Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 21, 2024 | Jun. 30, 2023 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Transition Report | false | ||
Entity File Number | 001-38899 | ||
Entity Registrant Name | Milestone Pharmaceuticals Inc. | ||
Entity Incorporation, State or Country Code | A8 | ||
Entity Tax Identification Number | 00-0000000 | ||
Entity Address, Address Line One | 1111 Dr. Frederik-Phillips Boulevard | ||
Entity Address, Address Line Two | Suite 420 | ||
Entity Address, City or Town | Montréal | ||
Entity Address, State or Province | QC | ||
Entity Address, Country | CA | ||
Entity Address, Postal Zip Code | H4M 2X6 | ||
City Area Code | 514 | ||
Local Phone Number | 336-0444 | ||
Title of 12(b) Security | Common Shares | ||
Trading Symbol | MIST | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 95.9 | ||
Entity Common Stock, Shares Outstanding | 53,149,778 | ||
Auditor Firm ID | 271 | ||
Auditor Name | PricewaterhouseCoopers LLP | ||
Auditor Location | Montreal, Canada | ||
Entity Central Index Key | 0001408443 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 13,760 | $ 7,636 |
Short-term investments | 52,243 | 56,949 |
Research and development tax credits receivable | 643 | 331 |
Prepaid expenses | 3,178 | 6,005 |
Other receivables | 3,208 | 882 |
Total current assets | 73,032 | 71,803 |
Operating lease right-of-use assets | 1,917 | 2,423 |
Property and equipment | 277 | 257 |
Total assets | 75,226 | 74,483 |
Current liabilities | ||
Accounts payable and accrued liabilities | 6,680 | 5,644 |
Operating lease liabilities | 546 | 495 |
Total current liabilities | 7,226 | 6,139 |
Operating lease liabilities, net of current portion | 1,457 | 1,996 |
Senior secured convertible notes | 49,772 | |
Total liabilities | 58,455 | 8,135 |
Shareholders' Equity | ||
Common shares, no par value, unlimited shares authorized 33,483,111 shares issued and outstanding as of December 31, 2023, 34,286,002 shares issued and outstanding as of December 31, 2022 | 260,504 | 273,900 |
Pre-funded warrants - 9,577,257 issued and outstanding as of December 31, 2023 and 8,518,257 as of December 31, 2022 | 48,459 | 34,352 |
Additional paid-in capital | 33,834 | 24,437 |
Accumulated deficit | (326,026) | (266,341) |
Total shareholders' equity | 16,771 | 66,348 |
Total liabilities and shareholders' equity | $ 75,226 | $ 74,483 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Consolidated Balance Sheets | ||
Common shares, par value (in dollars per share) | $ 0 | $ 0 |
Common shares, Shares issued (in shares) | 33,483,111 | 34,286,002 |
Common shares, Shares outstanding (in shares) | 33,483,111 | 34,286,002 |
Pre-funded warrants, Warrants issued (in shares) | 9,577,257 | 8,518,257 |
Pre-funded warrants, Warrants outstanding (in shares) | 9,577,257 | 8,518,257 |
Consolidated Statements of Loss
Consolidated Statements of Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Consolidated Statements of Loss | ||
Revenue | $ 1,000 | $ 5,000 |
Operating expenses | ||
Research and development, net of tax credits | 31,052 | 39,829 |
General and administrative | 15,932 | 15,718 |
Commercial | 15,114 | 9,095 |
Loss from operations | (61,098) | (59,642) |
Interest income | 3,967 | 1,254 |
Interest expense | (2,554) | |
Net loss and comprehensive loss | $ (59,685) | $ (58,388) |
Weighted average number of shares and pre-funded warrants outstanding, basic (in shares) | 42,955,779 | 42,450,316 |
Weighted average number of shares and pre-funded warrants outstanding, diluted (in shares) | 42,955,779 | 42,450,316 |
Net loss per share, basic (in dollars per share) | $ (1.39) | $ (1.38) |
Net loss per share, diluted (in dollars per share) | $ (1.39) | $ (1.38) |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Common Shares | Pre-funded warrants | Additional paid-in capital | Accumulated deficit | Total |
Opening balance at Dec. 31, 2021 | $ 251,901 | $ 52,941 | $ 15,711 | $ (207,953) | $ 112,600 |
Beginning Balance (in shares) at Dec. 31, 2021 | 29,897,559 | ||||
Beginning Balance, warrants (in shares) at Dec. 31, 2021 | 12,327,780 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | (58,388) | (58,388) | |||
Exercise of stock options | $ 742 | (322) | 420 | ||
Exercise of stock options (in shares) | 217,684 | ||||
Exercise of prefunded warrants, net of issuance costs | $ 18,627 | $ (18,589) | 38 | ||
Exercise of prefunded warrants, net of issuance costs (in shares) | 3,809,523 | (3,809,523) | |||
Share-based compensation | 9,048 | 9,048 | |||
Issuance of common shares, net of issuance costs | $ 2,630 | 2,630 | |||
Issuance of common shares, net of issuance costs (shares) | 361,236 | ||||
Closing balance at Dec. 31, 2022 | $ 273,900 | $ 34,352 | 24,437 | (266,341) | $ 66,348 |
Ending Balance (in shares) at Dec. 31, 2022 | 34,286,002 | 34,286,002 | |||
Ending Balance, warrants (in shares) at Dec. 31, 2022 | 8,518,257 | 8,518,257 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | (59,685) | $ (59,685) | |||
Exercise of stock options | $ 326 | (137) | 189 | ||
Exercise of stock options (in shares) | 114,103 | ||||
Share-based compensation | 9,534 | 9,534 | |||
Pre-funded warrants - Private Placement, net of issuance costs | $ 14,107 | 14,107 | |||
Pre-funded warrants - Private Placement, net of issuance costs (in shares) | 1,059,000 | ||||
Cancellation of common shares | $ (14,115) | (14,115) | |||
Cancellation of common shares (in shares) | (1,059,000) | ||||
Employee stock purchase plan purchases | $ 393 | 393 | |||
Employee stock purchase plan purchases (in shares) | 142,006 | ||||
Closing balance at Dec. 31, 2023 | $ 260,504 | $ 48,459 | $ 33,834 | $ (326,026) | $ 16,771 |
Ending Balance (in shares) at Dec. 31, 2023 | 33,483,111 | 33,483,111 | |||
Ending Balance, warrants (in shares) at Dec. 31, 2023 | 9,577,257 | 9,577,257 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows used in operating activities | ||
Net loss | $ (59,685) | $ (58,388) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation of property and equipment | 92 | 89 |
Amortization of debt costs | 244 | |
Accretion of investment discount | (162) | (97) |
Non-cash interest expense related to debt | 2,310 | |
Share-based compensation expense | 9,534 | 9,048 |
Loss on disposals of property and equipment | 141 | |
Changes in operating assets and liabilities: | ||
Other receivables | (2,326) | (755) |
Research and development tax credits receivable | (312) | 25 |
Prepaid expenses | 2,827 | (1,706) |
Operating lease assets and liabilities | 18 | 81 |
Accounts payable and accrued liabilities | 1,036 | (907) |
Net cash used in operating activities | (46,424) | (52,469) |
Cash provided by (used in) investing activities | ||
Acquisition of property and equipment | (112) | (272) |
Acquisition of short-term investments | (137,132) | (85,852) |
Redemption of short-term investments | 142,000 | 29,000 |
Net cash used in investing activities | 4,756 | (57,124) |
Cash provided by financing activities | ||
Proceeds from exercise of options | 189 | 420 |
Proceeds from exercise of warrants | 38 | |
Proceeds from issuance of senior secured convertible debt | 50,000 | |
Issuance of common shares, net of issuance costs | 2,630 | |
Pre-funded warrant issuance costs | (8) | |
Proceeds from employee stock purchase plan | 393 | |
Payment of debt issuance costs | (2,782) | |
Cash provided by financing activities | 47,792 | 3,088 |
Net increase (decrease) in cash and cash equivalents | 6,124 | (106,505) |
Cash and cash equivalents - Beginning of year | 7,636 | 114,141 |
Cash and cash equivalents - End of year | $ 13,760 | $ 7,636 |
Organization and Nature of Oper
Organization and Nature of Operations | 12 Months Ended |
Dec. 31, 2023 | |
Organization and Nature of Operations | |
Organization and Nature of Operations | 1 Organization and Nature of Operations Milestone Pharmaceuticals Inc. (Milestone or the Company) is a biopharmaceutical company incorporated under the Business Corporations Act of Québec. Milestone is focused on the development and commercialization of innovative cardiovascular medicines. Milestone’s lead product candidate, etripamil, is a novel, potent short-acting calcium channel blocker that the Company designed and is developing as a rapid-onset nasal spray to be administered by patients. The Company is developing etripamil to treat paroxysmal supraventricular tachycardia, atrial fibrillation, and other cardiovascular indications. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2 Summary of Significant Accounting Policies a) Basis of consolidation The consolidated financial statements include the accounts of the Company and Milestone Pharmaceuticals USA, Inc. All intercompany transactions and balances have been eliminated. b) Basis of Presentation and Use of Accounting Estimates These consolidated financial statements of the Company have been presented in United States dollars (USD) and have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP), including the applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding financial reporting. The preparation of consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and judgments that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the year. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes are reasonable under the circumstances, to determine the carrying values of assets and liabilities that are not readily apparent from other sources. Significant estimates and judgments include, but are not limited to, ● Estimates of the percentage of work completed of the total work over the life of the individual trial in accordance with agreements established with clinical research organizations, or CROs, contract manufacturing organizations, or CMOs, and clinical trial sites which in turn impact the research & development expenses. ● Estimate of the grant date fair value of share options granted to employees, consultants and directors, and the resulting share-based compensation expense, using the Black Scholes option pricing model. Estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require the exercise of judgment. As of the date of issuance of these consolidated financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, assumptions and judgments. These estimates may change as new events occur and additional information is obtained and are recognized in the consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to the Company’s consolidated financial statements. c) Segment Information The Company manages its operations as a single operating segment for the purposes of assessing performance and making operating decisions while focusing on the development and commercialization of innovative cardiovascular medicines. d) Revenue Recognition Collaborative Arrangements The Company considers the nature and contractual terms of arrangements and assesses whether an arrangement involves a joint operating activity pursuant to which the Company is an active participant and is exposed to significant risks and rewards dependent on the commercial success of the activity. If the Company is an active participant and is exposed to significant risks and rewards dependent on the commercial success of the activity, the Company accounts for such an arrangement as a collaborative arrangement under Accounting Standards Codification (ASC) 808, Collaborative Arrangements (ASC 808), which requires that certain transactions between the Company and collaborators be recorded in its consolidated statements of comprehensive loss on either a gross basis or net basis, depending on the characteristics of the collaborative relationship, and requires enhanced disclosure of collaborative relationships. The Company evaluates its collaboration agreements for proper classification in its consolidated statements of comprehensive loss based on the nature of the underlying activity. If payments to and from collaborative partners are not within the scope of other authoritative accounting literature, the consolidated statements of loss classification for the payments is based on a reasonable, rational analogy to authoritative accounting literature that is applied in a consistent manner. If the Company concludes that it has a customer relationship with one of its collaborators, the Company follows the guidance in Accounting Standards Codification (ASC) Topic 606, Revenue From Contracts With Customers (ASC 606). Revenue from Contracts with Customers In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled in exchange for these goods and services. To achieve this core principle, the Company applies the following five steps: 1) identify the customer contract; 2) identify the contract’s performance obligations; 3) determine the transaction price; 4) allocate the transaction price to the performance obligations; and 5) recognize revenue when or as a performance obligation is satisfied. The Company evaluates all promised goods and services within a customer contract and determines which of such goods and services are separate performance obligations. This evaluation includes an assessment of whether the good or service is capable of being distinct and whether the good or service is separable from other promises in the contract. In assessing whether promised goods or services in licensing arrangements are distinct, the Company considers factors such as the stage of development of the underlying intellectual property and the capabilities of the customer to develop the intellectual property on their own or whether the required expertise is readily available. Licensing arrangements are analyzed to determine whether the promised goods or services, which often include licenses, research and development services and governance committee services, are distinct or whether they must be accounted for as part of a combined performance obligation. If the license is considered not to be distinct, the license would then be combined with other promised goods or services as a combined performance obligation. If the Company is involved in a governance committee, it assesses whether its involvement constitutes a separate performance obligation. When governance committee services are determined to be separate performance obligations, the Company determines the fair value to be allocated to this promised service. Certain contracts contain optional and additional items, which are considered marketing offers and are accounted for as separate contracts with the customer if such option is elected by the customer, unless the option provides a material right which would not be provided without entering into the contract. An option that is considered a material right is accounted for as a separate performance obligation. The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods and services to the customer. A contract may contain variable consideration, including potential payments for both milestone and research and development services. For certain potential milestone payments, the Company estimates the amount of variable consideration by using the most likely amount method. In making this assessment, the Company evaluates factors such as the clinical, regulatory, commercial and other risks that must be overcome to achieve the milestone. Each reporting period the Company re-evaluates the probability of achievement of such variable consideration and any related constraints. Milestone will include variable consideration, without constraint, in the transaction price to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price among the performance obligations on a relative standalone selling price basis unless a portion of the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct good or service that forms part of a single performance obligation. The Company allocates the transaction price based on the estimated standalone selling price of the underlying performance obligations or in the case of certain variable consideration to one or more performance obligations. The Company must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. The Company utilizes key assumptions to determine the stand-alone selling price, which may include other comparable transactions, pricing considered in negotiating the transaction and the estimated costs to complete the respective performance obligation. Certain variable consideration is allocated specifically to one or more performance obligations in a contract when the terms of the variable consideration relate to the satisfaction of the performance obligation and the resulting amounts allocated to each performance obligation are consistent with the amount the Company would expect to receive for each performance obligation. When a performance obligation is satisfied, revenue is recognized for the amount of the transaction price, excluding estimates of variable consideration that are constrained, that is allocated to that performance obligation on a relative standalone selling price basis. Significant management judgment is required in determining the level of effort required under an arrangement and the period over which the Company is expected to complete its performance obligations under an arrangement. For performance obligations consisting of licenses and other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non- refundable, up-front fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company will recognize revenue from non-refundable, up-front fees allocated to the license at the point in time when the license is transferred to the customer and the customer is able to use and benefit from the license. e) Cash and Cash Equivalents Cash and cash equivalents consist of cash and highly liquid investments that are readily convertible into cash with original maturities of 90 days or less at acquisition date. f) Short-Term Investments Short-term investments are classified as held-to-maturity, are initially recognized at fair value and are subsequently accounted for at amortized cost. They are comprised of guaranteed investment certificates with a maturity greater than 90 days but less than one year and, as such, are classified as current assets. g) Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents and investment securities classified as held-to-maturity. The Company maintains deposits at major financial institutions. Additionally, the Company has adopted an investment policy that includes guidelines relative to credit quality, diversification of maturities and liquidity. h) Currency Risk The Company is exposed to currency risk due to financial instruments denominated in foreign currencies. The Company is exposed to the Canadian dollar currency risk and does not enter into arrangements to hedge its currency risk exposure. i) Property and Equipment Property and equipment is stated at historical cost less accumulated amortization. Expenditures for maintenance and repairs are recorded to expense as incurred. The Company reviews its property and equipment whenever events or changes in circumstances indicate that the carrying value of certain assets might not be recoverable and recognizes an impairment loss when it is probable that an asset’s realizable value is less than the carrying value. To date, no such impairment losses have been recorded. Amortization is calculated using the straight-line method over the following estimated useful lives of the assets: Computer hardware and software 3 years Office equipment 5 years Furniture and fixtures 5 years Leasehold improvements over the lease term j) Leases At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present in the arrangement. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets and short-term and long-term lease liabilities, as applicable. The Company does not have financing leases. Operating lease liabilities and their corresponding right-of-use assets are initially recorded based on the present value of lease payments over the expected remaining lease term. Right-out-use assets are subsequently accounted for as long-lived assets, including evaluating for indicators of impairment. Certain adjustments to the right-of-use asset may be required for items such as incentives received. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rate to discount lease payments, which reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment. Prospectively, the Company will adjust the right-of-use assets for straight-line rent expense or any incentives received and remeasure the lease liability at the net present value using the same incremental borrowing rate that was in effect as of the lease commencement or transition date. The Company has elected not to recognize leases with an original term of one year or less on the balance sheet. The Company typically only includes an initial lease term in its assessment of a lease arrangement. Options to renew a lease are not included in the Company’s assessment unless there is reasonable certainty that the Company will renew. k) Pre-funded Warrants Pre-funded warrants allow the holder to pay little or no consideration to receive the shares upon exercise of the warrant. The pre-funded warrants do not meet the definition of a derivative under ASC 815 because their fair value at issuance is equal to the fair value of the shares underlying the warrant. As such, they have the characteristics of a prepaid forward sale of equity. As a result, the pre-funded warrants are accounted for as equity instruments. l) Share Issuance Costs Share issuance costs applicable to the issuance of equity instruments are recorded as a reduction of the financing equity proceeds. m) Research and Development and Investment Tax Credits Research and development costs are charged to expense as costs are incurred in performing research and development activities. The Company’s research and development costs consist primarily of salaries and fees paid to contract research organizations (CROs) and to contract manufacturing organizations (CMOs). Clinical trial expenses include direct costs associated with CROs, direct CMO costs for the formulation and packaging of clinical trial material, as well as investigator and patient related costs at sites at which the Company’s trials are being conducted. Direct costs associated with the Company’s CROs and CMOs are generally payable on a time and materials basis, or when milestones are achieved. The invoicing from clinical trial sites can lag several months. The Company records expenses for its clinical trial activities performed by third parties based upon estimates of the percentage of work completed of the total work over the life of the individual study in accordance with agreements established with CROs and clinical trial sites. The Company determines the estimates through discussions with internal clinical personnel, CROs and CMOs as to the progress or stage of completion of trials or services and the agreed upon fee to be paid for such services based on facts and circumstances known to the Company as of each consolidated balance sheet date. The actual costs and timing of clinical trials are highly uncertain, subject to risks and may change depending upon a number of factors, including the Company’s clinical development plan. If the actual timing of the performance of services of the level of effort varies from the estimate, the Company will adjust the accrual accordingly. The Company recognizes the benefit of Canadian research and development tax credits as a reduction of research and development costs for fully refundable investment tax credits and as a reduction of income taxes for investment tax credits that can only be claimed against income taxes payable when there is reasonable assurance that the claim will be recovered. n) Income Taxes The provision for income taxes is computed using the liability method. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is recorded to reduce the carrying amount of deferred income tax assets until when it is more likely than not that these assets will be realized. Tax benefits related to tax positions not deemed to meet the “more-likely-than-not” threshold are not permitted to be recognized in the consolidated financial statements. o) Foreign Currency Translation and Transactions The functional currency of the Company is the US dollar. Accordingly, transactions denominated in currencies other than the functional currency are measured and recorded in the functional currency at the exchange rate in effect on the date of the transactions. At each consolidated balance sheet date, monetary assets and liabilities denominated in currencies other than the functional currency are remeasured using the exchange rate in effect at that date. Non-monetary assets and liabilities and revenue and expense items denominated in foreign currencies are translated into the functional currency using the exchange rate prevailing at the dates of the respective transactions. Any gains or losses arising on remeasurement are included in the consolidated statement of loss. p) Share Based Compensation The Company has a share based compensation plan which is described in detail in note 8 and records all share-based payments, including grants of employee share options, at their fair values. The fair value of share options granted to employees and non-employees is estimated at the date of grant using the Black-Scholes option pricing model. The Company recognizes share based compensation expense over the requisite service period of the individual grants, which equals the vesting period, using the straight-line method. Forfeitures, if any, are recorded as they occur. Any consideration paid by employees on exercising share options and the corresponding portion previously credited to contributed surplus are credited to share capital. The Black-Scholes option pricing model used by the Company to calculate option values was developed to estimate fair value. The Company approved an employee share purchase plan in April 2019, which became effective on May 8, 2019 and is described in note 9. The plan provides a means by which eligible employees of the Company may be given an opportunity to purchase common shares. The plan permits the Company to grant a series of purchase rights to eligible employees under an employee stock purchase plan. q) Recently Adopted Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires public entities to disclose information about their reportable segments’ significant expenses on an interim and annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is evaluating the effect of adopting this new accounting guidance on its financial statements, but does not intend to early adopt. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). The amendments in this update require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income [or loss] by the applicable statutory income tax rate). The amendments also require entities on an annual basis to disclose disaggregated amounts of income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is evaluating the effect of adopting this new accounting guidance on its financial statements, but does not intend to early adopt. r) Significant Risks and Uncertainties The Company is subject to challenges and risks specific to its business and its ability to execute on its strategy, as well as risks and uncertainties common to companies in the pharmaceutical industry, including, without limitation, risks and uncertainties associated with: obtaining regulatory approval of its product candidate; delays or problems in the supply of its study drug or failure to comply with manufacturing regulations; identifying, acquiring or in-licensing product candidates; pharmaceutical product development and the inherent uncertainty of clinical success; and the challenges of protecting and enhancing its intellectual property rights; and complying with applicable regulatory requirements. Further, the Company may be impacted by general economic, political, and market conditions, including deteriorating market conditions due to investor concerns regarding inflation, armed conflicts, and overall fluctuations in the financial markets in the U.S. and abroad. s) Sources of Liquidity and Funding Requirements The Company has incurred operating losses and experienced negative operating cash flows since its inception and anticipates to continue to incur losses for at least the next several years. As of December 31, 2023, the Company had cash and cash equivalents and short-term investments of $66.0 million and an accumulated deficit of $326.0 million. Management has evaluated the Company’s operating plan against its existing cash and cash equivalents and determined that the Company expects to be able to support its operations for at least the next 12 months from the date of issuance of these consolidated financial statements. The Company has historically financed its operations primarily through the sale of equity securities, convertible notes and, to a lesser extent from cash received pursuant to its license agreement. To date, the Company has not generated any revenue from product sales. Management expects operating losses and negative cash flows from operations to continue for the foreseeable future. The Company currently plans to raise additional funding as required based on the status of its clinical trials, progress of New Drug Application, or NDA, filing, and projected cash flows. There can be no assurance that, in the event the Company requires additional financing, such financing will be available at terms acceptable to the Company, if at all. Failure to generate sufficient cash flows from operations, raise additional capital and reduce discretionary spending should additional capital not become available could have a material adverse effect on the Company’s ability to achieve its business objectives. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2023 | |
Revenue | |
Revenue | 3 Revenue The Company recorded revenue of $1.0 million for the year ended December 31, 2023. This revenue was the result of having reached a milestone pursuant to our License and Collaboration Agreement, dated May 15, 2021, with Ji Xing Pharmaceuticals Limited (such party “Ji Xing” and , such agreement, the “Ji Xing License Agreement”) due upon the successful initiation of a Phase 1 Clinical Trial of a pharmaceutical product that uses a device to deliver etripamil by nasal spray by or on behalf of Ji Xing for the treatment of PSVT in the People’s Republic of China (the “Territory”), including mainland China, Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan. The Company recorded revenue of $5.0 million for the year ended December 31, 2022. This revenue was related to two milestones reached as a result of the first patient dosed in a Phase 3 Clinical Trial for the treatment of PSVT in the Territory pursuant to the Ji Xing License Agreement and the successful completion of a Phase 3 clinical trial for the treatment of PSVT in the United States. Strategic Partnerships Ji Xing On May 15, 2021, the Company entered into the License Agreement with Ji Xing, which is an entity affiliated with RTW Investments, LP, or RTW, a beneficial owner of approximately 9.7% of the Company’s common shares, as of December 31, 2023. Under the License Agreement, the Company granted Ji Xing exclusive development and commercialization rights to any pharmaceutical product that uses a device to deliver the Company’s proprietary calcium channel blocker known as etripamil by nasal spray for all prophylactic and therapeutic uses in humans in the Territory. Ji Xing will be responsible for development and regulatory activities in the Territory, and the Company will remain responsible for certain manufacturing activities in the Territory, subject to the supply agreement subsequently entered into by the Company and Ji Xing as contemplated by the License Agreement (the Supply Agreement). The Company received a non-refundable upfront cash payment of $15 million and the right to future payments of up to $107.5 million in total development and sales milestone payments. In addition, the Company is entitled to receive tiered royalty payments ranging from a percentage in the low double digits to the high double digits of Net Sales (as defined in the License Agreement) of all products sold in the Territory. Management evaluated all of the promised goods or services within the contract and determined that such goods and services were separate performance obligations. The Company determined that the license granted was a separate performance obligation as Ji Xing can benefit from the license granted on its own after the transfer of the license, as it does not require any significant development, regulatory or commercialization activities from Milestone. Ji Xing is responsible for all development, regulatory and commercialization activities in the Territory, including the performance of clinical trials necessary for regulatory approval, and is responsible for all such related costs. Supply of the product can be provided by another entity, as the Company currently uses a CMO for the production of etripamil without subsequent significant modification or customization by the Company, therefore the Company determined the obligation to supply product is a separate and distinct obligation. The Company concluded that the obligation for participation on the various governance committees was distinct as the services could be performed by an outside party, however it was determined to be immaterial after estimating the stand-alone cost compared to the License Agreement as a whole. As a result, the Company concluded there were two material and distinct performance obligations to account for under ASC 606 at the inception of the License Agreement. |
Short-term Investments
Short-term Investments | 12 Months Ended |
Dec. 31, 2023 | |
Short-term Investments | |
Short-term Investments | 4 Short-term Investments As of December 31, 2023, short-term investments of $52.2 million were comprised of term deposits issued in US currency, earning interest between 5.53% and 5.95%, maturing between January 16, 2024 and June 19, 2024. These short-term investments were in scope of ASC 320, Investments-Debt Securities 90 days but less than one year, and they were classified as held to maturity, recorded as current assets and were accounted for at amortized cost. Interest income earned on short-term investments is reported in interest income. The Company had short-term investments of $56.9 million as of December 31, 2022. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
Leases | 5 Leases On May 20, 2022, the Company entered into a new lease arrangement for a 62-month 62-month On July 1, 2020, the Company entered into an arrangement for the lease renewal for its headquarters located in Ville Saint-Laurent, Quebec. The 5-year The Company's operating office leases right-of-use assets as at December 31 were as follows: 2023 2022 Opening balance $ 2,423 $ 711 New operating lease right-of-use asset — 2,103 Amortization of right-of-use asset (506) (391) Closing balance $ 1,917 $ 2,423 Operating lease expenses of $681 and $490 are included in general and administrative operating expenses in the consolidated statement of loss, and within operating activities in the statement of cash flows for the years ended December 31, 2023 and 2022, respectively and are comprised of two operating lease right-of-use assets and one operating lease of less than 12 months. The following table summarizes the future minimum lease payments of right-of-use assets operating leases as at December 31, 2023: January 1, 2024 to December 31, 2024 673 January 1, 2025 to December 31, 2025 670 January 1, 2026 to December 31, 2026 530 January 1, 2027 to September 30, 2027 406 2,279 Less interest (276) $ 2,003 |
Property and equipment
Property and equipment | 12 Months Ended |
Dec. 31, 2023 | |
Property and equipment | |
Property and equipment | 6 Property and equipment Property and equipment consist of the following at December 31: 2023 2022 Computer hardware and software $ 226 $ 120 Office equipment 157 155 Leasehold improvements 85 102 Total $ 468 $ 377 Less accumulated depreciation (191) (120) Property and equipment, net $ 277 $ 257 No disposal was recorded for the year ended December 31, 2023. During the year ended December 31, 2022, the Company recorded a disposal of $348, which resulted in a loss of $141. For the years ended December 31, 2023 and 2022, depreciation expense was $92 and $89, respectively. |
Accounts payable and accrued li
Accounts payable and accrued liabilities | 12 Months Ended |
Dec. 31, 2023 | |
Accounts payable and accrued liabilities | |
Accounts payable and accrued liabilities | 7 Accounts payable and accrued liabilities Accounts payable and accrued liabilities comprised the following as of December 31: 2023 2022 Trade accounts payable $ 3,981 $ 2,263 Accrued compensation and benefits payable 712 2,573 Accrued research and development liabilities 894 404 Accrued commercial liabilities 710 149 Other accrued liabilities 383 255 Total $ 6,680 $ 5,644 |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2023 | |
Shareholders' Equity | |
Shareholders' Equity | 8 Shareholders’ Equity Authorized Share Capital The Company has authorized and issued common shares, voting and participating, without par value, of which unlimited shares were authorized and 33,483,111 shares were issued and outstanding As of December 31, 2023, there were 1,463,936 common shares available for issuance under the Employee Stock Purchase Plan, or the “ESPP”. The Company has issued 142,006 shares of common stock pursuant to the ESPP as of December 31, 2023. In August 2022, the Company issued and sold 361,236 common shares under the Open Market Sale Agreement SM Shelf Registration On November 12, 2021, the Company entered into an agreement and the Company may sell any combination of the securities described in this prospectus in one or more offerings up to a total aggregate offering price of $250,000,000. Pre-funded Warrants – Exchange Agreement On March 22, 2023, the Company entered into an exchange agreement, or the “Exchange Agreement”, with entities affiliated with RTW, or the “Exchanging Stockholders”, pursuant to which the Company exchanged an aggregate of 1,059,000 shares of the Company’s common shares owned by the Exchanging Stockholders for pre-funded warrants, or the Exchange Warrants, to purchase an aggregate of 1,059,000 common shares, with an exercise price of $0.001 per share and no expiration date. The Exchange Warrants are exercisable immediately and no additional cash consideration was rendered in exchange for the warrants. A holder of the Exchange Warrants (together with its affiliates and other attribution parties) may not exercise any portion of an Exchange Warrant to the extent that immediately prior to or after giving effect to such exercise the holder, together with its affiliates, would beneficially own more than 9.99% of the Company’s outstanding common shares immediately after exercise, which percentage may be increased or decreased to any other percentage specified not in excess of 9.99% at the holder's election upon 61 days ' notice to the Company subject to the terms of the Exchange Warrants. Open Market Sale Agreement On July 29, 2020, the Company entered into an Open Market Sale Agreement℠ with respect to an at-the-market offering program (ATM Program) under which the Company may issue and sell its common shares having an aggregate offering price of up to $50 million. The Company has sold 361,236 shares under the ATM program as of the date of this filing. |
Share Based Compensation
Share Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share Based Compensation | |
Share Based Compensation | 9 Share Based Compensation Under the Company’s 2019 Equity Incentive Plan (the 2019 Plan) and the Company’s Stock Option Plan (the 2011 Plan), unless otherwise decided by the Board of Directors, options vest and are exercisable as follows: 25% vest one thirty-sixth th remaining anniversary On November 10, 2021, the Company established a 2021 Inducement Plan under Nasdaq Marketplace Rules through the granting of awards. This 2021 Inducement Plan is intended to help the Company provide an inducement material for certain individuals to enter into employment with the Company, incentives for such persons to exert maximum efforts for the success of the Company and provide a means by which employees may benefit from increases in value of the common shares. As of December 31, 2023, there were 1,000,000 shares available for issuance under the 2021 Inducement Plan, of which 375,000 shares were available for future grants. On January 1, 2023 and on January 1, 2022, the number of the Company’s common shares reserved for issuance under the 2019 Plan increased by 1,371,440 and 1,195,902 common shares, respectively. Further, on July 5, 2022, the number of the Company’s common shares reserved for issuance under the 2019 Plan increased by 1,000,000 common shares. In addition, 125,323 options have been forfeited under the 2011 Plan since the adoption of the 2019 Plan and have become available for issuance under the 2019 Plan. As of December 31, 2023, 561,000 of previously issued options had been cancelled under the 2019 Plan and were available for future grants. As of December 31, 2023, there were 8,182,946 common shares available for issuance under the 2019 Plan, of which 1,704,960 common shares were available for future grants. On July 15, 2022, the Company offered an Employee Share Purchase Plan, or ESPP, in which participation is available to substantially all of our employees in the United States and Canada who meet certain service eligibility requirements. As of December 31, 2023, the Company has 1,463,936 common shares available under the ESPP. As of December 31, 2023, the Company has issued 142,006 shares of common stock pursuant to the ESPP. The total outstanding and exercisable options from the 2011 Plan, 2019 Plan and Inducement Plan as of December 31 were as follows: 2023 Weighted Number average of shares exercise 2019 Plan Inducement Plan 2011 Plan Total price Outstanding at beginning of year - 2011 Plan — — 1,802,672 1,802,672 $ 2.05 Outstanding at beginning of year - 2019 Plan 5,314,312 — — 5,314,312 8.35 Outstanding at beginning of year - Inducement Plan — 503,000 — 503,000 6.41 Granted - 2019 Plan 1,875,400 — — 1,875,400 3.61 Granted - Inducement Plan — 122,000 — 122,000 2.98 Exercised - 2019 Plan (7,000) — — (7,000) 3.74 Exercised - 2011 Plan — — (107,103) (107,103) 1.52 Forfeited - 2019 Plan (156,198) — — (156,198) 6.13 Expired - 2019 Plan (58,617) — — (58,617) 11.52 Expired - 2011 Plan — — (1,336) (1,336) 0.91 Cancelled - 2019 Plan (561,000) — — (561,000) 21.73 Outstanding at end of period 6,406,897 625,000 1,694,233 8,726,130 $ 5.09 Outstanding at end of period - Weighted average exercise price $ 5.82 $ 5.74 $ 2.09 Exercisable at end of period 3,228,422 221,833 1,694,233 5,144,488 $ 5.32 Exercisable at end of period - Weighted average exercise price $ 6.93 $ 6.42 $ 2.09 2022 Weighted Number average of shares exercise 2019 Plan Inducement Plan 2011 Plan Total price Outstanding at beginning of year - 2011 Plan — — 1,995,971 1,995,971 $ 2.07 Outstanding at beginning of year - 2019 Plan 3,749,834 — — 3,749,834 9.52 Granted - 2019 Plan 1,790,700 — — 1,790,700 5.76 Granted - Inducement Plan — 523,000 523,000 6.37 Exercised - 2019 Plan (45,089) — — (45,089) 3.83 Exercised - 2011 Plan — — (172,595) (172,595) 1.43 Forfeited - Inducement Plan — (20,000) — (20,000) 5.48 Forfeited - 2019 Plan (181,133) — — (181,133) 8.00 Forfeited - 2011 Plan — — (19,583) (19,583) 9.35 Expired - 2011 Plan — — (1,121) (1,121) 0.96 Outstanding at end of period 5,314,312 503,000 1,802,672 7,619,984 $ 6.73 Outstanding at end of period - Weighted average exercise price $ 8.35 $ 6.41 $ 2.05 Exercisable at end of period 2,390,549 — 1,800,546 4,191,095 $ 6.52 Exercisable at end of period - Weighted average exercise price $ 9.90 — $ 2.04 The weighted average remaining contractual life was 6.55 and 7.47 years for outstanding options as of December 31, 2023 and 2022, respectively. The weighted average remaining contractual life was 5.93 and 6.37 years for vested options, as of December 31, 2023 and 2022, respectively. There was $11.4 million and $15.7 million total unrecognized compensation cost related to non-vested share options as of December 31, 2023 and 2022, respectively. The share options are expected to be recognized over a remaining weighted average vesting period of 2.27 years and 2.36 years as of December 31, 2023 and 2022, respectively. For the year ending December 31, 2023, there were 561,000 shares cancelled under the 2019 plan, which resulted in additional share-based compensation expense of $0.6 million. Options granted are valued using the Black-Scholes option pricing model. Amortization of the fair value of the options over vesting years has been expensed and credited to additional paid-in capital in shareholders’ equity. The non-vested options as of December 31 were as follows: 2023 Number Weighted of options average 2019 Plan Inducement Plan 2011 Plan Total fair value Non-vested share options at beginning of year - 2011 Plan — — 2,126 2,126 $ 6.64 Non-vested share options at beginning of year - 2019 Plan 2,923,763 — — 2,923,763 5.30 Non-vested share options at beginning of year - Inducement Plan — 503,000 — 503,000 4.84 Granted - 2019 Plan 1,875,400 — — 1,875,400 2.87 Granted - Inducement Plan — 122,000 — 122,000 2.30 Vested, outstanding 2011 Plan — — (2,126) (2,126) 6.64 Vested, outstanding 2019 Plan (1,504,329) — — (1,504,329) 5.88 Vested, outstanding Inducement Plan — (221,833) — (221,833) 4.85 Forfeited - 2019 Plan (116,359) — — (116,359) 3.96 Non-vested share options at end of period 3,178,475 403,167 — 3,581,642 $ 3.69 Non-vested share options at end of period - Weighted average fair value $ 3.64 $ 4.07 $ — 2022 Number Weighted of options average 2019 Plan Inducement Plan 2011 Plan Total fair value Non-vested share options at beginning of year - 2011 Plan — — 200,639 200,639 $ 1.86 Non-vested share options at beginning of year - 2019 Plan 2,655,518 — — 2,655,518 6.40 Granted - 2019 Plan 1,790,700 — — 1,790,700 4.37 Granted - Inducement Plan — 523,000 — 523,000 4.81 Vested, outstanding 2011 Plan — — (198,317) (198,317) 1.81 Forfeited - 2011 Plan — — (196) (196) 1.91 Forfeited - Inducement Plan — (20,000) — (20,000) 4.18 Forfeited - 2019 Plan (145,664) — — (145,664) 5.49 Vested, outstanding 2019 Plan (1,376,791) — — (1,376,791) 6.19 Non-vested share options at end of period 2,923,763 503,000 2,126 3,428,889 $ 5.24 Non-vested share options at end of period - Weighted average fair value $ 5.30 $ 4.84 $ 6.64 The following table summarizes information with respect to share options outstanding as of December 31, 2023: Options outstanding Options exercisable Weighted Weighted average Weighted average Weighted remaining average remaining average Number contractual exercise Number contractual exercise Exercise price of options life (years) price of options life (years) price $0.84-$1.73 949,136 3.11 $ 1.43 949,136 3.11 $ 1.43 $1.74-$3.2 915,192 4.77 $ 2.69 709,192 4.76 $ 2.59 $3.21-$5.25 2,351,850 7.62 $ 3.67 688,000 6.63 $ 3.76 $5.26-$6.36 3,473,464 7.37 $ 5.90 2,133,496 7.34 $ 5.96 $6.37-$8.5 667,833 6.43 $ 6.85 316,521 6.58 $ 6.84 $8.51-$15.5 57,905 6.27 $ 9.08 42,780 5.42 $ 9.27 $15.51-$20.5 65,100 5.84 $ 17.21 64,829 5.84 $ 17.21 $20.51-$22.45 245,650 5.21 $ 21.48 240,534 5.21 $ 21.48 Total 8,726,130 6.55 $ 5.09 5,144,488 5.93 $ 5.32 The fair value of options is measured using Black-Scholes valuation model. This model also requires assumptions, including expected option life, volatility, risk-free interest rate and dividend yield, which greatly affect the calculated values: Year ended December 31, 2023 2022 Exercise price $ 3.58 $ 5.90 Share price $ 3.58 $ 5.90 Volatility 97 % 92 % Risk-free interest rate 3.97 % 2.43 % Expected life 6.01 years 6.03 years Dividend 0 % 0 % Expected volatility is determined using comparable companies for which the information is publicly available. The risk-free interest rate is determined based on the U.S. sovereign rates benchmark in effect at the time of grant with a remaining term equal to the expected life of the option. Expected option life is determined based on the simplified method as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The simplified method is an average of the contractual term of the options and its ordinary vesting period. Dividend yield is based on the share option’s exercise price and expected annual dividend rate at the time of grant. The Company recognized share-based compensation expense as follows for the years ended December 31: 2023 2022 Administration $ 4,849 $ 4,229 Research and development 3,281 3,483 Commercial activities 1,404 1,336 Total $ 9,534 $ 9,048 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2023 | |
Debt | |
Debt | 10 Debt On March 27, 2023, we entered into a note purchase agreement, or the “Note Purchase Agreement”, with RTW Investments LP and certain of its affiliates, or collectively, RTW On March 29, 2023, we closed the transactions contemplated by the Note Purchase Agreement, and issued and sold $50.0 million principal amount of 6.0% Convertible Senior Notes due 2029, or the “2029 Convertible Notes”, to the holders. The 2029 Convertible Notes are senior secured obligations and are guaranteed on a senior secured basis by our wholly owned subsidiary, Milestone Pharmaceuticals USA, Inc. Interest at the annual rate of 6.0% is payable quarterly in cash or, at our option, payable in kind for the first three years. The maturity date for the 2029 Convertible Notes is March 31, 2029, the “Maturity Date”. The obligations under the 2029 Convertible Notes are secured by substantially all of our and our subsidiary guarantor’s assets. Each $1,000 of principal of the 2029 Convertible Notes (including any interest added thereto as payment in kind) is convertible into 191.0548 shares of our common shares, equivalent to an initial conversion price of approximately $5.23 per share, subject to customary anti-dilution and other adjustments. In addition, following a notice of redemption or certain corporate events that occur prior to the Maturity Date, we will, in certain circumstances, increase the conversion rate for a holder who elects to convert its 2029 Convertible Notes in connection with such notice of redemption or corporate event. On or after March 27, 2027, the 2029 Convertible Notes are redeemable by us, subject to certain conditions, if the closing sale price of the common shares exceeds 150% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption, at a redemption price equal to 100% of the principal amount of the 2029 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. In accounting for the issuance of the Convertible Notes, the Company determined there were no embedded features, which require bifurcation between debt and equity components. As a result, the Convertible Notes are accounted for as a liability. As of December 31, 2023, the estimated fair value of the Convertible Notes was approximately $44.3 million based on level 2 inputs. The net carrying amount of the Convertible Note were as follows: As of December 31, 2023 2022 Original principal $ 50,000 $ — Paid in kind (PIK) interest 2,310 — Unamortized debt discount (547) — Unamortized debt issuance costs (1,991) — Total $ 49,772 $ — The following table presents the total amount of interest cost recognized relating to the 2029 Convertible Notes: Year ended December 31, 2023 2022 Contractual interest expense $ 2,310 $ — Amortization of debt discount 53 — Amortization of debt issuance costs 191 — Total interest expense $ 2,554 $ — |
Net loss per share
Net loss per share | 12 Months Ended |
Dec. 31, 2023 | |
Net loss per share | |
Net loss per share | 11 Net loss per share Basic and diluted net loss per common share is determined by dividing net loss applicable to common shareholders by the weighted average number of common shares and pre-funded warrants outstanding during the period. In addition to the conversion feature on the 2029 Convertible Notes described above, which the Company reviewed and concluded that if-converted would be anti-dilutive due to the facts surrounding the feature, the following potentially dilutive securities have also been excluded from the computation of diluted weighted average shares outstanding as of December 31, as they would be anti-dilutive: 2023 2022 Share options 8,726,130 7,619,984 Amounts in the table above reflect the common share equivalents of the noted instruments. |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income taxes | |
Income taxes | 12 Income taxes A reconciliation between tax expense and the product of accounting income multiplied by the basic income tax rate for the years ended December 31, 2023 and 2022 is as follows: 2023 2022 Loss before income taxes $ (59,685) $ (58,388) Basic income tax rate 26.50 % 26.50 % Computed income tax recovery (15,817) (15,473) Effect on income tax rate resulting from Accounting charges not deductible for tax purposes 4 13 Non‑deductible share‑based compensation 4,663 2,704 Share issue costs — 32 Accretion of investments — (26) Tax benefits of current period losses and other tax assets 10,945 12,387 Valuation allowance for prior year adjustment — 112 Other 205 251 Income tax expense (recovery) reported in the consolidated statements of loss $ — $ — The Company has incurred Canadian federal and provincial net operating losses (NOLs) from inception. As of December 31, 2023, the Company has NOL carry-forwards of approximately $206.5 million and $203.4 million, respectively, for Canadian federal and Québec purposes, available to reduce future taxable income, which expire beginning in 2026 through 2043. The Company also has scientific research and experimental development expenditures of approximately $26.5 million and $31.8 million, respectively, for Canadian federal and Québec income tax purposes, which have not been deducted. These expenditures are available to reduce future taxable income and have an unlimited carry-forward period. Research and development tax credits and expenditures are subject to verification by the tax authorities, and, accordingly, these amounts may vary. The Company has incurred NOLs for U.S. tax purposes. As of December 31, 2023, the Company has carry-forwards of approximately $54.0 million related to U.S. NOLs that may be carried forward indefinitely and are available to reduce future taxable income. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The net deferred tax assets have not been recognized in these financial statements because the criteria for recognition of these assets were not met. The Company’s deferred tax assets consist of the following for the years ended December 31, 2023 and 2022: 2023 2022 Net operating loss carry‑forwards $ 66,656 $ 57,952 Tax basis of property and equipment in excess of carrying values 67 97 Tax basis of right of use assets (421) — Tax basis of lease liability 438 — Tax basis of reserves 6 — Federal SR&ED investment tax credits 3,735 545 Taxation of federal SR&ED investment tax credits (990) (82) Research and development expenditures 7,643 6,323 Financing costs 186 1,008 Stock based compensation 2,850 — Change in tax rates — 51 Others 45 15 Total Net deferred tax assets 80,215 65,909 Less Valuation allowance (80,215) (65,909) Net deferred tax assets $ — $ — The Company files income tax returns in Canada and in the United States. The Company is subject to Canada Revenue Agency and Revenu Québec examination for fiscal years 2018 to 2023 due to unexpired statute of limitation periods and is subject to US Federal and state income tax examination for fiscal years 2020 to 2023. |
Government assistance
Government assistance | 12 Months Ended |
Dec. 31, 2023 | |
Government assistance | |
Government assistance | 13 Government assistance The Company incurs research and development expenditures that are eligible for investment tax credits. The investment tax credits recorded are based on management’s estimates of amounts expected to be recovered and are subject to audit by the taxation authorities. These amounts have been recorded as a reduction of research and development expenditures the years ended December 31, 2023 and 2022 for an amount of $312 and $456 , respectively. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2023 | |
Commitments | |
Commitments | 14 Commitments In the normal course of business, the Company enters into contracts with clinical research organizations, drug manufacturers and other vendors for preclinical and clinical research studies, research and development supplies and other services and products for operating purposes. These contracts generally provide for termination on notice, and therefore are cancellable contracts. Therefore, as at December 31, 2023 there are no contractual commitments, except for office leases (see note 5). |
Currency risk
Currency risk | 12 Months Ended |
Dec. 31, 2023 | |
Currency risk | |
Currency risk | 15 Currency risk The Company is exposed to the financial risk related to the fluctuation of foreign exchange rates and the degree of volatility of those rates. The foreign currency risk is limited to the portion of the Company’s business transactions denominated in currency other than US dollars. The following table provides an indication of the Company’s exposure to the Canadian dollar, which is expressed in US dollars as of December 31: 2023 2022 Cash $ 2,441 $ 262 Other receivables 263 262 Operating lease assets 311 462 Accounts payable and accrued liabilities (52) (484) Operating lease liabilities (306) (444) Net financial position exposure $ 2,657 $ 58 The Company does not enter into arrangements to hedge its currency risk exposure. |
Fair value of financial instrum
Fair value of financial instruments | 12 Months Ended |
Dec. 31, 2023 | |
Fair value of financial instruments | |
Fair value of financial instruments | 16 Fair value of financial instruments Pursuant to the accounting guidance for fair value measurement and its subsequent updates, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e. the exit price) in an orderly transaction between market participants at the measurement date. The accounting guidance establishes a hierarchy for inputs used in measuring fair value that minimizes the use of unobservable inputs by requiring the use of observable market data when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on active market data. Unobservable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances. The fair value hierarchy is broken down into the three input levels summarized below: Level 1 — Valuations are based on quoted prices in active markets for identical assets or liabilities and readily accessible by the Company at the reporting date. Level 2 — Valuations based on inputs other than the quoted prices in active markets that are observable either directly or indirectly in active markets. Level 3 — Valuations based on unobservable inputs in which there is little or no market data, which requires the Company to develop its own assumptions. For the years ending December 31, 2023 and December 31, 2022, there were no financial instruments measured at fair value on a recurring or non-recurring basis. |
Royalty Purchase Agreement
Royalty Purchase Agreement | 12 Months Ended |
Dec. 31, 2023 | |
Royalty Purchase Agreement | |
Royalty Purchase Agreement | 17 Royalty Purchase Agreement On March 27, 2023, we entered into a purchase and sale agreement, or the “Royalty Purchase Agreement”, with RTW and certain of its affiliates. Pursuant to the Royalty Purchase Agreement, RTW agreed to purchase, following the U.S. Food and Drug Administration approval of etripamil (subject to certain conditions), in exchange for a purchase price of $75.0 million, the right to receive a tiered quarterly royalty payments, or the “Royalty Interest”, on the annual net product sales of etripamil in the United States in an amount equal to: (i) 7%, or the “Initial Tier Royalty”, of annual net sales up to $500 million, (ii) 4% of annual net sales greater Based on the Company’s assessment of the terms and conditions under the Royalty Purchase Agreement, there is no accounting recognition required in these financial statements. |
Other receivables
Other receivables | 12 Months Ended |
Dec. 31, 2023 | |
Other receivables | |
Other receivables | 18 Other receivables Other receivables comprised the following as of December 31: 2023 2022 Interest receivable $ 528 $ 615 Sales tax receivable 264 261 Clinical receivable 2,400 — Other current receivable 16 6 $ 3,208 $ 882 For the year ended December 31, 2023, the Company recognized a clinical receivable of $2.4 million for clinical upfront payments made to the CRO that completed the NODE-303 trial. The Company recognized no clinical receivables for the year ended December 31, 2022. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events. | |
Subsequent Events | 19 Subsequent Events Financing Transaction On February 28, 2024, we entered into an underwriting agreement, or the Underwriting Agreement, related to an underwritten public offering, or the Offering, of 16,666,667 of our common shares, without par value, at a public offering price of $1.50 per share and, in lieu of common shares to certain investors, pre-funded warrants to purchase 3,333,333 Shares at a public offering price of $1.499 per pre-funded warrant. Under the terms of the Underwriting Agreement, we granted the Underwriters an option to purchase up to an additional 3,000,000 common shares at the same price per share as the other common shares sold in the Offering, which was exercised by the Underwriters in full on February 29, 2024. Each pre-funded warrant has an exercise price of $0.001 per share. The pre-funded warrants were exercisable immediately upon issuance, subject to certain beneficial ownership limitations. The net proceeds to the Company from the Offering, including the proceeds from the exercise by the Underwriters of their option to purchase the additional 3,000,000 common shares in full, was approximately $32.4 million after deducting underwriting commissions and offering expenses payable by the Company. The Offering closed on March 4, 2024. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Summary of Significant Accounting Policies | |
Basis of Consolidation | a) Basis of consolidation The consolidated financial statements include the accounts of the Company and Milestone Pharmaceuticals USA, Inc. All intercompany transactions and balances have been eliminated. |
Basis of Presentation and Use of Accounting Estimates | b) Basis of Presentation and Use of Accounting Estimates These consolidated financial statements of the Company have been presented in United States dollars (USD) and have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP), including the applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding financial reporting. The preparation of consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and judgments that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the year. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes are reasonable under the circumstances, to determine the carrying values of assets and liabilities that are not readily apparent from other sources. Significant estimates and judgments include, but are not limited to, ● Estimates of the percentage of work completed of the total work over the life of the individual trial in accordance with agreements established with clinical research organizations, or CROs, contract manufacturing organizations, or CMOs, and clinical trial sites which in turn impact the research & development expenses. ● Estimate of the grant date fair value of share options granted to employees, consultants and directors, and the resulting share-based compensation expense, using the Black Scholes option pricing model. Estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require the exercise of judgment. As of the date of issuance of these consolidated financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, assumptions and judgments. These estimates may change as new events occur and additional information is obtained and are recognized in the consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to the Company’s consolidated financial statements. |
Segment Information | c) Segment Information The Company manages its operations as a single operating segment for the purposes of assessing performance and making operating decisions while focusing on the development and commercialization of innovative cardiovascular medicines. |
Revenue Recognition | d) Revenue Recognition Collaborative Arrangements The Company considers the nature and contractual terms of arrangements and assesses whether an arrangement involves a joint operating activity pursuant to which the Company is an active participant and is exposed to significant risks and rewards dependent on the commercial success of the activity. If the Company is an active participant and is exposed to significant risks and rewards dependent on the commercial success of the activity, the Company accounts for such an arrangement as a collaborative arrangement under Accounting Standards Codification (ASC) 808, Collaborative Arrangements (ASC 808), which requires that certain transactions between the Company and collaborators be recorded in its consolidated statements of comprehensive loss on either a gross basis or net basis, depending on the characteristics of the collaborative relationship, and requires enhanced disclosure of collaborative relationships. The Company evaluates its collaboration agreements for proper classification in its consolidated statements of comprehensive loss based on the nature of the underlying activity. If payments to and from collaborative partners are not within the scope of other authoritative accounting literature, the consolidated statements of loss classification for the payments is based on a reasonable, rational analogy to authoritative accounting literature that is applied in a consistent manner. If the Company concludes that it has a customer relationship with one of its collaborators, the Company follows the guidance in Accounting Standards Codification (ASC) Topic 606, Revenue From Contracts With Customers (ASC 606). Revenue from Contracts with Customers In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled in exchange for these goods and services. To achieve this core principle, the Company applies the following five steps: 1) identify the customer contract; 2) identify the contract’s performance obligations; 3) determine the transaction price; 4) allocate the transaction price to the performance obligations; and 5) recognize revenue when or as a performance obligation is satisfied. The Company evaluates all promised goods and services within a customer contract and determines which of such goods and services are separate performance obligations. This evaluation includes an assessment of whether the good or service is capable of being distinct and whether the good or service is separable from other promises in the contract. In assessing whether promised goods or services in licensing arrangements are distinct, the Company considers factors such as the stage of development of the underlying intellectual property and the capabilities of the customer to develop the intellectual property on their own or whether the required expertise is readily available. Licensing arrangements are analyzed to determine whether the promised goods or services, which often include licenses, research and development services and governance committee services, are distinct or whether they must be accounted for as part of a combined performance obligation. If the license is considered not to be distinct, the license would then be combined with other promised goods or services as a combined performance obligation. If the Company is involved in a governance committee, it assesses whether its involvement constitutes a separate performance obligation. When governance committee services are determined to be separate performance obligations, the Company determines the fair value to be allocated to this promised service. Certain contracts contain optional and additional items, which are considered marketing offers and are accounted for as separate contracts with the customer if such option is elected by the customer, unless the option provides a material right which would not be provided without entering into the contract. An option that is considered a material right is accounted for as a separate performance obligation. The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods and services to the customer. A contract may contain variable consideration, including potential payments for both milestone and research and development services. For certain potential milestone payments, the Company estimates the amount of variable consideration by using the most likely amount method. In making this assessment, the Company evaluates factors such as the clinical, regulatory, commercial and other risks that must be overcome to achieve the milestone. Each reporting period the Company re-evaluates the probability of achievement of such variable consideration and any related constraints. Milestone will include variable consideration, without constraint, in the transaction price to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price among the performance obligations on a relative standalone selling price basis unless a portion of the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct good or service that forms part of a single performance obligation. The Company allocates the transaction price based on the estimated standalone selling price of the underlying performance obligations or in the case of certain variable consideration to one or more performance obligations. The Company must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. The Company utilizes key assumptions to determine the stand-alone selling price, which may include other comparable transactions, pricing considered in negotiating the transaction and the estimated costs to complete the respective performance obligation. Certain variable consideration is allocated specifically to one or more performance obligations in a contract when the terms of the variable consideration relate to the satisfaction of the performance obligation and the resulting amounts allocated to each performance obligation are consistent with the amount the Company would expect to receive for each performance obligation. When a performance obligation is satisfied, revenue is recognized for the amount of the transaction price, excluding estimates of variable consideration that are constrained, that is allocated to that performance obligation on a relative standalone selling price basis. Significant management judgment is required in determining the level of effort required under an arrangement and the period over which the Company is expected to complete its performance obligations under an arrangement. For performance obligations consisting of licenses and other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non- refundable, up-front fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company will recognize revenue from non-refundable, up-front fees allocated to the license at the point in time when the license is transferred to the customer and the customer is able to use and benefit from the license. |
Cash and Cash Equivalents | e) Cash and Cash Equivalents Cash and cash equivalents consist of cash and highly liquid investments that are readily convertible into cash with original maturities of 90 days or less at acquisition date. |
Short-Term Investments | f) Short-Term Investments Short-term investments are classified as held-to-maturity, are initially recognized at fair value and are subsequently accounted for at amortized cost. They are comprised of guaranteed investment certificates with a maturity greater than 90 days but less than one year and, as such, are classified as current assets. |
Concentration of Credit Risk | g) Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents and investment securities classified as held-to-maturity. The Company maintains deposits at major financial institutions. Additionally, the Company has adopted an investment policy that includes guidelines relative to credit quality, diversification of maturities and liquidity. |
Currency Risk | h) Currency Risk The Company is exposed to currency risk due to financial instruments denominated in foreign currencies. The Company is exposed to the Canadian dollar currency risk and does not enter into arrangements to hedge its currency risk exposure. |
Property and Equipment | i) Property and Equipment Property and equipment is stated at historical cost less accumulated amortization. Expenditures for maintenance and repairs are recorded to expense as incurred. The Company reviews its property and equipment whenever events or changes in circumstances indicate that the carrying value of certain assets might not be recoverable and recognizes an impairment loss when it is probable that an asset’s realizable value is less than the carrying value. To date, no such impairment losses have been recorded. Amortization is calculated using the straight-line method over the following estimated useful lives of the assets: Computer hardware and software 3 years Office equipment 5 years Furniture and fixtures 5 years Leasehold improvements over the lease term |
Leases | j) Leases At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present in the arrangement. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets and short-term and long-term lease liabilities, as applicable. The Company does not have financing leases. Operating lease liabilities and their corresponding right-of-use assets are initially recorded based on the present value of lease payments over the expected remaining lease term. Right-out-use assets are subsequently accounted for as long-lived assets, including evaluating for indicators of impairment. Certain adjustments to the right-of-use asset may be required for items such as incentives received. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rate to discount lease payments, which reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment. Prospectively, the Company will adjust the right-of-use assets for straight-line rent expense or any incentives received and remeasure the lease liability at the net present value using the same incremental borrowing rate that was in effect as of the lease commencement or transition date. The Company has elected not to recognize leases with an original term of one year or less on the balance sheet. The Company typically only includes an initial lease term in its assessment of a lease arrangement. Options to renew a lease are not included in the Company’s assessment unless there is reasonable certainty that the Company will renew. |
Pre-funded Warrants | k) Pre-funded Warrants Pre-funded warrants allow the holder to pay little or no consideration to receive the shares upon exercise of the warrant. The pre-funded warrants do not meet the definition of a derivative under ASC 815 because their fair value at issuance is equal to the fair value of the shares underlying the warrant. As such, they have the characteristics of a prepaid forward sale of equity. As a result, the pre-funded warrants are accounted for as equity instruments. |
Share Issuance Costs | l) Share Issuance Costs Share issuance costs applicable to the issuance of equity instruments are recorded as a reduction of the financing equity proceeds. |
Research and Development and Investment Tax Credits | m) Research and Development and Investment Tax Credits Research and development costs are charged to expense as costs are incurred in performing research and development activities. The Company’s research and development costs consist primarily of salaries and fees paid to contract research organizations (CROs) and to contract manufacturing organizations (CMOs). Clinical trial expenses include direct costs associated with CROs, direct CMO costs for the formulation and packaging of clinical trial material, as well as investigator and patient related costs at sites at which the Company’s trials are being conducted. Direct costs associated with the Company’s CROs and CMOs are generally payable on a time and materials basis, or when milestones are achieved. The invoicing from clinical trial sites can lag several months. The Company records expenses for its clinical trial activities performed by third parties based upon estimates of the percentage of work completed of the total work over the life of the individual study in accordance with agreements established with CROs and clinical trial sites. The Company determines the estimates through discussions with internal clinical personnel, CROs and CMOs as to the progress or stage of completion of trials or services and the agreed upon fee to be paid for such services based on facts and circumstances known to the Company as of each consolidated balance sheet date. The actual costs and timing of clinical trials are highly uncertain, subject to risks and may change depending upon a number of factors, including the Company’s clinical development plan. If the actual timing of the performance of services of the level of effort varies from the estimate, the Company will adjust the accrual accordingly. The Company recognizes the benefit of Canadian research and development tax credits as a reduction of research and development costs for fully refundable investment tax credits and as a reduction of income taxes for investment tax credits that can only be claimed against income taxes payable when there is reasonable assurance that the claim will be recovered. |
Income Taxes | n) Income Taxes The provision for income taxes is computed using the liability method. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is recorded to reduce the carrying amount of deferred income tax assets until when it is more likely than not that these assets will be realized. Tax benefits related to tax positions not deemed to meet the “more-likely-than-not” threshold are not permitted to be recognized in the consolidated financial statements. |
Foreign Currency Translation and Transactions | o) Foreign Currency Translation and Transactions The functional currency of the Company is the US dollar. Accordingly, transactions denominated in currencies other than the functional currency are measured and recorded in the functional currency at the exchange rate in effect on the date of the transactions. At each consolidated balance sheet date, monetary assets and liabilities denominated in currencies other than the functional currency are remeasured using the exchange rate in effect at that date. Non-monetary assets and liabilities and revenue and expense items denominated in foreign currencies are translated into the functional currency using the exchange rate prevailing at the dates of the respective transactions. Any gains or losses arising on remeasurement are included in the consolidated statement of loss. |
Share Based Compensation | p) Share Based Compensation The Company has a share based compensation plan which is described in detail in note 8 and records all share-based payments, including grants of employee share options, at their fair values. The fair value of share options granted to employees and non-employees is estimated at the date of grant using the Black-Scholes option pricing model. The Company recognizes share based compensation expense over the requisite service period of the individual grants, which equals the vesting period, using the straight-line method. Forfeitures, if any, are recorded as they occur. Any consideration paid by employees on exercising share options and the corresponding portion previously credited to contributed surplus are credited to share capital. The Black-Scholes option pricing model used by the Company to calculate option values was developed to estimate fair value. The Company approved an employee share purchase plan in April 2019, which became effective on May 8, 2019 and is described in note 9. The plan provides a means by which eligible employees of the Company may be given an opportunity to purchase common shares. The plan permits the Company to grant a series of purchase rights to eligible employees under an employee stock purchase plan. |
Recently Adopted Accounting Pronouncements | q) Recently Adopted Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires public entities to disclose information about their reportable segments’ significant expenses on an interim and annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is evaluating the effect of adopting this new accounting guidance on its financial statements, but does not intend to early adopt. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). The amendments in this update require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income [or loss] by the applicable statutory income tax rate). The amendments also require entities on an annual basis to disclose disaggregated amounts of income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is evaluating the effect of adopting this new accounting guidance on its financial statements, but does not intend to early adopt. |
Significant Risks and Uncertainties | r) Significant Risks and Uncertainties The Company is subject to challenges and risks specific to its business and its ability to execute on its strategy, as well as risks and uncertainties common to companies in the pharmaceutical industry, including, without limitation, risks and uncertainties associated with: obtaining regulatory approval of its product candidate; delays or problems in the supply of its study drug or failure to comply with manufacturing regulations; identifying, acquiring or in-licensing product candidates; pharmaceutical product development and the inherent uncertainty of clinical success; and the challenges of protecting and enhancing its intellectual property rights; and complying with applicable regulatory requirements. Further, the Company may be impacted by general economic, political, and market conditions, including deteriorating market conditions due to investor concerns regarding inflation, armed conflicts, and overall fluctuations in the financial markets in the U.S. and abroad. |
Sources of Liquidity and Funding Requirements | s) Sources of Liquidity and Funding Requirements The Company has incurred operating losses and experienced negative operating cash flows since its inception and anticipates to continue to incur losses for at least the next several years. As of December 31, 2023, the Company had cash and cash equivalents and short-term investments of $66.0 million and an accumulated deficit of $326.0 million. Management has evaluated the Company’s operating plan against its existing cash and cash equivalents and determined that the Company expects to be able to support its operations for at least the next 12 months from the date of issuance of these consolidated financial statements. The Company has historically financed its operations primarily through the sale of equity securities, convertible notes and, to a lesser extent from cash received pursuant to its license agreement. To date, the Company has not generated any revenue from product sales. Management expects operating losses and negative cash flows from operations to continue for the foreseeable future. The Company currently plans to raise additional funding as required based on the status of its clinical trials, progress of New Drug Application, or NDA, filing, and projected cash flows. There can be no assurance that, in the event the Company requires additional financing, such financing will be available at terms acceptable to the Company, if at all. Failure to generate sufficient cash flows from operations, raise additional capital and reduce discretionary spending should additional capital not become available could have a material adverse effect on the Company’s ability to achieve its business objectives. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Summary of Significant Accounting Policies | |
Schedule of estimated useful lives | Computer hardware and software 3 years Office equipment 5 years Furniture and fixtures 5 years Leasehold improvements over the lease term |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
Schedule of operating lease right-of-use asset | 2023 2022 Opening balance $ 2,423 $ 711 New operating lease right-of-use asset — 2,103 Amortization of right-of-use asset (506) (391) Closing balance $ 1,917 $ 2,423 |
Schedule of future minimum lease payments of right-of-use assets | The following table summarizes the future minimum lease payments of right-of-use assets operating leases as at December 31, 2023: January 1, 2024 to December 31, 2024 673 January 1, 2025 to December 31, 2025 670 January 1, 2026 to December 31, 2026 530 January 1, 2027 to September 30, 2027 406 2,279 Less interest (276) $ 2,003 |
Property and equipment (Tables)
Property and equipment (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property and equipment | |
Schedule of property and equipment | 2023 2022 Computer hardware and software $ 226 $ 120 Office equipment 157 155 Leasehold improvements 85 102 Total $ 468 $ 377 Less accumulated depreciation (191) (120) Property and equipment, net $ 277 $ 257 |
Accounts payable and accrued _2
Accounts payable and accrued liabilities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounts payable and accrued liabilities | |
Schedule of accounts payable and accrued liabilities | 2023 2022 Trade accounts payable $ 3,981 $ 2,263 Accrued compensation and benefits payable 712 2,573 Accrued research and development liabilities 894 404 Accrued commercial liabilities 710 149 Other accrued liabilities 383 255 Total $ 6,680 $ 5,644 |
Share Based Compensation (Table
Share Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share Based Compensation | |
Schedule of outstanding and exercisable options | 2023 Weighted Number average of shares exercise 2019 Plan Inducement Plan 2011 Plan Total price Outstanding at beginning of year - 2011 Plan — — 1,802,672 1,802,672 $ 2.05 Outstanding at beginning of year - 2019 Plan 5,314,312 — — 5,314,312 8.35 Outstanding at beginning of year - Inducement Plan — 503,000 — 503,000 6.41 Granted - 2019 Plan 1,875,400 — — 1,875,400 3.61 Granted - Inducement Plan — 122,000 — 122,000 2.98 Exercised - 2019 Plan (7,000) — — (7,000) 3.74 Exercised - 2011 Plan — — (107,103) (107,103) 1.52 Forfeited - 2019 Plan (156,198) — — (156,198) 6.13 Expired - 2019 Plan (58,617) — — (58,617) 11.52 Expired - 2011 Plan — — (1,336) (1,336) 0.91 Cancelled - 2019 Plan (561,000) — — (561,000) 21.73 Outstanding at end of period 6,406,897 625,000 1,694,233 8,726,130 $ 5.09 Outstanding at end of period - Weighted average exercise price $ 5.82 $ 5.74 $ 2.09 Exercisable at end of period 3,228,422 221,833 1,694,233 5,144,488 $ 5.32 Exercisable at end of period - Weighted average exercise price $ 6.93 $ 6.42 $ 2.09 2022 Weighted Number average of shares exercise 2019 Plan Inducement Plan 2011 Plan Total price Outstanding at beginning of year - 2011 Plan — — 1,995,971 1,995,971 $ 2.07 Outstanding at beginning of year - 2019 Plan 3,749,834 — — 3,749,834 9.52 Granted - 2019 Plan 1,790,700 — — 1,790,700 5.76 Granted - Inducement Plan — 523,000 523,000 6.37 Exercised - 2019 Plan (45,089) — — (45,089) 3.83 Exercised - 2011 Plan — — (172,595) (172,595) 1.43 Forfeited - Inducement Plan — (20,000) — (20,000) 5.48 Forfeited - 2019 Plan (181,133) — — (181,133) 8.00 Forfeited - 2011 Plan — — (19,583) (19,583) 9.35 Expired - 2011 Plan — — (1,121) (1,121) 0.96 Outstanding at end of period 5,314,312 503,000 1,802,672 7,619,984 $ 6.73 Outstanding at end of period - Weighted average exercise price $ 8.35 $ 6.41 $ 2.05 Exercisable at end of period 2,390,549 — 1,800,546 4,191,095 $ 6.52 Exercisable at end of period - Weighted average exercise price $ 9.90 — $ 2.04 |
Schedule of non-vested share options activity | 2023 Number Weighted of options average 2019 Plan Inducement Plan 2011 Plan Total fair value Non-vested share options at beginning of year - 2011 Plan — — 2,126 2,126 $ 6.64 Non-vested share options at beginning of year - 2019 Plan 2,923,763 — — 2,923,763 5.30 Non-vested share options at beginning of year - Inducement Plan — 503,000 — 503,000 4.84 Granted - 2019 Plan 1,875,400 — — 1,875,400 2.87 Granted - Inducement Plan — 122,000 — 122,000 2.30 Vested, outstanding 2011 Plan — — (2,126) (2,126) 6.64 Vested, outstanding 2019 Plan (1,504,329) — — (1,504,329) 5.88 Vested, outstanding Inducement Plan — (221,833) — (221,833) 4.85 Forfeited - 2019 Plan (116,359) — — (116,359) 3.96 Non-vested share options at end of period 3,178,475 403,167 — 3,581,642 $ 3.69 Non-vested share options at end of period - Weighted average fair value $ 3.64 $ 4.07 $ — 2022 Number Weighted of options average 2019 Plan Inducement Plan 2011 Plan Total fair value Non-vested share options at beginning of year - 2011 Plan — — 200,639 200,639 $ 1.86 Non-vested share options at beginning of year - 2019 Plan 2,655,518 — — 2,655,518 6.40 Granted - 2019 Plan 1,790,700 — — 1,790,700 4.37 Granted - Inducement Plan — 523,000 — 523,000 4.81 Vested, outstanding 2011 Plan — — (198,317) (198,317) 1.81 Forfeited - 2011 Plan — — (196) (196) 1.91 Forfeited - Inducement Plan — (20,000) — (20,000) 4.18 Forfeited - 2019 Plan (145,664) — — (145,664) 5.49 Vested, outstanding 2019 Plan (1,376,791) — — (1,376,791) 6.19 Non-vested share options at end of period 2,923,763 503,000 2,126 3,428,889 $ 5.24 Non-vested share options at end of period - Weighted average fair value $ 5.30 $ 4.84 $ 6.64 |
Schedule of share option outstanding | Options outstanding Options exercisable Weighted Weighted average Weighted average Weighted remaining average remaining average Number contractual exercise Number contractual exercise Exercise price of options life (years) price of options life (years) price $0.84-$1.73 949,136 3.11 $ 1.43 949,136 3.11 $ 1.43 $1.74-$3.2 915,192 4.77 $ 2.69 709,192 4.76 $ 2.59 $3.21-$5.25 2,351,850 7.62 $ 3.67 688,000 6.63 $ 3.76 $5.26-$6.36 3,473,464 7.37 $ 5.90 2,133,496 7.34 $ 5.96 $6.37-$8.5 667,833 6.43 $ 6.85 316,521 6.58 $ 6.84 $8.51-$15.5 57,905 6.27 $ 9.08 42,780 5.42 $ 9.27 $15.51-$20.5 65,100 5.84 $ 17.21 64,829 5.84 $ 17.21 $20.51-$22.45 245,650 5.21 $ 21.48 240,534 5.21 $ 21.48 Total 8,726,130 6.55 $ 5.09 5,144,488 5.93 $ 5.32 |
Schedule of weighted average assumptions for the options granted | Year ended December 31, 2023 2022 Exercise price $ 3.58 $ 5.90 Share price $ 3.58 $ 5.90 Volatility 97 % 92 % Risk-free interest rate 3.97 % 2.43 % Expected life 6.01 years 6.03 years Dividend 0 % 0 % |
Schedule of share-based compensation expense | 2023 2022 Administration $ 4,849 $ 4,229 Research and development 3,281 3,483 Commercial activities 1,404 1,336 Total $ 9,534 $ 9,048 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt | |
Schedule of Convertible Note | As of December 31, 2023 2022 Original principal $ 50,000 $ — Paid in kind (PIK) interest 2,310 — Unamortized debt discount (547) — Unamortized debt issuance costs (1,991) — Total $ 49,772 $ — |
Schedule of total amount of interest cost | Year ended December 31, 2023 2022 Contractual interest expense $ 2,310 $ — Amortization of debt discount 53 — Amortization of debt issuance costs 191 — Total interest expense $ 2,554 $ — |
Net loss per share (Tables)
Net loss per share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Net loss per share | |
Schedule of potentially dilutive securities excluded from the computation of diluted weighted average shares | 2023 2022 Share options 8,726,130 7,619,984 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income taxes | |
Reconciliation of differences between taxes on income (loss) before income taxes | A reconciliation between tax expense and the product of accounting income multiplied by the basic income tax rate for the years ended December 31, 2023 and 2022 is as follows: 2023 2022 Loss before income taxes $ (59,685) $ (58,388) Basic income tax rate 26.50 % 26.50 % Computed income tax recovery (15,817) (15,473) Effect on income tax rate resulting from Accounting charges not deductible for tax purposes 4 13 Non‑deductible share‑based compensation 4,663 2,704 Share issue costs — 32 Accretion of investments — (26) Tax benefits of current period losses and other tax assets 10,945 12,387 Valuation allowance for prior year adjustment — 112 Other 205 251 Income tax expense (recovery) reported in the consolidated statements of loss $ — $ — |
Schedule of deferred tax assets | The Company’s deferred tax assets consist of the following for the years ended December 31, 2023 and 2022: 2023 2022 Net operating loss carry‑forwards $ 66,656 $ 57,952 Tax basis of property and equipment in excess of carrying values 67 97 Tax basis of right of use assets (421) — Tax basis of lease liability 438 — Tax basis of reserves 6 — Federal SR&ED investment tax credits 3,735 545 Taxation of federal SR&ED investment tax credits (990) (82) Research and development expenditures 7,643 6,323 Financing costs 186 1,008 Stock based compensation 2,850 — Change in tax rates — 51 Others 45 15 Total Net deferred tax assets 80,215 65,909 Less Valuation allowance (80,215) (65,909) Net deferred tax assets $ — $ — |
Currency risk (Tables)
Currency risk (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Currency risk | |
Schedule of Company's net financial position exposure | 2023 2022 Cash $ 2,441 $ 262 Other receivables 263 262 Operating lease assets 311 462 Accounts payable and accrued liabilities (52) (484) Operating lease liabilities (306) (444) Net financial position exposure $ 2,657 $ 58 |
Other receivables (Tables)
Other receivables (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Other receivables | |
Schedule of other receivables | 2023 2022 Interest receivable $ 528 $ 615 Sales tax receivable 264 261 Clinical receivable 2,400 — Other current receivable 16 6 $ 3,208 $ 882 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Property and Equipment (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Property, Plant and Equipment | |
Impairment losses | $ 0 |
Computer hardware and software | |
Property, Plant and Equipment | |
Useful lives | 3 years |
Office equipment | |
Property, Plant and Equipment | |
Useful lives | 5 years |
Furniture and fixtures | |
Property, Plant and Equipment | |
Useful lives | 5 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Sources of Liquidity and Funding Requirements (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Summary of Significant Accounting Policies | ||
Cash, cash equivalents and short-term investments | $ 66,000 | |
Accumulated deficit | $ (326,026) | $ (266,341) |
Revenue (Details)
Revenue (Details) $ in Thousands | 12 Months Ended | ||
May 15, 2021 USD ($) | Dec. 31, 2023 USD ($) item | Dec. 31, 2022 USD ($) item | |
Collaboration revenue | |||
Revenue | $ 1,000 | $ 5,000 | |
Number of milestones | item | 2 | ||
Upfront cash payment | $ 15,000 | ||
Potential milestone payments | $ 107,500 | ||
Number of performance obligations | item | 2 | ||
Warrants | $ 48,459 | $ 34,352 | |
Ji Xing | |||
Collaboration revenue | |||
Percentage of beneficial owner | 9.70% |
Short-term Investments (Details
Short-term Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Net Investment Income | ||
Short-term investments | $ 52,243 | $ 56,949 |
Minimum | ||
Net Investment Income | ||
Interest rate earned from short-term investments | 5.53% | |
Maximum | ||
Net Investment Income | ||
Interest rate earned from short-term investments | 5.95% |
Leases (Details)
Leases (Details) - lease | Dec. 31, 2023 | Dec. 31, 2022 | May 20, 2022 | Jul. 01, 2020 |
Operating lease | ||||
Number of operating leases right-of-use assets | 2 | 2 | ||
Number of short-term operating leases | 1 | 1 | ||
Ville Saint-Laurent, Quebec | ||||
Operating lease | ||||
Operating lease, term | 5 years | |||
Incremental borrowing rate | 5.26% | |||
Remaining lease term | 65 months | |||
Charlotte, NC | ||||
Operating lease | ||||
Operating lease, term | 62 months | |||
Incremental borrowing rate | 7.55% |
Leases - Changes in ROU assets
Leases - Changes in ROU assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Changes in operating lease right-of-use asset | ||
Opening balance | $ 2,423 | $ 711 |
New operating lease right-of-use asset | 2,103 | |
Amortization of right-of-use asset | (506) | (391) |
Closing balance | 1,917 | 2,423 |
Operating lease expenses | $ 681 | $ 490 |
Leases - Future minimum lease p
Leases - Future minimum lease payments (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Future minimum lease payments | |
January 1, 2024 to December 31, 2024 | $ 673 |
January 1, 2025 to December 31, 2025 | 670 |
January 1, 2026 to December 31, 2026 | 530 |
January 1, 2027 to September 30, 2027 | 406 |
Total future minimum lease payments | 2,279 |
Less interest | (276) |
Operating lease liabilities | $ 2,003 |
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Operating Lease, Liability, Current, Operating Lease, Liability, Noncurrent |
Property and equipment (Details
Property and equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment | ||
Total | $ 468 | $ 377 |
Less accumulated depreciation | (191) | (120) |
Property and equipment, net | 277 | 257 |
Computer hardware and software | ||
Property, Plant and Equipment | ||
Total | 226 | 120 |
Office equipment | ||
Property, Plant and Equipment | ||
Total | 157 | 155 |
Leasehold improvements | ||
Property, Plant and Equipment | ||
Total | $ 85 | $ 102 |
Property and equipment - Impair
Property and equipment - Impairment losses and Amortization expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property and equipment | ||
Disposal of property plant and equipment | $ 0 | $ 348 |
Loss on disposals of property and equipment | 141 | |
Depreciation expense | $ 92 | $ 89 |
Accounts payable and accrued _3
Accounts payable and accrued liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Accounts payable and accrued liabilities | ||
Trade accounts payable | $ 3,981 | $ 2,263 |
Accrued compensation and benefits payable | 712 | 2,573 |
Accrued research and development liabilities | 894 | 404 |
Accrued commercial liabilities | 710 | 149 |
Other accrued liabilities | 383 | 255 |
Total | $ 6,680 | $ 5,644 |
Shareholders' Equity - Authoriz
Shareholders' Equity - Authorized share capital (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jul. 29, 2020 | Aug. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Authorized share capital | ||||
Common shares, Shares issued (in shares) | 33,483,111 | 34,286,002 | ||
Common shares, Shares outstanding (in shares) | 33,483,111 | 34,286,002 | ||
Issuance of common shares, net of issuance costs | $ 2,630 | |||
Employee Stock Purchase Plan | ||||
Authorized share capital | ||||
Number of common shares available for issuance | 1,463,936 | |||
Number of shares issued under the ESPP | 142,006 | |||
ATM Program | ||||
Authorized share capital | ||||
Number of shares issued during the period | 361,236 | 361,236 | ||
Issuance of common shares, net of issuance costs | $ 2,600 | |||
Stock issuance cost | $ 100 |
Shareholders' Equity - Open Mar
Shareholders' Equity - Open Market Sale Agreement and Public Offering (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Mar. 22, 2023 | Nov. 12, 2021 | Jul. 29, 2020 | Aug. 31, 2022 | Dec. 31, 2022 | |
Class of Warrant or Right | |||||
Net proceeds | $ 2,630 | ||||
Proceeds from exercise of warrants | 38 | ||||
Offering price | 2,630 | ||||
RTW Investments, LP | |||||
Class of Warrant or Right | |||||
Common shares exchanged for pre-funded warrants | 1,059,000 | ||||
Purchase price | $ 0.001 | ||||
Proceeds from exercise of warrants | $ 0 | ||||
Maximum ownership after exercise of exchange agreement | 9.99% | ||||
Required notice (in days) | 61 days | ||||
ATM Program | |||||
Class of Warrant or Right | |||||
Net proceeds | $ 2,600 | ||||
Number of shares issued during the period | 361,236 | 361,236 | |||
ATM Program | Maximum | |||||
Class of Warrant or Right | |||||
Offering price | $ 50,000 | ||||
Shelf Registration | |||||
Class of Warrant or Right | |||||
Net proceeds | $ 250,000 | ||||
Common Shares | |||||
Class of Warrant or Right | |||||
Offering price | $ 2,630 | ||||
Number of shares issued during the period | 361,236 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional paid-in capital (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Additional paid-in capital | ||
Opening balance | $ 66,348 | $ 112,600 |
Share-based compensation expense | 9,534 | 9,048 |
Exercise of stock options | 189 | 420 |
Closing balance | 16,771 | 66,348 |
Additional paid-in capital | ||
Additional paid-in capital | ||
Opening balance | 24,437 | 15,711 |
Share-based compensation expense | 9,534 | 9,048 |
Exercise of stock options | (137) | (322) |
Closing balance | $ 33,834 | $ 24,437 |
Share Based Compensation (Detai
Share Based Compensation (Details) - $ / shares | 12 Months Ended | |||||
Jan. 01, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Jan. 01, 2023 | Jul. 05, 2022 | Dec. 31, 2021 | |
Share-based compensation | ||||||
Number of options, Options outstanding | 8,726,130 | |||||
2011 Plan | ||||||
Share-based compensation | ||||||
Number of options forfeited after termination of one plan | 125,323 | |||||
Number of options, Options outstanding | 1,694,233 | 1,802,672 | 1,995,971 | |||
2019 Plan | ||||||
Share-based compensation | ||||||
Shares reserved for issuance | 1,195,902 | 8,182,946 | 1,371,440 | 1,000,000 | ||
Aggregate number of shares cancelled/forfeited | 561,000 | |||||
Shares available for future grants | 1,704,960 | |||||
Options granted | 1,875,400 | 1,790,700 | ||||
Cancelled | 561,000 | |||||
Number of options, Options outstanding | 6,406,897 | 5,314,312 | 3,749,834 | |||
Weighted average exercise price | $ 3.61 | $ 5.76 | ||||
2021 Inducement Plan | ||||||
Share-based compensation | ||||||
Shares reserved for issuance | 1,000,000 | |||||
Shares available for future grants | 375,000 | |||||
Options granted | 122,000 | 523,000 | ||||
Number of options, Options outstanding | 625,000 | 503,000 | ||||
Weighted average exercise price | $ 2.98 | |||||
ESPP | ||||||
Share-based compensation | ||||||
Shares reserved for issuance | 1,463,936 | |||||
Shares issued | 142,006 | |||||
Employee Stock Option | 2011 Plan | ||||||
Share-based compensation | ||||||
Vesting period | 4 years | |||||
Employee Stock Option | 2011 Plan | Share-based Compensation Award, Tranche One | ||||||
Share-based compensation | ||||||
Percentage of shares to vest | 25% | |||||
Employee Stock Option | 2011 Plan | Share-based Compensation Award, Tranche Two | ||||||
Share-based compensation | ||||||
Percentage of shares to vest | 2.78% | |||||
Employee Stock Option | 2019 Plan | ||||||
Share-based compensation | ||||||
Vesting period | 4 years | |||||
Employee Stock Option | 2019 Plan | Share-based Compensation Award, Tranche One | ||||||
Share-based compensation | ||||||
Percentage of shares to vest | 25% | |||||
Employee Stock Option | 2019 Plan | Share-based Compensation Award, Tranche Two | ||||||
Share-based compensation | ||||||
Percentage of shares to vest | 2.78% |
Share Based Compensation - Outs
Share Based Compensation - Outstanding and exercisable options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Outstanding and exercisable options, number of shares | ||
Outstanding at end of period | 8,726,130 | |
Exercisable at end of period | 5,144,488 | |
Outstanding and exercisable options, weighted average exercise price | ||
Outstanding at beginning of period | $ 6.73 | |
Outstanding at end of period | 5.09 | $ 6.73 |
Exercisable at end of period | $ 5.32 | |
Weighted average remaining contractual life (in years) | 6 years 6 months 18 days | 7 years 5 months 19 days |
Weighted average remaining contractual life for vested options (in years) | 5 years 11 months 4 days | 6 years 4 months 13 days |
Unrecognized compensation cost | $ 11,400 | $ 15,700 |
Expected period for recognition | 2 years 3 months 7 days | 2 years 4 months 9 days |
Share-based compensation expense | $ 9,534 | $ 9,048 |
Plans 2011 and 2019 and 2021 Inducement [Member] | ||
Outstanding and exercisable options, number of shares | ||
Outstanding at beginning of period | 7,619,984 | |
Outstanding at end of period | 8,726,130 | 7,619,984 |
Exercisable at end of period | 5,144,488 | 4,191,095 |
Outstanding and exercisable options, weighted average exercise price | ||
Exercisable at end of period | $ 6.52 | |
2011 Plan | ||
Outstanding and exercisable options, number of shares | ||
Outstanding at beginning of period | 1,802,672 | 1,995,971 |
Expired | (1,336) | (1,121) |
Exercised | (107,103) | (172,595) |
Forfeited | (19,583) | |
Outstanding at end of period | 1,694,233 | 1,802,672 |
Exercisable at end of period | 1,694,233 | 1,800,546 |
Outstanding and exercisable options, weighted average exercise price | ||
Outstanding at beginning of period | $ 2.05 | $ 2.07 |
Exercised | 1.52 | 1.43 |
Forfeited | 9.35 | |
Expired | 0.91 | 0.96 |
Outstanding at end of period | 2.09 | 2.05 |
Exercisable at end of period | $ 2.09 | $ 2.04 |
2019 Plan | ||
Outstanding and exercisable options, number of shares | ||
Outstanding at beginning of period | 5,314,312 | 3,749,834 |
Granted | 1,875,400 | 1,790,700 |
Expired | (58,617) | |
Exercised | (7,000) | (45,089) |
Forfeited | (156,198) | (181,133) |
Cancelled | (561,000) | |
Outstanding at end of period | 6,406,897 | 5,314,312 |
Exercisable at end of period | 3,228,422 | 2,390,549 |
Outstanding and exercisable options, weighted average exercise price | ||
Outstanding at beginning of period | $ 8.35 | $ 9.52 |
Granted | 3.61 | 5.76 |
Exercised | 3.74 | 3.83 |
Forfeited | 6.13 | 8 |
Cancelled | 21.73 | |
Expired | 11.52 | |
Outstanding at end of period | 5.82 | 8.35 |
Exercisable at end of period | $ 6.93 | $ 9.90 |
Additional share-based compensation expense | $ 600 | |
2021 Inducement Plan | ||
Outstanding and exercisable options, number of shares | ||
Outstanding at beginning of period | 503,000 | |
Granted | 122,000 | 523,000 |
Forfeited | (20,000) | |
Outstanding at end of period | 625,000 | 503,000 |
Exercisable at end of period | 221,833 | |
Outstanding and exercisable options, weighted average exercise price | ||
Outstanding at beginning of period | $ 6.41 | |
Granted | 2.98 | |
Exercised | $ 6.37 | |
Forfeited | 5.48 | |
Outstanding at end of period | 5.74 | $ 6.41 |
Exercisable at end of period | $ 6.42 |
Share Based Compensation - Non-
Share Based Compensation - Non-vested share options (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Plans 2011 and 2019 and 2021 Inducement | ||
Number of options | ||
Non-vested at beginning of period | 3,428,889 | |
Non-vested share options at end of period | 3,581,642 | 3,428,889 |
Weighted average fair value | ||
Non-vested at beginning of period | $ 5.24 | |
Non-vested at end of period | $ 3.69 | $ 5.24 |
2011 Plan | ||
Number of options | ||
Non-vested at beginning of period | 2,126 | 200,639 |
Vested, outstanding | (2,126) | (198,317) |
Forfeited | (196) | |
Non-vested share options at end of period | 2,126 | |
Weighted average fair value | ||
Non-vested at beginning of period | $ 6.64 | $ 1.86 |
Vested, outstanding | $ 6.64 | 1.81 |
Forfeited | 1.91 | |
Non-vested at end of period | $ 6.64 | |
2019 Plan | ||
Number of options | ||
Non-vested at beginning of period | 2,923,763 | 2,655,518 |
Granted | 1,875,400 | 1,790,700 |
Vested, outstanding | (1,504,329) | (1,376,791) |
Forfeited | (116,359) | (145,664) |
Non-vested share options at end of period | 3,178,475 | 2,923,763 |
Weighted average fair value | ||
Non-vested at beginning of period | $ 5.30 | $ 6.40 |
Granted | 2.87 | 4.37 |
Vested, outstanding | 5.88 | 6.19 |
Forfeited | 3.96 | 5.49 |
Non-vested at end of period | $ 3.64 | $ 5.30 |
2021 Inducement Plan | ||
Number of options | ||
Non-vested at beginning of period | 503,000 | |
Granted | 523,000 | |
Vested, outstanding | (221,833) | |
Forfeited | (20,000) | |
Non-vested share options at end of period | 403,167 | 503,000 |
Weighted average fair value | ||
Non-vested at beginning of period | $ 4.84 | |
Granted | $ 4.81 | |
Vested, outstanding | 4.85 | |
Forfeited | 4.18 | |
Non-vested at end of period | $ 4.07 | $ 4.84 |
Share Based Compensation - Ou_2
Share Based Compensation - Outstanding and exercisable options (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based compensation | ||
Exercise price (in dollars per share) | $ 3.58 | $ 5.90 |
Number of options, Options outstanding | 8,726,130 | |
Weighted average remaining contractual life (years), Options outstanding | 6 years 6 months 18 days | 7 years 5 months 19 days |
Weighted average exercise price, Options outstanding | $ 5.09 | $ 6.73 |
Number of options, Options exercisable | 5,144,488 | |
Weighted average remaining contractual life (years), Options exercisable | 5 years 11 months 4 days | |
Weighted average exercise price, Options exercisable | $ 5.32 | |
$0.84-$1.73 | ||
Share-based compensation | ||
Minimum exercise price | 0.84 | |
Maximum exercise price | $ 1.73 | |
Number of options, Options outstanding | 949,136 | |
Weighted average remaining contractual life (years), Options outstanding | 3 years 1 month 9 days | |
Weighted average exercise price, Options outstanding | $ 1.43 | |
Number of options, Options exercisable | 949,136 | |
Weighted average remaining contractual life (years), Options exercisable | 3 years 1 month 9 days | |
Weighted average exercise price, Options exercisable | $ 1.43 | |
$1.74-$3.2 | ||
Share-based compensation | ||
Minimum exercise price | 1.74 | |
Maximum exercise price | $ 3.2 | |
Number of options, Options outstanding | 915,192 | |
Weighted average remaining contractual life (years), Options outstanding | 4 years 9 months 7 days | |
Weighted average exercise price, Options outstanding | $ 2.69 | |
Number of options, Options exercisable | 709,192 | |
Weighted average remaining contractual life (years), Options exercisable | 4 years 9 months 3 days | |
Weighted average exercise price, Options exercisable | $ 2.59 | |
$3.21-$5.25 | ||
Share-based compensation | ||
Minimum exercise price | 3.21 | |
Maximum exercise price | $ 5.25 | |
Number of options, Options outstanding | 2,351,850 | |
Weighted average remaining contractual life (years), Options outstanding | 7 years 7 months 13 days | |
Weighted average exercise price, Options outstanding | $ 3.67 | |
Number of options, Options exercisable | 688,000 | |
Weighted average remaining contractual life (years), Options exercisable | 6 years 7 months 17 days | |
Weighted average exercise price, Options exercisable | $ 3.76 | |
$5.26-$6.36 | ||
Share-based compensation | ||
Minimum exercise price | 5.26 | |
Maximum exercise price | $ 6.36 | |
Number of options, Options outstanding | 3,473,464 | |
Weighted average remaining contractual life (years), Options outstanding | 7 years 4 months 13 days | |
Weighted average exercise price, Options outstanding | $ 5.90 | |
Number of options, Options exercisable | 2,133,496 | |
Weighted average remaining contractual life (years), Options exercisable | 7 years 4 months 2 days | |
Weighted average exercise price, Options exercisable | $ 5.96 | |
$6.37-$8.5 | ||
Share-based compensation | ||
Minimum exercise price | 6.37 | |
Maximum exercise price | $ 8.5 | |
Number of options, Options outstanding | 667,833 | |
Weighted average remaining contractual life (years), Options outstanding | 6 years 5 months 4 days | |
Weighted average exercise price, Options outstanding | $ 6.85 | |
Number of options, Options exercisable | 316,521 | |
Weighted average remaining contractual life (years), Options exercisable | 6 years 6 months 29 days | |
Weighted average exercise price, Options exercisable | $ 6.84 | |
$8.51-$15.5 | ||
Share-based compensation | ||
Minimum exercise price | 8.51 | |
Maximum exercise price | $ 15.5 | |
Number of options, Options outstanding | 57,905 | |
Weighted average remaining contractual life (years), Options outstanding | 6 years 3 months 7 days | |
Weighted average exercise price, Options outstanding | $ 9.08 | |
Number of options, Options exercisable | 42,780 | |
Weighted average remaining contractual life (years), Options exercisable | 5 years 5 months 1 day | |
Weighted average exercise price, Options exercisable | $ 9.27 | |
$15.51-$20.5 | ||
Share-based compensation | ||
Minimum exercise price | 15.51 | |
Maximum exercise price | $ 20.5 | |
Number of options, Options outstanding | 65,100 | |
Weighted average remaining contractual life (years), Options outstanding | 5 years 10 months 2 days | |
Weighted average exercise price, Options outstanding | $ 17.21 | |
Number of options, Options exercisable | 64,829 | |
Weighted average remaining contractual life (years), Options exercisable | 5 years 10 months 2 days | |
Weighted average exercise price, Options exercisable | $ 17.21 | |
$20.51-$22.45 | ||
Share-based compensation | ||
Minimum exercise price | 20.51 | |
Maximum exercise price | $ 22.45 | |
Number of options, Options outstanding | 245,650 | |
Weighted average remaining contractual life (years), Options outstanding | 5 years 2 months 15 days | |
Weighted average exercise price, Options outstanding | $ 21.48 | |
Number of options, Options exercisable | 240,534 | |
Weighted average remaining contractual life (years), Options exercisable | 5 years 2 months 15 days | |
Weighted average exercise price, Options exercisable | $ 21.48 |
Share Based Compensation - Weig
Share Based Compensation - Weighted average assumptions for the options granted (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share Based Compensation | ||
Exercise price (in dollars per share) | $ 3.58 | $ 5.90 |
Share price (in dollars per share) | $ 3.58 | $ 5.90 |
Volatility (as a percent) | 97% | 92% |
Risk-free interest rate (as a percent) | 3.97% | 2.43% |
Expected life (in years) | 6 years 3 days | 6 years 10 days |
Dividend (as a percent) | 0% | 0% |
Share Based Compensation - Reco
Share Based Compensation - Recognized share-based compensation expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based compensation | ||
Share-based compensation expense | $ 9,534 | $ 9,048 |
Administration | ||
Share-based compensation | ||
Share-based compensation expense | 4,849 | 4,229 |
Research and development | ||
Share-based compensation | ||
Share-based compensation expense | 3,281 | 3,483 |
Commercial activities | ||
Share-based compensation | ||
Share-based compensation expense | $ 1,404 | $ 1,336 |
Debt (Details)
Debt (Details) - USD ($) | 12 Months Ended | |
Mar. 29, 2023 | Dec. 31, 2023 | |
Debt Instruments | ||
Proceeds from convertible notes | $ 50,000,000 | |
Debt issuance costs paid | 2,782,000 | |
RTW Investments, LP | Senior Secured Convertible Notes | Strategic Financing Agreements | ||
Debt Instruments | ||
Proceeds from convertible notes | $ 50,000,000 | |
Coupon rate (as a percent) | 6% | |
Paid in kind, term | 3 years | |
Principal amount denomination for conversion | $ 1,000 | |
Convertible shares issuable | 191.0548 | |
Conversion price | $ 5.23 | |
Threshold Percentage of stock price | 150% | |
Threshold trading days | 20 | |
Threshold consecutive trading days | 30 | |
Redemption price percentage | 100% | |
Estimated Fair Value | $ 44,300,000 |
Debt - Convertible Note (Detail
Debt - Convertible Note (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Debt Instruments | |
Total | $ 49,772 |
Senior Secured Convertible Notes | RTW Investments, LP | Strategic Financing Agreements | |
Debt Instruments | |
Original principal | 50,000 |
Paid in kind (PIK) interest | 2,310 |
Unamortized debt discount | (547) |
Unamortized debt issuance costs | (1,991) |
Total | $ 49,772 |
Debt - Total amount of interest
Debt - Total amount of interest cost (Details) - Senior Secured Convertible Notes - RTW Investments, LP - Strategic Financing Agreements $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Debt Instruments | |
Contractual interest expense | $ 2,310 |
Amortization of debt discount | 53 |
Amortization of debt issuance costs | 191 |
Total interest expense | $ 2,554 |
Net loss per share (Details)
Net loss per share (Details) - shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share options | ||
Net income (loss) per share | ||
Share options | 8,726,130 | 7,619,984 |
Income taxes - Income Tax Expen
Income taxes - Income Tax Expense Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income taxes | ||
Loss before income taxes | $ (59,685) | $ (58,388) |
Basic income tax rate | 26.50% | 26.50% |
Computed income tax recovery | $ (15,817) | $ (15,473) |
Accounting charges not deductible for tax purposes | 4 | 13 |
Non-deductible share-based compensation | 4,663 | 2,704 |
Share issue costs | 32 | |
Accretion of investments | (26) | |
Tax benefits of current period losses and other tax assets | 10,945 | 12,387 |
Valuation allowance for prior year adjustment | 112 | |
Other | 205 | 251 |
Scientific research and experimental development expenditures | $ 31,052 | $ 39,829 |
Income taxes (Details)
Income taxes (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Canadian federal | |
NOL Carry Forwards | $ 206.5 |
Scientific research and experimental development expenditures available to reduce future taxable income | 26.5 |
Canadian provincial | |
NOL Carry Forwards | 203.4 |
Scientific research and experimental development expenditures available to reduce future taxable income | 31.8 |
United States | |
NOL Carry Forwards | $ 54 |
Income taxes - Deferred Tax Ass
Income taxes - Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Income taxes | ||
Net operating loss carry-forwards | $ 66,656 | $ 57,952 |
Tax basis of property and equipment in excess of carrying values | 67 | 97 |
Tax basis of right of use assets | (421) | |
Tax basis of lease liability | 438 | |
Tax basis of reserves | 6 | |
Federal SR&ED investment tax credits | 3,735 | 545 |
Taxation of federal SR&ED investment tax credits | (990) | (82) |
Research and development expenditures | 7,643 | 6,323 |
Financing costs | 186 | 1,008 |
Stock based compensation | 2,850 | |
Change in tax rates | 51 | |
Others | 45 | 15 |
Total Net deferred tax assets | 80,215 | 65,909 |
Less Valuation allowance | $ (80,215) | $ (65,909) |
Government assistance (Details)
Government assistance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Government assistance | ||
Research and development expenditures eligible for investment tax credits | $ 312 | $ 456 |
Commitments (Details)
Commitments (Details) | Dec. 31, 2023 USD ($) |
Commitments | |
Contractual commitments | $ 0 |
Currency risk (Details)
Currency risk (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Net financial position exposure | $ 2,657 | $ 58 |
Cash | ||
Net financial position exposure | 2,441 | 262 |
Other receivables | ||
Net financial position exposure | 263 | 262 |
Operating lease assets | ||
Net financial position exposure | 311 | 462 |
Accounts payable and accrued liabilities | ||
Net financial position exposure | (52) | (484) |
Operating lease liabilities | ||
Net financial position exposure | $ (306) | $ (444) |
Fair value of financial instr_2
Fair value of financial instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Fair value of financial instruments | $ 0 | $ 0 |
Royalty Purchase Agreement (Det
Royalty Purchase Agreement (Details) - RTW Investments, LP - Strategic Financing Agreements $ in Millions | Mar. 27, 2023 USD ($) |
Royalty Purchase Agreement | |
Funding received from sale of product rights | $ 75 |
Up to $500 million | |
Royalty Purchase Agreement | |
Future payment as a percentage of aggregate net sales | 7% |
Threshold amount of annual aggregate net sales | $ 500 |
Additional future payment as a percentage of aggregate net sales | 9.50% |
Above $800 million | |
Royalty Purchase Agreement | |
Future payment as a percentage of aggregate net sales | 1% |
Threshold amount of annual aggregate net sales | $ 800 |
Minimum | Above $500 million | |
Royalty Purchase Agreement | |
Future payment as a percentage of aggregate net sales | 4% |
Threshold amount of annual aggregate net sales | $ 500 |
Maximum | Up to $800 million | |
Royalty Purchase Agreement | |
Future payment as a percentage of aggregate net sales | 4% |
Threshold amount of annual aggregate net sales | $ 800 |
Other receivables (Details)
Other receivables (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Other receivables | ||
Interest receivable | $ 528 | $ 615 |
Sales tax receivable | 264 | 261 |
Clinical receivable | 2,400 | |
Other current receivable | 16 | 6 |
Other receivables | $ 3,208 | $ 882 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Mar. 04, 2024 | Feb. 28, 2024 | Dec. 31, 2022 | |
Subsequent events | |||
Net proceeds | $ 2,630 | ||
Subsequent Event [Member] | Pre-funded warrants | Strategic Financing Agreements | |||
Subsequent events | |||
Share price (in dollar per share) | $ 1.499 | ||
Warrants issued to purchase shares | 3,333,333 | ||
Warrants exercise price | $ 0.001 | ||
Subsequent Event [Member] | Pre-funded warrants | Strategic Financing Agreements | Maximum [Member] | |||
Subsequent events | |||
Number of shares issued during the period | 3,000,000 | ||
Subsequent Event [Member] | Underwriters | Strategic Financing Agreements | |||
Subsequent events | |||
Number of shares issued during the period | 3,000,000 | 16,666,667 | |
Share price (in dollar per share) | $ 1.50 | ||
Net proceeds | $ 32,400 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (59,685) | $ (58,388) |
Insider Trading Arrangements
Insider Trading Arrangements - Lorenz Muller | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | Type of Trading Arrangement Name and Position Action Date Rule 10b5-1* Non- Rule 10b5-1** Total Shares to be Sold Expiration Date Lorenz Muller, Chief Commercial Officer Termination 1 January 10, 2024 X 100,000 1/30/2026 * Contract, instruction or written plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act. ** “Non-Rule 10b5-1 trading arrangement” as defined in Item 408(c) of Regulation S-K under the Exchange Act. 1 |
Name | Lorenz Muller |
Title | Chief Commercial Officer |
Adoption Date | October 12, 2023 |
Rule 10b5-1 Arrangement Terminated | true |