COVER
COVER - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 01, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-39593 | |
Entity Registrant Name | Shattuck Labs, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 81-2575858 | |
Entity Address, Address Line One | 1018 W. 11th Street | |
Entity Address, Address Line Two | Suite 100 | |
Entity Address, City or Town | Austin | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78703 | |
City Area Code | 919 | |
Local Phone Number | 864-2700 | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | STTK | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 41,744,237 | |
Entity Central Index Key | 0001680367 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 128,600 | $ 7,013 |
Short-term investments | 6,339 | 32,074 |
Prepaid expenses and other current assets | 7,315 | 3,355 |
Total current assets | 142,254 | 42,442 |
Property and equipment, net | 2,515 | 2,437 |
Other assets | 89 | 90 |
Total assets | 144,858 | 44,969 |
Current liabilities: | ||
Accounts payable | 1,350 | 3,051 |
Accrued expenses | 6,518 | 4,039 |
Deferred revenue – related party | 8,613 | 12,894 |
Total current liabilities | 16,481 | 19,984 |
Deferred revenue – related party net of current portion | 19,722 | 9,571 |
Deferred rent | 911 | 898 |
Total liabilities | 37,114 | 30,453 |
Commitments and contingencies (Note 5) | ||
Stockholders' deficit: | ||
Common stock, $0.0001 par value: 10,000,000 shares authorized; 7,796,069 and 7,632,777 shares issued and 7,779,280 and 7,600,877 shares outstanding at September 30, 2020 and December 31, 2019, respectively | 1 | 1 |
Additional paid-in capital | 1,730 | 887 |
Accumulated other comprehensive income (loss) | (10) | 54 |
Accumulated deficit | (60,081) | (35,490) |
Total stockholders’ deficit | (58,360) | (34,548) |
Total liabilities, redeemable convertible preferred stock and stockholders’ deficit | $ 144,858 | $ 44,969 |
Common stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Series A Redeemable Convertible Preferred Stock | ||
Redeemable convertible preferred stock: | ||
Redeemable convertible preferred stock issued | $ 49,064 | $ 49,064 |
Series B Redeemable Convertible Preferred Stock | ||
Redeemable convertible preferred stock: | ||
Redeemable convertible preferred stock issued | 34,427 | 0 |
Series B-1 Redeemable Convertible Preferred Stock | ||
Redeemable convertible preferred stock: | ||
Redeemable convertible preferred stock issued | $ 82,613 | $ 0 |
CONDENSED BALANCE SHEETS - Pare
CONDENSED BALANCE SHEETS - Parenthetical - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Common stock, shares issued (in shares) | 7,796,069 | 7,632,777 |
Common stock, shares outstanding (in shares) | 7,779,280 | 7,600,877 |
Series A Redeemable Convertible Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 1,093,019 | 1,093,019 |
Preferred stock, shares issued (in shares) | 1,093,019 | 1,093,019 |
Preferred stock, shares outstanding (in shares) | 1,093,019 | 1,093,019 |
Preferred stock, liquidation value | $ 68,286 | |
Series B Redeemable Convertible Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 550,571 | 550,571 |
Preferred stock, shares issued (in shares) | 550,571 | 0 |
Preferred stock, shares outstanding (in shares) | 550,571 | 0 |
Preferred stock, liquidation value | $ 34,620 | |
Series B-1 Redeemable Convertible Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 1,319,964 | 1,319,964 |
Preferred stock, shares issued (in shares) | 1,319,964 | 0 |
Preferred stock, shares outstanding (in shares) | 1,319,964 | 0 |
Preferred stock, liquidation value | $ 83,000 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenue from Contract with Customer, Product and Service [Extensible List] | us-gaap:LicenseMember | |||
Collaboration revenue – related party | $ 2,435 | $ 1,784 | $ 8,592 | $ 7,066 |
Operating expenses: | ||||
Research and development | 11,804 | 7,945 | 27,696 | 20,447 |
General and administrative | 2,470 | 1,366 | 5,816 | 4,062 |
Expense from operations | 14,274 | 9,311 | 33,512 | 24,509 |
Loss from operations | (11,839) | (7,527) | (24,920) | (17,443) |
Other income (expense): | ||||
Interest income | 86 | 279 | 474 | 902 |
Other | (76) | (31) | (145) | (72) |
Total other income | 10 | 248 | 329 | 830 |
Net loss | (11,829) | (7,279) | (24,591) | (16,613) |
Unrealized gain (loss) on short-term investments | (28) | 10 | (64) | 119 |
Comprehensive loss | $ (11,857) | $ (7,269) | $ (24,655) | $ (16,494) |
Net loss per share – basic and diluted (in dollars per share) | $ (1.54) | $ (0.96) | $ (3.21) | $ (2.20) |
Weighted-average common shares outstanding (in shares) | 7,700,371 | 7,572,746 | 7,656,077 | 7,543,831 |
CONDENSED STATEMENT OF CHANGES
CONDENSED STATEMENT OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Series A Redeemable Convertible Preferred Stock | Series B Redeemable Convertible Preferred Stock | Series B-1 Redeemable Convertible Preferred Stock |
Preferred stock, beginning balance (in shares) at Dec. 31, 2018 | 1,093,019 | |||||||
Preferred stock, beginning balance at Dec. 31, 2018 | $ 49,064 | |||||||
Preferred stock, ending balance (in shares) at Mar. 31, 2019 | 1,093,019 | |||||||
Preferred stock, ending balance at Mar. 31, 2019 | $ 49,064 | |||||||
Beginning balance (in shares) at Dec. 31, 2018 | 7,495,988 | |||||||
Beginning balance at Dec. 31, 2018 | $ (11,081) | $ 1 | $ 426 | $ (11,508) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Stock-based compensation expense | 66 | 66 | ||||||
Unrealized gain (loss) on short-term investments | 44 | $ 44 | ||||||
Exercise of stock options (in shares) | 25,488 | |||||||
Vesting of common stock previously subject to vesting (in shares) | 5,037 | |||||||
Net loss | (3,449) | (3,449) | ||||||
Ending balance (in shares) at Mar. 31, 2019 | 7,526,513 | |||||||
Ending balance at Mar. 31, 2019 | (14,420) | $ 1 | 492 | 44 | (14,957) | |||
Preferred stock, beginning balance (in shares) at Dec. 31, 2018 | 1,093,019 | |||||||
Preferred stock, beginning balance at Dec. 31, 2018 | $ 49,064 | |||||||
Preferred stock, ending balance (in shares) at Sep. 30, 2019 | 1,093,019 | |||||||
Preferred stock, ending balance at Sep. 30, 2019 | $ 49,064 | |||||||
Beginning balance (in shares) at Dec. 31, 2018 | 7,495,988 | |||||||
Beginning balance at Dec. 31, 2018 | (11,081) | $ 1 | 426 | (11,508) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Unrealized gain (loss) on short-term investments | 119 | |||||||
Net loss | (16,613) | |||||||
Ending balance (in shares) at Sep. 30, 2019 | 7,587,147 | |||||||
Ending balance at Sep. 30, 2019 | (27,278) | $ 1 | 723 | 119 | (28,121) | |||
Preferred stock, beginning balance (in shares) at Mar. 31, 2019 | 1,093,019 | |||||||
Preferred stock, beginning balance at Mar. 31, 2019 | $ 49,064 | |||||||
Preferred stock, ending balance (in shares) at Jun. 30, 2019 | 1,093,019 | |||||||
Preferred stock, ending balance at Jun. 30, 2019 | $ 49,064 | |||||||
Beginning balance (in shares) at Mar. 31, 2019 | 7,526,513 | |||||||
Beginning balance at Mar. 31, 2019 | (14,420) | $ 1 | 492 | 44 | (14,957) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Stock-based compensation expense | 87 | 87 | ||||||
Unrealized gain (loss) on short-term investments | 65 | 65 | ||||||
Exercise of stock options (in shares) | 24,401 | |||||||
Vesting of common stock previously subject to vesting (in shares) | 5,037 | |||||||
Net loss | (5,885) | (5,885) | ||||||
Ending balance (in shares) at Jun. 30, 2019 | 7,555,951 | |||||||
Ending balance at Jun. 30, 2019 | (20,153) | $ 1 | 579 | 109 | (20,842) | |||
Preferred stock, ending balance (in shares) at Sep. 30, 2019 | 1,093,019 | |||||||
Preferred stock, ending balance at Sep. 30, 2019 | $ 49,064 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Stock-based compensation expense | 144 | 144 | ||||||
Unrealized gain (loss) on short-term investments | 10 | 10 | ||||||
Exercise of stock options (in shares) | 26,159 | |||||||
Vesting of common stock previously subject to vesting (in shares) | 5,037 | |||||||
Net loss | (7,279) | (7,279) | ||||||
Ending balance (in shares) at Sep. 30, 2019 | 7,587,147 | |||||||
Ending balance at Sep. 30, 2019 | (27,278) | $ 1 | 723 | 119 | (28,121) | |||
Preferred stock, beginning balance (in shares) at Dec. 31, 2019 | 1,093,019 | 0 | 0 | |||||
Preferred stock, beginning balance at Dec. 31, 2019 | $ 49,064 | $ 0 | $ 0 | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||
Sale of Series B redeemable convertible preferred stock, net of issuance costs (in shares) | 550,571 | |||||||
Sale of Series B redeemable convertible preferred stock, net of issuance costs | $ 34,427 | |||||||
Preferred stock, ending balance (in shares) at Mar. 31, 2020 | 1,093,019 | 550,571 | 0 | |||||
Preferred stock, ending balance at Mar. 31, 2020 | $ 49,064 | $ 34,427 | $ 0 | |||||
Beginning balance (in shares) at Dec. 31, 2019 | 7,600,877 | |||||||
Beginning balance at Dec. 31, 2019 | (34,548) | $ 1 | 887 | 54 | (35,490) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Stock-based compensation expense | 180 | 180 | ||||||
Unrealized gain (loss) on short-term investments | 61 | 61 | ||||||
Exercise of stock options (in shares) | 28,113 | |||||||
Vesting of common stock previously subject to vesting (in shares) | 5,037 | |||||||
Net loss | (6,788) | (6,788) | ||||||
Ending balance (in shares) at Mar. 31, 2020 | 7,634,027 | |||||||
Ending balance at Mar. 31, 2020 | (41,095) | $ 1 | 1,067 | 115 | (42,278) | |||
Preferred stock, beginning balance (in shares) at Dec. 31, 2019 | 1,093,019 | 0 | 0 | |||||
Preferred stock, beginning balance at Dec. 31, 2019 | $ 49,064 | $ 0 | $ 0 | |||||
Preferred stock, ending balance (in shares) at Sep. 30, 2020 | 1,093,019 | 550,571 | 1,319,964 | |||||
Preferred stock, ending balance at Sep. 30, 2020 | $ 49,064 | $ 34,427 | $ 82,613 | |||||
Beginning balance (in shares) at Dec. 31, 2019 | 7,600,877 | |||||||
Beginning balance at Dec. 31, 2019 | (34,548) | $ 1 | 887 | 54 | (35,490) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Unrealized gain (loss) on short-term investments | $ (64) | |||||||
Exercise of stock options (in shares) | 163,292 | |||||||
Net loss | $ (24,591) | |||||||
Ending balance (in shares) at Sep. 30, 2020 | 7,779,280 | |||||||
Ending balance at Sep. 30, 2020 | (58,360) | $ 1 | 1,730 | (10) | (60,081) | |||
Preferred stock, beginning balance (in shares) at Mar. 31, 2020 | 1,093,019 | 550,571 | 0 | |||||
Preferred stock, beginning balance at Mar. 31, 2020 | $ 49,064 | $ 34,427 | $ 0 | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||
Sale of Series B redeemable convertible preferred stock, net of issuance costs (in shares) | 1,319,964 | |||||||
Sale of Series B redeemable convertible preferred stock, net of issuance costs | $ 82,618 | |||||||
Preferred stock, ending balance (in shares) at Jun. 30, 2020 | 1,093,019 | 550,571 | 1,319,964 | |||||
Preferred stock, ending balance at Jun. 30, 2020 | $ 49,064 | $ 34,427 | $ 82,618 | |||||
Beginning balance (in shares) at Mar. 31, 2020 | 7,634,027 | |||||||
Beginning balance at Mar. 31, 2020 | (41,095) | $ 1 | 1,067 | 115 | (42,278) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Stock-based compensation expense | 137 | 137 | ||||||
Unrealized gain (loss) on short-term investments | (97) | (97) | ||||||
Exercise of stock options (in shares) | 20,131 | |||||||
Vesting of common stock previously subject to vesting (in shares) | 5,037 | |||||||
Net loss | (5,974) | (5,974) | ||||||
Ending balance (in shares) at Jun. 30, 2020 | 7,659,195 | |||||||
Ending balance at Jun. 30, 2020 | (47,029) | $ 1 | 1,204 | 18 | (48,252) | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||
Series B-1 additional issuance costs | $ (5) | |||||||
Preferred stock, ending balance (in shares) at Sep. 30, 2020 | 1,093,019 | 550,571 | 1,319,964 | |||||
Preferred stock, ending balance at Sep. 30, 2020 | $ 49,064 | $ 34,427 | $ 82,613 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Stock-based compensation expense | 312 | 312 | ||||||
Unrealized gain (loss) on short-term investments | (28) | (28) | ||||||
Exercise of stock options (in shares) | 115,048 | |||||||
Exercise of stock options | 214 | 214 | ||||||
Vesting of common stock previously subject to vesting (in shares) | 5,037 | |||||||
Net loss | (11,829) | (11,829) | ||||||
Ending balance (in shares) at Sep. 30, 2020 | 7,779,280 | |||||||
Ending balance at Sep. 30, 2020 | $ (58,360) | $ 1 | $ 1,730 | $ (10) | $ (60,081) |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operations: | ||
Net loss | $ (24,591) | $ (16,613) |
Adjustments to reconcile net loss to net cash used in operations: | ||
Depreciation | 448 | 403 |
Stock-based compensation | 629 | 297 |
Accretion of short-term investments | (22) | (82) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 0 | 207 |
Prepaid expenses and other current assets | (2,214) | 1,649 |
Non-current assets | (33) | 0 |
Accounts payable | (1,701) | (1,223) |
Accrued expenses | 1,985 | 1,169 |
Deferred revenue—related party | 5,870 | (146) |
Deferred rent | 13 | 985 |
Net cash used in operating activities | (19,616) | (13,354) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (526) | (445) |
Sale and maturities of short-term investments | 31,270 | 32,642 |
Purchases of short-term investments | (5,578) | (35,259) |
Net cash (used in) provided by investing activities | 25,166 | (3,062) |
Cash flows from financing activities: | ||
Payments for public offering costs | (1,251) | 0 |
Exercise of stock options | 214 | 0 |
Net cash provided by financing activities | 116,037 | 0 |
Net increase (decrease) in cash and cash equivalents | 121,587 | (16,416) |
Cash and cash equivalents, beginning of period | 7,013 | 31,644 |
Cash and cash equivalents, end of period | 128,600 | 15,228 |
Supplemental disclosures of non-cash financial activities: | ||
Unrealized gain (loss) on short-term investments | (64) | 119 |
Accrued public offering costs in other current assets | 495 | 0 |
Series B Redeemable Convertible Preferred Stock | ||
Cash flows from financing activities: | ||
Proceeds from the sale of redeemable convertible preferred stock, net of issuance costs | 34,461 | 0 |
Series B-1 Redeemable Convertible Preferred Stock | ||
Cash flows from financing activities: | ||
Proceeds from the sale of redeemable convertible preferred stock, net of issuance costs | $ 82,613 | $ 0 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business Shattuck Labs, Inc. (the “Company”) was incorporated in 2016 in the State of Delaware and is a clinical-stage biopharmaceutical company developing dual-sided fusion proteins, including its ARC ® and GADLEN ™ platforms, as novel classes of biologic medicines capable of multifunctional activity with potential applications in oncology and inflammatory diseases. Using its proprietary technology, the Company is building a pipeline of therapeutics, initially focused on the treatment of solid tumors and hematologic malignancies. The Company has two clinical-stage product candidates, SL-172154 and SL-279252. In addition, the Company has several ARC compounds in preclinical development. Liquidity The Company has incurred losses and negative cash flows from operations since inception and has an accumulated deficit of $60.1 million as of September 30, 2020. The Company anticipates incurring additional losses and negative cash flows from operations until such time, if ever, that it can generate significant sales of its product candidates currently in development, and is highly dependent on its ability to find additional sources of funding in the form of licensing of its technology, collaboration agreements, and/or debt and equity financing. The Company’s ability to fund its planned clinical operations, research and development, and commercialization of its product candidates is expected to depend on the amount and timing of cash receipts from these funding sources. Adequate additional funding may not be available to the Company on acceptable terms, or at all. The failure to raise funds as and when needed could have a negative impact on the Company’s financial condition and ability to pursue its business strategies. Management believes that the Company’s cash and cash equivalents and short-term investments of $134.9 million as of September 30, 2020, in addition to the $213.5 million of net proceeds from our initial public offering, are sufficient to fund the projected operations of the Company through at least the end of 2024. On March 10, 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. The virus and actions taken to mitigate its spread have had, and are expected to continue to have, a broad adverse impact on the economies and financial markets of many countries, including the geographical areas in which the Company operates and conducts its business and which the Company’s partners operate and conduct their business. The Company is currently following the recommendations of local health authorities to minimize exposure risk for its team members and visitors. However, the scale and scope of this pandemic is unknown and the duration of the business disruption and related financial impact cannot be reasonably estimated at this time. While we have implemented specific business continuity plans to reduce the potential impact of COVID-19, there is no guarantee that the Company’s continuity plans will be successful. The Company has already experienced certain disruptions to its business such as work-from-home-orders for offices and similar disruptions have occurred for its partners. Specifically, the outbreak has caused disruptions in enrollment and treatment of patients in clinical trials in process, and slowdowns and shutdowns of the laboratories and other service providers that are being relied upon in the development of the Company’s product candidates. The extent to which COVID-19 or any other health epidemic may impact the Company’s results will depend on future developments, which are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. Accordingly, COVID-19 could have a material adverse effect on the Company’s business, results of operations and financial condition. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited interim financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information. Unaudited Interim Financial Statements In the opinion of management, the accompanying interim financial statements include all normal and recurring adjustments (which consist primarily of accruals, estimates and assumptions that impact the financial statements) considered necessary to present fairly the Company’s financial position as of September 30, 2020 and its results of operations, statement of changes in redeemable convertible preferred stock and stockholder’s deficit and cash flows for the nine months ended September 30, 2020 and 2019. Operating results for the nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. The interim financial statements, presented herein, do not contain the required disclosures under U.S. GAAP for annual financial statements. The accompanying unaudited interim financial statements should be read in conjunction with the annual audited financial statements and related notes as of and for the year ended December 31, 2019. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, revenue recognition, the accrual of research and development expenses, and the valuation of stock-based awards. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from management’s estimates. Fair Value of Financial Instruments Fair value is defined as the price that would be received upon the sale of an asset or paid upon the transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. Fair value measurements are classified and disclosed in one of the following categories: • Level 1: Observable inputs such as quoted prices in active markets for identical assets the reporting entity has the ability to access as of the measurement date; • Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and • Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Fair value measurements are classified based on the lowest level of input that is significant to the measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of the assets and liabilities and their placement within the fair value hierarchy levels. The determination of the fair values stated below takes into account the market for its financial assets and liabilities, the associated credit risk and other factors as required. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Management believes that the carrying amounts of the Company’s financial instruments, including accounts payable, approximate fair value due to the short-term nature of those instruments. Short-term investments are recorded at their estimated fair value. Concentration of Risk Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of cash, cash equivalents, and short-term investments. The Company maintains its cash and cash equivalents at one accredited financial institution in amounts that exceed federally-insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. The Company invests in only highly rated debt securities that management believes protects the Company from risk of default and impairment of value. All of the Company’s revenue is derived from its collaboration agreement with Millennium Pharmaceuticals, Inc., a wholly owned subsidiary of Takeda Pharmaceutical Company Limited (see Note 8). The Company is highly dependent on a third-party manufacturer to supply drug products for its research and development activities of its programs, including clinical trials and non-clinical studies. These programs could be adversely affected by a significant interruption in the supply of such drug products. The Company is highly dependent on two contract research organizations (“CROs”) to manage its clinical trials. These programs could be adversely affected by a significant disruption in services provided by the CROs. Cash Equivalents The Company considers all demand deposits with financial institutions and all highly liquid investments with maturities of ninety days or less at the date of purchase to be cash and cash equivalents. Cash equivalents consist of $6.5 million held in a money market fund and $0.5 million held in an operating account at December 31, 2019 and $126.3 million held in a money market fund and $2.3 million held in an operating account at September 30, 2020, and are carried at fair value of the investment based on quoted market prices. Short-Term Investments Short-term investments consist of debt securities with a maturity of greater than three months when acquired. The Company classifies its short-term investments at the time of purchase as available-for-sale securities. Available-for-sale securities are carried at fair value. Unrealized gains and losses on available-for-sale securities are reported in accumulated other comprehensive income, a component of stockholders’ deficit, until realized. Deferred Offering Costs The Company capitalizes certain legal, accounting, and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs will be recorded as a reduction of additional paid-in capital generated as a result of the offering. Should the equity financing no longer be considered probable of being consummated, all deferred offering costs would be charged to operating expenses in the statement of operations and comprehensive loss. Deferred offering costs were $0.1 million and $1.8 million at December 31, 2019 and September 30, 2020, respectively. Series A, Series B and Series B-1 Redeemable Convertible Preferred Stock The Company records shares of redeemable convertible preferred stock at their respective fair values on the date of issuance, net of issuance costs. The redeemable convertible preferred stock is recorded outside of stockholders’ equity on the balance sheet because the shares contain liquidation features that are not solely within the Company’s control. The Company has elected not to adjust the carrying values of the redeemable convertible preferred stock to the liquidation preferences of such shares because of the uncertainty of whether or when such an event would occur. Subsequent adjustments to increase the carrying value to the liquidation preferences will be made only when it becomes probable that such a liquidation event will occur. See Note 6 for a discussion of the redeemable convertible preferred stock. Revenue Recognition Collaboration revenue is recognized in accordance with ASC 606, Revenue from Contracts with Customers (ASC 606). Arrangements with collaborators may include licenses to intellectual property, research and development services, manufacturing services for clinical and commercial supply, and participation on joint steering committees. The Company evaluates the promised goods or services in the contract to determine which promises, or group of promises, represent performance obligations. In contemplation of whether a promised good or service meets the criteria required of a performance obligation, the Company considers the stage of development of the underlying intellectual property, the capabilities and expertise of the customer relative to the underlying intellectual property, and whether the promised goods or services are integral to or dependent on other promises in the contract. When accounting for an arrangement that contains multiple performance obligations, the Company must develop judgmental assumptions, which may include market conditions, reimbursement rates for personnel costs, development timelines and probabilities of regulatory success to determine the stand-alone selling price for each performance obligation identified in the contract. Upon the amendment of an existing agreement, the Company evaluates whether the amendment represents a modification to an existing contract which would be recorded through a cumulative catch-up to revenue or a separate contract. If it is determined that it is a separate contract, the Company will evaluate the necessary revenue recognition through the five-step process described below. When the Company concludes that a contract should be accounted for as a combined performance obligation and recognized over time, the Company must then determine the period over which revenue should be recognized and the method by which to measure revenue. The Company generally recognizes revenue using a cost-based input method. The Company recognizes collaboration revenue when its customer or collaborator obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, it performs the following five steps: i. identify the contract(s) with a customer; ii. identify the performance obligations in the contract; iii. determine the transaction price; iv. allocate the transaction price to the performance obligations within the contract and; v. recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it determines that it is probable it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within the contract to determine whether each promised good or service is a performance obligation. The promised goods or services in the Company’s arrangements may consist of a license, or options to license, the Company’s intellectual property and research, development and manufacturing services. The Company may provide options to additional items in such arrangements, which are accounted for as separate contracts when the customer elects to exercise such options, unless the option provides a material right to the customer. Performance obligations are promises in a contract to transfer a distinct good or service to the customer that (i) the customer can benefit from on its own or together with other readily available resources, and (ii) is separately identifiable from other promises in the contract. Goods or services that are not individually distinct performance obligations are combined with other promised goods or services until such combined group of promises meet the requirements of a performance obligation. The Company determines transaction price based on the amount of consideration the Company expects to receive for transferring the promised goods or services in the contract. Consideration may be fixed, variable, or a combination of both. At contract inception for arrangements that include variable consideration, the Company estimates the probability and extent of consideration it expects to receive under the contract utilizing either the most likely amount method or expected amount method, whichever best estimates the amount expected to be received. The Company then considers any constraints on the variable consideration and includes in the transaction price variable consideration to the extent it is deemed probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company then allocates the transaction price to each performance obligation based on the relative standalone selling price and recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) control is transferred to the customer and the performance obligation is satisfied. For performance obligations which consist of licenses and other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The Company records amounts as accounts receivable when the right to consideration is deemed unconditional. When consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a contract, a contract liability is recorded as deferred revenue. Amounts received prior to satisfying the revenue recognition criteria are recognized as deferred revenue in the Company’s accompanying balance sheet. Deferred revenues expected to be recognized as revenue within the 12 months following the balance sheet date are classified as a current liability. Deferred revenues not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as non-current liabilities. The Company’s collaboration revenue arrangements may include the following: Up-front License Fees: If a license is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from nonrefundable, up-front fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Milestone Payments: At the inception of an agreement that includes research and development milestone payments, the Company evaluates each milestone to determine when and how much of the milestone to include in the transaction price. The Company first estimates the amount of the milestone payment that the Company could receive using either the expected value or the most likely amount approach. The Company primarily uses the most-likely amount approach as that approach is generally most predictive for milestone payments with a binary outcome. Then, the Company considers whether any portion of that estimated amount is subject to the variable consideration constraint (that is, whether it is probable that a significant reversal of cumulative revenue would not occur upon resolution of the uncertainty.) The Company updates the estimate of variable consideration included in the transaction price at each reporting date which includes updating the assessment of the likely amount of consideration and the application of the constraint to reflect current facts and circumstances. Royalties: For arrangements that include sales-based royalties, including milestone payments based on a level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any revenue related to sales-based royalties or milestone payments based on the level of sales. To date, the Company has not granted a development and commercialization license nor recognized any revenue related to licenses, sales-based royalties or milestone payments based on the level of sales. Research and Development Services: The Company will record costs associated with development and process optimization activities as research and development expenses in the statement of operations and comprehensive loss consistent with ASC 730, Research and Development. The Company considered the guidance in ASC 808, Collaborative Agreements and will recognize the payments received from these agreements as revenue when the related costs are incurred. Research and Development Costs Research and development cost are expensed as incurred, and include salaries, stock-based compensation and other personnel-related costs, equipment and supplies, preclinical studies, clinical trials, and manufacturing development activities. A substantial portion of the Company’s ongoing research and development activities are conducted by third-party service providers, including contract research and manufacturing organizations. The Company accrues for expenses resulting from obligations under agreements with CROs, contract manufacturing organizations (“CMOs”), and other outside service providers for which payment flows do not match the periods over which materials or services are provided to the Company. Accruals are recorded based on estimates of services received and efforts expended pursuant to agreements established with CROs, CMOs, and other outside service providers. These estimates are typically based on contracted amounts applied to the proportion of work performed and determined through analysis with internal personnel and external service providers as to the progress or stage of completion of the services. The Company makes significant judgements and estimates in determining the accrual and/or prepaid balance in each reporting period. In the event advance payments are made to a CRO, CMO, or outside service provider, the payments will be recorded as a prepaid asset which will be amortized as the contracted services are performed. As actual costs become known, the Company adjusts its accruals and prepaid assets accordingly. Inputs, such as the services performed, the number of patients enrolled, or the study duration, may vary from the Company’s estimates, resulting in adjustments to research and development expense in future periods. Changes in these estimates that result in material changes to the Company’s accruals could materially affect the Company’s results of operations. Net Loss Per Share Basic loss per share of common stock is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during each period. Diluted loss per share of common stock includes the effect, if any, from the potential exercise or conversion of securities, such as redeemable convertible preferred stock, stock options and restricted stock, which would result in the issuance of incremental shares of common stock. For diluted net loss per share, the weighted-average number of shares of common stock is the same for basic net loss per share due to the fact that when a net loss exists, dilutive securities are not included in the calculation as the impact is anti-dilutive. The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive: Nine Months Ended September 30, 2020 2019 Redeemable convertible preferred stock on an as converted to common stock basis 20,300,253 7,487,151 Stock options 2,538,225 1,255,543 Unvested restricted stock 16,789 36,937 22,855,267 8,779,631 Other Comprehensive Income (Loss) Other comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Other comprehensive loss is comprised of the net loss and unrealized gains on short-term investments. Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (the "FASB") issued ASU No. 2016-13, Financial Instruments-Credit Losses (“ASC 326”) : Measurement of Credit Losses on Financial Instruments (ASU 2016-13) which requires that expected credit losses relating to financial assets measured on an amortized cost basis and available-for-sale debt securities be recorded through an allowance for credit losses. ASU 2016-13 limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and also requires the reversal of previously recognized credit losses if fair value increases. ASU 2016-13 became effective for the Company during the first quarter of 2020. The Company adopted this pronouncement and it did not have a material impact on the financial statements or related disclosures. In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurements , which changes the fair value measurement disclosure requirements of ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). The goal of the ASU is to improve the effectiveness of ASC 820’s disclosure requirements. The standard is applicable to the Company for the fiscal year beginning January 1, 2020, and interim periods within that year. The Company adopted this pronouncement and it did not have a material impact on the financial statements or related disclosures. Recently Issued Accounting Pronouncements (not yet adopted) In February 2016, the FASB issued ASU No. 2016-02, Leases (ASC 842) which requires a lessee to record a right-of-use asset and a corresponding lease liability on the balance sheet for all leases with terms longer than 12 |
Short-Term Investments
Short-Term Investments | 9 Months Ended |
Sep. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Short-Term Investments | Short-Term Investments The Company classifies its debt securities as short-term investments. Debt securities are comprised of highly liquid investments with minimum “A” rated securities and consist of U.S. Treasury, agency bonds and corporate entity commercial paper with maturities of more than three months but less than one year at the date of purchase. Debt securities as of September 30, 2020 have an average maturity of 0.1 years. The debt securities are reported at fair value with unrealized gains or losses recorded in accumulated other comprehensive income in the balance sheets. The following table represents the Company’s available for sale short-term investments by major security type (in thousands): September 30, 2020 Amortized Gross Unrealized Total Short-term investments Corporate securities $ 2,350 $ (17) $ 2,333 U.S. government securities 3,999 7 4,006 Total short-term investments $ 6,349 $ (10) $ 6,339 December 31, 2019 Amortized Gross Unrealized Total Short-term investments Corporate securities $ 5,375 $ (17) $ 5,358 U.S. government securities 26,645 71 26,716 Total short-term investments $ 32,020 $ 54 $ 32,074 |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses consisted of the following (in thousands): September 30, December 31, Research contract costs $ 4,539 $ 2,648 Compensation 1,188 966 Other 791 425 $ 6,518 $ 4,039 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Leases On July 24, 2020, the Company entered into an amendment to the lease for the office space in Durham, North Carolina. The amendment expanded the existing leased space. Future minimum payments inclusive of the amended lease, by year and in aggregate, under non-cancelable operating leases consist of the following as of September 30, 2020 (in thousands): 2020 $ 73 2021 625 2022 730 2023 753 2024 775 Thereafter 3,340 Total minimum lease payments $ 6,296 Heat License Agreement In connection with a license agreement with Heat Biologics Inc. (“Heat”), the Company is required to make payments of up to $20.6 million in aggregate for the achievement of specified development, regulatory and commercial sales milestones for certain licensed products. The Company is required to pay Heat a percentage of any upfront fees or other non-royalty payments received that are not tied to milestone events under any sublicense of the licensed products. The Company is also required to pay Heat a royalty on all of its worldwide net sales, those of its affiliates and sublicenses of certain licensed products in the low single digits. The Company has not recorded a liability for the payments aforementioned given the achievement of specified development, regulatory and commercial sales milestones for certain licensed products is not probable as of the balance sheet date. Litigation From time to time, the Company may become involved in various legal actions arising in the ordinary course of business. As of September 30, 2020, management was not aware of any existing, pending, or threatened legal actions that would have a material impact on the financial position, results of operations, or cash flows of the Company. Contractual Obligations |
Preferred Stock
Preferred Stock | 9 Months Ended |
Sep. 30, 2020 | |
Temporary Equity Disclosure [Abstract] | |
Preferred Stock | Preferred Stock During the nine months ended September 30, 2020, the Company entered into various stock purchase agreements with new and existing investors pursuant to which the Company sold an aggregate 550,571 shares of the Company’s Series B redeemable convertible preferred stock (“Series B”) and 1,319,964 shares of Series B-1 redeemable convertible preferred stock (“Series B-1”) at $62.88051 per share for aggregate gross proceeds of $117.6 million. Transaction fees of $0.6 million were recorded as a reduction of the carrying value of the Series B and the Series B-1. The following is a summary of the rights, preferences, and terms of the Company’s Series A redeemable convertible preferred stock, the Series B, and the Series B-1 (“Preferred Stock”): Rank The Preferred Stock ranks senior to common stock as to payment of dividends, distributions of assets upon a liquidation event, or otherwise. Dividends The holders of Preferred Stock are entitled to receive non-cumulative dividends, when and if declared by the Board, and in preference to any declaration or payment of any dividend on the Company’s common stock at the rate of 8% of the original issue price per share. No dividends have been declared to date. Voting Rights Each share of Preferred Stock entitles the holder to one vote on all matters for which shares of common stock may vote. The Series A holders can elect two board members if a minimum of 276,059 shares of Series A are outstanding. If the number of Series A holders falls below 276,059 but not below 110,423 then they can elect one board member. The Series B-1 holders can elect two board members if a minimum of 329,991 shares of Series B-1 are outstanding. The Series B holders vote for remaining board members as a single class with all other shareholders on an “as converted” basis. Liquidation Preference In the event of a liquidation, dissolution, or winding up of the Company, or in the event the Company merges with or is acquired by another entity, each holder has a liquidation preference. Liquidating distributions will first be made to holders of shares of Series B-1 at $62.88051 per share and then to holders of Series B and Series A on a pari passu basis at $62.88051 and $62.475 per share, respectively. As the redemption event is outside of our control, all shares of preferred stock have been presented outside of permanent equity. We have also concluded that since the shares of preferred stock are not mandatorily redeemable, but rather are only contingently redeemable, and given that the redemption event is not certain to occur, the shares have not been accounted for as a liability in any of the periods presented. After all liquidation preferences are fulfilled, the remaining funds and assets of the Company will be distributed between Series B-1 holders and common shareholders ratably based on the number of shares held by common shareholders and the common shares that would be held by Series B-1 holders on an “as converted” basis. If the total amount received by Series B-1 holders is greater than three times the original issue price, than the holders of the Series B-1 are entitled to the greater of three times the original issue price or the amount such holder would have received if all shares of Series B-1 had been converted into common stock immediately prior to such liquidation. Conversion Each share of Preferred Stock is convertible into common stock at any time at the option of the holder at a conversion price then in effect and equal to one-for-6.85 subject to adjustment. All outstanding Preferred Stock will automatically convert into common stock at the conversion price then in effect upon a qualified initial public offering of common stock with a public offering price of at least $9.17964 per share and aggregate gross proceeds of at least $50.0 million. All shares of Preferred Stock are convertible into common stock upon the affirmative election of the holders of at least a 65% of the outstanding shares of Preferred Stock. As disclosed in 'Note 10', on October 14, 2020, the Company completed the initial public offering (IPO) of its common stock pursuant to a Registration Statement on Form S-1. As a result, all Preferred Stock was converted into common stock as of the date of the initial public offering. Redemption |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation In 2016, the Company adopted and subsequently amended the 2016 Stock Incentive Plan (the “Plan”). The total number of shares authorized under the Plan as of September 30, 2020 was 3,819,786, and 335,403 shares remain available for future grants as of September 30, 2020. The Plan permits the granting of options and restricted stock. The terms of the agreements are determined by the Company’s Board of Directors. The Company’s awards vest based on the terms in the agreements and generally vest over four years and have a term of 10 years. The Company measures employee and non-employee stock-based awards at grant-date fair value and records compensation expense on a straight-line basis over the vesting period of the award. The Company recorded stock-based compensation expense in the following expense categories of its accompanying unaudited interim statements of operations and comprehensive loss (in thousands): Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Research and development $ 159 $ 93 $ 350 $ 151 General and administrative 153 50 279 146 $ 312 $ 143 $ 629 $ 297 The following table summarizes option activity under the Stock Plan: Options Weighted average exercise price Weighted average remaining contract life Balance at January 1, 2020 1,615,375 $2.60 Granted 1,116,966 $5.28 Exercised (163,292) $1.28 Forfeited (30,824) $2.95 Outstanding at September 30, 2020 2,538,225 $3.86 8.95 Vested and expected to vest September 30, 2020 2,485,746 $3.85 8.94 Exercisable at September 30, 2020 684,910 $2.60 8.03 Options granted during the nine months ended September 30, 2020 had a weighted-average grant-date fair value of $3.36. As of September 30, 2020, unrecognized compensation cost for options issued was $4.5 million, and will be recognized over an estimated weighted-average amortization period of 2.88 years. The aggregate intrinsic value of options outstanding and exercisable as of September 30, 2020 was $8.5 million. The fair value of each option is estimated on the date of grant using a Black-Scholes option pricing model which takes into account inputs such as the exercise price, the estimated fair value of the underlying common stock at grant date, expected term, expected stock price volatility, risk-free interest rate, and dividend yield. The fair value of each grant of stock options was determined by the Company using the methods and assumptions discussed below. Certain of these inputs are subjective and generally required judgement to determine. • The expected term of employee stock options with service-based vesting is determined using the “simplified” method, whereby the expected life equals the arithmetic average of the vesting term and the original contractual term of the option due to the Company’s lack of sufficient historical data. The expected term of non-employee options is equal to the contractual term. • The expected stock price volatility is based on historical volatilities of comparable public entities within the Company’s industry. • The risk-free interest rate is based on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the respective expected term or contractual term. • The expected dividend yield is 0% because the Company has not historically paid, and does not expect, for the foreseeable future, to pay a dividend on its common stock. • As the Company’s common stock has not been publicly traded, its board of directors periodically estimated the fair value of the Company’s common stock considering, among other things, contemporaneous valuations of its common stock prepared by an unrelated third-party valuation firm. The grant date fair value of each option grant was estimated throughout the nine months ended September 30, 2020 using the Black-Scholes option-pricing model using the following weighted-average assumptions: Expected term 5.91 Expected volatility 74.21% Risk-free interest rate 0.47% Expected dividends — Fair value of common stock $5.28 For accounting purposes, restricted shares granted are considered the issuance of shares as opposed to the sale of stock and as such, the Company has recognized compensation expense for these awards. Twenty-five percent of the shares became vested after one year and the remaining shares vest monthly over 36 months so long as the grantee remains employed by or provides service to the Company. In the event the grantee ceases to provide service, the Company has the option to repurchase any or all of the unvested shares at the original issuance price. The following table summarizes the activity relating to these shares for the nine months ended September 30, 2020 : Awards Balance at January 1, 2020 31,900 Vested 15,111 Outstanding at September 30, 2020 16,789 |
Collaboration Agreement_Related
Collaboration Agreement—Related Party | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Collaboration Agreement—Related Party | Collaboration Agreement—Related Party In August 2017, the Company entered into a Collaboration agreement with Takeda related to the development of certain ARC molecules as amended in April 2018, October 2018 and March 2020, (the “Collaboration Agreement”). Under the Collaboration Agreement, the Company is responsible to use its commercially reasonable efforts to further research and develop six molecules in accordance with specified development plans for each molecule. Two Designated Molecules, SL-279252 (“DM1”) and SL-115154 (“DM2”) (collectively referred to as the “DMs”), will be progressed through a Phase 1 clinical trial and four Selected Molecules will be developed through the completion of toxicology studies (collectively known as “SMs”). Takeda has an option, which extends through the end of the development term for each molecule, to exclusively license (on a molecule-by-molecule basis) each DM and up to two SMs, which license would grant Takeda exclusive rights to undertake further clinical development and commercialization of the licensed molecule. Additionally, Takeda was granted a right of first negotiation (“ROFN”) to enter into a license for each molecule within a specified class of ARC molecules. The Company received payments of $8.5 million and $12.1 million in the periods ended September 30, 2019 and 2020, respectively, and recognized total revenue of $50.6 million through September 30, 2020 under the Collaboration Agreement. The Company assessed this arrangement in accordance with ASC 606 and concluded that the Collaboration Agreement had four distinct performance obligations representing the combination of research and development services and participation in a joint development committee associated with both DMs, one SM and the remaining three SMs as a group. The Company also concluded that since the option for the exclusive license was deemed to be at standalone selling price it does not provide the customer with a material right and therefore, it does not represent a separate performance obligation. Finally the Company noted that the ROFN does not guarantee that Takeda can negotiate a license for molecules at prices that are below their respective standalone selling prices and further noted that if Takeda exercises the ROFN, the license fee will be negotiated at standalone selling price for each molecule. On March 31, 2020, the Company and Takeda entered into an amendment to the Collaboration Agreement (Amendment No. 3) which provided for a second dose expansion cohort for DM1, improvements to the DM1 process and manufacturing controls, certain administrative tasks and a non-refundable up-front payment applied to the license fee for DM1 of $11.3 million. The Company can receive reimbursement for costs incurred in the performance of the second dose expansion cohort up to $3.2 million, plus fifty percent of out-of-pocket costs incurred by the Company for clinical trial materials for the first and second dose expansion cohorts up to $4.0 million and reimbursements of up to $1.6 million for costs related to improvement to the DM1 process and manufacturing controls. The Company evaluated the consideration anticipated to be received for each performance obligation under Amendment No. 3 and determined that the contractual amounts for each obligation represent the stand-alone selling price and relate directly to the efforts that the Company will exert to fulfill its performance obligation. The potential reimbursements for costs incurred in the performance of the second dose expansion cohort and costs incurred by the Company for clinical trial materials for the second dose expansion cohort were determined to be variable consideration. The Company determined that the potential reimbursement associated with the second dose expansion cohort was fully constrained and did not include it in the transaction price. The Company anticipates that the reimbursements associated with clinical trial materials will be earned and as such, the amount was included in the transaction price. The Company further evaluated the terms of Amendment No. 3 to determine if they represented a modification to the existing agreement or a new agreement. The Company determined that improvements to the DM1 process and manufacturing controls are new and distinct performance obligations with underlying revenue that is to be recorded prospectively. The second dose expansion cohort was determined to be a continuation of research and development services being performed. As such, the second dose expansion cohorts represent a modification to the existing agreement and a continuation under the existing research and development performance obligation. At the outset of the contract with Takeda the Company viewed the option to license molecules as a discrete performance obligation which would be transferred upon Takeda executing their option and remitting consideration that was negotiated and believed to be in line with the stand-alone value of the option. In conjunction with Amendment No. 3, the $11.3 million payment was applied to the license fee and as such, results in a lower cost to license the molecule. The Company evaluated and determined the prepayment provided a material right. Management determined the stand-alone selling price of the material right using comparable arrangements and probability that Takeda will exercise its option to license. The non-refundable payment was recognized as deferred revenue upon receipt of the up-front payment and will be recognized as revenue upon Takeda entering into the underlying license agreement or when it is certain that Takeda will not exercise its option. The Company recognizes revenue for the allocated upfront payments using a cost-based input measure. In applying the cost-based input method of revenue recognition, the Company uses actual costs incurred relative to budgeted costs expected to be incurred for the combined performance obligation. Revenue is recognized based on actual costs incurred as a percentage of total budgeted costs as the Company completes its performance obligation over the estimated service period. The Company recognizes revenue related to the reimbursable cost as they are incurred. The stated development term under the Collaboration Agreement commenced on August 8, 2017 and terminates 90 days after the Phase 1 clinical report is delivered to Takeda for each of the DMs. The development term for the SMs expired in the second quarter of 2019 as the toxicology reports for the SMs were delivered to Takeda and the option period for the exclusive license expired. Revenue recognized under this agreement is related-party revenue. |
Related-Party Transactions
Related-Party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party Transactions Takeda had a seat on the Company’s Board of Directors and held an approximate 7.5% ownership interest in the Company’s outstanding shares as of September 30, 2020. As of December 31, 2019, Takeda held an approximate 14% ownership interest in the Company’s outstanding shares. As a result, all revenue, and deferred revenue associated with the Takeda Collaboration Agreement are represented as related-party transactions. Prepaids and other current assets includes $2.4 million of cost that are reimbursable by Takeda under the Collaboration Agreement. Following the completion of the Company's initial public offering in October 2020, Takeda no longer has a seat on the Company's Board of Directors |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company has evaluated subsequent events from the balance sheet date through November 13, 2020, the date at which the financial statements were available to be issued, and there are no other items requiring disclosure except for the following: Stock Split In September 2020, the Board of Directors and the stockholders of the Company approved a 6.85-for-1 stock split of the Company’s outstanding common stock and adjusted the conversion ratio of the Company’s preferred stock accordingly. The forward stock split was effective as of October 1, 2020. All common stock, preferred stock, and per share information has been retroactively adjusted to give effect to this forward stock split and the adjusted conversion ratios for all periods presented. Shares of common stock underlying outstanding stock options and other equity instruments were proportionately increased and the respective per share value and exercise prices, if applicable, were proportionately decreased in accordance with the terms of the agreements governing such securities. There were no changes in the par values of the Company’s common stock and preferred stock as a result of the forward stock split. Initial Public Offering On October 14, 2020, the Company completed the initial public offering ("IPO") of its common stock pursuant to a Registration Statement on Form S-1. In the IPO, the Company sold an aggregate of 13,664,704 shares of common stock (including 1,782,352 shares issued pursuant to the underwriters' option to purchase additional shares) under the Registration Statement at a public offering price of $17.00 per share. On October 14, 2020 the Company received net proceeds of approximately $213.5 million, after deducting underwriting discounts and commissions of $16.3 million and offering expenses of $2.5 million. Upon the completion of the IPO, all outstanding shares of the Company’s Preferred Stock were converted into 20,300,253 shares of common stock. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Unaudited Interim Financial Statements | Basis of Presentation The accompanying unaudited interim financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information. Unaudited Interim Financial Statements In the opinion of management, the accompanying interim financial statements include all normal and recurring adjustments (which consist primarily of accruals, estimates and assumptions that impact the financial |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, revenue recognition, the accrual of research and development expenses, and the valuation of stock-based awards. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from management’s estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received upon the sale of an asset or paid upon the transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. Fair value measurements are classified and disclosed in one of the following categories: • Level 1: Observable inputs such as quoted prices in active markets for identical assets the reporting entity has the ability to access as of the measurement date; • Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and • Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Fair value measurements are classified based on the lowest level of input that is significant to the measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of the assets and liabilities and their placement within the fair value hierarchy levels. The determination of the fair values stated below takes into account the market for its financial assets and liabilities, the associated credit risk and other factors as required. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. |
Concentration of Risk | Concentration of Risk Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of cash, cash equivalents, and short-term investments. The Company maintains its cash and cash equivalents at one accredited financial institution in amounts that exceed federally-insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. The Company invests in only highly rated debt securities that management believes protects the Company from risk of default and impairment of value. All of the Company’s revenue is derived from its collaboration agreement with Millennium Pharmaceuticals, Inc., a wholly owned subsidiary of Takeda Pharmaceutical Company Limited (see Note 8). |
Cash Equivalents | Cash Equivalents The Company considers all demand deposits with financial institutions and all highly liquid investments with maturities of ninety days or less at the date of purchase to be cash and cash equivalents. Cash equivalents consist of $6.5 million held in a money market fund and $0.5 million held in an operating account at December 31, 2019 and $126.3 million held in a money market fund and $2.3 million held in an operating account at September 30, 2020, and are carried at fair value of the investment based on quoted market prices. |
Short-Term Investments | Short-Term Investments Short-term investments consist of debt securities with a maturity of greater than three months when acquired. The Company classifies its short-term investments at the time of purchase as available-for-sale securities. Available-for-sale securities are carried at fair value. Unrealized gains and losses on available-for-sale securities are reported in accumulated other comprehensive income, a component of stockholders’ deficit, until realized. |
Deferred Offering Costs | Deferred Offering Costs The Company capitalizes certain legal, accounting, and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs will be recorded as a reduction of additional paid-in capital generated as a result of the offering. Should the equity financing no longer be considered probable of being consummated, all deferred offering costs would be charged to operating expenses in the statement of operations and comprehensive loss. Deferred offering costs were $0.1 million and $1.8 million at December 31, 2019 and September 30, 2020, respectively. |
Series A, Series B and Series B-1 Redeemable Convertible Preferred Stock | Series A, Series B and Series B-1 Redeemable Convertible Preferred Stock The Company records shares of redeemable convertible preferred stock at their respective fair values on the date of issuance, net of issuance costs. The redeemable convertible preferred stock is recorded outside of stockholders’ equity on the balance sheet because the shares contain liquidation features that are not solely within the Company’s control. The Company has elected not to adjust the carrying values of the redeemable convertible preferred stock to the liquidation preferences of such shares because of the uncertainty of whether or when such an event would occur. Subsequent adjustments to increase the carrying value to the liquidation preferences will be made only when it becomes probable that such a liquidation event will occur. See Note 6 for a discussion of the redeemable convertible preferred stock. |
Revenue Recognition | Revenue Recognition Collaboration revenue is recognized in accordance with ASC 606, Revenue from Contracts with Customers (ASC 606). Arrangements with collaborators may include licenses to intellectual property, research and development services, manufacturing services for clinical and commercial supply, and participation on joint steering committees. The Company evaluates the promised goods or services in the contract to determine which promises, or group of promises, represent performance obligations. In contemplation of whether a promised good or service meets the criteria required of a performance obligation, the Company considers the stage of development of the underlying intellectual property, the capabilities and expertise of the customer relative to the underlying intellectual property, and whether the promised goods or services are integral to or dependent on other promises in the contract. When accounting for an arrangement that contains multiple performance obligations, the Company must develop judgmental assumptions, which may include market conditions, reimbursement rates for personnel costs, development timelines and probabilities of regulatory success to determine the stand-alone selling price for each performance obligation identified in the contract. Upon the amendment of an existing agreement, the Company evaluates whether the amendment represents a modification to an existing contract which would be recorded through a cumulative catch-up to revenue or a separate contract. If it is determined that it is a separate contract, the Company will evaluate the necessary revenue recognition through the five-step process described below. When the Company concludes that a contract should be accounted for as a combined performance obligation and recognized over time, the Company must then determine the period over which revenue should be recognized and the method by which to measure revenue. The Company generally recognizes revenue using a cost-based input method. The Company recognizes collaboration revenue when its customer or collaborator obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, it performs the following five steps: i. identify the contract(s) with a customer; ii. identify the performance obligations in the contract; iii. determine the transaction price; iv. allocate the transaction price to the performance obligations within the contract and; v. recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it determines that it is probable it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within the contract to determine whether each promised good or service is a performance obligation. The promised goods or services in the Company’s arrangements may consist of a license, or options to license, the Company’s intellectual property and research, development and manufacturing services. The Company may provide options to additional items in such arrangements, which are accounted for as separate contracts when the customer elects to exercise such options, unless the option provides a material right to the customer. Performance obligations are promises in a contract to transfer a distinct good or service to the customer that (i) the customer can benefit from on its own or together with other readily available resources, and (ii) is separately identifiable from other promises in the contract. Goods or services that are not individually distinct performance obligations are combined with other promised goods or services until such combined group of promises meet the requirements of a performance obligation. The Company determines transaction price based on the amount of consideration the Company expects to receive for transferring the promised goods or services in the contract. Consideration may be fixed, variable, or a combination of both. At contract inception for arrangements that include variable consideration, the Company estimates the probability and extent of consideration it expects to receive under the contract utilizing either the most likely amount method or expected amount method, whichever best estimates the amount expected to be received. The Company then considers any constraints on the variable consideration and includes in the transaction price variable consideration to the extent it is deemed probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company then allocates the transaction price to each performance obligation based on the relative standalone selling price and recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) control is transferred to the customer and the performance obligation is satisfied. For performance obligations which consist of licenses and other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The Company records amounts as accounts receivable when the right to consideration is deemed unconditional. When consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a contract, a contract liability is recorded as deferred revenue. Amounts received prior to satisfying the revenue recognition criteria are recognized as deferred revenue in the Company’s accompanying balance sheet. Deferred revenues expected to be recognized as revenue within the 12 months following the balance sheet date are classified as a current liability. Deferred revenues not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as non-current liabilities. The Company’s collaboration revenue arrangements may include the following: Up-front License Fees: If a license is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from nonrefundable, up-front fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Milestone Payments: At the inception of an agreement that includes research and development milestone payments, the Company evaluates each milestone to determine when and how much of the milestone to include in the transaction price. The Company first estimates the amount of the milestone payment that the Company could receive using either the expected value or the most likely amount approach. The Company primarily uses the most-likely amount approach as that approach is generally most predictive for milestone payments with a binary outcome. Then, the Company considers whether any portion of that estimated amount is subject to the variable consideration constraint (that is, whether it is probable that a significant reversal of cumulative revenue would not occur upon resolution of the uncertainty.) The Company updates the estimate of variable consideration included in the transaction price at each reporting date which includes updating the assessment of the likely amount of consideration and the application of the constraint to reflect current facts and circumstances. Royalties: For arrangements that include sales-based royalties, including milestone payments based on a level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any revenue related to sales-based royalties or milestone payments based on the level of sales. To date, the Company has not granted a development and commercialization license nor recognized any revenue related to licenses, sales-based royalties or milestone payments based on the level of sales. Research and Development Services: The Company will record costs associated with development and process optimization activities as research and development expenses in the statement of operations and comprehensive loss consistent with ASC 730, Research and Development. The Company considered the guidance in ASC 808, Collaborative Agreements |
Research and Development Costs | Research and Development Costs Research and development cost are expensed as incurred, and include salaries, stock-based compensation and other personnel-related costs, equipment and supplies, preclinical studies, clinical trials, and manufacturing development activities. A substantial portion of the Company’s ongoing research and development activities are conducted by third-party service providers, including contract research and manufacturing organizations. The Company accrues for expenses resulting from obligations under agreements with CROs, contract manufacturing organizations (“CMOs”), and other outside service providers for which payment flows do not match the periods over which materials or services are provided to the Company. Accruals are recorded based on estimates of services received and efforts expended pursuant to agreements established with CROs, CMOs, and other outside service providers. These estimates are typically based on contracted amounts applied to the proportion of work performed and determined through analysis with internal personnel and external service providers as to the progress or stage of completion of |
Net Loss Per Share | Net Loss Per Share Basic loss per share of common stock is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during each period. Diluted loss per share of common stock includes the effect, if any, from the potential exercise or conversion of securities, such as redeemable convertible preferred stock, stock options and restricted stock, which would result in the issuance of incremental shares of common stock. For diluted net loss per share, the weighted-average number of shares of common stock is the same for basic net loss per share due to the fact that when a net loss exists, dilutive securities are not included in the calculation as the impact is anti-dilutive. The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive: Nine Months Ended September 30, 2020 2019 Redeemable convertible preferred stock on an as converted to common stock basis 20,300,253 7,487,151 Stock options 2,538,225 1,255,543 Unvested restricted stock 16,789 36,937 22,855,267 8,779,631 |
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) Other comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Other comprehensive loss is comprised of the net loss and unrealized gains on short-term investments. |
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements (not yet adopted) | Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (the "FASB") issued ASU No. 2016-13, Financial Instruments-Credit Losses (“ASC 326”) : Measurement of Credit Losses on Financial Instruments (ASU 2016-13) which requires that expected credit losses relating to financial assets measured on an amortized cost basis and available-for-sale debt securities be recorded through an allowance for credit losses. ASU 2016-13 limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and also requires the reversal of previously recognized credit losses if fair value increases. ASU 2016-13 became effective for the Company during the first quarter of 2020. The Company adopted this pronouncement and it did not have a material impact on the financial statements or related disclosures. In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurements , which changes the fair value measurement disclosure requirements of ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). The goal of the ASU is to improve the effectiveness of ASC 820’s disclosure requirements. The standard is applicable to the Company for the fiscal year beginning January 1, 2020, and interim periods within that year. The Company adopted this pronouncement and it did not have a material impact on the financial statements or related disclosures. Recently Issued Accounting Pronouncements (not yet adopted) In February 2016, the FASB issued ASU No. 2016-02, Leases (ASC 842) which requires a lessee to record a right-of-use asset and a corresponding lease liability on the balance sheet for all leases with terms longer than 12 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of antidilutive securities excluded from computation of net loss per share | The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive: Nine Months Ended September 30, 2020 2019 Redeemable convertible preferred stock on an as converted to common stock basis 20,300,253 7,487,151 Stock options 2,538,225 1,255,543 Unvested restricted stock 16,789 36,937 22,855,267 8,779,631 |
Short-Term Investments (Tables)
Short-Term Investments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of available for sale short-term investments | The following table represents the Company’s available for sale short-term investments by major security type (in thousands): September 30, 2020 Amortized Gross Unrealized Total Short-term investments Corporate securities $ 2,350 $ (17) $ 2,333 U.S. government securities 3,999 7 4,006 Total short-term investments $ 6,349 $ (10) $ 6,339 December 31, 2019 Amortized Gross Unrealized Total Short-term investments Corporate securities $ 5,375 $ (17) $ 5,358 U.S. government securities 26,645 71 26,716 Total short-term investments $ 32,020 $ 54 $ 32,074 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses | Accrued expenses consisted of the following (in thousands): September 30, December 31, Research contract costs $ 4,539 $ 2,648 Compensation 1,188 966 Other 791 425 $ 6,518 $ 4,039 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum rental payments for operating leases | Future minimum payments inclusive of the amended lease, by year and in aggregate, under non-cancelable operating leases consist of the following as of September 30, 2020 (in thousands): 2020 $ 73 2021 625 2022 730 2023 753 2024 775 Thereafter 3,340 Total minimum lease payments $ 6,296 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock-based compensation expense | The Company recorded stock-based compensation expense in the following expense categories of its accompanying unaudited interim statements of operations and comprehensive loss (in thousands): Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Research and development $ 159 $ 93 $ 350 $ 151 General and administrative 153 50 279 146 $ 312 $ 143 $ 629 $ 297 |
Schedule of option activity | The following table summarizes option activity under the Stock Plan: Options Weighted average exercise price Weighted average remaining contract life Balance at January 1, 2020 1,615,375 $2.60 Granted 1,116,966 $5.28 Exercised (163,292) $1.28 Forfeited (30,824) $2.95 Outstanding at September 30, 2020 2,538,225 $3.86 8.95 Vested and expected to vest September 30, 2020 2,485,746 $3.85 8.94 Exercisable at September 30, 2020 684,910 $2.60 8.03 |
Schedule of valuation assumptions | The grant date fair value of each option grant was estimated throughout the nine months ended September 30, 2020 using the Black-Scholes option-pricing model using the following weighted-average assumptions: Expected term 5.91 Expected volatility 74.21% Risk-free interest rate 0.47% Expected dividends — Fair value of common stock $5.28 |
Schedule of restricted stock activity | The following table summarizes the activity relating to these shares for the nine months ended September 30, 2020 : Awards Balance at January 1, 2020 31,900 Vested 15,111 Outstanding at September 30, 2020 16,789 |
Organization and Description _2
Organization and Description of Business (Details) - USD ($) $ in Thousands | Oct. 14, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Accumulated deficit | $ 60,081 | $ 35,490 | |
Cash, cash equivalents, and short-term investments | $ 134,900 | ||
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Proceeds from initial public offering | $ 213,500 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Deferred offering costs | $ 1,800 | $ 100 |
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | 128,600 | 7,013 |
Money Market Funds | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | 126,300 | 6,500 |
Operating Account | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | $ 2,300 | $ 500 |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of anti-dilutive securities (Details) - shares | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of net loss per share (in shares) | 22,855,267 | 8,779,631 |
Redeemable convertible preferred stock on an as converted to common stock basis | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of net loss per share (in shares) | 20,300,253 | 7,487,151 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of net loss per share (in shares) | 2,538,225 | 1,255,543 |
Unvested restricted stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of net loss per share (in shares) | 16,789 | 36,937 |
Short-Term Investments - Schedu
Short-Term Investments - Schedule of available for sale short-term investments (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Short-term investments | ||
Amortized Cost | $ 6,349 | $ 32,020 |
Gross Unrealized Gain/(Loss) | (10) | 54 |
Total Fair Value | 6,339 | 32,074 |
Corporate securities | ||
Short-term investments | ||
Amortized Cost | 2,350 | 5,375 |
Gross Unrealized Gain/(Loss) | (17) | (17) |
Total Fair Value | 2,333 | 5,358 |
U.S. government securities | ||
Short-term investments | ||
Amortized Cost | 3,999 | 26,645 |
Gross Unrealized Gain/(Loss) | 7 | 71 |
Total Fair Value | $ 4,006 | $ 26,716 |
Short-Term Investments - Narrat
Short-Term Investments - Narrative (Details) | Sep. 30, 2020 |
Investments, Debt and Equity Securities [Abstract] | |
Debt securities, average maturity term | 1 month 6 days |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of accrued expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Research contract costs | $ 4,539 | $ 2,648 |
Compensation | 1,188 | 966 |
Other | 791 | 425 |
Accrued expenses | $ 6,518 | $ 4,039 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of minimum lease payments (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 | $ 73 |
2021 | 625 |
2022 | 730 |
2023 | 753 |
2024 | 775 |
Thereafter | 3,340 |
Total minimum lease payments | $ 6,296 |
Commitments and Contingencies_2
Commitments and Contingencies - Narrative (Details) | Sep. 30, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
License agreement, maximum payment | $ 20,600,000 |
Accrued royalty | $ 0 |
Preferred Stock (Details)
Preferred Stock (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2020USD ($)membervote$ / sharesshares | Sep. 30, 2019USD ($) | |
Temporary Equity [Line Items] | ||
Transaction fees | $ | $ 1,251 | $ 0 |
Preferred stock, dividend rate | 0.08% | |
Dividends declared (in dollars per share) | $ 0 | |
Preferred stock, voting right, number of votes per share | vote | 1 | |
Convertible preferred stock, conversion ratio | 6.85 | |
Preferred stock, conversion price, at least (in dollars per share) | $ 9.17964 | |
Preferred stock, proceeds from stock conversion (at least) | $ | $ 50,000 | |
Conversion of preferred stock, percentage of votes needed (in percentage) | 0.65 | |
Series B Redeemable Convertible Preferred Stock | ||
Temporary Equity [Line Items] | ||
Preferred stock sold (in shares) | shares | 550,571 | |
Sale of preferred stock (in dollars per share) | $ 62.88051 | |
Liquidation preference (in dollars per share) | $ 62.88051 | |
Series B-1 Redeemable Convertible Preferred Stock | ||
Temporary Equity [Line Items] | ||
Preferred stock sold (in shares) | shares | 1,319,964 | |
Sale of preferred stock (in dollars per share) | $ 62.88051 | |
Voting rights, trigger, number of board members to be elected, scenario one | member | 2 | |
Voting rights, trigger, minimum number of preferred shares outstanding, scenario one | shares | 329,991 | |
Liquidation preference (in dollars per share) | $ 62.88051 | |
Series A Redeemable Convertible Preferred Stock | ||
Temporary Equity [Line Items] | ||
Voting rights, trigger, number of board members to be elected, scenario one | member | 2 | |
Voting rights, trigger, minimum number of preferred shares outstanding, scenario one | shares | 276,059 | |
Voting rights, trigger, minimum number of preferred shares outstanding, scenario two | shares | 110,423 | |
Voting rights, trigger, number of board members to be elected, scenario two | vote | 1 | |
Liquidation preference (in dollars per share) | $ 62.475 | |
Redeemable convertible preferred stock on an as converted to common stock basis | ||
Temporary Equity [Line Items] | ||
Sale of stock, proceeds received | $ | $ 117,600 | |
Transaction fees | $ | $ 600 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) $ / shares in Units, $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grant date fair value (in dollars per share) | $ / shares | $ 3.36 |
Unrecognized compensation cost | $ 4.5 |
Aggregate intrinsic value of options outstanding | 8.5 |
Aggregate intrinsic value of options exercisable | $ 8.5 |
Restricted Stock | Tranche One | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock-based compensation, vesting period | 1 year |
Award vesting rights, percentage | 25.00% |
Restricted Stock | Tranche Two | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock-based compensation, vesting period | 36 months |
Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted-average amortization period | 2 years 10 months 17 days |
Expected dividends | 0.00% |
2016 Stock Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares authorized (in shares) | shares | 3,819,786 |
Number of shares available for future grant (in shares) | shares | 335,403 |
Stock-based compensation, vesting period | 4 years |
Share-based compensation, expiration period | 10 years |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of stock-based compensation expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 312 | $ 143 | $ 629 | $ 297 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 159 | 93 | 350 | 151 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 153 | $ 50 | $ 279 | $ 146 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of option activity (Details) - $ / shares | 9 Months Ended |
Sep. 30, 2020 | |
Options | |
Options, beginning balance (in shares) | 1,615,375 |
Options, granted (in shares) | 1,116,966 |
Options, exercised (in shares) | (163,292) |
Options, forfeited (in shares) | (30,824) |
Options, ending balance (in shares) | 2,538,225 |
Options, vested and expected to vest (in shares) | 2,485,746 |
Options, exercisable (in shares) | 684,910 |
Weighted average exercise price | |
Weighted average exercise price, beginning balance (in dollars per share) | $ 2.60 |
Weighted average exercise price, granted (in dollars per share) | 5.28 |
Weighted average exercise price, exercised (in dollars per share) | 1.28 |
Weighted average exercise price, forfeited (in dollars per share) | 2.95 |
Weighted average exercise price, ending balance (in dollars per share) | 3.86 |
Weighted average exercise price, vested and expected to vest (in dollars per share) | 3.85 |
Weighted average exercise price, exercisable (in dollars per share) | $ 2.60 |
Weighted average remaining contract life | |
Weighted average remaining contract life, outstanding | 8 years 11 months 12 days |
Weighted average remaining contract life, vested and expected to vest | 8 years 11 months 8 days |
Weighted average remaining contract life, exercisable | 8 years 10 days |
Stock-Based Compensation - Sc_3
Stock-Based Compensation - Schedule of valuation assumptions (Details) - Stock options | 9 Months Ended |
Sep. 30, 2020$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term | 5 years 10 months 28 days |
Expected volatility | 74.21% |
Risk-free interest rate | 0.47% |
Expected dividends | 0.00% |
Fair value of common stock (in dollars per share) | $ 5.28 |
Stock-Based Compensation - sc_4
Stock-Based Compensation - schedule of restricted stock activity (Details) - Restricted Stock | 9 Months Ended |
Sep. 30, 2020shares | |
Awards | |
Awards, beginning balance (in shares) | 31,900 |
Awards, vested (in shares) | 15,111 |
Awards, ending balance (in shares) | 16,789 |
Collaboration Agreement_Relat_2
Collaboration Agreement—Related Party (Details) $ in Thousands | Mar. 31, 2020USD ($) | Aug. 31, 2017molecule | Sep. 30, 2020USD ($)obligation | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)obligationmolecule | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)obligation |
Related Party Transaction [Line Items] | |||||||
Collaboration revenue – related party | $ 2,435 | $ 1,784 | $ 8,592 | $ 7,066 | |||
Investor | Collaborative Arrangement | Takeda | |||||||
Related Party Transaction [Line Items] | |||||||
Number of molecules | molecule | 6 | ||||||
Proceeds from collaborators | $ 12,100 | $ 8,500 | |||||
Collaboration revenue – related party | $ 50,600 | ||||||
Number of performance obligations | obligation | 4 | 4 | 4 | ||||
Upfront payment, license fee | $ 11,300 | ||||||
Maximum reimbursement cost, second dose expansion | $ 3,200 | ||||||
Out-of-pocket cost reimbursement percentage | 0.50 | ||||||
Maximum reimbursement for clinical trial materials | $ 4,000 | ||||||
Investor | Collaborative Arrangement | Designated Molecules (DMs) | Takeda | |||||||
Related Party Transaction [Line Items] | |||||||
Number of molecules | molecule | 2 | ||||||
Collaboration arrangement, termination period | 90 days | ||||||
Investor | Collaborative Arrangement | Selected Molecules (SMs) | Takeda | |||||||
Related Party Transaction [Line Items] | |||||||
Number of molecules | molecule | 4 | ||||||
Number of Selected Molecules subject to exclusively license option (up to) | molecule | 2 | ||||||
Number of Selected Molecules in joint development committee | molecule | 1 | ||||||
Number of Selected Molecules in joint development committee as a group | molecule | 3 | ||||||
Investor | Collaborative Arrangement, DMI Process And Manufacturing Controls | Takeda | |||||||
Related Party Transaction [Line Items] | |||||||
Maximum reimbursement for process improvement | $ 1,600 |
Related-Party Transactions (Det
Related-Party Transactions (Details) $ in Thousands | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Related Party Transaction [Line Items] | ||
Prepaid expenses and other current assets | $ 7,315 | $ 3,355 |
Takeda | ||
Related Party Transaction [Line Items] | ||
Shareholder ownership percentage | 0.075 | 0.14 |
Investor | Takeda | Collaborative Arrangement | ||
Related Party Transaction [Line Items] | ||
Prepaid expenses and other current assets | $ 2,400 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event $ / shares in Units, $ in Millions | Oct. 14, 2020USD ($)$ / sharesshares | Oct. 01, 2020 |
Subsequent Event [Line Items] | ||
Stock split conversion ratio | 6.85 | |
Price of shares sold (in dollars per share) | $ / shares | $ 17 | |
Proceeds from initial public offering | $ | $ 213.5 | |
Preferred stock, common shares issued upon conversion (in shares) | shares | 20,300,253 | |
IPO | ||
Subsequent Event [Line Items] | ||
Common stock sold (in shares) | shares | 13,664,704 | |
Underwriting discounts and commissions | $ | $ 16.3 | |
Offering expenses | $ | $ 2.5 | |
Over-Allotment Option | ||
Subsequent Event [Line Items] | ||
Common stock sold (in shares) | shares | 1,782,352 |