Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Mar. 15, 2023 | |
Cover [Abstract] | ||
Document Type | 10-K | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | FY | |
Entity Registrant Name | PEPGEN INC. | |
Entity Central Index Key | 0001835597 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 23,781,905 | |
Entity Public Float | $ 114.2 | |
Documents Incorporated by Reference | Portions of the registrant’s Definitive Proxy Statement relating to its 2023 Annual Meeting of Stockholders to be filed hereafter are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. | |
Entity Shell Company | false | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
ICFR Auditor Attestation Flag | false | |
Title of 12(b) Security | Common stock, par value $0.0001 per share | |
Trading Symbol | PEPG | |
Security Exchange Name | NASDAQ | |
Entity File Number | 001-41374 | |
Entity Tax Identification Number | 85-3819886 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 321 Harrison Avenue | |
Entity Address, City or Town | Boston | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02118 | |
City Area Code | 781 | |
Local Phone Number | 797-0979 | |
Document Annual Report | true | |
Document Transition Report | false | |
Auditor Firm ID | 185 | |
Auditor Location | Phoenix, AZ, USA | |
Auditor Name | KPMG LLP |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 181,752 | $ 132,895 |
Other receivables | 58 | 4,744 |
Prepaid expenses and other current assets | 4,273 | 2,347 |
Total current assets | 186,083 | 139,986 |
Property and equipment, net | 3,335 | 636 |
Operating lease right-of-use asset | 26,549 | |
Other assets | 1,473 | 3,019 |
Total assets | 217,440 | 143,641 |
Current liabilities: | ||
Accounts payable | 1,362 | 3,240 |
Accrued expenses | 11,913 | 7,081 |
Operating lease liability | 5,553 | |
Total current liabilities | 18,828 | 10,321 |
Preferred stock warrant liability | 226 | |
Operating lease liability, net of current portion | 18,981 | |
Total liabilities | 37,809 | 10,547 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity (deficit) | ||
Preferred stock, $0.0001 par value; 10,000,000 and zero shares authorized at December 31, 2022 and 2021, respectively | ||
Common stock, $0.0001 par value; 500,000,000 and 16,000,000 shares authorized as of December 31, 2022 and 2021, respectively; 23,713,197 and 963,588 shares issued and outstanding as of December 31, 2022 and 2021, respectively | 2 | |
Additional paid-in capital | 282,566 | 1,653 |
Accumulated other comprehensive income (loss) | (81) | 17 |
Accumulated deficit | (102,856) | (33,752) |
Total stockholders' equity (deficit) | 179,631 | (32,082) |
Total liabilities, convertible preferred stock, and stockholders' equity (deficit) | $ 217,440 | 143,641 |
Series A-1 Convertible Preferred Stock | ||
Convertible preferred stock: | ||
Convertible preferred stock | 8,454 | |
Series A-2 Convertible Preferred Stock | ||
Convertible preferred stock: | ||
Convertible preferred stock | 44,639 | |
Series B Convertible Preferred Stock | ||
Convertible preferred stock: | ||
Convertible preferred stock | $ 112,083 |
CONSOLIDATED BALANCE SHEETS (PA
CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Temporary Equity, Shares Issued | 0 | |
Temporary equity, shares outstanding | 0 | |
Preferred stock par value | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 10,000,000 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 500,000,000 | 16,000,000 |
Common stock, shares, issued | 23,713,196 | 963,588 |
Common stock, shares outstanding | 23,713,196 | 963,588 |
Series A-1 Convertible Preferred Stock | ||
Temporary equity, par value | $ 0.0001 | $ 0.0001 |
Temporary equity, shares authorized | 0 | 1,372,970 |
Temporary Equity, Shares Issued | 0 | 1,372,970 |
Temporary equity, shares outstanding | 0 | 1,372,970 |
Temporary Equity, Liquidation Preference | $ 0 | $ 6,400,000 |
Series A-2 Convertible Preferred Stock | ||
Temporary equity, par value | $ 0.0001 | $ 0.0001 |
Temporary equity, shares authorized | 0 | 3,974,598 |
Temporary Equity, Shares Issued | 0 | 3,939,069 |
Temporary equity, shares outstanding | 0 | 3,939,069 |
Temporary Equity, Liquidation Preference | $ 0 | $ 45,000,000 |
Series B Convertible Preferred Stock | ||
Temporary equity, par value | $ 0.0001 | $ 0.0001 |
Temporary equity, shares authorized | 0 | 7,234,766 |
Temporary Equity, Shares Issued | 0 | 7,234,766 |
Temporary equity, shares outstanding | 0 | 7,234,766 |
Temporary Equity, Liquidation Preference | $ 0 | $ 112,500,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating Expenses [Abstract] | ||
Research and development | $ 54,077,000 | $ 18,999,000 |
General and administrative | 14,224,000 | 8,110,000 |
Total operating expenses | 68,301,000 | 27,109,000 |
Operating loss | (68,301,000) | (27,109,000) |
Other income (expense) | ||
Interest income | 2,793,000 | |
Other income (expense), net | 110,000 | (172,000) |
Total other income (expense), net | 2,903,000 | (172,000) |
Net loss before income tax | (65,398,000) | (27,281,000) |
Income tax expense | (3,706,000) | 0 |
Net loss | $ (69,104,000) | $ (27,281,000) |
Net loss per share, basic | $ (4.42) | $ (30.27) |
Net loss per share, diluted | $ (4.42) | $ (30.27) |
Weighted-average common shares outstanding, basic | 15,639,728 | 901,108 |
Weighted-average common shares outstanding, diluted | 15,639,728 | 901,108 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (69,104) | $ (27,281) |
Cumulative translation adjustment arising during the period | (98) | 25 |
Comprehensive loss | $ (69,202) | $ (27,256) |
CONSOLIDATED STATEMENTS OF CONV
CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Total | Series A-1 Convertible Preferred Stock | Series A-2 Convertible Preferred Stock | Series B Convertible Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | Accumulated Deficit |
Temporary Equity Beginning Balance at Dec. 31, 2020 | $ 8,454 | $ 7,680 | ||||||
Temporary Equity Beginning Balance, shares at Dec. 31, 2020 | 1,372,970 | 700,278 | ||||||
Beginning Balance at Dec. 31, 2020 | $ (6,360) | $ 119 | $ (8) | $ (6,471) | ||||
Beginning Balance, shares at Dec. 31, 2020 | 894,060 | |||||||
Release of common stock from vesting restrictions | 69,528 | |||||||
Temporary equity, Issuance of convertible preferred stock, net of issuance cost, shares | 3,238,791 | 7,234,766 | ||||||
Temporary equity, Issuance of convertible preferred stock, net of issuance cost | $ 36,959 | $ 112,083 | ||||||
Stock-based compensation expense | 1,534 | 1,534 | ||||||
Net loss | (27,281) | (27,281) | ||||||
Foreign currency translation adjustment | 25 | 25 | ||||||
Temporary Equity Ending Balance at Dec. 31, 2021 | $ 8,454 | $ 44,639 | $ 112,083 | |||||
Temporary Equity Ending Balance, shares at Dec. 31, 2021 | 1,372,970 | 3,939,069 | 7,234,766 | |||||
Ending Balance at Dec. 31, 2021 | (32,082) | 1,653 | 17 | (33,752) | ||||
Ending Balance, shares at Dec. 31, 2021 | 963,588 | |||||||
Temporary equity, Issuance of Series A-2 stock upon exercise of warrants, shares | 35,529 | |||||||
Temporary equity, Issuance of Series A-2 stock upon exercise of warrants | $ 574 | |||||||
Temporary equity, Conversion of convertible preferred stock upon IPO, shares | (1,372,970) | (3,974,598) | (7,234,766) | |||||
Temporary equity, Conversion of convertible preferred stock upon IPO | $ (8,454) | $ (45,213) | $ (112,083) | |||||
Conversion of convertible preferred stock upon IPO, shares | 12,359,856 | |||||||
Conversion of convertible preferred stock upon IPO | 165,752 | $ 1 | 165,751 | |||||
Issuance of Common Stock in IPO, net of underwritings' fees and issuance cost, shares | 10,238,951 | |||||||
Issuance of Common Stock in IPO, net of underwritings' fees and issuance cost | $ 110,183 | $ 1 | 110,182 | |||||
Release of common stock from vesting restrictions | 69,529 | |||||||
Stock Options, Exercised | 81,272 | 81,272 | ||||||
Exercise of stock options | $ 217 | 217 | ||||||
Stock-based compensation expense | 4,763 | 4,763 | ||||||
Net loss | (69,104) | (69,104) | ||||||
Foreign currency translation adjustment | $ (98) | (98) | ||||||
Temporary Equity Ending Balance, shares at Dec. 31, 2022 | 0 | 0 | 0 | 0 | ||||
Ending Balance at Dec. 31, 2022 | $ 179,631 | $ 2 | $ 282,566 | $ (81) | $ (102,856) | |||
Ending Balance, shares at Dec. 31, 2022 | 23,713,196 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (PARENTHETICAL) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Common Stock | ||
Net of issuance costs | $ 12,684 | |
Series A-2 Convertible Preferred Stock | ||
Net of issuance costs | $ 40 | |
Series B Convertible Preferred Stock | ||
Net of issuance costs | $ 417 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (69,104) | $ (27,281) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Depreciation | 493 | 178 |
Stock-based compensation expense | 4,763 | 1,534 |
Change in fair value of preferred stock warrant liability | (58) | 196 |
Other non-cash adjustments | 134 | |
Changes in operating assets and liabilities: | ||
Other receivables | 4,183 | (4,342) |
Prepaids and other current and non-current assets | (1,784) | (2,215) |
Accounts payable | (1,407) | 2,510 |
Accrued expenses and other non-current liabilities | 5,531 | 6,821 |
Operating lease liabilities, current and non-current | (2,016) | |
Net cash used in operating activities | (59,265) | (22,599) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (3,755) | (500) |
Net cash used in investing activities | (3,755) | (500) |
Cash flows from financing activities: | ||
Issuance of common stock upon initial public offering, net of underwriters' fees | 114,267 | |
Payment of offering costs | (2,697) | (1,386) |
Proceeds from issuance of common stock upon exercise of Series A-2 warrants | 406 | |
Proceeds from exercise of stock options | 217 | |
Net cash provided by financing activities | 112,193 | 147,656 |
Effect of exchange rate changes on cash | (316) | 33 |
Net increase in cash, cash equivalents and restricted cash | 48,857 | 124,590 |
Cash, cash equivalents and restricted cash at beginning of period | 134,368 | 9,778 |
Cash, cash equivalents and restricted cash at end of period | 183,225 | 134,368 |
Components of cash, cash equivalents and restricted cash | ||
Cash and cash equivalents | 181,752 | 132,895 |
Restricted Cash | 1,473 | 1,473 |
Total cash, cash equivalents and restricted cash at end of period | 183,225 | 134,368 |
Supplemental noncash investing and financing activities | ||
Property and equipment included in accounts payable and accrued expenses | 363 | |
Lease assets obtained in exchange for new operating lease liabilities | $ 26,549 | |
Deferred offering costs included in accounts payable and accrued expenses | 160 | |
Series A-2 Convertible Preferred Stock | ||
Cash flows from financing activities: | ||
Proceeds from issuance of convertible preferred stock, net of issuance costs | 36,959 | |
Series B Convertible Preferred Stock | ||
Cash flows from financing activities: | ||
Proceeds from issuance of convertible preferred stock, net of issuance costs | $ 112,083 |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business and Basis of Presentation | 1. Nature of Business and Basis of Presentation PepGen Inc. (PepGen or the Company), is a clinical-stage biotechnology company advancing the next generation of oligonucleotide therapeutics with the goal of transforming the treatment of severe neuromuscular and neurologic diseases. The Company's principal offices are located in Boston, Massachusetts. The Company was initially formed as PepGen Limited on January 25, 2018, in the United Kingdom, or the UK. On November 9, 2020, PepGen Limited completed a corporate reorganization, or the Reorganization. As part of the Reorganization, PepGen Limited formed PepGen Inc., a Delaware corporation with nominal assets and liabilities, for the purpose of consummating the Reorganization. In connection with the Reorganization, the existing stockholders of PepGen Limited exchanged each of its classes of shares of PepGen Limited for the same number and class of common stock of PepGen Inc. on a one-to-one basis. The newly issued stock of PepGen Inc. had substantially identical rights to the exchanged shares of PepGen Limited. As a result of the exchange, PepGen Inc. became the sole stockholder of PepGen Limited. Upon the completion of the Reorganization on November 23, 2020, the historical financial statements of PepGen Limited became the historical financial statements of PepGen Inc. as the Reorganization was deemed to be between entities under common control. Initial Public Offering On May 10, 2022, the Company closed its initial public offering (IPO) in which the Company sold an aggregate of 9,000,000 shares at a public offering price of $ 12.00 per share for gross proceeds of $ 108.0 million. In connection with the IPO, the Company granted the underwriters a 30-day option to purchase 1,350,000 additional shares of common stock. On May 16, 2022, the underwriters exercised the option in part and the Company issued 1,238,951 shares of common stock for gross proceeds of $ 14.9 million. From the IPO and option exercise by the underwriters, the Company received approximately $ 122.9 million in gross proceeds and $ 110.2 million in net proceeds, after deducting underwriting discounts and estimated offering expenses payable by the Company. Immediately prior to consummation of the IPO, all 12,546,805 outstanding shares of the Company’s redeemable convertible preferred stock, and 35,529 preferred stock warrants that were exercised on May 4, 2022 (see Note 3), converted into 12,359,856 shares of the Company’s common stock. As a result of this conversion, the Company's net loss per share, basic and diluted, will be significantly different in future filings. Liquidity and Going Concern Since inception, the Company has not generated any revenue from product sales or other sources and has incurred significant operating losses and negative cash flows from operations. The Company’s primary uses of cash and cash equivalents to date have been to fund research and development activities, business planning, establishing and maintaining the Company’s intellectual property portfolio, hiring personnel, leasing premises and associated capital expenditures, raising capital, and providing general and administrative support for these operations. As of December 31, 2022, the Company had an accumulated deficit of $ 102.9 million. To date, the Company has funded operations primarily through private placements of convertible preferred stock and its IPO. As of December 31, 2022, the Company had cash and cash equivalents of $ 181.8 million. Based on its current operating plans, the Company believes that its cash and cash equivalents as of December 31, 2022, will be sufficient to fund its currently planned operations for at least the next 12 months from the filing of these consolidated financial statements. As the Company continues to pursue its business plan to successfully develop and obtain regulatory approval for the Company’s product candidates, it expects to finance its operations through the sale of equity, debt financings or other capital resources, which could include income from collaborations, strategic partnerships or marketing, distribution, licensing or other strategic arrangements with third parties, or from grants. However, there can be no assurance that any additional financing or strategic transactions will be available to the Company on acceptable terms, if at all. If events or circumstances occur such that the Company does not obtain additional funding, it may need to delay, reduce or eliminate its product development or future commercialization efforts, which could have a material adverse effect on the Company’s business, results of operations or financial condition. Basis of Presentation and Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. The consolidated financial statements include the accounts of PepGen Inc. (a U.S. Corporation) and its wholly owned subsidiaries PepGen Limited (a UK corporation) and PepGen Securities Corp. All intercompany accounts and transactions have been eliminated in consolidation. |
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 preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Management bases its estimates and judgments on historical experience, knowledge of current conditions, and beliefs of what could occur in the future, given the available information. On an ongoing basis, management evaluates such estimates and assumptions for continued reasonableness. In particular, management makes estimates with respect to accruals for research and development activities, for the valuation of Intellectual Property, for the fair value of common stock and convertible preferred stock warrants and stock-based compensation expense. Appropriate adjustments, if any, to the estimates used are made prospectively based upon such periodic evaluation. Actual results could differ materially from those estimates and assumptions. 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, or the CODM. The Company’s CODM is its chief executive officer who reviews financial information together with certain operating metrics principally to make decisions about how to allocate resources and to measure the Company’s performance. The Company has determined that it operates as a single reportable segment. The Company’s CODM evaluates financial information on a consolidated basis. As the Company operates as one operating segment, all required segment financial information is presented in the consolidated financial statements. Foreign Currency Remeasurement The Company’s reporting currency is the U.S. Dollar. The functional currency of PepGen Limited is the British Pound. The assets and liabilities of PepGen Limited are translated into U.S. Dollars at the exchange rates in effect at each balance sheet date, and the results of operations are translated using the average exchange rates prevailing throughout the reporting period. Adjustments resulting from translating foreign functional currency financial statements into U.S. Dollars are included in the foreign currency translation adjustment, a component of accumulated other comprehensive loss in stockholders’ deficit. Concentration of Credit Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash and money market accounts. As of December 31, 2022, the Company’s cash and money market accounts were held by one financial institution in the U.S. and one financial institution in the U.K. At times, the Company’s deposits held in the U.S. and U.K. may exceed the Federal Depository Insurance Corporation and Financial Services Compensation Scheme, respectively, insured limits. Deferred Offering Costs The Company capitalizes within other long-term assets certain legal, accounting, and other third- party fees that are directly related to the Company’s in-process equity financings, until such financings are consummated. After consummation of the equity financing, these costs are recorded as a reduction of the proceeds received as a result of the offering. Should a planned equity financing be abandoned, terminated, or significantly delayed, the deferred offering costs are immediately written off to operating expenses. As of December 31, 2021, deferred offering costs of $ 1.5 million were recorded within other assets on the consolidated balance sheets. Subsequent to the completion of the IPO in May 2022, deferred offering costs totaling $ 4.1 million were recorded within stockholders’ equity as a reduction of additional paid-in-capital generated from the initial public offering. Fair Value Measurements Certain assets and liabilities of the Company are carried at fair value under U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: • Level 1: Fair values are determined utilizing prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. • Level 2: Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. • Level 3: Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. For certain financial instruments, including cash and cash equivalents, prepaid expenses, accounts payable, as well as certain accrued liabilities, the recorded amount approximates estimated fair value due to their relatively short maturity period. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents are recorded at cost, which approximates fair value. As of December 31, 2022 and 2021, cash and cash equivalents consisted primarily of checking and money market funds composed of US government obligations. Restricted Cash The Company classifies all cash whose use is limited by contractual provisions as restricted cash. Restricted cash arises from the requirement for the Company to maintain cash of $ 1.5 million as collateral under a lease agreement. As of December 31, 2022 and 2021, $ 1.5 million of restricted cash was recorded in other assets on the consolidated balance sheets. Property and Equipment, Net Property and equipment are stated at cost, net of accumulated depreciation. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the respective assets. Maintenance and repairs that do not improve or extend the life of the assets are expensed when incurred. The estimated useful lives of the Company’s property and equipment are as follows: Laboratory and computer equipment 5 years Furniture and fixtures 3 years Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset or asset group to the estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset or asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized as the amount by which the carrying amount of the asset or asset group exceeds the estimated discounted future cash flows of the asset or asset group. There have been no such impairments of long-lived assets for the years ended December 31, 2022 and 2021. Leases Effective January 1, 2022, the Company adopted ASU 2016-02, Leases (Topic 842) (“ASC 842”). Under ASC 842, at the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances presented in the arrangement, including whether the Company controls the use of identified assets. The Company classifies leases with a term greater than one year as either operating or finance leases at the lease commencement date and records a right-of-use assets and current and non-current lease liabilities, as applicable on the balance sheet. The Company has elected not to recognize on the balance sheet leases with terms of one year or less, but payments are recognized as expense on a straight-line basis over the lease term. If a lease includes options to extend the lease term, the Company does not assume the option will be exercised in its initial lease term assessment unless there is reasonable certainty that the Company will renew based on an assessment of economic factors present as of the lease commencement date. The Company monitors its plans to renew its material lease each reporting period. If a lease includes provisions for leasehold improvements for which the Company has an obligation to pay, the Company determines if the improvements should be considered lessor or lessee assets. If the improvements are considered lessor assets, the Company records the payments in the calculation of the lease liability and corresponding right-of-use asset. Lease liabilities and the corresponding right-of-use assets are recorded based on the present value of lease payments over the remaining lease term. The present value of future lease payments are discounted using the interest rate implicit in lease contracts if that rate is readily determinable; otherwise the Company utilizes information available at the commencement of the lease to calculate the incremental borrowing rate, or IBR, which reflects the fixed rate at which the Company could borrow on a collateralized basis over a similar term, the amount of the lease payments in a similar economic environment. In order to determine the appropriate incremental borrowing rate, the Company used available third-party information, including comparable company collateralized borrowing information. After lease commencement and the establishment of a right-to-use asset and operating lease liability, lease expense is recorded on a straight-line basis over the lease term. The Company enters into contracts that contain both lease and non-lease components. Non-lease components include costs that do not provide a right-to-use a leased asset but instead provide a service, such as maintenance costs. The Company has elected to account for the lease and non-lease components together as a single component for all classes of underlying assets. Variable costs associated with the lease, such as maintenance and utilities, are not included in the measurement of right-to-use assets and lease liabilities but rather are expensed when the events determining the amount of variable consideration to be paid have occurred. Commitment and Contingencies The Company recognizes a liability with regard to loss contingencies when it believes it is probable a liability has been incurred, and the amount can be reasonably estimated. If some amount within a range of loss appears at the time to be a better estimate than any other amount within the range, the Company accrues that amount. When no amount within the range is a better estimate than any other amount the Company accrues the minimum amount in the range. The Company has not recorded any such liabilities as of December 31, 2022 and 2021 that were material to the consolidated financial statements . Convertible Preferred Stock The Company recorded convertible preferred stock at fair value on the dates of issuance, net of issuance costs. Upon the occurrence of certain events that are outside the Company’s control, including a deemed liquidation event, holders of the convertible preferred stock can cause redemption for cash. Therefore, convertible preferred stock was classified outside of stockholders’ deficit on the consolidated balance sheets as events triggering the liquidation preferences are not solely within the Company’s control. No accretion was recognized as the contingent events that could give rise to redemption were not deemed probable. Upon completion of the IPO, all preferred stock was converted to common stock and as such no amounts were issued or outstanding as of December 31, 2022. Preferred Stock Warrants The Company classified warrants to purchase its Series A-2 convertible preferred stock as a liability on the consolidated balance sheets as these warrants were freestanding financial instruments that could require the Company to transfer assets upon exercise. Research and Development Research and development costs are expensed as incurred. Research and development costs consist of salaries, benefits, and other personnel-related costs, including stock-based compensation, laboratory supplies, process development costs, fees paid to other entities to conduct certain research and development activities on the Company’s behalf, including contract manufacturing organizations and contract research organizations, and allocated facility and other related costs. Non-refundable advance payments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized as prepaid expenses until the related goods are delivered or services are performed. The Company recognizes the benefit of government grants and refundable research and development tax credits as a reduction of research and development expense when it is probable that the Company has complied with the conditions attached and will receive reimbursement. Government grants and refundable research and development tax credits are included in other receivables within the consolidated balance sheets. For the years ended December 31, 2022 and 2021, the Company recorded nil and $ 4.8 million as reductions of research and development expense in the consolidated statements of operations, respectively. During the year-ended December 31, 2022, the Company received £ 3.4 million (approximately $ 4.1 million) relating to its 2021 United Kingdom research and development tax credit for research and development activities undertaken by its U.K. subsidiary. As of December 31, 2022 and 2021, nil and $ 4.7 million of research and development tax credits were recorded in other receivables on the consolidated balance sheets, respectively. The Company records accrued liabilities for estimated costs of research and development activities conducted by third-party service providers. The Company accrues for these costs based on factors such as estimates of the work completed and in accordance with agreements established with its third-party service providers under the service agreements. The Company makes significant judgments and estimates in determining the accrued liabilities balance in each reporting period. As actual costs become known, the Company adjusts its accrued liabilities. The historical accrual estimates made by the Company have not been materially different from the actual costs. Common Stock Valuation Prior to the Company's IPO, due to the absence of an active market for the Company’s common stock, the Company utilized methodologies, approaches and assumptions consistent with the American Institute of Certified Public Accountants’ Audit and Accounting Practice Guide: Valuation of Privately-Held Company Equity Securities Issued as Compensation to estimate the fair value of its common stock. In determining the exercise prices for options granted, the Company has considered the fair value of the common stock as of the grant date. The fair value of the common stock has been determined based upon a variety of factors, including valuations of the Company’s common stock performed with the assistance of independent third-party valuation specialists; the Company’s stage of development and business strategy, including the status of research and development efforts of its product candidates, and the material risks related to its business and industry; the Company’s business conditions and projections; the Company’s results of operations and financial position, including its levels of available capital resources; the valuation of publicly traded companies in the life sciences and biotechnology sectors, as well as recently completed mergers and acquisitions of peer companies; the lack of marketability of the Company’s common stock as a private company; the prices of the Company’s convertible preferred stock sold to investors in arm’s length transactions and the rights, preferences and privileges of its convertible preferred stock relative to those of its common stock; the likelihood of achieving a liquidity event for the holders of the Company’s common stock, such as an initial public offering or a sale of the Company given prevailing market conditions; trends and developments in its industry; the hiring of key personnel and the experience of management; and external market conditions affecting the life sciences and biotechnology industry sectors. Significant changes to the key assumptions underlying the factors used could result in different fair values of common stock at each valuation date. Stock-Based Compensation The Company accounts for its stock-based compensation in accordance with ASC Topic 718, Compensation-Stock Compensation (ASC 718). ASC 718 requires all stock-based payments to employees, non-employees and directors, to be recognized as expense in the consolidated statements of operations based on their grant date fair values. The Company estimates the fair value of options granted using the Black-Scholes option pricing model (Black-Scholes) for stock option grants to both employees and non-employees. The fair value of the Company’s common stock is used to determine the fair value of restricted stock awards. The Company’s stock-based compensation awards are generally subject to service-based vesting conditions. Compensation expense related to awards to employees, directors and non-employees with service-based vesting conditions is recognized on a straight-line basis based on the grant date fair value over the associated service period of the award, which is generally the vesting term. Black-Scholes requires inputs based on certain subjective assumptions, including (i) the expected stock price volatility, (ii) the expected term of the award, (iii) the risk-free interest rate and (iv) expected dividends. The Company determines the expected volatility using a the historical volatility of a peer group of comparable publicly traded companies with product candidates in similar stages of development to the Company’s product candidates. The Company uses the simplified method as prescribed by the SEC Staff Accounting Bulletin No. 107, Share-Based Payment, to calculate the expected term for options granted to employees and non-employees whereby, the expected term equals the arithmetic average of the vesting term and the original contractual term of the options due to its lack of sufficient historical data. The risk-free interest rate is based on U.S. Treasury securities with a maturity date commensurate with the expected term of the associated award. The expected dividend yield is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock. The Company recognizes forfeitures as they occur. Prior to the Company’s IPO, there was no public market for its common stock, and consequently, the estimated fair value of its common stock was determined by the board of directors as of the date of each option grant, with input from management, considering third-party valuations of its common stock as well as its board of directors’ assessment of additional objective and subjective factors that it believed were relevant and which may have changed from the date of the most recent third-party valuation through the date of the grant. These third-party valuations were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation (Practice Aid). The Practice Aid identifies various available methods for allocating the enterprise value across classes of series of capital stock in determining the fair value of the Company’s common stock at each valuation date. Subsequent to the Company’s IPO, the fair value of the common stock underlying the stock-based awards is the closing price of the Company’s common stock on the date of grant. The Company classifies stock-based compensation expense in its consolidated statements of operations in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified. Income Taxes Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts or existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period of enactment. The Company records a valuation allowance to reduce deferred tax assets to an amount for which realization is more likely than not. The Company recognizes the tax benefit from an uncertain tax position if it is more likely than not that the tax position will be sustained upon examination by the tax authorities, based on the merits of the position. The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense or benefit. To date, there have been no interest or penalties charged in relation to the unrecognized tax benefits. Comprehensive Loss Comprehensive loss is composed of two components — net loss and other comprehensive loss. Other comprehensive loss refers to gains and losses that under U.S. GAAP are recorded as an element of stockholders’ equity but are excluded from net loss. The Company’s other comprehensive loss consists of foreign currency translation adjustments. Net Loss Per Share Basic net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period, without consideration of potential dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the sum of the weighted average number of common shares plus the potential dilutive effects of potential dilutive securities outstanding during the period. Potential dilutive securities are excluded from diluted earnings or loss per share if the effect of such inclusion is anti-dilutive. The Company’s potentially dilutive securities, which include convertible preferred stock and unvested common stock under the Company’s equity incentive plan, vesting conditions placed on previously issued common shares and warrants to purchase convertible preferred stock have been excluded from the computation of diluted net loss per share as they would be anti-dilutive to the net loss per share. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position. The following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of diluted net loss per share because their inclusion would be anti-dilutive: As of December 31, 2022 2021 Series A-1 convertible preferred stock — 1,372,970 Series A-2 convertible preferred stock — 3,939,069 Series A-2 convertible preferred stock warrants — 35,529 Series B convertible preferred stock — 7,234,766 Options to purchase common stock 3,341,834 1,898,084 Vesting conditions placed on previously issued common shares — 69,528 Total 3,341,834 14,549,946 Emerging Growth Company Status The Company is an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act, or JOBS Act, and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. The Company may take advantage of these exemptions until the Company is no longer an “emerging growth company.” Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards. The Company has elected to use the extended transition period for complying with new or revised accounting standards and as a result of this election, its consolidated financial statements may not be comparable to companies that comply with public company effective dates. The Company may take advantage of these exemptions up until the last day of the fiscal year following the fifth anniversary of an offering or such earlier time that it is no longer an “emerging growth company.” As a result of the Company having elected the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act, 2016-13 and ASU 2019-11 are effective for the Company for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard-setting bodies that the Company adopts as of the specified effective date. The Company qualifies as an “emerging growth company” as defined in the JOBS Act of 2012 and has elected not to “opt out” of the extended transition related to complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public and non-public companies, the Company can adopt the new or revised standard at the time non-public companies adopt the new or revised standard and can do so until such time that the Company either (i) irrevocably elects to “opt out” of such extended transition period or (ii) no longer qualifies as an emerging growth company. The Company may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for non-public companies. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its consolidated financial statements and disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), the amendment relates to leases to increase transparency and comparability among organizations by requiring the recognition of right-of-use, or the ROU, assets obtained in exchange for lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of consolidated financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The effective date of this update is for fiscal years beginning after December 15, 2021, and interim periods therein. The Company adopted the standard on January 1, 2022 . On December 29, 2022, the Company commenced a lease for accounting purposes, resulting in the recording of a lease liability and corresponding right of use asset on the consolidated balance sheet in accordance with Topic 842 (refer to Note 6). Prior to commencing this lease in December 2022, the Company had no leases with initial terms greater than 12 months and had no right-of-use assets or lease liabilities. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The standard changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The effective date of this update is for fiscal years beginning after December 15, 2022, and interim periods therein. The Company is currently assessing the impact of adopting this standard on the Company’s consolidated financial statements and related disclosures. In November 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments—Credit Losses. The standard is an accounting pronouncement that amends ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The amendments update guidance on reporting credit losses for financial assets. These amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amendments in both ASU 2016-13 and ASU 2019-11 are effective for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years. The Company does not expect ASU 2016-13 and ASU 2019-11 to have a material impact on its consolidated financial statements and financial statement disclosures. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740). The standard simplifies the Accounting for Income Taxes. The standard simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and also improves consistent application by clarifying and amending existing guidance. The standard is effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company is assessing the impact of this guidance and is continuing to evaluate the impact on its consolidated financial statements. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. Fair Value Measurements The following table set forth the fair value of the Company’s financial assets measure at fair value on a recurring basis and indicates the level within the fair value hierarchy utilized to determine such values (in thousands): As of December 31, 2022 Total Level 1 Level 2 Level 3 US Treasury-backed money market funds $ 18,645 $ 18,645 — — Total $ 18,645 $ 18,645 $ — $ — As of December 31, 2021 Total Level 1 Level 2 Level 3 US Treasury-backed money market funds $ 30,719 $ 30,719 — — Total $ 30,719 $ 30,719 $ — $ — Money market funds are highly liquid investments that are valued based on quoted market prices in active markets, which represent a Level 1 measurement within the fair value hierarchy. These money market funds are classified on the balance sheet under cash and cash equivalents. Preferred stock warrant liability In connection with the November 24, 2020 Stock Purchase Agreement (Note 8), the Company granted warrants to purchase up to 35,529 shares of Series A-2 convertible preferred stock at a price per share equal to $ 11.42 and with a term ending upon the earlier of an underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, the consummation of a Deemed Liquidation Event, as such term is defined in the Company’s Restated Certificate of Incorporation or 10 years . As the warrants are for preferred stock, which do not qualify for equity classification, the warrants were recorded as a liability and were required to be remeasured to fair value at each reporting date. The warrants were exercised on May 4, 2022 , just prior to the completion of the IPO, for proceeds of $ 0.4 million. Immediately prior to the consummation of the IPO, the warrants were converted into 34,901 shares of the Company's common stock. As there are a number of inputs that are not observable in the market, the warrant valuation represented a Level 3 measurement within the fair value hierarchy. The Company’s valuation of the preferred stock warrant utilized the Black-Scholes option-pricing model, which incorporates assumptions and estimates to value the preferred stock warrant. The quantitative elements associated with the Company’s Level 3 inputs impacting the fair value measurement of the preferred stock warrant liability included the fair value per share of the underlying Series A-2 convertible preferred stock, the remaining contractual term of the warrant, risk-free interest rate, expected dividend yield and expected volatility of the price of the underlying preferred stock. The most significant assumption in the Black-Scholes option-pricing model impacting the fair value of the preferred stock warrant was the fair value of the Company’s Series A-2 convertible preferred stock as of each remeasurement date. The Company determined the fair value per share of the underlying preferred stock by taking into consideration its most recent sales of its convertible preferred stock. The Company historically had been a private company and lacked company-specific historical and implied volatility information of its stock. Therefore, it estimated its expected stock volatility based on the historical volatility of publicly traded peer companies for a term equal to the remaining contractual term of the warrant. The risk-free interest rate was determined by reference to the U.S. Treasury yield curve for time periods approximately equal to the remaining contractual term of the warrant. The Company had estimated a 0 % dividend yield based on the expected dividend yield and the fact that the Company has never paid or declared dividends. The Company recognized changes in the fair value of the warrant liability as a component of other income (expense) in its consolidated statements of operations and comprehensive loss. A reconciliation of the Level 3 warrant liability through exercise in the second quarter of 2022 is as follows (in thousands): Series A-2 Preferred Balance as of December 31, 2020 $ 30 Change in fair value 196 Balance as of December 31, 2021 226 Change in fair value ( 58 ) Exercise of preferred stock warrants ( 168 ) Balance as of December 31, 2022 $ 0 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 4. Property and Equipment, Net The cost and accumulated depreciation of property and equipment were as follows (in thousands): December 31, 2022 2021 Lab equipment $ 2,424 $ 975 Computer and office equipment 171 91 Construction in process 1,129 — Total property and equipment 3,724 1,066 Less accumulated depreciation ( 389 ) ( 430 ) Total property and equipment, net $ 3,335 $ 636 Depreciation expense was $ 0.5 million and $ 0.2 million for the year ended December 31, 2022 and 2021, respectively. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Expenses | 5. Accrued Expenses Accrued expenses consisted of the following (in thousands): December 31, 2022 2021 Research and development $ 4,840 $ 5,343 Employee-related expenses 2,440 1,205 Taxes payable 3,248 — Other 1,385 533 Total accrued expenses $ 11,913 $ 7,081 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | 6. Leases In December 2021, the Company entered into a non-cancellable operating lease agreement, or the Harrison Lease, pursuant to which the Company leases 31,668 square feet of office and laboratory space located in Boston, Massachusetts, or the Premises. The Harrison Lease commenced for accounting purposes when the Company gained access to the premises on December 29, 2022 or the Lease Commencement Date. The Harrison Lease has a term of nine years and two months from the lease commencement date. The Company’s obligation for the payment of base rent for the Premises begins in March 2023, and will be $ 0.2 million per month, increasing up to $ 0.3 million per month during the term of the Lease. The Company has one option to extend the term of the Harrison Lease, for a period of an additional five years . Due to the timing of the lease commencement date at the end of 2022, there was no fixed lease rent expense associated with the Harrison Lease in 2022. At December 31, 2022, the Harrison Lease was the only lease for which the Company recorded a lease liability and corresponding right-of-use asset. The landlord is completing significant leasehold improvements to the leased space, a portion of which the Company is obligated to pay per the term of the Harrison Lease. The Company paid $ 2.0 million for the improvements prior to lease commencement, and expects to pay approximately $ 3.9 million for the improvements in 2023. The Company has determined that the landlord is the accounting owner of the improvements, and expected payments by the Company for the improvements have been included in the calculation of the right-of-use asset and lease liability. During 2022, the Company leased office space in Cambridge, Massachusetts, the terms of which were month-to-month, with a 30-day written notice of cancellation . The Company terminated this lease in January 2023 . The Company also leased laboratory space at the University of Massachusetts, Mount Ida Campus in Newton, Massachusetts, on an initial lease term from February 1, 2022 to January 31, 2023, which the Company extended until March 2023. The Company also leased space at Innovation Building, University of Oxford in Oxford, United Kingdom. The Company terminated its lease in Oxford in July 2022 . All of these leases had terms of under 12 months and are considered short-term lease costs and are not recognized on the consolidated balance sheets. Summary of lease costs The components of lease cost under ASC 842 for the leases were as follows (in thousands): December 31, 2022 December 31, 2021 Fixed lease cost $ — $ — Short-term lease cost 1,294 520 Total lease cost $ 1,294 $ 520 The Company recorded immaterial variable lease costs for the years ended December 31, 2022 and 2021. Supplemental disclosure of cash flow information under ASC 842 for the leases were as follows (in thousands): December 31, 2022 Operating cash payments for operating leases $ 2,016 Cash payments for operating leases during 2022 related to tenant improvements made to the office and lab space prior to the Company obtaining occupancy. These payments were recorded in the right-of-use asset at December 31, 2022. The remaining lease term for the Harrison Lease is 9.2 years, and the discount rate is 8.0 %. Future minimum lease payments under the non-cancelable operating leases consisted of the following as of December 31, 2022: Year Ending December 31, (in thousands) 2023 $ 6,289 2024 3,033 2025 3,124 2026 3,218 2027 3,315 Thereafter 14,906 Total future minimum lease payments $ 33,885 Less: imputed interest ( 9,351 ) Present value of lease liability $ 24,534 Included in the consolidated balance sheet (in thousands) December 31, 2022 Lease liability $ 5,553 Lease liability, net of current portion 18,981 Total lease liability $ 24,534 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 7. Related Party Transactions Technology license agreement In March 2018, the Company, Oxford University Innovation Limited, or OUI, and the Medical Research Council of United Kingdom Research and Innovation, or MRC (or collectively the Licensors), entered into a license of technology agreement, or the License Agreement, which was subsequently amended in December 2018 and further amended and restated in November 2020. The Licensors and affiliates hold shares of Series A-1 and Series A-2 preferred stock, Series B preferred stock and Class A common stock. The License Agreement provides the Company with an exclusive world-wide license to licensed data and technology owned by OUI and MRC in respect of cell penetrating peptides for treatment of Duchenne muscular dystrophy, spinal muscular atrophy, and other conditions. The License Agreement provides the Company with the rights to grant and authorize sublicenses to make, use, sell, and import products and otherwise exploit the patent rights. As consideration for the license, the Company made an initial upfront payment in 2018 of $ 0.1 million upon transfer of the license technology and data and in 2020 upon amending and restating the License Agreement made two additional payments of $ 19,000 for a Restatement Completion Fee and License Data Fee. The Company determined that the upfront payment and subsequent Restatement Completion Fee and License Data Fee as part of the license agreement would be expensed upon execution of the original contract and subsequent amendment as the license was acquired for research and development purposes which does not have alternative future uses, and the underlying technology has not reached technological feasibility. The Company could be required to make milestone payments to the Licensors upon completion of certain patent and commercial milestones related to the patents and commercialization of certain of the Company’s product candidates. The aggregate potential milestone payments are $ 0.1 million. The Company also agreed to pay the Licensors low single digit royalties on net sales of any licensed products that are commercialized by the Company or sublicensees in excess of a threshold amount between £ 20 million and £ 30 million ($ 24.2 million and $ 36.3 million as of December 31, 2022), subject to certain adjustments. The term of the License Agreement continues until the later of (i) the date on which all the patents and patent applications covered thereunder have been abandoned or allowed to lapse or expired or been rejected or revoked or (ii) 20 years from the date of the original agreement. Upon completion of the Company’s Initial Public Offering, or IPO in May 2022, the Company became obligated to pay OUI an exit fee between 0.5 % to 2 % of the value determined in an acquisition or initial public offering, not to exceed £ 5 million ($ 6.2 million as of the IPO date). The exit fee due to OUI, based on the IPO raise, was $ 1.4 million, which was paid during the second quarter of 2022 and included in research and development expense on the consolidated statement of operations. Additionally, the Company paid office space rent to OUI. For the years ended December 31, 2022 and 2021, total rent payments were $ 0.2 million and $ 0.2 million, respectively. As of December 31, 2022 and 2021, nil and $ 30,000 , respectively, was due to OUI by the Company. Services agreement In November 2020, the Company entered into an agreement, or the Services Agreement, with Carnot Pharma, LLC, or Carnot, under which Carnot provides research and other services to the Company. Carnot is an entity controlled by RA Capital Management, L.P. Entities affiliated with RA Capital Management, L.P. purchased shares of Series A-2 convertible preferred stock in the Company’s preferred stock financing in November of 2020 and May and July of 2021. In addition, entities affiliated with RA Capital Management, L.P. purchased shares of our Series B convertible preferred stock in the Company’s preferred stock financing in July 2021. Two members of the Company’s Board of Directors are also affiliated with RA Capital Management, L.P. Under the terms of the Services Agreement, the Company compensates Carnot on a fully burdened cost basis for personal time devoted to Company projects. In addition, the Company reimburses Carnot on a costs basis for any subcontractor costs incurred. The Company pays Carnot on a quarterly basis, in arrears, for services performed and costs incurred. The Services Agreement is for a term of the later of (A) two ( 2 ) years and (B) the later of (a) completion of the Services or (b) latest-to-occur delivery of a final report or any other items required to be delivered to the Company under the last ongoing project as part of the services, if any. The Company may terminate the services agreement by giving 30 days’ prior notice and either party can terminate the services agreement for a material breach, if not cured within 30 days following notice by the non-breaching party. The services agreement was terminated on April 15, 2022 . Expenses incurred by the Company under the Services Agreement with Carnot for the year ended December 31, 2022 and 2021, totaled $ 0.1 million and $ 0.8 million, respectively. As of December 31, 2022 and 2021, nil and $ 2,600 was due to Carnot by the Company for services rendered under the Services Agreement, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. Commitments and Contingencies Legal proceedings From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made and that such expenditures can be reasonably estimated. The Company is not party to any litigation and does not have contingency reserves established for any litigation liabilities. Other The Company enters into standard indemnification agreements in the ordinary course of business. Pursuant to the agreements, the Company agrees to indemnify, hold harmless, and to reimburse the indemnified party for losses suffered or incurred by the indemnified party, including in connection with any U.S. patent or any copyright or other intellectual property infringement claim by any third-party with respect to the Company’s products. Further, the Company indemnifies its directors and officers who are, or were, serving at the Company’s request in such capacities. The Company’s maximum exposure under these arrangements is unknown as of December 31, 2022. The Company does not anticipate recognizing any significant losses relating to these arrangements. The term of these indemnification agreements is generally perpetual any time after execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements may be unlimited. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. |
Convertible Preferred Stock and
Convertible Preferred Stock and Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Convertible Preferred Stock and Stockholders' Equity | 9. Convertible Preferred Stock and Stockholders’ Equity Reverse Stock Split On April 29, 2022, the Company filed a charter amendment to affect a 1.018 for 1 reverse stock split of its issued and outstanding shares of common stock, which resulted in a proportional adjustment to the existing conversion ratios for each series of the Company’s preferred stock. Accordingly, all share and per share amounts for all periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this reverse stock split and adjustment of the preferred stock conversion ratios. Series A-1 convertible preferred stock and Series A-2 convertible preferred stock In connection with the November 24, 2020, Stock Purchase Agreement, the Company agreed to issue an aggregate of 3,939,069 shares of Series A-2 convertible preferred stock to new and existing investors at a price of $ 11.42 per share, in three closings, and elected to convert 1,348,693 shares of outstanding Class A and Class B common stock into 1,372,970 shares of Series A-1 convertible preferred stock. A total of 1,033,117 shares of Class A common stock held by certain founding investors and employees were not modified and continue to exist as Class A common stock. The Series A-1 and Series A-2 convertible preferred stock was converted to common stock immediately prior to the consummation of the Company’s IPO in May 2022 (see Note 1). Series B convertible preferred stock In July 2021 the Company entered into the Series B Stock Purchase Agreement, whereby the Company agreed to issue and sold an aggregate of 7,234,766 shares of Series B convertible stock to new and existing investors at a per share price of $ 15.55 per share for aggregate gross proceeds of $ 112.5 million. The Series B convertible preferred stock was converted to common stock immediately prior to the consummation of the Company's IPO in May 2022 (see Note 1). Common stock Under the Third Amended and Restated Certificate of Incorporation, dated May 10, 2022, the Company has the authority to issue a total of 500,000,000 shares of common stock (par value of $ 0.0001 per share) and 10,000,000 shares of undesignated preferred stock (par value of $ 0.0001 per share). In connection with the IPO, the Company re-designated all shares of Class A common stock as shares of common stock. Each share of common stock has the right to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the board of directors, subject to the prior rights of holders of all classes of stock outstanding having priority rights as to dividends. No cash dividends have been declared by the board of directors during the year ended December 31, 2022 and December 31, 2021. The Company has reserved the following shares of common stock for issuance, on an as-converted basis for 2021, as follows: December 31, 2022 2021 Convertible preferred stock — 12,546,805 Stock options issued and outstanding 3,341,834 1,898,084 Preferred stock warrants issued and outstanding — 35,529 Vesting conditions placed on previously issued common shares — 69,529 Authorized for future stock awards or option grants 901,462 456,416 Authorized for future issuance under employee stock purchase plan 226,000 — Total 4,469,296 15,006,363 Shares of Common Stock Subject to Repurchase In November 2020, in connection with the Series A-2 convertible preferred stock financing, two founding stockholders entered into Stock Restriction Agreements, or Restriction Agreements, whereby 139,057 shares that were previously vested and not subject to repurchase became restricted and subject to repurchase. The repurchase rights lapse 50 % on the one-year anniversary of the Restriction Agreements and 50 % on the second anniversary of the Restriction Agreements. Shares subject to repurchase by the Company are not deemed, for accounting purposes, to be outstanding until those shares vest and therefore are not included in the shares outstanding on the consolidated balance sheet. In connection with the vesting restrictions placed on these previously vested shares, the Company was required to determine the measurement date fair value of the shares, which was $ 2.37 per share or $ 0.3 million in aggregate. The measurement date fair value of the restricted stock will be recognized as stock-based compensation expense over the vesting period. As of December 31, 2022 and 2021, zero and 69,529 shares were subject to repurchase by the Company, respectively. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 10. Stock-Based Compensation The Company maintains three equity compensation plans; the 2020 Stock Plan, or the 2020 Plan, the 2022 Stock Option Incentive Plan, or the 2022 Plan, and the 2022 Employee Stock Purchase Plan, or the ESPP. The number of shares of common stock that may be issued under the 2022 Plan is subject to increase by the number of shares forfeited under any options forfeited and not exercised under the 2020 Plan. Additionally, the number of shares reserved for issuance under the 2022 Plan automatically increases on the first day of each fiscal year in an amount equal to the lower of (1) 5 % of the shares of common stock outstanding on such date and (2) an amount determined by the Company’s board of directors. The board of directors has determined not to make any further awards under the 2020 plan. As of December 31, 2022, 901,462 shares remained available for grant under the 2022 Plan and 226,000 shares remained available for grant under the ESPP. Stock Option Valuation In determining the fair value of the stock options granted, the Company uses the Black-Scholes option-pricing model and assumptions discussed below. Each of these inputs is subjective and generally requires significant judgment. Expected Term —The Company’s expected term represents the period that the Company’s stock- based awards are expected to be outstanding. For stock options with service-based vesting periods, the expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. Expected Volatility —The Company has historically been a private company and lacks significant company-specific historical and implied volatility information. The expected volatility was estimated based the average historical volatilities for comparable publicly traded pharmaceutical companies over a period equal to the expected term of the stock option grants. The comparable companies were chosen based on their similar size, stage in the life cycle and area of specialty. The Company will continue to apply this process until enough historical information regarding the volatility of its own stock price becomes available. The Company expects to estimate stock volatility based on the historical volatility of peer companies until such time as it has adequate historical data regarding the volatility of its own traded stock price. Risk-Free Interest Rate —The risk-free interest rate is based on the U.S. Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term of option. Expected Dividend Yield —The Company has never paid dividends on its common stock and has no plans to pay dividends on its common stock. Therefore, the Company used an expected dividend yield of zero . The fair value of stock options was estimated using the following weighted average assumptions: Year Ended 2022 2021 Risk-free interest rate % 2.95 % 1.10 % Expected volatility % 71.68 % 77.00 % Expected term (in years) 6.08 6.03 Expected dividend yield — — Stock Option Activity Stock option activity under the Plan, is as follows: Stock Weighted-Average Weighted-Average Aggregate Outstanding as of December 31, 2021 1,898,084 $ 7.46 9.6 $ 7,157 Granted 1,544,285 11.69 Exercised ( 81,272 ) 2.71 Canceled/Forfeited ( 19,263 ) 9.51 Outstanding as of December 31, 2022 3,341,834 $ 9.52 8.7 $ 12,877 Vested and exercisable as of December 31, 2022 681,880 $ 6.38 8.2 $ 4,764 Vested and expected to vest as of December 31, 2022 3,341,834 $ 9.52 8.7 $ 12,877 The aggregate intrinsic value of options is calculated as the difference between the exercises price of the options and the fair value of the Company's common stock for those options that had exercises prices lower than the fair value of the Company's common stock. The total intrinsic value of the options exercised during the year ended December 31, 2022 and 2021 was $ 0.9 million and nil , respectively. The intrinsic value is the difference between the estimated fair value of the Company’s common stock at the time of exercise and the exercise price of the stock option. During the years ended December 31, 2022 and 2021, the total proceeds to the Company from stock option exercises was $ 0.2 million and nil , respectively. The weighted-average grant date fair value of options granted during the year ended December 31, 2022 and 2021 was $ 7.66 and $ 5.22 per share, respectively. Stock-Based Compensation Expense Stock based compensation expense recognized for stock option grants included in the accompanying consolidated statements of operations and comprehensive loss is as follows (in thousands): Year Ended 2022 2021 Research and development $ 1,695 $ 394 General and administrative 3,068 1,140 Total stock-based compensation expense $ 4,763 $ 1,534 The Company had 3,341,834 unvested options outstanding as of December 31, 2022. As of December 31, 2022, total unrecognized compensation cost related to stock options was $ 15.8 million. This amount is expected to be recognized over a weighted average period of approximately 2.98 years. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11. Income Taxes The Company’s loss before income taxes for the years ended December 31, 2022 and 2021 were generated in the following jurisdictions (in thousands): Year Ended 2022 2021 Domestic $ ( 96,781 ) $ ( 6,181 ) Foreign 31,383 ( 21,100 ) Worldwide $ ( 65,398 ) $ ( 27,281 ) The foreign income for the year-ended December 31, 2022 was due to the transfer of intellectual property (IP) from PepGen Limited to the parent company, PepGen Inc., in an arm’s length transaction at fair value pursuant to an asset transfer agreement. The components of net deferred income taxes consisted of the following as of December 31, 2022 and 2021 (in thousands): December 31, 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 474 $ 3,103 Research and development credits 1,287 36 Accrued expenses 523 234 Capitalized Section 174 R&D Costs 11,818 — Stock compensation accruals 1,081 264 Right-of-use liability 5,760 — Intangible asset amortization 6,879 — Deferred tax assets 27,822 3,637 Deferred tax liabilities Right-of-use-Asset ( 6,233 ) Fixed Assets ( 45 ) ( 13 ) Other, net ( 2 ) — Deferred tax liabilities ( 6,280 ) ( 13 ) Net deferred tax assets 21,542 3,624 Valuation allowance ( 21,542 ) ( 3,624 ) Net deferred tax assets $ — $ — The components of income tax expense were as follows for the years ended December 31, 2022 and 2021 (in thousands): Year Ended 2022 2021 Current expense: U.S. Federal $ — $ — State 23 — Foreign 3,683 — Total current expense 3,706 — Deferred expense: U.S. Federal — — State — — Foreign — — Total deferred expense — — Provision for income taxes $ 3,706 $ — A reconciliation of income tax expense to the amount computed by applying the statutory federal income tax rate to the loss from operations is summarized for the years ended December 31, 2022 and 2021, as follows: Year Ended 2022 2021 Tax at statutory rate 21.0 % 21.0 % State tax (net of federal benefit) ( 0.0 )% 0.7 % Permanent differences ( 0.1 )% ( 0.6 )% Research and development credit 1.6 % 0.2 % GILTI Inclusion ( 8.8 )% — UK R&D credit 0.0 % ( 9.4 )% Foreign rate differential ( 1.0 )% ( 1.5 )% Change in valuation allowance ( 23.4 )% ( 10.3 )% Other 5.0 % ( 0.1 )% Income tax expense (benefit) ( 5.7 )% — The Company’s income tax expense of $ 3.7 million for the year ended December 31, 2022, compared to nil for the year ended December 31, 2021. The income tax expense for the year ended December 31, 2022 was due to the intellectual property (IP) transfer noted in the paragraph below. On January 1, 2022, or the Transfer Date, the Company’s wholly owned subsidiary, PepGen Limited, transferred all IP assets to the parent company, PepGen Inc., in an arm’s length transaction at fair value pursuant to an asset transfer agreement. The fair value of the IP assets is a non-recurring fair value measurement. The Company engaged valuation specialists to calculate the IP value, and the IP value was measured using the historical cost method. The historical cost method estimated the fair value of the IP assets using the historical cost base of the IP assets and the expected market return as of the Transfer Date. The significant assumption inherent in estimating the fair value using the historical cost method was the expected market return. The Company utilized a 40 % expected market return, which a third-party investor may expect as a return on their investment, and which is based on studies of venture capital investment returns. The Company calculated the fair value of the IP assets by computing the present value of the historical cost base using the 40 % expected market return. The expected market return assumption used in the estimation of the IP assets represents a Level 3 input of the fair value hierarchy (see Note 3). The Company had federal research and development (R&D) credits of approximately $ 1.4 million as of December 31, 2022, before consideration of limitations under Section 382 of the Internal Revenue Code or Section 382, as further described below. The R&D credits will expire beginning in 2041 . The Company has state net operating losses of $ 16.3 million and state R&D credits of $ 0.3 million which begin expiring in 2042 . The future utilization of the Company’s state NOL's and federal and state R&D credits to offset future taxable income may be subject to a substantial annual limitation as a result of changes in ownership by stockholders that hold 5 % or more of the Company’s common stock. An assessment of such ownership changes under Section 382 was not completed through December 31, 2022. To the extent that an assessment is completed in the future, the Company’s ability to utilize tax attributes could be restricted on a year-by-year basis and certain attributes could expire before they are utilized. The Company will examine the impact of any potential ownership changes in the future. The Company is subject to taxation in the U.S. and the UK. The Company’s federal and state returns since inception are subject to examination due to the carryover of net operating losses. The Company has not been, nor is it currently, under examination by any tax authorities. The UK tax returns from 2018 and forward are subject to examination by the UK tax authorities. The following table summarizes the reconciliation of the beginning and ending amount of total unrecognized tax benefits for each of the periods indicated: December 31, 2022 2021 Balance at beginning of the period $ — $ — Increase related to current year tax positions 751 — Increase related to prior year tax positions — — Decrease related to prior year tax positions — — Currency translation ( 78 ) — Balance at the end of the period $ 673 $ — The Company does not expect that the amount of unrecognized tax benefits to change significantly in the next twelve months. The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense. It had no accrual for interest or penalties on its consolidated balance sheets at December 31, 2022 or 2021. No interest and/or penalties were recognized in 2022 or 2021. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | 12. Subsequent Events On March 10, 2023, Silicon Valley Bank (SVB) was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation as receiver. On March 12, 2023 the Federal Deposit Insurance Corporation (“FDIC”) transferred all deposits, both insured and uninsured, and substantially all assets from the former SVB to a newly created, full-service FDIC-operated “bridge bank”, Silicon Valley Bridge Bank, N.A. and the FDIC, Treasury Department, and Federal Reserve announced that all deposits will be fully protected, whether or not they had been insured by the FDIC. As of the date of the filing of these consolidated financial statements with the Securities and Exchange Commission, the Company has full access to and control over all its cash and cash equivalents. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Management bases its estimates and judgments on historical experience, knowledge of current conditions, and beliefs of what could occur in the future, given the available information. On an ongoing basis, management evaluates such estimates and assumptions for continued reasonableness. In particular, management makes estimates with respect to accruals for research and development activities, for the valuation of Intellectual Property, for the fair value of common stock and convertible preferred stock warrants and stock-based compensation expense. Appropriate adjustments, if any, to the estimates used are made prospectively based upon such periodic evaluation. Actual results could differ materially from those estimates and assumptions. |
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, or the CODM. The Company’s CODM is its chief executive officer who reviews financial information together with certain operating metrics principally to make decisions about how to allocate resources and to measure the Company’s performance. The Company has determined that it operates as a single reportable segment. The Company’s CODM evaluates financial information on a consolidated basis. As the Company operates as one operating segment, all required segment financial information is presented in the consolidated financial statements. |
Foreign Currency Remeasurement | Foreign Currency Remeasurement The Company’s reporting currency is the U.S. Dollar. The functional currency of PepGen Limited is the British Pound. The assets and liabilities of PepGen Limited are translated into U.S. Dollars at the exchange rates in effect at each balance sheet date, and the results of operations are translated using the average exchange rates prevailing throughout the reporting period. Adjustments resulting from translating foreign functional currency financial statements into U.S. Dollars are included in the foreign currency translation adjustment, a component of accumulated other comprehensive loss in stockholders’ deficit. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash and money market accounts. As of December 31, 2022, the Company’s cash and money market accounts were held by one financial institution in the U.S. and one financial institution in the U.K. At times, the Company’s deposits held in the U.S. and U.K. may exceed the Federal Depository Insurance Corporation and Financial Services Compensation Scheme, respectively, insured limits. |
Deferred Offering Costs | Deferred Offering Costs The Company capitalizes within other long-term assets certain legal, accounting, and other third- party fees that are directly related to the Company’s in-process equity financings, until such financings are consummated. After consummation of the equity financing, these costs are recorded as a reduction of the proceeds received as a result of the offering. Should a planned equity financing be abandoned, terminated, or significantly delayed, the deferred offering costs are immediately written off to operating expenses. As of December 31, 2021, deferred offering costs of $ 1.5 million were recorded within other assets on the consolidated balance sheets. Subsequent to the completion of the IPO in May 2022, deferred offering costs totaling $ 4.1 million were recorded within stockholders’ equity as a reduction of additional paid-in-capital generated from the initial public offering. |
Fair Value Measurements | Fair Value Measurements Certain assets and liabilities of the Company are carried at fair value under U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: • Level 1: Fair values are determined utilizing prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. • Level 2: Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. • Level 3: Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. For certain financial instruments, including cash and cash equivalents, prepaid expenses, accounts payable, as well as certain accrued liabilities, the recorded amount approximates estimated fair value due to their relatively short maturity period. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents are recorded at cost, which approximates fair value. As of December 31, 2022 and 2021, cash and cash equivalents consisted primarily of checking and money market funds composed of US government obligations. |
Restricted Cash | Restricted Cash The Company classifies all cash whose use is limited by contractual provisions as restricted cash. Restricted cash arises from the requirement for the Company to maintain cash of $ 1.5 million as collateral under a lease agreement. As of December 31, 2022 and 2021, $ 1.5 million of restricted cash was recorded in other assets on the consolidated balance sheets. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are stated at cost, net of accumulated depreciation. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the respective assets. Maintenance and repairs that do not improve or extend the life of the assets are expensed when incurred. The estimated useful lives of the Company’s property and equipment are as follows: Laboratory and computer equipment 5 years Furniture and fixtures 3 years |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset or asset group to the estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset or asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized as the amount by which the carrying amount of the asset or asset group exceeds the estimated discounted future cash flows of the asset or asset group. There have been no such impairments of long-lived assets for the years ended December 31, 2022 and 2021. |
Leases | Leases Effective January 1, 2022, the Company adopted ASU 2016-02, Leases (Topic 842) (“ASC 842”). Under ASC 842, at the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances presented in the arrangement, including whether the Company controls the use of identified assets. The Company classifies leases with a term greater than one year as either operating or finance leases at the lease commencement date and records a right-of-use assets and current and non-current lease liabilities, as applicable on the balance sheet. The Company has elected not to recognize on the balance sheet leases with terms of one year or less, but payments are recognized as expense on a straight-line basis over the lease term. If a lease includes options to extend the lease term, the Company does not assume the option will be exercised in its initial lease term assessment unless there is reasonable certainty that the Company will renew based on an assessment of economic factors present as of the lease commencement date. The Company monitors its plans to renew its material lease each reporting period. If a lease includes provisions for leasehold improvements for which the Company has an obligation to pay, the Company determines if the improvements should be considered lessor or lessee assets. If the improvements are considered lessor assets, the Company records the payments in the calculation of the lease liability and corresponding right-of-use asset. Lease liabilities and the corresponding right-of-use assets are recorded based on the present value of lease payments over the remaining lease term. The present value of future lease payments are discounted using the interest rate implicit in lease contracts if that rate is readily determinable; otherwise the Company utilizes information available at the commencement of the lease to calculate the incremental borrowing rate, or IBR, which reflects the fixed rate at which the Company could borrow on a collateralized basis over a similar term, the amount of the lease payments in a similar economic environment. In order to determine the appropriate incremental borrowing rate, the Company used available third-party information, including comparable company collateralized borrowing information. After lease commencement and the establishment of a right-to-use asset and operating lease liability, lease expense is recorded on a straight-line basis over the lease term. The Company enters into contracts that contain both lease and non-lease components. Non-lease components include costs that do not provide a right-to-use a leased asset but instead provide a service, such as maintenance costs. The Company has elected to account for the lease and non-lease components together as a single component for all classes of underlying assets. Variable costs associated with the lease, such as maintenance and utilities, are not included in the measurement of right-to-use assets and lease liabilities but rather are expensed when the events determining the amount of variable consideration to be paid have occurred. |
Commitment and Contingencies | Commitment and Contingencies The Company recognizes a liability with regard to loss contingencies when it believes it is probable a liability has been incurred, and the amount can be reasonably estimated. If some amount within a range of loss appears at the time to be a better estimate than any other amount within the range, the Company accrues that amount. When no amount within the range is a better estimate than any other amount the Company accrues the minimum amount in the range. The Company has not recorded any such liabilities as of December 31, 2022 and 2021 that were material to the consolidated financial statements |
Convertible Preferred Stock | Convertible Preferred Stock The Company recorded convertible preferred stock at fair value on the dates of issuance, net of issuance costs. Upon the occurrence of certain events that are outside the Company’s control, including a deemed liquidation event, holders of the convertible preferred stock can cause redemption for cash. Therefore, convertible preferred stock was classified outside of stockholders’ deficit on the consolidated balance sheets as events triggering the liquidation preferences are not solely within the Company’s control. No accretion was recognized as the contingent events that could give rise to redemption were not deemed probable. Upon completion of the IPO, all preferred stock was converted to common stock and as such no amounts were issued or outstanding as of December 31, 2022. |
Preferred Stock Warrants | Preferred Stock Warrants The Company classified warrants to purchase its Series A-2 convertible preferred stock as a liability on the consolidated balance sheets as these warrants were freestanding financial instruments that could require the Company to transfer assets upon exercise. |
Research and Development | Research and Development Research and development costs are expensed as incurred. Research and development costs consist of salaries, benefits, and other personnel-related costs, including stock-based compensation, laboratory supplies, process development costs, fees paid to other entities to conduct certain research and development activities on the Company’s behalf, including contract manufacturing organizations and contract research organizations, and allocated facility and other related costs. Non-refundable advance payments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized as prepaid expenses until the related goods are delivered or services are performed. The Company recognizes the benefit of government grants and refundable research and development tax credits as a reduction of research and development expense when it is probable that the Company has complied with the conditions attached and will receive reimbursement. Government grants and refundable research and development tax credits are included in other receivables within the consolidated balance sheets. For the years ended December 31, 2022 and 2021, the Company recorded nil and $ 4.8 million as reductions of research and development expense in the consolidated statements of operations, respectively. During the year-ended December 31, 2022, the Company received £ 3.4 million (approximately $ 4.1 million) relating to its 2021 United Kingdom research and development tax credit for research and development activities undertaken by its U.K. subsidiary. As of December 31, 2022 and 2021, nil and $ 4.7 million of research and development tax credits were recorded in other receivables on the consolidated balance sheets, respectively. The Company records accrued liabilities for estimated costs of research and development activities conducted by third-party service providers. The Company accrues for these costs based on factors such as estimates of the work completed and in accordance with agreements established with its third-party service providers under the service agreements. The Company makes significant judgments and estimates in determining the accrued liabilities balance in each reporting period. As actual costs become known, the Company adjusts its accrued liabilities. The historical accrual estimates made by the Company have not been materially different from |
Common Stock Valuation | Common Stock Valuation Prior to the Company's IPO, due to the absence of an active market for the Company’s common stock, the Company utilized methodologies, approaches and assumptions consistent with the American Institute of Certified Public Accountants’ Audit and Accounting Practice Guide: Valuation of Privately-Held Company Equity Securities Issued as Compensation to estimate the fair value of its common stock. In determining the exercise prices for options granted, the Company has considered the fair value of the common stock as of the grant date. The fair value of the common stock has been determined based upon a variety of factors, including valuations of the Company’s common stock performed with the assistance of independent third-party valuation specialists; the Company’s stage of development and business strategy, including the status of research and development efforts of its product candidates, and the material risks related to its business and industry; the Company’s business conditions and projections; the Company’s results of operations and financial position, including its levels of available capital resources; the valuation of publicly traded companies in the life sciences and biotechnology sectors, as well as recently completed mergers and acquisitions of peer companies; the lack of marketability of the Company’s common stock as a private company; the prices of the Company’s convertible preferred stock sold to investors in arm’s length transactions and the rights, preferences and privileges of its convertible preferred stock relative to those of its common stock; the likelihood of achieving a liquidity event for the holders of the Company’s common stock, such as an initial public offering or a sale of the Company given prevailing market conditions; trends and developments in its industry; the hiring of key personnel and the experience of management; and external market conditions affecting the life sciences and biotechnology industry sectors. Significant changes to the key assumptions underlying the factors used could result in different fair values of common stock at each valuation date. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for its stock-based compensation in accordance with ASC Topic 718, Compensation-Stock Compensation (ASC 718). ASC 718 requires all stock-based payments to employees, non-employees and directors, to be recognized as expense in the consolidated statements of operations based on their grant date fair values. The Company estimates the fair value of options granted using the Black-Scholes option pricing model (Black-Scholes) for stock option grants to both employees and non-employees. The fair value of the Company’s common stock is used to determine the fair value of restricted stock awards. The Company’s stock-based compensation awards are generally subject to service-based vesting conditions. Compensation expense related to awards to employees, directors and non-employees with service-based vesting conditions is recognized on a straight-line basis based on the grant date fair value over the associated service period of the award, which is generally the vesting term. Black-Scholes requires inputs based on certain subjective assumptions, including (i) the expected stock price volatility, (ii) the expected term of the award, (iii) the risk-free interest rate and (iv) expected dividends. The Company determines the expected volatility using a the historical volatility of a peer group of comparable publicly traded companies with product candidates in similar stages of development to the Company’s product candidates. The Company uses the simplified method as prescribed by the SEC Staff Accounting Bulletin No. 107, Share-Based Payment, to calculate the expected term for options granted to employees and non-employees whereby, the expected term equals the arithmetic average of the vesting term and the original contractual term of the options due to its lack of sufficient historical data. The risk-free interest rate is based on U.S. Treasury securities with a maturity date commensurate with the expected term of the associated award. The expected dividend yield is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock. The Company recognizes forfeitures as they occur. Prior to the Company’s IPO, there was no public market for its common stock, and consequently, the estimated fair value of its common stock was determined by the board of directors as of the date of each option grant, with input from management, considering third-party valuations of its common stock as well as its board of directors’ assessment of additional objective and subjective factors that it believed were relevant and which may have changed from the date of the most recent third-party valuation through the date of the grant. These third-party valuations were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation (Practice Aid). The Practice Aid identifies various available methods for allocating the enterprise value across classes of series of capital stock in determining the fair value of the Company’s common stock at each valuation date. Subsequent to the Company’s IPO, the fair value of the common stock underlying the stock-based awards is the closing price of the Company’s common stock on the date of grant. The Company classifies stock-based compensation expense in its consolidated statements of operations in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified. |
Income Taxes | Income Taxes Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts or existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period of enactment. The Company records a valuation allowance to reduce deferred tax assets to an amount for which realization is more likely than not. The Company recognizes the tax benefit from an uncertain tax position if it is more likely than not that the tax position will be sustained upon examination by the tax authorities, based on the merits of the position. The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense or benefit. To date, there have been no interest or penalties charged in relation to the unrecognized tax benefits. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is composed of two components — net loss and other comprehensive loss. Other comprehensive loss refers to gains and losses that under U.S. GAAP are recorded as an element of stockholders’ equity but are excluded from net loss. The Company’s other comprehensive loss consists of foreign currency translation adjustments. |
Net loss per share | Net Loss Per Share Basic net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period, without consideration of potential dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the sum of the weighted average number of common shares plus the potential dilutive effects of potential dilutive securities outstanding during the period. Potential dilutive securities are excluded from diluted earnings or loss per share if the effect of such inclusion is anti-dilutive. The Company’s potentially dilutive securities, which include convertible preferred stock and unvested common stock under the Company’s equity incentive plan, vesting conditions placed on previously issued common shares and warrants to purchase convertible preferred stock have been excluded from the computation of diluted net loss per share as they would be anti-dilutive to the net loss per share. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position. The following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of diluted net loss per share because their inclusion would be anti-dilutive: As of December 31, 2022 2021 Series A-1 convertible preferred stock — 1,372,970 Series A-2 convertible preferred stock — 3,939,069 Series A-2 convertible preferred stock warrants — 35,529 Series B convertible preferred stock — 7,234,766 Options to purchase common stock 3,341,834 1,898,084 Vesting conditions placed on previously issued common shares — 69,528 Total 3,341,834 14,549,946 |
Emerging Growth Company Status | Emerging Growth Company Status The Company is an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act, or JOBS Act, and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. The Company may take advantage of these exemptions until the Company is no longer an “emerging growth company.” Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards. The Company has elected to use the extended transition period for complying with new or revised accounting standards and as a result of this election, its consolidated financial statements may not be comparable to companies that comply with public company effective dates. The Company may take advantage of these exemptions up until the last day of the fiscal year following the fifth anniversary of an offering or such earlier time that it is no longer an “emerging growth company.” As a result of the Company having elected the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act, 2016-13 and ASU 2019-11 are effective for the Company for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard-setting bodies that the Company adopts as of the specified effective date. The Company qualifies as an “emerging growth company” as defined in the JOBS Act of 2012 and has elected not to “opt out” of the extended transition related to complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public and non-public companies, the Company can adopt the new or revised standard at the time non-public companies adopt the new or revised standard and can do so until such time that the Company either (i) irrevocably elects to “opt out” of such extended transition period or (ii) no longer qualifies as an emerging growth company. The Company may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for non-public companies. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its consolidated financial statements and disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), the amendment relates to leases to increase transparency and comparability among organizations by requiring the recognition of right-of-use, or the ROU, assets obtained in exchange for lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of consolidated financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The effective date of this update is for fiscal years beginning after December 15, 2021, and interim periods therein. The Company adopted the standard on January 1, 2022 . On December 29, 2022, the Company commenced a lease for accounting purposes, resulting in the recording of a lease liability and corresponding right of use asset on the consolidated balance sheet in accordance with Topic 842 (refer to Note 6). Prior to commencing this lease in December 2022, the Company had no leases with initial terms greater than 12 months and had no right-of-use assets or lease liabilities. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The standard changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The effective date of this update is for fiscal years beginning after December 15, 2022, and interim periods therein. The Company is currently assessing the impact of adopting this standard on the Company’s consolidated financial statements and related disclosures. In November 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments—Credit Losses. The standard is an accounting pronouncement that amends ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The amendments update guidance on reporting credit losses for financial assets. These amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amendments in both ASU 2016-13 and ASU 2019-11 are effective for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years. The Company does not expect ASU 2016-13 and ASU 2019-11 to have a material impact on its consolidated financial statements and financial statement disclosures. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740). The standard simplifies the Accounting for Income Taxes. The standard simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and also improves consistent application by clarifying and amending existing guidance. The standard is effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company is assessing the impact of this guidance and is continuing to evaluate the impact on its consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Estimated Useful Lives of Property and Equipment | The estimated useful lives of the Company’s property and equipment are as follows: Laboratory and computer equipment 5 years Furniture and fixtures 3 years |
Summary of Outstanding Potentially Dilutive Securities Excluded in Calculation of Diluted Net Loss per Share | The following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of diluted net loss per share because their inclusion would be anti-dilutive: As of December 31, 2022 2021 Series A-1 convertible preferred stock — 1,372,970 Series A-2 convertible preferred stock — 3,939,069 Series A-2 convertible preferred stock warrants — 35,529 Series B convertible preferred stock — 7,234,766 Options to purchase common stock 3,341,834 1,898,084 Vesting conditions placed on previously issued common shares — 69,528 Total 3,341,834 14,549,946 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value of Financial Assets Measure at Fair Value on Recurring Basis | The following table set forth the fair value of the Company’s financial assets measure at fair value on a recurring basis and indicates the level within the fair value hierarchy utilized to determine such values (in thousands): As of December 31, 2022 Total Level 1 Level 2 Level 3 US Treasury-backed money market funds $ 18,645 $ 18,645 — — Total $ 18,645 $ 18,645 $ — $ — As of December 31, 2021 Total Level 1 Level 2 Level 3 US Treasury-backed money market funds $ 30,719 $ 30,719 — — Total $ 30,719 $ 30,719 $ — $ — |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Summary of Cost and Accumulated Depreciation of Property and Equipment | The cost and accumulated depreciation of property and equipment were as follows (in thousands): December 31, 2022 2021 Lab equipment $ 2,424 $ 975 Computer and office equipment 171 91 Construction in process 1,129 — Total property and equipment 3,724 1,066 Less accumulated depreciation ( 389 ) ( 430 ) Total property and equipment, net $ 3,335 $ 636 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following (in thousands): December 31, 2022 2021 Research and development $ 4,840 $ 5,343 Employee-related expenses 2,440 1,205 Taxes payable 3,248 — Other 1,385 533 Total accrued expenses $ 11,913 $ 7,081 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Components of Lease Cost | The components of lease cost under ASC 842 for the leases were as follows (in thousands): December 31, 2022 December 31, 2021 Fixed lease cost $ — $ — Short-term lease cost 1,294 520 Total lease cost $ 1,294 $ 520 |
Supplemental Disclosure of Cash Flow Information Related to Leases | Supplemental disclosure of cash flow information under ASC 842 for the leases were as follows (in thousands): December 31, 2022 Operating cash payments for operating leases $ 2,016 |
Schedule of Future Minimum Lease Payments Under Non-cancelable Operating Leases | Future minimum lease payments under the non-cancelable operating leases consisted of the following as of December 31, 2022: Year Ending December 31, (in thousands) 2023 $ 6,289 2024 3,033 2025 3,124 2026 3,218 2027 3,315 Thereafter 14,906 Total future minimum lease payments $ 33,885 Less: imputed interest ( 9,351 ) Present value of lease liability $ 24,534 Included in the consolidated balance sheet (in thousands) December 31, 2022 Lease liability $ 5,553 Lease liability, net of current portion 18,981 Total lease liability $ 24,534 |
Convertible Preferred Stock a_2
Convertible Preferred Stock and Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Reserved Shares of Common Stock for Issuance, on an As-Converted Basis | The Company has reserved the following shares of common stock for issuance, on an as-converted basis for 2021, as follows: December 31, 2022 2021 Convertible preferred stock — 12,546,805 Stock options issued and outstanding 3,341,834 1,898,084 Preferred stock warrants issued and outstanding — 35,529 Vesting conditions placed on previously issued common shares — 69,529 Authorized for future stock awards or option grants 901,462 456,416 Authorized for future issuance under employee stock purchase plan 226,000 — Total 4,469,296 15,006,363 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Weighted Average Assumptions Used to Compute Estimated Fair Value of Stock Options | The fair value of stock options was estimated using the following weighted average assumptions: Year Ended 2022 2021 Risk-free interest rate % 2.95 % 1.10 % Expected volatility % 71.68 % 77.00 % Expected term (in years) 6.08 6.03 Expected dividend yield — — |
Summary of Stock Options Activity | Stock option activity under the Plan, is as follows: Stock Weighted-Average Weighted-Average Aggregate Outstanding as of December 31, 2021 1,898,084 $ 7.46 9.6 $ 7,157 Granted 1,544,285 11.69 Exercised ( 81,272 ) 2.71 Canceled/Forfeited ( 19,263 ) 9.51 Outstanding as of December 31, 2022 3,341,834 $ 9.52 8.7 $ 12,877 Vested and exercisable as of December 31, 2022 681,880 $ 6.38 8.2 $ 4,764 Vested and expected to vest as of December 31, 2022 3,341,834 $ 9.52 8.7 $ 12,877 |
Summary of Stock-based Compensation Expense | Stock based compensation expense recognized for stock option grants included in the accompanying consolidated statements of operations and comprehensive loss is as follows (in thousands): Year Ended 2022 2021 Research and development $ 1,695 $ 394 General and administrative 3,068 1,140 Total stock-based compensation expense $ 4,763 $ 1,534 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Loss Before for Income Taxes | The Company’s loss before income taxes for the years ended December 31, 2022 and 2021 were generated in the following jurisdictions (in thousands): Year Ended 2022 2021 Domestic $ ( 96,781 ) $ ( 6,181 ) Foreign 31,383 ( 21,100 ) Worldwide $ ( 65,398 ) $ ( 27,281 ) |
Components of Net Deferred Income Taxes | The components of net deferred income taxes consisted of the following as of December 31, 2022 and 2021 (in thousands): December 31, 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 474 $ 3,103 Research and development credits 1,287 36 Accrued expenses 523 234 Capitalized Section 174 R&D Costs 11,818 — Stock compensation accruals 1,081 264 Right-of-use liability 5,760 — Intangible asset amortization 6,879 — Deferred tax assets 27,822 3,637 Deferred tax liabilities Right-of-use-Asset ( 6,233 ) Fixed Assets ( 45 ) ( 13 ) Other, net ( 2 ) — Deferred tax liabilities ( 6,280 ) ( 13 ) Net deferred tax assets 21,542 3,624 Valuation allowance ( 21,542 ) ( 3,624 ) Net deferred tax assets $ — $ — |
Schedule of Components of Income Tax Expense | The components of income tax expense were as follows for the years ended December 31, 2022 and 2021 (in thousands): Year Ended 2022 2021 Current expense: U.S. Federal $ — $ — State 23 — Foreign 3,683 — Total current expense 3,706 — Deferred expense: U.S. Federal — — State — — Foreign — — Total deferred expense — — Provision for income taxes $ 3,706 $ — |
Reconciliation of Income Tax Expense to Statutory Federal Income Tax Rate to Loss From Operations | A reconciliation of income tax expense to the amount computed by applying the statutory federal income tax rate to the loss from operations is summarized for the years ended December 31, 2022 and 2021, as follows: Year Ended 2022 2021 Tax at statutory rate 21.0 % 21.0 % State tax (net of federal benefit) ( 0.0 )% 0.7 % Permanent differences ( 0.1 )% ( 0.6 )% Research and development credit 1.6 % 0.2 % GILTI Inclusion ( 8.8 )% — UK R&D credit 0.0 % ( 9.4 )% Foreign rate differential ( 1.0 )% ( 1.5 )% Change in valuation allowance ( 23.4 )% ( 10.3 )% Other 5.0 % ( 0.1 )% Income tax expense (benefit) ( 5.7 )% — |
Reconciliation of Unrecognized Tax Benefits | The following table summarizes the reconciliation of the beginning and ending amount of total unrecognized tax benefits for each of the periods indicated: December 31, 2022 2021 Balance at beginning of the period $ — $ — Increase related to current year tax positions 751 — Increase related to prior year tax positions — — Decrease related to prior year tax positions — — Currency translation ( 78 ) — Balance at the end of the period $ 673 $ — |
Nature of Business and Basis _2
Nature of Business and Basis of Presentation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
May 16, 2022 | May 10, 2022 | Dec. 31, 2022 | May 04, 2022 | Dec. 31, 2021 | |
Subsidiary, Sale of Stock [Line Items] | |||||
Option to purchase | 1,544,285 | ||||
Common stock issued in connection with exercise of stock options | 81,272 | ||||
Gross proceeds from underwriters exercised option | $ 217 | ||||
Received from IPO and option exercise by underwriters | 122,900 | ||||
Net Received from IPO and option exercise by underwriters | 110,200 | ||||
Accumulated deficit | 102,856 | $ 33,752 | |||
Cash and cash equivalents | $ 181,752 | $ 132,895 | |||
Common stock | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Number of shares sold | 10,238,951 | ||||
Common stock issued in connection with exercise of stock options | 1,238,951 | 81,272 | |||
Gross proceeds from underwriters exercised option | $ 14,900 | ||||
IPO | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Number of shares sold | 9,000,000 | ||||
Public offering price per share | $ 12 | ||||
Gross proceeds from sale of shares | $ 108,000 | ||||
Shares issued upon conversion of redeemable convertible preferred stock | 12,359,856 | ||||
Preferred stock warrants exercised | 35,529 | ||||
IPO | Redeemable Convertible Preferred Stock | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Outstanding shares | 12,546,805 | ||||
IPO | Common stock | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Option to purchase | 1,350,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) £ in Millions | 12 Months Ended | ||
Dec. 31, 2022 USD ($) Segment shares | Dec. 31, 2022 GBP (£) Segment | Dec. 31, 2021 USD ($) | |
Summary of Significant Accounting Policies [Line Items] | |||
Number of operating segment | Segment | 1 | 1 | |
Deferred offering costs | $ 4,100,000 | ||
Cash | 1,500,000 | ||
Restricted cash | $ 1,500,000 | $ 1,500,000 | |
Restricted Cash, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other Assets, Noncurrent | Other Assets, Noncurrent | |
Impairments of long-lived assets | $ 0 | $ 0 | |
Unrecognized tax benefits, interest on income taxes expense | 0 | ||
Unrecognized tax benefits, income tax penalties | $ 0 | ||
Convertible preferred stock shares Issued | shares | 0 | ||
Convertible preferred stock shares outstanding | shares | 0 | ||
Reductions in research and development expenses | 4,800,000 | ||
Research and development tax credits | $ 0 | 4,700,000 | |
ASU 2016-02 | |||
Summary of Significant Accounting Policies [Line Items] | |||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | ||
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Jan. 01, 2022 | ||
United Kingdom | |||
Summary of Significant Accounting Policies [Line Items] | |||
Research and development tax credits | £ 3.4 | 4,100,000 | |
Other Assets | |||
Summary of Significant Accounting Policies [Line Items] | |||
Deferred offering costs | $ 1,500,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Estimated Useful Lives of Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Laboratory and Computer Equipment | |
Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 5 years |
Furniture and Fixtures | |
Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 3 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Summary of Outstanding Potentially Dilutive Securities Excluded in Calculation of Diluted Net Loss per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,341,834 | 14,549,946 |
Vesting Conditions Placed on Previously Issued Common Shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 69,528 | |
Options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,341,834 | 1,898,084 |
Series A-1 Convertible Preferred Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,372,970 | |
Series A-2 Convertible Preferred Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,939,069 | |
Series A-2 Convertible Preferred Stock Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 35,529 | |
Series B Convertible Preferred Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 7,234,766 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Fair Value of Financial Assets Measure at Fair Value on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of financial assets | $ 18,645 | $ 30,719 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of financial assets | 18,645 | 30,719 |
US Treasury-Backed Money Market Funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of financial assets | 18,645 | 30,719 |
US Treasury-Backed Money Market Funds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of financial assets | $ 18,645 | $ 30,719 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
May 04, 2022 USD ($) shares | Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2021 $ / shares | Nov. 24, 2020 $ / shares shares | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Preferred stock par value | $ / shares | $ 0.0001 | $ 0.0001 | ||
Warrants term | 10 years | |||
Warrants exercised, date | May 04, 2022 | |||
Proceeds from warrant exercises | $ | $ 406 | |||
Dividend Yield | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Expected dividend yield | 0 | |||
Series A-2 Convertible Preferred Stock | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Number of warrants purchase granted | 35,529 | |||
Preferred stock par value | $ / shares | $ 11.42 | |||
IPO | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Number of warrants purchase granted | 35,529 | |||
Proceeds from warrant exercises | $ | $ 400 | |||
Class of warrants or rights number of shares converted into common stock | 34,901 |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Reconciliation of Warrant Liabilities (Details) - Series A-2 Preferred Stock Warrant Liability - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | $ 226 | $ 30 |
Change in fair value | $ (58) | $ 196 |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Exercise of preferred stock warrants | $ (168) | |
Ending balance | $ 0 | $ 226 |
Property and Equipment, Net - S
Property and Equipment, Net - Summary of Cost and Accumulated Depreciation of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 3,724 | $ 1,066 |
Less: accumulated depreciation | (389) | (430) |
Total property and equipment, net | 3,335 | 636 |
Lab Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 2,424 | 975 |
Computer and Office Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 171 | $ 91 |
Construction in Process | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 1,129 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation expenses | $ 0.5 | $ 0.2 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accrued Liabilities, Current [Abstract] | ||
Research and development expenses | $ 4,840 | $ 5,343 |
Employee-related expenses | 2,440 | 1,205 |
Taxes payable | 3,248 | |
Other | 1,385 | 533 |
Total accrued expenses | $ 11,913 | $ 7,081 |
Leases - Additional Information
Leases - Additional Information (Details) | 1 Months Ended | 12 Months Ended | ||
Dec. 28, 2022 USD ($) | Dec. 31, 2021 USD ($) ft² | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Harrison Lease | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease, description | The Company’s obligation for the payment of base rent for the Premises begins in March 2023, and will be $0.2 million per month, increasing up to $0.3 million per month during the term of the Lease. The Company has one option to extend the term of the Harrison Lease, for a period of an additional five years. | |||
Option to extend lease | The Company has one option to extend the term of the Harrison Lease, for a period of an additional five years | |||
Option to extend lease term | true | |||
Leased space | ft² | 31,668 | |||
Lease commencement date | Dec. 29, 2022 | |||
Lease term | 9 years 2 months | |||
Fixed lease rent expense | $ 0 | |||
Monthly rent expense | $ 200,000 | |||
Increase in monthly rent expense | $ 300,000 | |||
Additional period of lease | 5 years | |||
Remaining lease term | 9 years 2 months 12 days | |||
Lease discount rate | 8% | |||
Harrison Lease | Leaseholds and Leasehold Improvements | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease cost improvements | $ 2,000,000 | |||
Harrison Lease | Leaseholds and Leasehold Improvements | Forecast | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease cost improvements | $ 3,900,000 | |||
Cambridge, Massachusetts | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease, description | the Company leased office space in Cambridge, Massachusetts, the terms of which were month-to-month, with a 30-day written notice of cancellation. | |||
Lease, Existence of Option to Terminate [true false] | true | |||
Lease termination term | the terms of which were month-to-month, with a 30-day written notice of cancellation | |||
Lease terimation | 2023-01 | |||
Newton, Massachusetts | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease, description | The Company also leased laboratory space at the University of Massachusetts, Mount Ida Campus in Newton, Massachusetts, on an initial lease term from February 1, 2022 to January 31, 2023, which the Company extended until March 2023. | |||
Oxford, United Kingdom | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease terimation | 2022-07 |
Leases - Summary of Components
Leases - Summary of Components of Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Short-term lease cost | $ 1,294 | $ 520 |
Total lease cost | $ 1,294 | $ 520 |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Disclosure of Cash Flow Information Related to Leases (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Leases [Abstract] | |
Operating cash payments for operating leases | $ 2,016 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments under Non-Cancelable Operating Leases (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Lessee, Operating Lease, Liability, to be Paid [Abstract] | |
2023 | $ 6,289 |
2024 | 3,033 |
2025 | 3,124 |
2026 | 3,218 |
2027 | 3,315 |
Thereafter | 14,906 |
Total future minimum lease payments | 33,885 |
Less: imputed interest | (9,351) |
Present value of lease liability | 24,534 |
Lease liability | 5,553 |
Lease liability, net of current portion | $ 18,981 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) € in Millions, £ in Millions | 1 Months Ended | 12 Months Ended | |||||
May 31, 2022 USD ($) | May 31, 2022 EUR (€) | Nov. 30, 2020 | Mar. 31, 2018 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 GBP (£) | Dec. 31, 2021 USD ($) | |
Technology License Agreement | |||||||
Related Party Transaction [Line Items] | |||||||
Initial upfront payment | $ 100,000 | ||||||
Additional payments of restatement completion fee and license data fee one | $ 19,000 | ||||||
Additional payments of restatement completion fee and license data fee two | 19,000 | ||||||
Aggregate potential milestone payments | $ 100,000 | ||||||
Term of license agreement | 20 years | 20 years | |||||
Technology License Agreement | Minimum | |||||||
Related Party Transaction [Line Items] | |||||||
Sublicensees threshold amount | $ 24,200,000 | £ 20 | |||||
Technology License Agreement | Maximum | |||||||
Related Party Transaction [Line Items] | |||||||
Sublicensees threshold amount | 36,300,000 | £ 30 | |||||
Technology License Agreement | Oxford University Innovation Limited | |||||||
Related Party Transaction [Line Items] | |||||||
Rent expense | 200,000 | $ 200,000 | |||||
Rent payable to related parties | 0 | 30,000 | |||||
Technology License Agreement | Oxford University Innovation Limited | IPO | |||||||
Related Party Transaction [Line Items] | |||||||
Required to pay exit fee amount | 1,400,000 | ||||||
Technology License Agreement | Oxford University Innovation Limited | IPO | Minimum | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of exit fee | 0.50% | 0.50% | |||||
Technology License Agreement | Oxford University Innovation Limited | IPO | Maximum | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of exit fee | 2% | 2% | |||||
Required to pay exit fee amount | $ 6,200,000 | € 5 | |||||
Services Agreement [Member] | Carnot Pharma, LLC | |||||||
Related Party Transaction [Line Items] | |||||||
Term of services agreement | 2 years | ||||||
Services agreement terminate prior notice period | 30 days | ||||||
Services agreement terminated date | Apr. 15, 2022 | ||||||
Related party transaction expenses | 100,000 | 800,000 | |||||
Due to related party for service rendered | $ 0 | $ 2,600 |
Convertible Preferred Stock a_3
Convertible Preferred Stock and Stockholders' Equity - Additional Information (Details) | 1 Months Ended | 12 Months Ended | ||||
Apr. 29, 2022 | Nov. 24, 2020 $ / shares shares | Jul. 31, 2021 USD ($) $ / shares shares | Nov. 30, 2020 USD ($) Stockholder $ / shares shares | Dec. 31, 2022 USD ($) Vote $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | |
Class of Stock [Line Items] | ||||||
Reverse stock split, description | 1.018 for 1 reverse stock split | |||||
Number of shares agreed to issue | 0 | |||||
Common stock, shares outstanding | 23,713,196 | 963,588 | ||||
Reverse stock split, conversion ratio | 0.982 | |||||
Common stock, shares authorized | 500,000,000 | 16,000,000 | ||||
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Preferred stock authorized | 10,000,000 | 0 | ||||
Preferred stock par value | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Cash dividend | $ | $ 0 | $ 0 | ||||
Number of common stock vote | Vote | 1 | |||||
Series A-2 Convertible Preferred Stock | ||||||
Class of Stock [Line Items] | ||||||
Number of shares agreed to issue | 0 | 3,939,069 | ||||
Price per share | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Gross proceeds from issuance of convertible preferred stock | $ | $ 36,959,000 | |||||
Preferred stock par value | $ / shares | $ 11.42 | |||||
Series A-1 Convertible Preferred Stock | ||||||
Class of Stock [Line Items] | ||||||
Number of shares agreed to issue | 0 | 1,372,970 | ||||
Price per share | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Series B Convertible Preferred Stock | ||||||
Class of Stock [Line Items] | ||||||
Number of shares agreed to issue | 0 | 7,234,766 | ||||
Price per share | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Gross proceeds from issuance of convertible preferred stock | $ | $ 112,083,000 | |||||
Undesignated Preferred Stock | ||||||
Class of Stock [Line Items] | ||||||
Preferred stock authorized | 10,000,000 | |||||
Preferred stock par value | $ / shares | $ 0.0001 | |||||
Stock Purchase Agreement | Series A-2 Convertible Preferred Stock | ||||||
Class of Stock [Line Items] | ||||||
Number of shares agreed to issue | 3,939,069 | |||||
Price per share | $ / shares | $ 11.42 | |||||
Stock Purchase Agreement | Class A and Class B Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Common stock, shares outstanding | 1,348,693 | |||||
Stock Purchase Agreement | Series A-1 Convertible Preferred Stock | ||||||
Class of Stock [Line Items] | ||||||
Number of shares converted | 1,372,970 | |||||
Stock Purchase Agreement | Class A Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Common stock, shares outstanding | 1,033,117 | |||||
Series B Stock Purchase Agreement | Series B Convertible Preferred Stock | ||||||
Class of Stock [Line Items] | ||||||
Number of shares agreed to issue | 7,234,766 | |||||
Price per share | $ / shares | $ 15.55 | |||||
Gross proceeds from issuance of convertible preferred stock | $ | $ 112,500,000 | |||||
Stock Restriction Agreements | ||||||
Class of Stock [Line Items] | ||||||
Number of shares became restricted and subject to repurchase | 139,057 | |||||
Number of founding stockholders entered | Stockholder | 2 | |||||
Percentage of repurchase rights lapse on one-year anniversary. | 50% | |||||
Percentage of repurchase rights lapse on second anniversary | 50% | |||||
Measurement date fair value of shares vested per share | $ / shares | $ 2.37 | |||||
Measurement date aggregate fair value of shares | $ | $ 300,000 | |||||
Shares subject to repurchase | 0 | 69,529 |
Convertible Preferred Stock a_4
Convertible Preferred Stock and Stockholders' Equity - Schedule of Reserved Shares of Common Stock for Issuance, on an As-Converted Basis (Details) - shares | Dec. 31, 2022 | Dec. 31, 2021 |
Class of Stock [Line Items] | ||
Reserved shares of common stock for issuance | 4,469,296 | 15,006,363 |
Convertible Preferred Stock | ||
Class of Stock [Line Items] | ||
Reserved shares of common stock for issuance | 12,546,805 | |
Stock Options Issued and Outstanding | ||
Class of Stock [Line Items] | ||
Reserved shares of common stock for issuance | 3,341,834 | 1,898,084 |
Preferred Stock Warrants Issued and Outstanding | ||
Class of Stock [Line Items] | ||
Reserved shares of common stock for issuance | 35,529 | |
Vesting Conditions Placed on Previously Issued Common Shares | ||
Class of Stock [Line Items] | ||
Reserved shares of common stock for issuance | 69,529 | |
Authorized for Future Stock Awards or Option Grants | ||
Class of Stock [Line Items] | ||
Reserved shares of common stock for issuance | 901,462 | 456,416 |
Authorized for Future Issuance under Employee Stock Purchase Plan | ||
Class of Stock [Line Items] | ||
Reserved shares of common stock for issuance | 226,000 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Proceeds from exercise of stock options | $ 217,000 | |
Outstanding unvested options | 3,341,834 | |
Unrecognized compensation cost related to unvested share options | $ 15,800,000 | |
Expected recognition period of unrecognized compensation cost related to unvested share options | 2 years 11 months 23 days | |
Expected dividend yield | 0% | |
Stock Option Activity | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Intrinsic value of options exercised | $ 900,000 | $ 0 |
Proceeds from exercise of stock options | $ 200,000 | $ 0 |
Weighted average grant date fair value of options granted | $ 7.66 | $ 5.22 |
2022 Plan | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Shares Remaining available for grant | 901,462 | |
Common stock outstanding percentage | 5% | |
2022 Employee Stock Purchase Plan | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Shares Remaining available for grant | 226,000 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Weighted Average Assumptions Used to Compute Estimated Fair Value of Stock Options (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||
Risk-free interest rate % | 2.95% | 1.10% |
Expected volatility % | 71.68% | 77% |
Expected term (in years) | 6 years 29 days | 6 years 10 days |
Expected dividend yield | 0% |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Stock Options Outstanding as of December 31, 2021 | 1,898,084 | |
Stock Options, Granted | 1,544,285 | |
Stock Options, Exercised | (81,272) | |
Stock Options, Canceled/Forfeited | (19,263) | |
Stock Options, Outstanding as of December 31, 2022 | 3,341,834 | 1,898,084 |
Stock Options, Vested and exercisable as of December 31, 2022 | 681,880 | |
Stock Options, Vested and expected to vest as of December 31, 2022 | 3,341,834 | |
Weighted Average Exercise Price, Outstanding as of December 31, 2021 | $ 7.46 | |
Weighted Average Exercise Price, Granted | 11.69 | |
Weighted average exercise price, exercised | 2.71 | |
Weighted average exercise price, canceled/forfeited | 9.51 | |
Weighted Average Exercise Price, Outstanding as of December31, 2022 | 9.52 | $ 7.46 |
Weighted Average Exercise Price, Vested and exercisable as of December 31, 2022 | 6.38 | |
Weighted Average Exercise Price, Vested and expected to vest as of December 31, 2022 | $ 9.52 | |
Outstanding, Weighted Average Remaining Life | 8 years 8 months 12 days | 9 years 7 months 6 days |
Vested and exercisable , Weighted Average Remaining Life | 8 years 2 months 12 days | |
Vested and expected to vest, Weighted Average Remaining Life | 8 years 8 months 12 days | |
Outstanding, Aggregate Intrinsic Value | $ 12,877 | $ 7,157 |
Vested and exercisable, Aggregate Intrinsic Value | 4,764 | |
Vested and expected to vest, Aggregate Intrinsic Value | $ 12,877 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 4,763 | $ 1,534 |
Research and development | ||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 1,695 | 394 |
General and administrative | ||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 3,068 | $ 1,140 |
Income Taxes - Schedule of Loss
Income Taxes - Schedule of Loss Before for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Domestic | $ (96,781) | $ (6,181) |
Foreign | 31,383 | (21,100) |
Net loss before income tax | $ (65,398) | $ (27,281) |
Income Taxes - Components of Ne
Income Taxes - Components of Net Deferred Income Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 474 | $ 3,103 |
Research and development credits | 1,287 | 36 |
Accrued expenses | 523 | 234 |
Capitalized Section 174 R&D Costs | 11,818 | |
Stock compensation accruals | 1,081 | 264 |
Right-of-use liability | 5,760 | |
Intangible asset amortization | 6,879 | |
Deferred tax assets | 27,822 | 3,637 |
Deferred tax liabilities | ||
Right-of-use-Asset | (6,233) | |
Fixed Assets | (45) | (13) |
Other, net | (2) | |
Deferred tax liabilities | (6,280) | (13) |
Net deferred tax assets | 21,542 | 3,624 |
Valuation allowance | $ (21,542) | $ (3,624) |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Current expense: | ||
State | $ 23,000 | |
Foreign | 3,683,000 | |
Total current expense | 3,706,000 | |
Provision for income taxes | $ 3,706,000 | $ 0 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax Expense to Statutory Federal Income Tax Rate to Loss from Operations (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Tax at statutory rate | 21% | 21% |
State tax (net of federal benefit) | (0.00%) | 0.70% |
Permanent differences | (0.10%) | (0.60%) |
Research and development credit | 1.60% | 0.20% |
GILTI Inclusion | (8.80%) | |
UK R&D credit | 0% | (9.40%) |
Foreign rate differential | (1.00%) | (1.50%) |
Change in valuation allowance | (23.40%) | (10.30%) |
Other | 5% | (0.10%) |
Income tax expense (benefit) | (5.70%) | 0% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Jan. 01, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes [Line Items] | |||
Income tax expense | $ 3,706,000 | $ 0 | |
Uncertain tax position | 673,000 | ||
Expected market return | 40% | ||
Research and development credits | $ 1,287,000 | 36,000 | |
Changes in ownership by stockholders holding percentage | 5% | ||
Accrual for interest or penalties | $ 0 | 0 | |
Interest or penalties were recognized | $ 0 | $ 0 | |
Internal Revenue Service (IRS) | |||
Income Taxes [Line Items] | |||
Research and development credits expiration year | 2041 | ||
Internal Revenue Service (IRS) | State | |||
Income Taxes [Line Items] | |||
Research and development credits | $ 300,000 | ||
Net operating losses | $ 16,300,000 | ||
Operating loss carry forwards expiration year | 2042 | ||
Internal Revenue Service (IRS) | Federal | |||
Income Taxes [Line Items] | |||
Research and development credits | $ 1,400,000 | ||
UK tax authorities | |||
Income Taxes [Line Items] | |||
Open tax year | 2018 |
Income Taxes - Reconciliation_2
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Income Tax Disclosure [Abstract] | |
Increase related to current year tax positions | $ 751 |
Currency translation | (78) |
Balance at the end of the period | $ 673 |