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Metacrine (MTCR)

Document and Entity Information

Document and Entity Information - shares9 Months Ended
Sep. 30, 2020Nov. 09, 2020
Cover [Abstract]
Document Type10-Q
Amendment Flagfalse
Document Period End DateSep. 30,
2020
Document Fiscal Year Focus2020
Document Fiscal Period FocusQ3
Entity Registrant NameMetacrine, Inc.
Entity Central Index Key0001634379
Entity Current Reporting StatusYes
Entity Interactive Data CurrentYes
Current Fiscal Year End Date--12-31
Entity Filer CategoryNon-accelerated Filer
Entity Small Businessfalse
Entity Emerging Growth Companytrue
Entity Ex Transition Periodtrue
Entity Shell Companyfalse
Entity Common Stock Shares Outstanding25,956,300
Security12b TitleCommon Stock, par value $0.0001 per share
Trading SymbolMTCR
Security Exchange NameNASDAQ
Entity File Number001-39512
Entity Incorporation State Country CodeDE
Entity Tax Identification Number47-2297384
Entity Address Address Line13985 Sorrento Valley Blvd.
Entity Address, Address Line TwoSuite C
Entity Address City Or TownSan Diego
Entity Address State Or ProvinceCA
Entity Address Postal Zip Code92121
City Area Code858
Local Phone Number369-7800
Document Quarterly Reporttrue
Document Transition Reportfalse

Unaudited Condensed Consolidate

Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in ThousandsSep. 30, 2020Dec. 31, 2019
Current assets:
Cash and cash equivalents $ 98,281 $ 15,668
Short-term investments10,958 39,983
Prepaid expenses and other current assets1,663 1,692
Total current assets110,902 57,343
Property and equipment, net690 735
Operating lease right-of-use asset1,740 2,203
Total assets113,332 60,281
Current liabilities:
Accounts payable655 239
Accrued liabilities2,725 3,549
Current portion of operating lease liability722 600
Total current liabilities4,102 4,388
Unvested stock liability34 109
Warrant liability184
Operating lease liability, net of current portion1,199 1,748
Long-term debt, net of debt discount9,309 9,099
Other long-term liabilities525 525
Commitments and contingencies (Note 3)
Convertible preferred stock, $0.0001 par value; authorized shares – 10,000,000 and 85,683,310 at September 30, 2020 and December 31, 2019, respectively; issued and outstanding shares – none and 85,093,688 at September 30, 2020 and December 31, 2019, respectively; Liquidation preference – none and $123,100 at September 30, 2020 and December 31, 2019, respectively.122,465
Stockholders’ equity (deficit):
Common stock, $0.0001 par value; authorized shares – 200,000,000 and 111,098,749 at September 30, 2020 and December 31, 2019, respectively; issued shares – 25,957,408 and 2,682,397 at September 30, 2020 and December 31, 2019, respectively; outstanding shares – 25,909,488 and 2,484,848 at September 30, 2020 and December 31, 2019, respectively.3
Additional paid-in-capital208,076 5,164
Accumulated other comprehensive income14 41
Accumulated deficit(109,930)(83,442)
Total stockholders’ equity (deficit)98,163 (78,237)
Total liabilities, convertible preferred stock, and stockholders’ equity (deficit) $ 113,332 $ 60,281

Unaudited Condensed Consolida_2

Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in ThousandsSep. 30, 2020Dec. 31, 2019
Statement Of Financial Position [Abstract]
Convertible preferred stock, par value $ 0.0001 $ 0.0001
Convertible preferred stock, authorized shares10,000,000 85,683,310
Convertible preferred stock, issued shares0 85,093,688
Convertible preferred stock, outstanding shares0 85,093,688
Liquidation preference $ 0 $ 123,100
Common stock, par value $ 0.0001 $ 0.0001
Common stock, authorized shares200,000,000 111,098,749
Common stock, issued shares25,957,408 2,682,397
Common stock, outstanding shares25,909,488 2,484,848

Unaudited Condensed Consolida_3

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands3 Months Ended9 Months Ended
Sep. 30, 2020Sep. 30, 2019Sep. 30, 2020Sep. 30, 2019
Operating expenses:
Research and development $ 6,217 $ 7,647 $ 19,973 $ 19,497
General and administrative2,693 1,069 6,087 3,057
Total operating expenses8,910 8,716 26,060 22,554
Loss from operations(8,910)(8,716)(26,060)(22,554)
Other income (expense):
Interest income82 344 445 1,111
Interest expense(258)(93)(765)(93)
Change in fair value of warrant liability45 (75)
Other income (expense)(13)(33)
Total other income (expense)(144)251 (428)1,018
Net loss(9,054)(8,465)(26,488)(21,536)
Other comprehensive loss:
Unrealized gain (loss) on available-for-sale securities, net(65)(27)115
Comprehensive loss $ (9,119) $ (8,465) $ (26,515) $ (21,421)
Net loss per share, basic and diluted $ (1.41) $ (3.51) $ (6.89) $ (9.17)
Weighted average shares of common stock outstanding, basic and diluted6,436,546 2,409,227 3,845,793 2,349,635

Unaudited Condensed Consolida_4

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands9 Months Ended
Sep. 30, 2020Sep. 30, 2019
Operating activities:
Net loss $ (26,488) $ (21,536)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation217 187
Stock-based compensation3,151 1,442
Non-cash interest expense210 23
Accretion of discounts on investments, net(91)(579)
Amortization of right-of-use asset463 432
Change in fair value of warrant liability75
Changes in operating assets and liabilities
Prepaid expenses and other current assets29 89
Accounts payable and accrued liabilities(1,260)1,646
Lease liability(427)(374)
Net cash used in operating activities(24,121)(18,670)
Investing activities:
Purchases of property and equipment(172)(56)
Purchases of short-term investments(7,944)(48,827)
Sale and maturities of short-term investments37,033 60,225
Net cash provided by investing activities28,917 11,342
Financing activities:
Proceeds from issuance of common stock from initial public offering, net of issuance costs77,750
Proceeds from exercise of common stock options69 30
Repurchase of unvested common stock(2)(1)
Proceeds from issuance of long-term debt, net of issuance cost9,717
Net cash provided by financing activities77,817 9,746
Net increase in cash and cash equivalents82,613 2,418
Cash and cash equivalents at beginning of period15,668 15,965
Cash and cash equivalents at end of period98,281 18,383
Supplemental disclosure of cash flow information:
Cash paid for interest554
Supplemental non-cash investing and financing activities:
Conversion of convertible preferred stock to common stock122,465
Conversion of convertible preferred stock warrant to common stock warrant259
Issuance costs in accounts payable and accrued liabilities852
Initial fair value of warrant liability184
Vesting of common stock $ 73 $ 75

Unaudited Condensed Consolida_5

Unaudited Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) - USD ($) $ in ThousandsTotalConvertible Preferred StockCommon StockAdditional Paid-In CapitalAccumulated Other Comprehensive IncomeAccumulated Deficit
Temporary equity, Balance, shares at Dec. 31, 201885,093,688
Temporary equity, Balance at Dec. 31, 2018 $ 122,465
Balance, shares at Dec. 31, 20182,249,749
Balance at Dec. 31, 2018 $ (51,465) $ 3,097 $ (53) $ (54,509)
Stock-based compensation1,442 1,442
Exercise of stock options30 30
Exercise of stock options, shares22,344
Vesting of early exercised stock options75 75
Vesting of early exercised stock options, shares161,548
Unrealized gain (loss) on available-for-sale securities, net115 115
Net loss(21,536)(21,536)
Temporary equity, Balance, shares at Sep. 30, 201985,093,688
Temporary equity, Balance at Sep. 30, 2019 $ 122,465
Balance, shares at Sep. 30, 20192,433,641
Balance at Sep. 30, 2019(71,339)4,644 62 (76,045)
Temporary equity, Balance, shares at Jun. 30, 201985,093,688
Temporary equity, Balance at Jun. 30, 2019 $ 122,465
Balance, shares at Jun. 30, 20192,383,729
Balance at Jun. 30, 2019(63,384)4,134 62 (67,580)
Stock-based compensation484 484
Vesting of early exercised stock options26 26
Vesting of early exercised stock options, shares49,912
Net loss(8,465)(8,465)
Temporary equity, Balance, shares at Sep. 30, 201985,093,688
Temporary equity, Balance at Sep. 30, 2019 $ 122,465
Balance, shares at Sep. 30, 20192,433,641
Balance at Sep. 30, 2019 $ (71,339)4,644 62 (76,045)
Temporary equity, Balance, shares at Dec. 31, 201985,093,688 85,093,688
Temporary equity, Balance at Dec. 31, 2019 $ 122,465 $ 122,465
Balance, shares at Dec. 31, 20192,484,848 2,484,848
Balance at Dec. 31, 2019 $ (78,237)5,164 41 (83,442)
Issuance of common stock from initial public offering, net of issuance costs76,898 $ 1 76,897
Issuance of common stock from initial public offering, net of issuance costs, shares6,540,000
Temporary equity, Conversion of preferred stock to common stock from completion of initial public offering, shares(85,093,688)
Temporary equity, Conversion of preferred stock to common stock from completion of initial public offering $ (122,465)
Conversion of preferred stock to common stock from completion of initial public offering, shares16,685,014
Conversion of preferred stock to common stock from completion of initial public offering122,465 $ 2 122,463
Conversion of convertible preferred stock warrant to common stock warrant259 259
Stock-based compensation3,151 3,151
Exercise of stock options $ 69 69
Exercise of stock options, shares54,266 54,266
Vesting of early exercised stock options $ 73 73
Vesting of early exercised stock options, shares145,360
Unrealized gain (loss) on available-for-sale securities, net(27)(27)
Net loss $ (26,488)(26,488)
Temporary equity, Balance, shares at Sep. 30, 20200
Balance, shares at Sep. 30, 202025,909,488 25,909,488
Balance at Sep. 30, 2020 $ 98,163 $ 3 208,076 14 (109,930)
Temporary equity, Balance, shares at Jun. 30, 202085,093,688
Temporary equity, Balance at Jun. 30, 2020 $ 122,465
Balance, shares at Jun. 30, 20202,600,373
Balance at Jun. 30, 2020(94,213)6,584 79 (100,876)
Issuance of common stock from initial public offering, net of issuance costs76,898 $ 1 76,897
Issuance of common stock from initial public offering, net of issuance costs, shares6,540,000
Temporary equity, Conversion of preferred stock to common stock from completion of initial public offering, shares(85,093,688)
Temporary equity, Conversion of preferred stock to common stock from completion of initial public offering $ (122,465)
Conversion of preferred stock to common stock from completion of initial public offering, shares16,685,014
Conversion of preferred stock to common stock from completion of initial public offering122,465 $ 2 122,463
Conversion of convertible preferred stock warrant to common stock warrant259 259
Stock-based compensation1,791 1,791
Exercise of stock options58 58
Exercise of stock options, shares35,882
Vesting of early exercised stock options24 24
Vesting of early exercised stock options, shares48,219
Unrealized gain (loss) on available-for-sale securities, net(65)(65)
Net loss $ (9,054)(9,054)
Temporary equity, Balance, shares at Sep. 30, 20200
Balance, shares at Sep. 30, 202025,909,488 25,909,488
Balance at Sep. 30, 2020 $ 98,163 $ 3 $ 208,076 $ 14 $ (109,930)

Basis of Presentation

Basis of Presentation9 Months Ended
Sep. 30, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Basis of PresentationNote 1. Basis of Presentation Organization Metacrine, Inc. (the “Company”) was incorporated in the state of Delaware on September 17, 2014 and is based in San Diego, California. The Company is a clinical-stage biopharmaceutical company focused on building an innovative pipeline of differentiated drugs to treat liver and gastrointestinal diseases. Principles of Consolidation In May 2019, the Company established a wholly-owned Australian subsidiary, Metacrine, Pty Ltd, in order to conduct various clinical activities for its product candidates. The unaudited condensed consolidated financial statements include the accounts of the Company and Metacrine, Pty Ltd. The functional currency of both the Company and Metacrine, Pty Ltd is the U.S. dollar. Assets and liabilities that are not denominated in the functional currency are remeasured into U.S. dollars at foreign currency exchange rates in effect at the balance sheet date except for nonmonetary assets, which are remeasured at historical foreign currency exchange rates in effect at the date of transaction. Net realized and unrealized gains and losses from foreign currency transactions and remeasurement are reported in other income (expense) in the unaudited condensed consolidated statements of operations and comprehensive loss. All intercompany accounts and transactions have been eliminated in consolidation. Initial Public Offering On September 18, 2020, the Company closed its initial public offering (“IPO”) of 6,540,000 shares of common stock at a public offering price of $13.00 per share. The Company raised $76.9 million in net proceeds from the IPO after deducting underwriters’ discounts and commissions of $6.0 million and issuance costs of $2.2 million. The net proceeds from the Company’s IPO included $0.9 million in unpaid issuance costs classified in accounts payable and accrued liabilities as of September 30, 2020. Upon closing of the Company’s IPO, all of the Company’s outstanding preferred stock were automatically converted into 16,685,014 shares of common stock. Reverse Stock Split On September 8, 2020, the Company effected a 1-for-5.1 reverse stock split of its common stock. The par value and the authorized shares of the common stock were not adjusted as a result of the reverse stock split. The reverse stock split resulted in an adjustment to the Series Preferred conversion prices to reflect a proportional decrease in the number of shares of common stock to be issued upon conversion. The unaudited condensed consolidated financial statements and accompanying notes give retroactive effect to the reverse stock split for all periods presented. Liquidity and Capital Resources From its inception through September 30, 2020, the Company has devoted substantially all its efforts to organizing and staffing, business planning, raising capital, researching, discovering and developing its pipeline in FXR and other drug targets, and general and administrative support for these operations and has funded its operations primarily with the net proceeds from the issuance of convertible preferred stock, common stock, and long-term debt. The Company has incurred net losses and negative cash flows from operations since inception and had an accumulated deficit of $109.9 million and $83.4 million as of September 30, 2020 and December 31, 2019, respectively. Management expects the Company will incur substantial operating losses for the foreseeable future in order to complete clinical trials and launch and commercialize any product candidates for which it receives regulatory approval. The Company will need to raise additional capital through a combination of equity offerings, debt financings, additional borrowings under the Company’s existing loan agreement, collaborations, and other similar arrangements. Use of Estimates The Company’s unaudited condensed consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The preparation of the Company’s unaudited condensed consolidated financial statements requires it to make estimates and assumptions that impact the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities. The most significant estimates in the Company’s unaudited condensed consolidated financial statements relate to accruals for research and development expenses and stock-based compensation. These estimates and assumptions are based on current facts, historical experience, and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected. Fair Value Measurement The following tables summarize the Company’s financial instruments measured at fair value on a recurring basis:
Fair Value Measurements At Reporting Date Using
Total
Quoted Prices in Active Markets For Identical Assets (Level 1)
Significant Other Observable Inputs (Level 2)
Significant Unobservable Inputs (Level 3)
As of September 30, 2020
Assets:
Commercial paper
$
3,249
$

$
3,249
$

Corporate debt securities
4,707

4,707

Asset backed securities
3,002

3,002

Total assets measured at fair value
$
10,958
$

$
10,958
$

As of December 31, 2019
Assets:
Commercial paper
$
9,694
$

$
9,694
$

Corporate debt securities
24,781

24,781

Asset backed securities
5,508

5,508

Total assets measured at fair value
$
39,983
$

$
39,983
$

Liabilities:
Preferred stock warrant liability
$
184
$

$

$
184
Upon completion of the Company’s IPO, the Series C convertible preferred stock warrant was automatically converted into a warrant to purchase 23,122 shares of common stock. The Company adjusted the carrying value of the Series C convertible preferred stock warrant to reflect its estimated fair value on the IPO date and will not be recognizing any fair value adjustments subsequent to its conversion to a common stock warrant. The assumptions used in the Black-Scholes option pricing model to determine the fair value of the warrant liability were as follows:
September 15, 2020 (Conversion Date)
December 31, 2019
Fair value of underlying preferred stock
$
13.00
$
9.79
Exercise price
$
10.812
$
10.812
Risk-free interest rate
0.7
%
1.9
%
Expected volatility
93.3
%
80.0
%
Expected term (in years)
9.0
9.7
Expected dividend yield


For the period from issuance to September 15, 2020, there were no material changes in the fair value of the warrant liability or the related assumptions used in the Black-Scholes option pricing model. The following table provides a reconciliation of the warrant liability measured at fair value using Level 3 significant unobservable inputs:
Warrant Liability
Balance at December 31, 2019
$
184
Change in fair value of warrant liability
75
Conversion to common stock warrant upon completion of IPO
(259
)
Balance at September 30, 2020
-
Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. Cash and cash equivalents include cash in readily available checking accounts, money market funds, corporate debt securities, and obligations of U.S. Government-sponsored enterprises. The carrying amounts reported in the unaudited condensed consolidated balance sheets for cash and cash equivalents are valued at cost, which approximates fair value. Short-Term Investments Short-term investments primarily consist of commercial paper, corporate debt securities, and asset backed securities. The Company has classified these investments as available-for-sale, as the sale of such investments may be required prior to maturity to implement management strategies, and therefore has classified all short-term investments with maturity dates beyond three months at the date of purchase as current assets in the accompanying unaudited condensed consolidated balance sheets. Short-term investments are carried at fair value with the unrealized gains and losses included in other comprehensive loss as a component of stockholders’ equity until realized. Any premium or discount arising at purchase is amortized and/or accreted to interest income as an adjustment to yield using the straight-line method over the life of the instrument. A decline in the market value of any short-term investment below amortized cost that is determined to be other-than-temporary will result in a revaluation of its carrying amount to fair value. The impairment is charged to earnings and a new cost basis for the security is established. No such impairment charges have been recorded for any period presented. Realized gains and losses are determined using the specific identification method and are included in other income (expense). The following tables summarize short-term investments (in thousands):
As of September 30, 2020
Unrealized
Amortized Cost
Gains
Losses
Estimated Fair Value
Commercial paper
$
3,243
$
6
$

$
3,249
Corporate debt securities
4,701
6

4,707
Asset backed securities
3,000
2

3,002
Total
$
10,944
$
14
$

$
10,958
As of December 31, 2019
Unrealized
Amortized Cost
Gains
Losses
Estimated Fair Value
Commercial paper
$
9,680
$
14
$

$
9,694
Corporate debt securities
24,762
20
(1
)
24,781
Asset backed securities
5,500
8

5,508
Total
$
39,942
$
42
$
(1
)
$
39,983
As of September 30, 2020 and December 31, 2019, the remaining contractual maturities of all short-term investments were less than one year and the Company determined none of its investments in an unrealized loss position had other-than-temporary impairment. Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, and short-term investments. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. Property and Equipment, Net Property and equipment are stated at cost and depreciated on a straight-line basis over the estimated useful life of the related assets (generally three to five years). Leasehold improvements are stated at cost and amortized on a straight-line basis over the lesser of the remaining lease term or the estimated useful life of the leasehold improvements. Repairs and maintenance costs are charged to expense as incurred. Leases At the inception of a contractual arrangement, the Company determines whether the contract contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. Lease terms are determined at the commencement date by considering whether renewal options and termination options are reasonably assured of exercise. For its long-term operating leases, the Company recognizes a lease liability and a right-of-use (“ROU”) asset on its unaudited condensed consolidated balance sheets and recognizes lease expense on a straight-line basis over the lease term. The lease liability is determined as the present value of future lease payments using the discount rate implicit in the lease or, if the implicit rate is not readily determinable, an estimate of the Company’s incremental borrowing rate. The ROU asset is based on the lease liability, adjusted for any prepaid or deferred rent. The Company aggregates all lease and non-lease components for each class of underlying assets into a single lease component and variable charges for common area maintenance and other variable costs are recognized as expense as incurred. The Company has elected to not recognize a lease liability or ROU asset in connection with short-term operating leases and recognizes lease expense for short-term operating leases on a straight-line basis over the lease term. The Company does not have any financing leases. Impairment of Long-Lived Assets The Company reviews long-lived assets, such as property and equipment, for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. Fair value would be assessed using discounted cash flows or other appropriate measures of fair value. The Company has not recognized any impairment losses through September 30, 2020. Warrant Liability The Company issued a freestanding warrant to purchase shares of its Series C convertible preferred stock. Since the underlying Series C convertible preferred stock was classified as temporary equity, the Series C convertible preferred stock warrant was classified as a liability as of December 31, 2019 in the accompanying unaudited condensed consolidated balance sheets. The Company adjusted the carrying value of such Series C convertible preferred stock warrant to its estimated fair value at each reporting date, with any related increases or decreases in the fair value recorded within other income (expense) in the unaudited condensed consolidated statements of operations and comprehensive loss. The Series C convertible preferred stock warrant was automatically converted into 23,122 shares of common stock upon completion of the Company’s IPO. The Company adjusted the carrying value of the Series C convertible preferred stock warrant to reflect its estimated fair value on the IPO date and ceased recognizing any fair value adjustments subsequent to its conversion to a common stock warrant. Research and Development Costs All costs of research and development are expensed in the period incurred. Research and development costs primarily consist of salaries and related expenses for personnel, stock-based compensation, external research and development costs incurred under agreements with contract research organizations, investigative sites and consultants to conduct our preclinical, toxicology and clinical studies, laboratory supplies, costs related to compliance with regulatory requirements, costs related to manufacturing the Company’s product candidates for clinical trials and preclinical studies, facilities, depreciation, and other allocated expenses. Payments made prior to the receipt of goods or services to be used in research and development are capitalized until the related goods are delivered or services performed. The Company has entered into various research and development contracts with clinical research organizations, clinical manufacturing organizations and other companies. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and payments made in advance of performance are reflected in the accompanying unaudited condensed consolidated balance sheets as prepaid expenses. The Company records accruals for estimated costs incurred for ongoing research and development activities. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the services, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates may be made in determining the prepaid or accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates. Patent Costs Costs related to filing and pursuing patent applications are recorded as general and administrative expenses and expensed as incurred since recoverability of such expenditures is uncertain. Stock-Based Compensation Stock-based compensation expense represents the cost of the grant date fair value of stock option grants recognized over the requisite service period of the awards (usually the vesting period) on a straight-line basis. The Company recognizes expense for awards subject to performance-based milestones over the remaining service period when management determines that achievement of the milestone is probable. Management evaluates when the achievement of a performance-based milestone is probable based on the expected satisfaction of the performance conditions at each reporting date. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model and recognizes forfeitures as they occur. Income Taxes Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the unaudited condensed consolidated financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the unaudited condensed consolidated financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes net deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies and results of recent operations. If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their net recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions on the basis of a two-step process whereby (1) management determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Any accrued interest and penalties are included within the related tax liability. Comprehensive Loss Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources. The only component of other comprehensive loss is unrealized gains (losses) on available-for-sale securities. Comprehensive gains (losses) have been reflected in the unaudited condensed consolidated statements of operations and comprehensive loss and as a separate component in the unaudited condensed consolidated statements of convertible preferred stock and stockholders’ equity (deficit) for all periods presented. Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company and its chief operating decision-maker view the Company’s operations and manages its business in one operating segment. Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses, to improve financial reporting by requiring timely recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The ASU requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. This guidance will become effective for the Company beginning January 1, 2023, with early adoption permitted. The Company is evaluating ASU No. 2016-13 and does not currently expect the adoption of this guidance will have a material impact on its unaudited condensed consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU No. 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and also improves consistent application by clarifying and amending existing guidance. This guidance will become effective for the Company beginning January 1, 2021, with early adoption permitted. The Company is evaluating ASU No. 2019-12 and does not currently expect the adoption of this guidance will have a material impact on its unaudited condensed consolidated financial statements. Net Loss Per Share Basic net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding for the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss by the weighted average number of common shares and dilutive common stock equivalents outstanding for the period determined using the treasury-stock and if-converted methods. Dilutive common stock equivalents are comprised of convertible preferred stock, preferred and common stock warrants, unvested common stock subject to repurchase, and options outstanding under the Company’s stock option plan. Potentially dilutive securities not included in the calculation of diluted net loss per share because to do so would be anti-dilutive are as follows (in common stock equivalent shares):
September 30,
December 31,
2020
2019
Convertible preferred stock

16,685,014
Preferred stock warrant

23,122
Common stock warrant
23,122

Common stock options
3,332,545
1,684,630
Unvested common stock
47,920
197,549
Total
3,403,587
18,590,315
Note 2 . Basis of Presentation Property and equipment consist of the following (in thousands):
September 30,
December 31,
2020
2019
Laboratory equipment
$
1,088
$
945
Computer equipment and software
207
182
Furniture and fixtures
178
178
Leasehold improvements
136
132
Property and equipment, gross
1,609
1,437
Less accumulated depreciation and amortization
(919
)
(702
)
Property and equipment, net
$
690
$
735
Accrued liabilities consist of the following (in thousands):
September 30,
December 31,
2020
2019
Accrued compensation
$
1,099
$
976
Accrued research and development
846
2,369
Other accrued liabilities
780
204
$
2,725
$
3,549

Commitment and Contingencies

Commitment and Contingencies9 Months Ended
Sep. 30, 2020
Commitments And Contingencies Disclosure [Abstract]
Commitments and ContingenciesNote 3 . Commitments and Contingencies Operating Leases The Company entered into a five-year noncancelable operating lease in June 2017 for its corporate headquarters in San Diego, California (the “2017 Lease”) under an agreement that commenced in March 2018. Under the terms of the agreement, there is no option to extend the lease and the Company is subject to additional charges for common area maintenance and other costs. Monthly rental payments due under the lease commenced in March 2018 and escalate throughout the lease term. Information related to the Company’s operating lease is as follows (in thousands):
Three Months Ended September 30,
Nine Months Ended September 30,
2020
2019
2020
2019
Operating lease expense (including variable costs of $83 and $75 during the three months ended September 30, 2020 and 2019 and $224 and $225 during the nine months ended September 30, 2020 and 2019)
$
277
$
273
$
813
$
818
Cash paid for amounts included in the measurement of lease liabilities
$
193
$
180
$
557
$
535
As of September 30, 2020 and December 31, 2019, the remaining lease term of the Company’s operating lease was 30 months and 39 months, respectively. As of September 30, 2020 and December 31, 2019, the discount rate on the Company’s operating lease was 8.0%. Future minimum noncancelable operating lease payments and information related to the lease liability are as follows (in thousands):
September 30, 2020
Remaining during 2020
$
210
2021
855
2022
876
2023
183
Total lease payments
2,124
Imputed interest
(203
)
Lease liability
1,921
Less current portion of lease liability
722
Lease liability, net of current portion
$
1,199
License Agreement with the Salk Institute In November 2016, the Company and The Salk Institute for Biological Studies (“The Salk”) entered into the Amended and Restated Exclusive FXR License Agreement, which was amended in February 2017 and July 2018, pursuant to which The Salk granted the Company an exclusive, worldwide license to certain FXR related intellectual property to make, use, offer for sale, import, export, and distribute products covered by such intellectual property (“FXR Licensed Products”) and a non-exclusive, worldwide license to use certain technical information to research, develop, test, make, use, offer for sale, import, export and distribute FXR Licensed Products. The Company is required to use commercially reasonable efforts to achieve certain diligence milestones with respect to the FXR Licensed Products, including with respect to developing, producing and selling FXR Licensed Products. The Company is also required to pay The Salk up to $6.5 million in milestone payments upon the completion of certain clinical and regulatory milestones, certain of which payments the Company may defer under certain circumstances. The Company is also obligated to pay The Salk a low single-digit percentage royalty on net sales, with a minimum annual royalty payment due beginning with the first commercial sale of each FXR Licensed Product. The applicable minimum annual royalty payment amount depends on the number of years that have elapsed since the first commercial sale of an FXR Licensed Product and is in the hundreds-of-thousands-of-dollars range. In addition, if the Company chooses to sublicense the FXR Licensed Product to any third parties, the Company must pay to The Salk a low single-digit percentage of all sublicensing revenue. In addition, in the event of a change of control, the Company is required to pay The Salk a low single-digit percentage of any payments and consideration that it receives in consideration of the change of control. Contingencies In the event the Company becomes subject to claims or suits arising in the ordinary course of business, the Company would accrue a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated.

Long-Term Debt

Long-Term Debt9 Months Ended
Sep. 30, 2020
Debt Disclosure [Abstract]
Long-Term DebtNote 4 . Long-Term Debt Long-term debt –consists of the following (in thousands):
September 30, 2020
December 31, 2019
Long-term debt
$
10,000
$
10,000
Unamortized debt discount
(691
)
(901
)
Long-term debt, net of debt discount
$
9,309
$
9,099
On August 27, 2019, the Company entered into a Loan and Security Agreement (the “Loan Agreement”, and all amounts borrowed thereunder the “Term Loans”) with a lender (the “Lender”). The Company borrowed $10.0 million (the “First Tranche Term Loan”) at the inception of the Loan Agreement and may borrow up to an additional $15.0 million in a fourth tranche at the Company’s option through December 31, 2020, subject to (i) achievement of certain clinical milestones and (ii) receipt of at least $70.0 million of net proceeds from either a preferred equity financing or an underwritten initial public offering. The available credit under the second and third tranche of the Loan Agreement expired on June 30, 2020. The Term Loans bear interest at a floating annual rate equal to the greater of (i) the prime rate used by the Lender plus 2.0% (5.25% and 6.75% at September 30, 2020 and December 31, 2019, respectively), and (ii) 7.25%. The monthly payments are interest-only until September 1, 2022. Subsequent to the interest-only period, the Term Loans will be payable in equal monthly installments of principal plus accrued and unpaid interest, through the maturity date of September 1, 2023 or, in the event the Fourth Tranche is funded in full, September 1, 2024 (the “Term Loan Maturity Date”). In addition, the Company is obligated to pay a final payment fee of 5.25% of the original principal amount of the Term Loans on the Term Loan Maturity Date. As of September 30, 2020 and December 31, 2019, the final payment fee of $0.5 million has been recorded as a long-term liability. The Company may elect to prepay all, but not less than all, of the Term Loans prior to the Term Loan Maturity Date, subject to a prepayment fee of up to 3.0% (which fee is 3.0% at September 30, 2020 and December 31, 2019) of the then outstanding principal balance. After repayment, no Term Loan amounts may be borrowed again. The Company’s obligations under the Loan Agreement are secured by a security interest in substantially all of its assets, other than its intellectual property. The Loan Agreement includes customary affirmative and negative covenants and also includes standard events of default, including an event of default based on the occurrence of a material adverse event, and a default under any agreement with a third party resulting in a right of such third party to accelerate the maturity of any debt in excess of $0.3 million. The negative covenants include, among others, restrictions on the Company transferring collateral, incurring additional indebtedness, engaging in mergers or acquisitions, paying cash dividends or making other distributions, making investments, creating liens, selling assets and making any payment on subordinated debt, in each case subject to certain exceptions. Upon the occurrence and continuance of an event of default, the Lender may declare all outstanding obligations immediately due and payable and take such other actions as set forth in the Loan Agreement. As of September 30, 2020 and December 31, 2019, the Company was in compliance with all applicable covenants under the Loan Agreement. In connection with the Loan Agreement, the Company issued the Lender a warrant (the “Lender Warrant”) to purchase shares of the Company’s Series C convertible preferred stock at an exercise price of $10.812 per share and expiring on August 27, 2029. The number of Series C convertible preferred shares issuable upon exercise of the warrant is an amount equal to (i) 2.5% of the aggregate Term Loans funded under the Loan Agreement divided by (ii) $10.812. Upon the funding of the First Tranche Term Loan, the Lender Warrant was initially exercisable for 117,924 shares of Series C convertible preferred stock. The Lender Warrant was automatically converted into a warrant to purchase 23,122 shares of common stock upon completion of the Company’s IPO. The initial $0.2 million fair value of the Lender Warrant, $0.5 million final payment fee, and $0.3 million of debt issuance costs were recorded as a debt discount and are being amortized to interest expense using the effective interest method over the term of the Term Loans. For the three months ended September 30, 2020 and 2019, the Company recognized $0.3 million and $0.1 million of interest expense, including $0.1 million and $23 thousand of debt discount amortization, respectively, in connection with the Loan Agreement. For the nine months ended September 30, 2020 and 2019, the Company recognized $0.8 million and $0.1 million of interest expense, including $0.2 million and $23 thousand of debt discount amortization. As of September 30, 2020 and December 31, 2019, the Company had outstanding Term Loans of $10.0 million and accrued interest of $0.1 million, respectively. Future minimum principal and interest payments under the Term Loans, including the final payment fee, as of September 30, 2020 are as follows (in thousands):
September 30, 2020
Remaining in 2020
$
185
2021
735
2022
4,438
2023
6,949
Total principal and interest payments
12,307
Less interest and final payment fee
(2,307
)
Long-term debt
$
10,000

Convertible Preferred Stock and

Convertible Preferred Stock and Stockholders' Equity9 Months Ended
Sep. 30, 2020
Equity [Abstract]
Convertible Preferred Stock and Stockholders' EquityNote 5 . Convertible Preferred Stock and Stockholders’ Equity Equity Incentive Plan In January 2015, the Company adopted the Metacrine, Inc. 2015 Equity Incentive Plan (as amended, the “2015 Plan”), which provides for the grant of incentive stock options, nonstatutory stock options, restricted stock awards, restricted stock unit awards, and stock appreciation rights to its employees, members of its board of directors, and consultants. In August 2020, the Company’s Board of Directors approved the 2020 Equity Incentive Plan (the “2020 Plan”), which is the successor and continuation of the 2015 Plan. No additional awards may be granted under the 2015 Plan and all outstanding awards under the 2015 Plan remain subject to the terms of the 2015 Plan. As of September 30, 2020, there were 2,759,799 shares authorized and available for issuance under the 2020 Plan. Recipients of incentive stock options are eligible to purchase shares of the Company’s common stock at an exercise price equal to no less than the estimated fair market value of such stock on the date of grant. The maximum term of options granted under the 2015 and 2020 Plans (or collectively, the “Equity Plans”) is ten years and, in general, the options issued under the Equity Plans vest over a four-year period from the vesting commencement date. The 2015 Plan allows for early exercise of stock options, which may be subject to repurchase by the Company at the lower of (i) the fair market value at the repurchase date or (ii) the original exercise price. The early exercise of stock options is not permitted under the 2020 Plan. A summary of the Company’s unvested shares and unvested stock liability is as follows (in thousands, except share data):
Number of Unvested Shares
Unvested Stock Liability
Balance at December 31, 2019
197,549
109
Repurchased shares
(4,269
)
(2
)
Vested shares
(145,360
)
(73
)
Balance at September 30, 2020
47,920
$
34
A summary of the Company’s stock option activity is as follows (in thousands, except share and per share data):
Number of Outstanding Options
Weighted Average Exercise Price
Weighted Average Remaining Contractual Term (In Years)
Aggregate Intrinsic Value
Balance at December 31, 2019
1,684,630
$
2.47
8.73
$
911
Granted
1,812,016
$
7.20
Cancelled
(109,835
)
$
5.14
Exercised
(54,266
)
$
1.27
Balance at September 30, 2020
3,332,545
$
4.98
8.85
$
17,525
Vested and expected to vest at September 30, 2020
3,332,545
$
4.98
8.85
$
17,525
The weighted average grant date fair value per share of option grants for the nine months ended September 30, 2020 and 2019 (excluding the impact of the modifications described below) was $8.41 and $2.09, respectively. The total intrinsic value of stock options exercised during the nine months ended September 30, 2020 and 2019 was $0.5 million and $49 thousand, respectively. The assumptions used in the Black-Scholes option pricing model to determine the fair value of stock option grants were as follows:
Nine Months Ended September 30,
2020
2019
Risk-free interest rate
0.4% – 0.7%
1.8% –1.9%
Expected volatility
82.4% – 94.8%
72.6% – 81.0%
Expected term (in years)
5.8 – 10.0
5.1 – 6.1
Expected dividend yield
0.0
%
0.0
% Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of grant for zero coupon U.S. Treasury notes with maturities similar to the expected term of the awards. Expected volatility. Since the Company recently completed its IPO and does not have sufficient trading history for its common stock, the expected volatility assumption is based on volatilities of a peer group of similar companies whose share prices are publicly available. The peer group was developed based on companies in the biotechnology industry. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available. Expected term. The expected term represents the period of time that options are expected to be outstanding. Because the Company does not have historical exercise behavior, it determines the expected life assumption using the simplified method, for employees, which is an average of the contractual term of the option and its vesting period. The expected term for nonemployee options is equal to the contractual term. Expected dividend yield. The Company bases the expected dividend yield assumption on the fact that it has never paid cash dividends and has no present intention to pay cash dividends and, therefore, used an expected dividend yield of zero. Employee Stock Purchase Plan In September 2020, the Company’s Board of Directors and stockholders adopted and approved the 2020 Employee Stock Purchase Plan (the “ESPP”). The ESPP permits eligible employees, who elect to participate in an offering under the ESPP, to contribute up to 15% of their eligible gross compensation towards the purchase of shares of common stock. Eligible employees can purchase up to 20,000 shares of common stock on a given purchase date. The price at which stock is purchased under the ESPP is equal to 85% of the fair market value of the Company’s common stock on the commencement date of each offering period or the relevant purchase date, whichever is lower. Offerings under the ESPP are approximately two years in duration and consist of four purchase periods that are approximately six months in duration. The ESPP is considered a compensatory plan as defined by the authoritative guidance for stock-based compensation. Stock-based compensation expense attributable to the ESPP was immaterial for the three and nine months ended September 30, 2020. As of September 30, 2020, there were 405,000 shares of common stock available for future issuance under the ESPP. Stock-Based Compensation Expense Stock-based compensation expense recognized for all equity awards has been reported in the unaudited condensed consolidated statements of operations and comprehensive loss as follows (in thousands):
Three Months Ended September 30,
Nine Months Ended September 30,
2020
2019
2020
2019
Research and development
$
342
$
211
$
839
$
620
General and administrative
1,449
273
2,312
822
$
1,791
$
484
$
3,151
$
1,442
As of September 30, 2020, unrecognized stock-based compensation cost was $16.3 million, which is expected to be recognized over a remaining weighted average period of approximately 3.0 years. Stock Option Modification In June 2020, the Company entered into a separation and consulting agreement in connection with the resignation of Dr. Song as the Company’s President and Chief Executive Officer. Under the terms of the separation and consulting agreement, Dr. Song will receive $0.1 million in cash compensation, was provided the potential of an extended period of time to exercise vested stock options if certain conditions are met, and will continue to vest while he provides limited but substantive consulting services to the Company through December 31, 2020. The benefit received in connection with the potential extended exercise period and continued vesting as originally scheduled were considered modifications to the original terms of the equity Dr. Song maintains. These modifications resulted in incremental fair value of $1.1 million, substantially all of which will be recognized on a straight-line basis through December 31, 2020. Common Stock Reserved For Future Issuance Common stock reserved for future issuance consists of the following:
September 30,
December 31,
2020
2019
Conversion of preferred stock

16,685,014
Common stock warrant
23,122

Preferred stock warrant

23,122
Common stock options outstanding
3,332,545
1,684,630
Shares available for issuance under the 2020 Plan
2,759,799
616,423
6,115,466
19,009,189

401 (k) Plan

401 (k) Plan9 Months Ended
Sep. 30, 2020
Compensation And Retirement Disclosure [Abstract]
401 (k) PlanNote 6 . 401(k) Plan The Company maintains a defined contribution 401(k) plan available to eligible employees. Employee contributions are voluntary and are determined on an individual basis, limited to the maximum amount allowable under federal tax regulations. The Company, at its discretion, may make certain matching contributions to the 401(k) plan. As of September 30, 2020, no contributions to the 401(k) plan have been made by the Company.

Basis of Presentation (Policies

Basis of Presentation (Policies)9 Months Ended
Sep. 30, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Principles of ConsolidationPrinciples of Consolidation In May 2019, the Company established a wholly-owned Australian subsidiary, Metacrine, Pty Ltd, in order to conduct various clinical activities for its product candidates. The unaudited condensed consolidated financial statements include the accounts of the Company and Metacrine, Pty Ltd. The functional currency of both the Company and Metacrine, Pty Ltd is the U.S. dollar. Assets and liabilities that are not denominated in the functional currency are remeasured into U.S. dollars at foreign currency exchange rates in effect at the balance sheet date except for nonmonetary assets, which are remeasured at historical foreign currency exchange rates in effect at the date of transaction. Net realized and unrealized gains and losses from foreign currency transactions and remeasurement are reported in other income (expense) in the unaudited condensed consolidated statements of operations and comprehensive loss. All intercompany accounts and transactions have been eliminated in consolidation.
Initial Public OfferingInitial Public Offering On September 18, 2020, the Company closed its initial public offering (“IPO”) of 6,540,000 shares of common stock at a public offering price of $13.00 per share. The Company raised $76.9 million in net proceeds from the IPO after deducting underwriters’ discounts and commissions of $6.0 million and issuance costs of $2.2 million. The net proceeds from the Company’s IPO included $0.9 million in unpaid issuance costs classified in accounts payable and accrued liabilities as of September 30, 2020. Upon closing of the Company’s IPO, all of the Company’s outstanding preferred stock were automatically converted into 16,685,014 shares of common stock.
Reverse Stock SplitReverse Stock Split On September 8, 2020, the Company effected a 1-for-5.1 reverse stock split of its common stock. The par value and the authorized shares of the common stock were not adjusted as a result of the reverse stock split. The reverse stock split resulted in an adjustment to the Series Preferred conversion prices to reflect a proportional decrease in the number of shares of common stock to be issued upon conversion. The unaudited condensed consolidated financial statements and accompanying notes give retroactive effect to the reverse stock split for all periods presented.
Liquidity and Capital ResourcesLiquidity and Capital Resources From its inception through September 30, 2020, the Company has devoted substantially all its efforts to organizing and staffing, business planning, raising capital, researching, discovering and developing its pipeline in FXR and other drug targets, and general and administrative support for these operations and has funded its operations primarily with the net proceeds from the issuance of convertible preferred stock, common stock, and long-term debt. The Company has incurred net losses and negative cash flows from operations since inception and had an accumulated deficit of $109.9 million and $83.4 million as of September 30, 2020 and December 31, 2019, respectively. Management expects the Company will incur substantial operating losses for the foreseeable future in order to complete clinical trials and launch and commercialize any product candidates for which it receives regulatory approval. The Company will need to raise additional capital through a combination of equity offerings, debt financings, additional borrowings under the Company’s existing loan agreement, collaborations, and other similar arrangements.
Use of EstimatesUse of Estimates The Company’s unaudited condensed consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The preparation of the Company’s unaudited condensed consolidated financial statements requires it to make estimates and assumptions that impact the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities. The most significant estimates in the Company’s unaudited condensed consolidated financial statements relate to accruals for research and development expenses and stock-based compensation. These estimates and assumptions are based on current facts, historical experience, and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected.
Fair Value MeasurementFair Value Measurement The following tables summarize the Company’s financial instruments measured at fair value on a recurring basis:
Fair Value Measurements At Reporting Date Using
Total
Quoted Prices in Active Markets For Identical Assets (Level 1)
Significant Other Observable Inputs (Level 2)
Significant Unobservable Inputs (Level 3)
As of September 30, 2020
Assets:
Commercial paper
$
3,249
$

$
3,249
$

Corporate debt securities
4,707

4,707

Asset backed securities
3,002

3,002

Total assets measured at fair value
$
10,958
$

$
10,958
$

As of December 31, 2019
Assets:
Commercial paper
$
9,694
$

$
9,694
$

Corporate debt securities
24,781

24,781

Asset backed securities
5,508

5,508

Total assets measured at fair value
$
39,983
$

$
39,983
$

Liabilities:
Preferred stock warrant liability
$
184
$

$

$
184
Upon completion of the Company’s IPO, the Series C convertible preferred stock warrant was automatically converted into a warrant to purchase 23,122 shares of common stock. The Company adjusted the carrying value of the Series C convertible preferred stock warrant to reflect its estimated fair value on the IPO date and will not be recognizing any fair value adjustments subsequent to its conversion to a common stock warrant. The assumptions used in the Black-Scholes option pricing model to determine the fair value of the warrant liability were as follows:
September 15, 2020 (Conversion Date)
December 31, 2019
Fair value of underlying preferred stock
$
13.00
$
9.79
Exercise price
$
10.812
$
10.812
Risk-free interest rate
0.7
%
1.9
%
Expected volatility
93.3
%
80.0
%
Expected term (in years)
9.0
9.7
Expected dividend yield


For the period from issuance to September 15, 2020, there were no material changes in the fair value of the warrant liability or the related assumptions used in the Black-Scholes option pricing model. The following table provides a reconciliation of the warrant liability measured at fair value using Level 3 significant unobservable inputs:
Warrant Liability
Balance at December 31, 2019
$
184
Change in fair value of warrant liability
75
Conversion to common stock warrant upon completion of IPO
(259
)
Balance at September 30, 2020
-
Cash and Cash EquivalentsCash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. Cash and cash equivalents include cash in readily available checking accounts, money market funds, corporate debt securities, and obligations of U.S. Government-sponsored enterprises. The carrying amounts reported in the unaudited condensed consolidated balance sheets for cash and cash equivalents are valued at cost, which approximates fair value.
Short-Term InvestmentsShort-Term Investments Short-term investments primarily consist of commercial paper, corporate debt securities, and asset backed securities. The Company has classified these investments as available-for-sale, as the sale of such investments may be required prior to maturity to implement management strategies, and therefore has classified all short-term investments with maturity dates beyond three months at the date of purchase as current assets in the accompanying unaudited condensed consolidated balance sheets. Short-term investments are carried at fair value with the unrealized gains and losses included in other comprehensive loss as a component of stockholders’ equity until realized. Any premium or discount arising at purchase is amortized and/or accreted to interest income as an adjustment to yield using the straight-line method over the life of the instrument. A decline in the market value of any short-term investment below amortized cost that is determined to be other-than-temporary will result in a revaluation of its carrying amount to fair value. The impairment is charged to earnings and a new cost basis for the security is established. No such impairment charges have been recorded for any period presented. Realized gains and losses are determined using the specific identification method and are included in other income (expense). The following tables summarize short-term investments (in thousands):
As of September 30, 2020
Unrealized
Amortized Cost
Gains
Losses
Estimated Fair Value
Commercial paper
$
3,243
$
6
$

$
3,249
Corporate debt securities
4,701
6

4,707
Asset backed securities
3,000
2

3,002
Total
$
10,944
$
14
$

$
10,958
As of December 31, 2019
Unrealized
Amortized Cost
Gains
Losses
Estimated Fair Value
Commercial paper
$
9,680
$
14
$

$
9,694
Corporate debt securities
24,762
20
(1
)
24,781
Asset backed securities
5,500
8

5,508
Total
$
39,942
$
42
$
(1
)
$
39,983
As of September 30, 2020 and December 31, 2019, the remaining contractual maturities of all short-term investments were less than one year and the Company determined none of its investments in an unrealized loss position had other-than-temporary impairment.
Concentration of Credit RiskConcentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, and short-term investments. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held.
Property and Equipment, NetProperty and Equipment, Net Property and equipment are stated at cost and depreciated on a straight-line basis over the estimated useful life of the related assets (generally three to five years). Leasehold improvements are stated at cost and amortized on a straight-line basis over the lesser of the remaining lease term or the estimated useful life of the leasehold improvements. Repairs and maintenance costs are charged to expense as incurred.
LeasesLeases At the inception of a contractual arrangement, the Company determines whether the contract contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. Lease terms are determined at the commencement date by considering whether renewal options and termination options are reasonably assured of exercise. For its long-term operating leases, the Company recognizes a lease liability and a right-of-use (“ROU”) asset on its unaudited condensed consolidated balance sheets and recognizes lease expense on a straight-line basis over the lease term. The lease liability is determined as the present value of future lease payments using the discount rate implicit in the lease or, if the implicit rate is not readily determinable, an estimate of the Company’s incremental borrowing rate. The ROU asset is based on the lease liability, adjusted for any prepaid or deferred rent. The Company aggregates all lease and non-lease components for each class of underlying assets into a single lease component and variable charges for common area maintenance and other variable costs are recognized as expense as incurred. The Company has elected to not recognize a lease liability or ROU asset in connection with short-term operating leases and recognizes lease expense for short-term operating leases on a straight-line basis over the lease term. The Company does not have any financing leases.
Impairment of Long-Lived AssetsImpairment of Long-Lived Assets The Company reviews long-lived assets, such as property and equipment, for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. Fair value would be assessed using discounted cash flows or other appropriate measures of fair value. The Company has not recognized any impairment losses through September 30, 2020.
Warrant LiabilityWarrant Liability The Company issued a freestanding warrant to purchase shares of its Series C convertible preferred stock. Since the underlying Series C convertible preferred stock was classified as temporary equity, the Series C convertible preferred stock warrant was classified as a liability as of December 31, 2019 in the accompanying unaudited condensed consolidated balance sheets. The Company adjusted the carrying value of such Series C convertible preferred stock warrant to its estimated fair value at each reporting date, with any related increases or decreases in the fair value recorded within other income (expense) in the unaudited condensed consolidated statements of operations and comprehensive loss. The Series C convertible preferred stock warrant was automatically converted into 23,122 shares of common stock upon completion of the Company’s IPO. The Company adjusted the carrying value of the Series C convertible preferred stock warrant to reflect its estimated fair value on the IPO date and ceased recognizing any fair value adjustments subsequent to its conversion to a common stock warrant.
Research and Development CostsResearch and Development Costs All costs of research and development are expensed in the period incurred. Research and development costs primarily consist of salaries and related expenses for personnel, stock-based compensation, external research and development costs incurred under agreements with contract research organizations, investigative sites and consultants to conduct our preclinical, toxicology and clinical studies, laboratory supplies, costs related to compliance with regulatory requirements, costs related to manufacturing the Company’s product candidates for clinical trials and preclinical studies, facilities, depreciation, and other allocated expenses. Payments made prior to the receipt of goods or services to be used in research and development are capitalized until the related goods are delivered or services performed. The Company has entered into various research and development contracts with clinical research organizations, clinical manufacturing organizations and other companies. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and payments made in advance of performance are reflected in the accompanying unaudited condensed consolidated balance sheets as prepaid expenses. The Company records accruals for estimated costs incurred for ongoing research and development activities. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the services, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates may be made in determining the prepaid or accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates.
Patent CostsPatent Costs Costs related to filing and pursuing patent applications are recorded as general and administrative expenses and expensed as incurred since recoverability of such expenditures is uncertain.
Stock-Based CompensationStock-Based Compensation Stock-based compensation expense represents the cost of the grant date fair value of stock option grants recognized over the requisite service period of the awards (usually the vesting period) on a straight-line basis. The Company recognizes expense for awards subject to performance-based milestones over the remaining service period when management determines that achievement of the milestone is probable. Management evaluates when the achievement of a performance-based milestone is probable based on the expected satisfaction of the performance conditions at each reporting date. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model and recognizes forfeitures as they occur.
Income TaxesIncome Taxes Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the unaudited condensed consolidated financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the unaudited condensed consolidated financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes net deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies and results of recent operations. If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their net recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions on the basis of a two-step process whereby (1) management determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Any accrued interest and penalties are included within the related tax liability.
Comprehensive LossComprehensive Loss Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources. The only component of other comprehensive loss is unrealized gains (losses) on available-for-sale securities. Comprehensive gains (losses) have been reflected in the unaudited condensed consolidated statements of operations and comprehensive loss and as a separate component in the unaudited condensed consolidated statements of convertible preferred stock and stockholders’ equity (deficit) for all periods presented.
Segment ReportingSegment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company and its chief operating decision-maker view the Company’s operations and manages its business in one operating segment.
Recent Accounting PronouncementsRecent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses, to improve financial reporting by requiring timely recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The ASU requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. This guidance will become effective for the Company beginning January 1, 2023, with early adoption permitted. The Company is evaluating ASU No. 2016-13 and does not currently expect the adoption of this guidance will have a material impact on its unaudited condensed consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU No. 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and also improves consistent application by clarifying and amending existing guidance. This guidance will become effective for the Company beginning January 1, 2021, with early adoption permitted. The Company is evaluating ASU No. 2019-12 and does not currently expect the adoption of this guidance will have a material impact on its unaudited condensed consolidated financial statements.
Net Loss Per ShareNet Loss Per Share Basic net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding for the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss by the weighted average number of common shares and dilutive common stock equivalents outstanding for the period determined using the treasury-stock and if-converted methods. Dilutive common stock equivalents are comprised of convertible preferred stock, preferred and common stock warrants, unvested common stock subject to repurchase, and options outstanding under the Company’s stock option plan. Potentially dilutive securities not included in the calculation of diluted net loss per share because to do so would be anti-dilutive are as follows (in common stock equivalent shares):
September 30,
December 31,
2020
2019
Convertible preferred stock

16,685,014
Preferred stock warrant

23,122
Common stock warrant
23,122

Common stock options
3,332,545
1,684,630
Unvested common stock
47,920
197,549
Total
3,403,587
18,590,315

Basis of Presentation (Tables)

Basis of Presentation (Tables)9 Months Ended
Sep. 30, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Summary of Financial Instruments Measured at Fair Value on Recurring BasisThe following tables summarize the Company’s financial instruments measured at fair value on a recurring basis:
Fair Value Measurements At Reporting Date Using
Total
Quoted Prices in Active Markets For Identical Assets (Level 1)
Significant Other Observable Inputs (Level 2)
Significant Unobservable Inputs (Level 3)
As of September 30, 2020
Assets:
Commercial paper
$
3,249
$

$
3,249
$

Corporate debt securities
4,707

4,707

Asset backed securities
3,002

3,002

Total assets measured at fair value
$
10,958
$

$
10,958
$

As of December 31, 2019
Assets:
Commercial paper
$
9,694
$

$
9,694
$

Corporate debt securities
24,781

24,781

Asset backed securities
5,508

5,508

Total assets measured at fair value
$
39,983
$

$
39,983
$

Liabilities:
Preferred stock warrant liability
$
184
$

$

$
184
Summary of Assumptions Used in Black-Scholes Option Pricing Model to Determine Fair Value of Warrant LiabilityThe assumptions used in the Black-Scholes option pricing model to determine the fair value of the warrant liability were as follows:
September 15, 2020 (Conversion Date)
December 31, 2019
Fair value of underlying preferred stock
$
13.00
$
9.79
Exercise price
$
10.812
$
10.812
Risk-free interest rate
0.7
%
1.9
%
Expected volatility
93.3
%
80.0
%
Expected term (in years)
9.0
9.7
Expected dividend yield

Summary of Reconciliation of Warrant Liability Measured at Fair Value Using Level 3 Significant Unobservable InputsThe following table provides a reconciliation of the warrant liability measured at fair value using Level 3 significant unobservable inputs:
Warrant Liability
Balance at December 31, 2019
$
184
Change in fair value of warrant liability
75
Conversion to common stock warrant upon completion of IPO
(259
)
Balance at September 30, 2020
-
Summary of Short-Term InvestmentsThe following tables summarize short-term investments (in thousands):
As of September 30, 2020
Unrealized
Amortized Cost
Gains
Losses
Estimated Fair Value
Commercial paper
$
3,243
$
6
$

$
3,249
Corporate debt securities
4,701
6

4,707
Asset backed securities
3,000
2

3,002
Total
$
10,944
$
14
$

$
10,958
As of December 31, 2019
Unrealized
Amortized Cost
Gains
Losses
Estimated Fair Value
Commercial paper
$
9,680
$
14
$

$
9,694
Corporate debt securities
24,762
20
(1
)
24,781
Asset backed securities
5,500
8

5,508
Total
$
39,942
$
42
$
(1
)
$
39,983
Summary of Potentially Dilutive Securities Not Included in Calculation of Diluted Net Loss Per SharePotentially dilutive securities not included in the calculation of diluted net loss per share because to do so would be anti-dilutive are as follows (in common stock equivalent shares):
September 30,
December 31,
2020
2019
Convertible preferred stock

16,685,014
Preferred stock warrant

23,122
Common stock warrant
23,122

Common stock options
3,332,545
1,684,630
Unvested common stock
47,920
197,549
Total
3,403,587
18,590,315
Schedule of Property and EquipmentProperty and equipment consist of the following (in thousands):
September 30,
December 31,
2020
2019
Laboratory equipment
$
1,088
$
945
Computer equipment and software
207
182
Furniture and fixtures
178
178
Leasehold improvements
136
132
Property and equipment, gross
1,609
1,437
Less accumulated depreciation and amortization
(919
)
(702
)
Property and equipment, net
$
690
$
735
Schedule of Accrued liabilitiesAccrued liabilities consist of the following (in thousands):
September 30,
December 31,
2020
2019
Accrued compensation
$
1,099
$
976
Accrued research and development
846
2,369
Other accrued liabilities
780
204
$
2,725
$
3,549

Commitments and Contingencies (

Commitments and Contingencies (Tables)9 Months Ended
Sep. 30, 2020
Commitments And Contingencies Disclosure [Abstract]
Information Related to Operating LeaseInformation related to the Company’s operating lease is as follows (in thousands):
Three Months Ended September 30,
Nine Months Ended September 30,
2020
2019
2020
2019
Operating lease expense (including variable costs of $83 and $75 during the three months ended September 30, 2020 and 2019 and $224 and $225 during the nine months ended September 30, 2020 and 2019)
$
277
$
273
$
813
$
818
Cash paid for amounts included in the measurement of lease liabilities
$
193
$
180
$
557
$
535
Schedule of Future Minimum Noncancelable Operating Lease Payments and Lease LiabilityFuture minimum noncancelable operating lease payments and information related to the lease liability are as follows (in thousands):
September 30, 2020
Remaining during 2020
$
210
2021
855
2022
876
2023
183
Total lease payments
2,124
Imputed interest
(203
)
Lease liability
1,921
Less current portion of lease liability
722
Lease liability, net of current portion
$
1,199

Long-Term Debt (Tables)

Long-Term Debt (Tables)9 Months Ended
Sep. 30, 2020
Debt Disclosure [Abstract]
Schedule of Long-Term DebtLong-term debt –consists of the following (in thousands):
September 30, 2020
December 31, 2019
Long-term debt
$
10,000
$
10,000
Unamortized debt discount
(691
)
(901
)
Long-term debt, net of debt discount
$
9,309
$
9,099
Schedule of Future Minimum Principal and Interest Payments under Term LoansFuture minimum principal and interest payments under the Term Loans, including the final payment fee, as of September 30, 2020 are as follows (in thousands):
September 30, 2020
Remaining in 2020
$
185
2021
735
2022
4,438
2023
6,949
Total principal and interest payments
12,307
Less interest and final payment fee
(2,307
)
Long-term debt
$
10,000

Convertible Preferred Stock a_2

Convertible Preferred Stock and Stockholders' Equity (Tables)9 Months Ended
Sep. 30, 2020
Equity [Abstract]
Summary of Unvested Shares and Unvested Stock LiabilityA summary of the Company’s unvested shares and unvested stock liability is as follows (in thousands, except share data):
Number of Unvested Shares
Unvested Stock Liability
Balance at December 31, 2019
197,549
109
Repurchased shares
(4,269
)
(2
)
Vested shares
(145,360
)
(73
)
Balance at September 30, 2020
47,920
$
34
Summary of Stock Option ActivityA summary of the Company’s stock option activity is as follows (in thousands, except share and per share data):
Number of Outstanding Options
Weighted Average Exercise Price
Weighted Average Remaining Contractual Term (In Years)
Aggregate Intrinsic Value
Balance at December 31, 2019
1,684,630
$
2.47
8.73
$
911
Granted
1,812,016
$
7.20
Cancelled
(109,835
)
$
5.14
Exercised
(54,266
)
$
1.27
Balance at September 30, 2020
3,332,545
$
4.98
8.85
$
17,525
Vested and expected to vest at September 30, 2020
3,332,545
$
4.98
8.85
$
17,525
Summary of Fair Value of Stock Option GrantsThe assumptions used in the Black-Scholes option pricing model to determine the fair value of stock option grants were as follows:
Nine Months Ended September 30,
2020
2019
Risk-free interest rate
0.4% – 0.7%
1.8% –1.9%
Expected volatility
82.4% – 94.8%
72.6% – 81.0%
Expected term (in years)
5.8 – 10.0
5.1 – 6.1
Expected dividend yield
0.0
%
0.0
%
Summary of Stock-Based Compensation Expense RecognizedStock-based compensation expense recognized for all equity awards has been reported in the unaudited condensed consolidated statements of operations and comprehensive loss as follows (in thousands):
Three Months Ended September 30,
Nine Months Ended September 30,
2020
2019
2020
2019
Research and development
$
342
$
211
$
839
$
620
General and administrative
1,449
273
2,312
822
$
1,791
$
484
$
3,151
$
1,442
Schedule of Common Stock Reserved for Future IssuanceCommon stock reserved for future issuance consists of the following:
September 30,
December 31,
2020
2019
Conversion of preferred stock

16,685,014
Common stock warrant
23,122

Preferred stock warrant

23,122
Common stock options outstanding
3,332,545
1,684,630
Shares available for issuance under the 2020 Plan
2,759,799
616,423
6,115,466
19,009,189

Basis of Presentation - Additio

Basis of Presentation - Additional Information (Details)Sep. 18, 2020USD ($)$ / sharessharesSep. 08, 2020Sep. 30, 2020USD ($)SecuritysharesSep. 30, 2020USD ($)SecuritysharesDec. 31, 2019USD ($)
Basis Of Presentation [Line Items]
Reverse stock split, description1-for-5.1 reverse stock split of its common stock
Reverse stock split, conversion ratio0.196078431
Accumulated deficit $ (109,930,000) $ (109,930,000) $ (83,442,000)
Cash, cash equivalents and short-term investments109,200,000 109,200,000
Working capital $ 106,800,000 $ 106,800,000
Number of investments unrealized loss position had other-than-temporary impairment | Security0 0
Long-lived assets, impairment losses $ 0
Minimum
Basis Of Presentation [Line Items]
Property and equipment, estimated useful life3 years
Maximum
Basis Of Presentation [Line Items]
Property and equipment, estimated useful life5 years
Series C Convertible Preferred Stock
Basis Of Presentation [Line Items]
Warrant converted into number of common stock | shares23,122
Common Stock
Basis Of Presentation [Line Items]
Shares issued | shares6,540,000 6,540,000
IPO | Common Stock
Basis Of Presentation [Line Items]
Shares issued | shares6,540,000
Shares issued, offering price per share | $ / shares $ 13
Net proceeds from issuance $ 76,900,000
Underwriter's discounts and commissions6,000,000
Stock issuance costs $ 2,200,000
Unpaid issuance costs $ 900,000 $ 900,000
Preferred stock automatically converted into Common Stock | shares16,685,014

Basis of Presentation - Summary

Basis of Presentation - Summary of Financial Instruments Measured at Fair Value on Recurring Basis (Details) - Fair Value Recurring - USD ($) $ in ThousandsSep. 30, 2020Dec. 31, 2019
Assets:
Total assets measured at fair value $ 10,958 $ 39,983
Liabilities:
Preferred stock warrant liability184
Commercial Paper
Assets:
Short-term investments3,249 9,694
Corporate Debt Securities
Assets:
Short-term investments4,707 24,781
Asset Backed Securities
Assets:
Short-term investments3,002 5,508
Significant Other Observable Inputs (Level 2)
Assets:
Total assets measured at fair value10,958 39,983
Significant Other Observable Inputs (Level 2) | Commercial Paper
Assets:
Short-term investments3,249 9,694
Significant Other Observable Inputs (Level 2) | Corporate Debt Securities
Assets:
Short-term investments4,707 24,781
Significant Other Observable Inputs (Level 2) | Asset Backed Securities
Assets:
Short-term investments $ 3,002 5,508
Significant Observable Inputs (Level 3)
Liabilities:
Preferred stock warrant liability $ 184

Basis of Presentation - Summa_2

Basis of Presentation - Summary of Assumptions Used in Black-Scholes Option Pricing Model to Determine Fair Value of Warrant Liability (Details) - Black Scholes OptionSep. 15, 2020$ / sharesDec. 31, 2019$ / shares
Fair Value of Underlying Preferred Stock
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Warrants and rights outstanding, measurement input13 9.79
Exercise Price
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Warrants and rights outstanding, measurement input10.812 10.812
Risk-Free Interest Rate
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Warrants and rights outstanding, measurement input0.007 0.019
Expected Volatility
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Warrants and rights outstanding, measurement input0.933 0.800
Expected Term (in years)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Warrants and rights outstanding, term9 years9 years 8 months 12 days

Basis of Presentation - Summa_3

Basis of Presentation - Summary of Reconciliation of Warrant Liability Measured at Fair Value Using Level 3 Significant Unobservable Inputs (Details) - USD ($) $ in Thousands3 Months Ended9 Months Ended
Sep. 30, 2020Sep. 30, 2020
Fair Value Disclosures [Abstract]
Balance at December 31, 2019 $ 184
Change in fair value of warrant liability $ (45)75
Conversion to common stock warrant upon completion of IPO $ (259)

Basis of Presentation - Summa_4

Basis of Presentation - Summary of Short-Term Investments (Details) - USD ($) $ in ThousandsSep. 30, 2020Dec. 31, 2019
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost $ 10,944 $ 39,942
Unrealized Gains14 42
Unrealized Losses(1)
Estimated Fair Value10,958 39,983
Commercial Paper
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost3,243 9,680
Unrealized Gains6 14
Estimated Fair Value3,249 9,694
Corporate Debt Securities
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost4,701 24,762
Unrealized Gains6 20
Unrealized Losses(1)
Estimated Fair Value4,707 24,781
Asset Backed Securities
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost3,000 5,500
Unrealized Gains2 8
Estimated Fair Value $ 3,002 $ 5,508

Basis of Presentation - Summa_5

Basis of Presentation - Summary of Potentially Dilutive Securities Not Included in Calculation of Diluted Net Loss Per Share (Details) - shares9 Months Ended12 Months Ended
Sep. 30, 2020Dec. 31, 2019
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total3,403,587 18,590,315
Convertible Preferred Stock
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total16,685,014
Preferred Stock Warrant
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total23,122
Common Stock Warrant
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total23,122
Common Stock Options
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total3,332,545 1,684,630
Unvested Common Stock
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total47,920 197,549

Basis of Presentation - Schedul

Basis of Presentation - Schedule of Property and Equipment (Details) - USD ($) $ in ThousandsSep. 30, 2020Dec. 31, 2019
Property Plant And Equipment [Line Items]
Property and equipment, gross $ 1,609 $ 1,437
Less accumulated depreciation and amortization(919)(702)
Property and equipment, net690 735
Laboratory Equipment
Property Plant And Equipment [Line Items]
Property and equipment, gross1,088 945
Computer Equipment and Software
Property Plant And Equipment [Line Items]
Property and equipment, gross207 182
Furniture and Fixtures
Property Plant And Equipment [Line Items]
Property and equipment, gross178 178
Leasehold Improvements
Property Plant And Equipment [Line Items]
Property and equipment, gross $ 136 $ 132

Basis of Presentation - Sched_2

Basis of Presentation - Schedule of Accrued liabilities (Details) - USD ($) $ in ThousandsSep. 30, 2020Dec. 31, 2019
Accrued Liabilities Current [Abstract]
Accrued compensation $ 1,099 $ 976
Accrued research and development846 2,369
Other accrued liabilities780 204
Accrued liabilities $ 2,725 $ 3,549

Commitments and Contingencies -

Commitments and Contingencies - Additional Information (Details)1 Months Ended9 Months Ended
Mar. 31, 2018Sep. 30, 2020Dec. 31, 2019
Commitments And Contingencies Disclosure [Abstract]
Operating lease term5 years
Operating lease commencement period2018-03
Operating lease option to extendUnder the terms of the agreement, there is no option to extend
Lessee, Operating Lease, Existence of Option to Extend [true false]false
Operating lease, remaining lease term30 months39 months
Operating lease, discount rate8.00%8.00%

Commitments and Contingencies_2

Commitments and Contingencies - Information Related to Operating Lease (Details) - USD ($) $ in Thousands3 Months Ended9 Months Ended
Sep. 30, 2020Sep. 30, 2019Sep. 30, 2020Sep. 30, 2019
Commitments And Contingencies Disclosure [Abstract]
Operating lease expense (including variable costs of $83 and $75 during the three months ended September 30, 2020 and 2019 and $224 and $225 during the nine months ended September 30, 2020 and 2019) $ 277 $ 273 $ 813 $ 818
Cash paid for amounts included in the measurement of lease liabilities $ 193 $ 180 $ 557 $ 535

Commitments and Contingencies_3

Commitments and Contingencies - Information Related to Operating Lease (Parenthetical) (Details) - USD ($) $ in Thousands3 Months Ended9 Months Ended
Sep. 30, 2020Sep. 30, 2019Sep. 30, 2020Sep. 30, 2019
Commitments And Contingencies Disclosure [Abstract]
Variable lease cost $ 83 $ 75 $ 224 $ 225

Commitments and Contingencies_4

Commitments and Contingencies - Schedule of Future Minimum Noncancelable Operating Lease Payments and Lease Liability (Details) - USD ($) $ in ThousandsSep. 30, 2020Dec. 31, 2019
Commitments And Contingencies Disclosure [Abstract]
Remaining during 2020 $ 210
2021855
2022876
2023183
Total lease payments2,124
Imputed interest(203)
Lease liability1,921
Current portion of operating lease liability722 $ 600
Operating lease liability, net of current portion $ 1,199 $ 1,748

Commitments and Contingencies_5

Commitments and Contingencies - Additional Information 1 (Details)Sep. 30, 2020USD ($)
License Agreement with Salk Institute | Maximum
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Milestone payments payable $ 6,500,000

Long-Term Debt - Schedule of Lo

Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in ThousandsSep. 30, 2020Dec. 31, 2019
Debt Disclosure [Abstract]
Long-term debt $ 10,000 $ 10,000
Unamortized debt discount(691)(901)
Long-term debt, net of debt discount $ 9,309 $ 9,099

Long-Term Debt - Additional Inf

Long-Term Debt - Additional Information (Details) - USD ($)Aug. 27, 2019Sep. 30, 2020Sep. 30, 2019Sep. 30, 2020Sep. 30, 2019Dec. 31, 2019Sep. 18, 2020
Debt Instrument [Line Items]
Long-term debt $ 10,000,000 $ 10,000,000 $ 10,000,000
Series C Convertible Preferred Stock
Debt Instrument [Line Items]
Number of preferred stock shares initially exercisable upon funding of first tranche term loan23,122
Lender Warrant
Debt Instrument [Line Items]
Warrant to purchase number of shares of common stock upon completion of IPO23,122 23,122
Lender Warrant | Series C Convertible Preferred Stock
Debt Instrument [Line Items]
Warrant exercise price per share $ 10.812 $ 10.812
Warrant expiration dateAug. 27,
2029
Percentage of preferred shares issuable on aggregate term loans upon exercise of warrant2.50%
Number of preferred stock shares initially exercisable upon funding of first tranche term loan117,924 117,924
Fair value of liabilities $ 200,000 $ 200,000
Term Loans
Debt Instrument [Line Items]
Loan agreement dateAug. 27,
2019
Long-term debt $ 10,000,000 $ 10,000,000 10,000,000
Debt instrument, interest rate termsThe Term Loans bear interest at a floating annual rate equal to the greater of (i) the prime rate used by the Lender plus 2.0% (5.25% and 6.75% at September 30, 2020 and December 31, 2019, respectively), and (ii) 7.25%.
Debt instrument, payment termsThe monthly payments are interest-only until September 1, 2022. Subsequent to the interest-only period, the Term Loans will be payable in equal monthly installments of principal plus accrued and unpaid interest, through the maturity date of September 1, 2023 or, in the event the Fourth Tranche is funded in full, September 1, 2024 (the “Term Loan Maturity Date”).
Debt instrument, frequency of periodic paymentmonthly
Debt instrument, final payment fee percentage5.25%5.25%
Debt instrument, final payment fee $ 500,000 $ 500,000 $ 500,000
Debt instrument, prepayment fee percentage3.00%3.00%3.00%
Debt instrument, subjective acceleration clauseThe Loan Agreement includes customary affirmative and negative covenants and also includes standard events of default, including an event of default based on the occurrence of a material adverse event, and a default under any agreement with a third party resulting in a right of such third party to accelerate the maturity of any debt in excess of $0.3 million.
Debt instrument, acceleration of maturity of debt, threshold amount $ 300,000 $ 300,000
Debt instrument, covenant complianceAs of September 30, 2020 and December 31, 2019, the Company was in compliance with all applicable covenants under the Loan Agreement.
Debt issuance costs300,000 $ 300,000
Debt interest expense300,000 $ 100,000 800,000 $ 100,000
Debt discount amortization100,000 $ 23,000 200,000 $ 23,000
Accrued interest $ 100,000 $ 100,000 $ 100,000
Term Loans | Prime Rate
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate2.00%
Debt instrument, variable rate5.25%6.75%
Term Loans | Minimum
Debt Instrument [Line Items]
Debt instrument, variable rate7.25%
Term Loans | Maximum
Debt Instrument [Line Items]
Debt instrument, prepayment fee percentage3.00%3.00%
First Tranche Term Loan
Debt Instrument [Line Items]
Long-term debt $ 10,000,000
Debt instrument, maturity dateSep. 1,
2023
Fourth Tranche Term Loan
Debt Instrument [Line Items]
Additional borrowing capacity $ 15,000,000
Expiration dateDec. 31,
2020
Additional borrowing capacity, descriptionmay borrow up to an additional $15.0 million in a fourth tranche at the Company’s option through December 31, 2020, subject to (i) achievement of certain clinical milestones and (ii) receipt of at least $70.0 million of net proceeds from either a preferred equity financing or an underwritten initial public offering.
Threshold net proceeds from preferred equity financing or underwritten initial public offering to borrow additional term loan $ 70,000,000
Debt instrument, maturity dateSep. 1,
2024

Long-Term Debt - Schedule of Fu

Long-Term Debt - Schedule of Future Minimum Principal and Interest Payments under Term Loans (Details) - USD ($) $ in ThousandsSep. 30, 2020Dec. 31, 2019
Debt Disclosure [Abstract]
Remaining in 2020 $ 185
2021735
20224,438
20236,949
Total principal and interest payments12,307
Less interest and final payment fee(2,307)
Long-term debt $ 10,000 $ 10,000

Convertible Preferred Stock a_3

Convertible Preferred Stock and Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands1 Months Ended7 Months Ended9 Months Ended
Sep. 30, 2020Dec. 31, 2020Sep. 30, 2020Sep. 30, 2019Dec. 31, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Weighted average grant date fair value per share of option grants $ 8.41 $ 2.09
Total intrinsic value of stock options exercised $ 500 $ 49
Common stock available for future issuance6,115,466 6,115,466 19,009,189
Unrecognized stock-based compensation cost $ 16,300 $ 16,300
Remaining weighted average period of unrecognized stock-based compensation cost3 years
Forecast | Dr. Song
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Cash compensation $ 100
Incremental fair value $ 1,100
2020 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares authorized for issuance2,759,799 2,759,799
Number of shares available for issuance2,759,799 2,759,799
Equity Plans
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Option vesting period termOptions issued under the Equity Plans vest over a four-year period from the vesting commencement date
Equity Plans | Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Maximum term of options granted10 years
ESPP
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Maximum contribution percentage of eligible gross compensation15.00%15.00%
Maximum number of common stock shares purchase by eligible employees20,000
Percentage of fair market value of common stock85.00%
Offering period2 years
Offering period termOfferings under the ESPP are approximately two years in duration and consist of four purchase periods that are approximately six months in duration
Common stock available for future issuance405,000 405,000

Convertible Preferred Stock a_4

Convertible Preferred Stock and Stockholders' Equity - Summary of Unvested Shares and Unvested Stock Liability (Details) $ in Thousands9 Months Ended
Sep. 30, 2020USD ($)shares
Equity [Abstract]
Number of Unvested Shares, Beginning balance | shares197,549
Number of Unvested Shares, Repurchased shares | shares(4,269)
Number of Unvested Shares, Vested shares | shares(145,360)
Number of Unvested Shares, Ending balance | shares47,920
Unvested Stock Liability, Beginning balance | $ $ 109
Unvested Stock Liability, Repurchased shares | $(2)
Unvested Stock Liability, Vested shares | $(73)
Unvested Stock Liability, Ending balance | $ $ 34

Convertible Preferred Stock a_5

Convertible Preferred Stock and Stockholders' Equity - Summary of Stock Option Activity (Details) $ / shares in Units, $ in Thousands9 Months Ended12 Months Ended
Sep. 30, 2020USD ($)$ / sharessharesDec. 31, 2019USD ($)$ / sharesshares
Number of Outstanding Options
Balance at December 31, 2019 | shares1,684,630
Granted | shares1,812,016
Cancelled | shares(109,835)
Exercised | shares(54,266)
Balance at September 30, 2020 | shares3,332,545 1,684,630
Vested and expected to vest at September 30, 2020 | shares3,332,545
Weighted Average Exercise Price
Balance at December 31, 2019 | $ / shares $ 2.47
Granted | $ / shares7.20
Cancelled | $ / shares5.14
Exercised | $ / shares1.27
Balance at September 30, 2020 | $ / shares4.98 $ 2.47
Vested and expected to vest at September 30, 2020 | $ / shares $ 4.98
Weighted Average Remaining Contractual Term (In Years)
Balance8 years 10 months 6 days8 years 8 months 23 days
Vested and expected to vest at September 30, 20208 years 10 months 6 days
Aggregate Intrinsic Value
Balance | $ $ 17,525 $ 911
Vested and expected to vest at September 30, 2020 | $ $ 17,525

Convertible Preferred Stock a_6

Convertible Preferred Stock and Stockholders' Equity - Summary of Fair Value of Stock Option Grants (Details)9 Months Ended
Sep. 30, 2020Sep. 30, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Risk-free interest rate, minimum0.40%1.80%
Risk-free interest rate. maximum0.70%1.90%
Expected volatility, minimum82.40%72.60%
Expected volatility, maximum94.80%81.00%
Expected dividend yield0.00%0.00%
Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected term (in years)5 years 9 months 18 days5 years 1 month 6 days
Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected term (in years)10 years6 years 1 month 6 days

Convertible Preferred Stock a_7

Convertible Preferred Stock and Stockholders' Equity - Stock-Based Compensation Expense Recognized (Details) - USD ($) $ in Thousands3 Months Ended9 Months Ended
Sep. 30, 2020Sep. 30, 2019Sep. 30, 2020Sep. 30, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense $ 1,791 $ 484 $ 3,151 $ 1,442
Research and Development
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense342 211 839 620
General and Administrative
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense $ 1,449 $ 273 $ 2,312 $ 822

Convertible Preferred Stock a_8

Convertible Preferred Stock and Stockholders' Equity - Schedule of Common Stock Reserved for Future Issuance (Details) - sharesSep. 30, 2020Dec. 31, 2019
Class Of Stock [Line Items]
Common stock available for future issuance6,115,466 19,009,189
Conversion of Preferred Stock
Class Of Stock [Line Items]
Common stock available for future issuance16,685,014
Common Stock Warrant
Class Of Stock [Line Items]
Common stock available for future issuance23,122
Preferred Stock Warrant
Class Of Stock [Line Items]
Common stock available for future issuance23,122
Common Stock Options Outstanding
Class Of Stock [Line Items]
Common stock available for future issuance3,332,545 1,684,630
Shares Available for Issuance under the 2020 Plan
Class Of Stock [Line Items]
Common stock available for future issuance2,759,799 616,423

401 (k) Plan - Additional Infor

401 (k) Plan - Additional Information (Details)9 Months Ended
Sep. 30, 2020USD ($)
Compensation And Retirement Disclosure [Abstract]
Defined contribution plan, descriptionThe Company maintains a defined contribution 401(k) plan available to eligible employees. Employee contributions are voluntary and are determined on an individual basis, limited to the maximum amount allowable under federal tax regulations. The Company, at its discretion, may make certain matching contributions to the 401(k) plan.
Defined contribution plan, plan name [Extensible List]mtcr:Plan401KMember
Contributions to plan made by company $ 0