Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 30, 2022 | Feb. 28, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Registrant Name | IO BIOTECH, INC. | ||
Entity Central Index Key | 0001865494 | ||
Entity File Number | 001-41008 | ||
Entity Tax Identification Number | 84-0909276 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | Ole Maaløes Vej 3 | ||
Entity Address, City or Town | Copenhagen N | ||
Entity Address, Country | DK | ||
Entity Address, Postal Zip Code | DK-2200 | ||
City Area Code | +45 | ||
Local Phone Number | 7070 2980 | ||
Title of each class | Common stock, par value $0.001 per share | ||
Trading Symbol(s) | IOBT | ||
Name of each exchange on which registered | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 75.9 | ||
Entity Common Stock, Shares Outstanding | 28,815,267 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Documents incorporated by reference | Portions of the registrant’s proxy statement relating to its 2022 Annual Meeting of Stockholders have been incorporated by reference herein in response to Part III, as specifically set forth in Part III. | ||
Auditor Name | EY Godkendt Revisionspartnerselskab | ||
Auditor Firm ID | 1757 | ||
Auditor Location | Copenhagen, Denmark |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 211,531 | $ 3,405 |
Prepaid expenses and other current assets | 10,207 | 2,230 |
Total current assets | 221,738 | 5,635 |
Restricted cash | 268 | |
Other non-current assets | 282 | 18 |
Total assets | 222,288 | 5,653 |
Current liabilities | ||
Accounts payable | 3,928 | 522 |
Accrued expenses and other current liabilities | 6,377 | 2,528 |
Total current liabilities | 10,305 | 3,050 |
Other long-term liabilities | 59 | |
Total liabilities | 10,364 | 3,050 |
Commitments and contingencies (Note 9) | ||
Stockholders' equity (deficit) | ||
Preferred stock, par value of $0.001 per share; 5,000,000 shares authorized, no shares issued and outstanding as of December 31, 2021 and 2020 | ||
Common stock | 29 | |
Additional paid-in capital | 319,665 | 1,110 |
Accumulated deficit | (106,281) | (38,402) |
Accumulated other comprehensive loss | (1,489) | 1,961 |
Total stockholders' equity (deficit) | 211,924 | (35,303) |
Total liabilities, convertible preference shares and stockholders' equity (deficit) | $ 222,288 | 5,653 |
Class B Convertible Preference Stock | ||
Convertible preference shares | ||
Class B preference shares, $0.16 par value; no shares authorized, issued or outstanding at December 31, 2021; 584,583 shares authorized, issued and outstanding at December 31, 2020 | 37,906 | |
Class A Ordinary Shares | ||
Stockholders' equity (deficit) | ||
Common stock | $ 28 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 300,000,000 | 0 |
Common stock, shares issued | 28,815,267 | 0 |
Common stock, shares outstanding | 28,815,267 | 0 |
Class B Convertible Preference Stock | ||
Convertible preference shares, par value | $ 0.16 | $ 0.16 |
Convertible preference shares, shares authorized | 0 | 584,583 |
Convertible preference shares, shares issued | 0 | 584,583 |
Convertible preference shares, shares outstanding | 0 | 584,583 |
Class A Ordinary Shares | ||
Common stock, par value | $ 0.16 | $ 0.16 |
Common stock, shares authorized | 0 | 177,200 |
Common stock, shares issued | 0 | 177,200 |
Common stock, shares outstanding | 0 | 177,200 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating expenses | ||
Research and development | $ 30,152 | $ 8,464 |
General and administrative | 11,082 | 1,681 |
Total operating expenses | 41,234 | 10,145 |
Loss from operations | (41,234) | (10,145) |
Other income (expense) | ||
Currency exchange gain (loss), net | 319 | 114 |
Interest expense | (361) | (26) |
Fair value adjustments on preference shares tranche obligations and convertible notes | (26,535) | (1,985) |
Total other income (expense), net | (26,577) | (1,897) |
Loss before income tax expense | (67,811) | (12,042) |
Income tax expense | 68 | |
Net loss | (67,879) | (12,042) |
Cumulative dividends on class B and C preference shares | (7,108) | (2,552) |
Net loss attributable to common shareholders | $ (74,987) | $ (14,594) |
Net loss per common share, basic and diluted | $ (17.30) | $ (82.36) |
Weighted-average number of shares used in computing net loss per common share, basic and diluted | 4,335,629 | 177,200 |
Other comprehensive loss | ||
Net loss | $ (67,879) | $ (12,042) |
Foreign currency translation | (3,450) | 664 |
Total comprehensive loss | $ (71,329) | $ (11,378) |
Consolidated Statements of Conv
Consolidated Statements of Convertible Preference Shares and Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Total | IPO | Class B Convertible Preference Stock | Class C Convertible Preference Stock | Common Stock | Common StockIPO | Common StockClass A Ordinary Shares | Additional Paid-In Capital | Additional Paid-In CapitalIPO | Other Comprehensive Loss | Accumulated Deficit |
Temporary equity, Balance at Dec. 31, 2019 | $ 22,060 | ||||||||||
Temporary equity, Balance, shares at Dec. 31, 2019 | 366,301 | ||||||||||
Balance at Dec. 31, 2019 | $ (23,531) | $ 0 | $ 28 | $ 1,504 | $ 1,297 | $ (26,360) | |||||
Balance, shares at Dec. 31, 2019 | 177,200 | ||||||||||
Temporary equity, Issuance of preference shares, net of issuance costs | $ 5,573 | ||||||||||
Temporary equity, Issuance of preference shares, net of issuance costs, shares | 75,845 | ||||||||||
Temporary equity, issuance of shares upon conversion of securities | $ 10,273 | ||||||||||
Temporary equity, issuance of shares upon conversion of securities, shares | 142,437 | ||||||||||
Issuance of common stock | (458) | (458) | |||||||||
Equity-based compensation expense | 64 | 64 | |||||||||
Currency translation | 664 | 664 | |||||||||
Net loss | (12,042) | (12,042) | |||||||||
Temporary equity, Balance at Dec. 31, 2020 | $ 37,906 | ||||||||||
Temporary equity, Balance, shares at Dec. 31, 2020 | 584,583 | ||||||||||
Balance at Dec. 31, 2020 | (35,303) | 0 | $ 28 | 1,110 | 1,961 | (38,402) | |||||
Balance, shares at Dec. 31, 2020 | 177,200 | ||||||||||
Temporary equity, Issuance of class C preference shares, net of issuance costs of $340 and adjusted for settlement of tranche obligation of $28,276 of which $25,908 is non-cash | $ 175,509 | ||||||||||
Temporary equity, Issuance of class C preference shares, net of issuance costs of $340 and adjusted for fair value of tranche obligation of $25,908 at non-cash settlement, shares | 1,194,864 | ||||||||||
Temporary equity, issuance of shares upon conversion of securities | $ (37,906) | $ (175,509) | |||||||||
Temporary equity, issuance of shares upon conversion of securities, shares | (584,583) | (1,194,864) | |||||||||
Exchange of preferred and ordinary shares of IO Biotech ApS into common stock of IO Biotech, Inc. | 213,415 | $ 21 | $ (28) | 213,422 | |||||||
Exchange of preferred and ordinary shares of IO Biotech ApS into common stock of IO Biotech, Inc., shares | 20,592,413 | (177,200) | |||||||||
Issuance of common stock, shares | 354 | 8,222,500 | |||||||||
Issuance of common stock | 0 | $ 103,350 | $ 0 | $ 8 | $ 103,342 | ||||||
Equity-based compensation expense | 1,791 | 1,791 | |||||||||
Currency translation | (3,450) | (3,450) | |||||||||
Net loss | (67,879) | (67,879) | |||||||||
Temporary equity, Balance, shares at Dec. 31, 2021 | 0 | ||||||||||
Balance at Dec. 31, 2021 | $ 211,924 | $ 29 | $ 319,665 | $ (1,489) | $ (106,281) | ||||||
Balance, shares at Dec. 31, 2021 | 28,815,267 |
Consolidated Statements of Co_2
Consolidated Statements of Convertible Preference Shares and Stockholders' Equity (Deficit) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Temporary equity, issuance cost | $ 11,765 | |
Class B Convertible Preference Stock | ||
Temporary equity, issuance costs | $ 10 | |
Temporary equity, issuance cost | $ 4 | |
Class C Convertible Preference Stock | ||
Temporary equity, issuance costs | 340 | |
Temporary equity adjusted for settlement of tranche obligation | 28,276 | |
Temporary equity adjusted for settlement of tranche obligation non cash portion | $ 25,908 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities | ||
Net loss | $ (67,879) | $ (12,042) |
Adjustment to reconcile net loss to net cash used in operating activities | ||
Equity-based compensation | 1,791 | 64 |
Fair value adjustments on preference shares tranche obligations | 26,535 | |
Fair value adjustments convertible notes | 1,985 | |
Other non-cash items, net | (317) | (111) |
Changes in operating assets and liabilities | ||
Prepaid expenses and other assets | (8,090) | (672) |
Accounts payable | 3,406 | (475) |
Accrued expenses and other current liabilities | 3,908 | 1,295 |
Net cash used in operating activities | (40,646) | (9,956) |
Cash flows from investing activities | ||
Purchase of property and equipment | (153) | |
Net cash used in investing activities | (153) | |
Cash flows from financing activities | ||
Proceeds from issuance of preference shares | 149,941 | 5,116 |
Proceeds from issuance of common stock | 115,115 | |
Net cash provided by financing activities | 252,951 | 5,102 |
Net increase (decrease) in cash and cash equivalents | 212,152 | (4,854) |
Effect of exchange rate changes on cash and cash equivalents | (3,758) | 413 |
Cash and cash equivalents, beginning of period | 3,405 | 7,846 |
Cash and cash equivalents, end of period | 211,799 | 3,405 |
Components of cash, cash equivalents, and restricted cash | ||
Cash and cash equivalents | 211,531 | 3,405 |
Restricted cash | 268 | |
Supplemental disclosures of non-cash financing activities: | ||
Exchange of preferred and ordinary shares of IO Biotech ApS into common stock of IO Biotech, Inc. upon closing of initial public offering | 213,443 | |
Non-cash portion of settlement of preference shares tranche obligation | 25,908 | |
Exchange of convertible notes for class B preference shares | 10,277 | |
Preferred Stock | ||
Cash flows from financing activities | ||
Issuance costs | (340) | $ (14) |
Common Stock | ||
Cash flows from financing activities | ||
Issuance costs | $ (11,765) |
Description of Business, Organi
Description of Business, Organization and Liquidity | 12 Months Ended |
Dec. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of Business, Organization and Liquidity | 1. Description of Business, Organization and Liquidity Business IO Biotech, Inc. is a clinical-stage biotechnology company dedicated to the identification and development of disruptive immune therapies for the treatment of cancer. As used in these financial statements, unless the context otherwise requires, references to the “Company”, “we,” “us,” and “our” refer to IO Biotech, Inc. and its subsidiaries. IO Biotech ApS was incorporated in Denmark in December 2014. We are developing novel, immune-modulating cancer therapies based on our T-win technology platform. Corporate reorganization In November 2021, we completed a corporate reorganization whereby IO Biotech ApS became a wholly-owned subsidiary of the Company. In connection with the corporate reorganization, each issued and outstanding class A ordinary share ($ 0.16 par value) was exchanged on a one for one basis into shares of common stock of the Company ($ 0.001 par value). Each class B and class C preference share of IO Biotech ApS was exchanged on a one for one basis into shares of class B and class C preferred stock of the Company. Initial Public Offering ("IPO") In November 2021, we completed our IPO, selling an aggregate of 8,222,500 shares of common stock at a price to the public of $ 14.00 per share, including 1,072,500 shares of common stock sold pursuant to the underwriters’ exercise of their option to purchase additional shares of common stock. We received net proceeds from the IPO, after deducting underwriting discounts and commissions and other offering costs, of approximately $ 103.3 million. Immediately prior to the consummation of the IPO, all outstanding shares of our class A ordinary shares and class B and class C convertible preference shares were converted into 20,592,413 shares of common stock. Upon the closing of the IPO on November 9, 2021, a total of 28,815,267 shares of common stock were outstanding. Our common stock began trading on the Nasdaq Global Market on November 5, 2021 under the symbol “IOBT”. On November 9, 2021, we amended and restated the certificate of incorporation of IO Biotech, Inc. to authorize 300,000,000 shares of common stock and 5,000,000 shares of preferred stock, which shares of preferred stock are currently undesignated. Risks and Uncertainties We are subject to risks common to companies in the biotechnology industry including, but not limited to, new technological innovations, protection of proprietary technology, dependence on key personnel, compliance with government regulations and the need to obtain additional financing. Product candidates currently under development will require significant additional research and development efforts, including extensive pre-clinical and clinical testing and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel infrastructure and extensive compliance reporting capabilities. Our product candidates are in development. There can be no assurance that our research and development will be successfully completed, that adequate protection for our intellectual property will be obtained, that any products developed will obtain necessary government regulatory approval or that any approved products will be commercially viable. Even if our product development efforts are successful, it is uncertain when, if ever, we will generate significant revenue from product sales. We operate in an environment of rapid change in technology and substantial competition from pharmaceutical and biotechnology companies. In addition, we are dependent upon the services of our employees and consultants. Liquidity Considerations Since inception, we have devoted substantially all our efforts to business planning, conducting research and development, recruiting management and technical staff, and raising capital. We have financed our operations primarily through the issuance of convertible preference shares, convertible notes and, most recently, our IPO. Our continued discovery and development of product candidates will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even if product development efforts are successful, it is uncertain when, if ever, we will realize significant revenue from product sales. As of December 31, 2021, we had an accumulated deficit of $ 106.3 million. We have incurred losses and negative cash flows from operations since inception, including net losses of $ 67.9 million and $ 12.0 million for the years ended December 31, 2021 and 2020, respectively. We expect that our operating losses and negative cash flows will continue for the foreseeable future as we continue to develop our product candidates. We currently expect that our cash and cash equivalents of $ 211.5 million as of December 31, 2021 will be sufficient to fund our operating expenses and capital requirements for at least 12 months from the date the financial statements are issued. However, additional funding will be necessary to fund future discovery research, pre-clinical and clinical activities. We will seek additional funding through public financings, debt financings, collaboration agreements, strategic alliances and licensing arrangements. Although we have been successful in raising capital in the past, there is no assurance that we will be successful in obtaining such additional financing on acceptable terms, or at all, and we may not be able to enter into collaborations or other arrangements. If we are unable to obtain funding, we could be forced to delay, reduce or eliminate our research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect our business prospects, even our ability to continue operations. Coronavirus Pandemic In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. In order to mitigate the spread of COVID-19, governments have imposed unprecedented restrictions on business operations, travel and gatherings, resulting in a global economic downturn and other adverse economic and societal impacts. The COVID-19 pandemic has also overwhelmed or otherwise led to changes in the operations of many healthcare facilities, including clinical trial sites. While we are considered an essential business under applicable regulations and continue to operate, the impacts of COVID-19 continue to place significant strain on our clinical trial sites, have raised concerns around monitoring patient safety, and resulted in changes to patient visit frequencies. We are continuing to work closely with our clinical partners and have taken steps as necessary to adjust our protocols and timelines due to the impact of the COVID-19 pandemic. The COVID-19 pandemic and its impacts continue to strain our clinical sites, impact patient recruitment and affect enrollment. We cannot predict the scope and severity of any further disruptions as a result of COVID-19 or their impacts on us, but business disruptions for us or any of the third parties with whom we engage, including the collaborators, contract organizations, third-party manufacturers, suppliers, clinical trial sites, regulators and other third parties with whom we conduct business could materially and negatively impact our ability to conduct our business in the manner and on the timelines presently planned. The extent to which the COVID-19 pandemic may continue to impact our business and financial performance will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope and duration of the pandemic, the extent and effectiveness of government restrictions and other actions, including relief measures, implemented to address the impact of the pandemic, and resulting economic impacts. The actual and perceived impact of the COVID-19 pandemic is changing daily, and its ultimate effect on our business cannot be predicted. As a result, there can be no assurance that we will not experience additional negative impacts associated with COVID-19, which could be significant. The COVID-19 pandemic may negatively impact our business, financial condition and results of operations causing interruptions or delays in the Company’s research and programs. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP. Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP, as found in the Accounting Standards Codification, or ASC, and Accounting Standards Update, or ASU, of the Financial Accounting Standards Board, or FASB. Prior to the completion of our IPO, we approved a 3.544 -for-1 stock split of our common stock. All share and per share amounts in the balance sheet and notes thereto have been retroactively adjusted for all periods presented to give effect to this split. Principles of consolidation The Company’s consolidated financial statements include the accounts of its subsidiaries IO Biotech ApS, IO Bio US, Inc. and IO Biotech Limited. IO Bio US, Inc., a wholly owned subsidiary of IO Biotech ApS, was incorporated in Delaware in May 2021. IO Biotech Limited, a wholly owned subsidiary of IO Biotech ApS, was incorporated in the UK in August 2021. In October 2021, the Company engaged in a series of transactions, referred to collectively as the Corporate Reorganization. As a result of the Corporate Reorganization, IO Biotech ApS became a wholly-owned subsidiary of IO Biotech, Inc. and accordingly, our consolidated financial statements are those of IO Biotech, Inc. for the periods after the date of the Corporate Reorganization. IO Biotech, Inc. is a recently formed holding company, which, prior to our IPO, had nominal assets and no liabilities, contingencies, or commitments, and which has not conducted any operations prior to our IPO other than acquiring the entire issued and outstanding stock of IO Biotech ApS. The Company, IO Biotech ApS, and the holders of all of the issued and outstanding equity interests of IO Biotech ApS have entered into a Share Contribution and Exchange Agreement, dated as of October 29, 2021, pursuant to which the Corporate Reorganization was effected. Management has concluded it has a single reporting segment for purposes of reporting financial condition and results of operations. All intercompany transactions and balances have been eliminated. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect certain reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting periods. Significant items subject to such estimates and assumptions include contract research accruals, stock-based compensation expense, the fair value of the Company’s class A ordinary shares, or ordinary shares, applied to measuring convertible notes and valuation of the Company’s deferred tax assets. We base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates. Currency and Currency Translation The financial statements are presented in U.S. dollars, our reporting currency. The functional currency of IO Biotech ApS and IO Biotech Limited is the Euro. Adjustments that arise from exchange rate changes on transactions denominated in a currency other than the functional currency are included in other income and expense in the statements of operations. Assets and liabilities recorded in our Euro functional currency are translated into the U.S. dollar reporting currency at the exchange rate on the balance sheet date. Our expenses in the Euro functional currency are translated into the U.S. dollar reporting currency at the average exchange rate prevailing during the year. Resulting translation adjustments are recorded to other comprehensive income (loss), or OCI. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash equivalents, which consist of money market accounts, are stated at fair value. At December 31, 2021, we had money market funds of $ 101.6 million, which are included in cash and cash equivalents and reported at fair value (Note 3). At December 31, 2020, we had no cash equivalents. Concentrations of Credit Risk and Off-Balance Sheet Risk We maintain our cash in bank deposit and checking accounts that at times exceed insured limits. We have not experienced any losses in such accounts and believe we are not exposed to any significant credit risk. Fair Value of Financial Instruments Fair value is defined as the price we would receive to sell an investment in a timely transaction or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. A framework is used for measuring fair value utilizing a three-tier hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are as follows: Level 1 —Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 —Quoted prices in markets that are not considered to be active or financial instrument valuations for which all significant inputs are observable, either directly or indirectly; and Level 3 —Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. Financial instruments are categorized in their entirety based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires judgment and considers factors specific to the investment. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by us in determining fair value is greatest for instruments categorized in Level 3. We monitor the availability of inputs that are significant to the measurement of fair value to assess the appropriate categorization of financial instruments within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. In such instances, our policy is to recognize significant transfers between levels at the end of the reporting period. The significance of transfers between levels is evaluated based upon the nature of the financial instrument and size of the transfer relative to total net assets. Research and Development Expenses Research and development costs are expensed as incurred. The Company’s research and development expenses consist primarily of costs incurred for the development of its product candidates and include expenses incurred under agreements with contract manufacturing organizations, or CMOs, contract research organizations, or CROs, investigative sites and consultants to conduct clinical trials and preclinical and non-clinical studies, costs to acquire, develop and manufacture supplies for clinical trials and other studies, salaries and related costs, including stock-based compensation, depreciation and other allocated facility-related and overhead expenses and licensing fees and milestone payments incurred under product license agreements where no alternative future use exists. We may obtain grants from public and private funds for our research and development projects. The grant income for a given period is recognized as a cost reimbursement and is typically based on the time and the costs that we have spent on the specific project during that period. During the years ended December 31, 2021 and 2020, we had active cost reimbursement grants with Innovation Fund Denmark. The grants provided partial reimbursement of employment-related costs related to two employees pursuant to Business Ph.D. and Business post-doctoral programs. For the years ended December 31, 2021 and 2020 , research and development expenses in the statements of operations include $ 109,000 and $ 91,000 , respectively, of grant income cost reimbursement. We have historically met the requirements to receive a tax credit in Denmark of up to 5.5 million Danish Kroner per year for losses resulting from research and development costs of up to 25 million Danish Kroner per year. The tax credit is reported as a reduction to research and development expense in the statements of operations. For the years ended December 31, 2021 and 2020 , research and development expenses include refundable tax credits of $ 841,000 and $ 904,000 respectively. Accrued Research and Development Costs Substantial portions of our pre-clinical and clinical trials are performed by third-party laboratories, medical centers, CMOs, CROs and other vendors. These vendors generally bill monthly for services performed, or bill based upon milestone achievement. For preclinical studies, we accrue expenses based upon estimated percentage of work completed and the contract milestones remaining. For clinical studies, expenses are accrued based upon the number of patients enrolled, the duration of the study and other investigative costs. We monitor patient enrollment, the progress of clinical studies and related activities to the extent possible through internal reviews of data reported to us by the CROs, correspondence with the CROs and clinical site visits. Our estimates depend on the timeliness and accuracy of the data provided by the CROs regarding the status of each program and total program spending. We periodically evaluate the estimates to determine if adjustments are necessary or appropriate based on information we receive. Leases We enter into lease agreements for office and laboratory facilities and account for them in accordance with ASC Topic 840, Leases. These leases are classified as operating leases. Rent expense is recognized on a straight-line basis over the term of the lease and, accordingly, we record the difference between cash rent payments and the recognition of rent expense as a deferred rent liability. During the year ended December 31, 2021, we entered into new lease agreements for office space and laboratory facilities in the US. Each lease had a free-rent period after lease inception, which led to the recording of a deferred rent liability. No deferred rent liability was recorded in the year ended December 31, 2020 . Incentives granted under our facilities leases, including allowances to fund leasehold improvements, are deferred and are recognized as adjustments to rental expense on a straight-line basis over the term of the lease. No incentives were recognized in the years ended December 31, 2021 and 2020. Convertible Preference Shares We classify convertible preference shares outside of stockholders’ deficit on our balance sheet as certain liquidation events are not strictly within our control. We record the issuance of convertible preference shares at the issuance price less related issuance costs. We have not adjusted the carrying values of the convertible preferred stock to its liquidation preference because of the uncertainty as to whether a deemed liquidation event may occur. Equity-Based Compensation We account for stock options granted in accordance with ASC 718, Compensation-Stock Compensation, or ASC 718. In accordance with ASC 718, compensation expense is measured at the estimated fair value of the stock options at grant date and is included as compensation expense over the vesting period during which an employee provides service in exchange for the award. All share-based awards granted are measured based on the fair value on the date of the grant and compensation expense is recognized with respect to those awards over the requisite service period, which is generally the vesting period of the respective award. The Company reverses any previously recognized compensation cost associated with forfeited awards in the period the forfeiture occurs. Equity-based compensation expense is classified in the Company’s consolidated statement of operations and comprehensive loss in the same manner in which the award recipients’ payroll costs are classified or in which the award recipients’ service payments are classified. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes model. The following summarizes the inputs used: Expected volatility - The Company estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies because we lack company-specific historical and implied volatility information due in part to the limited time in which we have operated as a publicly traded company. We expect to continue to do so until such time as we have adequate historical data regarding the volatility of our traded stock price. Expected term - The expected term of the Company’s stock options has been determined based on the expected time to liquidity. The Company uses the simplified method prescribed by the SEC’s Staff Accounting Bulletin No. 107, Share-Based Payment, to calculate the expected term of options granted because we lack company-specific historical and implied expected term information due in part to the limited time in which we have operated as a publicly traded company. Risk-free interest rate - The risk-free interest rate is based on the implied yield on a U.S. Treasury security at a constant maturity with a remaining term equal to the expected term of the option granted. Dividends - Expected dividend yield is zero because the Company does not pay cash dividends on common shares and does not expect to pay any cash dividends in the foreseeable future. Prior to the IPO, our board of directors, with input from management, determined the estimated fair value of the common shares as of the date of each incentive share grant considering the Company’s then-most recently available third-party valuation of common shares. Valuations are updated when facts and circumstances indicate that the most recent valuation is no longer valid, such as changes in the stage of development efforts, various exit strategies and their timing, and other scientific developments that could be related to the Company’s valuation, or, at a minimum, annually. 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. Income Taxes Deferred income tax assets and liabilities arise from temporary differences associated with differences between the financial statements and tax basis of assets and liabilities, as measured by the enacted tax rates, which are expected to be in effect when these differences reverse. Deferred tax assets and liabilities are classified as current or non-current, depending upon the classification of the asset or liabilities to which they relate. Deferred tax assets and liabilities not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. Valuation allowances are established when necessary, to reduce deferred tax assets to the amount expected to be realized. We follow the provisions of ASC 740-10, Uncertainty in Income Taxes, or ASC 740-10. We have not recognized a liability as a result of the implementation of ASC 740-10. A reconciliation of the beginning and ending amount of unrecognized tax benefits has not been provided since there is no unrecognized benefit since the date of adoption. We have not recognized interest expense or penalties as a result of the implementation of ASC 740-10. If there were an unrecognized tax benefit, we would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. We have identified Denmark and the United States of America as our major tax jurisdictions. Net Loss Per Share We calculate basic and diluted net loss per share attributable to ordinary shareholders in conformity with the two-class method required for participating securities. Our convertible preference shares were participating securities in Company distributions. The net loss attributable to ordinary shareholders is not allocated to the convertible preference shares as the holders of convertible preference shares do not have a contractual obligation to share in losses. Cumulative dividends on preference shares are added to net loss to arrive at net loss available to ordinary shareholders. Under the two-class method, basic net loss per share attributable to ordinary shareholders is computed by dividing the net loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period, without consideration of potential dilutive securities. Diluted net loss per share is calculated by dividing net loss by the weighted average number of shares of ordinary shares and potential dilutive common share equivalents outstanding during the period if the effect is dilutive. Potentially dilutive securities include stock warrants and convertible preference shares. In all periods presented, the Company’s outstanding stock warrants and convertible preference shares were excluded from the calculation of diluted net loss per share because their effects were anti-dilutive. Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the chief operating decision maker, or CODM, in deciding how to allocate resources to an individual segment and in assessing performance. Our CODM is our chief executive officer. We have determined we operate in a single segment. Other Comprehensive Income (loss) Other comprehensive income (loss), or OCI, is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Our OCI includes currency translation from the Euro, the functional currency of IO Biotech ApS and IO Biotech Limited, to the U.S. dollar, our reporting currency. Emerging Growth Company Status We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, or JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. Recently Issued Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , as amended, with guidance regarding the accounting for and disclosure of leases. ASU 2016-02 requires lessees to recognize the liabilities related all leases, including operating leases, with a term greater than 12 months on the balance sheet. This update also requires lessees and lessors to disclose key information about their leasing transactions. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. As the Company elected to use the extended transition period for complying with new or revised accounting standards as available under the Jobs Act, the standard is effective for the Company beginning January 1, 2022. The Company will utilize the practical expedients available under ASU No. 2016-02, including, electing the package of practical expedients to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs. In addition, the Company will apply the accounting policy election to not separate lease and non-lease components and the accounting policy election to not apply the recognition requirement under ASU No. 2016-02 to leases with a term of twelve months or less. The Company will not have a material cumulative adjustment to the statement of operations and comprehensive loss on January 1, 2022. The Company expects a material adjustment to the balance sheet in connection with the recognition of right-of-use assets and lease liabilities on January 1, 2022. In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments . ASU 2016-13 requires measurement and recognition of expected credit losses for financial assets. In April 2019, the FASB issued clarification to ASU 2016-13 within ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging , and Topic 825, Financial Instruments , or ASU 2016-13. The guidance is effective for fiscal years beginning after December 15, 2022. We are currently assessing the potential impact of adopting ASU 2016-13 on our financial statements and financial statement disclosures. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes , or ASU 2019-12. ASU 2019-12 eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of the accounting for income taxes. This guidance is effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. We are currently assessing the impact adoption of ASU 2019-12 will have on our financial statements and disclosures. In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging Contracts in Entity s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity . ASU 2020-06 will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models results in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (i) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (ii) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU 2020-06 also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 will be effective for us beginning after December 15, 2023. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. We are currently assessing the impact adoption of ASU 2020-06 will have on our financial statements and disclosures. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. Fair Value Measurements 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 are performed in a manner to maximize the use of observable inputs and minimize the use of unobservable inputs. The Company classified its money market funds within Level 1 because their fair values are based on their quoted market prices. The Company had no financial assets or liabilities measured at fair value on a recurring basis as of December 31, 2020 . A summary of the assets that are measured at fair value as of December 31, 2021 is as follows (in thousands): December 31, 2021 Total Level 1 Level 2 Level 3 Assets Money market funds(1) $ 101,561 $ 101,561 $ — $ — Total assets measured at fair value $ 101,561 $ 101,561 $ — $ — (1) Money market funds with maturities of 90 days or less at the date of purchase are included within cash and cash equivalents in the accompanying consolidated balance sheets and are recognized at fair value. The following table presents a roll-forward of the fair value of the convertible note and preference shares tranche obligations for which fair value is determined by Level 3 inputs (in thousands): Preference Shares Tranche Obligations Convertible Note Total Balance, January 1, 2020 $ — $ 8,663 $ 8,663 Fair value adjustments — 1,985 1,985 Currency exchange — ( 375 ) ( 375 ) Conversion into class B preference shares — ( 10,273 ) ( 10,273 ) Balance at December 31, 2020 — — — Addition in cash on issuance of class C preference shares 2,425 — 2,425 Fair value adjustments through statement of operations 26,830 — 26,830 Currency exchange ( 979 ) — ( 979 ) Settlement of preference shares tranche obligation through issuance of preference shares ( 28,276 ) — ( 28,276 ) Balance at December 31, 2021 $ — $ — $ — Valuation techniques used to measure fair value maximize the use of relevant observable inputs and minimize the use of unobservable inputs. Our convertible notes are classified within Level 3 of the fair value hierarchy because the fair value measurement is based, in part, on significant inputs not observed in the market. In July 2019, we issued convertible notes to existing related party investors for proceeds of $ 9.0 million. Upon issuance, we elected the fair value option to account for the convertible notes, with any subsequent changes in fair value being recognized through the statements of operations as other income (expense) until the convertible notes are settled. We have not recorded interest expense separate from those fair value adjustments. The convertible notes accrued interest at 8 % per year beginning in August 2019 payable in cash or, at the investor’s discretion, into our class B or class C preference shares. In April 2020, the convertible notes plus accrued interest of $ 0.5 million, were converted according to the terms of the convertible notes into 142,437 shares of class B preference shares (Note 8). Our class C Preference Shares Tranche Obligation was measured at fair value using a Black-Scholes option pricing valuation methodology. The fair value of class C Preference Shares Tranche Obligation includes inputs not observable in the market and thus represents a Level 3 measurement. The option pricing valuation methodology utilized requires inputs based on certain subjective assumptions, including (i) expected stock price volatility, (ii) calculation of an expected term, (iii) a risk-free interest rate, and (iv) expected dividends. The assumptions utilized to value the class C Preference Shares Tranche Obligation during 2021 were (i) expected stock price volatility of 73.7 %; (ii) remaining term of 0.3 years; (iii) a risk-free interest rate of 0.05 %; and (iv) an expectation of no dividends. There were no transfers among Level 1, Level 2 or Level 3 categories in the years ended December 31, 2 0 21 and 2020 . |
License and Collaboration Agree
License and Collaboration Agreements | 12 Months Ended |
Dec. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
License and Collaboration Agreements | 4. License and Collaboration Agreements Clinical Trial Collaboration and Supply Agreements with MSD International GmbH In February 2018, we entered into a clinical collaboration with MSD International GmbH (" MSDIG"), to evaluate IO102 in combination with KEYTRUDA ® (pembrolizumab) in first-line treatment of patients with metastatic non-small cell lung cancer. Under the terms of the collaboration with MSDIG, we will conduct an international Phase 1/2 study to evaluate a combination therapy of IO102 and KEYTRUDA ® . We will sponsor the clinical trials and MSDIG will provide KEYTRUDA ® to be used in the clinical trials free of charge. We and MSDIG will be responsible for our own internal costs and expenses to support the study and we shall bear all other costs associated with conducting the study, including costs of providing IO102 for use in the study. The rights to the data from the clinical trials will be shared by us and MSDIG and we will maintain global commercial rights to IO102. In September 2021, we entered into a clinical collaboration with MSDIG and MSD International Business GmbH (MSDIB), another affiliate of Merck, (collectively, "MSD") to evaluate IO102-IO103 in combination with KEYTRUDA® versus KEYTRUDA® alone in treatment of patients with metastatic (advanced) melanoma. Under the terms of the collaboration with MSD, we will conduct an international Phase 3 study to evaluate a combination therapy of IO102-IO103 and KEYTRUDA®. We will sponsor the clinical trials and MSD will provide KEYTRUDA® to be used in the clinical trials free of charge. We and MSD will be responsible for our own internal costs and expenses to support the study and we shall bear all other costs associated with conducting the study, including costs of providing IO102-IO103 for use in the study. The rights to the data from the clinical trials will be shared by us and MSD and we will maintain global commercial rights to IO102-IO103. In December 2021, we entered into a clinical collaboration with MSD to evaluate IO102-IO103 in combination with KEYTRUDA® in previously untreated patients with three different tumor types— metastatic non-small cell lung cancer (NSCLC), squamous cell carcinoma of the head and neck (SCCHN), and metastatic urothelial bladder cancer (UBC). Under the terms of the collaboration with MSD, we will conduct an international Phase 2 study to evaluate a combination therapy of IO102-IO103 and KEYTRUDA®. We will sponsor the clinical trials and MSD will provide KEYTRUDA® to be used in the clinical trials free of charge. We and MSD will be responsible for our own internal costs and expenses to support the study and we shall bear all other costs associated with conducting the study, including costs of providing IO102-IO103 for use in the study. The rights to the data from the clinical trials will be shared by us and MSD and we will maintain global commercial rights to IO102-IO103. Agreements with Herlev Hospital We have a number of existing agreements with the Herlev University Hospital in Denmark (“Herlev”) for scientific and other support of our ongoing development activities. In January 2021, we entered into an additional agreement with Herlev regarding the payment of specific services whereupon in addition to any consideration payable by us to Herlev pursuant to the existing agreements we were required to pay a fee to Herlev of DKK 5.0 million (approximately $ 0.8 million) in the event of an initial public offering or other liquidity event whereby all or substantially all of the value of the Company is realized in consideration for cash. The Company consummated its IPO in November 2021, resulting in this payment to Herlev becoming payable. Additionally, upon the completion of the IPO, the Company was obligated to make payments to Herlev in the aggregate amount of DKK 13.2 million, (which is approximately $ 2.1 million based on the exchange rate of DKK 6.54 to one U.S. dollar on December 31, 2021). We expensed $ 2.9 million to research and development expense for the year ended December 31, 2021, which was subsequently paid in February 2022. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | 5. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following (in thousands): December 31, 2021 2020 Prepaid contract research and development costs $ 4,770 $ 359 Insurance 3,197 — Research and development tax credit receivable 841 904 Value-added tax refund receivable 1,250 596 Other 149 371 Total prepaid expenses and other current assets $ 10,207 $ 2,230 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2021 | |
Payables And Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | 6. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following (in thousands): December 31, 2021 2020 Accrued contract research and development costs $ 3,861 $ 1,487 Professional costs 1,028 — Employee compensation costs 1,027 785 Other liabilities 461 256 Total accrued expenses and other current liabilities $ 6,377 $ 2,528 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies Lease Commitments We had two operating leases in Copenhagen, Denmark for office space that expired in August 2021 and December 2021 , respectively. In March 2021, we entered into a new lease for our office space in Copenhagen, Denmark that expires in January 2025 , terminable upon three months’ notice. In August 2021, we entered into a new lease for laboratory facilities and office space in Rockwell, Maryland that expires in April 2027 . In October 2021, we entered into a new lease for office space in New York, NY that expires in January 2027 . Rent expense for years ended December 31, 2021 and 2020 was $ 290,000 and $ 202,000 respectively. Future minimum rental payments under noncancellable leases are as follows at December 31, 2021 (in thousands): Year ending December 31, Amount 2022 $ 411 2023 605 2024 621 2025 547 2026 553 Thereafter 150 Total $ 2,887 Legal Proceedings From time to time, we may be party to litigation arising in the ordinary course of its business. We were not subject to any material legal proceedings during the years ended December 31, 2021 and 2020, and, to our knowledge, no material legal proceedings are currently pending or threatened. Indemnification Agreements We enter into certain types of contracts that contingently requires us to indemnify various parties against claims from third parties. These contracts primarily relate to procurement, service, consultancy or license agreements under which we may be required to indemnify vendors, service providers or licensees for certain claims, including claims that may be brought against them arising from our acts or omissions with respect to our products, technology, intellectual property or services. From time to time, we may receive indemnification claims under these contracts in the normal course of business. In the event that one or more of these matters were to result in a claim against us, an adverse outcome, including a judgment or settlement, may cause a material adverse effect on our future business, operating results or financial condition. It is not possible to estimate the maximum amount potentially payable under these contracts since we have no history of prior indemnification claims and the unique facts and circumstances involved in each particular claim will be determinative. We, as permitted under Delaware law and in accordance with our certification of incorporation and bylaws and pursuant to indemnification agreements with certain of our officers and directors, indemnifies our officers and directors for certain events or occurrences, subject to certain limits, which our officer or director is or was serving at the our request in such capacity. |
Convertible Preference Shares
Convertible Preference Shares | 12 Months Ended |
Dec. 31, 2021 | |
Temporary Equity Disclosure [Abstract] | |
Convertible Preference Shares | 8. Convertible Preference Shares As of December 31, 2021 we had no preference shares authorized, issued and outstanding. As of December 31, 2020 , we had 584,583 class B preference shares authorized, issued and outstanding. Sales and Issuances of Preference Shares During the Years Ended December 31, 2021 and 2020 In April 2020, we issued 142,437 class B preference shares at a subscription price of $ 64.48 per share to existing related-party investors upon the conversion of convertible notes (Note 3). We recorded the 142,437 class B preference shares at fair value of $ 10.3 million ($ 72.15 per share) determined using an option pricing model, or OPM, assuming a Company equity value of $ 40.6 million, a term of 1.6 years, volatility of 86.0 % and a risk-free rate of 0.18 %. We incurred issuance costs of $ 4,000 in connection with the issuances of the class B preference shares on conversion of the convertible notes. In July 2020, we issued 75,845 class B preference shares to existing related-party investors at a subscription price of $ 67.46 per share for gross cash proceeds of $ 5.1 million. We recorded the 75,845 class B preference shares at fair value of $ 5.6 million ($ 73.60 per share), resulting in a deemed dividend of $ 0.5 million recorded against additional paid-in capital on our balance sheet. Fair value of the class B preference shares issued on this date was determined using an OPM methodology assuming a Company equity value of $ 47.6 million, a term of 1.36 years, volatility of 92.4 % and a risk-free rate of 0.16 %. We incurred issuance costs of $ 10,000 in connection with the issuances of the class B preference shares. In January 2021, we completed an investment agreement, Class C Investment Agreement, for the sale and issuance of up to 1,263,804 class C preference shares to new investors and existing related-party investors at a subscription price of $ 121.55 per share. Then, pursuant to the Class C Investment Agreement, we issued 505,520 class C preference shares for gross cash proceeds of $ 61.5 million. The Class C Investment Agreement further provided for a milestone closing in the event of certain development milestones before April 2022, whereby purchasers of class C preference shares are obligated to a further subscription amount of $ 88.4 million, or the Preference Shares Tranche Obligation, which resulted in a further issuance of 689,344 class C preference shares at a subscription price of $ 128.19 per share. We incurred issuance costs of $ 340,000 in connection with the issuances of the class C preference shares. We concluded that the Preference Shares Tranche Obligation met the definition of a freestanding financial instrument, as it was legally detachable and separately exercisable from the class C preference shares. Therefore, we allocated the proceeds received from the issuance of shares under the Class C Investment Agreement between the Preference Shares Tranche Obligation and the class C preference shares. The fair value of the Preference Shares Tranche Obligation of $ 2.4 million on issuance was allocated from the $ 61.5 million proceeds of the class C preference shares financing and was classified as a current liability on the balance sheet as the class C preference shares would become redeemable upon a Deemed Liquidation Event, the occurrence of which is not within our control. In March 2021, prior to a milestone closing, an investor elected to purchase and we issued 35,825 class C preference shares for gross cash proceeds of $ 4.2 million pursuant to the Class C Investment Agreement. As a result of entering into a collaboration agreement with Merck in September 2021, the number of class C preference shares issued in March 2021 was adjusted downward to 32,568 class C preference shares. In October 2021, investors purchased and we issued 656,776 class C preference shares for gross cash proceeds of $ 84.1 million pursuant to the Class C Investment Agreement, resulting in the settlement of the preference shares tranche obligations. Immediately prior to consummation of our IPO, all outstanding class B and class C preference shares were converted into 20,415,213 shares of common stock. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Stockholders' Equity | 9. Stockholders' Equity Common and preferred stock In November 2021, we completed our IPO selling an aggregate of 8,222,500 shares of common stock at $ 14.00 per share, which included 1,072,500 shares that represented the full exercise of an option to purchase additional shares granted to the underwriters in connection with the IPO. The offering resulted in $ 103.3 million of net proceeds to us, after deducting underwriting discounts and commissions and other offering expenses. Upon the closing of our IPO, we filed an amended and restated certificate of incorporation, which authorized us to issue 300,000,000 shares of common stock and 5,000,000 shares of preferred stock, which shares of preferred stock are currently undesignated. Common stockholders are entitled to one vote for each share of common stock held at all meetings of stockholders and written actions in lieu of meetings. Common stockholders are entitled to receive dividends, if and when declared by the Board. No dividends have been declared or paid by us through December 31, 2021. The Company had 28,815,267 common shares outstanding as of December 31, 2021 . As of December 31, 2020, we had 177,200 class A ordinary shares authorized, issued and outstanding. |
Equity-Based Compensation
Equity-Based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Equity-Based Compensation | 10. Equity-Based Compensation Employee Equity Plan Prior to our IPO, we issued warrants to certain employees, board members and advisors ("Pre-IPO Plan"). Each vested warrant entitled the warrant holder to a single class A ordinary share. Holders of stock warrants were entitled to exercise the vested portion of the stock warrant. Stock warrants generally vest over a three-year period and expire five years from the vest date. In November 2021, our board of directors adopted, and our stockholders approved, the 2021 Equity Incentive Plan (or the “2021 Plan”), which became effective on November 4, 2021. The 2021 Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, awards of restricted stock, restricted stock units and other stock-based awards. The number of shares of our common stock reserved for issuance under the 2021 Plan is equal to 2,465,150 , subject to an annual increase, to be added on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2022 and continuing until, and including, the fiscal year ending December 31, 2031, equal to the lesser of (i) 4 % of the number of shares of common stock outstanding on the first day of such fiscal year or (ii) such other amount determined by our board of directors . The 2,396,413 outstanding warrants granted under the Pre-IPO Plan were transferred to the 2021 Equity Plan and no further warrants were available to be issued under the Pre-IPO Plan. As of December 31, 2021 , we had 1,789,950 options available for future grant under the 2021 Equity Plan. There were no grants, exercises, or forfeitures of any stock warrants during the year ended December 31, 2020 . We issued 2,306,478 warrants with a weighted average exercise price of $ 14.74 to certain employees, board members and advisors during the year ended December 31, 2021 . These warrants, and all previously issued warrants, were transferred to the 2021 Equity Plan in November 2021. We also issued 675,200 options with an exercise price of $ 14.00 under our 2021 Equity Plan during the year ended December 31, 2021 . We did no t recognize any tax benefits for stock-based compensation during the years ended December 31, 2021 and 2020. The following table summarizes our stock warrants for the years ended December 31, 2021 and 2020: Number of Weighted- Weighted- Aggregate Outstanding December 31, 2019 89,935 $ 15.00 5.6 $ — Outstanding December 31, 2020 89,935 $ 15.00 4.6 $ — Granted 2,981,678 $ 14.58 Outstanding, December 31, 2021 3,071,613 $ 13.12 8.5 $ — Exercisable at December 31, 2021 220,575 $ 14.48 6.5 $ — 2021 Employee Stock Purchase Plan In November 2021, our board of directors adopted and our stockholders approved the 2021 Employee Stock Purchase Plan (or the “2021 ESPP”), which became effective on November 4, 2021. The number of shares of our common stock reserved for issuance under the 2021 ESPP is equal to 257,272 , subject to an annual increase, to be added on the first day of each fiscal year, beginning January 1, 2023, equal to the lesser of (i) 1 % of the number of shares of common stock outstanding on the first day of such fiscal year, (ii) 257,272 shares of our common stock or (iii) such other amount determined by our board of directors. Equity-Based Compensation In October 2021, our board of directors approved the amendment of all nonvested warrant awards issued in July and August 2021 with an exercise price of $ 19.62 per share to reduce the exercise price of such warrants to $ 12.64 per share. Warrants to purchase an aggregate of 670,849 shares of our class A ordinary shares were modified. The vesting schedule of such awards was not modified. The modification resulted in a $ 0.6 million charge which will be recognized over the remaining vesting periods of each award averaging 3.75 years. We recorded equity-based compensation expense of $ 1.8 million and $ 64,000 related to the issuance of stock options and warrants during the years ended December 31, 2021 and 2020, respectively. As of December 31, 2021, there was $ 22.6 million of unrecognized compensation cost related to unvested stock-based compensation arrangements that is expected to be recognized over a weighted average period of 3.7 years. The fair values of the options granted were estimated based on the Black-Scholes model, using the following assumptions: Year Ended December 31, 2021 Expected volatility 72.9 % - 82.6 % Risk-free interest rate 0.79 % - 1.45 % Expected term (in years) 5.0 - 9.0 Expected dividend yield 0 % Equity-based compensation expense recorded as research and development and general and administrative expenses is as follows (in thousands): December 31, 2021 2020 Research and development $ 600 $ 22 General and administrative 1,191 42 Total equity-based compensation $ 1,791 $ 64 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11. Income Taxes We are subject to U.S. federal, state and foreign corporate income taxes. Our loss before provision (benefit) for income taxes for the years ended December 31, 2021 and 2020 consisted of the following (in thousands): Year Ended December 31, 2021 2020 Domestic $ 206 $ — Foreign ( 68,017 ) ( 12,042 ) Total $ ( 67,811 ) $ ( 12,042 ) Our provision for income taxes consists of the following (in thousands): Year Ended December 31, 2021 2020 Current: Federal $ 114 $ — State 23 — Foreign 18 — 155 — Deferred: Federal ( 72 ) — State ( 15 ) — Foreign — — ( 87 ) — Total provision for income taxes $ 68 $ — Reconciliation of Effective Tax Rate Our effective tax rate for the years ended December 31, 2021 and 2020 is different from the statutory rate in the U.S. primarily due to the valuation allowance against deferred tax assets as a result of insufficient sources of income. The reconciliation of the statutory income tax rate to our effective income tax rate is as follows: Year Ended December 31, 2021 2020 Income tax benefit at the statutory rate 21.0 % 21.0 % Permanent differences ( 6.5 ) ( 2.2 ) Difference in tax rate 1.0 1.0 Change in valuation allowance ( 15.6 ) ( 19.8 ) Total ( 0.1 %) — % Deferred Taxes Deferred tax assets and liabilities represent future tax consequences of temporary differences between the financial statement carrying amounts and the tax basis of assets and liabilities and for loss carryforwards using enacted tax rates expected to be in effect in the years in which the differences reverse. A valuation allowance is recorded when it is more likely than not that some or all of the deferred tax assets will not be realized. The principal components of the Company’s deferred tax assets consisted of the following (in thousands): December 31, 2021 2020 Deferred tax assets: Net operating loss carryforwards $ 14,693 $ 5,234 Share-based compensation expense 345 71 Accrued compensation 88 — Other 73 74 Total deferred tax assets $ 15,199 $ 5,379 Valuation allowance ( 15,112 ) ( 5,379 ) Net deferred tax assets $ 87 $ — We determine whether it is more likely than not that a tax position will be sustained upon examination. If it is not more likely than not that a position will be sustained, none of the benefit attributable to the position is recognized. The tax benefit to be recognized for any tax position that meets the more likely than not recognition threshold is calculated as the largest amount that is more than 50%. When realization of a deferred tax asset is more likely than not to occur, the benefit related to the deductible temporary differences attributable to operations is recognized as a reduction of income tax expense. Valuation allowances are provided against deferred tax assets when, based on all available evidence, it is considered more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. We cannot be certain that future income in Denmark will be sufficient to realize the Company’s deferred tax assets. Accordingly, a full valuation allowance has been provided against our net deferred tax assets in Denmark. The valuation allowance increased by $ 9.7 million in 2021. The increase in 2021 is primarily the result of an increase in net operating loss carryforwards, or NOLs. Available Carryforward Tax Losses At December 31, 2021 , we had NOL carryforwards of approximately $ 66.8 million that can be carried forward indefinitely according to Danish Tax Authority regulations. Uncertain Tax Positions We determine our uncertain tax positions based on whether and how much of a tax benefit taken by us in our tax filings is more likely than not to be sustained upon examination by the relevant income tax authorities. We have reviewed the tax positions taken, or to be taken, in our tax returns for all tax years currently open to examination by the Danish Tax Authority. As of December 31, 2021 and 2020 , we have no t recorded an uncertain tax position liability Tax filings in Denmark remain subject to examination by the Danish Tax Authority. As of December 31, 2021 , tax years 2018 and forward were generally open to examination by the Danish Tax Authority. Other Tax Matters The Company recognizes accrued interest related to unrecognized tax benefits and penalties as income tax expense. The Company does not have any material unrecognized tax benefits which would affect the effective tax rate if recognized. The Company does not have any unrecognized tax benefits which would reverse within the next twelve months. The Company is eligible for the Danish enhanced research and development tax allowance, providing for an increase in the deductible value of the amount of certain R&D expenditures. For 2019, the deduction is set at 101.5 %. Furthermore, the deduction for R&D expenditures is set at 130 % for 2020 through 2022, 108 % for 2023 through 2025, and 110 % for 2026. The tax allowance is reported as a reduction to research and development expense in the statements of operations. For the years ended December 31, 2021 and 2020 , we applied for refundable tax credit of 25 million DKK for each year and a receivable was recorded for $ 0.8 million and $ 0.9 million respectively. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 12. Net Loss Per Share Basic and diluted net loss per ordinary share is calculated as follows (in thousands except share and per share amounts): Year Ended December 31, 2021 2020 Net loss $ ( 67,879 ) $ ( 12,042 ) Cumulative dividends on class B and C preference shares ( 7,108 ) ( 2,552 ) Net loss attributable to common shareholders $ ( 74,987 ) $ ( 14,594 ) Net loss per common share, basic and diluted $ ( 17.30 ) $ ( 82.36 ) Weighted-average number of shares used in computing net loss per common share, basic and diluted 4,335,629 177,200 The following outstanding potentially dilutive securities have been excluded from the calculation of diluted net loss per class A ordinary share, as their effect is anti-dilutive: December 31, 2021 2020 Convertible preference shares — 584,583 Stock options to purchase common stock 3,071,613 — Stock warrants to purchase class A ordinary shares — 89,935 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. Subsequent Events We have evaluated subsequent events through the date on which the consolidated financial statements were issued. The Company has concluded that no subsequent events have occurred that require disclosure to the consolidated financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP. Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP, as found in the Accounting Standards Codification, or ASC, and Accounting Standards Update, or ASU, of the Financial Accounting Standards Board, or FASB. Prior to the completion of our IPO, we approved a 3.544 -for-1 stock split of our common stock. All share and per share amounts in the balance sheet and notes thereto have been retroactively adjusted for all periods presented to give effect to this split. |
Principles of Consolidation | Principles of consolidation The Company’s consolidated financial statements include the accounts of its subsidiaries IO Biotech ApS, IO Bio US, Inc. and IO Biotech Limited. IO Bio US, Inc., a wholly owned subsidiary of IO Biotech ApS, was incorporated in Delaware in May 2021. IO Biotech Limited, a wholly owned subsidiary of IO Biotech ApS, was incorporated in the UK in August 2021. In October 2021, the Company engaged in a series of transactions, referred to collectively as the Corporate Reorganization. As a result of the Corporate Reorganization, IO Biotech ApS became a wholly-owned subsidiary of IO Biotech, Inc. and accordingly, our consolidated financial statements are those of IO Biotech, Inc. for the periods after the date of the Corporate Reorganization. IO Biotech, Inc. is a recently formed holding company, which, prior to our IPO, had nominal assets and no liabilities, contingencies, or commitments, and which has not conducted any operations prior to our IPO other than acquiring the entire issued and outstanding stock of IO Biotech ApS. The Company, IO Biotech ApS, and the holders of all of the issued and outstanding equity interests of IO Biotech ApS have entered into a Share Contribution and Exchange Agreement, dated as of October 29, 2021, pursuant to which the Corporate Reorganization was effected. Management has concluded it has a single reporting segment for purposes of reporting financial condition and results of operations. All intercompany transactions and balances have been eliminated. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect certain reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting periods. Significant items subject to such estimates and assumptions include contract research accruals, stock-based compensation expense, the fair value of the Company’s class A ordinary shares, or ordinary shares, applied to measuring convertible notes and valuation of the Company’s deferred tax assets. We base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates. |
Currency and Currency Translation | Currency and Currency Translation The financial statements are presented in U.S. dollars, our reporting currency. The functional currency of IO Biotech ApS and IO Biotech Limited is the Euro. Adjustments that arise from exchange rate changes on transactions denominated in a currency other than the functional currency are included in other income and expense in the statements of operations. Assets and liabilities recorded in our Euro functional currency are translated into the U.S. dollar reporting currency at the exchange rate on the balance sheet date. Our expenses in the Euro functional currency are translated into the U.S. dollar reporting currency at the average exchange rate prevailing during the year. Resulting translation adjustments are recorded to other comprehensive income (loss), or OCI. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash equivalents, which consist of money market accounts, are stated at fair value. At December 31, 2021, we had money market funds of $ 101.6 million, which are included in cash and cash equivalents and reported at fair value (Note 3). At December 31, 2020, we had no cash equivalents. |
Concentrations of Credit Risk and Off-Balance Sheet Risk | Concentrations of Credit Risk and Off-Balance Sheet Risk We maintain our cash in bank deposit and checking accounts that at times exceed insured limits. We have not experienced any losses in such accounts and believe we are not exposed to any significant credit risk. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price we would receive to sell an investment in a timely transaction or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. A framework is used for measuring fair value utilizing a three-tier hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are as follows: Level 1 —Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 —Quoted prices in markets that are not considered to be active or financial instrument valuations for which all significant inputs are observable, either directly or indirectly; and Level 3 —Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. Financial instruments are categorized in their entirety based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires judgment and considers factors specific to the investment. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by us in determining fair value is greatest for instruments categorized in Level 3. We monitor the availability of inputs that are significant to the measurement of fair value to assess the appropriate categorization of financial instruments within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. In such instances, our policy is to recognize significant transfers between levels at the end of the reporting period. The significance of transfers between levels is evaluated based upon the nature of the financial instrument and size of the transfer relative to total net assets. |
Research and Development Expenses | Research and Development Expenses Research and development costs are expensed as incurred. The Company’s research and development expenses consist primarily of costs incurred for the development of its product candidates and include expenses incurred under agreements with contract manufacturing organizations, or CMOs, contract research organizations, or CROs, investigative sites and consultants to conduct clinical trials and preclinical and non-clinical studies, costs to acquire, develop and manufacture supplies for clinical trials and other studies, salaries and related costs, including stock-based compensation, depreciation and other allocated facility-related and overhead expenses and licensing fees and milestone payments incurred under product license agreements where no alternative future use exists. We may obtain grants from public and private funds for our research and development projects. The grant income for a given period is recognized as a cost reimbursement and is typically based on the time and the costs that we have spent on the specific project during that period. During the years ended December 31, 2021 and 2020, we had active cost reimbursement grants with Innovation Fund Denmark. The grants provided partial reimbursement of employment-related costs related to two employees pursuant to Business Ph.D. and Business post-doctoral programs. For the years ended December 31, 2021 and 2020 , research and development expenses in the statements of operations include $ 109,000 and $ 91,000 , respectively, of grant income cost reimbursement. We have historically met the requirements to receive a tax credit in Denmark of up to 5.5 million Danish Kroner per year for losses resulting from research and development costs of up to 25 million Danish Kroner per year. The tax credit is reported as a reduction to research and development expense in the statements of operations. For the years ended December 31, 2021 and 2020 , research and development expenses include refundable tax credits of $ 841,000 and $ 904,000 respectively. |
Accrued Research and Development Costs | Accrued Research and Development Costs Substantial portions of our pre-clinical and clinical trials are performed by third-party laboratories, medical centers, CMOs, CROs and other vendors. These vendors generally bill monthly for services performed, or bill based upon milestone achievement. For preclinical studies, we accrue expenses based upon estimated percentage of work completed and the contract milestones remaining. For clinical studies, expenses are accrued based upon the number of patients enrolled, the duration of the study and other investigative costs. We monitor patient enrollment, the progress of clinical studies and related activities to the extent possible through internal reviews of data reported to us by the CROs, correspondence with the CROs and clinical site visits. Our estimates depend on the timeliness and accuracy of the data provided by the CROs regarding the status of each program and total program spending. We periodically evaluate the estimates to determine if adjustments are necessary or appropriate based on information we receive. |
Leases | Leases We enter into lease agreements for office and laboratory facilities and account for them in accordance with ASC Topic 840, Leases. These leases are classified as operating leases. Rent expense is recognized on a straight-line basis over the term of the lease and, accordingly, we record the difference between cash rent payments and the recognition of rent expense as a deferred rent liability. During the year ended December 31, 2021, we entered into new lease agreements for office space and laboratory facilities in the US. Each lease had a free-rent period after lease inception, which led to the recording of a deferred rent liability. No deferred rent liability was recorded in the year ended December 31, 2020 . Incentives granted under our facilities leases, including allowances to fund leasehold improvements, are deferred and are recognized as adjustments to rental expense on a straight-line basis over the term of the lease. No incentives were recognized in the years ended December 31, 2021 and 2020. |
Convertible Preference Shares | Convertible Preference Shares We classify convertible preference shares outside of stockholders’ deficit on our balance sheet as certain liquidation events are not strictly within our control. We record the issuance of convertible preference shares at the issuance price less related issuance costs. We have not adjusted the carrying values of the convertible preferred stock to its liquidation preference because of the uncertainty as to whether a deemed liquidation event may occur. |
Equity-Based Compensation | Equity-Based Compensation We account for stock options granted in accordance with ASC 718, Compensation-Stock Compensation, or ASC 718. In accordance with ASC 718, compensation expense is measured at the estimated fair value of the stock options at grant date and is included as compensation expense over the vesting period during which an employee provides service in exchange for the award. All share-based awards granted are measured based on the fair value on the date of the grant and compensation expense is recognized with respect to those awards over the requisite service period, which is generally the vesting period of the respective award. The Company reverses any previously recognized compensation cost associated with forfeited awards in the period the forfeiture occurs. Equity-based compensation expense is classified in the Company’s consolidated statement of operations and comprehensive loss in the same manner in which the award recipients’ payroll costs are classified or in which the award recipients’ service payments are classified. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes model. The following summarizes the inputs used: Expected volatility - The Company estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies because we lack company-specific historical and implied volatility information due in part to the limited time in which we have operated as a publicly traded company. We expect to continue to do so until such time as we have adequate historical data regarding the volatility of our traded stock price. Expected term - The expected term of the Company’s stock options has been determined based on the expected time to liquidity. The Company uses the simplified method prescribed by the SEC’s Staff Accounting Bulletin No. 107, Share-Based Payment, to calculate the expected term of options granted because we lack company-specific historical and implied expected term information due in part to the limited time in which we have operated as a publicly traded company. Risk-free interest rate - The risk-free interest rate is based on the implied yield on a U.S. Treasury security at a constant maturity with a remaining term equal to the expected term of the option granted. Dividends - Expected dividend yield is zero because the Company does not pay cash dividends on common shares and does not expect to pay any cash dividends in the foreseeable future. Prior to the IPO, our board of directors, with input from management, determined the estimated fair value of the common shares as of the date of each incentive share grant considering the Company’s then-most recently available third-party valuation of common shares. Valuations are updated when facts and circumstances indicate that the most recent valuation is no longer valid, such as changes in the stage of development efforts, various exit strategies and their timing, and other scientific developments that could be related to the Company’s valuation, or, at a minimum, annually. 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. |
Income Taxes | Income Taxes Deferred income tax assets and liabilities arise from temporary differences associated with differences between the financial statements and tax basis of assets and liabilities, as measured by the enacted tax rates, which are expected to be in effect when these differences reverse. Deferred tax assets and liabilities are classified as current or non-current, depending upon the classification of the asset or liabilities to which they relate. Deferred tax assets and liabilities not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. Valuation allowances are established when necessary, to reduce deferred tax assets to the amount expected to be realized. We follow the provisions of ASC 740-10, Uncertainty in Income Taxes, or ASC 740-10. We have not recognized a liability as a result of the implementation of ASC 740-10. A reconciliation of the beginning and ending amount of unrecognized tax benefits has not been provided since there is no unrecognized benefit since the date of adoption. We have not recognized interest expense or penalties as a result of the implementation of ASC 740-10. If there were an unrecognized tax benefit, we would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. We have identified Denmark and the United States of America as our major tax jurisdictions. |
Net Loss Per Share | Net Loss Per Share We calculate basic and diluted net loss per share attributable to ordinary shareholders in conformity with the two-class method required for participating securities. Our convertible preference shares were participating securities in Company distributions. The net loss attributable to ordinary shareholders is not allocated to the convertible preference shares as the holders of convertible preference shares do not have a contractual obligation to share in losses. Cumulative dividends on preference shares are added to net loss to arrive at net loss available to ordinary shareholders. Under the two-class method, basic net loss per share attributable to ordinary shareholders is computed by dividing the net loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period, without consideration of potential dilutive securities. Diluted net loss per share is calculated by dividing net loss by the weighted average number of shares of ordinary shares and potential dilutive common share equivalents outstanding during the period if the effect is dilutive. Potentially dilutive securities include stock warrants and convertible preference shares. In all periods presented, the Company’s outstanding stock warrants and convertible preference shares were excluded from the calculation of diluted net loss per share because their effects were anti-dilutive. |
Segments | Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the chief operating decision maker, or CODM, in deciding how to allocate resources to an individual segment and in assessing performance. Our CODM is our chief executive officer. We have determined we operate in a single segment. |
Other Comprehensive Income (loss) | Other Comprehensive Income (loss) Other comprehensive income (loss), or OCI, is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Our OCI includes currency translation from the Euro, the functional currency of IO Biotech ApS and IO Biotech Limited, to the U.S. dollar, our reporting currency. |
Emerging Growth Company Status | Emerging Growth Company Status We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, or JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , as amended, with guidance regarding the accounting for and disclosure of leases. ASU 2016-02 requires lessees to recognize the liabilities related all leases, including operating leases, with a term greater than 12 months on the balance sheet. This update also requires lessees and lessors to disclose key information about their leasing transactions. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. As the Company elected to use the extended transition period for complying with new or revised accounting standards as available under the Jobs Act, the standard is effective for the Company beginning January 1, 2022. The Company will utilize the practical expedients available under ASU No. 2016-02, including, electing the package of practical expedients to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs. In addition, the Company will apply the accounting policy election to not separate lease and non-lease components and the accounting policy election to not apply the recognition requirement under ASU No. 2016-02 to leases with a term of twelve months or less. The Company will not have a material cumulative adjustment to the statement of operations and comprehensive loss on January 1, 2022. The Company expects a material adjustment to the balance sheet in connection with the recognition of right-of-use assets and lease liabilities on January 1, 2022. In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments . ASU 2016-13 requires measurement and recognition of expected credit losses for financial assets. In April 2019, the FASB issued clarification to ASU 2016-13 within ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging , and Topic 825, Financial Instruments , or ASU 2016-13. The guidance is effective for fiscal years beginning after December 15, 2022. We are currently assessing the potential impact of adopting ASU 2016-13 on our financial statements and financial statement disclosures. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes , or ASU 2019-12. ASU 2019-12 eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of the accounting for income taxes. This guidance is effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. We are currently assessing the impact adoption of ASU 2019-12 will have on our financial statements and disclosures. In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging Contracts in Entity s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity . ASU 2020-06 will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models results in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (i) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (ii) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU 2020-06 also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 will be effective for us beginning after December 15, 2023. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. We are currently assessing the impact adoption of ASU 2020-06 will have on our financial statements and disclosures. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Summary of Assets Measured at Fair Value | A summary of the assets that are measured at fair value as of December 31, 2021 is as follows (in thousands): December 31, 2021 Total Level 1 Level 2 Level 3 Assets Money market funds(1) $ 101,561 $ 101,561 $ — $ — Total assets measured at fair value $ 101,561 $ 101,561 $ — $ — |
Roll-forward of Fair Value of Convertible Note and Preference Shares Tranche Obligations for Which Fair Value Determined by Level 3 Inputs | The following table presents a roll-forward of the fair value of the convertible note and preference shares tranche obligations for which fair value is determined by Level 3 inputs (in thousands): Preference Shares Tranche Obligations Convertible Note Total Balance, January 1, 2020 $ — $ 8,663 $ 8,663 Fair value adjustments — 1,985 1,985 Currency exchange — ( 375 ) ( 375 ) Conversion into class B preference shares — ( 10,273 ) ( 10,273 ) Balance at December 31, 2020 — — — Addition in cash on issuance of class C preference shares 2,425 — 2,425 Fair value adjustments through statement of operations 26,830 — 26,830 Currency exchange ( 979 ) — ( 979 ) Settlement of preference shares tranche obligation through issuance of preference shares ( 28,276 ) — ( 28,276 ) Balance at December 31, 2021 $ — $ — $ — |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Summary of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of the following (in thousands): December 31, 2021 2020 Prepaid contract research and development costs $ 4,770 $ 359 Insurance 3,197 — Research and development tax credit receivable 841 904 Value-added tax refund receivable 1,250 596 Other 149 371 Total prepaid expenses and other current assets $ 10,207 $ 2,230 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Payables And Accruals [Abstract] | |
Summary of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consist of the following (in thousands): December 31, 2021 2020 Accrued contract research and development costs $ 3,861 $ 1,487 Professional costs 1,028 — Employee compensation costs 1,027 785 Other liabilities 461 256 Total accrued expenses and other current liabilities $ 6,377 $ 2,528 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Future Minimum Rental Payments Under Noncancellable Leases | Future minimum rental payments under noncancellable leases are as follows at December 31, 2021 (in thousands): Year ending December 31, Amount 2022 $ 411 2023 605 2024 621 2025 547 2026 553 Thereafter 150 Total $ 2,887 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Schedule of Stock Warrants Activity | The following table summarizes our stock warrants for the years ended December 31, 2021 and 2020: Number of Weighted- Weighted- Aggregate Outstanding December 31, 2019 89,935 $ 15.00 5.6 $ — Outstanding December 31, 2020 89,935 $ 15.00 4.6 $ — Granted 2,981,678 $ 14.58 Outstanding, December 31, 2021 3,071,613 $ 13.12 8.5 $ — Exercisable at December 31, 2021 220,575 $ 14.48 6.5 $ — |
Summary of Assumptions for Estimated Fair Value of Options | The fair values of the options granted were estimated based on the Black-Scholes model, using the following assumptions: Year Ended December 31, 2021 Expected volatility 72.9 % - 82.6 % Risk-free interest rate 0.79 % - 1.45 % Expected term (in years) 5.0 - 9.0 Expected dividend yield 0 % |
Schedule of Equity-based Compensation Expense | Equity-based compensation expense recorded as research and development and general and administrative expenses is as follows (in thousands): December 31, 2021 2020 Research and development $ 600 $ 22 General and administrative 1,191 42 Total equity-based compensation $ 1,791 $ 64 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Loss Before Provision (Benefit) for Income Taxes | Our loss before provision (benefit) for income taxes for the years ended December 31, 2021 and 2020 consisted of the following (in thousands): Year Ended December 31, 2021 2020 Domestic $ 206 $ — Foreign ( 68,017 ) ( 12,042 ) Total $ ( 67,811 ) $ ( 12,042 ) |
Schedule of Provision for Income Taxes | Our provision for income taxes consists of the following (in thousands): Year Ended December 31, 2021 2020 Current: Federal $ 114 $ — State 23 — Foreign 18 — 155 — Deferred: Federal ( 72 ) — State ( 15 ) — Foreign — — ( 87 ) — Total provision for income taxes $ 68 $ — |
Reconciliation of the Statutory Income Tax Rate to our Effective Income Tax Rate | The reconciliation of the statutory income tax rate to our effective income tax rate is as follows: Year Ended December 31, 2021 2020 Income tax benefit at the statutory rate 21.0 % 21.0 % Permanent differences ( 6.5 ) ( 2.2 ) Difference in tax rate 1.0 1.0 Change in valuation allowance ( 15.6 ) ( 19.8 ) Total ( 0.1 %) — % |
Schedule of Principal Components of Deferred Tax Assets | The principal components of the Company’s deferred tax assets consisted of the following (in thousands): December 31, 2021 2020 Deferred tax assets: Net operating loss carryforwards $ 14,693 $ 5,234 Share-based compensation expense 345 71 Accrued compensation 88 — Other 73 74 Total deferred tax assets $ 15,199 $ 5,379 Valuation allowance ( 15,112 ) ( 5,379 ) Net deferred tax assets $ 87 $ — |
Net Loss Per Share (Table)
Net Loss Per Share (Table) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Basic and diluted net loss per ordinary share is calculated as follows (in thousands except share and per share amounts): Year Ended December 31, 2021 2020 Net loss $ ( 67,879 ) $ ( 12,042 ) Cumulative dividends on class B and C preference shares ( 7,108 ) ( 2,552 ) Net loss attributable to common shareholders $ ( 74,987 ) $ ( 14,594 ) Net loss per common share, basic and diluted $ ( 17.30 ) $ ( 82.36 ) Weighted-average number of shares used in computing net loss per common share, basic and diluted 4,335,629 177,200 |
Schedule of Potentially Dilutive Securities Excluded from Calculation of Diluted Net Loss per Share | The following outstanding potentially dilutive securities have been excluded from the calculation of diluted net loss per class A ordinary share, as their effect is anti-dilutive: December 31, 2021 2020 Convertible preference shares — 584,583 Stock options to purchase common stock 3,071,613 — Stock warrants to purchase class A ordinary shares — 89,935 |
Description of Business, Orga_2
Description of Business, Organization and Liquidity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Nov. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Nov. 09, 2021 | Jul. 31, 2020 | |
Description Of Business Organization And Liquidity [Line Items] | |||||
Accumulated deficit | $ (106,281) | $ (38,402) | |||
Net losses | (67,879) | (12,042) | |||
Cash and cash equivalents | $ 211,531 | $ 3,405 | |||
Common stock, par value | $ 0.001 | $ 0.001 | |||
Net proceeds from IPO, after deducting underwriting discounts, commissions and other offering costs | $ 103,300 | ||||
Convertible preference share issued upon conversion | 20,592,413 | ||||
Common stock shares outstanding | 28,815,267 | 0 | 28,815,267 | ||
Common stock shares authorized | 300,000,000 | 0 | 300,000,000 | ||
Preferred stock shares authorized | 5,000,000 | 5,000,000 | |||
Class A Ordinary Shares | |||||
Description Of Business Organization And Liquidity [Line Items] | |||||
Common stock, par value | $ 0.16 | $ 0.16 | $ 0.16 | ||
Common stock conversion basis | one for one | ||||
Common stock shares outstanding | 0 | 177,200 | |||
Common stock shares authorized | 0 | 177,200 | |||
Class B Preference Shares | |||||
Description Of Business Organization And Liquidity [Line Items] | |||||
Common stock, par value | $ 0.001 | ||||
Common stock conversion basis | one for one | ||||
Common stock shares sold, price per share | $ 73.60 | ||||
Preferred stock shares authorized | 0 | 584,583 | |||
Class C Preference Shares | |||||
Description Of Business Organization And Liquidity [Line Items] | |||||
Common stock, par value | $ 0.001 | ||||
Common stock conversion basis | one for one | ||||
Undesignated Preferred Stock | |||||
Description Of Business Organization And Liquidity [Line Items] | |||||
Preferred stock shares authorized | 5,000,000 | ||||
Underwriters | |||||
Description Of Business Organization And Liquidity [Line Items] | |||||
Shares issued | 1,072,500 | ||||
IPO | |||||
Description Of Business Organization And Liquidity [Line Items] | |||||
Shares issued | 8,222,500 | ||||
Common stock shares sold, price per share | $ 14 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) kr in Millions | Nov. 01, 2021 | Dec. 31, 2021USD ($) | Dec. 31, 2021DKK (kr) | Dec. 31, 2020USD ($) | Dec. 31, 2021DKK (kr) |
Property, Plant and Equipment [Line Items] | |||||
Stock split, description | 3.544-for-1 stock split | ||||
Stock split, conversion ratio | 3.544 | ||||
Money market funds | $ 101,600,000 | ||||
Cash equivalents | $ 0 | ||||
Operating lease description | we entered into new lease agreements for office space and laboratory facilities in the US. Each lease had a free-rent period after lease inception, which led to the recording of a deferred rent liability. | we entered into new lease agreements for office space and laboratory facilities in the US. Each lease had a free-rent period after lease inception, which led to the recording of a deferred rent liability. | |||
Deferred rent liability | 0 | ||||
Lease incentives | $ 0 | 0 | |||
Expected dividend yield | 0.00% | 0.00% | |||
Unrecognized tax benefits | $ 0 | 0 | |||
Research and Development Expense | |||||
Property, Plant and Equipment [Line Items] | |||||
Grant income cost reimbursement | 109,000 | 91,000 | |||
Research and Development Expense | Danish Tax Authority | |||||
Property, Plant and Equipment [Line Items] | |||||
Refundable tax credit | kr | kr 25 | ||||
Refundable tax credit receivable | $ 841,000 | $ 904,000 | |||
Research and Development Expense | Maximum | Danish Tax Authority | |||||
Property, Plant and Equipment [Line Items] | |||||
Tax credit carryforward | kr | kr 5.5 | ||||
Refundable tax credit | kr | kr 25 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Assets Measured at Fair Value (Details) - Fair Value, Nonrecurring $ in Thousands | Dec. 31, 2021USD ($) |
Assets | |
Total assets measured at fair value | $ 101,561 |
Money Market Funds [Member] | |
Assets | |
Total assets measured at fair value | 101,561 |
Level 1 | |
Assets | |
Total assets measured at fair value | 101,561 |
Level 1 | Money Market Funds [Member] | |
Assets | |
Total assets measured at fair value | $ 101,561 |
Fair Value Measurements - Roll-
Fair Value Measurements - Roll-forward of Fair Value of Convertible Note and Preference Shares Tranche Obligations for Which Fair Value Determined by Level 3 Inputs (Details) - Level 3 - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Beginning balance | $ 8,663 | |
Addition in cash on issuance of class C preference shares | $ 2,425 | |
Fair value adjustments | 1,985 | |
Fair value adjustments through statement of operations | 26,830 | |
Currency exchange | (979) | (375) |
Conversion or settlement of preference shares | (28,276) | |
Class B Convertible Preferred Stock [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Conversion or settlement of preference shares | (10,273) | |
Preference Shares Tranche Obligations | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Addition in cash on issuance of class C preference shares | 2,425 | |
Fair value adjustments through statement of operations | 26,830 | |
Currency exchange | (979) | |
Conversion or settlement of preference shares | $ (28,276) | |
Convertible Note | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Beginning balance | 8,663 | |
Fair value adjustments | 1,985 | |
Currency exchange | (375) | |
Convertible Note | Class B Convertible Preferred Stock [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Conversion or settlement of preference shares | $ (10,273) |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2020USD ($)shares | Jul. 31, 2019USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Proceeds from issuance of convertible notes | $ 9,000,000 | |||
Convertible notes converted | $ 500,000 | |||
Transfers from Level 1 to Level 2 | $ 0 | $ 0 | ||
Transfers from Level 2 to Level 1 | 0 | 0 | ||
Transfers into Level 3 | 0 | 0 | ||
Transfers out of Level 3 | $ 0 | 0 | ||
Recurring | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Financial liabilities at fair value | 0 | |||
Financial assets at fair value | $ 0 | |||
Convertible Notes | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Convertible notes interest rate | 8.00% | |||
Class B Preference Shares | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Number of preferred stock shares upon conversion | shares | 142,437 | |||
Class C Convertible Preference Stock | Expected Stock Price Volatility | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Preference stock measurement input | 0.737 | |||
Class C Convertible Preference Stock | Remaining Term | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Remaining term | 3 months 18 days | |||
Class C Convertible Preference Stock | Risk-Free Interest Rate | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Preference stock measurement input | 0.05 | |||
Class C Convertible Preference Stock | Expectation of Dividends | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Preference stock measurement input | 0 |
License and Collaboration Agr_2
License and Collaboration Agreements - Additional Information (Details) $ in Thousands, kr in Millions | 12 Months Ended | |||
Dec. 31, 2021USD ($) | Dec. 31, 2021DKK (kr) | Dec. 31, 2020USD ($) | Dec. 31, 2021DKK (kr) | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Research and development expense | $ 30,152 | $ 8,464 | ||
Herlev | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Payment fee for specific services | 800 | kr 5 | ||
Fee payable for specific services | 2,100 | kr 13.2 | ||
Research and development expense | $ 2,900 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets - Summary of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | ||
Prepaid contract research and development costs | $ 4,770 | $ 359 |
Insurance | 3,197 | |
Research and development tax credit receivable | 841 | 904 |
Value-added tax refund receivable | 1,250 | 596 |
Other | 149 | 371 |
Total prepaid expenses and other current assets | $ 10,207 | $ 2,230 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities - Summary of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Payables And Accruals [Abstract] | ||
Accrued contract research and development costs | $ 3,861 | $ 1,487 |
Professional cost | 1,028 | |
Employee compensation costs | 1,027 | 785 |
Other liabilities | 461 | 256 |
Total accrued expenses and other current liabilities | $ 6,377 | $ 2,528 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | 1 Months Ended | 12 Months Ended | |||
Oct. 31, 2021 | Aug. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2021USD ($)Lease | Dec. 31, 2020USD ($) | |
Lessee, Lease, Description [Line Items] | |||||
Number of operating leases | Lease | 2 | ||||
Operating lease expiration period one | 2021-08 | ||||
Operating lease expiration period two | 2021-12 | ||||
Rent expense | $ | $ 290,000 | $ 202,000 | |||
Operating new lease expiration period | 2027-01 | 2027-04 | 2025-01 | ||
Lessee, operating lease, option to terminate | In March 2021, we entered into a new lease for our office space in Copenhagen, Denmark that expires in January 2025, terminable upon three months’ notice. In August 2021, we entered into a new lease for laboratory facilities and office space in Rockwell, Maryland that expires in April 2027. In October 2021, we entered into a new lease for office space in New York, NY that expires in January 2027. |
Commitments and Contingencies_2
Commitments and Contingencies - Future Minimum Rental Payments Under Noncancellable Leases (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2022 | $ 411 |
2023 | 605 |
2024 | 621 |
2025 | 547 |
2026 | 553 |
Thereafter | 150 |
Total | $ 2,887 |
Convertible Preference Shares -
Convertible Preference Shares - Additional information (Details) | 1 Months Ended | 12 Months Ended | ||||||
Oct. 31, 2021USD ($)shares | Mar. 31, 2021USD ($)shares | Jan. 31, 2021USD ($)$ / sharesshares | Jul. 31, 2020USD ($)$ / sharesshares | Apr. 30, 2020USD ($)$ / sharesshares | Dec. 31, 2021USD ($)Vote$ / sharesshares | Nov. 09, 2021shares | Dec. 31, 2020$ / sharesshares | |
Class Of Stock [Line Items] | ||||||||
Preference shares authorized | shares | 5,000,000 | 5,000,000 | ||||||
Preference shares issued | shares | 0 | 0 | ||||||
Preference shares outstanding | shares | 0 | 0 | ||||||
Preference share per share | $ / shares | $ 0.001 | $ 0.001 | ||||||
Convertible preference share issued upon conversion | shares | 20,592,413 | |||||||
Number of votes per share | Vote | 1 | |||||||
Class B Preference Shares | ||||||||
Class Of Stock [Line Items] | ||||||||
Preference shares authorized | shares | 0 | 584,583 | ||||||
Preference shares issued | shares | 142,437 | 0 | 584,583 | |||||
Preference shares outstanding | shares | 0 | 584,583 | ||||||
Preference share per share | $ / shares | $ 64.48 | |||||||
Fair value of shares issued | $ | $ 10,300,000 | |||||||
Shares issued fair value per share | $ / shares | $ 72.15 | |||||||
Convertible preference shares, shares issued | shares | 75,845 | |||||||
Temporary equity, subscription price per share | $ / shares | $ 67.46 | |||||||
Proceeds from issuance of preference shares | $ | $ 5,100,000 | |||||||
Temporary equity, Issuance of preference shares, net of issuance costs | $ | $ 5,600,000 | |||||||
Temporary equity, share price | $ / shares | $ 73.60 | |||||||
Deemed dividend | $ | $ 500,000 | |||||||
Temporary equity, issuance costs | $ | 10,000 | |||||||
Class B Preference Shares | Option Pricing Model | ||||||||
Class Of Stock [Line Items] | ||||||||
Convertible notes equity value | $ | $ 40,600,000 | |||||||
Convertible notes term | 1 year 7 months 6 days | |||||||
Convertible notes volatility percentage | 86.00% | |||||||
Convertible notes risk free rate | 0.18% | |||||||
Convertible notes conversion cost | $ | $ 4,000,000 | |||||||
Equity, fair value assumed | $ | $ 47,600,000 | |||||||
Equity securities term | 1 year 4 months 9 days | |||||||
Class B Preference Shares | Option Pricing Model | Expected Stock Price Volatility | ||||||||
Class Of Stock [Line Items] | ||||||||
Equity securities, measurement input | 92.4 | |||||||
Class B Preference Shares | Option Pricing Model | Risk-Free Interest Rate | ||||||||
Class Of Stock [Line Items] | ||||||||
Equity securities, measurement input | 0.16 | |||||||
Class C Preference Shares | ||||||||
Class Of Stock [Line Items] | ||||||||
Convertible preference shares, shares issued | shares | 656,776 | 35,825 | 505,520 | |||||
Temporary equity, subscription price per share | $ / shares | $ 121.55 | |||||||
Proceeds from issuance of preference shares | $ | $ 84,100,000 | $ 4,200,000 | $ 61,500,000 | |||||
Temporary equity, issuance costs | $ | $ 340,000 | |||||||
Convertible preference shares, shares authorized | shares | 1,263,804 | |||||||
Number of shares issued for adjusted downward | shares | 32,568 | |||||||
Class C Preference Shares | Tranche Obligation | ||||||||
Class Of Stock [Line Items] | ||||||||
Convertible preference shares, shares issued | shares | 689,344 | |||||||
Temporary equity, subscription price per share | $ / shares | $ 128.19 | |||||||
Proceeds from issuance of preference shares | $ | $ 61,500,000 | |||||||
Temporary equity, subscription amount | $ | $ 88,400,000 | |||||||
Fair value of preference shares tranche obligation | $ | $ 2,400,000 | |||||||
Class B and Class C Preference Shares | ||||||||
Class Of Stock [Line Items] | ||||||||
Convertible preference share issued upon conversion | shares | 20,415,213 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2021USD ($)$ / sharesshares | Dec. 31, 2021USD ($)Voteshares | Nov. 09, 2021shares | Dec. 31, 2020shares | |
Subsidiary, Sale of Stock [Line Items] | ||||
Net proceeds from IPO, after deducting underwriting discounts, commissions and other offering costs | $ | $ 103,300,000 | |||
Common stock shares authorized | 300,000,000 | 300,000,000 | 0 | |
Preferred stock shares authorized | 5,000,000 | 5,000,000 | ||
Number of votes per share | Vote | 1 | |||
Common stock shares outstanding | 28,815,267 | 28,815,267 | 0 | |
Common stock, shares issued | 28,815,267 | 0 | ||
Dividend Declared | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Dividends | $ | $ 0 | |||
Dividend Paid | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Dividends | $ | $ 0 | |||
Undesignated Preferred Stock | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Preferred stock shares authorized | 5,000,000 | |||
Class A Ordinary Shares | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Common stock shares authorized | 0 | 177,200 | ||
Common stock shares outstanding | 0 | 177,200 | ||
Common stock, shares issued | 0 | 177,200 | ||
IPO | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Shares issued | 8,222,500 | |||
Common stock shares sold, price per share | $ / shares | $ 14 | |||
Underwriters | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Shares issued | 1,072,500 |
Equity-Based Compensation - Add
Equity-Based Compensation - Additional Information (Details) - USD ($) | Nov. 04, 2021 | Nov. 30, 2021 | Oct. 31, 2021 | Aug. 31, 2021 | Jul. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Equity-based compensation expense | $ 1,791,000 | $ 64,000 | |||||
Unrecognized compensation cost | $ 22,600,000 | ||||||
Unrecognized compensation cost, recognition period | 3 years 8 months 12 days | ||||||
Stock Warrants | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Number of warrants granted transferred to plan | 2,981,678 | ||||||
Nonvested Warrant Awards | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Vesting period | 3 years 9 months | ||||||
Warrants, weighted average exercise price | $ 12.64 | $ 19.62 | $ 19.62 | ||||
Modification amount | $ 600,000 | ||||||
Weighted average period | 3 years 9 months | ||||||
Nonvested Warrant Awards | Class A Ordinary Shares | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Warrants to purchase aggregate shares | 670,849 | ||||||
Pre-IPO Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Number of warrants available for future grant | 0 | ||||||
Employee Equity Plan | Stock Warrants | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Vesting period | 3 years | ||||||
Expiration period from vest date | 5 years | ||||||
Number of warrants issued/granted | 2,306,478 | 0 | |||||
Warrants, weighted average exercise price | $ 14.74 | ||||||
Weighted average period | 3 years | ||||||
Number of warrants, exercised | 0 | ||||||
Number of warrants, forfeitures | 0 | ||||||
2021 Equity Incentive Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Common stock reserved for issuance | 2,465,150 | ||||||
Maximum percentage of shares that may be issued under the plan as a proportion of outstanding capital stock | 4.00% | ||||||
Number of warrants available for future grant | 1,789,950 | ||||||
Number of warrants issued/granted | 675,200 | ||||||
Warrants, weighted average exercise price | $ 14 | ||||||
Tax benefits recognized for stock-based compensation | $ 0 | $ 0 | |||||
2021 Equity Incentive Plan | Pre-IPO Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Number of warrants granted transferred to plan | 2,396,413 | ||||||
2021 Employee Stock Purchase Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Common stock reserved for issuance | 257,272 | ||||||
2021 Employee Stock Purchase Plan | Maximum | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Maximum percentage of shares that may be issued under the plan as a proportion of outstanding capital stock | 1.00% |
Equity-Based Compensation - Sch
Equity-Based Compensation - Schedule of Stock Warrants Activity (Details) - Warrant - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of Warrants, Beginning balance | 89,935 | 89,935 | |
Number of Warrants, Granted | 2,981,678 | ||
Number of Warrants, Ending balance | 3,071,613 | 89,935 | 89,935 |
Number of Warrants, Exercisable | 220,575 | ||
Weighted-average exercise price per share, Beginning balance | $ 15 | $ 15 | |
Weighted-average exercise price per share, Granted | 14.58 | ||
Weighted-average exercise price per share, Ending balance | 13.12 | $ 15 | $ 15 |
Weighted-average exercise price per share, Exercisable | $ 14.48 | ||
Weighted-average remaining contractual term (in years), Outstanding | 8 years 6 months | 4 years 7 months 6 days | 5 years 7 months 6 days |
Weighted-average remaining contractual term (in years), Exercisable | 6 years 6 months |
Equity-Based Compensation - Sum
Equity-Based Compensation - Summary of Assumptions for Estimated Fair Value of Options (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Expected volatility minimum | 72.90% |
Expected volatility maximum | 82.60% |
Risk-free interest rate minimum | 0.79% |
Risk-free interest rate maximum | 1.45% |
Expected dividend yield | 0.00% |
Minimum | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Expected term (in years) | 5 years |
Maximum | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Expected term (in years) | 9 years |
Equity-Based Compensation - S_2
Equity-Based Compensation - Schedule of Equity-based Compensation Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total equity-based compensation | $ 1,791,000 | $ 64,000 |
Research and Development Expense | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total equity-based compensation | 600,000 | 22,000 |
General and Administrative Expense | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total equity-based compensation | $ 1,191,000 | $ 42,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) kr in Millions | 12 Months Ended | |||
Dec. 31, 2021DKK (kr) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019 | |
Operating Loss Carryforwards [Line Items] | ||||
Valuation allowance | $ 9,700,000 | |||
Deferred tax assets, credit carryforwards | 66,800,000 | |||
Unrecognized tax benefits | $ 0 | $ 0 | ||
Danish Tax Authority | ||||
Operating Loss Carryforwards [Line Items] | ||||
Open tax year | 2018 | 2018 | ||
Danish Tax Authority | Research and Development Expense | ||||
Operating Loss Carryforwards [Line Items] | ||||
Effective income tax rate | 101.50% | |||
Refundable tax credit | kr | kr 25 | |||
Refundable tax credit receivable | $ 841,000 | $ 904,000 | ||
Danish Tax Authority | Research and Development Expense | Maximum | ||||
Operating Loss Carryforwards [Line Items] | ||||
Refundable tax credit | kr | kr 25 | |||
Danish Tax Authority | 2020 through 2022 | Research and Development Expense | ||||
Operating Loss Carryforwards [Line Items] | ||||
Effective income tax rate | 130.00% | 130.00% | ||
Danish Tax Authority | 2023 through 2025 | Research and Development Expense | ||||
Operating Loss Carryforwards [Line Items] | ||||
Effective income tax rate | 108.00% | 108.00% | ||
Danish Tax Authority | Period 2026 | Research and Development Expense | ||||
Operating Loss Carryforwards [Line Items] | ||||
Effective income tax rate | 110.00% | 110.00% |
Income Taxes - Schedule of Loss
Income Taxes - Schedule of Loss Before Provision (Benefit) for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Domestic | $ 206 | |
Foreign | (68,017) | $ (12,042) |
Loss before income tax expense | $ (67,811) | $ (12,042) |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Current: | |
Federal | $ 114 |
State | 23 |
Foreign | 18 |
Current | 155 |
Deferred: | |
Federal | (72) |
State | (15) |
Deferred | (87) |
Total provision for income taxes | $ 68 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of the Statutory Income Tax Rate to our Effective Income Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefit at the statutory rate | 21.00% | 21.00% |
Permanent differences | (6.50%) | (2.20%) |
Difference in tax rate | 1.00% | 1.00% |
Change in valuation allowance | (15.60%) | (19.80%) |
Total | (0.10%) |
Income Taxes - Schedule of Prin
Income Taxes - Schedule of Principal Components of Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 14,693 | $ 5,234 |
Share-based compensation expense | 345 | 71 |
Accrued compensation | 88 | |
Other | 73 | 74 |
Total deferred tax assets | 15,199 | 5,379 |
Valuation allowance | (15,112) | $ (5,379) |
Net deferred tax assets | $ (87) |
Net Loss Per Share - Basic and
Net Loss Per Share - Basic and Diluted Net Loss Per Ordinary Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (67,879) | $ (12,042) |
Cumulative dividends on class B and C preference shares | (7,108) | (2,552) |
Net loss attributable to common shareholders | $ (74,987) | $ (14,594) |
Net loss per common share, basic and diluted | $ (17.30) | $ (82.36) |
Weighted-average number of shares used in computing net loss per common share, basic and diluted | 4,335,629 | 177,200 |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of Potentially Dilutive Securities Excluded from Calculation of Diluted Net Loss per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Convertible Preference Shares | ||
Earnings Per Share Basic [Line Items] | ||
Outstanding potentially dilutive securities | 584,583 | |
Stock Options to Purchase Common Stock | ||
Earnings Per Share Basic [Line Items] | ||
Outstanding potentially dilutive securities | 3,071,613 | |
Stock Warrants to Purchase Class A Ordinary Shares | ||
Earnings Per Share Basic [Line Items] | ||
Outstanding potentially dilutive securities | 89,935 |