company’s common stock on the first trading day of the offering period or on the last trading day of the offering period. An aggregate of 880,000 shares were initially reserved and available for issuance under the ESPP. The ESPP provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2022, by 1.0 % of the outstanding number of shares of common stock on the immediately preceding December 31, or such lesser amount as determined by our board of directors; provided that the total number of shares of common stock that become available for issuance under the ESPP will never exceed 15,000,000 . If our capital structure changes because of a stock dividend, stock split or similar event, the number of shares that can be issued under the ESPP will be appropriately adjusted. As of December 31, 2022, 1,200,842 shares were reserved for future issuance under the ESPP. During the year ended December 31, 2022, 86,057 shares of common stock were issued under the ESPP. 2013 Equity Incentive Plan Prior to the Business Combination, Old eFFECTOR maintained its 2013 Equity Incentive Plan (the “2013 Plan”), under which Old eFFECTOR granted incentive stock options, restricted stock awards, and other stock-based awards to employees, directors, and non-employee consultants. Upon the closing, the Company ceased granting awards under the 2013 Plan and, as described below, all awards under the 2013 Plan were converted into awards under the 2021 Plan with the same terms and conditions. As of August 25, 2021, prior to the Business Combination transaction, 3,920,657 Old eFFECTOR options remained outstanding under the 2013 Plan. As of December 31, 2022, the number of shares reserved under the 2013 Plan was 3,629,846 . There were zero shares available for grant under the 2013 Plan as of December 31, 2022. In connection with the completion of the Business Combination and the adoption of the 2021 Plan, no further awards will be granted under the 2013 Plan. 2021 Equity Incentive Plan In connection with the consummation of the Business Combination on August 25, 2021, the Board of Directors approved the adoption of the 2021 Equity Incentive Plan (the “2021 Plan”). As of Decem ber 31, 2022, 8,794,485 shares of common stock are authorized for issuance pursuant to awards under the 2021 Plan, inclusive of any shares of common stock subject to stock options, restricted stock awards or other awards that were assumed in the Business Combination. As of December 31, 2022, 5,598,409 options to purchase common shares have been awarded and 3,685,451 shares remain avail able for issuance under the 2021 Plan. The 2021 Plan permits the granting of incentive stock options, restricted stock awards, other stock-based award or other cash-based awards to employees, directors, and non-employee consultants. Options granted under the 2021 Plan are exercisable at various dates as determined upon grant and will expire no more than ten years from their date of grant, or in the case of certain non-statutory options, ten years from the date of grant. The exercise price of each option shall be determined by the Board of Directors based on the Fair Market Value of the Company’s stock on the date of the option grant, defined as the closing sales price of the Company's common stock. In the case of incentive stock options, the exercise price shall not be less than 100 % of the Fair Market Value of the Company’s common stock at the time the option is granted. For holders of more than 10% of the Company’s total combined voting power of all classes of stock, incentive stock options may not be granted at less than 110 % of the Fair Market Value of the Company’s stock at the date of grant and for a term not to exceed five years . A summary of the Company’s stock option activity under the plans is as follows (in thousands, except share and per share amounts and years): Shares Weighted- Weighted- Aggregate Outstanding at December 31, 2021 4,193,321 $ 2.41 6.0 $ 26,115 Granted 5,253,923 3.17 9.4 Exercised ( 4,828 ) 0.52 0.4 Cancelled or forfeited ( 703,536 ) 4.14 8.6 Outstanding at December 31, 2022 8,738,880 $ 2.73 7.4 $ — Vested and exercisable at December 31, 2022 4,354,101 $ 2.40 5.4 $ — For the years ended December 31, 2022 and 2021, the total fair value of vested options was $ 4.2 million and $ 1.1 million, respectively. The intrinsic value of options exercised during the years ended December 31, 2022 and 2021 wa s zero and $ 0.7 million, respectively. The weighted-average grant date fair value of employee option grants during the years ended December 31, 2022 and 2021 was $ 2.21 per share and $ 4.75 per share, respectively. The weighted-average grant date fair value of non-employee option grants during the years ended December 31, 2022 and 2021 was $ 2.30 per share and $ 8.71 per share, respectively. Stock-Based Compensation Expense The Company recognized stock-based compensation expense specifically related to stock options of $ 5.0 million and $ 1.0 million for the years ended December 31, 2022 and 2021, respectively. The assumptions used in t he Black-Scholes option pricing model to determine the fair value of the stock option grants were as follows: Year Ended December 31, 2022 2021 Risk-free interest rate 1.7 % - 4.1 % 0.7 % - 1.3 % Expected volatility 82 % - 86 % 81 % - 90 % Expected term (in years) 5.2 - 6.1 5.5 - 6.1 Expected dividend yield 0 % 0 % Risk-free interest rate. The risk-free rate assumption is based on the U.S. Treasury instruments, the terms of which were consistent with the expected term of the Company’s stock options. Expected volatility. Due to the Company’s limited operating history and lack of company-specific historical or implied volatility, the expected volatility assumption was determined by examining the historical volatilities of a group of industry peers whose share prices are publicly available. Expected term. The expected term of stock options represents the weighted-average period the stock options are expected to be outstanding. The Company uses the simplified method for estimating the expected term as provided by the SEC. The simplified method calculates the expected term as the weighted average of the time-to-vesting and the contractual life of the options. Expected dividend yield. The expected dividend assumption is based on the Company’s history and expectation of dividend payouts. The Company has not paid and does not intend to pay dividends. Forfeitures . The Company reduces stock-based compensation expense for actual forfeitures during the period in which they occur. As of December 31, 2022, the unrecognized compensation cost related to out standing employee options was $ 7.3 million and is expected to be recognized as expense over approximately 2.4 years. Unrecognized compensation cost related to outstanding nonemployee options was $ 1.5 million as of December 31, 2022 , and is expected to be recognized as expense over approximately 1.0 years. Common Stock Reserved for Future Issuance Common stock reserved for future issuance consists of the following as of December 31, 2022 and December 31, 2021: December 31, December 31, Stock options issued and outstanding 8,738,880 4,193,321 Public warrants issued and outstanding 5,833,323 5,833,333 Private placement warrants issued and outstanding 181,667 181,667 Earn-Out shares 5,000,000 5,000,000 Unvested sponsor shares 300,000 300,000 Authorized for future stock awards or option grants 3,685,451 6,201,340 Authorized for future issuances under the ESPP 1,200,842 880,000 Total 24,940,163 22,589,661 |
Earn-out Shares
Earn-out Shares | 12 Months Ended |
Dec. 31, 2022 | |
Earn out Share [Abstract] | |
Earn-out Shares | 10. Earn-Out Shares In accordance with the Merger Agreement, 5,000,000 Earn-Out Shares are contingently issuable to Old eFFECTOR stockholders and option holders upon the occurrence of the Triggering Event, defined within the Merger Agreement as the date on which the common stock price equals or exceeds $ 20.00 over at least 20 trading days out of 30 consecutive trading day period for the two-year period following the close date of the Business Combination. As of December 31, 2022, the stockholders and option holders would be eligible to receive approximately 4,561,353 and 438,647 Earn-Out Shares, respectively. As of December 31, 2021, the stockholders and option holders would be eligible to receive approximately 4,426,889 and 573,111 Earn-Out Shares, respectively. The fair value per share of the Earn-Out Shares was $ 0.0014 and $ 2.74 , respectively as of December 31, 2022 and December 31, 2021. The fair value was determined using a Monte Carlo simulation valuation model using a distribution of potential outcomes on a monthly basis over the Earn-Out Period using the most reliable information available. Assumptions used in the valuation were as follows: December 31, December 31, Stock price $ 0.43 $ 8.28 Expected volatility 115.0 % 65.0 % Risk-free interest rate 4.8 % 0.6 % Forecast period (in years) 0.6 1.6 Cost of equity 20.0 % 20.0 % Old eFFECTOR Shareholders The Company has determined that the contingent obligation to issue Earn-Out Shares to existing Old eFFECTOR shareholders is not indexed to the Company's stock under ASC 815-40 and therefore equity treatment is precluded. The Triggering Event that determines the issuance of the Earn-Out Shares includes terms that are not solely indexed to the common stock of the Company, and as such liability classification is required. As of the consummation date of the Business Combination, the estimated fair value of the shareholder Earn-Out Shares was approximately $ 61.0 million and the Company will revalue the liability each reporting period with the changes in fair value being recorded to the consolidated statements of operations and comprehensive income (loss). For the years ended December 31, 2022 and 2021, there was a decrease in the earn-out liability of $ 12.1 million and $ 48.9 million, respectively, which was recorded as a gain on change in fair value within the consolidated statements of operations and comprehensive income (loss). In accordance with the Merger Agreement, Earn-Out Shares attributable to Old eFFECTOR option holders who discontinue providing service before the occurrence of the Triggering Event are reallocated to the remaining eligible stockholders and option holders. T he following table presents activity for the earn-out liability measured at fair value using significant unobservable Level 3 inputs at December 31, 2021 and December 31, 2022 (in thousands): Earn-out Liability Earn-out liability - August 25, 2021 (Closing Date) $ 61,024 Incremental shares due to option holder forfeitures 16 Change in fair value - Closing Date through December 31, 2021 ( 48,910 ) Earn-out liability - December 31, 2021 12,130 Change in fair value ( 12,124 ) Balance at December 31, 2022 $ 6 Old eFFECTOR Option Holders The contingent obligation to issue Earn-Out Shares to existing Old eFFECTOR option holders falls within the scope of ASC 718, Share-based Compensation, because the option holders are required to continue providing service until the occurrence of the Triggering Event. The fair value of the option holder Earn-Out Shares at the consummation date of the Business Combination was approximately $ 7.9 million, which was recorded as share-based compensation over the derived service period of 0.36 years following the consummation of the Business Combination. For the years ended December 31, 2022 and 2021, there was approximately $ 0.3 million and $ 7.6 million recorded in share-based compensation related to the Earn-Out Shares, respectively, and the derived service period was completed as of March 31, 2022, with no additional share-based compensation expense to be recorded. |
License Agreements
License Agreements | 12 Months Ended |
Dec. 31, 2021 | |
License Agreement Disclosure [Abstract] | |
License Agreement | 11. License Agreements In May 2013, the Company entered into an agreement with the Regents of the University of California (“UCSF”) which provides the Company with an exclusive license to UCSF’s patent rights in certain inventions (the “UCSF Translational Profiling Patent Rights”) relating to translational profiling laboratory techniques initially developed at UCSF. Under the agreement, the Company is permitted to research, develop, make and sell products that it discovers and develops utilizing the UCSF Translational Profiling Patent Rights, which the Company refers to as licensed products, and use certain licensed processes utilizing the UCSF Translational Profiling Patent Rights and to sublicense such licensed products and processes. In July 2021, the Company entered into an amendment to the license agreement to confirm the impact of the Business Combination on the license agreement, including clarifying that in connection with the closing of the Business Combination, the Company would pay UCSF a one-time cash payment of approximately $ 1.0 million. The $ 1.0 million payment was made to UCSF in August 2021 in connection with the close of the Business Combination. The Company is also required to make cash milestone payments to UCSF upon the completion of certain clinical and regulatory milestones for the licensed products. The aggregate remaining potential milestone payments are approximately $ 375,000 . The Company paid an annual minimum royalty of $ 15,000 to UCSF for each of the years ended December 31, 2022 and 2021. All license related fees were recorded as research and development expense. |
Research Collaboration and Lice
Research Collaboration and License Agreement | 12 Months Ended |
Dec. 31, 2022 | |
Research and Development [Abstract] | |
Research Collaboration and License Agreement | 12. Research Collaboration and License Agreement In December 2019, the Company entered into a Research Collaboration and License Agreement (the “Pfizer Agreement”) with Pfizer to research and develop small molecules that target eIF4E. Under the Pfizer Agreement, the Company was responsible for initial research in collaboration with Pfizer, and Pfizer is responsible for all further development of the program, including submission of an IND and conducting all clinical development and commercialization activities. Pfizer is obligated to use commercially reasonable efforts to develop and seek regulatory approval for a licensed product, and commercialize a licensed product where Pfizer has received regulatory approval, in the United States and certain other countries. In the event the Company exercises its co-funding and co-promotion option, a joint steering committee will oversee the development plan and budget of the co-developed product, and the Company will have the responsibility to conduct a portion of product marketing presentations to healthcare providers. Pursuant to the Pfizer Agreement, the Company received an upfront, one-time, non-refundable, non-creditable payment of $ 15 million from Pfizer. Pfizer was obligated to reimburse the Company for costs incurred for research performed, up to a specified cap in the low double-digit millions. Upon the achievement of specified early development and regulatory milestones, Pfizer will be obligated to pay the Company up to $ 80 million in the aggregate. For other non-early stage development milestones Pfizer’s payment obligations to the Company depends upon whether the Company has exercised its co-funding and co-promotion option: 1) if it does not exercise the option, non-early stage development payments may total up to $ 165 million in aggregate, and 2) if it does exercise the option, non-early stage development payments may total up to $ 70 million in aggregate. Upon the achievement of specified sales milestones, Pfizer is also obligated to make tiered milestone payments of up to $ 235 million in aggregate. On a product-by-product basis, Pfizer will also be required to pay the Company high single-digit percentage royalties on annual net sales of each licensed product. If the Company exercises its co-promotion and co-funding option, royalty payments will exclude sales in the United States and the Company will share with Pfizer profits from sale of the relevant licensed product in the United States. The initial transaction price of $ 27.0 million was allocated to the two performance obligations on a relative standalone value basis, with $ 25.6 million allocated to the license and $ 1.4 million allocated to the research activities, which were completed in 2020. The value attributable to the license was recognized upon delivery of the license to Pfizer and the value attributable to the research activities was recognized pro-rata based on the actual costs incurred by the Company compared to the total estimated costs of the research activities from the time of execution to the end of the research program. There was no revenue recorded in connection with this agreement for the years ended December 31, 2022 and 2021 because all development and sales milestones (variable consideration) were fully constrained. |
DARPA Grant Revenue
DARPA Grant Revenue | 12 Months Ended |
Dec. 31, 2022 | |
DARPA Grant Revenue Disclosure [Abstract] | |
DARPA Grant Revenue | 13. DARPA Grant Revenue In April 2021, the Company entered into a Research Subaward Agreement with UCSF (the "Subaward Agreement"), whereby up to $ 5.0 million in allowable costs were reimbursable for clinical and manufacturing activities related to zotatifin for the treatment of COVID-19. Under the terms of the Subaward Agreement, the Company was obligated to provide financial and technical reports to UCSF on a periodic basis. The Subaward Agreement can be terminated by either party upon written notice and also in the event that DARPA suspends or terminates its cooperative agreement with UCSF. The initial award period for the Subaward Agreement ended in December 2021, and in April 2022 the Company received an extension of the award period to December 2022, with the same maximum $ 5.0 million reimbursement amount. The Company recognized $ 3.6 million and $ 1.4 million o f revenue under the Subaward Agreement in the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, the Company exhausted the full $ 5.0 million of allowable reimbursable costs under the Subaward Agreement. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 14. Commitments and Contingencies Leases In November 2020, the Company entered into a non-cancelable operating sublease for office space in San Diego, California, with a lease term through December 2021. Rent expense under this lease was $ 0.1 million for the year ended December 31, 2021. In September 2021, the Company entered a non-cancelable three-year lease for certain new office space in Solana Beach, California, with an option to renew for a n additional three-year term. The initial term of the lease started on November 1, 2021, and is serving as the Company's new headquarters. Rent expense under this lease was $ 0.1 million and $ 16,400 for the years ended December 31, 2022 and 2021, respectively. During each of the years ended December 31, 2022 and 2021, the Company paid $ 0.1 million in lease payments. All lease payments were included in operating activities in the statements of cash flows. The following table summarizes supplemental balance sheet information related to leases as of December 31, 2022 and December 31, 2021 (in thousands): December 31, December 31, Assets: Operating lease right-of-use assets $ 111 $ 166 Total right-of-use assets 111 166 Liabilities Operating lease liabilities, current 60 44 Operating lease liabilities, non-current 60 126 Total operating lease liabilities $ 120 $ 170 As of December 31, 2022, the future minimum annual lease payments under the existing operating leases were as follows (in thousands, except for weighted-average remaining lease term and weighted-average discount rate): 2023 67 2024 62 Total remaining lease payments 129 Less: imputed interest ( 9 ) Total operating lease liabilities 120 Less: current portion ( 60 ) Long-term operating lease liabilities $ 60 Weighted-average remaining lease term ( in years ) 1.8 Weighted-average discount rate 8 % |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Employee Benefits | 15. Employee Benefits The Company has a defined contribution 401(k) plan available to eligible employees. Under the terms of the plan, employees may make voluntary contributions as a percent of compensation, limited to the maximum amount allowable under federal tax regulations. The Company, at its d iscretion, may make certain contributions to the 401(k) plan. Through December 31, 2022, the Company made no matching contributions. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 16. Income Taxes There was no income tax expense recorded by the Company for the years ended December 31, 2022 and 2021. Significant components of the Company’s net deferred tax assets are summarized as follows (in thousands): December 31, December 31, Deferred tax assets: Net operating loss carryforwards $ 42,243 $ 36,898 Intangibles 189 3,565 Research and development capitalization 3,839 — Accrued compensation 2,282 1,284 Credits 8,013 7,107 Fixed assets 10 6 Other, net 88 74 Right-of-use liability 25 36 Deferred tax assets 56,689 48,970 Deferred tax liabilities: Right-of-use asset ( 23 ) ( 35 ) Deferred tax liabilities ( 23 ) ( 35 ) Net deferred tax assets 56,666 48,935 Valuation allowance ( 56,666 ) ( 48,935 ) Net deferred tax assets $ — $ — A reconciliation of the income tax computed at the federal statutory tax rate to the expense (benefit) for income taxes for the years ended December 31, 2022 and 2021 is as follows (in thousands): December 31, December 31, Tax at statutory rate $ ( 4,760 ) $ 3,318 State income taxes, net of federal benefits ( 2,076 ) ( 1,853 ) Change in valuation allowance 7,726 8,515 Uncertain tax positions 586 569 Gain on change in fair value of earn-out liability ( 2,546 ) ( 10,271 ) Permanent differences and other 281 636 Transaction costs 244 — Capitalized R&D 3,381 510 LWAC net operating loss ( 1,370 ) — Credits ( 1,466 ) ( 1,424 ) Income tax expense $ — $ — Management assesses all available evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. The Company has experienced net losses since inception (aside from the years ended December 31, 2021 and December 31, 2020 when net income was realized as a result of a gain in fair value recognized associated with the earn-out liability and non-recurring revenue in connection with the Research Collaboration and License Agreement with Pfizer, respectively), and the revenue and income potential of the Company’s business and market are unproven. Due to the Company’s continuing research and development activities, the Company expects to continue to incur net losses into the foreseeable future. As such, the Company cannot conclude that it is more likely than not that its deferred tax assets will be realized. A valuation allowance of $ 56.7 million and $ 48.9 million at December 31, 2022 and 2021, respectively, has been established to offset the deferred tax assets, as realization of such assets is uncertain. Utilization of net operating loss (“NOL”) and research and development (“R&D”) credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that may have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), as well as similar state and foreign provisions. These ownership changes may limit the amount of NOL and R&D credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an “ownership change” as defined by Section 382 of the Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders. Since the Company’s formation, the Company has raised capital through the issuance of capital stock on several occasions, which on its own or combined with the purchasing stockholders’ subsequent disposition of those shares, may have resulted in such an ownership change, or could result in an ownership change in the future. The Company completed a preliminary Code section 382 and 383 study from inception through December 31, 2020 and concluded that $ 1.8 million of federal and California net operating losses and $ 0.1 million of federal R&D credits will expire unused. The Company removed deferred tax assets for net operating loss of $ 0.6 million and research credits of $ 0.1 million from its deferred tax assets schedule and has recorded a corresponding decrease in the valuation allowance. The Company has not conducted the 382 study after December 31, 2020. When the study is completed, the Company will adjust its deferred tax assets accordingly. Due to the existence of a full valuation allowance any subsequent ownership changes will not impact the Company’s effective tax rate. The Company had federal and California NOL carryforwards of approximately $ 181.6 million and $ 92.8 million, respectively, portions of which begin to expire in 2034 and 2036, respectively. Federal NOLs of $ 103.1 million carry forward indefinitely. As of December 31, 2022, the Company had federal and California research and development (“R&D” tax) credit carryforwards of approximately $ 9.6 million, inclusive of the federal orphan drug tax credit carryforward, and $ 4.3 million , respectively. The federal R&D tax credit carryforwards will begin to expire in 2034, unless previously utilized. The California R&D tax credit carryforwards are available indefinitely. As of December 31, 2022, the Company also had federal orphan drug tax credit carryforwards of $ 2.2 million that will begin to expire in 2037. The Inflation Reduction Act 2022 which incorporates a Corporate Alternative Minimum Tax (CAMT) was signed on August 16, 2022. The changes will affect for the tax years beginning after December 31, 2022. The new tax will require companies to compute two separate calculations for federal income tax purposes and pay the greater of the new minimum tax or their regular tax liability. The Company will be monitoring the impacts of the act to determine if this will have an impact for the Company for years beginning after December 31, 2022. The act is not expected to have a material impact for the Company. The Company recognizes a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more likely than not recognition at the effective date to be recognized. A reconciliation of the beginning and ending amount of unrecognized tax benefits for 2022 and 2021, excluding interest and penalties, is as follows (in thousands): December 31, December 31, Balance at beginning of the year $ 8,235 $ 7,623 Additions/(reductions) for tax positions - prior year — — Increase related to current year positions 625 612 Balance at the end of the year $ 8,860 $ 8,235 For the year ended December 31, 2022, the Company recognized interest and penalties of approximately $ 62,000 and $ 50,000 , respectively, which are recorded in accrued expenses on the consolidated balance sheets. Interest and penalties are captured within the interest expense and other income (expense) lines, respectively, on the consolidated statements of operations and comprehensive income (loss). For the year ended December 31, 2021, the Company did not recognize any interest or penalties. The Company currently files income tax returns in California and with the U.S. Internal Revenue Service. The Company currently has no tax periods under examination by any jurisdiction. Due to the existence of net operating loss carryforwards, all tax periods from inception of the Company are open for examination by taxing authorities for all jurisdictions. Included in the balance of unrecognized tax benefits at December 31, 2022 is $ 7.4 million that, if recognized, would not impact the Company’s income tax expense (benefit) or effective tax rate as long as our deferred tax asset remains subject to a full valuation allowance. The Company does not expect any significant increases or decreases to our unrecognized tax benefits within the next 12 months. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). All intercompany balances and transactions have been eliminated in consolidation. The Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, LWAC was treated as the “acquired” company and eFFECTOR is treated as the acquirer for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Old eFFECTOR issuing stock for the net assets of LWAC, accompanied by a recapitalization. The net assets of LWAC are stated at historical cost, with no goodwill or other intangible assets recorded. Old eFFECTOR was determined to be the accounting acquirer based on the following predominant factors: • Old eFFECTOR’s shareholders have a majority of the voting power of the combined company; • the Board and Management are primarily composed of individuals associated with Old eFFECTOR; and • Old eFFECTOR comprises all of the ongoing operations of the combined company. The consolidated assets, liabilities and results of operations prior to the Business Combination are those of Old eFFECTOR. |
Liquidity | Liquidity The Company has a limited operating history and the sales and income potential of the Company’s business and market are unproven. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classification of liabilities that may result from the outcome of this uncertainty. Management is required to perform a two-step analysis over its ability to continue as a going concern. Management must first evaluate whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern (step 1). If management concludes that substantial doubt is raised, management is also required to consider whether its plans alleviate that doubt (step 2). The Company has experienced net losses and negative cash flows from operating activities since its inception, aside from the years ended December 31, 2021 and December 31, 2020 when net income was realized as a result of a gain in fair value recognized associated with the earn-out liability and non-recurring revenue in connection with the Research Collaboration and License Agreement with Pfizer, respectively. The Company has an accumulated deficit of $ 143.6 million at December 31, 2022. For the year ended December 31, 2022, the Company used $ 25.9 million in cash for operations. At December 31, 2022, the Company had cash and cash equivalents and short-term investments of $ 26.3 million. The Company anticipates that its expenses will increase significantly in connection with its ongoing activities to support its research and development efforts, and it expects to incur substantial operating losses and negative cash flows from operations for the foreseeable future. Management has prepared cash flow forecasts which indicate that based on the Company’s expected operating losses and negative cash flows, there is substantial doubt about the Company’s ability to continue as a going concern within twelve months from the date that these financial statements for the year ended December 31, 2022 are issued. The principal payments due under the Oxford Loans (as defined below), and the related accrued final payment, have been classified as current liabilities as of December 31, 2022, due to the considerations discussed above and the assessment that the material adverse change clause under the Oxford Loans is not within the Company’s control. The Company has not been notified of an event of default by the lender as of the date of issuance of these financial statements. The Company’s ability to continue as a going concern is dependent upon its ability to receive additional capital. Management intends to raise additional capital through equity offerings or other capital sources, including potential additional collaborations, licenses and other similar arrangements. Additionally, the Company may receive additional milestone payments from the Research Collaboration and License Agreement with Pfizer (described in Note 12), through the issuance of common stock under the equity purchase agreement with Lincoln Park Capital Fund, LLC (described in Note 9) or through the issuance of common stock under the at-the-market offering program (described in Note 9) with Cantor Fitzgerald & Co. However, the Company may not be able to secure additional financing in a timely manner or on favorable terms, if at all, and may not receive any milestone payments. Without additional capital, the Company may be forced to delay, scale back or eliminate some of its research and development activities, or other operations and potentially delay product development in an effort to provide sufficient funds to continue its operations, or may be required to pursue merger or acquisition strategies, all of which could adversely affect the holdings or the rights of its stockholders. |
Use of Estimates | Use of Estimates The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of the Company’s consolidated financial statements requires it to make estimates and assumptions that impact the reported amounts of assets, liabilities and expenses and the disclosure of contingent liabilities in the Company’s consolidated financial statements and accompanying notes. The most significant estimate in the Company’s consolidated financial statements relates to its clinical trial expense accruals. Management evaluates its estimates on an ongoing basis. Although these estimates are based on the Company’s historical experience, knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions. |
Cash and Cash Equivalents | Cash, Cash Equivalen ts and Short-term Investments Cash and Cash Equivalents The Company considers all highly liquid investments with insignificant interest rate risk and an original maturity of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents consist of money market funds with an original maturity of less than three months at the date of purchase. Short-term Investments Short-term investments consist of U.S. Treasury securities, classified as available-for-sale securities and have maturities of greater than three months but less than one year. The Company has classified all of its available-for-sale securities as current assets on the balance sheets because these are considered highly liquid securities and are available for use in current operations. The Company carries these securities at fair value, and reports unrealized gains and losses as a separate component of accumulated other comprehensive loss. Amortization and accretion of any purchase premiums or discounts is included in interest income in the consolidated statements of operations and comprehensive income (loss). |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of all cash equivalents, prepaid expenses and other assets, accounts payable and accrued liabilities are reasonable estimates of their fair value because of the short-term nature of these items. Based on the borrowing rates currently available to the Company for loans with similar terms, the Company believes the fair value of the term loans approximate their carrying value (see Note 7). |
Concentration of Credit Risk and Other Risks and Uncertainties | Concentration of Credit Risk and Other Risks and Uncertainties Financial instruments, which potentially subject the Company to significant concentration of credit risk, consist primarily of cash and cash equivalents and short-term investments. The Company maintains deposits in a federally insured major financial institution in excess of federally insured limits. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institution in which those deposits are held. The Company is subject to a number of risks similar to other biopharmaceutical companies, including, but not limited to, the need to obtain adequate additional funding, possible failure of current or future preclinical studies or clinical trials, reliance on third parties or partners to conduct its clinical trials, the need to obtain regulatory and marketing approvals for its drug candidates or to rely on partners to do so, competitors developing new technological innovations, the need to successfully commercialize and gain market acceptance of its drug candidates, the right to develop and commercialize drug candidates pursuant to the terms and conditions of the licenses granted to the Company, protection of proprietary technology, the ability to make milestone, royalty or other payments due under any license or collaboration agreements, and the need to secure and maintain adequate manufacturing arrangements with third parties. If the Company does not successfully commercialize or partner any of its drug candidates, it will be unable to generate product revenue or achieve profitability. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost and depreciated or amortized using the straight-line method over the estimated useful lives of the assets (generally three to five years , or the remaining term of the lease for leasehold improvements, whichever is shorter) and generally consist of laboratory equipment, computer and office equipment, furniture and fixtures, and leasehold improvements. Repairs and maintenance costs are charged to expense as incurred. |
Long-Lived Assets | Long-Lived Assets The Company regularly reviews the carrying value and estimated lives of all of its long-lived assets, including property and equipment to determine whether indicators of impairment may exist which warrant adjustments to carrying values or estimated useful lives. Should an impairment exist, the impairment loss would be measured based on the excess over the carrying amount of the asset’s fair value. The Company has no t recognized any impairment losses from inception through December 31, 2022. |
Leases | Leases At the inception of a contractual arrangement, the Company determines whether the contract contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. If both criteria are met, the Company records the associated lease liability and corresponding right-of-use asset upon commencement of the lease using the implicit rate or a discount rate based on a credit-adjusted secured borrowing rate commensurate with the term of the lease. The Company additionally evaluates leases at their inception to determine if they are to be accounted for as an operating lease or a finance lease. A lease is accounted for as a finance lease if it meets one of the following five criteria: the lease has a purchase option that is reasonably certain of being exercised, the present value of the future cash flows is substantially all of the fair market value of the underlying asset, the lease term is for a significant portion of the remaining economic life of the underlying asset, the title to the underlying asset transfers at the end of the lease term, or if the underlying asset is of such a specialized nature that it is expected to have no alternative uses to the lessor at the end of the term. Leases that do not meet the finance lease criteria are accounted for as an operating lease. Operating lease assets represent a right to use an underlying asset for the lease term and operating lease liabilities represent an obligation to make lease payments arising from the lease. Operating lease liabilities with a term greater than one year and their corresponding right-of-use assets are recognized on the balance sheet at the commencement date of the lease based on the present value of lease payments over the expected lease term. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. As the Company’s leases do not typically provide an implicit rate, the Company utilizes the appropriate incremental borrowing rate, determined as the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and in a similar economic environment. Lease cost is recognized on a straight-line basis over the lease term and variable lease payments are recognized as operating expenses in the period in which the obligation for those payments is incurred. Variable lease payments primarily include common area maintenance, utilities, real estate taxes, insurance, and other operating costs that are passed on from the lessor in proportion to the space leased by the Company. The Company has elected the practical expedient to not separate between lease and non-lease components. |
Grant Revenue | Grant Revenue The Company’s grant revenues were derived from a grant with the Defense Advanced Research Projects Agency (“DARPA”) through the University of California, San Francisco (“UCSF”). The Company recognizes DARPA grant revenue as reimbursable grant costs are incurred up to pre-approved award limits within the budget period. The costs associated with these reimbursements are reflected as a component of research and development expense in the accompanying consolidated statements of operations and comprehensive income (loss). Billings in excess of receipts are included as a receivable recorded within prepaid expenses and other current assets on the consolidated balance sheets. |
Research and Development Costs | Research and Development Costs Research and development expenses primarily consist of costs associated with the preclinical and clinical development of the Company’s product candidates. Research and development costs are expensed as incurred. |
Clinical Trial Accruals and Preclinical Studies | Clinical Trial Accruals and Preclinical Studies The Company records expenses resulting from our obligations under contracts with vendors and consultants, CROs and clinical sites in connection with conducting clinical trials and preclinical studies. The financial terms of these contracts are subject to negotiations which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. The Company reflects clinical trial and preclinical study expenses in the financial statements by matching those expenses with the period in which services and efforts are expended. The Company accounts for these expenses according to the progress of the clinical trial or preclinical study as measured by the timing of various aspects of the clinical trial, preclinical study, or related activities. The Company determines accrual estimates based on the underlying contracts, correspondence with clinical and other key personnel and third-party service providers as to the progress of the clinical trials, preclinical studies, or other services being conducted, and amounts invoiced or paid to date. During the course of a clinical trial or preclinical study, the Company adjusts the rate of expense recognition if actual results differ from estimates. |
Patent Costs | Patent Costs Costs related to filing and pursuing patent applications are recorded as general and administrative expense and expensed as incurred since recoverability of such expenditures is uncertain. |
Revenue Recognition | Revenue Recognition The Company evaluates collaboration arrangements to determine whether units of account within the collaboration arrangement exhibit the characteristics of a vendor and customer relationship. For arrangements and units of account where a customer relationship exists, the Company applies the revenue recognition guidance. The Company recognizes revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. To determine revenue recognition for contracts with customers the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies the performance obligations. At contract inception, the Company assesses the goods or services promised within each contract and assesses whether each promised good or service is distinct and determines those that are performance obligations. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, upfront fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other performance obligations, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition on a prospective basis. For research and development services performed under a collaboration agreement in which the performance obligation is satisfied over time, the Company measures the progress of the activities using an input method. The input methods used are based on the effort expended or costs incurred toward the satisfaction of the related performance obligation. The Company estimates the amount of effort expended, including the time the Company estimates it will take to complete the activities, or costs incurred in a given period, relative to the estimated total effort or costs to satisfy the performance obligation. This results in a percentage that is multiplied by the consideration allocated to the research and development services to determine the amount of revenue recognized each period. This approach requires estimates and the use of significant judgement. If the estimates or judgements change over the course of the collaboration, they may affect the timing and amount of revenue recognized in the current and future periods. |
Milestones | Milestones At the inception of each arrangement that includes milestone payments (variable consideration), the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company or the Company’s collaboration partner’s control, such as regulatory approvals, are generally not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such milestones and any related constraint, and if necessary, adjusts the Company’s estimate of the overall transaction price. Any such adjustments are allocated on a cumulative catch-up basis to satisfied and partially satisfied performance obligations, with the consideration allocated to an ongoing performance obligation being recognized over the period of performance. |
Royalties | Royalties For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and for which the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any royalty revenue from any collaborative arrangement. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the consolidated financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. As of December 31, 2022 and 2021, the Company maintained valuation allowances against its deferred tax assets as the Company concluded it had not met the “more likely than not” to be realized threshold. Changes in the valuation allowance when they are recognized in the provision for income taxes may result in a change in the estimated annual effective tax rate. The Company records uncertain tax positions on the basis of a two-step process whereby (1) management determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more likely than not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Any accrued interest and penalties are included within the related tax liability. |
Comprehensive Income | Comprehen sive Loss Comprehensive loss consists of net loss and unrealized gains or losses on available-for-sale investments. The Company presents comprehensive loss and its components as part of the consolidated statements of operations and comprehensive income (loss). |
Segment Reporting | Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company and its chief operating decision-maker view the Company’s operations and manage its business in one operating segment. |
Stock-Based Compensation Expense | Stock-Based Compensation Expense Stock-based compensation expense represents the cost of the grant date fair value of employee stock option grants recognized over the requisite service period of the awards (usually the vesting period) on a straight- line basis. The Company estimates the fair value of stock option grants using the Black-Scholes option-pricing model. The Company accounts for stock options granted to non-employees using the fair value approach. The Black-Scholes option-pricing model requires the use of subjective assumptions, including the risk- free interest rate, the expected stock price volatility, the expected term of stock options, and the expected dividend yield. The Company has limited historical stock option activity and therefore estimates the expected term of stock options granted using the simplified method, which represents the average of the contractual term of the stock option and its weighted-average vesting period. The fair value of the underlying common stock used within the Black-Scholes option-pricing model is based on the closing price of common stock on the date of grant. |
Public and Private Placement Warrants | Public and Private Placement Warrants Upon completion of the Business Combination, the Company assumed public and private placement warrants that were issued by LWAC in connection with their initial public offering in January 2021 whereby holders of the public and private placement warrants are entitled to acquire common stock of the Company. The Company has concluded that the public warrants are equity-classified. Since the settlement value of the private placement warrants is dependent, in part, on who holds the warrants at the time of settlement, they are not considered indexed to the Company's stock and are therefore recorded as liabilities. Warrants classified as liabilities are recorded at their estimated fair value on the date of issuance and are revalued at each subsequent balance sheet date, with fair value changes recognized in other income (expense), net in the accompanying consolidated statements of operations and comprehensive income (loss). The Company estimates the fair value of these warrants using the Black-Scholes option pricing model. |
Earn-out Shares | Earn-out Shares In accordance with the Merger Agreement, 5,000,000 shares ("Earn-Out Shares") are contingently issuable to Old eFFECTOR stockholders and option holders upon the occurrence of the Triggering Event (see Note 3), defined within the Merger Agreement as the date on which the common stock price equals or exceeds $ 20.00 over at least 20 trading days out of a 30 consecutive trading day period during the two-year period following the close date of the Business Combination. The estimated fair value of the Earn-Out Shares was determined using a Monte Carlo simulation valuation model using a distribution of potential outcomes on a monthly basis over the earn-out period using the most reliable information available. The Company has determined that the contingent obligation to issue Earn-Out Shares to existing Old eFFECTOR shareholders is not indexed to the Company's stock under ASC 815-40 and therefore equity treatment is precluded. The Triggering Event that determines the issuance of the Earn-Out Shares includes terms that are not solely indexed to our common stock , and as such liability classification is required. Equity-linked instruments classified as liabilities are recorded at their estimated fair value on the date of issuance and are revalued at each subsequent balance sheet date, with fair value changes recognized in other income (expense), net in the accompanying consolidated statements of operations and comprehensive income (loss). The Company has determined that the contingent obligation to issue Earn-Out Shares to existing Old eFFECTOR option holders falls within the scope of ASC 718, Share-based Compensation, because the option holders are required to continue providing service until the occurrence of the Triggering Event. The fair value of the option holder Earn-Out Shares is recorded as share-based compensation over the derived service period of the Monte Carlo simulation valuation model, recognized in research and development and general and administrative expense in the consolidated statements of operations and comprehensive income (loss). |
Recent Accounting Guidance | Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes, based on their preliminary assessment, that the impact of recently issued standards that are not yet effective will not have a material impact on their financial position or results of operations upon adoption. In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) , which addresses the complexity associated with applying generally accepted accounting principles for certain financial instruments with characteristics of liabilities and equity. The amendments in this ASU reduce the number of accounting models for convertible debt instruments and convertible preferred stock, as well as amend the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusion. In addition, this ASU improves and amends the related earnings per share guidance. The amendments in this ASU are effective for the Company on January 1, 2024, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Adoption is either a modified retrospective method or a fully retrospective method of transition. The Company adopted this standard as of January 1, 2022 under the modified retrospective transition method, and it did not have a material impact on the consolidated financial statements or the related disclosures. |
Net Income Per Share | Net Incom e (Loss) Per Share The Company computes net income (loss) per share in accordance with the FASB guidance for Earnings Per Share, which established standards regarding the computation of earnings per share by companies that have issued securities other than common stock that contractually entitle the holder to participate in earnings and dividends. The guidance requires earnings available to common shareholders for the period, after deduction of preferred stock preferences, to be allocated between the common and preferred shareholders based on their respective rights to receive dividends. The Company is not required to present basic and diluted net income per share for securities other than common stock; therefore, the net income (loss) per share amounts only pertain to the Company’s common stock. Basic net income (loss) per share is calculated by dividing income (loss) allocable to common shareholders (net income after reduction for any required returns to preferred stock shareholders prior to paying dividends to the common shareholders, assuming current income for the period had been distributed) by the weighted-average number of common shares outstanding, during the period. The Company calculates diluted net income per share using the more dilutive of the 1) treasury stock method, if-converted method, or contingently issuable share method, as applicable, or 2) the two-class method. Due to the Company recording net loss for the year ended December 31, 2022, and none of the outstanding securities being dilutive for this period, basic and diluted loss per share are the same for the year ended December 31, 2022. The Company has used the treasury stock method to calculate diluted net income per share for the year ended December 31, 2021, as there were no participating securities as of December 31, 2021 (and there were no participating securities in the period of net income during 2021). Diluted net income per share for the year ended December 31, 2021 also reflects the assumed exercise of options outstanding during the period using the treasury stock method, to the extent dilutive. Warrants were included in the calculation of diluted net income per share for the year ended December 31, 2021 to the extent the warrants were dilutive. The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands, except share and per share data): For the Year Ended December 31, 2022 2021 Basic Net Income (Loss) per share Net income (loss) $ ( 22,665 ) $ 15,798 Weighted average common shares outstanding - basic 41,179,741 15,105,851 Net income (loss) per share - basic $ ( 0.55 ) $ 1.05 Diluted Net Income (Loss) per share Net income (loss) attributable to common shareholders $ ( 22,665 ) $ 15,798 Weighted average common shares outstanding - basic 41,179,741 15,105,851 Weighted average effect of dilutive securities: Convertible preferred stock — 18,556,453 Stock options — 2,341,759 Weighted average common shares outstanding - diluted 41,179,741 36,004,063 Net income (loss) per share - diluted $ ( 0.55 ) $ 0.44 Potentially dilutive securities as of December 31, 2022 and 2021 are as follows (in common stock equivalent shares): For the Year Ended December 31, 2022 2021 Public warrants 5,833,323 5,833,333 Private placement warrants 181,667 181,667 Earn-Out Shares 5,000,000 5,000,000 Unvested sponsor shares 300,000 300,000 Stock options outstanding 8,738,880 403,278 Total 20,053,870 11,718,278 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Computation of Basic and Diluted Net Income (Loss) Per Share | The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands, except share and per share data): For the Year Ended December 31, 2022 2021 Basic Net Income (Loss) per share Net income (loss) $ ( 22,665 ) $ 15,798 Weighted average common shares outstanding - basic 41,179,741 15,105,851 Net income (loss) per share - basic $ ( 0.55 ) $ 1.05 Diluted Net Income (Loss) per share Net income (loss) attributable to common shareholders $ ( 22,665 ) $ 15,798 Weighted average common shares outstanding - basic 41,179,741 15,105,851 Weighted average effect of dilutive securities: Convertible preferred stock — 18,556,453 Stock options — 2,341,759 Weighted average common shares outstanding - diluted 41,179,741 36,004,063 Net income (loss) per share - diluted $ ( 0.55 ) $ 0.44 |
Schedule of Potentially Dilutive Securities | Potentially dilutive securities as of December 31, 2022 and 2021 are as follows (in common stock equivalent shares): For the Year Ended December 31, 2022 2021 Public warrants 5,833,323 5,833,333 Private placement warrants 181,667 181,667 Earn-Out Shares 5,000,000 5,000,000 Unvested sponsor shares 300,000 300,000 Stock options outstanding 8,738,880 403,278 Total 20,053,870 11,718,278 |
Business Combination (Tables)
Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combinations [Abstract] | |
Schedule of Common Stock Outstanding following the Consummation of the Business Combination | The following summarizes the common stock outstanding following the consummation of the Business Combination, PIPE Financing and the automatic cashless exercise of Old eFFECTOR warrants: Shares % Old eFFECTOR Stockholders 30,021,762 74.4 % LWAC Stockholders 521,358 1.3 % LWAC Founders (1) 3,756,250 9.3 % PIPE Investors 6,070,003 15.0 % Total 40,369,373 100.0 % (1) Excludes 300,000 Sponsor Shares subject to vesting that are not considered outstanding from an accounting perspective. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Summary of assets and liabilities measured at fair value on a recurring basis | The following table summarizes the Company’s assets and liabilities that require fair value measurements on a recurring basis and their respective input levels based on the fair value hierarchy as of December 31, 2022 and December 31, 2021 (in thousands): Fair Value Measurements Using December 31, Quoted Prices Significant Significant 2022 Level 1 Level 2 Level 3 Assets Cash equivalents: Money market funds $ 8,708 $ 8,708 $ — $ — Short-term investments: U.S. Treasury securities 17,602 — $ 17,602 — Total assets $ 26,310 $ 8,708 $ 17,602 $ — Liabilities Private placement warrant liability $ 40 $ — $ — $ 40 Earn-out liability 6 — — 6 Total liabilities $ 46 $ — $ — $ 46 Fair Value Measurements Using December 31, Quoted Prices Significant Significant 2021 Level 1 Level 2 Level 3 Assets Money market funds $ 49,702 $ 49,702 $ — $ — Total assets $ 49,702 $ 49,702 $ — $ — Liabilities Private placement warrant liability $ 678 $ — $ — $ 678 Earn-out liability 12,130 — — 12,130 Total liabilities $ 12,808 $ — $ — $ 12,808 |
Summary of Short term Investment | The following tables summarize the Company’s short-term investments accounted for as available-for-sale securities as of December 31, 2022 (in thousands): December 31, 2022 Maturity Amortized Unrealized Unrealized Estimated (in years) Cost Gains Losses Fair Value U.S. Treasury securities 1 year or less $ 17,620 $ 1 $ ( 19 ) $ 17,602 $ 17,620 $ 1 $ ( 19 ) $ 17,602 |
Preferred Stock Warrant Liability [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Summary of change in fair value of derivative warrant liabilities | The following table presents activity for the preferred stock warrant liability measured at fair value using significant unobservable Level 3 inputs during th e year ended December 31, 2021 (in thousands): Series C Preferred Stock Warrant Liability Balance at December 31, 2020 $ 433 Issuance of new warrants 271 Change in fair value 153 Warrant exercises ( 857 ) Balance at December 31, 2021 $ — |
Private Placement Warrants Liability [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Summary of fair value measurements inputs | The following key assumptions were used in determining the fair value of the private placement warrant liability valued using the Black-Scholes option pricing model as of December 31, 2022 and December 31, 2021: December 31, December 31, Common stock price $ 0.43 $ 8.28 Expected volatility 125.0 % 65.0 % Risk-free interest rate 4.2 % 1.3 % Expected term (in years) 3.7 4.7 Expected dividend yield — — |
Summary of change in fair value of derivative warrant liabilities | The following table presents activity for the private placement warrant liability measured at fair value using significant unobservable Level 3 inputs during the year ended December 31, 2022 (in thousands): Private Placement Warrant Liability Private Placement Warrants liability - August 25, 2021 (closing date) $ 1,862 Change in fair value - Closing Date through December 31, 2021 ( 1,184 ) Balance at December 31, 2021 678 Change in fair value ( 638 ) Balance at December 31, 2022 $ 40 |
Property and Equipment , net (T
Property and Equipment , net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment ,net | Property and equipment, net consists of the following (in thousands): December 31, December 31, Lab equipment $ 30 $ 30 Computer and office equipment 149 127 Furniture and fixtures 61 64 Leasehold improvements 188 — Construction in process 29 74 457 295 Less accumulated depreciation and amortization ( 216 ) ( 204 ) $ 241 $ 91 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consist of the following (in thousands): December 31, December 31, Employee compensation $ 1,385 $ 1,343 Research and development 1,206 1,115 Professional and outside services 112 452 Interest 197 133 Income taxes payable 463 351 Other 5 24 $ 3,368 $ 3,418 |
Term Loans (Tables)
Term Loans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes and Loans Payable, by Type, Current and Noncurrent [Abstract] | |
Schedule of Principal Future Payments of Term Loans | Based on the outstanding principal amounts for the Company’s Term A Loans, the following table sets forth by year the Company’s required future principal payments as of December 31, 2022 (in thousands): As of December 31, 2022 2024 $ 5,555 2025 6,667 2026 6,667 2027 1,111 Required future principal payments $ 20,000 Unamortized debt discount ( 939 ) Current term loans, net as of December 31, 2022 $ 19,061 |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Warrants and Rights Note Disclosure [Abstract] | |
Summary of Public and private placement warrants outstanding. | Private placement warrants are liability-classified (See Note 4) and the public warrants are equity-classified. The following table summarizes the number of outstanding public warrants and private placement warrants and the corresponding exercise price as of December 31, 2022 and December 31, 2021: December 31, December 31, Exercise Price Expiration Date Public warrants 5,833,323 5,833,333 $ 11.50 August 24, 2026 Private placement warrants 181,667 181,667 $ 11.50 August 24, 2026 |
Preferred Stock and Stockhold_2
Preferred Stock and Stockholders' Equity (Deficit) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Summary of option activity under the company's plans | A summary of the Company’s stock option activity under the plans is as follows (in thousands, except share and per share amounts and years): Shares Weighted- Weighted- Aggregate Outstanding at December 31, 2021 4,193,321 $ 2.41 6.0 $ 26,115 Granted 5,253,923 3.17 9.4 Exercised ( 4,828 ) 0.52 0.4 Cancelled or forfeited ( 703,536 ) 4.14 8.6 Outstanding at December 31, 2022 8,738,880 $ 2.73 7.4 $ — Vested and exercisable at December 31, 2022 4,354,101 $ 2.40 5.4 $ — |
Schedule of assumptions used in the Black-Scholes option pricing model to determine the fair value of the stock option grants. | The assumptions used in t he Black-Scholes option pricing model to determine the fair value of the stock option grants were as follows: Year Ended December 31, 2022 2021 Risk-free interest rate 1.7 % - 4.1 % 0.7 % - 1.3 % Expected volatility 82 % - 86 % 81 % - 90 % Expected term (in years) 5.2 - 6.1 5.5 - 6.1 Expected dividend yield 0 % 0 % |
Schedule of Common Stock, Reserved for Future Issuance | Common stock reserved for future issuance consists of the following as of December 31, 2022 and December 31, 2021: December 31, December 31, Stock options issued and outstanding 8,738,880 4,193,321 Public warrants issued and outstanding 5,833,323 5,833,333 Private placement warrants issued and outstanding 181,667 181,667 Earn-Out shares 5,000,000 5,000,000 Unvested sponsor shares 300,000 300,000 Authorized for future stock awards or option grants 3,685,451 6,201,340 Authorized for future issuances under the ESPP 1,200,842 880,000 Total 24,940,163 22,589,661 |
Earn-out Shares (Tables)
Earn-out Shares (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earn out Share [Abstract] | |
Schedule Of Estimated Fair Value Of The Earn Out Shares | The fair value per share of the Earn-Out Shares was $ 0.0014 and $ 2.74 , respectively as of December 31, 2022 and December 31, 2021. The fair value was determined using a Monte Carlo simulation valuation model using a distribution of potential outcomes on a monthly basis over the Earn-Out Period using the most reliable information available. Assumptions used in the valuation were as follows: December 31, December 31, Stock price $ 0.43 $ 8.28 Expected volatility 115.0 % 65.0 % Risk-free interest rate 4.8 % 0.6 % Forecast period (in years) 0.6 1.6 Cost of equity 20.0 % 20.0 % |
Schedule Of Activity For Earn Out Liability | he following table presents activity for the earn-out liability measured at fair value using significant unobservable Level 3 inputs at December 31, 2021 and December 31, 2022 (in thousands): Earn-out Liability Earn-out liability - August 25, 2021 (Closing Date) $ 61,024 Incremental shares due to option holder forfeitures 16 Change in fair value - Closing Date through December 31, 2021 ( 48,910 ) Earn-out liability - December 31, 2021 12,130 Change in fair value ( 12,124 ) Balance at December 31, 2022 $ 6 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Supplemental Balance sheet Information related to Leases | The following table summarizes supplemental balance sheet information related to leases as of December 31, 2022 and December 31, 2021 (in thousands): December 31, December 31, Assets: Operating lease right-of-use assets $ 111 $ 166 Total right-of-use assets 111 166 Liabilities Operating lease liabilities, current 60 44 Operating lease liabilities, non-current 60 126 Total operating lease liabilities $ 120 $ 170 |
Schedule of Future Minimum Rental Payments for Operating Leases | As of December 31, 2022, the future minimum annual lease payments under the existing operating leases were as follows (in thousands, except for weighted-average remaining lease term and weighted-average discount rate): 2023 67 2024 62 Total remaining lease payments 129 Less: imputed interest ( 9 ) Total operating lease liabilities 120 Less: current portion ( 60 ) Long-term operating lease liabilities $ 60 Weighted-average remaining lease term ( in years ) 1.8 Weighted-average discount rate 8 % |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Net Deferred Tax Assets Components | Significant components of the Company’s net deferred tax assets are summarized as follows (in thousands): December 31, December 31, Deferred tax assets: Net operating loss carryforwards $ 42,243 $ 36,898 Intangibles 189 3,565 Research and development capitalization 3,839 — Accrued compensation 2,282 1,284 Credits 8,013 7,107 Fixed assets 10 6 Other, net 88 74 Right-of-use liability 25 36 Deferred tax assets 56,689 48,970 Deferred tax liabilities: Right-of-use asset ( 23 ) ( 35 ) Deferred tax liabilities ( 23 ) ( 35 ) Net deferred tax assets 56,666 48,935 Valuation allowance ( 56,666 ) ( 48,935 ) Net deferred tax assets $ — $ — |
Schedule of Components of Income Tax Expense (Benefit) | A reconciliation of the income tax computed at the federal statutory tax rate to the expense (benefit) for income taxes for the years ended December 31, 2022 and 2021 is as follows (in thousands): December 31, December 31, Tax at statutory rate $ ( 4,760 ) $ 3,318 State income taxes, net of federal benefits ( 2,076 ) ( 1,853 ) Change in valuation allowance 7,726 8,515 Uncertain tax positions 586 569 Gain on change in fair value of earn-out liability ( 2,546 ) ( 10,271 ) Permanent differences and other 281 636 Transaction costs 244 — Capitalized R&D 3,381 510 LWAC net operating loss ( 1,370 ) — Credits ( 1,466 ) ( 1,424 ) Income tax expense $ — $ — |
Schedule of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits for 2022 and 2021, excluding interest and penalties, is as follows (in thousands): December 31, December 31, Balance at beginning of the year $ 8,235 $ 7,623 Additions/(reductions) for tax positions - prior year — — Increase related to current year positions 625 612 Balance at the end of the year $ 8,860 $ 8,235 |
Organization and Basis of Pre_2
Organization and Basis of Presentation - Additional Information (Detail) $ in Thousands | 12 Months Ended | ||
Aug. 25, 2021 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Subsidiary Sale Of Stock [Line Items] | |||
Date of incorporation | Oct. 02, 2020 | ||
Place of incorporation | DE | ||
Accumulated deficit | $ 143,566 | $ 120,901 | |
Cash from operation | 25,900 | ||
Cash and cash equivalents and short-term investments | 26,300 | ||
Cash and cash equivalents | $ 8,708 | $ 49,702 | |
Proceeds from cash acquired through acquisition and PIPE offering | $ 67,000 | ||
Locust Walk Acquisition Corp [Member] | |||
Subsidiary Sale Of Stock [Line Items] | |||
Conversion of outstanding common and preferred shares into common shares | 0.09657 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) Segment $ / shares shares | Dec. 31, 2021 $ / shares shares | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Impairment losses | $ | $ 0 | |
Operating segments | Segment | 1 | |
Common stock, shares issued | shares | 41,990,383 | 40,689,975 |
Common stock price per share | $ / shares | $ 0.0001 | $ 0.0001 |
Consecutive trading days required for entitlement of common stock | 30 days | |
Maximum | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Estimated useful lives | five years | |
Minimum | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Estimated useful lives | P3Y | |
Leasehold Improvements | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Estimated useful lives | the remaining term of the lease | |
Earn-Out Shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Common stock, shares issued | shares | 5,000,000 | |
Common stock price per share | $ / shares | $ 20 | |
Trading days required for entitlement of common stock | 20 days | |
Consecutive trading days required for entitlement of common stock | 30 days |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of basic and diluted net income (loss) per share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Basic Net Income per share | ||
Net income | $ (22,665) | $ 15,798 |
Net income attributable to common shareholders | $ (22,665) | $ 15,798 |
Weighted average common shares outstanding - basic | 41,179,741 | 15,105,851 |
Net income per share - Basic | $ (0.55) | $ 1.05 |
Diluted Net income per share | ||
Net income | $ (22,665) | $ 15,798 |
Weighted average common shares outstanding - basic | 41,179,741 | 15,105,851 |
Weighted average common shares outstanding - diluted | 41,179,741 | 36,004,063 |
Net income per share - diluted | $ (0.55) | $ 0.44 |
Convertible Preferred Stock [Member] | ||
Diluted Net income per share | ||
Weighted average effect of dilutive securities | 0 | 18,556,453 |
Stock Options [Member] | ||
Diluted Net income per share | ||
Weighted average effect of dilutive securities | 0 | 2,341,759 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Potentially Dilutive Securities (Detail) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially Dilutive Securities (in common stock equivalent shares) | 20,053,870 | 11,718,278 |
Public warrants | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially Dilutive Securities (in common stock equivalent shares) | 5,833,323 | 5,833,333 |
Private Placement [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially Dilutive Securities (in common stock equivalent shares) | 181,667 | 181,667 |
Earn-Out Shares | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially Dilutive Securities (in common stock equivalent shares) | 5,000,000 | 5,000,000 |
Unvested sponsor shares | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially Dilutive Securities (in common stock equivalent shares) | 300,000 | 300,000 |
Stock Options Outstanding [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially Dilutive Securities (in common stock equivalent shares) | 8,738,880 | 403,278 |
Business Combination - Addition
Business Combination - Additional Information (Detail) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Aug. 25, 2021 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Business Acquisition [Line Items] | |||
Trading Days Required For Entitlement Of Common Stock1 | 20 days | ||
Business acquisition transaction cost | $ 3,000 | ||
Liabilities | $ 25,181 | $ 36,772 | |
Proceeds from cash acquired through acquisition and PIPE offering | 67,000 | ||
Issuance of common stock | $ 3,958 | ||
Proceeds from business combination | 52,900 | ||
Cash acquired | 6,300 | ||
Transaction costs paid by SPAC in business combination | 11,100 | ||
Private Investment In Public Entity Offering [Member] | |||
Business Acquisition [Line Items] | |||
Issuance of common stock | $ 60,700 | ||
Old eFFECTOR Stockholders | |||
Business Acquisition [Line Items] | |||
Preferred stock conversion ratio | 0.09657 | ||
Exchange ratio of outstanding stock and options | 0.09657 | ||
Shares issued on conversion | shares | 30,021,762 | ||
Option to purchase common stock | shares | 3,920,657 | ||
Weighted average exercise price of stock options that were exchanged | $ / shares | $ 1.56 | ||
Old eFFECTOR Stockholders | Earn-Out Shares | |||
Business Acquisition [Line Items] | |||
Contingently issuable shares issued to shareholders and option holders | shares | 5,000,000 | ||
Contingently issuable shares description | Former holders of shares of Old eFFECTOR common stock (including shares received as a result of the conversion of Old eFFECTOR preferred stock and the exercise of Old eFFECTOR warrants) and former holders of options to purchase shares of Old eFFECTOR will also be entitled to receive their pro rata share of up to 5,000,000 Earn-Out Shares of common stock if, on or prior to August 26, 2023, the closing share price of shares of common stock equals or exceeds $20.00 over at least 20 trading days within a 30-day trading period (the “Triggering Event”) and, in respect of each former holder of Old eFFECTOR stock options, such holder continues to provide services to the Company or one of its subsidiaries at the time of such Triggering Event. The Earn-Out Shares will also be earned and issuable in the event of a change in control of the Company on or prior to August 26, 2023 that results in the holders of common stock receiving a per-share price equal to or in excess of $20.00. | ||
Old eFFECTOR Stockholders | Earn-Out Shares | Minimum | |||
Business Acquisition [Line Items] | |||
Trigger price of common stock for issuance of earnout shares | $ / shares | $ 20 | ||
Trading Days Required For Entitlement Of Common Stock1 | 20 days | ||
Old eFFECTOR Stockholders | Earn-Out Shares | Maximum | |||
Business Acquisition [Line Items] | |||
Trading Days Required For Entitlement Of Common Stock1 | 30 days | ||
Old eFFECTOR Stockholders | Common Stock [Member] | |||
Business Acquisition [Line Items] | |||
Common stock up on conversion | shares | 4,056,250 | ||
PIPE Investor | |||
Business Acquisition [Line Items] | |||
Business acquisition, equity interest issued or issuable, number of shares | shares | 6,070,003 | ||
Business acquisition share price | $ / shares | $ 10 | ||
Business acquisition, equity interest issued or issuable value assigned | $ 60,700 | ||
Stock issued, Shares, Acquisitions | shares | 40,669,373 | ||
Stock Outstanding During Period Shares Acquisitions | shares | 40,369,373 | ||
LWAC Stockholders | |||
Business Acquisition [Line Items] | |||
Business acquisition, equity interest issued or issuable, number of shares | shares | 10,347,611 | ||
Liabilities | $ 900 | ||
LWAC Stockholders | Common Stock Subject to Vesting | |||
Business Acquisition [Line Items] | |||
Common stock up on conversion | shares | 300,000 | ||
LWAC Stockholders | Common Stock Subject to Vesting | Minimum | |||
Business Acquisition [Line Items] | |||
Trading Days Required For Entitlement Of Common Stock1 | 20 days | ||
Trigger price of common stock for vesting of unvested shares | $ / shares | $ 15 | ||
LWAC Stockholders | Common Stock Subject to Vesting | Maximum | |||
Business Acquisition [Line Items] | |||
Trading Days Required For Entitlement Of Common Stock1 | 30 days |
Business Combination - Summary
Business Combination - Summary of common stock outstanding following the consummation of business combination (Detail) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Business Acquisition [Line Items] | |||
Common stock, shares outstanding | 41,690,383 | 40,389,975 | |
Common stock, shares outstanding | 40,369,373 | ||
Percentage of ownership | 100% | ||
Old eFFECTOR Stockholders | |||
Business Acquisition [Line Items] | |||
Common stock, shares outstanding | 30,021,762 | ||
Percentage of ownership | 74.40% | ||
LWAC Stockholders | |||
Business Acquisition [Line Items] | |||
Common stock, shares outstanding | 521,358 | ||
Percentage of ownership | 1.30% | ||
LWAC Founders | |||
Business Acquisition [Line Items] | |||
Common stock, shares outstanding | [1] | 3,756,250 | |
Percentage of ownership | [1] | 9.30% | |
PIPE Investors | |||
Business Acquisition [Line Items] | |||
Common stock, shares outstanding | 6,070,003 | ||
Percentage of ownership | 15% | ||
[1] Excludes 300,000 Sponsor Shares subject to vesting that are not considered outstanding from an accounting perspective. |
Business Combination - Summar_2
Business Combination - Summary of common stock outstanding following the consummation of business combination (Parenthetical) (Detail) - shares | Dec. 31, 2022 | Dec. 31, 2021 |
Business Combinations [Abstract] | ||
Unvested Shares Held By Sponsors | 300,000 | 300,000 |
Fair Value Measurementsn - Addi
Fair Value Measurementsn - Additional Information (Detail) - Fair Value, Inputs, Level 1, 2 and 3 [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair value, net derivative asset (liability) measured on recurring basis, unobservable inputs reconciliation, transfers, net | $ 0 | $ 0 |
Money Market Funds, at Carrying Value | 8,700,000 | 49,700,000 |
Marketable Securities | 17,600,000 | $ 0 |
Short-Term Investments [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Interest Receivable | $ 27,000 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Assets And Liabilities Measured At Fair Value On Recurring Basis (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Liabilities | ||
Earn-out liability | $ 6 | $ 12,130 |
Fair Value, Recurring | ||
Assets | ||
Total assets | 26,310 | 49,702 |
Liabilities | ||
Earn-out liability | 6 | 12,130 |
Total liabilities | 46 | 12,808 |
Fair Value, Recurring | Private Placement Warrant Liability | ||
Liabilities | ||
Warrant liability | 40 | 678 |
Fair Value, Recurring | Fair Value Inputs Level 1 | ||
Assets | ||
Total assets | 8,708 | 49,702 |
Liabilities | ||
Total liabilities | 0 | 0 |
Fair Value, Recurring | Fair Value Inputs Level 2 | ||
Assets | ||
Total assets | 17,602 | 0 |
Liabilities | ||
Total liabilities | 0 | 0 |
Fair Value, Recurring | Fair Value Inputs Level 3 | ||
Assets | ||
Total assets | 0 | 0 |
Liabilities | ||
Earn-out liability | 6 | 12,130 |
Total liabilities | 46 | 12,808 |
Fair Value, Recurring | Fair Value Inputs Level 3 | Private Placement Warrant Liability | ||
Liabilities | ||
Warrant liability | 40 | 678 |
Fair Value, Recurring | Money Market Funds | ||
Assets | ||
Money market funds | 8,708 | 49,702 |
Fair Value, Recurring | Money Market Funds | Fair Value Inputs Level 1 | ||
Assets | ||
Money market funds | 8,708 | $ 49,702 |
Fair Value, Recurring | Short-Term Investments [Member] | ||
Assets | ||
U.S. Treasury securities | 17,602 | |
Fair Value, Recurring | Short-Term Investments [Member] | Fair Value Inputs Level 2 | ||
Assets | ||
U.S. Treasury securities | $ 17,602 |
Fair Value Measurements - Short
Fair Value Measurements - Short Term Investment (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Debt Securities, Available-for-Sale [Line Items] | |
Amortized Cost | $ 17,620 |
Unrealized Gains | 1 |
Unrealized Losses | (19) |
Estimated Fair Value | $ 17,602 |
US Treasury Securities [Member] | |
Debt Securities, Available-for-Sale [Line Items] | |
Maturity (in years) | 1 year |
Amortized Cost | $ 17,620 |
Unrealized Gains | 1 |
Unrealized Losses | (19) |
Estimated Fair Value | $ 17,602 |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of change in fair value of preferred stock warrant liability (Detail) - Series C Preferred Stock Warrant Liability [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2021 USD ($) | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Fair value, Beginning Balance | $ 433 |
Issuance of new warrants | 271 |
Change in fair value | 153 |
Warrant exercises | (857) |
Fair value, Ending Balance | $ 0 |
Fair Value Measurements - Sum_3
Fair Value Measurements - Summary of fair value measurements inputs of private placement warrant liability (Detail) - Private Placement Warrant Liability | Dec. 31, 2022 yr USD ($) | Dec. 31, 2021 yr USD ($) |
Common Stock Price | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Measurement Input | $ | 0.43 | 8.28 |
Expected volatility | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Measurement Input | 125 | 65 |
Risk-free interest rate | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Measurement Input | 4.2 | 1.3 |
Expected term (in years) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Measurement Input | yr | 3.7 | 4.7 |
Expected dividend yield | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Measurement Input | 0 | 0 |
Fair Value Measurements - Sum_4
Fair Value Measurements - Summary of change in fair value of private placement warrant liability (Detail) - Private Placement Warrant Liability - USD ($) $ in Thousands | 4 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Dec. 31, 2022 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair value, Beginning Balance | $ 1,862 | $ 678 |
Change in fair value | (1,184) | (638) |
Fair value, Ending Balance | $ 678 | $ 40 |
Property and Equipment, net - S
Property and Equipment, net - Summary of Property and Equipment, net (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property Plant And Equipment [Line Items] | ||
Property and Equipment, Gross | $ 457 | $ 295 |
Less accumulated depreciation and amortization | (216) | (204) |
Property and Equipment, Net | 241 | 91 |
Lab Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and Equipment, Gross | 30 | 30 |
Computer And Office Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and Equipment, Gross | 149 | 127 |
Furniture and Fixtures [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and Equipment, Gross | 61 | 64 |
Leasehold Improvements [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and Equipment, Gross | 188 | 0 |
Construction in Progress [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and Equipment, Gross | $ 29 | $ 74 |
Property and Equipment, net - A
Property and Equipment, net - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization | $ 53,000 | $ 24,000 |
Accrued Expenses - Summary of A
Accrued Expenses - Summary of Accrued Expenses (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Employee compensation | $ 1,385 | $ 1,343 |
Research and development | 1,206 | 1,115 |
Professional and outside services | 112 | 452 |
Interest | 197 | 133 |
Income taxes payable | 463 | 351 |
Other | 5 | 24 |
Accrued Liabilities, Current | $ 3,368 | $ 3,418 |
Term Loans - Additional Informa
Term Loans - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Feb. 22, 2022 USD ($) | Mar. 31, 2021 USD ($) Tranche | Mar. 31, 2021 USD ($) Tranche | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) | Aug. 31, 2018 USD ($) | |
Debt Instrument [Line Items] | ||||||
Outstanding principal, Term loans | $ 19,061,000 | |||||
Accrued final payment on term loans, non-current | 0 | $ 1,100,000 | ||||
Loss on debt extinguishment | 0 | (492,000) | ||||
Issuance of term loans, net of issuance costs | 0 | $ 19,835,000 | ||||
Extended cut off date before which the interest on term loan shall be paid | Mar. 01, 2024 | |||||
Long term debt net of unamortized debt discounts | $ 20,000,000 | |||||
Loan and Security Agreement [Member] | Less Than One Year From The Date Of Loan Agreement [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Prepayment fee as a percentage of the outstanding principal | 3% | |||||
Loan and Security Agreement [Member] | Greater Than One Year And Less Than Two Years From The Date Of Loan Agreement [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Prepayment fee as a percentage of the outstanding principal | 2% | |||||
Loan and Security Agreement [Member] | Later Than Two Years And Not Later Than Three Years From The Date Of Loan Agreement [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Prepayment fee as a percentage of the outstanding principal | 1% | |||||
Loan and Security Agreement [Member] | Later Than Three Years From The Date Of Loan Agreement [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Prepayment fee as a percentage of the outstanding principal | 0% | |||||
Loan and Security Agreement [Member] | Silicon Valley Bank [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Ceiling limit of maximum percentage amount to be paid on aggregate principal amount | 5.50% | |||||
Loss on debt extinguishment | $ 500,000 | |||||
Prepayment fees paid in respect of term loan | 100,000 | |||||
Fee Paid For Modification Of Term Loans | $ 37,000 | $ 37,000 | ||||
Loan and Security Agreement [Member] | Oxford Finance LLC [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Number of tranches | Tranche | 2 | 2 | ||||
Debt instrument, face amount | $ 30,000,000 | $ 30,000,000 | ||||
Number of days within which a portion of term loan will be available subject to achievement of milestone | 45 days | |||||
Long term debt variable interest rate percentage | 7.70% | 7.70% | ||||
Loan and Security Agreement [Member] | Prime Rate [Member] | Oxford Finance LLC [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument variable interest rate spread | 4.45% | |||||
Loan and Security Agreement [Member] | Warrants To Purchase Series C Redeemable Convertible Stock | Oxford Finance LLC [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Exercise price of warrants | $ / shares | $ 5.33 | |||||
Number of shares subject to each warrant | shares | 37,575 | |||||
Loan and Security Agreement [Member] | Common Stock [Member] | Oxford Finance LLC [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Common stock up on conversion | shares | 17,575 | |||||
Loan and Security Agreement [Member] | Debt Instrument, Term Loan A [Member] | Oxford Finance LLC [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Description | In connection with the amendment, the maturity of the Term A Loans was extended from March 18, 2026 to February 1, 2027. | |||||
Debt Instrument, Discount | $ 1,600,000 | |||||
Outstanding principal, Term loans | $ 20,000,000 | $ 20,000,000 | 20,000,000 | |||
Amortization of debt discount | 2,200,000 | |||||
Issuance of term loans, net of issuance costs | $ 12,500,000 | |||||
Term loan final payment as a percentage of the amount funded | 5.50% | |||||
Long term debt net of unamortized debt discounts | $ 19,100,000 | |||||
Loan and Security Agreement [Member] | Debt Instrument, Term Loan B [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, Current borrowing amount | $ 15,000,000 | |||||
Additional Term Loans | $ 10,000,000 | |||||
Loan and Security Agreement [Member] | Debt Instrument, Term Loan B [Member] | Less Than One Year From The Date Of Loan Agreement [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Loan initiation date | Jun. 30, 2023 | |||||
Loan and Security Agreement [Member] | Debt Instrument, Term Loan B [Member] | Oxford Finance LLC [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 10,000,000 | 10,000,000 | ||||
Issuance of term loans, net of issuance costs | $ 7,400,000 | |||||
Loan and Security Agreement [Member] | Debt Instrument Term Loan A and B [Member] | Silicon Valley Bank [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Repayment of term loans | 11,500,000 | |||||
Term loan final payment | $ 800,000 | |||||
Term loan final payment as a percentage of the original principal amount | 1% |
Term Loans - Schedule of Princi
Term Loans - Schedule of Principal Future Payments of Term Loans (Detail) $ in Thousands | Dec. 31, 2022 USD ($) |
Notes and Loans Payable, by Type, Current and Noncurrent [Abstract] | |
2024 | $ 5,555 |
2025 | 6,667 |
2026 | 6,667 |
2027 | 1,111 |
Required future principal payments | 20,000 |
Unamortized debt discount | (939) |
Current term loans, net as of December 31, 2022 | $ 19,061 |
Warrants - Additional Informati
Warrants - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Aug. 25, 2021 | |
Class of Warrant or Right [Line Items] | |||
Warrants exercise | 0 | ||
Warrants and rights outstanding, term | 5 years | ||
Stock option exercises, net, shares | 4,828 | ||
Public Warrants and Private Placement Warrants [Member] | |||
Class of Warrant or Right [Line Items] | |||
Exercise price of warrants | $ 11.50 | ||
Class of warrants, redemption price per unit | $ 0.01 | ||
Class of warrants, redemption notice period | 30 days | ||
Share price | $ 18 | ||
Number of consecutive trading days for determining share price | 20 days | ||
Number of trading days to determine share price | 30 days | ||
Stock option exercises, net, shares | 10 | ||
Proceeds from Warrant Exercises | $ 1 | ||
Preferred Stock Warrants [Member] | |||
Class of Warrant or Right [Line Items] | |||
Warrants exercise | 50,529 |
Warrants - Schedule of Public a
Warrants - Schedule of Public and private placement warrants outstanding (Detail) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Public Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Class of Warrant or Right, Outstanding | 5,833,323 | 5,833,333 |
Exercise price of warrants | $ 11.50 | |
Expiration date | Aug. 24, 2026 | |
Private Placement Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Class of Warrant or Right, Outstanding | 181,667 | 181,667 |
Exercise price of warrants | $ 11.50 | |
Expiration date | Aug. 24, 2026 |
Preferred Stock and Stockhold_3
Preferred Stock and Stockholders' Equity (Deficit) - Additional Information (Detail) | 1 Months Ended | 12 Months Ended | ||||
Jan. 24, 2022 USD ($) $ / shares shares | Aug. 25, 2021 shares | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Aug. 24, 2021 shares | |
Class Of Stock [Line Items] | ||||||
Common stock value issued | $ | $ 4,000 | $ 4,000 | ||||
Common stock, shares issued | 41,990,383 | 40,689,975 | ||||
Proceeds in cash | $ | $ 3,000 | $ 56,000 | ||||
Preferred stock, shares authorized | 100,000,000 | 0 | ||||
Preferred stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Preferred stock, shares issued | 0 | 0 | ||||
Preferred stock, shares outstanding | 28,453,228 | 0 | 0 | |||
Convertible preferred stock exchange ratio | 0.09657 | |||||
Stock options outstanding | 8,738,880 | 4,193,321 | ||||
Option, exercise price range, lower range limit | $ / shares | $ 100 | |||||
Option, exercise price range, upper range limit | $ / shares | $ 110 | |||||
Share-based payment award, expiration period | 5 years | |||||
Fair value of vested option | $ | $ 4,200,000 | $ 1,100,000 | ||||
Intrinsic value of options exercised | $ | 0 | 700,000 | ||||
Share-based payment arrangement, expense | $ | 5,000,000 | 1,000,000 | ||||
Unrecognized compensation cost related to outstanding employee options | $ | $ 7,300,000 | |||||
Expected term (in years) | 2 years 4 months 24 days | |||||
Unrecognized compensation cost related to outstanding nonemployee options | $ | $ 1,500,000 | |||||
Outstanding non employee expense expected period | 1 year | |||||
Stock option exercises, net | $ | $ 3,000 | $ 56,000 | ||||
Stock option exercises, net, shares | 4,828 | |||||
Number of Option Outstanding,Granted | 5,253,923 | |||||
Employee Option [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Weighted-average grant date fair value | $ / shares | $ 2.21 | $ 4.75 | ||||
Non-Employee Option [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Weighted-average grant date fair value | $ / shares | $ 2.30 | $ 8.71 | ||||
Maximum [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Expected term (in years) | 6 years 1 month 6 days | 6 years 1 month 6 days | ||||
Minimum [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Expected term (in years) | 5 years 2 months 12 days | 5 years 6 months | ||||
2013, Equity Incentive Plan | ||||||
Class Of Stock [Line Items] | ||||||
Number of shares reserved for future issuance | 0 | |||||
Stock options outstanding | 3,920,657 | 3,629,846 | ||||
2021, Equity Incentive Plan | ||||||
Class Of Stock [Line Items] | ||||||
Number of shares reserved for future issuance | 3,685,451 | |||||
Number of shares authorized | 8,794,485 | |||||
Shares purchased for award | 5,598,409 | |||||
ATM Offering Program [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Payments of commission percentage | 3% | |||||
Common stock, shares issued | 478,964 | |||||
Price of share issued | $ / shares | $ 0.60 | |||||
Proceeds in cash | $ | $ 300 | |||||
Temporary equity underwriting discounts, commissions and fees | $ | $ 200,000 | |||||
ATM Offering Program [Member] | Maximum [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Common stock value issued | $ | $ 15,000,000 | |||||
Employee Stock Purchase Plan [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Shares fair market value percentage | 85% | |||||
Number of shares reserved for future issuance | 1,200,842 | 880,000 | ||||
Increase in reserved shares, percentage | 1% | |||||
Stock issued under employee stock purchase plans | 86,057 | |||||
Employee Stock Purchase Plan [Member] | Maximum [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Number of shares reserved for future issuance | 15,000,000 | |||||
Common Stock [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Preferred stock, shares outstanding | 28,453,228 | |||||
Stock option exercises, net, shares | 4,828 | 93,542 | ||||
Series A Preferred Stock [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Preferred stock, shares outstanding | 11,563,819 | |||||
Series B Preferred Stock [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Preferred stock, shares outstanding | 10,154,819 | |||||
Series C Preferred Stock [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Preferred stock, shares outstanding | 6,734,590 | |||||
Purchase Agreement [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Other expense relating to the commitment fee | $ | $ 800,000 | |||||
lincoln Park [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Purchase Agreement | 36 years | |||||
Initial purchase amount | $ | $ 3,000,000 | |||||
Initial purchase number of shares | 557,610 | |||||
Shares issued, commitment shares | 142,939 | |||||
Price per share | $ / shares | $ 1.74 | |||||
lincoln Park [Member] | Maximum [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Available for sales of common shares under the facility | $ | $ 50,000,000 | |||||
Gross proceeds | $ | $ 52,000 | |||||
lincoln Park [Member] | Common Stock [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Ownership percentage | 4.99% | |||||
lincoln Park [Member] | Common Stock [Member] | Maximum [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Purchase shares | 30,000 | |||||
lincoln Park [Member] | Purchase Agreement [Member] | Common Stock [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Price per share | $ / shares | $ 6.42 | |||||
Percentage of common shares outstanding prior to the execution of purchase agreement | 19.99% | |||||
Aggregate number of common shares | 8,133,926 | |||||
lincoln Park [Member] | Regular Purchase [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Trading volume percentage | 25% | |||||
Percentage of common shares outstanding prior to the execution of purchase agreement | 97% | |||||
lincoln Park [Member] | Regular Purchase [Member] | Common Stock [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Regular purchase, description | The Regular Purchase Amount may be increased as follows: to up to 50,000 shares if the closing price is not below $5.00, and up to 75,000 shares if the closing price is not below $10.00 | |||||
Committed obligation amount | $ | $ 2,500,000 | |||||
lincoln Park [Member] | Regular Purchase [Member] | Common Stock [Member] | Maximum [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Purchase shares | 30,000 |
Preferred Stock and Stockhold_4
Preferred Stock and Stockholders' Equity (Deficit) - Schedule of Convertible Preferred Stock (Detail) - shares | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Series A Preferred Stock [Member] | |||
Temporary Equity [Line Items] | |||
Shares Outstanding | 0 | 0 | 11,563,819 |
Series B Preferred Stock [Member] | |||
Temporary Equity [Line Items] | |||
Shares Outstanding | 0 | 0 | 10,154,819 |
Series C Preferred Stock [Member] | |||
Temporary Equity [Line Items] | |||
Shares Outstanding | 0 | 0 | 6,734,590 |
Preferred Stock and Stockhold_5
Preferred Stock and Stockholders' Equity (Deficit) - Summary of Option Activity Under the Company's Plans (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Equity [Abstract] | ||
Number of Option Outstanding,Beginning balance | 4,193,321 | |
Number of Option Outstanding,Granted | 5,253,923 | |
Number of Option Outstanding,Exercised | (4,828) | |
Number of Option Outstanding,Cancelled | (703,536) | |
Number of Option Outstanding,Ending balance | 8,738,880 | 4,193,321 |
Number of Option Exercisable | 4,354,101 | |
Weighted Average Exercise Price,Beginning balance | $ 2.41 | |
Weighted Average Exercise Price,Granted | 3.17 | |
Weighted average exercise price,Exercised | 0.52 | |
Weighted average exercise price,Cancelled | 4.14 | |
Weighted Average Exercise Price,Ending balance | 2.73 | $ 2.41 |
Weighted Average Exercise Price,Exercisable | $ 2.40 | |
Weighted- Average Remaining Contractual Term,Beginning balance | 7 years 4 months 24 days | 6 years |
Weighted- Average Remaining Contractual Term,Granted | 9 years 4 months 24 days | |
Weighted- Average Remaining Contractual Term,Exercised | 4 months 24 days | |
Weighted- Average Remaining Contractual Term,Cancelled | 8 years 7 months 6 days | |
Weighted- Average Remaining Contractual Term, Ending balance | 7 years 4 months 24 days | 6 years |
Weighted- Average Remaining Contractual Term,Exercisable | 5 years 4 months 24 days | |
Aggregate Intrinsic Value,Beginning balance | $ 26,115 | |
Aggregate Intrinsic Value,Ending balance | 0 | $ 26,115 |
Aggregate Intrinsic Value,Exercisable | $ 0 |
Preferred Stock and Stockhold_6
Preferred Stock and Stockholders' Equity (Deficit) - Schedule of assumptions used in the Black-Scholes option pricing model to determine the fair value of the stock option grants (Detail) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (in years) | 2 years 4 months 24 days | |
Expected dividend yield | 0% | 0% |
Minimum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Risk-free interest rate | 1.70% | 0.70% |
Expected volatility | 82% | 81% |
Expected term (in years) | 5 years 2 months 12 days | 5 years 6 months |
Maximum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Risk-free interest rate | 4.10% | 1.30% |
Expected volatility | 86% | 90% |
Expected term (in years) | 6 years 1 month 6 days | 6 years 1 month 6 days |
Preferred Stock and Stockhold_7
Preferred Stock and Stockholders' Deficit - Summary of Common Stock Reserved for Future Issuance (Detail) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Class Of Stock [Line Items] | ||
Preferred stock, shares issued | 0 | 0 |
Stock options issued and outstanding | 8,738,880 | 4,193,321 |
Unvested Shares Held By Sponsors | 300,000 | 300,000 |
Additional issuance of common stock in future | 3,685,451 | 6,201,340 |
Authorized for future issuances under the ESPP | 1,200,842 | 880,000 |
Total | 24,940,163 | 22,589,661 |
Public Warrants Issued and Outstanding | ||
Class Of Stock [Line Items] | ||
Class of Warrant or Right, Outstanding | 5,833,323 | 5,833,333 |
Private Placement Warrants Issued and Outstanding | ||
Class Of Stock [Line Items] | ||
Class of Warrant or Right, Outstanding | 181,667 | 181,667 |
Common Stock [Member] | ||
Class Of Stock [Line Items] | ||
Stock options issued and outstanding | 8,738,880 | 4,193,321 |
Earn-Out Shares | ||
Class Of Stock [Line Items] | ||
Earn-Out shares | 5,000,000 | 5,000,000 |
Earn-Out Shares - Additional In
Earn-Out Shares - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Aug. 25, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | |||
Consecutive trading days required for entitlement of common stock | 30 days | ||
Trading days required for entitlement of common stock | 20 days | ||
Common stock price per share | $ 0.0001 | $ 0.0001 | |
Decrease in the warrant liability | $ (638) | $ (1,031) | |
Common stock, shares issued | 41,990,383 | 40,689,975 | |
Earn-Out Shares [Member] | |||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | |||
Fair value of earn-out shares | $ 0.0014 | $ 2.74 | |
Fair value of option holder Earn-out Shares | $ 7,900 | ||
Decrease in the warrant liability | $ 12,100 | $ 48,900 | |
Share based compensation | 300 | $ 7,600 | |
Share based compensation service period | 4 months 9 days | ||
Unrecognized compensation expense | 0 | ||
Estimated fair value of Earn-out Shares | $ 61,000 | ||
Earn-Out Shares [Member] | Stockholders [Member] | |||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | |||
Common stock, shares issued | 4,561,353 | 4,426,889 | |
Earn-Out Shares [Member] | Option Holders [Member] | |||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | |||
Common stock, shares issued | 438,647 | 573,111 | |
Earn-Out Shares [Member] | Effector Therapeutics Inc [Member] | |||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | |||
Business acquisition, equity interest issued or issuable, number of shares | 5,000,000 | ||
Common stock price per share | $ 20 |
Earn-Out Shares - Summary of Es
Earn-Out Shares - Summary of Estimated Fair Value of Earn-Out Shares (Detail) - Earn-Out Shares [Member] | Dec. 31, 2022 shares yr | Dec. 31, 2021 yr USD ($) |
Common Stock Price | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.43 | 8.28 |
Expected volatility | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 1.150 | 0.650 |
Risk-free interest rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.048 | 0.006 |
Forecast period (in years) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.6 | 1.6 |
Cost of equity | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.200 | 0.200 |
Earn-Out Shares - Summary of Ac
Earn-Out Shares - Summary of Activity for Earn-Out Liability (Detail) - Earn- out Liability [Member] - Fair Value, Inputs, Level 3 [Member] - USD ($) $ in Thousands | 4 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Dec. 31, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair value, Beginning Balance | $ 61,024 | $ 12,130 |
Incremental shares due to option holder forfeitures | 16 | |
Change in fair value | (48,910) | $ (12,124) |
Fair Value, Net Derivative Asset (Liability), Recurring Basis, Still Held, Unrealized Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Change In Fair Value Of Earn-out Liability | |
Fair value, Ending Balance | $ 12,130 | $ 6 |
License Agreements - Additional
License Agreements - Additional Information (Detail) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Aug. 31, 2021 | Jul. 31, 2021 | |
License Agreement Disclosure [Line Items] | ||||
Research and development capitalization | $ 23,313,000 | $ 19,956,000 | ||
Regents of the University of California [Member] | ||||
License Agreement Disclosure [Line Items] | ||||
Payable in connection with the closing of the merger agreement | $ 1,000,000 | |||
Research and development capitalization | $ 15,000 | $ 15,000 | ||
Regents of the University of California [Member] | Amendment to the License Agreement [Member] | ||||
License Agreement Disclosure [Line Items] | ||||
Payable in connection with the closing of the merger agreement | $ 1,000,000 | |||
Regents of the University of California [Member] | Amendment to the License Agreement [Member] | Certain Clinical and Regulatory Milestones [Member] | ||||
License Agreement Disclosure [Line Items] | ||||
Remaining milestone payments payable | $ 375,000 |
Research Collaboration and Li_2
Research Collaboration and License Agreement - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2022 | Dec. 31, 2021 | |
Research Collaboration And License Agreement [Line Items] | |||
Performance obligation transaction price | $ 27,000 | ||
Revenue from contract with customer excluding assessed tax | 3,553 | $ 1,430 | |
Based on License [Member] | |||
Research Collaboration And License Agreement [Line Items] | |||
Performance obligation transaction price | 25,600 | ||
Based on Research Activities [Member] | |||
Research Collaboration And License Agreement [Line Items] | |||
Performance obligation transaction price | 1,400 | ||
Early Development and Regulatory Milestones [Member] | |||
Research Collaboration And License Agreement [Line Items] | |||
Upfront of milestones payment | 80,000 | ||
Non Early Stage Development Milestones [Member] | Non Exercise of Co-Funding And Co-Promotion Option [Member] | |||
Research Collaboration And License Agreement [Line Items] | |||
Upfront of milestones payment | 165,000 | ||
Non Early Stage Development Milestones [Member] | Exercise of Co-Funding And Co-Promotion Option [Member] | |||
Research Collaboration And License Agreement [Line Items] | |||
Upfront of milestones payment | 70,000 | ||
Specified Sales Based Milestones [Member] | |||
Research Collaboration And License Agreement [Line Items] | |||
Upfront of milestones payment | $ 235,000 | ||
Pfizer [Member] | |||
Research Collaboration And License Agreement [Line Items] | |||
Upfront payment received | $ 15,000 |
DARPA Grant Revenue - Additiona
DARPA Grant Revenue - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Apr. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Revenue Reconciling Item [Line Items] | |||
Allowable costs of reimbursable | $ 5,000 | ||
Prepaid expenses and other current assets | $ 1,704 | $ 3,194 | |
Maximum | |||
Segment Reporting Revenue Reconciling Item [Line Items] | |||
Reimbursement amount | $ 5,000 | ||
Cooperative Agreement [Member] | |||
Segment Reporting Revenue Reconciling Item [Line Items] | |||
Revenues | 3,600 | $ 1,400 | |
Reimbursable for allowable costs | $ 5,000 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | |
Lessee, Lease, Description [Line Items] | |||
Operating lease, cost | $ 100,000 | ||
Operating lease, payments | $ 100,000 | ||
Solana Beach, California | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease, cost | $ 100,000 | $ 16,400 | |
Lease term | 3 years |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Supplemental Balance Sheet Information Related to Leases (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Operating lease right-of-use assets | $ 111 | $ 166 |
Total right-of-use assets | 111 | 166 |
Liabilities | ||
Lease liabilities, current portion | 60 | 44 |
Operating lease liabilities, non-current | 60 | 126 |
Total operating lease liabilities | $ 120 | $ 170 |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Future Minimum Rental Payments for Operating Leases (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||
2023 | $ 67 | |
2024 | 62 | |
Total remaining lease payments | 129 | |
Less: imputed interest | (9) | |
Total operating lease liabilities | 120 | $ 170 |
Less: current portion | (60) | |
Operating lease liabilities, non-current | $ 60 | $ 126 |
Weighted-average remaining lease term (in years) | 1 year 9 months 18 days | |
Weighted-average discount rate | 8% |
Employee Benefits (Additional I
Employee Benefits (Additional Information) (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Retirement Benefits [Abstract] | |
Defined Contribution Plan, Cost | $ 0 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | |||
Income tax expense | $ 0 | $ 0 | |
Valuation allowance | 56,666,000 | 48,935,000 | |
Net operating loss | (32,403,000) | (31,897,000) | |
Research and development credits | 100,000 | ||
Deferred tax assets for net operating losses | 600,000 | ||
Research credits | 100,000 | ||
Unrecognize interest or penalties. | 62,000,000 | 50,000,000 | |
Unrecognized tax benefits | 8,860,000 | $ 8,235,000 | $ 7,623,000 |
Federal [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss | 103,100,000 | ||
Net operating loss carryforwards | 181,600,000 | ||
Research and development credits | 9,600,000 | ||
Orphan drug tax credit, carryforwards | 2,200,000 | ||
California [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss | 1,800,000 | ||
Net operating loss carryforwards | 92,800,000 | ||
Research and development credits | 4,300,000 | ||
Unrecognized tax benefits | $ 7,400 |
Income Taxes - Schedule of Net
Income Taxes - Schedule of Net Deferred Tax Assets Components (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred Tax Assets, Net [Abstract] | ||
Net operating loss carryforwards | $ 42,243 | $ 36,898 |
Intangibles | 189 | 3,565 |
Research and development capitalization | 3,839 | |
Accrued compensation | 2,282 | 1,284 |
Credits | 8,013 | 7,107 |
Fixed assets | 10 | 6 |
Other, net | 88 | 74 |
Right-of-use liability | 25 | 36 |
Deferred tax assets | 56,689 | 48,970 |
Deferred tax liabilities: | ||
Right-of-use asset | 23 | 35 |
Deferred tax liabilities | (23) | (35) |
Net deferred tax assets | 56,666 | 48,935 |
Valuation allowance | (56,666) | (48,935) |
Net deferred tax assets | $ 0 | $ 0 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Tax at statutory rate | $ (4,760) | $ 3,318 |
State income taxes, net of federal benefits | (2,076) | (1,853) |
Change in valuation allowance | 7,726 | 8,515 |
Uncertain tax positions | 586 | 569 |
Gain on change in fair value of earn-out liability | (2,546) | (10,271) |
Permanent differences and other | 281 | 636 |
Transaction Costs | 244 | 0 |
Capitalized R&D | 3,381 | 510 |
LWAC net operating loss | (1,370) | |
Credits | (1,466) | (1,424) |
Income tax expense (benefit) | $ 0 | $ 0 |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Unrecognized tax benefits, Beginning balance | $ 8,235 | $ 7,623 |
Additions/(reductions) for tax positions - prior year | 0 | 0 |
Increase related to current year positions | 625 | 612 |
Unrecognized tax benefits, Ending balance | $ 8,860 | $ 8,235 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Subsequent Event [Line Items] | ||
Common Stock, Value, Issued | $ 4 | $ 4 |
Additional issuance of common stock in future | 3,685,451 | 6,201,340 |