Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 21, 2023 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2023 | |
Entity File Number | 001-41740 | |
Entity Registrant Name | Apogee Therapeutics, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 88-0588063 | |
Entity Address, Address Line One | 221 Crescent St. | |
Entity Address, Address Line Two | Building 17 | |
Entity Address, Address Line Three | Suite 102b | |
Entity Address, City or Town | Waltham | |
Entity Address State Or Province | MA | |
Entity Address, Postal Zip Code | 02453 | |
City Area Code | 650 | |
Local Phone Number | 394-5230 | |
Title of 12(b) Security | Common Stock, par value $0.00001 per share | |
Trading Symbol | APGE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001974640 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Voting Common Stock | ||
Entity Common Stock, Shares Outstanding | 37,187,654 | |
Nonvoting Common Stock | ||
Entity Common Stock, Shares Outstanding | 13,486,642 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash | $ 125,069 | $ 151,890 |
Prepaid expenses and other current assets | 5,598 | 165 |
Total current assets | 130,667 | 152,055 |
Total assets | 130,667 | 152,055 |
Current liabilities: | ||
Accounts payable | 11,148 | 418 |
Accrued expenses | 6,467 | 9,562 |
Total current liabilities | 17,615 | 9,980 |
Total liabilities | 17,615 | 9,980 |
Commitments and contingencies (Note 7) | ||
Preferred Units | 177,467 | 177,467 |
Members' deficit: | ||
Common Units; 5,000,000 units authorized, issued and outstanding as June 30, 2023 and December 31, 2022 | 2,251 | 2,251 |
Incentive Units; 16,537,557 units authorized, 14,270,275 issued and 2,481,543 outstanding as of June 30, 2023; 12,412,473 units authorized, 9,648,374 issued and 1,625,086 outstanding as of December 31, 2022 | 4,529 | 2,142 |
Accumulated deficit | (71,195) | (39,785) |
Total members' deficit | (64,415) | (35,392) |
Total liabilities, preferred units and members' deficit | 130,667 | 152,055 |
Series A Preferred Units | ||
Current liabilities: | ||
Preferred Units | 28,971 | 28,971 |
Series B Preferred Units | ||
Current liabilities: | ||
Preferred Units | $ 148,496 | $ 148,496 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Preferred Units, units authorized | 65,089,212 | 65,089,212 |
Preferred Units, units issued | 65,089,212 | 65,089,212 |
Preferred Units, units outstanding | 65,089,212 | 65,089,212 |
Preferred Units, liquidation value | $ 169,000 | $ 169,000 |
Common Units, units authorized | 5,000,000 | 5,000,000 |
Common Units, units issued | 5,000,000 | 5,000,000 |
Common Units, units outstanding | 5,000,000 | 5,000,000 |
Incentive Units, units authorized | 16,537,557 | 12,412,473 |
Incentive Units, units issued | 14,270,275 | 9,648,374 |
Incentive Units, units outstanding | 2,481,543 | 1,625,086 |
Series A Preferred Units | ||
Preferred Units, units authorized | 20,000,000 | 20,000,000 |
Preferred Units, units issued | 20,000,000 | 20,000,000 |
Preferred Units, units outstanding | 20,000,000 | 20,000,000 |
Preferred Units, liquidation value | $ 20,000 | $ 20,000 |
Series B Preferred Units | ||
Preferred Units, units authorized | 45,089,212 | 45,089,212 |
Preferred Units, units issued | 45,089,212 | 45,089,212 |
Preferred Units, units outstanding | 45,089,212 | 45,089,212 |
Preferred Units, liquidation value | $ 149,000 | $ 149,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 5 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2023 | ||
Operating expenses: | |||||
Research and development | [1] | $ 13,946 | $ 1,448 | $ 5,693 | $ 22,401 |
General and administrative | [2] | 4,939 | 368 | 428 | 9,142 |
Total operating expenses | 18,885 | 1,816 | 6,121 | 31,543 | |
Loss from operations | (18,885) | (1,816) | (6,121) | (31,543) | |
Other income (expense), net: | |||||
Interest income | 133 | ||||
Total other income (expense), net | 133 | ||||
Net loss and comprehensive loss | $ (18,885) | $ (1,816) | $ (6,121) | $ (31,410) | |
Net loss per unit, basic | $ (3.78) | $ (1.45) | $ (5.25) | $ (6.28) | |
Net loss per unit, diluted | $ (3.78) | $ (1.45) | $ (5.25) | $ (6.28) | |
Weighted-average common units outstanding, basic | 5,000,000 | 1,250,000 | 1,164,966 | 5,000,000 | |
Weighted-average common units outstanding, diluted | 5,000,000 | 1,250,000 | 1,164,966 | 5,000,000 | |
[1] Includes related-party amounts of $5,884 for the three months ended June 30, 2023, $1,378 for the three months ended June 30, 2022, $13,411 for the six months ended June 30, 2023 and $5,604 for the period from February 4, 2022 (inception) to June 30, 2022. Includes related-party amounts of $14 for the three months ended June 30, 2023, $230 for the three months ended June 30, 2022, $33 for the six months ended June 30, 2023 and $290 for the period from February 4, 2022 (inception) to June 30, 2022. |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 5 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2023 | ||
Research and development | [1] | $ 13,946 | $ 1,448 | $ 5,693 | $ 22,401 |
General and administrative | [2] | 4,939 | 368 | 428 | 9,142 |
Related Party | |||||
Research and development | 5,884 | 1,378 | 5,604 | 13,411 | |
General and administrative | $ 14 | $ 230 | $ 290 | $ 33 | |
[1] Includes related-party amounts of $5,884 for the three months ended June 30, 2023, $1,378 for the three months ended June 30, 2022, $13,411 for the six months ended June 30, 2023 and $5,604 for the period from February 4, 2022 (inception) to June 30, 2022. Includes related-party amounts of $14 for the three months ended June 30, 2023, $230 for the three months ended June 30, 2022, $33 for the six months ended June 30, 2023 and $290 for the period from February 4, 2022 (inception) to June 30, 2022. |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF PREFERRED UNITS AND MEMBERS' DEFICIT - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2023 | |
PREFERRED UNITS | ||||||
Beginning balance | $ 177,467 | $ 177,467 | ||||
Beginning balance (in shares) | 65,089,212 | 65,089,212 | ||||
Ending balance | $ 177,467 | $ 177,467 | ||||
Ending balance (in shares) | 65,089,212 | 65,089,212 | ||||
MEMBERS' DEFICIT | ||||||
Beginning balance | $ 0 | $ (46,643) | $ (35,392) | $ (2,617) | $ 0 | $ (35,392) |
Issuance of Common Units in payment of option fee | 1,688 | |||||
Equity-based compensation expense | 1,113 | 1,274 | ||||
Net Income (Loss) | (4,305) | (18,885) | (12,525) | (1,816) | (6,121) | (31,410) |
Ending balance | (2,617) | (64,415) | (46,643) | (4,433) | (4,433) | (64,415) |
COMMON UNITS | ||||||
MEMBERS' DEFICIT | ||||||
Beginning balance | $ 0 | $ 2,251 | $ 2,251 | $ 1,688 | $ 0 | $ 2,251 |
Beginning balance (in shares) | 0 | 5,000,000 | 5,000,000 | 1,250,000 | 0 | 5,000,000 |
Issuance of Common Units in payment of option fee | $ 1,688 | |||||
Issuance of Common Units in payment of option fee (in shares) | 1,250,000 | |||||
Ending balance | $ 1,688 | $ 2,251 | $ 2,251 | $ 1,688 | $ 1,688 | $ 2,251 |
Ending balance (in shares) | 1,250,000 | 5,000,000 | 5,000,000 | 1,250,000 | 1,250,000 | 5,000,000 |
INCENTIVE UNITS | ||||||
MEMBERS' DEFICIT | ||||||
Beginning balance | $ 0 | $ 3,416 | $ 2,142 | $ 0 | $ 2,142 | |
Beginning balance (in shares) | 0 | 1,625,086 | 1,625,086 | 0 | 1,625,086 | |
Vesting of incentive units (in shares) | 856,457 | |||||
Equity-based compensation expense | $ 1,113 | $ 1,274 | ||||
Ending balance | $ 4,529 | $ 3,416 | $ 4,529 | |||
Ending balance (in shares) | 2,481,543 | 1,625,086 | 2,481,543 | |||
ACCUMULATED DEFICIT | ||||||
MEMBERS' DEFICIT | ||||||
Beginning balance | $ 0 | $ (52,310) | $ (39,785) | $ (4,305) | $ 0 | $ (39,785) |
Net Income (Loss) | (4,305) | (18,885) | (12,525) | (1,816) | ||
Ending balance | (4,305) | (71,195) | (52,310) | (6,121) | (6,121) | (71,195) |
Series A Preferred Units | ||||||
PREFERRED UNITS | ||||||
Beginning balance | $ 0 | $ 28,971 | $ 28,971 | $ 3,771 | $ 0 | $ 28,971 |
Beginning balance (in shares) | 0 | 20,000,000 | 20,000,000 | 5,000,000 | 0 | 20,000,000 |
Issuance of Series A Preferred Unitsinitial closing, net of a net tranche option liability of $1,050 and issuance costs of $179 | $ 3,771 | |||||
Issuance of Series A Preferred Unitsinitial closing, net of a net tranche option liability of $1,050 and issuance costs of $179 (in shares) | 5,000,000 | |||||
Ending balance | $ 3,771 | $ 28,971 | $ 28,971 | $ 3,771 | $ 3,771 | $ 28,971 |
Ending balance (in shares) | 5,000,000 | 20,000,000 | 20,000,000 | 5,000,000 | 5,000,000 | 20,000,000 |
Series B Preferred Units | ||||||
PREFERRED UNITS | ||||||
Beginning balance | $ 0 | $ 148,496 | $ 148,496 | $ 0 | $ 148,496 | |
Beginning balance (in shares) | 0 | 45,089,212 | 45,089,212 | 0 | 45,089,212 | |
Ending balance | $ 148,496 | $ 148,496 | $ 148,496 | |||
Ending balance (in shares) | 45,089,212 | 45,089,212 | 45,089,212 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENT OF PREFERRED UNITS AND MEMBERS' DEFICIT (Parenthetical) - Series A Preferred Units $ in Thousands | 2 Months Ended |
Mar. 31, 2022 USD ($) | |
Net tranche option liability | $ 1,050 |
Issuance costs | $ 179 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Thousands | 5 Months Ended | 6 Months Ended |
Jun. 30, 2022 | Jun. 30, 2023 | |
Cash flows from operating activities: | ||
Net loss | $ (6,121) | $ (31,410) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Equity-based compensation expense | 1,700 | 2,387 |
Non-cash research and development license expense | 1,688 | |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | (1,964) | |
Accounts payable | 1,114 | 10,339 |
Accrued expenses | 3,319 | (4,479) |
Net cash used in operating activities | (25,127) | |
Cash flows from financing activities: | ||
Proceeds from issuance of Series A Preferred Units and the tranche option, net | 4,974 | |
Payment of deferred offering costs | (1,694) | |
Net cash (used in) provided by financing activities | 4,974 | (1,694) |
Increase (decrease) in cash | 4,974 | (26,821) |
Cash, beginning of period | 151,890 | |
Cash, end of period | 4,974 | 125,069 |
Supplemental disclosures of non-cash activities: | ||
Deferred financing issuance costs in accrued liability | 1,384 | |
Deferred financing issuance costs in accounts payable | $ 153 | $ 391 |
Nature of the Business
Nature of the Business | 6 Months Ended |
Jun. 30, 2023 | |
Nature of the Business | |
Nature of the Business | 1. Apogee Therapeutics, LLC, together with its consolidated subsidiary (collectively, “Apogee” or the “Company”), is a biotechnology company seeking to develop differentiated biologics for the treatment of atopic dermatitis, chronic obstructive pulmonary disease (“COPD”) and related inflammatory and immunology indications with high unmet need. The Company’s antibody programs are designed to overcome limitations of existing therapies by leveraging clinically validated mechanisms and incorporating advanced antibody engineering to optimize half-life and other properties designed. The condensed consolidated financial statements and other financial information included in these financial statements are those of Apogee Therapeutics, LLC and its consolidated subsidiary and do not give effect to the Reorganization (as defined below) as it occurred after June 30, 2023. Apogee Therapeutics, LLC is the predecessor of Apogee Therapeutics, Inc. for financial reporting purposes. As used in these notes, unless the context otherwise requires, references to the “Company” or “Apogee” refer: (1) following the consummation of the Company’s Reorganization, as defined elsewhere in these notes, on July 13, 2023 in connection with the Company’s initial public offering (“IPO”), to Apogee Therapeutics, Inc. and its consolidated subsidiaries, and (2) prior to the completion of the Company’s Reorganization, to Apogee Therapeutics, LLC and its subsidiary. See Note 14 for further information. Apogee Therapeutics, LLC was formed as a limited liability company under the laws of the State of Delaware in February 2022 and was founded by leading healthcare investors, Fairmount Funds and Venrock Healthcare Capital Partners and has since assembled a management team of drug developers with significant experience in clinical development. The Company operates as a virtual company and, thus, does not maintain a corporate headquarters or other significant facilities. In addition, the Company engages third parties, including Paragon Therapeutics, Inc. (“Paragon”), who is also a related party founded by one of the Series A Preferred Unit investors, to perform ongoing research and development and other services on its behalf. In February 2022, the Company entered into an antibody discovery and option agreement with Paragon, which was subsequently amended in November 2022 (as amended, the “Option Agreement”). Under the terms of the Option Agreement, Paragon identifies, evaluates and develops antibodies directed against certain mutually agreed therapeutic targets of interest to the Company. The Option Agreement initially included two selected targets, IL-13 and IL-4R α In November 2022, the Company exercised its option available under the Option Agreement with respect to the IL-13 Research Program (as defined below) and, in April 2023, the Company exercised its options available under the Option Agreement with respect to the IL-4Rα Research Program and OX40L Research Program. Upon such exercises, the parties entered into associated license agreements for each target. Under the terms of each license agreement, Paragon granted to the Company an exclusive, worldwide, royalty-bearing, sublicensable right and license with respect to certain information, patent rights and sequence information related to antibodies directed at the respective target to use, make, sell, import, export and otherwise exploit the antibodies directed at the respective target. The Company is solely responsible for the development, manufacture and commercialization of IL-13, IL-4Rα and OX40L products at its own cost and expense. On July 13, 2023, the Company completed a reorganization, pursuant to which the members of Apogee Therapeutics, LLC contributed their units in Apogee Therapeutics, LLC to Apogee Therapeutics, Inc. in exchange for shares of common stock or non-voting common stock of Apogee Therapeutics, Inc. and Apogee Therapeutics, LLC became a wholly-owned subsidiary of Apogee Therapeutics, Inc. (the “Reorganization”), as follows: ● holders of Series A preferred units of Apogee Therapeutics, LLC received 7,678,000 shares of non-voting common stock of Apogee Therapeutics, Inc.; ● holders of Series B preferred units of Apogee Therapeutics, LLC received 11,501,108 shares of common stock and 5,808,642 shares of non-voting common stock of Apogee Therapeutics, Inc.; ● holders of common units of Apogee Therapeutics, LLC received 1,919,500 shares of common stock of Apogee Therapeutics, Inc.; ● holders of vested incentive units of Apogee Therapeutics, LLC received 690,188 shares of common stock of Apogee Therapeutics, Inc.; and ● holders of unvested incentive units of Apogee Therapeutics, LLC received 2,779,358 shares of restricted common stock of Apogee Therapeutics, Inc. The information in these condensed consolidated financial statements does not give effect to the Reorganization (See Note 14). On July 18, 2023, the Company completed its IPO, pursuant to which it issued and sold an aggregate of 20,297,500 shares of its common stock (inclusive of 2,647,500 shares pursuant to the exercise of the underwriters’ overallotment option in full) at the IPO price of $17.00 per share for net cash proceeds of $315.4 million, after deducting underwriting discounts and commissions and other offering expenses. The shares of Apogee Therapeutics, Inc. began trading on the Nasdaq Global Market on July 14, 2023 under the ticker symbol APGE (see Note 14). The Company is subject to risks and uncertainties common to early stage companies in the biotechnology industry, including, but not limited to, completing preclinical studies and clinical trials, obtaining regulatory approval for its programs, market acceptance of products, development by competitors of new technological innovations, dependence on key personnel, the ability to attract and retain qualified employees, reliance on third-party organizations, protection of proprietary technology, compliance with government regulations, and the ability to raise additional capital to fund operations. The Company’s two most advanced programs currently under development, APG777 and APG808, as well as other programs, 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 the Company’s development efforts are successful, it is uncertain when, if ever, the Company will realize revenue from product sales. The Company has primarily funded its operations with proceeds from the sales of preferred units and common stock and has not generated any revenue since inception. As a result, the Company will need substantial additional funding to support its continued operations and growth strategy. Until such a time as the Company can generate significant revenue from product sales, if ever, the Company expects to finance its operations through the sale of equity, debt financings or other capital sources, including collaborations with other companies or other strategic transactions. The Company may be unable to raise additional funds or enter into such other agreements on favorable terms, or at all. If the Company fails to raise capital or enter into such agreements as, and when, needed, the Company may have to significantly delay, scale back or discontinue the development and commercialization of one or more of its programs. Company Liquidity The Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the date that the accompanying condensed consolidated financial statements are issued. The Company had an accumulated deficit of $71.2 million as of June 30, 2023. Further, the Company incurred a net loss of $31.4 million and experienced negative cash flows from operations of $25.1 million for the six months ended June 30, 2023. Based on the Company’s current operating plan, it estimates that its existing cash of $125.1 million as of June 30, 2023, along with the net proceeds received in our IPO of Apogee Therapeutics, Inc. of approximately $315.4 million (see Note 14), will be sufficient to enable the Company to fund its operating expenses and capital requirements through at least the next twelve months from the issuance of these condensed consolidated financial statements. The Company is subject to those risks associated with any biotechnology company that has substantial expenditures for research and development. There can be no assurance that the Company’s research and development projects will be successful, that products developed will obtain necessary regulatory approval, or that any approved product will be commercially viable. In addition, the Company operates in an environment of rapid technological change and is largely dependent on the services of its employees and consultants. If the Company fails to become profitable or is unable to sustain profitability on a continuing basis, then it may be unable to continue its operations at planned levels and be forced to reduce its operations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. There have been no material changes to the significant accounting policies as disclosed in Note 2 to the Company’s consolidated financial statements for the period from February 4, 2022 (inception) to December 31, 2022 included in the Company’s final prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended (the “Securities Act”), on July 17, 2023, except as noted below. Basis of Presentation These condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates of the Financial Accounting Standards Board (“FASB”). In the Company’s management opinion, the information furnished in these unaudited condensed consolidated financial statements reflect all adjustments, all of which are of a normal and recurring nature, necessary for a fair presentation of the financial position and results of operations for the reported interim periods. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year or any other interim period. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of Apogee Therapeutics, LLC and its wholly-owned subsidiary, Apogee Biologics, Inc. All intercompany balances and transactions have been eliminated in consolidation. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original final maturities of three months or less from the date of purchase to be cash equivalents. As of June 30, 2023 and December 31, 2022, the Company’s financial assets were comprised entirely of cash. Concentrations of Credit Risk and Significant Suppliers Financial instruments that potentially expose the Company to credit risk primarily consist of cash. The Company maintains its cash with accredited financial institutions and, consequently, the Company does not believe it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. Bank accounts in the United States are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. As of June 30, 2023 and December 31, 2022, predominantly all of the Company’s primary operating accounts significantly exceeded the FDIC limits. The Company is dependent on third-party organizations to research, develop, manufacture and process its product candidates for its development programs. In particular, the Company relies on one third-party contract manufacturer to produce and process its two most advanced programs, APG777 and APG808, for preclinical and clinical activities. The Company expects to continue to be dependent on a small number of manufacturers to supply it with its requirements for all products. The Company’s research and development programs could be adversely affected by a significant interruption in the supply of the necessary materials. A significant amount of the Company’s research and development activities are performed under its agreements with Paragon (see Note 6). Off-Balance Sheet Risk As of June 30, 2023 and December 31, 2022, the Company had no off-balance sheet risks such as foreign exchange contracts, option contracts or other foreign hedging arrangements. Comprehensive Loss Comprehensive loss includes net loss as well as other changes in members’ deficit that result from transactions and economic events other than those with stockholders. For the three and six months ended June 30, 2023, and the three months ended June 30, 2022 and the period from February 4, 2022 (inception) to June 30, 2022, there were no differences between net loss and comprehensive loss. Deferred Offering Costs The Company capitalizes certain legal, accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After the consummation of the equity financing, these costs are recorded in members’ deficit as a reduction of additional paid-in capital or the associated preferred unit account, as applicable. In the event the offering is terminated, all capitalized deferred offering costs, currently recorded within other current assets, will be expensed immediately as a charge to operating expenses in the statement of operations and comprehensive loss. As of June 30, 2023, the Company had $3.5 million of deferred offering costs. As of December 31, 2022, the Company had no deferred offering costs. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Measurements | |
Fair Value Measurements | 3. The Company had no assets or liabilities measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022. The Company estimated the fair value of the Tranche Options, as defined below (see Note 8) at the time of issuance and subsequently remeasured them at each reporting period and prior to settlement, which occurred prior to December 31, 2022. The fair value of the Tranche Options was determined using a contingent forward model, which considered as inputs the estimated fair value of the preferred units as of each valuation date, the risk-free interest rate, probability of achievement, salvage value and estimated time to each tranche closing. The most significant assumptions in the contingent forward model impacting the fair value of the Tranche Options is the fair value of the Company’s Series A Preferred Unit, probability of achievement and time to the tranche closing as of each measurement date. The Company determined the fair value per share of the underlying preferred unit by taking into consideration the most recent sales of its preferred units, results obtained from third-party valuations and additional factors the Company deems relevant. The following table provides a reconciliation of all assets and liabilities measured at fair value using Level 3 significant unobservable inputs (in thousands): PREFERRED UNIT PREFERRED UNIT PREFERRED UNIT TRANCHE OPTION TRANCHE OPTION TRANCHE OPTION, ASSET (LIABILITY) NET Balance as of February 4, 2022 (inception) $ — $ — $ — Issuance 650 (1,700) (1,050) Change in fair value — — — Balance as of June 30, 2022 $ 650 $ (1,700) $ (1,050) |
Prepaids and Other Current Asse
Prepaids and Other Current Assets | 6 Months Ended |
Jun. 30, 2023 | |
Prepaids and Other Current Assets | |
Prepaids and Other Current Assets | 4. Prepaids and Other Current Assets Prepaid expenses and other current assets consisted of the following (in thousands): JUNE 30, DECEMBER 31, 2023 2022 Prepaid expenses $ 1,242 $ 108 Deferred offering costs 3,469 — Other current assets 887 57 Total $ 5,598 $ 165 |
Accrued Expenses
Accrued Expenses | 6 Months Ended |
Jun. 30, 2023 | |
Accrued Expenses | |
Accrued Expenses | 5. Accrued Expenses Accrued expenses consisted of the following (in thousands): JUNE 30, DECEMBER 31, 2023 2022 Accrued external research and development expenses $ 3,753 $ 8,847 Accrued other 1,829 200 Accrued employee compensation 885 515 Total $ 6,467 $ 9,562 |
Other Significant Agreements Pa
Other Significant Agreements Paragon Option Agreement | 6 Months Ended |
Jun. 30, 2023 | |
Other Significant Agreements Paragon Option Agreement | |
Other Significant Agreements Paragon Option Agreement | 6. In February 2022, the Company entered into an antibody discovery and option agreement with Paragon, which was subsequently amended in November 2022. Under the terms of the Option Agreement, Paragon identifies, evaluates and develops antibodies directed against certain mutually agreed therapeutic targets of interest to the Company. The Option Agreement initially included two selected targets, IL-13 and IL-4R α Pursuant to the terms of the Option Agreement, the parties initiated certain research programs that generally focus on a particular target (each, a “Research Program”). Each Research Program is aimed at discovering, generating, identifying and/or characterizing antibodies directed to the respective target. For each Research Program, the parties established a research plan that sets forth the activities that will be conducted, and the associated research budget (each, a “Research Plan”). Upon execution of the Option Agreement, the Company and Paragon agreed on an initial Research Plan that outlined the services that will be performed commencing at inception of the arrangement related to IL-13 and IL-4R α Unless terminated earlier, the Option Agreement shall continue in force on a Research Program-by-Research Program basis until the earlier of: (i) the end of the Option Period for such Research Program, as applicable, if such Option is not exercised by the Company; and (ii) the effective date of the license agreement for such Research Program if the Company exercises its Option with respect to such Research Program (the “Term”). Upon the expiration of the Term for all then-existing Research Programs, the Option Agreement will automatically expire in its entirety. The Company may terminate the Option Agreement or any Research Program at any time for any or no reason upon 30 days’ prior written notice to Paragon, provided that the Company must pay certain unpaid fees due to Paragon upon such termination, as well as any non-cancellable obligations reasonably incurred by Paragon in connection with its activities under any terminated Research Program. Each party has the right to terminate the Option Agreement or any Research Program upon (i) 30 days In consideration for the exclusive options granted under the Option Agreement, the Company paid an upfront cash amount of $1.3 million and issued 1,250,000 common units to Paragon. Paragon was also entitled to up to an additional 3,750,000 of common units in exchange for the rights granted under the Option Agreement, which were issued in connection with the closings of the additional Tranche Options of the Series A Preferred Unit financing (see Note 8). Through December 31, 2022, the Company had issued a total of 5,000,000 common units to Paragon with an aggregate fair value of $2.2 million on the grant dates. On a Research Program-by-Research Program basis following the finalization of the Research Plan for each respective Research Program, the Company is required to pay Paragon a nonrefundable fee in cash of $0.5 million. The Company is also obligated to compensate Paragon on a quarterly basis for its services performed under each Research Program based on the actual costs incurred. The Company expenses the service fees as the associated costs are incurred when the underlying services are rendered. Such amounts are classified within research and development expenses in the accompanying condensed consolidated statement of operations and comprehensive loss. The Company concluded that the rights obtained under the Option Agreement represent an asset acquisition whereby the underlying assets comprise in-process research and development assets with no alternative future use. The Option Agreement did not qualify as a business combination because substantially all of the fair value of the assets acquired was concentrated in the exclusive license options, which represent a group of similar identifiable assets. Therefore, the aggregate acquisition cost of $2.9 million, related to the upfront cash and equity payments, was recognized as acquired in-process research and development expense, which is reported as a component of research and development expense during the period from February 4, 2022 (inception) to June 30, 2022. Amounts paid as on-going development cost reimbursements associated with services being rendered under the related Research Programs is recognized as research and development expense when incurred. For the three months ended June 30, 2022 and for the period from February 4, 2022 (inception) to June 30, 2022, the Company recognized $1.4 million and $2.7 million, respectively, and for the three and six months ended June 30, 2023, the Company recognized $5.1 million and $8.8 million, respectively, of research and development expense in connection with services provided by Paragon under the Option Agreement, including nonrefundable fees following the finalization of a Research Plan. Paragon License Agreements In November 2022, the Company exercised its option available under the Option Agreement with respect to the IL-13 Research Program. Upon such exercise, the parties entered into an associated license agreement (the “IL-13 License Agreement”). In April 2023, the Company exercised its option available under the Option Agreement with respect to the IL- 4Rα Research Program and OX40L Research Program. Upon such exercise, the parties entered into associated license agreements (the “IL-4Rα License Agreement” and the “OX40L License Agreement,” respectively, and collectively with the IL-13 License Agreement, the “License Agreements”). Under the terms of each of the License Agreements, Paragon granted to the Company an exclusive, worldwide, royalty-bearing, sublicensable right and license with respect to certain information, patent rights and sequence information related to antibodies directed at the respective target to use, make, sell, import, export and otherwise exploit the antibodies directed at the respective target. Pursuant to the License Agreements, the Company granted to Paragon a similar license (except that such license the Company granted to Paragon is non-exclusive) to the respective licenses with respect to multispecific antibodies that are directed at the respective target and one or more other antibodies. The Company was also granted a right of first negotiation with Paragon concerning the development, license and grant of rights to certain multispecific antibodies associated with each license. The Company is solely responsible for the continued development, manufacture and commercialization of products at its own cost and expense for each licensed target. The Company is obligated to pay Paragon up to $3.0 million upon the achievement of specific development and clinical milestones for the first product under each of the License Agreements that achieves such specified milestones, including a payment of $1.0 million upon the nomination of a development candidate and $2.0 million upon the first dosing of a human patient in a Phase 1 trial. Upon execution of the IL-13 License Agreement, the Company paid Paragon a $1.0 million fee for the nomination of a development candidate. The nomination of a development candidate under the IL-4Rα License Agreement and the OX40L License Agreement has not yet occurred. Except for the first milestone payment of $1.0 million, no other milestone or royalty payments had become due to Paragon through June 30, 2023. In August 2023, the Company dosed its first participant in the Phase 1 trial of APG777 and will make a milestone payment of $2.0 million to Paragon in the third quarter of 2023. The Company is also obligated to pay royalties to Paragon equal to a low-single digit percentage of net sales of any products under each of the License Agreements, and Paragon has a similar obligation to pay royalties to the Company with respect to the each of the multispecific licenses. Royalties are due on a product-by-product and country-by-country basis beginning upon the first commercial sale of each product and ending on the later of (i) 12 years after the first commercial sale of such product in such country and (ii) expiration of the last valid claim of a patent covering such product in such country (the “Royalty Term”). Unless earlier terminated, the License Agreements remain in effect until the expiration of the last-to-expire Royalty Term for any and all Products associated with the respective license. The Company may terminate the agreement in its entirety or on a country-by-country or product-by-product at any time for any or no reason upon 60 days’ advance written notice to Paragon, and either party may terminate for (i) the other party’s material breach that remains uncured for 90 days (or 30 days with respect to any failure to make payments) following notice of such breach and (ii) the other party’s bankruptcy. Upon any termination prior to the expiration of a License Agreement, all licenses and rights granted pursuant to such License Agreement will automatically terminate and revert to the granting party and all other rights and obligations of the parties will terminate. The Company concluded that each of the License Agreements constitutes an asset acquisition of in-process research and development assets with no alternative future use. Each of the arrangements did not qualify as a business combination because substantially all of the fair value of the assets acquired was concentrated in the license which comprises a single identifiable asset. Therefore, the aggregate acquisition cost for each license was recognized as research and development expense. No expense was recognized for the three months ended June 30, 2022 and for the period from February 4, 2022 (inception) to June 30, 2022, as a program candidate was not nominated until November 2022. For the three and six months ended June 30, 2023, the Company recognized $7.6 million and $11.8 million, respectively, of research and development expense in connection with services provided by Paragon under the License Agreements. Biologics Master Services Agreement — WuXi Biologics (Hong Kong) Limited In June 2022, Paragon and WuXi Biologics (Hong Kong) Limited (“WuXi Biologics”) entered into a biologics master services agreement (the “WuXi Biologics MSA”), which was subsequently novated to the Company by Paragon in the second quarter of 2023. The WuXi Biologics MSA governs all development activities and GMP manufacturing and testing for APG777 and APG808 programs, as well as potential future programs, on a work order basis. Under the WuXi Biologics MSA, the Company is obligated to pay WuXi Biologics a service fee and all non-cancellable obligations in the amount specified in each work order associated with the agreement for the provision of services. The WuXi Biologics MSA terminates on the later of (i) June 20, 2027 or (ii) the completion of services under all work orders executed by the parties prior to June 20, 2027, unless terminated earlier. The term of each work order terminates upon completion of the services under such work order, unless terminated earlier. The Company can terminate the WuXi Biologics MSA or any work order at any time upon 30 days’ prior written notice and immediately upon written notice if WuXi Biologics fails to obtain or maintain required material governmental licenses or approvals. Either party may terminate a work order (i) at any time upon six months’ prior notice with reasonable cause, provided however that if WuXi Biologics terminates a work order in such manner, no termination or cancellation fees shall be paid busy the Company and (ii) immediately for cause upon (a) the other party’s material breach that remains uncured for 30 days after notice of such breach, (b) the other party’s bankruptcy or (c) a force majeure event that prevents performance for a period of at least 90 days. For the three and six months ended June 30, 2023, the Company recognized $5.9 million of research and development expense in connection with the WuXi Biologics MSA subsequent to novation. As of June 30, 2023, there were no non-cancelable obligations under the WuXi Biologics MSA. Cell Line License Agreement — WuXi Biologics (Hong Kong) Limited In June 2022, Paragon and WuXi Biologics entered into a cell line license agreement (the “Cell Line License Agreement”), which was subsequently novated to the Company by Paragon in the second quarter of 2023. Under the Cell Line License Agreement, the Company received a non-exclusive, worldwide, sublicensable license to certain of WuXi Biologics’s know-how, cell line, biological materials (the “WuXi Biologics Licensed Technology”) and media and feeds to make, have made, use, sell and import certain therapeutic products produced through the use of the cell line licensed by WuXi Biologics under the Cell Line License Agreement (the “WuXi Biologics Licensed Products”). Specifically, the WuXi Biologics Licensed Technology is used to manufacture a component of the APG777 program. In consideration for the license, the Company agreed to pay WuXi Biologics a non-refundable license fee of $150,000. Additionally, if the Company manufactures all of its commercial supplies of bulk drug product with a manufacturer other than WuXi Biologics or its affiliates, it is required to make royalty payments to WuXi Biologics in an amount equal to a fraction of a single digit percentage of global net sales of WuXi Biologics Licensed Products manufactured by a third-party manufacturer (the “Royalty”). If the Company manufactures part of its commercial supplies of the WuXi Biologics Licensed Products with WuXi Biologics or its affiliates, then the Royalty will be reduced accordingly on a pro rata basis. The Cell Line License Agreement will continue indefinitely unless terminated (i) by the Company upon six months’ prior written notice and its payment of all undisputed amounts due to WuXi Biologics through the effective date of termination, (ii) by WuXi Biologics for a material breach by the Company that remains uncured for 60 days after written notice, (iii) by WuXi Biologics if the Company fails to make a payment and such failure continues for 30 days after receiving notice of such failure, or (iv) by either party upon the other party’s bankruptcy. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies | |
Commitments and Contingencies | 7. Other Contracts Currently, all of the Company’s preclinical and clinical drug manufacturing, storage, distribution or quality testing are outsourced to third-party manufacturers. As development programs progress and new process efficiencies are built, the Company expects to continually evaluate this strategy with the objective of satisfying demand for registration trials and, if approved, the manufacture, sale and distribution of commercial products. Under such agreements, the Company is contractually obligated to make certain payments to vendors upon early termination, primarily to reimburse them for their unrecoverable outlays incurred prior to cancellation as well as any amounts owed by the Company prior to early termination. The actual amounts the Company could pay in the future to the vendors under such agreements may differ from the purchase order amounts due to cancellation provisions. Indemnification Agreements The Company enters into standard indemnification agreements and/or indemnification sections in other agreements in the ordinary course of business. Pursuant to the agreements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company’s business partners. The term of these indemnification agreements is generally perpetual any time after execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. The Company was not aware of any claims under these indemnification arrangements as of June 30, 2023 and December 31, 2022. Legal Proceedings The Company is not currently party to any material legal proceedings. At each reporting date, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of FASB ASC Topic 450, Contingencies ( “ ” ) |
Preferred Units
Preferred Units | 6 Months Ended |
Jun. 30, 2023 | |
Preferred Units | |
Preferred Units | 8. As of June 30, 2023 and December 31, 2022, the Company had authorized, issued and outstanding an aggregate of 65,089,212 preferred units, of which 20,000,000 units have been designated as Series A Preferred Units and 45,089,212 units have been designated as Series B Preferred Units. Series A Preferred Units On February 24, 2022, the Company executed the Series A Preferred Unit Purchase Agreement (the “Series A Agreement”) to issue and sell up to 20,000,000 Series A Preferred Units at a purchase price of $1.00 per unit. In the initial closing on February 24, 2022, the Company issued 5,000,000 Series A Preferred Units at a purchase price of $1.00, resulting in gross cash proceeds to the Company of $5.0 million, and incurred $0.2 million of issuance costs. The Series A Agreement provided for three tranche option closings following the initial closing (the “Tranche Options”), which Tranche Option closings were subject to approval of the Board of Managers of Apogee Therapeutics, LLC (the “Board of Managers”), which was controlled by the holders of the Series A Preferred Units. The Board of Managers approved all such subsequent closings resulting in investors purchasing 5,000,000 Series A Preferred Units in each of the three subsequent Tranche Option closings throughout 2022. As a result, the Company received an aggregate of $20.0 million in gross proceeds associated with the Series A Agreement. The Company assessed the Tranche Options and concluded that they met the definition of a freestanding financial instrument, as the Tranche Options were legally detachable and separately exercisable from the Series A Preferred Units. Therefore, the Company allocated the proceeds between the Tranche Options and the Series A Preferred Units sold at the initial closing. As the Series A Preferred Units are contingently redeemable upon an event that is not completely within the control of the Company, the Tranche Options are classified as an asset or liability and are initially recorded at fair value. The Tranche Options are measured at fair value at each reporting period, through the settlement of the instrument. Since the Tranche Options are subject to fair value accounting, the Company allocated $1.1 million of the initial proceeds to the Tranche Options based on the fair value at the date of issuance with the remaining proceeds beings allocated to the Series A Preferred Units. Upon the Tranche Option closings in August and October 2022, the respective Tranche Option value was remeasured at fair value and then reclassified to Series A Preferred Units upon settlement. Series B Preferred Units On November 15, 2022, the Company executed the Series B Preferred Unit Purchase Agreement (the “Series B Agreement”) to issue and sell 45,089,212 Series B Preferred Units in a single closing at a purchase price of $3.30456 per unit, resulting in gross cash proceeds to the Company of $149.0 million. The Company incurred $0.5 million of issuance costs in connection with the issuance of the Series B Preferred Units. The Company’s preferred units as of June 30, 2023 and December 31, 2022 consisted of the following (in thousands, except unit amounts): PREFERRED PREFERRED UNITS UNITS ISSUED AND CARRYING LIQUIDATION AUTHORIZED OUTSTANDING VALUE PREFERENCE Series A Preferred Units 20,000,000 20,000,000 $ 28,971 $ 20,000 Series B Preferred Units 45,089,212 45,089,212 148,496 149,000 Total 65,089,212 65,089,212 $ 177,467 $ 169,000 Rights, Privileges and Preferences The preferred units had the following rights, privileges and preferences as follows: Voting Rights Holders of preferred units voted together with the holders of common units as a single class. Any action to be taken by the unitholders required the approval of unitholders holding a majority of the outstanding preferred units and common units, voting together as a single class on an as-converted basis, unless a different threshold is specifically required by the Delaware Limited Liability Act, the Securities Act, or other applicable law, or the Second Amended and Restated Limited Liability Company Agreement of Apogee Therapeutics, LLC dated November 15, 2022 (the “LLC Agreement”). Distribution Rights The holders of the preferred units had preferences in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, or upon the occurrence of a change of control event (as defined below). The holders of the preferred units then outstanding were entitled to be paid out of the assets or funds of the Company then-available for distribution before any payment was made to the holders of common units and incentive units. The distribution preferences are set forth below: (i) First, the holders of the Series B Preferred Units unit holders receive proceeds equal to their initial preferences, or price per unit as adjusted for any split, combination, or other recapitalization or reclassification of the Series B Preferred Units (currently $3.30456 per unit). (ii) Next, the holders of the Series A Preferred Units unit holders receive proceeds equal to their initial preferences, or price per unit as adjusted for any split, combination, or other recapitalization or reclassification of the Series A Preferred Units (currently $1.00 per unit). (iii) Next, the holders of common units and vested incentive units receive proceeds until the holder of each common unit and vested incentive unit has received an aggregate amount equal to the Series A Preferred Units preference amount. With regard to the vested incentive units, no unitholder of vested incentive units is entitled to distributions until the distributions to common unit holders is in excess of the strike price of the incentive unit. (iv) Next, the holders of the Series A Preferred Units, common units and vested incentive units receive proceeds until the holders of each such Series A Preferred Unit, common unit and vested incentive unit has received an aggregate amount equal to the Series B Preferred Units preference amount. (v) Lastly, the holders of the preferred units, common units and vested incentive units, receive proceeds pro rata in proportion to the holde r’s equity ownership percentage basis. A change of control means (i) a merger or consolidation in which (A) the Company is a constituent party or (B) a subsidiary of the Company is a constituent party and the Company issues equity ownership interests pursuant to such merger or consolidation, except any such merger or consolidation involving the Company or a subsidiary in which the equity ownership interests of the Company outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for shares of equity securities that represent, immediately following such merger or consolidation, at least a majority, by voting power, of (B) the sale or disposition (whether by merger, consolidation or otherwise) of one or more subsidiaries of the Company if substantially all of the assets of the Company and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to Conversion Each preferred unit would be automatically converted into common units (or other applicable common stock or common equity of the applicable successor entity), at the applicable conversion ratio then in effect, upon the earlier of: (i) the date, or the occurrence of an event, specified by the vote or written consent of the holders of a majority of the outstanding preferred units, or (ii) immediately prior to the closing of an initial public offering resulting in minimum gross proceeds to the Company of at least $75.0 million. The conversion ratio of each series of preferred unit would be determined by dividing the original issuance price of each series by the adjustment price of each series. The Series A Original Issuance Price is $1.00 per unit for the Series A Preferred Unit and the Series B Original Issuance Price is $3.30456 per unit for the Series B Preferred Unit. The Series A Adjustment Price is $1.00 per unit for the Series A Preferred Unit and the Series B Adjustment Price $3.30456 per unit for the Series B Preferred Unit (in each case subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization and other adjustments as set forth in the LLC Agreement). As of December 31, 2022 and June 30, 2023, each unit of preferred units was convertible into common units (or other applicable common stock or common equity of the applicable successor entity), on a one-for-one basis. Embedded Securities Evaluation The Company assessed the Series A Preferred Units and the Series B Preferred Units for any features that may require separate accounting under FASB ASC Topic 815- Derivatives and Hedging |
Common Units
Common Units | 6 Months Ended |
Jun. 30, 2023 | |
Common Units | |
Common Units | 9. As of June 30, 2023 and December 31, 2022, the Company had 5,000,000 common units authorized, issued and outstanding. The holders of common units were entitled to one vote for each unit held on all matters submitted to a vote of the Company’s equity holders. The holders of incentive units were not entitled to vote on any matter. |
Equity-Based Compensation
Equity-Based Compensation | 6 Months Ended |
Jun. 30, 2023 | |
Equity-Based Compensation | |
Equity-Based Compensation | 10. Incentive Units Prior to the Reorganization, the Company periodically granted incentive units to employees, managers and executives, as well as to consultants and service providers of the Company. The incentive units represent a separate substantive class of members’ equity with defined rights. The incentive units represent profits interest in the increase in the value of the entity over a threshold value, or strike price, as determined at the time of grant. The strike price is established for tax compliance purposes related to Internal Revenue Service Revenue Procedure 93-27 and 2001-43 where the Company allocates equity value to separate classes of equity in a hypothetical liquidation transaction as of the date of grant. Each incentive unit issued includes a strike price determined by the Board of Managers. The strike price is based on an estimate of the amount a common unit would receive on the date of issuance of such incentive units in a hypothetical liquidation of the Company in which the Company sold its assets for their fair market value, satisfied its liabilities, and distributed the net proceeds to the holders of units in liquidation of the Company. The Company accounts for equity-based compensation in accordance with ASC 718, Compensation-Stock Compensation The Company determined that incentive units issued to employees, managers, executives, non-employees and service providers are equity-based service payments and, as such, the Company measures and recognizes the related compensation expense in a manner consistent with its accounting policy for equity-based awards. The fair value of each incentive unit grant is estimated on the grant date using either an option pricing method (“OPM”), or a hybrid method, both of which use market approaches to estimate the Company’s enterprise value. The OPM treats common units, incentive units and preferred units as call options on the total equity value of a company, with exercise prices based on the value thresholds at which the allocation among the various holders of a company’s securities changes. Under this method, the incentive units have value only if the funds available for distribution to unitholders exceed the value of the preferred and common unit distribution preferences and the strike price with respect to such incentive unit at the time of the liquidity event. The hybrid method is a probability-weighted expected return method (“PWERM”), where the equity value is allocated in one or more of the scenarios using an OPM. The PWERM is a scenario-based methodology that estimates the fair value of each unit based upon an analysis of future values, assuming various outcomes. The incentive unit value is based on the probability-weighted value across the scenarios, considering the OPM to estimate the value within each scenario given the rights of each class of unit. A discount for lack of marketability of the incentive unit is then applied to arrive at an indication of fair value for the incentive unit. The following assumptions were used in determining the fair value of incentive units granted during the period: THREE MONTHS SIX MONTHS ENDED ENDED JUNE 30, JUNE 30, 2023 2023 Risk free interest rate 4.1% - 4.9% 4.1% - 4.9% Expected dividend yield 0.0% 0.0% Expected term 0.17 – 2 0.17 – 2 Expected volatility 84% - 90% 84% - 90% The number of incentive units reserved for issuance under the LLC Agreement is 16,537,557 and 12,412,473 units as of June 30, 2023 and December 31, 2022, respectively. As of June 30, 2023 and December 31, 2022, there were 2,267,282 and 2,764,099 units, respectively, available for future issuance. No incentive units were issued during the period from February 4, 2022 (inception) to June 30, 2022. The following table summarizes the Company’s incentive unit activity: WEIGHTED- AVERAGE NUMBER OF GRANT DATE FAIR UNITS VALUE PER UNIT Unvested incentive units as of December 31, 2022 8,023,288 $ 1.20 Granted 4,621,901 $ 1.32 Vested (856,457) $ 1.54 Unvested incentive units as of June 30, 2023 11,788,732 $ 1.24 Equity-Based Compensation Expense The following table presents the classification of equity-based compensation expense related to incentive units granted to employees, managers, executives, and service providers (in thousands): THREE MONTHS SIX MONTHS FEBRUARY 4, 2022 ENDED JUNE 30, ENDED JUNE 30, (INCEPTION) to 2023 2023 JUNE 30, 2022 Research and development expense $ 205 $ 338 $ — General and administrative expense 908 2,049 — Total $ 1,113 $ 2,387 $ — As of June 30, 2023, the total unrecognized compensation expense related to the Company’s incentive units was $12.7 million, which the Company expects to recognize over a weighted-average period of approximately 3.42 years. For the period from February 4, 2022 (inception) to June 30, 2022, the Company recognized an additional $1.7 million of equity-based compensation expense, in connection with the additional common units issued under the Option Agreement with Paragon. |
Related Parties
Related Parties | 6 Months Ended |
Jun. 30, 2023 | |
Related Parties | |
Related Parties | 11. Related Parties Under the Option Agreement and the License Agreements, Paragon, a member of the Company which was founded by a Series A Unit investor, received upfront consideration in the form of common units, is entitled to receive milestone and royalty payments upon specific conditions and receives payments from the Company for providing ongoing services under the agreements (see Note 6). As of June 30, 2023 and December 31, 2022, $5.9 million and $8.0 million was due to Paragon, respectively. The Company incurred $5.9 million and $13.4 million of research and development expenses for the three and six months ended June 30, 2023, respectively. The Company incurred $1.4 million and $5.6 million of research and development expenses and $0.2 million and $0.3 million of general and administration expenses for the three months ended June 30, 2022 and for the period from February 4, 2022 (inception) to June 30, 2022, respectively. |
Net Loss Per Unit
Net Loss Per Unit | 6 Months Ended |
Jun. 30, 2023 | |
Net Loss Per Unit | |
Net Loss Per Unit | 12. Basic and diluted net loss per unit attributable to common unitholders was calculated as follows (in thousands, except unit and per unit data): PERIOD FROM SIX MONTHS FEBRUARY 4 THREE MONTHS ENDED JUNE 30, ENDED JUNE 30, (INCEPTION) TO 2023 2022 2023 JUNE 30, 2022 Numerator: Net loss $ (18,885) $ (1,816) $ (31,410) $ (6,121) Net loss attributable to common unitholders, basic and diluted $ (18,885) $ (1,816) $ (31,410) $ (6,121) Denominator: Weighted average common units outstanding, basic and diluted 5,000,000 1,250,000 5,000,000 1,164,966 Net loss per unit attributable to common unitholders, basic and diluted $ (3.78) $ (1.45) $ (6.28) $ (5.25) The following potential common units, presented based on amounts outstanding period end, were excluded from the calculation of diluted net loss per unit attributable to common unitholders for the period indicated because including them would have been anti-dilutive: PERIOD FROM SIX MONTHS FEBRUARY 4 THREE MONTHS ENDED JUNE 30, ENDED (INCEPTION) TO 2023 2022 JUNE 30, 2023 JUNE 30, 2022 Series A Preferred Units 20,000,000 5,000,000 20,000,000 5,000,000 Series B Preferred Units 45,089,212 — 45,089,212 — Vested incentive units 2,481,543 — 2,481,543 — Unvested incentive units 11,788,732 — 11,788,732 — Total 79,359,487 5,000,000 79,359,487 5,000,000 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
Income Taxes | |
Income Taxes | 13. Apogee Therapeutics, LLC is taxed under the Partnership provisions of the Internal Revenue Code. Accordingly, all income and deductions of Apogee Therapeutics, LLC are reported on the members’ individual income tax returns, and no income taxes are recorded by Apogee Therapeutics, LLC. Apogee Biologics, Inc., the operating subsidiary of the Company, is separately taxed as a C corporation for federal tax purposes. The Company’s loss before income taxes is comprised solely of domestic losses. There is no income tax expense for the six months ended June 30, 2023 and from February 4, 2022 (inception) to June 30, 2022. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events | |
Subsequent Events | 14. The Company evaluated subsequent events through the date on which these financial statements were issued to ensure that these condensed consolidated financial statements include appropriate disclosure of events both recognized in the financial statements as of June 30, 2023 and events which occurred subsequently but not recognized in the financial statements. No subsequent events have occurred that require disclosure, except as disclosed below. Reorganization and Initial Public Offering Prior to the Reorganization, the Company’s business was conducted by Apogee Therapeutics, LLC and its subsidiary, Apogee Biologics, Inc. (formerly named Apogee Therapeutics, Inc.). Apogee Therapeutics, Inc. was formed on June 9, 2023 in connection with the IPO to serve as a holding company that would wholly own the assets of Apogee Therapeutics, LLC, including stock of its subsidiary. Prior to the consummation of the Reorganization and the IPO, Apogee Therapeutics, Inc. did not conduct any activities other than those incidental to its formation and the preparation of its prospectus and registration statement for its IPO. Apogee Therapeutics, Inc. had no or nominal assets and liabilities, had no material contingent liabilities and had not commenced operations. The following series of transactions were completed on July 13, 2023, which are referred to, collectively, as the Reorganization: ● the amendment and restatement of the certificate of incorporation of Apogee Therapeutics, Inc., to, among other things, authorize two classes of common stock, common stock and non-voting common stock; ● Apogee Therapeutics, Inc.’s acquisition of the units of Apogee Therapeutics, LLC previously held by the members of Apogee Therapeutics, LLC, pursuant to the contribution and exchange described below, and the issuance in such transaction of shares of common stock or non-voting common stock of Apogee Therapeutics, Inc., as applicable; and ● the merger of Apogee Therapeutics, LLC with and into Apogee Therapeutics, Inc., with Apogee Therapeutics, Inc. surviving the merger and Apogee Biologics, Inc. becoming a wholly-owned subsidiary of Apogee Therapeutics, Inc. As a result of the Reorganization, Apogee Therapeutics, Inc. directly and wholly owns the assets of Apogee Therapeutics, LLC, including the stock of Apogee Biologics, Inc. As part of the Reorganization, pursuant to a contribution and exchange agreement effective July 13, 2023, the members of Apogee Therapeutics, LLC contributed their units to Apogee Therapeutics, Inc. in exchange for common stock or non-voting common stock of Apogee Therapeutics, Inc. as follows: ● holders of Series A preferred units of Apogee Therapeutics, LLC received 7,678,000 shares of non-voting common stock of Apogee Therapeutics, Inc.; ● holders of Series B preferred units of Apogee Therapeutics, LLC received 11,501,108 shares of common stock and 5,808,642 shares of non-voting common stock of Apogee Therapeutics, Inc.; ● holders of common units of Apogee Therapeutics, LLC received 1,919,500 shares of common stock of Apogee Therapeutics, Inc.; ● holders of vested incentive units of Apogee Therapeutics, LLC received 690,188 shares of common stock of Apogee Therapeutics, Inc.; and ● holders of unvested incentive units of Apogee Therapeutics, LLC received 2,779,358 shares of restricted common stock of Apogee Therapeutics, Inc. The condensed consolidated financial statements and other financial information included in these financial statements are those of Apogee Therapeutics, LLC and its consolidated subsidiary and do not give effect to the Reorganization as it occurred after June 30, 2023. In July 2023, the Company completed its IPO pursuant to which it issued and sold an aggregate of 20,297,500 shares of its common stock, including the full exercise of the underwriters’ option to purchase 2,647,500 additional shares, at the IPO price of $17.00 per share. The aggregate gross proceeds from the offering were approximately $345.1 million, before deducting underwriting discounts and commissions and other offering expenses. The net proceeds from the offering totaled approximately $315.4 million. The shares of common stock of Apogee Therapeutics, Inc. began trading on the Nasdaq Global Market on July 14, 2023 under the ticker symbol “APGE”. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation These condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates of the Financial Accounting Standards Board (“FASB”). In the Company’s management opinion, the information furnished in these unaudited condensed consolidated financial statements reflect all adjustments, all of which are of a normal and recurring nature, necessary for a fair presentation of the financial position and results of operations for the reported interim periods. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year or any other interim period. |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of Apogee Therapeutics, LLC and its wholly-owned subsidiary, Apogee Biologics, Inc. All intercompany balances and transactions have been eliminated in consolidation. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original final maturities of three months or less from the date of purchase to be cash equivalents. As of June 30, 2023 and December 31, 2022, the Company’s financial assets were comprised entirely of cash. |
Concentrations of Credit Risk and Significant Suppliers | Concentrations of Credit Risk and Significant Suppliers Financial instruments that potentially expose the Company to credit risk primarily consist of cash. The Company maintains its cash with accredited financial institutions and, consequently, the Company does not believe it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. Bank accounts in the United States are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. As of June 30, 2023 and December 31, 2022, predominantly all of the Company’s primary operating accounts significantly exceeded the FDIC limits. The Company is dependent on third-party organizations to research, develop, manufacture and process its product candidates for its development programs. In particular, the Company relies on one third-party contract manufacturer to produce and process its two most advanced programs, APG777 and APG808, for preclinical and clinical activities. The Company expects to continue to be dependent on a small number of manufacturers to supply it with its requirements for all products. The Company’s research and development programs could be adversely affected by a significant interruption in the supply of the necessary materials. A significant amount of the Company’s research and development activities are performed under its agreements with Paragon (see Note 6). |
Off-Balance Sheet Risk | Off-Balance Sheet Risk As of June 30, 2023 and December 31, 2022, the Company had no off-balance sheet risks such as foreign exchange contracts, option contracts or other foreign hedging arrangements. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss includes net loss as well as other changes in members’ deficit that result from transactions and economic events other than those with stockholders. For the three and six months ended June 30, 2023, and the three months ended June 30, 2022 and the period from February 4, 2022 (inception) to June 30, 2022, there were no differences between net loss and comprehensive loss. |
Deferred Offering Costs | Deferred Offering Costs The Company capitalizes certain legal, accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After the consummation of the equity financing, these costs are recorded in members’ deficit as a reduction of additional paid-in capital or the associated preferred unit account, as applicable. In the event the offering is terminated, all capitalized deferred offering costs, currently recorded within other current assets, will be expensed immediately as a charge to operating expenses in the statement of operations and comprehensive loss. As of June 30, 2023, the Company had $3.5 million of deferred offering costs. As of December 31, 2022, the Company had no deferred offering costs. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Measurements | |
Schedule of reconciliation of all assets measured at fair value using Level 3 significant unobservable inputs | The following table provides a reconciliation of all assets and liabilities measured at fair value using Level 3 significant unobservable inputs (in thousands): PREFERRED UNIT PREFERRED UNIT PREFERRED UNIT TRANCHE OPTION TRANCHE OPTION TRANCHE OPTION, ASSET (LIABILITY) NET Balance as of February 4, 2022 (inception) $ — $ — $ — Issuance 650 (1,700) (1,050) Change in fair value — — — Balance as of June 30, 2022 $ 650 $ (1,700) $ (1,050) |
Prepaids and Other Current As_2
Prepaids and Other Current Assets (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Prepaids and Other Current Assets | |
Schedule of prepaid expenses and other current assets | Prepaid expenses and other current assets consisted of the following (in thousands): JUNE 30, DECEMBER 31, 2023 2022 Prepaid expenses $ 1,242 $ 108 Deferred offering costs 3,469 — Other current assets 887 57 Total $ 5,598 $ 165 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Accrued Expenses | |
Schedule of components of accrued expenses | Accrued expenses consisted of the following (in thousands): JUNE 30, DECEMBER 31, 2023 2022 Accrued external research and development expenses $ 3,753 $ 8,847 Accrued other 1,829 200 Accrued employee compensation 885 515 Total $ 6,467 $ 9,562 |
Preferred Units (Tables)
Preferred Units (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Preferred Units | |
Schedule of preferred units | The Company’s preferred units as of June 30, 2023 and December 31, 2022 consisted of the following (in thousands, except unit amounts): PREFERRED PREFERRED UNITS UNITS ISSUED AND CARRYING LIQUIDATION AUTHORIZED OUTSTANDING VALUE PREFERENCE Series A Preferred Units 20,000,000 20,000,000 $ 28,971 $ 20,000 Series B Preferred Units 45,089,212 45,089,212 148,496 149,000 Total 65,089,212 65,089,212 $ 177,467 $ 169,000 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Equity-Based Compensation | |
Schedule of fair value assumptions of share based payment | THREE MONTHS SIX MONTHS ENDED ENDED JUNE 30, JUNE 30, 2023 2023 Risk free interest rate 4.1% - 4.9% 4.1% - 4.9% Expected dividend yield 0.0% 0.0% Expected term 0.17 – 2 0.17 – 2 Expected volatility 84% - 90% 84% - 90% |
Schedule of summarizes the company's incentive unit | WEIGHTED- AVERAGE NUMBER OF GRANT DATE FAIR UNITS VALUE PER UNIT Unvested incentive units as of December 31, 2022 8,023,288 $ 1.20 Granted 4,621,901 $ 1.32 Vested (856,457) $ 1.54 Unvested incentive units as of June 30, 2023 11,788,732 $ 1.24 |
Schedule of equity-based compensation expense | The following table presents the classification of equity-based compensation expense related to incentive units granted to employees, managers, executives, and service providers (in thousands): THREE MONTHS SIX MONTHS FEBRUARY 4, 2022 ENDED JUNE 30, ENDED JUNE 30, (INCEPTION) to 2023 2023 JUNE 30, 2022 Research and development expense $ 205 $ 338 $ — General and administrative expense 908 2,049 — Total $ 1,113 $ 2,387 $ — |
Net Loss Per Unit (Tables)
Net Loss Per Unit (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Net Loss Per Unit | |
Schedule of basic and diluted net loss per unit attributable to common unitholders | Basic and diluted net loss per unit attributable to common unitholders was calculated as follows (in thousands, except unit and per unit data): PERIOD FROM SIX MONTHS FEBRUARY 4 THREE MONTHS ENDED JUNE 30, ENDED JUNE 30, (INCEPTION) TO 2023 2022 2023 JUNE 30, 2022 Numerator: Net loss $ (18,885) $ (1,816) $ (31,410) $ (6,121) Net loss attributable to common unitholders, basic and diluted $ (18,885) $ (1,816) $ (31,410) $ (6,121) Denominator: Weighted average common units outstanding, basic and diluted 5,000,000 1,250,000 5,000,000 1,164,966 Net loss per unit attributable to common unitholders, basic and diluted $ (3.78) $ (1.45) $ (6.28) $ (5.25) |
Schedule of potential common units excluded from calculation of diluted net loss per unit attributable to common unitholders | PERIOD FROM SIX MONTHS FEBRUARY 4 THREE MONTHS ENDED JUNE 30, ENDED (INCEPTION) TO 2023 2022 JUNE 30, 2023 JUNE 30, 2022 Series A Preferred Units 20,000,000 5,000,000 20,000,000 5,000,000 Series B Preferred Units 45,089,212 — 45,089,212 — Vested incentive units 2,481,543 — 2,481,543 — Unvested incentive units 11,788,732 — 11,788,732 — Total 79,359,487 5,000,000 79,359,487 5,000,000 |
Nature of the Business (Details
Nature of the Business (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | |||||
Jul. 18, 2023 USD ($) $ / shares shares | Nov. 30, 2022 item | Mar. 31, 2022 USD ($) shares | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jul. 13, 2023 shares | Dec. 31, 2022 USD ($) | |
Nature of the Business | ||||||||||
Accumulated deficit | $ | $ 71,195 | $ 71,195 | $ 39,785 | |||||||
Net loss | $ | $ 4,305 | 18,885 | $ 12,525 | $ 1,816 | $ 6,121 | 31,410 | ||||
Negative cash flows from operations | $ | 25,127 | |||||||||
Cash | $ | $ 125,069 | 125,069 | $ 151,890 | |||||||
Net proceeds from IPO | $ | $ 315,400 | |||||||||
Subsequent Events | ||||||||||
Nature of the Business | ||||||||||
Net proceeds from IPO | $ | $ 315,400 | |||||||||
Subsequent Events | IPO | ||||||||||
Nature of the Business | ||||||||||
Shares issued | 20,297,500 | |||||||||
Share price | $ / shares | $ 17 | |||||||||
Underwriter option to purchase additional number of shares | 2,647,500 | |||||||||
Common Units | ||||||||||
Nature of the Business | ||||||||||
Shares issued | 1,250,000 | |||||||||
Apogee Therapeutics, LLC | Common Units | Subsequent Events | ||||||||||
Nature of the Business | ||||||||||
Common stock shares issued | 1,919,500 | |||||||||
Apogee Therapeutics, LLC | Vested incentive units | Subsequent Events | ||||||||||
Nature of the Business | ||||||||||
Common stock shares issued | 690,188 | |||||||||
Apogee Therapeutics, LLC | Unvested incentive units | Subsequent Events | ||||||||||
Nature of the Business | ||||||||||
Common stock shares issued | 2,779,358 | |||||||||
Apogee Therapeutics, LLC | Series A Preferred Units | Subsequent Events | ||||||||||
Nature of the Business | ||||||||||
Nonvoting common stock shares issued | 7,678,000 | |||||||||
Apogee Therapeutics, LLC | Series B Preferred Units | Subsequent Events | ||||||||||
Nature of the Business | ||||||||||
Nonvoting common stock shares issued | 5,808,642 | |||||||||
Common stock shares issued | 11,501,108 | |||||||||
Option Agreement | Related party | Paragon Therapeutics, Inc | ||||||||||
Nature of the Business | ||||||||||
Number of selected targets initially included under the agreement | item | 2 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Summary of Significant Accounting Policies | ||
Concentration Risk, Credit Risk, Financial Instrument, Maximum Exposure | $ 0 | $ 0 |
Deferred offering costs | $ 3,469 | $ 0 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 5 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2023 | Dec. 31, 2022 | |
PREFERRED UNIT TRANCHE OPTION ASSET, reconciliation | |||
Issuance | $ 650 | ||
Balance as of ending | 650 | ||
PREFERRED UNIT TRANCHE OPTION (LIABILITY), reconciliation | |||
Issuance | (1,700) | ||
Balance as of end | (1,700) | ||
Issuance | (1,050) | ||
Balance as of ending | $ (1,050) | ||
Recurring | |||
Fair Value Measurements | |||
Assets measured at fair value | $ 0 | $ 0 | |
Liabilities measured at fair value | $ 0 | $ 0 |
Prepaids and Other Current As_3
Prepaids and Other Current Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Prepaids and Other Current Assets | ||
Prepaid expenses | $ 1,242 | $ 108 |
Deferred offering costs | 3,469 | 0 |
Other current assets | 887 | 57 |
Total | $ 5,598 | $ 165 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Accrued Expenses | ||
Accrued external research and development expenses | $ 3,753 | $ 8,847 |
Accrued other | 1,829 | 200 |
Accrued employee compensation | 885 | 515 |
Total | $ 6,467 | $ 9,562 |
Other Significant Agreements _2
Other Significant Agreements Paragon Option Agreement (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | ||||
Nov. 30, 2022 item | Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) shares | Jun. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) shares | Dec. 31, 2022 USD ($) | ||
Other Significant Agreements Paragon Option Agreement | ||||||||
Research and development | [1] | $ 13,946 | $ 1,448 | $ 5,693 | $ 22,401 | |||
Option Agreement | ||||||||
Other Significant Agreements Paragon Option Agreement | ||||||||
Payments due upon exercise of option | $ 0 | |||||||
Aggregate acquisition cost | 2,900 | |||||||
Paragon IL13 License Agreement | ||||||||
Other Significant Agreements Paragon Option Agreement | ||||||||
Research and development | 7,600 | 0 | 0 | 11,800 | ||||
Paragon Therapeutics, Inc | Related party | ||||||||
Other Significant Agreements Paragon Option Agreement | ||||||||
Research and development | 5,900 | 1,400 | 5,600 | 13,400 | ||||
Paragon Therapeutics, Inc | Option Agreement | ||||||||
Other Significant Agreements Paragon Option Agreement | ||||||||
Research and development | $ 5,100 | $ 1,400 | $ 2,700 | $ 8,800 | ||||
Termination period of agreement | 30 days | |||||||
Period of material breach | 30 days | |||||||
Paragon Therapeutics, Inc | Option Agreement | Related party | ||||||||
Other Significant Agreements Paragon Option Agreement | ||||||||
Number of selected targets initially included under the agreement | item | 2 | |||||||
Upfront cash amount paid | $ 1,300 | |||||||
Issued common units (in shares) | shares | 1,250,000 | |||||||
Issued total common units (in shares) | shares | 5,000,000 | 5,000,000 | ||||||
Aggregate fair value on grant date | $ 2,200 | $ 2,200 | ||||||
Non-refundable fee | $ 500 | |||||||
Paragon Therapeutics, Inc | Option Agreement | Maximum | Related party | ||||||||
Other Significant Agreements Paragon Option Agreement | ||||||||
Issued total common units (in shares) | shares | 3,750,000 | 3,750,000 | ||||||
Paragon Therapeutics, Inc | Paragon IL13 License Agreement | ||||||||
Other Significant Agreements Paragon Option Agreement | ||||||||
Maximum amount of achievement of development and clinical mile stones | $ 3,000 | $ 3,000 | ||||||
Nomination fee paid | 1,000 | |||||||
Milestone payments due | 0 | |||||||
Royalty payments due | 0 | |||||||
Milestone payment of trial payable | $ 2,000 | |||||||
Milestone payment of trial | $ 2,000 | |||||||
Expiration period of commercial sale | 12 years | |||||||
Termination period of agreement | 60 days | |||||||
Period of material breach | 90 days | |||||||
Threshold number of days for termination upon failure to make payment and such failure persists even after the notice | 30 days | |||||||
[1] Includes related-party amounts of $5,884 for the three months ended June 30, 2023, $1,378 for the three months ended June 30, 2022, $13,411 for the six months ended June 30, 2023 and $5,604 for the period from February 4, 2022 (inception) to June 30, 2022. |
Other Significant Agreements _3
Other Significant Agreements Paragon Option Agreement - WuXi Biologics (Hong Kong) limited agreements (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2023 | ||
Other Significant Agreements Paragon Option Agreement | ||||||
Research and development | [1] | $ 13,946,000 | $ 1,448,000 | $ 5,693,000 | $ 22,401,000 | |
Cell Line License Agreement | WuXi Biologics | ||||||
Other Significant Agreements Paragon Option Agreement | ||||||
Prior notice period for termination of work order | 6 months | |||||
Non-refundable license fee | $ 150,000 | |||||
Threshold number of days for termination upon uncured material breach after notice of such breach | 60 days | |||||
Threshold number of days for termination upon failure to make payment and such failure persists even after the notice | 30 days | |||||
Biologics Master Services Agreement | WuXi Biologics | ||||||
Other Significant Agreements Paragon Option Agreement | ||||||
Prior notice period for termination of work order | 6 months | |||||
Threshold number of days for no termination or cancellation fee upon uncured breach after notice of such breach | 30 days | |||||
Threshold number of days for no termination or cancellation fee upon performance breach | 90 days | |||||
Research and development | 5,900,000 | 5,900,000 | ||||
Non-cancelable obligations | $ 0 | $ 0 | ||||
[1] Includes related-party amounts of $5,884 for the three months ended June 30, 2023, $1,378 for the three months ended June 30, 2022, $13,411 for the six months ended June 30, 2023 and $5,604 for the period from February 4, 2022 (inception) to June 30, 2022. |
Preferred Units (Details)
Preferred Units (Details) $ / shares in Units, $ in Millions | 6 Months Ended | |||
Nov. 15, 2022 USD ($) $ / shares shares | Feb. 24, 2022 USD ($) $ / shares shares | Jun. 30, 2023 USD ($) $ / shares shares | Dec. 31, 2022 shares | |
Preferred Units | ||||
Preferred Units, units authorized | 65,089,212 | 65,089,212 | ||
Preferred Units, units issued | 65,089,212 | 65,089,212 | ||
Preferred Units, units outstanding | 65,089,212 | 65,089,212 | ||
Minimum gross proceeds | $ | $ 75 | |||
Preferred stock conversion ratio | 1 | 1 | ||
Series A Preferred Units | ||||
Preferred Units | ||||
Preferred Units, units authorized | 20,000,000 | 20,000,000 | ||
Preferred Units, units issued | 20,000,000 | 20,000,000 | ||
Preferred Units, units outstanding | 20,000,000 | 20,000,000 | ||
Recapitalization or reclassification of preferred units others (in dollars per share) | $ / shares | $ 1 | |||
Original issuance price (in dollars per share) | $ / shares | 1 | |||
Adjustment price (in dollars per share) | $ / shares | $ 1 | |||
Series A Preferred Units | Tranche Option | ||||
Preferred Units | ||||
Initial proceeds of issuance of preferred units | $ | $ 1.1 | |||
Series A Preferred Units | Series A Agreement | ||||
Preferred Units | ||||
Preferred Units, units issued | 5,000,000 | |||
Maximum number of issue and sell of preferred shares | 20,000,000 | |||
Temporary equity preferred shares purchase price (in dollars per share) | $ / shares | $ 1 | |||
Preferred units purchase price (in dollars per share) | $ / shares | $ 1 | |||
Gross cash proceeds | $ | $ 5 | |||
Net issuance cost | $ | $ 0.2 | |||
Series A Preferred Units | Series A Agreement | Tranche Option | ||||
Preferred Units | ||||
Preferred Units, units issued | 5,000,000 | |||
Gross cash proceeds | $ | $ 20 | |||
Series B Preferred Units | ||||
Preferred Units | ||||
Preferred Units, units authorized | 45,089,212 | 45,089,212 | ||
Preferred Units, units issued | 45,089,212 | 45,089,212 | ||
Preferred Units, units outstanding | 45,089,212 | 45,089,212 | ||
Recapitalization or reclassification of preferred units others (in dollars per share) | $ / shares | $ 3.30456 | |||
Original issuance price (in dollars per share) | $ / shares | 3.30456 | |||
Adjustment price (in dollars per share) | $ / shares | $ 3.30456 | |||
Series B Preferred Units | Series B Agreement | ||||
Preferred Units | ||||
Maximum number of issue and sell of preferred shares | 45,089,212 | |||
Temporary equity preferred shares purchase price (in dollars per share) | $ / shares | $ 3.30456 | |||
Gross cash proceeds | $ | $ 149 | |||
Net issuance cost | $ | $ 0.5 |
Preferred Units - Schedule of p
Preferred Units - Schedule of preferred units (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Preferred Units | ||
PREFERRED UNITS AUTHORIZED | 65,089,212 | 65,089,212 |
PREFERRED UNITS ISSUED | 65,089,212 | 65,089,212 |
PREFERRED UNITS OUTSTANDING | 65,089,212 | 65,089,212 |
CARRYING VALUE | $ 177,467 | $ 177,467 |
LIQUIDATION PREFERENCE | $ 169,000 | $ 169,000 |
Series A Preferred Units | ||
Preferred Units | ||
PREFERRED UNITS AUTHORIZED | 20,000,000 | 20,000,000 |
PREFERRED UNITS ISSUED | 20,000,000 | 20,000,000 |
PREFERRED UNITS OUTSTANDING | 20,000,000 | 20,000,000 |
CARRYING VALUE | $ 28,971 | $ 28,971 |
LIQUIDATION PREFERENCE | $ 20,000 | $ 20,000 |
Series B Preferred Units | ||
Preferred Units | ||
PREFERRED UNITS AUTHORIZED | 45,089,212 | 45,089,212 |
PREFERRED UNITS ISSUED | 45,089,212 | 45,089,212 |
PREFERRED UNITS OUTSTANDING | 45,089,212 | 45,089,212 |
CARRYING VALUE | $ 148,496 | $ 148,496 |
LIQUIDATION PREFERENCE | $ 149,000 | $ 149,000 |
Common Units - Additional Infor
Common Units - Additional Information (Details) - shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Common Units | ||
Common Units, units authorized | 5,000,000 | 5,000,000 |
Common Units, units issued | 5,000,000 | 5,000,000 |
Common Units, units outstanding | 5,000,000 | 5,000,000 |
Common units voting rights | one | one |
Equity-Based Compensation - Det
Equity-Based Compensation - Determining fair value of incentive units (Details) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2023 | Jun. 30, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Risk free interest rate, Minimum | 4.10% | 4.10% |
Risk free interest rate, Maximum | 4.90% | 4.90% |
Expected dividend yield | 0% | 0% |
Expected volatility, Minimum | 84% | 84% |
Expected volatility, Maximum | 90% | 90% |
Minimum | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Expected term | 2 months 1 day | 2 months 1 day |
Maximum | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Expected term | 2 years | 2 years |
Equity-Based Compensation - Sum
Equity-Based Compensation - Summary of Company's incentive unit activity (Details) | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
NUMBER OF UNITS | |
Unvested incentive units | shares | 8,023,288 |
Granted | shares | 4,621,901 |
Vested | shares | (856,457) |
Unvested incentive units | shares | 11,788,732 |
WEIGHTED-AVERAGE GRANT DATE FAIR VALUE PER UNIT | |
Unvested incentive units | $ / shares | $ 1.20 |
Granted | $ / shares | 1.32 |
Vested | $ / shares | 1.54 |
Unvested incentive units | $ / shares | $ 1.24 |
Equity-Based Compensation - S_2
Equity-Based Compensation - Summary of classification of equity-based compensation expense related to incentive units (Details) - USD ($) $ in Thousands | 3 Months Ended | 5 Months Ended | 6 Months Ended |
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Equity-based compensation expense | $ 1,113 | $ 1,700 | $ 2,387 |
Research and development expense | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Equity-based compensation expense | 205 | 338 | |
General and administrative expense | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Equity-based compensation expense | $ 908 | $ 2,049 |
Equity-Based Compensation - Add
Equity-Based Compensation - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 5 Months Ended | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Dec. 31, 2022 | |
Equity-Based Compensation | ||||
Vesting percentage | 25% | |||
Number of incentive units reserved for issuance | 2,267,282 | 0 | 2,267,282 | 2,764,099 |
Total unrecognized compensation expense | $ 12,700 | $ 12,700 | ||
Share based compensation recognition period | 3 years 5 months 1 day | |||
Share based compensation | $ 1,113 | $ 1,700 | $ 2,387 | |
Number of anniversary vesting date | 12 months | |||
Tranche One [Member] | ||||
Equity-Based Compensation | ||||
Vesting period | 4 years | |||
Tranche Two [Member] | ||||
Equity-Based Compensation | ||||
Vesting period | 36 months | |||
LLC Agreement | ||||
Equity-Based Compensation | ||||
Number of incentive units reserved for issuance | 16,537,557 | 16,537,557 | 12,412,473 |
Related Parties (Details)
Related Parties (Details) - USD ($) $ in Thousands | 3 Months Ended | 5 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2023 | Dec. 31, 2022 | ||
Related Parties | ||||||
Research and development | [1] | $ 13,946 | $ 1,448 | $ 5,693 | $ 22,401 | |
General and administrative | [2] | 4,939 | 368 | 428 | 9,142 | |
Related party | Paragon Therapeutics, Inc | ||||||
Related Parties | ||||||
Due to related party | 5,900 | 5,900 | $ 8,000 | |||
Research and development | $ 5,900 | 1,400 | 5,600 | $ 13,400 | ||
General and administrative | $ 200 | $ 300 | ||||
[1] Includes related-party amounts of $5,884 for the three months ended June 30, 2023, $1,378 for the three months ended June 30, 2022, $13,411 for the six months ended June 30, 2023 and $5,604 for the period from February 4, 2022 (inception) to June 30, 2022. Includes related-party amounts of $14 for the three months ended June 30, 2023, $230 for the three months ended June 30, 2022, $33 for the six months ended June 30, 2023 and $290 for the period from February 4, 2022 (inception) to June 30, 2022. |
Net Loss Per Unit - Basic and d
Net Loss Per Unit - Basic and diluted net loss per unit attributable to common unitholders (Details) - USD ($) $ / shares in Units, $ in Thousands | 2 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2023 | |
Numerator: | ||||||
Net Income (Loss) | $ (4,305) | $ (18,885) | $ (12,525) | $ (1,816) | $ (6,121) | $ (31,410) |
Net loss attributable to common unitholders, basic | (18,885) | (1,816) | (6,121) | (31,410) | ||
Net loss attributable to common unitholders, diluted | $ (18,885) | $ (1,816) | $ (6,121) | $ (31,410) | ||
Denominator: | ||||||
Weighted-average common units outstanding, basic | 5,000,000 | 1,250,000 | 1,164,966 | 5,000,000 | ||
Weighted-average common units outstanding, diluted | 5,000,000 | 1,250,000 | 1,164,966 | 5,000,000 | ||
Net loss per unit attributable to common unitholders, basic | $ (3.78) | $ (1.45) | $ (5.25) | $ (6.28) | ||
Net loss per unit attributable to common unitholders, diluted | $ (3.78) | $ (1.45) | $ (5.25) | $ (6.28) |
Net Loss Per Unit - Potential c
Net Loss Per Unit - Potential common units excluded from calculation of diluted net loss per unit attributable to common unitholders (Details) - shares | 3 Months Ended | 5 Months Ended | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2023 | |
Net Loss Per Unit | ||||
Antidilutive units | 79,359,487 | 5,000,000 | 5,000,000 | 79,359,487 |
Series A Preferred Units | ||||
Net Loss Per Unit | ||||
Antidilutive units | 20,000,000 | 5,000,000 | 5,000,000 | 20,000,000 |
Series B Preferred Units | ||||
Net Loss Per Unit | ||||
Antidilutive units | 45,089,212 | 45,089,212 | ||
Vested incentive units | ||||
Net Loss Per Unit | ||||
Antidilutive units | 2,481,543 | 2,481,543 | ||
Unvested incentive units | ||||
Net Loss Per Unit | ||||
Antidilutive units | 11,788,732 | 11,788,732 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2022 | Feb. 28, 2022 | Jun. 30, 2022 | Jun. 30, 2023 | |
Income Taxes | ||||
Income tax expense | $ 0 | $ 0 | $ 0 | $ 0 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 2 Months Ended | 6 Months Ended | ||
Jul. 18, 2023 | Mar. 31, 2022 | Jun. 30, 2023 | Jul. 13, 2023 | |
Subsequent Events | ||||
Net proceeds from IPO | $ 315.4 | |||
Subsequent Events | ||||
Subsequent Events | ||||
Proceeds from IPO | $ 345.1 | |||
Net proceeds from IPO | $ 315.4 | |||
Subsequent Events | IPO | ||||
Subsequent Events | ||||
Shares issued | 20,297,500 | |||
Underwriter option to purchase additional number of shares | 2,647,500 | |||
Share price | $ 17 | |||
Common Units | ||||
Subsequent Events | ||||
Shares issued | 1,250,000 | |||
Apogee Therapeutics, LLC | Common Units | Subsequent Events | ||||
Subsequent Events | ||||
Common stock shares issued | 1,919,500 | |||
Apogee Therapeutics, LLC | Vested incentive units | Subsequent Events | ||||
Subsequent Events | ||||
Common stock shares issued | 690,188 | |||
Apogee Therapeutics, LLC | Unvested incentive units | Subsequent Events | ||||
Subsequent Events | ||||
Common stock shares issued | 2,779,358 | |||
Apogee Therapeutics, LLC | Series A Preferred Units | Subsequent Events | ||||
Subsequent Events | ||||
Nonvoting common stock shares issued | 7,678,000 | |||
Apogee Therapeutics, LLC | Series B Preferred Units | Subsequent Events | ||||
Subsequent Events | ||||
Nonvoting common stock shares issued | 5,808,642 | |||
Common stock shares issued | 11,501,108 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2023 | |
Pay vs Performance Disclosure | ||||||
Net Income (Loss) | $ (4,305) | $ (18,885) | $ (12,525) | $ (1,816) | $ (6,121) | $ (31,410) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2023 | |
Michael Henderson [Member] | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | Chief Executive Officer Employment Agreement On August 25, 2023, we entered into an employment agreement with Michael Henderson, M.D. in connection with Dr. Henderson’s service as the Company’s Chief Executive Officer (the “Dr. Henderson Employment Agreement”). The Dr. Henderson Employment Agreement is at-will and expires on the date Dr. Henderson’s employment with the Company terminates for any reason. Dr. Henderson will receive an annual base salary of $630,000 commencing on the effective date of the Dr. Henderson Employment Agreement (the “Dr. Henderson Base Salary”). Each calendar year, Dr. Henderson will be eligible to receive an annual performance bonus targeted at 55% of the Dr. Henderson Base Salary or such other higher amount as determined in the sole discretion of the Company’s Board of Directors (the “Board”) or a committee of the Board. Dr. Henderson will also be eligible to receive annual equity-based incentive awards as determined by the Board. The Dr. Henderson Employment Agreement provides that Dr. Henderson is eligible to participate in any employee benefits or compensation practices generally available to other executive officers of the Company, as well as any additional benefits provided to Dr. Henderson consistent with past practice. The Dr. Henderson Employment Agreement contains certain severance provisions which provide for the benefits to be received by Dr. Henderson upon termination of employment under specified circumstances. |
Name | Michael Henderson |
Title | Chief Executive Officer |
Jane Pritchett Henderson [Member] | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | Chief Financial Officer Employment Agreement On August 25, 2023, we entered into an employment agreement with Jane Pritchett Henderson in connection with her service as the Company’s Chief Financial Officer (the “Henderson Employment Agreement”) The Henderson Employment Agreement is at-will and provides for a term that expires on the date Ms. Henderson’s employment with the Company terminates for any reason. Ms. Henderson will receive an annual base salary of $500,000 commencing on the effective date of the Henderson Employment Agreement (the “Henderson Base Salary”). Each calendar year, Ms. Henderson will be eligible to receive an annual performance bonus targeted at 45% of the Henderson Base Salary or such other higher amount as determined in the sole discretion of the Board or a committee of the Board. Additionally, Ms. Henderson will be eligible to receive annual equity-based incentive awards as determined by the Board. The Henderson Employment Agreement provides that Ms. Henderson is eligible to participate in any employee benefits or compensation practices generally available to other executive officers of the Company, as well as any additional benefits provided to Ms. Henderson consistent with past practice. The Henderson Employment Agreement contains certain severance provisions which provide for the benefits to be received by Ms. Henderson upon termination of employment under specified circumstances. |
Name | Jane Pritchett Henderson |
Title | Chief Financial Officer |
Carl Dambkowski [Member] | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | Chief Medical Officer Employment Agreement On August 25, 2023, we entered into an employment agreement with Carl Dambkowski, M.D. in connection with his service as the Company’s Chief Medical Officer (the “Dambkowski Employment Agreement” and together with the Dr. Henderson Employment Agreement and the Henderson Employment Agreement, the “Employment Agreements”). The Dambkowski Employment Agreement is at-will and provides for a term that expires on the date Dr. Dambkowski’s employment with the Company terminates for any reason. Dr. Dambkowski will receive an annual base salary of $500,000 commencing on the effective date of the Dambkowski Employment Agreement (the “Dambkowski Base Salary”). Each calendar year, Dr. Dambkowski will be eligible to receive an annual performance bonus targeted at 45% of the Dambkowski Base Salary or such other higher amount as determined in the sole discretion of the Board or a committee of the Board. Additionally, Dr. Dambkowski will be eligible to receive annual equity-based incentive awards as determined by the Board. The Dambkowski Employment Agreement provides that Dr. Dambkowski is eligible to participate in any employee benefits or compensation practices generally available to other executive officers of the Company, as well as any additional benefits provided to Dr. Dambkowski consistent with past practice. The Dambkowski Employment Agreement contains certain severance provisions which provide for the benefits to be received by Dr. Dambkowski upon termination of employment under specified circumstances. The foregoing descriptions of the Employment Agreements are qualified in their entirety by reference to the complete terms and conditions of each of the Employment Agreements, which are attached hereto as Exhibits 10.2, 10.3 and 10.4 and incorporated herein by reference. |
Name | Carl Dambkowski |
Title | Chief Medical Officer |