Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 01, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-41614 | |
Entity Registrant Name | MINERALYS THERAPEUTICS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 84-1966887 | |
Entity Address, Address Line One | 150 N. Radnor Chester Rd | |
Entity Address, Address Line Two | Ste F200 | |
Entity Address, City or Town | Radnor | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 19087 | |
City Area Code | 888 | |
Local Phone Number | 378-6240 | |
Title of 12(b) Security | Common stock, $0.0001 par value per share | |
Trading Symbol | MLYS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 41,105,118 | |
Entity Central Index Key | 0001933414 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 86,300 | $ 87,701 |
Investments | 167,461 | 22,409 |
Prepaid and other current assets | 11,614 | 2,701 |
Total current assets | 265,375 | 112,811 |
Investments, noncurrent | 12,129 | 0 |
Other assets | 51 | 1,631 |
Total assets | 277,555 | 114,442 |
Current liabilities: | ||
Accounts payable | 5,573 | 1,907 |
Accrued liabilities | 7,970 | 6,160 |
Total current liabilities | 13,543 | 8,067 |
Commitments and contingencies (Note 4) | ||
Stockholders’ equity (deficit): | ||
Common stock, $0.0001 par value, 500,000,000 and 319,000,000 shares authorized and 41,105,118 and 6,419,238 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | 4 | 1 |
Additional paid-in capital | 364,327 | 540 |
Accumulated deficit | (100,319) | (52,810) |
Total stockholders’ equity (deficit) | 264,012 | (52,269) |
Total liabilities, convertible preferred stock, and stockholders’ equity (deficit) | 277,555 | 114,442 |
Series A Convertible Preferred Stock | ||
Current liabilities: | ||
Convertible preferred stock | 0 | 40,987 |
Series B Convertible Preferred Stock | ||
Current liabilities: | ||
Convertible preferred stock | $ 0 | $ 117,657 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Common stock par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock shares authorized (in shares) | 500,000,000 | 319,000,000 |
Common stock shares outstanding (in shares) | 41,105,118 | 6,419,238 |
Common stock shares issued (in shares) | 41,105,118 | 6,419,238 |
Series A Convertible Preferred Stock | ||
Convertible preferred stock par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Convertible preferred stock, shares authorized (in shares) | 0 | 86,332,216 |
Convertible preferred stock, shares outstanding (in shares) | 0 | 86,332,216 |
Convertible preferred stock, shares issued (in shares) | 0 | 86,332,216 |
Convertible preferred stock, liquidation preference | $ 0 | $ 41,180 |
Series B Convertible Preferred Stock | ||
Convertible preferred stock par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Convertible preferred stock, shares authorized (in shares) | 0 | 136,510,868 |
Convertible preferred stock, shares outstanding (in shares) | 0 | 136,510,868 |
Convertible preferred stock, shares issued (in shares) | 0 | 136,510,868 |
Convertible preferred stock, liquidation preference | $ 0 | $ 118,000 |
Condensed Statements of Operati
Condensed Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Operating expenses: | ||||
Research and development | $ 22,499 | $ 6,059 | $ 46,676 | $ 18,432 |
General and administrative | 3,774 | 1,364 | 10,270 | 3,039 |
Total operating expenses | 26,273 | 7,423 | 56,946 | 21,471 |
Loss from operations | (26,273) | (7,423) | (56,946) | (21,471) |
Interest income, net | 3,513 | 741 | 9,435 | 741 |
Other income | 0 | 4 | 2 | 4 |
Total other income, net | 3,513 | 745 | 9,437 | 745 |
Net loss | $ (22,760) | $ (6,678) | $ (47,509) | $ (20,726) |
Basic net loss per share attributable to common stockholders (in USD per share) | $ (0.57) | $ (1.29) | $ (1.36) | $ (4.02) |
Diluted net loss per share attributable to common stockholders (in USD per share) | $ (0.57) | $ (1.29) | $ (1.36) | $ (4.02) |
Basic weighted-average shares used to compute net loss per share attributable to common stockholders (in shares) | 39,930,748 | 5,181,410 | 34,872,287 | 5,152,752 |
Diluted weighted-average shares used to compute net loss per share attributable to common stockholders (in shares) | 39,930,748 | 5,181,410 | 34,872,287 | 5,152,752 |
Condensed Statements of Convert
Condensed Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Series A Convertible Preferred Stock | Series B Convertible Preferred Stock | Common Stock | Additional Paid-In-Capital | Accumulated Deficit |
Beginning balance, convertible preferred stock (in shares) at Dec. 31, 2021 | 61,180,259 | 0 | ||||
Beginning balance, convertible preferred stock at Dec. 31, 2021 | $ 28,996 | $ 0 | ||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||
Issuance of Series A convertible preferred stock, net of issuance costs (in shares) | 25,151,957 | |||||
Issuance of Series A convertible preferred stock, net of issuance costs | $ 11,991 | |||||
Ending balance, convertible preferred stock (in shares) at Mar. 31, 2022 | 86,332,216 | 0 | ||||
Ending balance, convertible preferred stock at Mar. 31, 2022 | $ 40,987 | $ 0 | ||||
Beginning balance (in shares) at Dec. 31, 2021 | 5,441,980 | |||||
Beginning balance at Dec. 31, 2021 | $ (22,925) | $ 1 | $ 85 | $ (23,011) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of restricted stock awards (in shares) | 172,444 | |||||
Stock-based compensation | 19 | 19 | ||||
Net loss | (7,569) | (7,569) | ||||
Ending balance (in shares) at Mar. 31, 2022 | 5,614,424 | |||||
Ending balance at Mar. 31, 2022 | (30,475) | $ 1 | 104 | (30,580) | ||
Beginning balance, convertible preferred stock (in shares) at Dec. 31, 2021 | 61,180,259 | 0 | ||||
Beginning balance, convertible preferred stock at Dec. 31, 2021 | $ 28,996 | $ 0 | ||||
Ending balance, convertible preferred stock (in shares) at Sep. 30, 2022 | 86,332,216 | 136,510,868 | ||||
Ending balance, convertible preferred stock at Sep. 30, 2022 | $ 40,987 | $ 117,657 | ||||
Beginning balance (in shares) at Dec. 31, 2021 | 5,441,980 | |||||
Beginning balance at Dec. 31, 2021 | (22,925) | $ 1 | 85 | (23,011) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (20,726) | |||||
Ending balance (in shares) at Sep. 30, 2022 | 6,419,238 | |||||
Ending balance at Sep. 30, 2022 | (43,414) | $ 1 | 322 | (43,737) | ||
Beginning balance, convertible preferred stock (in shares) at Mar. 31, 2022 | 86,332,216 | 0 | ||||
Beginning balance, convertible preferred stock at Mar. 31, 2022 | $ 40,987 | $ 0 | ||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||
Issuance of Series A convertible preferred stock, net of issuance costs (in shares) | 136,510,868 | |||||
Issuance of Series A convertible preferred stock, net of issuance costs | $ 117,657 | |||||
Ending balance, convertible preferred stock (in shares) at Jun. 30, 2022 | 86,332,216 | 136,510,868 | ||||
Ending balance, convertible preferred stock at Jun. 30, 2022 | $ 40,987 | $ 117,657 | ||||
Beginning balance (in shares) at Mar. 31, 2022 | 5,614,424 | |||||
Beginning balance at Mar. 31, 2022 | (30,475) | $ 1 | 104 | (30,580) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 26 | 26 | ||||
Net loss | (6,479) | (6,479) | ||||
Ending balance (in shares) at Jun. 30, 2022 | 5,614,424 | |||||
Ending balance at Jun. 30, 2022 | (36,928) | $ 1 | 130 | (37,059) | ||
Ending balance, convertible preferred stock (in shares) at Sep. 30, 2022 | 86,332,216 | 136,510,868 | ||||
Ending balance, convertible preferred stock at Sep. 30, 2022 | $ 40,987 | $ 117,657 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of restricted stock awards (in shares) | 804,814 | |||||
Stock-based compensation | 192 | 192 | ||||
Net loss | (6,678) | (6,678) | ||||
Ending balance (in shares) at Sep. 30, 2022 | 6,419,238 | |||||
Ending balance at Sep. 30, 2022 | $ (43,414) | $ 1 | 322 | (43,737) | ||
Beginning balance, convertible preferred stock (in shares) at Dec. 31, 2022 | 86,332,216 | 136,510,868 | ||||
Beginning balance, convertible preferred stock at Dec. 31, 2022 | $ 40,987 | $ 117,657 | ||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||
Conversion of preferred stock to common stock upon closing initial public offering (in shares) | (86,332,216) | (136,510,868) | ||||
Conversion of preferred stock to common stock upon closing of initial public offering | $ (40,987) | $ (117,657) | ||||
Ending balance, convertible preferred stock (in shares) at Mar. 31, 2023 | 0 | 0 | ||||
Ending balance, convertible preferred stock at Mar. 31, 2023 | $ 0 | $ 0 | ||||
Beginning balance (in shares) at Dec. 31, 2022 | 6,419,238 | 6,419,238 | ||||
Beginning balance at Dec. 31, 2022 | $ (52,269) | $ 1 | 540 | (52,810) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Conversion of preferred stock to common stock upon closing initial public offering (in shares) | 20,637,415 | |||||
Conversion of preferred stock to common stock upon closing of initial public offering | 158,644 | $ 2 | 158,642 | |||
Issuance of Series A convertible preferred stock, net of issuance costs (in shares) | 13,800,000 | |||||
Issuance of Series A convertible preferred stock, net of issuance costs | 201,359 | $ 1 | 201,358 | |||
Stock-based compensation | 749 | 749 | ||||
Net loss | (12,608) | (12,608) | ||||
Ending balance (in shares) at Mar. 31, 2023 | 40,856,653 | |||||
Ending balance at Mar. 31, 2023 | $ 295,875 | $ 4 | 361,289 | (65,418) | ||
Beginning balance, convertible preferred stock (in shares) at Dec. 31, 2022 | 86,332,216 | 136,510,868 | ||||
Beginning balance, convertible preferred stock at Dec. 31, 2022 | $ 40,987 | $ 117,657 | ||||
Ending balance, convertible preferred stock (in shares) at Sep. 30, 2023 | 0 | 0 | ||||
Ending balance, convertible preferred stock at Sep. 30, 2023 | $ 0 | $ 0 | ||||
Beginning balance (in shares) at Dec. 31, 2022 | 6,419,238 | 6,419,238 | ||||
Beginning balance at Dec. 31, 2022 | $ (52,269) | $ 1 | 540 | (52,810) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | $ (47,509) | |||||
Ending balance (in shares) at Sep. 30, 2023 | 41,105,118 | 41,105,118 | ||||
Ending balance at Sep. 30, 2023 | $ 264,012 | $ 4 | 364,327 | (100,319) | ||
Beginning balance, convertible preferred stock (in shares) at Mar. 31, 2023 | 0 | 0 | ||||
Beginning balance, convertible preferred stock at Mar. 31, 2023 | $ 0 | $ 0 | ||||
Ending balance, convertible preferred stock (in shares) at Jun. 30, 2023 | 0 | 0 | ||||
Ending balance, convertible preferred stock at Jun. 30, 2023 | $ 0 | $ 0 | ||||
Beginning balance (in shares) at Mar. 31, 2023 | 40,856,653 | |||||
Beginning balance at Mar. 31, 2023 | 295,875 | $ 4 | 361,289 | (65,418) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 1,276 | 1,276 | ||||
Net loss | (12,141) | (12,141) | ||||
Ending balance (in shares) at Jun. 30, 2023 | 40,856,653 | |||||
Ending balance at Jun. 30, 2023 | 285,010 | $ 4 | 362,565 | (77,559) | ||
Ending balance, convertible preferred stock (in shares) at Sep. 30, 2023 | 0 | 0 | ||||
Ending balance, convertible preferred stock at Sep. 30, 2023 | $ 0 | $ 0 | ||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||
Issuance of common stock from stock option exercises (in shares) | 248,465 | |||||
Issuance of common stock from stock option exercises | 184 | 184 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 1,578 | 1,578 | ||||
Net loss | $ (22,760) | (22,760) | ||||
Ending balance (in shares) at Sep. 30, 2023 | 41,105,118 | 41,105,118 | ||||
Ending balance at Sep. 30, 2023 | $ 264,012 | $ 4 | $ 364,327 | $ (100,319) |
Condensed Statements of Conve_2
Condensed Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | |
Common Stock | |||
Issuance of common stock in initial public offering, issuance costs | $ 19,441 | ||
Series A Convertible Preferred Stock | |||
Issuance of Series A convertible preferred stock, net of issuance costs | $ 7 | ||
Series B Convertible Preferred Stock | |||
Issuance of Series A convertible preferred stock, net of issuance costs | $ 343 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net loss | $ (47,509) | $ (20,726) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Accretion of discount on held-to-maturity securities | (4,799) | (239) | |
Stock-based compensation | 3,603 | 237 | |
Changes in operating assets and liabilities: | |||
Accrued interest receivable | (655) | 0 | |
Prepaid and other current assets | (8,308) | (473) | |
Accounts payable and accrued liabilities | 5,476 | 2,166 | |
Net cash used in operating activities | (52,192) | (19,035) | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of marketable securities | (274,883) | (71,759) | |
Maturity of marketable securities | 122,500 | 0 | |
Net cash used in investing activities | (152,383) | (71,759) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Issuance of common stock in initial public offering, net of offering costs | 202,990 | (561) | |
Proceeds from stock option exercises | 184 | 0 | |
Net cash provided by financing activities | 203,174 | 129,087 | |
Net increase in cash and cash equivalents | (1,401) | 38,293 | |
Cash, cash equivalents, and restricted cash - beginning | 87,701 | 10,662 | |
Cash, cash equivalents, and restricted cash - ending | [1] | 86,300 | 48,955 |
Supplement Disclosure of Non-Cash Financing Activities: | |||
Conversion of convertible preferred stock to common stock upon closing of initial public offering | 159,180 | 0 | |
Deferred offering costs included in accounts payable and accrued liabilities | 0 | 421 | |
Proceeds from the issuance of Series A convertible preferred stock, net of offering costs | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from the issuance of convertible preferred stock, net of offering costs | 0 | 11,991 | |
Proceeds from the issuance of Series B convertible preferred stock, net of offering costs | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from the issuance of convertible preferred stock, net of offering costs | $ 0 | $ 117,657 | |
[1]Cash and cash equivalents as of September 30, 2023 exclude investments of $179.6 million. Cash, cash equivalents, and investments amounted to $265.9 million as of September 30, 2023. |
Condensed Statements of Cash _2
Condensed Statements of Cash Flows (Parenthetical) $ in Millions | Sep. 30, 2023 USD ($) |
Statement of Cash Flows [Abstract] | |
Investments | $ 179.6 |
Cash, cash equivalents, and investments | $ 265.9 |
Nature of Business
Nature of Business | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | Nature of Business Mineralys Therapeutics, Inc. (the Company) is a clinical-stage biopharmaceutical company focused on developing medicines to target diseases driven by abnormally elevated aldosterone. The Company’s clinical-stage product candidate, lorundrostat, is a proprietary, orally administered, aldosterone synthase inhibitor that the Company is initially developing for the treatment of cardiorenal conditions affected by abnormally elevated aldosterone, including hypertension and chronic kidney disease. The Company has initiated a pivotal clinical program of lorundrostat for the treatment of uncontrolled or resistant hypertension and has plans to initiate a Phase 2 trial in the second half of 2023 for lorundrostat in hypertensive patients with Stage 2 to 3b chronic kidney disease. The Company was incorporated as a Delaware corporation in May 2019, and it is headquartered in Radnor, Pennsylvania. The Company’s operations to date have been limited to business planning, raising capital, in-licensing lorundrostat, conducting preclinical and clinical trials, and other research and development. Initial Public Offering On February 14, 2023, the Company completed an initial public offering (IPO) of 13,800,000 shares of its common stock, which included the exercise in full by the underwriters of their option to purchase 1,800,000 additional shares, at a public offering price of $16.00 per share. The net proceeds to the Company from the IPO were $201.4 million, net of underwriting discounts, commissions, and offering costs. Reverse Stock Split On February 1, 2023, the Company effected a one-for-10.798 reverse stock split of its issued and outstanding shares of common stock, par value $0.0001 per share, and a proportional adjustment to the existing conversion ratio of the Company’s preferred stock (the Reverse Stock Split). Accordingly, all share and per-share amounts for all periods presented in the accompanying condensed financial statements and notes thereto have been adjusted to reflect this Reverse Stock Split. Liquidity and Capital Resources Since its inception, the Company has not generated any revenue from product sales or other sources and has incurred significant operating losses and negative cash flows from operations. The Company’s primary uses of cash to date have been to fund research and development activities, business planning, establishing and maintaining the Company’s intellectual property portfolio, hiring personnel, raising capital, and providing general and administrative support for these operations. As of September 30, 2023, the Company had an accumulated deficit of $100.3 million and cash, cash equivalents, and investments of $265.9 million. For the nine months ended September 30, 2023, the Company had a net loss of $47.5 million and net cash used in operating activities of $52.2 million. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) and applicable rules and regulations of the U.S. Securities and Exchange Commission for interim reporting. As permitted under those rules and regulations, certain footnotes or other financial information normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These condensed financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of the Company’s financial information. These unaudited condensed financial statements should be read in conjunction with the audited financial statements and related notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Updates of the Financial Accounting Standards Board (FASB). Segment Information The Company operates in one operating segment for the purposes of assessing performance and making operating decisions and, accordingly, no segment disclosures have been presented herein. All assets are held in the United States. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. Estimates have been used in the following areas, among others: research and development accruals, fair value of the Company’s common stock prior to the closing of the Company’s IPO, and income taxes. Cash and Cash Equivalents All highly-liquid investments that have maturities of 90 days or less at the date of purchase are classified as cash equivalents. As of September 30, 2023 and December 31, 2022, the Company did not have any restricted cash balances. The following table provides a reconciliation of cash, cash equivalents, and restricted cash as reported in the statement of cash flows to the balance sheets (in thousands): September 30, December 31, 2023 2022 Cash $ 1,352 $ 2,872 Cash equivalents 84,948 84,829 Total cash and cash equivalents $ 86,300 $ 87,701 The Company’s cash and cash equivalents balances as of September 30, 2023 include cash balances, time deposits, and amounts held primarily in interest-bearing money market accounts. As of December 31, 2021, the Company had $50 thousand classified as restricted cash, which is reported in the 2022 opening cash, cash equivalents, and restricted cash balance reported in the condensed statements of cash flows. Concentration of Credit Risk The Company has no significant off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts, or other hedging arrangements. Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of cash balances in several accounts with two financial institutions which, from time to time, are in excess of federally insured limits. Fair Value Measurements The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. ASC Topic 820, Fair Value Measurement, establishes a hierarchy of inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value and is not a measure of the investment credit quality. The three levels of the fair value hierarchy are described below: • Level 1 – quoted prices in active markets for identical assets and liabilities • Level 2 – other significant observable inputs (including quoted prices for similar assets and liabilities, interest rates, credit risk, etc.) • Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of assets and liabilities) For certain financial instruments, including cash and restricted cash, prepaid expenses, accounts payable, and certain accrued liabilities, the recorded amount approximates estimated fair value due to their relatively short maturity period. Refer to Note 3. “ Fair Value of Financial Instruments ” for additional details of the Company’s financial instruments. Investments The Company generally invests its excess cash in money market funds and investment-grade short- and long-term fixed-income debt securities, such as U.S. Treasury bills. Such investments are included in cash and cash equivalents, current investments, and investments - noncurrent in the condensed balance sheets. The Company determines the appropriate classification of short-term and long-term securities at the time of purchase and re-evaluates such designation as of each balance sheet date. Securities are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are carried at amortized cost, adjusted for the accretion of discounts using the interest method. The Company invested in marketable securities during the nine months ended September 30, 2023 and 2022, and no impairment charges were recorded. For held-to-maturity investments, the Company periodically reviews each individual security position that has an unrealized loss, or impairment, to determine if that impairment is other-than-temporary. If the Company believes an impairment of a security position is other than temporary, based on available quantitative and qualitative information as of the report date, the loss will be recognized within other income, net in the Company’s condensed statements of operations and a new cost basis in the investment is established. Deferred Offering Costs The Company capitalizes certain legal, professional, accounting, and other third-party fees that are directly associated with in-process equity issuances as deferred offering costs until such equity issuances are consummated. After consummation of the equity issuance, these costs are recorded as a reduction in the capitalized amount associated with the equity issuance. Should the equity issuance be abandoned, the deferred offering costs are expensed immediately as a charge to operating expenses in the statement of operations. Deferred offering costs as of September 30, 2023 and December 31, 2022 were $0 and $1.6 million, respectively. Such costs are classified in other assets on the condensed balance sheets. Stock-Based Compensation The Company accounts for its stock-based compensation awards in accordance with ASC Topic 718, Compensation – Stock Compensation (ASC 718). ASC 718 requires all stock-based payments to employees, including grants of employee stock options, to be recognized in the statements of operations based on their fair values. The Company’s stock-based awards are subject only to service-based vesting conditions. The Company measures restricted common stock awards using the difference, if any, between the purchase price per share of the award and the fair value of the Company’s common stock at the date of the grant or modification. The Company estimates the fair value of its stock option awards using the Black-Scholes option pricing model, which requires the input of assumptions, including (i) the expected stock price volatility, (ii) the calculation of expected term of the award, (iii) the risk-free interest rate, and (iv) expected dividends. Volatility — Due to the Company’s limited operating history and a lack of company-specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar publicly-traded companies. The Company believes that the companies in the group were most representative of the Company and had characteristics similar to its own, including stage of product development, a focus on the life sciences industry, and other economic and industry characteristics. Expected Term — The Company uses the simplified method to calculate the expected term, as it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term for options granted, and utilized the contractual term for options granted. Risk-Free Interest Rate — The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of the stock options. Expected Dividends — To date, the Company has not issued any dividends and does not expect to issue dividends over the life of the options and therefore has estimated the dividend yield to be zero. Subsequent to the closing of the Company’s IPO, the Company determines the fair market value of its common stock using the closing price of its common stock as reported on the Nasdaq Global Select Market. Prior to the closing of the Company’s IPO, there was no public market for the Company’s common stock, and the Company determined the fair value of the shares of its common stock underlying its share-based awards by considering a number of objective and subjective factors, including third-party valuations of the Company’s common stock, the valuation of comparable companies, the Company’s operating and financial performance, and general and industry-specific economic outlook, among other factors. The assumptions underlying these valuations represented management’s best estimate, with the assistance of a third-party valuation specialist, which involved inherent uncertainties and the application of management’s judgment. As a result, if the Company had used different assumptions or estimates, the fair value of the Company’s common stock and its stock-based compensation expense could have been materially different. Compensation expense related to awards is recognized on a straight-line basis by recognizing the grant date fair value over the associated service period of the award, which is generally the vesting term. The Company accounts for forfeitures as they occur. Net Loss Per Share The Company’s basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. The diluted net loss per share attributable to common stockholders is computed by giving effect to all potential common stock equivalents outstanding for the period determined using the treasury stock method. For purposes of this calculation, convertible preferred stock and stock options to purchase common stock are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is anti-dilutive. The following table sets forth the potential common shares excluded from the calculation of net loss per common share because their inclusion would be anti-dilutive: Nine Months Ended September 30, 2023 2022 Outstanding options 2,568,503 1,320,932 Unvested restricted stock awards 1,047,648 1,228,075 Convertible preferred stock (as converted into common stock) — 20,637,415 Total 3,616,151 23,186,422 Recently Issued Accounting Pronouncements |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The following table presents financial instruments measured at fair value on a recurring basis based on the fair value hierarchy as of September 30, 2023 and December 31, 2022 (in thousands): September 30, December 31, 2023 2022 Level 1 Assets Cash equivalents Money market funds $ 45,356 $ 84,829 Time deposits 39,592 — Total cash equivalents $ 84,948 $ 84,829 There were no transfers within the fair value hierarchy during the periods presented. The following methods and assumptions were used by the Company in estimating the fair values of each class of financial instrument disclosed herein: Money Market Funds and Time Deposits—The carrying amounts of money market funds and time deposits reported as cash and cash equivalents in the condensed balance sheets approximate their fair values due to their short-term nature. The fair values of money market funds are determined by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical assets. U.S. Treasury Bills—As of September 30, 2023 and December 31, 2022, the Company had short- and/or long-term U.S. Treasury bills. Fair values of these securities are determined by Level 2 inputs utilizing quoted prices (unadjusted) in active markets for similar assets. The following table presents held-to-maturity U.S. Treasury bills information as of each reported date (in thousands): As of September 30, 2023 Balance Sheet Location Original Maturities Amortized Cost Estimated Fair Value Investments between 3 and 12 months $ 167,461 $ 167,280 Investments, noncurrent greater than 1 year 12,129 12,066 Total $ 179,590 $ 179,346 As of December 31, 2022 Balance Sheet Location Original Maturities Amortized Cost Estimated Fair Value Investments between 3 and 6 months $ 22,409 $ 22,386 |
Commitment and Contingencies
Commitment and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies License Agreement with Mitsubishi Tanabe In July 2020, the Company entered into a license agreement (the Mitsubishi License) with Mitsubishi Tanabe Pharmaceutical Company (Mitsubishi Tanabe), pursuant to which Mitsubishi Tanabe granted the Company an exclusive, worldwide, royalty-bearing, sublicensable license under Mitsubishi Tanabe’s patent and other intellectual property rights to exploit products incorporating lorundrostat (formerly MT-4129) (Lorundrostat Products) for the prevention, treatment, diagnosis, detection, monitoring, or predisposition testing with respect to indications, diseases, and conditions in humans. Pursuant to the Mitsubishi License, the Company paid Mitsubishi Tanabe a $1.0 million upfront fee, and the Company was initially obligated to pay Mitsubishi Tanabe development milestone payments of up to $9.0 million in the aggregate and commercial milestone payments of up to $155.0 million in the aggregate upon first commercial sale and upon meeting certain annual sales targets, as well as additional commercial milestone payments of up to $10.0 million for a second indication. Additionally, the Company is obligated to pay Mitsubishi Tanabe tiered royalties at percentages ranging from the mid-single-digits to ten percent (10%) of aggregate net sales of each Lorundrostat Product on a Lorundrostat Product-by-Lorundrostat Product and country-by-country basis, until the later of (i) the expiration of the last-to-expire valid Mitsubishi Tanabe patent claim covering a Lorundrostat Product, (ii) ten years from the first commercial sale of a Lorundrostat Product, or (iii) the expiration of regulatory exclusivity in such country. Such royalties are subject to reduction under specified conditions, including lack of patent coverage and generic competition. The Company is obligated to use commercially reasonable efforts to conduct and complete the development activities and to file for regulatory approval for at least one Lorundrostat Product in a major market country and consider in good faith developing at least one Lorundrostat Product in a non-major market country. If the Company elects to sublicense its rights under the Mitsubishi License to a third party with respect to exploitation of lorundrostat or any Lorundrostat Product in certain countries in Asia, the Company has agreed to negotiate such a sublicense first, for a specified period of time, with Mitsubishi Tanabe, if Mitsubishi Tanabe notifies the Company that it would like to obtain such a sublicense. The Company also agreed not to commercialize any competing product prior to three years following the first commercial sale of the first Lorundrostat Product in any country without Mitsubishi Tanabe’s prior consent. Unless terminated earlier, the Mitsubishi License will continue until the expiration of all of the Company’s royalty obligations to Mitsubishi Tanabe. The Company may terminate the Mitsubishi License for any or no reason upon 90 or 180 days’ prior written notice to Mitsubishi Tanabe depending on whether the Lorundrostat Product has received regulatory approval. Mitsubishi Tanabe may terminate the Mitsubishi License if the Company has not initiated regulatory consultation for the first global clinical trials of lorundrostat in at least one major market country within a specified amount of time or if the Company or its affiliates or sublicensees initiate a challenge to the patent rights licensed to the Company by Mitsubishi Tanabe. In addition, either party may terminate the Mitsubishi License in the event of an uncured material breach by or bankruptcy of the other party, subject to certain notice and cure periods, or upon the other party’s bankruptcy or insolvency. The Company incurred $4.0 million and $0 of research and development expenses related to the Mitsubishi License during the nine months ended September 30, 2023 and 2022, respectively. A development milestone was achieved in March 2023 related to the Company’s planned initiation of its pivotal clinical program of lorundrostat. Litigation Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business. The Company was not subject to any material legal proceedings during the nine months ended September 30, 2023 and 2022, and no material legal proceedings are currently pending or threatened. Indemnification Agreements In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners, and other parties with respect to certain matters including, but not limited to, losses arising from breach of such agreements or intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with officers of the Company and members of its board of directors that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company is not aware of any claims under indemnification arrangements, and it has not accrued any liabilities related to such obligations in its condensed financial statements as of September 30, 2023 and December 31, 2022. |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued liabilities consisted of the following (in thousands): September 30, December 31, 2023 2022 Research and development expenses $ 5,853 $ 4,846 Compensation and benefits 1,221 665 Professional fees and other 896 649 Total $ 7,970 $ 6,160 |
Capital Stock
Capital Stock | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Capital Stock | Capital Stock As of September 30, 2023, the Company had reserved authorized shares of common stock for future issuance as follows: September 30, 2023 Shares available for grant under the 2023 Plan 3,198,474 Common stock options outstanding 2,568,503 Shares available for grant under the ESPP 400,000 Total 6,166,977 In connection with the closing of the IPO in February 2023, the Company’s board of directors approved an amendment to the Company’s amended and restated certificate of incorporation (the Restated Certificate). The Restated Certificate amended and restated the Company’s amended and restated certificate of incorporation, in its entirety to, among other things, increase the authorized number of shares of common stock to 500,000,000 shares and authorize 50,000,000 shares of undesignated preferred stock that may be issued from time to time by the Company’s board of directors in one or more series. Immediately prior to the closing of the IPO, 86,332,216 shares of Series A Preferred Stock and 136,510,868 shares of Series B Preferred Stock converted into 20,637,415 shares of the Company’s common stock, and the carrying value of Series A Preferred Stock and Series B Preferred Stock was converted to permanent equity. Preferred Stock Offerings In February 2021, the Company entered into a Series A redeemable convertible preferred stock agreement (the Series A Purchase Agreement). From February 2021 to April 2021, the Company issued 50,311,827 shares of Series A Preferred Stock at $0.477 per share for net proceeds of $23.8 million. Additionally, in February 2021, the Company’s convertible notes and related accrued interest converted into 10,868,432 shares of Series A Preferred Stock. The Series A Purchase Agreement provided for an additional closing for the Series A purchasers for the issuance of up to 25,151,957 shares of Series A Preferred Stock, at a purchase price of $0.477 per share for aggregate cash proceeds of $12.0 million, upon the achievement of the Milestone (as defined in the Series A Purchase Agreement) or a waiver of the Milestone by the requisite holders. In January 2022, the Company achieved the Milestone under the Series A Purchase Agreement and sold an aggregate of 25,151,957 shares of Series A Preferred Stock under the Series A Purchase Agreement to certain existing investors, members of the Company’s board of directors and affiliates of members of its board of directors, at a purchase price of $0.477 per share for aggregate net proceeds of approximately $12.0 million. In June 2022, the Company entered into a Series B convertible preferred stock agreement with certain investors, including members of the Company’s board of directors and affiliates of members of its board of directors, pursuant to which the Company issued and sold to such investors an aggregate of 136,510,868 shares of Series B Preferred Stock at a purchase price of $0.8644 per share for aggregate net proceeds of approximately $117.7 million. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation 2023 Incentive Award Plan In February 2023, the Company’s board of directors adopted and stockholders approved the 2023 Incentive Award Plan that became effective upon the closing of the IPO (2023 Plan), under which the Company may grant stock options, restricted stock, dividend equivalents, restricted stock units, stock appreciation rights, and other stock or cash-based awards to its employees, consultants, and directors. The number of shares of the Company’s common stock initially available for issuance under awards granted pursuant to the 2023 Plan was the sum of (i) 4,650,000 shares of the Company’s common stock, plus (ii) any shares subject to outstanding awards under the 2020 Plan described below as of the effective date of the 2023 Plan that become available for issuance under the 2023 Plan thereafter in accordance with its terms. The number of shares initially available for issuance will be increased on January 1 of each calendar year beginning in 2024 and ending in 2033, by an amount equal to the lesser of (i) 4% of the shares of the Company’s common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as determined by the Company’s board of directors. No more than 100,000,000 shares of the Company’s common stock may be issued upon the exercise of incentive stock options under the 2023 Plan. Shares issued under the 2023 Plan may be authorized but unissued shares, shares purchased on the open market, or treasury shares. In connection with the Company’s IPO, the Company’s board of directors approved the grant under the 2023 Plan of stock options to purchase an aggregate of 1,071,935 shares of its common stock to certain of the Company’s employees and directors, at an exercise price equal to the IPO price of $16.00. 2020 Equity Incentive Plan On July 7, 2020, the board of directors adopted, and the Company’s stockholders approved, the 2020 Equity Incentive Plan. The 2020 Equity Incentive Plan, as amended and restated (the 2020 Plan), provided for the grant of incentive stock options to employees of the Company, and for the grant of non-statutory stock options, restricted stock awards, restricted stock unit awards, and other forms of stock awards to employees, directors, and consultants of the Company. The board of directors or a designated committee of the board of directors is responsible for the administration of the 2020 Plan and determined the term, exercise price, and vesting terms of each award. Under the terms of existing awards, all stock option grants expire ten years from the grant date. New option grants could not have an exercise price less than 100% of the fair market value of the Company’s common stock on the grant date, and generally vest over a period of four years. Subsequent to the closing of the IPO, no additional awards will be granted under the 2020 Plan. However, the 2020 Plan will continue to govern the terms and conditions of the outstanding awards granted under it. Shares of the Company’s common stock subject to awards granted under the 2020 Plan that expire, lapse, or are terminated, exchanged for cash, surrendered, repurchased, or forfeited following the effective date of the 2020 Plan will be available for issuance under the 2023 Plan in accordance with its terms. 2023 Employee Stock Purchase Plan In February 2023, the Company’s board of directors and stockholders approved the 2023 Employee Stock Purchase Plan (ESPP), which became effective upon the closing of the Company’s IPO. The ESPP permits eligible employees who elect to participate in an offering under the ESPP to have up to a specified percentage of their eligible compensation withheld, subject to certain limitations, to purchase shares of common stock pursuant to the ESPP. A total of 400,000 shares of the Company’s common stock was initially reserved for issuance under the ESPP. The first ESPP offering period commenced on July 1, 2023, with each new six-month offering period beginning each January 1 and July 1. ESPP purchases of common stock occur at a price equal to 85% of the lower of (i) the closing price on the first trading day of the offering period or (ii) the closing price on the last trading day of the offering period. In addition, the number of shares available for issuance under the ESPP will be annually increased on January 1 of each calendar year beginning in 2024 and ending in and including 2033, by an amount equal to the lesser of (i) 1% of the shares outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as is determined by the Company’s board of directors, provided that no more than 15,000,000 shares of the Company’s common stock may be issued under the ESPP. Total stock-based compensation expense reported in the statements of operations was allocated as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Research and development $ 759 $ 79 $ 1,619 $ 109 General and administrative 819 113 1,984 128 Total $ 1,578 $ 192 $ 3,603 $ 237 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||||||
Net loss | $ (22,760) | $ (12,141) | $ (12,608) | $ (6,678) | $ (6,479) | $ (7,569) | $ (47,509) | $ (20,726) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) and applicable rules and regulations of the U.S. Securities and Exchange Commission for interim reporting. As permitted under those rules and regulations, certain footnotes or other financial information normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These condensed financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of the Company’s financial information. These unaudited condensed financial statements should be read in conjunction with the audited financial statements and related notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Updates of the Financial Accounting Standards Board (FASB). |
Segment Information | Segment Information The Company operates in one operating segment for the purposes of assessing performance and making operating decisions and, accordingly, no segment disclosures have been presented herein. All assets are held in the United States. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. Estimates have been used in the following areas, among others: research and development accruals, fair value of the Company’s common stock prior to the closing of the Company’s IPO, and income taxes. |
Cash and Cash Equivalents | Cash and Cash Equivalents All highly-liquid investments that have maturities of 90 days or less at the date of purchase are classified as cash equivalents. |
Concentration of Credit Risk | Concentration of Credit Risk The Company has no significant off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts, or other hedging arrangements. Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of cash balances in several accounts with two financial institutions which, from time to time, are in excess of federally insured limits. |
Fair Value Measurements | Fair Value Measurements The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. ASC Topic 820, Fair Value Measurement, establishes a hierarchy of inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value and is not a measure of the investment credit quality. The three levels of the fair value hierarchy are described below: • Level 1 – quoted prices in active markets for identical assets and liabilities • Level 2 – other significant observable inputs (including quoted prices for similar assets and liabilities, interest rates, credit risk, etc.) • Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of assets and liabilities) For certain financial instruments, including cash and restricted cash, prepaid expenses, accounts payable, and certain accrued liabilities, the recorded amount approximates estimated fair value due to their relatively short maturity period. Refer to Note 3. “ Fair Value of Financial Instruments ” for additional details of the Company’s financial instruments. |
Investments | Investments The Company generally invests its excess cash in money market funds and investment-grade short- and long-term fixed-income debt securities, such as U.S. Treasury bills. Such investments are included in cash and cash equivalents, current investments, and investments - noncurrent in the condensed balance sheets. The Company determines the appropriate classification of short-term and long-term securities at the time of purchase and re-evaluates such designation as of each balance sheet date. Securities are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are carried at amortized cost, adjusted for the accretion of discounts using the interest method. The Company invested in marketable securities during the nine months ended September 30, 2023 and 2022, and no impairment charges were recorded. For held-to-maturity investments, the Company periodically reviews each individual security position that has an unrealized loss, or impairment, to determine if that impairment is other-than-temporary. If the Company believes an impairment of a security position is other than temporary, based on available quantitative and qualitative information as of the report date, the loss will be recognized within other income, net in the Company’s condensed statements of operations and a new cost basis in the investment is established. |
Deferred Offering Costs | Deferred Offering CostsThe Company capitalizes certain legal, professional, accounting, and other third-party fees that are directly associated with in-process equity issuances as deferred offering costs until such equity issuances are consummated. After consummation of the equity issuance, these costs are recorded as a reduction in the capitalized amount associated with the equity issuance. Should the equity issuance be abandoned, the deferred offering costs are expensed immediately as a charge to operating expenses in the statement of operations. Deferred offering costs as of September 30, 2023 and December 31, 2022 were $0 and $1.6 million, respectively. Such costs are classified in other assets on the condensed balance sheets. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for its stock-based compensation awards in accordance with ASC Topic 718, Compensation – Stock Compensation (ASC 718). ASC 718 requires all stock-based payments to employees, including grants of employee stock options, to be recognized in the statements of operations based on their fair values. The Company’s stock-based awards are subject only to service-based vesting conditions. The Company measures restricted common stock awards using the difference, if any, between the purchase price per share of the award and the fair value of the Company’s common stock at the date of the grant or modification. The Company estimates the fair value of its stock option awards using the Black-Scholes option pricing model, which requires the input of assumptions, including (i) the expected stock price volatility, (ii) the calculation of expected term of the award, (iii) the risk-free interest rate, and (iv) expected dividends. Volatility — Due to the Company’s limited operating history and a lack of company-specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar publicly-traded companies. The Company believes that the companies in the group were most representative of the Company and had characteristics similar to its own, including stage of product development, a focus on the life sciences industry, and other economic and industry characteristics. Expected Term — The Company uses the simplified method to calculate the expected term, as it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term for options granted, and utilized the contractual term for options granted. Risk-Free Interest Rate — The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of the stock options. Expected Dividends — To date, the Company has not issued any dividends and does not expect to issue dividends over the life of the options and therefore has estimated the dividend yield to be zero. Subsequent to the closing of the Company’s IPO, the Company determines the fair market value of its common stock using the closing price of its common stock as reported on the Nasdaq Global Select Market. Prior to the closing of the Company’s IPO, there was no public market for the Company’s common stock, and the Company determined the fair value of the shares of its common stock underlying its share-based awards by considering a number of objective and subjective factors, including third-party valuations of the Company’s common stock, the valuation of comparable companies, the Company’s operating and financial performance, and general and industry-specific economic outlook, among other factors. The assumptions underlying these valuations represented management’s best estimate, with the assistance of a third-party valuation specialist, which involved inherent uncertainties and the application of management’s judgment. As a result, if the Company had used different assumptions or estimates, the fair value of the Company’s common stock and its stock-based compensation expense could have been materially different. Compensation expense related to awards is recognized on a straight-line basis by recognizing the grant date fair value over the associated service period of the award, which is generally the vesting term. The Company accounts for forfeitures as they occur. |
Net Loss Per Share | Net Loss Per Share The Company’s basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. The diluted net loss per share attributable to common stockholders is computed by giving effect to all potential common stock equivalents outstanding for the period determined using the treasury stock method. For purposes of this calculation, convertible preferred stock and stock options to purchase common stock are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is anti-dilutive. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting PronouncementsFrom time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash as reported in the statement of cash flows to the balance sheets (in thousands): September 30, December 31, 2023 2022 Cash $ 1,352 $ 2,872 Cash equivalents 84,948 84,829 Total cash and cash equivalents $ 86,300 $ 87,701 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table sets forth the potential common shares excluded from the calculation of net loss per common share because their inclusion would be anti-dilutive: Nine Months Ended September 30, 2023 2022 Outstanding options 2,568,503 1,320,932 Unvested restricted stock awards 1,047,648 1,228,075 Convertible preferred stock (as converted into common stock) — 20,637,415 Total 3,616,151 23,186,422 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets Measured on Recurring Basis | The following table presents financial instruments measured at fair value on a recurring basis based on the fair value hierarchy as of September 30, 2023 and December 31, 2022 (in thousands): September 30, December 31, 2023 2022 Level 1 Assets Cash equivalents Money market funds $ 45,356 $ 84,829 Time deposits 39,592 — Total cash equivalents $ 84,948 $ 84,829 |
Held-to-Maturity U.S. Treasury Bills | . The following table presents held-to-maturity U.S. Treasury bills information as of each reported date (in thousands): As of September 30, 2023 Balance Sheet Location Original Maturities Amortized Cost Estimated Fair Value Investments between 3 and 12 months $ 167,461 $ 167,280 Investments, noncurrent greater than 1 year 12,129 12,066 Total $ 179,590 $ 179,346 As of December 31, 2022 Balance Sheet Location Original Maturities Amortized Cost Estimated Fair Value Investments between 3 and 6 months $ 22,409 $ 22,386 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following (in thousands): September 30, December 31, 2023 2022 Research and development expenses $ 5,853 $ 4,846 Compensation and benefits 1,221 665 Professional fees and other 896 649 Total $ 7,970 $ 6,160 |
Capital Stock (Tables)
Capital Stock (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Schedule of Common Stock Authorized | As of September 30, 2023, the Company had reserved authorized shares of common stock for future issuance as follows: September 30, 2023 Shares available for grant under the 2023 Plan 3,198,474 Common stock options outstanding 2,568,503 Shares available for grant under the ESPP 400,000 Total 6,166,977 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Payment Arrangement, Expensed and Capitalized, Amount | Total stock-based compensation expense reported in the statements of operations was allocated as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Research and development $ 759 $ 79 $ 1,619 $ 109 General and administrative 819 113 1,984 128 Total $ 1,578 $ 192 $ 3,603 $ 237 |
Nature of Business (Details)
Nature of Business (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 5 Months Ended | 9 Months Ended | |||||||||
Feb. 14, 2023 USD ($) $ / shares shares | Feb. 28, 2023 | Sep. 30, 2023 USD ($) $ / shares | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Jun. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) $ / shares | Sep. 30, 2022 USD ($) | Feb. 01, 2023 $ / shares | Dec. 31, 2022 USD ($) $ / shares | |
Class of Stock [Line Items] | |||||||||||||
Price per share (in USD per share) | $ / shares | $ 16 | ||||||||||||
Gross proceeds of sale of stock | $ 378,800 | ||||||||||||
Reverse stock split conversion ratio | 0.926 | ||||||||||||
Common stock par value (in USD per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||
Accumulated deficit | $ 100,319 | $ 100,319 | $ 52,810 | ||||||||||
Cash, cash equivalents, and investments | 265,900 | 265,900 | |||||||||||
Net loss | $ 22,760 | $ 12,141 | $ 12,608 | $ 6,678 | $ 6,479 | $ 7,569 | 47,509 | $ 20,726 | |||||
Net cash used in operating activities | $ 52,192 | $ 19,035 | |||||||||||
IPO | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Shares issued (in shares) | shares | 13,800,000 | ||||||||||||
Gross proceeds of sale of stock | $ 201,400 | ||||||||||||
Over-Allotment Option | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Shares issued (in shares) | shares | 1,800,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Segment Information (Details) | 9 Months Ended |
Sep. 30, 2023 operatingSegment | |
Accounting Policies [Abstract] | |
Number of operating segments | 1 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | |||
Cash | $ 1,352 | $ 2,872 | |
Cash equivalents | 84,948 | 84,829 | |
Total cash and cash equivalents | 86,300 | 87,701 | |
Restricted Cash | $ 0 | $ 0 | $ 50 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Deferred Offering Costs (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||
Deferred offering costs | $ 0 | $ 1.6 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Net Loss per Share (Details) - shares | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Total | 3,616,151 | 23,186,422 |
Outstanding options | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Total | 2,568,503 | 1,320,932 |
Unvested restricted stock awards | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Total | 1,047,648 | 1,228,075 |
Convertible preferred stock (as converted into common stock) | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Total | 0 | 20,637,415 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Assets Measured on Recurring Basis (Details) - Level 1 - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Cash and Cash Equivalents [Line Items] | ||
Cash equivalents | $ 84,948 | $ 84,829 |
Money market funds | ||
Cash and Cash Equivalents [Line Items] | ||
Cash equivalents | 45,356 | 84,829 |
Time deposits | ||
Cash and Cash Equivalents [Line Items] | ||
Cash equivalents | $ 39,592 | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Balance Sheet Grouping (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Amortized Cost | ||
Investments | $ 167,461 | $ 22,409 |
Investments, noncurrent | 12,129 | 0 |
Total | 179,600 | |
Amortized Cost | ||
Amortized Cost | ||
Investments | 167,461 | |
Investments, noncurrent | 12,129 | |
Total | 179,590 | 22,409 |
Estimated Fair Value | ||
Estimated Fair Value | ||
Investments | 167,280 | |
Investments, noncurrent | 12,066 | |
Total | $ 179,346 | $ 22,386 |
Commitment and Contingencies (D
Commitment and Contingencies (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Jul. 31, 2020 | |
Other Commitments [Line Items] | |||||
Research and development | $ 22,499 | $ 6,059 | $ 46,676 | $ 18,432 | |
Mitsubishi Tanabe | Collaborative Arrangement, Transaction with Party to Collaborative Arrangement | |||||
Other Commitments [Line Items] | |||||
Upfront fee | $ 1,000 | ||||
Development milestone payments | 9,000 | ||||
First commercial milestone payments | 155,000 | ||||
Second commercial milestone payment | $ 10,000 | ||||
Expiration period | 10 years | ||||
Non-compete period | 3 years | ||||
Research and development | $ 4,000 | $ 0 | |||
Mitsubishi Tanabe | Collaborative Arrangement, Transaction with Party to Collaborative Arrangement | Maximum | |||||
Other Commitments [Line Items] | |||||
Royalties percentage | 10% | ||||
Termination period | 180 days | ||||
Mitsubishi Tanabe | Collaborative Arrangement, Transaction with Party to Collaborative Arrangement | Minimum | |||||
Other Commitments [Line Items] | |||||
Termination period | 90 days |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Research and development expenses | $ 5,853 | $ 4,846 |
Compensation and benefits | 1,221 | 665 |
Professional fees and other | 896 | 649 |
Accrued liabilities | $ 7,970 | $ 6,160 |
Capital Stock - Schedule of Com
Capital Stock - Schedule of Common Stock (Details) | Sep. 30, 2023 shares |
Class of Stock [Line Items] | |
Common stock shares reserved for future issuance (in shares) | 6,166,977 |
Outstanding options | |
Class of Stock [Line Items] | |
Common stock shares reserved for future issuance (in shares) | 2,568,503 |
Shares available for grant under the 2023 Plan | |
Class of Stock [Line Items] | |
Common stock shares reserved for future issuance (in shares) | 3,198,474 |
Shares available for grant under the ESPP | |
Class of Stock [Line Items] | |
Common stock shares reserved for future issuance (in shares) | 400,000 |
Capital Stock - Narrative (Deta
Capital Stock - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | ||||||
Feb. 14, 2023 | Jun. 30, 2022 | Jan. 31, 2022 | Feb. 28, 2021 | Mar. 31, 2023 | Apr. 30, 2021 | Sep. 30, 2023 | Dec. 31, 2022 | |
Class of Stock [Line Items] | ||||||||
Common stock shares authorized (in shares) | 500,000,000 | 319,000,000 | ||||||
Convertible preferred stock, shares authorized (in shares) | 50,000,000 | |||||||
Price per share (in USD per share) | $ 16 | |||||||
Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Conversion of preferred stock to common stock upon closing initial public offering (in shares) | 20,637,415 | |||||||
Series A Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Issuance of Series A convertible preferred stock, net of issuance costs of $7 (in shares) | 25,151,957 | 10,868,432 | 50,311,827 | |||||
Price per share (in USD per share) | $ 0.477 | $ 0.477 | ||||||
Issuance of Series A convertible preferred stock, net of issuance costs | $ 12 | $ 23.8 | ||||||
Series B Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Issuance of Series A convertible preferred stock, net of issuance costs of $7 (in shares) | 136,510,868 | |||||||
Price per share (in USD per share) | $ 0.8644 | |||||||
Issuance of Series A convertible preferred stock, net of issuance costs | $ 117.7 | |||||||
IPO | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock shares authorized (in shares) | 500,000,000 | |||||||
IPO | Common Stock | Conversion Of Convertible Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Conversion of preferred stock to common stock upon closing initial public offering (in shares) | 20,637,415 | |||||||
IPO | Series A Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Conversion of preferred stock to common stock upon closing initial public offering (in shares) | 86,332,216 | |||||||
IPO | Series B Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Conversion of preferred stock to common stock upon closing initial public offering (in shares) | 136,510,868 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - $ / shares | 1 Months Ended | |||
Jul. 01, 2023 | Feb. 14, 2023 | Jul. 07, 2020 | Feb. 28, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Price per share (in USD per share) | $ 16 | |||
Shares available for grant under the 2023 Plan | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Shares authorized (in shares) | 4,650,000 | |||
Percent of outstanding shares | 4% | |||
Number of additional shares allowed under the plan (in shares) | 100,000,000 | |||
Shares issued (in shares) | 1,071,935 | |||
2020 Equity Incentive Plan | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Grants expiration period | 10 years | |||
Grants vesting period | 4 years | |||
Employee Stock | Shares available for grant under the ESPP | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Shares authorized (in shares) | 400,000 | |||
Purchase price of common stock, percentage | 85% | |||
Percent of outstanding shares | 1% | |||
Number of additional shares allowed under the plan (in shares) | 15,000,000 |
Stock-Based Compensation - Repo
Stock-Based Compensation - Reported in Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Total | $ 1,578 | $ 192 | $ 3,603 | $ 237 |
Research and development | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Total | 759 | 79 | 1,619 | 109 |
General and administrative | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Total | $ 819 | $ 113 | $ 1,984 | $ 128 |