Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 27, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | CYCLERION THERAPEUTICS, INC. | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2021 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 34,134,466 | |
Entity Central Index Key | 0001755237 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Tax Identification Number | 83-1895370 | |
Entity File Number | 001-38787 | |
Entity Incorporation, State or Country Code | MA | |
Entity Address, Address Line One | 245 First Street | |
Entity Address, City or Town | Cambridge | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02142 | |
City Area Code | 857 | |
Local Phone Number | 327-8778 | |
Title of 12(b) Security | Common Stock, no par value | |
Trading Symbol | CYCN | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 41,429 | $ 54,395 |
Related party accounts receivable | 127 | |
Prepaid expenses | 1,213 | 816 |
Other current assets | 1,804 | 3,163 |
Total current assets | 44,446 | 58,501 |
Restricted cash, net of current portion | 3,837 | 3,837 |
Property and equipment, net | 6,607 | 6,865 |
Operating lease right-of-use asset | 42,396 | 43,402 |
Other assets | 2,681 | 2,773 |
Total assets | 99,967 | 115,378 |
Current liabilities: | ||
Accounts payable | 1,095 | 1,149 |
Related party accounts payable | 286 | |
Accrued research and development costs | 1,620 | 1,421 |
Accrued expenses and other current liabilities | 3,858 | 7,294 |
Short-term note payable | 3,509 | 3,509 |
Current portion of operating lease liabilities | 3,385 | 3,293 |
Total current liabilities | 13,467 | 16,952 |
Operating lease liabilities, net of current portion | 38,067 | 38,933 |
Commitments and contingencies | ||
Stockholders' equity | ||
Accumulated deficit | (176,828) | (163,429) |
Paid-in capital | 225,288 | 222,949 |
Accumulated other comprehensive loss | (27) | (27) |
Total stockholders' equity | 48,433 | 59,493 |
Total liabilities and stockholders' equity | $ 99,967 | $ 115,378 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 34,129,925 | 34,047,300 |
Common stock, shares outstanding | 34,129,925 | 34,047,300 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues: | ||
Revenue from development agreement | $ 62 | |
Revenue from related party | $ 1,014 | |
Total revenues | 62 | 1,014 |
Cost and expenses: | ||
Research and development | 8,092 | 16,825 |
General and administrative | 5,365 | 6,891 |
Gain on lease modification, net | (2,113) | |
Total cost and expenses | 13,457 | 21,603 |
Loss from operations | (13,395) | (20,589) |
Interest and other income, net | (4) | 361 |
Net loss | $ (13,399) | $ (20,228) |
Net loss per share: | ||
Basic and diluted net loss per share (in dollars per share) | $ (0.39) | $ (0.73) |
Weighted average shares used in calculating: | ||
Basic and diluted net loss per share (in shares) | 34,081 | 27,669 |
Other comprehensive loss: | ||
Net loss | $ (13,399) | $ (20,228) |
Other comprehensive loss: | ||
Foreign currency translation adjustment (loss) gain | 2 | |
Total other comprehensive (loss) gain | 2 | |
Comprehensive loss | $ (13,399) | $ (20,226) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Common stock | Paid-in capital | Accumulated deficit | Accumulated other comprehensive loss |
Beginning balance at Dec. 31, 2019 | $ 97,729 | $ 183,376 | $ (85,627) | $ (20) | |
Beginning balance (in shares) at Dec. 31, 2019 | 27,598,133 | ||||
Change in Stockholders' Equity (Deficit) | |||||
Net loss | (20,228) | (20,228) | |||
Issuance of common stock upon exercise of stock options, RSUs and employee stock purchase plan | 1 | 1 | |||
Issuance of common stock upon exercise of stock options, RSUs and employee stock purchase plan (in shares) | 156,761 | ||||
Share-based compensation expense related to issuance of stock options and RSUs to employees and employee stock purchase plan | 4,036 | 4,036 | |||
Foreign currency translation adjustment | 2 | 2 | |||
Ending balance at Mar. 31, 2020 | 81,540 | 187,413 | (105,855) | (18) | |
Ending balance (in shares) at Mar. 31, 2020 | 27,754,894 | ||||
Beginning balance at Dec. 31, 2020 | $ 59,493 | 222,949 | (163,429) | (27) | |
Beginning balance (in shares) at Dec. 31, 2020 | 34,047,300 | 34,047,300 | |||
Change in Stockholders' Equity (Deficit) | |||||
Net loss | $ (13,399) | (13,399) | |||
Issuance of common stock upon exercise of stock options, RSUs and employee stock purchase plan | 27 | 27 | |||
Issuance of common stock upon exercise of stock options, RSUs and employee stock purchase plan (in shares) | 82,625 | ||||
Share-based compensation expense related to issuance of stock options and RSUs to employees and employee stock purchase plan | 1,921 | 1,921 | |||
Share‑based compensation expense related to issuance of stock options to non-employees | 391 | 391 | |||
Ending balance at Mar. 31, 2021 | $ 48,433 | $ 225,288 | $ (176,828) | $ (27) | |
Ending balance (in shares) at Mar. 31, 2021 | 34,129,925 | 34,129,925 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (13,399) | $ (20,228) |
Adjustments to reconcile net loss to net cash (used in) operating activities: | ||
Depreciation and amortization | 258 | 626 |
Net loss on disposal of property and equipment | (12) | (41) |
Gain on lease modification, net | (2,113) | |
Share-based compensation expense | 2,312 | 4,036 |
Changes in operating assets and liabilities: | ||
Related party accounts receivable | 127 | 448 |
Prepaid expenses | (396) | 98 |
Other current assets | (92) | (9) |
Operating lease assets | 1,006 | (5,502) |
Other assets | 91 | (519) |
Accounts payable | (54) | (1,026) |
Related party accounts payable | (286) | (22) |
Accrued research and development costs | 199 | 484 |
Operating lease liabilities | (774) | (699) |
Accrued expenses and other current liabilities | (3,435) | (4,713) |
Net cash (used in) operating activities | (14,455) | (29,180) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (1,405) | |
Proceeds from sale of property and equipment | 1,462 | 49 |
Net cash provided by (used in) investing activities | 1,462 | (1,356) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from exercises of stock options and ESPP | 27 | 1 |
Net cash provided by financing activities | 27 | 1 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 2 | |
Net (decrease) in cash, cash equivalents and restricted cash | (12,966) | (30,533) |
Cash, cash equivalents and restricted cash, beginning of period | 58,232 | 102,620 |
Cash, cash equivalents and restricted cash, end of period | $ 45,266 | 72,087 |
Supplemental cash flow disclosure: | ||
Cash paid for initial direct costs of lease modification | 6,507 | |
Non-cash investing activities | ||
Fixed asset purchases in accounts payable and accrued expenses | $ 39 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2021 | Mar. 31, 2020 |
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated and combined balance sheets | ||
Cash and cash equivalents | $ 41,429 | $ 67,096 |
Restricted cash | 3,837 | 4,991 |
Total cash, cash equivalents and restricted cash | $ 45,266 | $ 72,087 |
Nature of Business
Nature of Business | 3 Months Ended |
Mar. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Nature of Business | 1. Nature of Business Nature of Operations Cyclerion Therapeutics, Inc. (“Cyclerion”, the “Company” or “we”) is a clinical-stage biopharmaceutical company on a mission to develop treatments that restore cognitive function. Our lead asset, CY6463 (previously known as IW-6463), is a pioneering, CNS-penetrant, soluble guanylate cyclase (sGC) stimulator that is currently in clinical development for Alzheimer’s disease with vascular pathology (ADv), and Mitochondrial Encephalomyopathy, Lactic Acidosis and Stroke-like episodes (MELAS). sGC stimulators are small molecules that act synergistically with nitric oxide (NO) as positive allosteric modulators of sGC to boost production of cyclic guanosine monophosphate, or cGMP. cGMP is a key second messenger that, when produced by sGC, regulates diverse and critical biological functions in the CNS including neuronal function, neuroinflammation, cellular bioenergetics, and vascular function. Cyclerion GmbH, a wholly owned subsidiary, was incorporated in Zug, Switzerland on May 3, 2019. Cyclerion GmbH is an operational entity with one employee who is the Company’s Chief Scientific Officer. The functional currency is the Swiss franc. Cyclerion Securities Corporation, a wholly owned subsidiary, was incorporated in Massachusetts on November 15, 2019 and was granted securities corporation status in Massachusetts for the 2019 tax year. Cyclerion Securities Corporation has no employees. Company Overview The Company’s mission is to develop treatments that restore cognitive function. Its priorities are advancing its ongoing CY6463 clinical programs and seeking the out-licensing of praliciguat and other non-CNS assets. CNS assets. CY6463 is an orally administered CNS-penetrant sGC stimulator that is being developed as a symptomatic and potentially disease-modifying therapy for serious CNS diseases. Nitric oxide-sGC-cGMP is a fundamental CNS signaling network, but it has not yet been leveraged for its full therapeutic potential. CY6463 enhances the brain’s natural ability to produce cGMP, an important second messenger in the CNS, by stimulating sGC, a key node in the NO-sGC-cGMP pathway. This pathway is critical to basic CNS functions and deficient NO-sGC-cGMP signaling is believed to play an important role in the pathogenesis of neurodegenerative diseases. Agents that stimulate sGC to produce cGMP may compensate for deficient NO signaling. On January 13, 2020, we announced positive results from our Phase 1 first-in-human study that provided the foundation for continued development of CY6463. The Phase 1 healthy participant study results indicate that CY6463 was well tolerated. Pharmacokinetic (PK) data, obtained from both blood and cerebral spinal fluid (CSF), support once-daily dosing with or without food and demonstrated CY6463 penetration of the blood-brain-barrier with CSF concentrations expected to be pharmacologically active. On October 14, 2020, we announced positive topline results from our CY6463 Phase 1 translational pharmacology study – in healthy elderly participants. Treatment with CY6463 for 15 days in this 24-subject study confirmed and extended results seen in the earlier first-in-human Phase 1 study: once-daily oral treatment demonstrated blood-brain-barrier penetration with expected CNS exposure and target engagement. Results also showed significant improvements in neurophysiological and objective performance measures as well as in inflammatory biomarkers associated with aging and neurodegenerative diseases. CY6463 was shown to be safe and generally well tolerated. Significant effects on cerebral blood flow and markers of bioenergetics were not observed in this study of healthy elderly participants. We believe that these results, together with nonclinical data, support continued development of CY6463 as a potential new medicine for serious CNS diseases. We have initiated our CY6463 Phase 2a clinical trial in adult participants with MELAS. Startup activities are ongoing for our Phase 2a clinical trial in ADv, with enrollment expected to begin in mid-2021.The ADv study will be supported in part by a grant from the Alzheimer’s Association’s Part the Cloud-Gates Partnership Grant Program, which provides Cyclerion with $2 million of funding over two years. We continue to explore the potential for CY6463 in additional indications starting with cognitive impairment associated with schizophrenia (CIAS) where we are planning to initiate a Phase 1b signal-seeking study, Our next generation CNS asset, CY3018, is a differentiated CNS-penetrant sGC stimulator with greater CSF-to-plasma exposure relative to CY6463. CY3018 is intended to expand the potential of sGC stimulation for the treatment of disorders of the CNS. Non-CNS assets. We have other assets that are outside of our current strategic focus. These non-core assets are not being internally developed at this time and are available for licensing to a third-party partner. is an orally administered, once-daily systemic sGC stimulator that was evaluated in two Phase 2 proof-of-concept studies for adult participants with diabetic nephropathy (DN) and heart failure with preserved ejection fraction (HFpEF). We released topline results from these studies in October 2019. is an orally administered, once-daily, vascular sGC stimulator that was evaluated in a Phase 2 study of participants with sickle cell disease. We released topline results from this study in October 2020. We also have programs with organ-targeted sGC stimulators. The Separation On April 1, 2019, Ironwood Pharmaceuticals, Inc. (“Ironwood”) completed the previously announced separation of its sGC business, and certain other assets and liabilities, into a separate, independent publicly traded company by way of a pro-rata distribution of all of the outstanding shares of common stock of Cyclerion Therapeutics, Inc. through a dividend distribution of one share of the Company’s common stock, with no par value per share, for every 10 shares of Ironwood common stock held by Ironwood stockholders as of the close of business on March 19, 2019, the record date for the Distribution (the entire transaction being the “Separation”). As a result of the Separation, the Company became an independent public company and commenced trading under the symbol “CYCN” on the Nasdaq Global Select Market on April 2, 2019. At-the-Market Offering On July 24, 2020, the Company filed a Registration Statement on Form S-3 (the “Shelf”) with the Securities and Exchange Commission (the “SEC”) in relation to the registration of common stock, preferred stock, debt securities, warrants and units of any combination thereof for an aggregate initial offering price not to exceed $150.0 million. The Shelf was declared effective as of July 31, 2020. On September 3, 2020, the Company entered into a Sales Agreement (the “Sales Agreement”) with Jefferies LLC (“Jefferies”) with respect to an at-the-market offering (the “ATM Offering”) under the Shelf. Under the ATM Offering, the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, having an aggregate offering price of up to $50.0 million through Jefferies as its sales agent. The Company will pay to Jefferies cash commissions of 3.0 percent of the gross proceeds of sales of common stock under the Sales Agreement. As of March 31, 2021, no shares have been issued or sold under the ATM Offering. Basis of Presentation The condensed consolidated financial statements and the related disclosures are unaudited and have been prepared in accordance with accounting principles generally accepted in the U.S. Additionally, certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the Securities and Exchange Commission on February 25, 2021. In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all normal recurring adjustments considered necessary for a fair presentation of the Company’s financial position and the results of its operations for the interim periods presented. The results of operations for the three months ended March 31, 2021 and 2020 are not necessarily indicative of the results that may be expected for the full year or any other subsequent interim period. The condensed consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries, Cyclerion GmbH, and Cyclerion Securities Corporation. All significant intercompany accounts and transactions have been eliminated in the preparation of the accompanying condensed consolidated financial statements. Going Concern At each reporting period, the Company evaluates whether there are conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. The Company’s evaluation entails analyzing prospective operating budgets and forecasts for expectations of the Company’s cash needs and comparing those needs to the current cash and cash equivalent balances. The Company is required to make certain additional disclosures if it concludes substantial doubt exists and it is not alleviated by the Company’s plans or when its plans alleviate substantial doubt about the Company’s ability to continue as a going concern. The Company has experienced negative operating cash flows for all historical periods presented and the Company expects these losses to continue into the foreseeable future as the Company continues the development and clinical testing of its product candidate CY6463, and its discovery research programs. Through March 31, 2021, the Company had raised an aggregate of $189.3 million from equity private placements. After considering the Company’s current research and development plans and the timing expectations related to the progress of its programs, and after considering its existing cash and cash equivalents as of March 31, 2021, the Company did not identify conditions or events that would raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date these financial statements were issued. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies The accounting policies of the Company are set forth in Note 2. Summary of Significant Accounting Policies Use of Estimates The preparation of consolidated financial statements in accordance with U.S. GAAP requires the Company’s management to make estimates and judgments that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the amounts of expenses during the reported periods. On an ongoing basis, the Company’s management evaluates its estimates, judgments, and methodologies. Significant estimates and assumptions in the consolidated financial statements include those related to revenue, impairment of long-lived assets, valuation procedures for right-of-use assets and operating lease liabilities, income taxes, including the valuation allowance for deferred tax assets, research and development expenses, contingencies, and share-based compensation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ materially from these estimates under different assumptions or conditions. Changes in estimates are reflected in reported results in the period in which they become known. New Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by the Company as of the specified effective date. Except as discussed elsewhere in the notes to the consolidated financial statements, the Company did not adopt any new accounting pronouncements during the three months ended March 31, 2021 that had a material effect on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses. This standard requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. As a smaller reporting company, ASU 2016-13 will become effective for the Company for fiscal years beginning after December 15, 2022, and early adoption is permitted. The Company is currently evaluating the impact that ASU 2016-13 will have on its financial statements and related disclosures. No other accounting standards known by the Company to be applicable to it that have been issued by the FASB or other standard-setting bodies and that do not require adoption until a future date are expected to have a material impact on the Company’s consolidated financial statements upon adoption. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 3. Related Party Transactions Development Agreement with Ironwood As part of the Separation from Ironwood, the Company entered into a Development Agreement with Ironwood. Under the Development Agreement, the Company provided certain research and development services to Ironwood at mutually agreed upon rates and the amounts earned are recorded as revenue from related party for the three months ended March 31, 2020. Such research and development activities were governed by a joint steering committee composed of representatives of both Ironwood and the Company. Ironwood and the Company have agreed not to renew the Development Agreement beyond the end of its initial term on March 31, 2021. These transactions under the Development Agreement were considered related party transactions due to Mark Currie’s role as President of the Company through December 31, 2020 and board member of Ironwood. In January 2021, Mark Currie’s role transitioned from President of the Company to a senior advisor on a consulting basis. Therefore, effective January 2021, transactions under the Development Agreement are no longer accounted for as related party transactions. The Company recorded approximately $1.0 million as related party revenue for the three months ended March 31, 2020. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 4. Fair Value of Financial Instruments The Company’s cash equivalents are generally classified within Level 1 of the fair value hierarchy. The following tables present information about the Company’s financial assets measured at fair value on a recurring basis and indicate the level of the fair value hierarchy used to determine such fair values as of March 31, 2021 and December 31, 2020 (in thousands): Fair Value Measurements as of March 31, 2021 Using: Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 40,310 $ — $ — $ 40,310 Cash equivalents $ 40,310 $ — $ — $ 40,310 Fair Value Measurements as of December 31, 2020 Using: Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 53,240 $ — $ — $ 53,240 Cash equivalents $ 53,240 $ — $ — $ 53,240 During the three months ended March 31, 2021 and 2020, there were no transfers between levels. The fair value of the Company’s cash equivalents, consisting of money market funds, is based on quoted market prices in active markets with no valuation adjustment. The Company believes the carrying amounts of its prepaid expenses and other current assets, restricted cash, accounts payable and accrued expenses approximate their fair value due to the short-term nature of these amounts. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2021 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | 5. Property and Equipment Property and equipment, net consisted of the following (in thousands): March 31, December 31, 2021 2020 Software $ 2,214 $ 2,214 Computer and office equipment 44 44 Leasehold improvements 14,894 14,894 Property and equipment, gross 17,152 17,152 Less: accumulated depreciation and amortization (10,545 ) (10,287 ) Property and equipment, net $ 6,607 $ 6,865 As of March 31, 2021, and December 31, 2020, the Company’s property and equipment was primarily located in Cambridge, Massachusetts. Depreciation and amortization expense of the Company’s property and equipment was approximately $0.3 million and $0.6 million for the three months ended March 31, 2021 and 2020, respectively. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2021 | |
Accrued Liabilities And Other Liabilities [Abstract] | |
Accrued Expenses and Other Current Liabilities | 6. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): March 31, December 31, 2021 2020 Accrued incentive compensation $ 368 $ 1,720 Salaries 457 514 Accrued vacation 351 555 Professional fees 528 689 Accrued severance and benefit costs 1,779 3,640 Other 375 176 Accrued expenses and other current liabilities $ 3,858 $ 7,294 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies Other Funding Commitments In the normal course of business, the Company enters into contracts with clinical research organizations and other third parties for clinical and preclinical research studies and other services and products for operating purposes. These contracts are generally cancellable, with notice, at the Company’s option and do not have any significant cancellation penalties. Guarantees On September 6, 2018, Cyclerion was incorporated in Massachusetts and its officers and directors are indemnified for certain events or occurrences while they are serving in such capacity. The Company enters into certain agreements with other parties in the ordinary course of business that contain indemnification provisions. These typically include agreements with directors and officers, business partners, contractors, clinical sites, and customers. Under these provisions, the Company generally indemnifies and holds harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of the Company’s activities. These indemnification provisions generally survive termination of the underlying agreements. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is unlimited. However, to date the Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. As a result, the estimated fair value of these obligations is minimal. Accordingly, the Company did not have any liabilities recorded for these obligations as of March 31, 2021 and December 31, 2020. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Leases | 8. Leases On April 1, 2019, the Company entered into the Head Lease, a direct operating lease for its former headquarters located at 301 Binney Street, Cambridge, MA originally consisting of approximately 114,000 rentable square feet of office and laboratory space on the first and second floors. The Head Lease had a term of 123 months with two five-year extension options and certain expansion rights. The Head Lease also included a letter of credit of $7.7 million, posted with the landlord as a security deposit, which was collateralized by a money market account recorded as restricted cash on the Company’s consolidated balance sheets. The Company had also entered into customary non-disturbance arrangements with the building landlord’s mortgagee and with the property ground lessor recognizing Company’s leasehold interest in this property. On February 28, 2020 the Company amended the Head Lease. The Lease Amendment partially terminated the Company’s rights and obligations with respect to an approximately 40,000 rentable square feet. The Company continued to lease the remaining space of approximately 74,000 square feet including the area covered by the subleased premise, discussed below. In connection with this Lease Amendment the Company reduced its remaining lease payments through June 2029 by approximately $41.9 million and paid a $6.3 million termination fee and $0.2 million related to other initial direct costs, which were deferred and recognized over the remaining lease term. The Company’s security deposit was also reduced by approximately $2.7 million to approximately $5.0 million. The Lease Amendment was determined to be a lease modification that qualified as a change of accounting on the existing lease and not a separate contract. As such, the Right-of-Use (“ROU”) assets and operating lease liabilities were remeasured using an incremental borrowing rate at the date of modification of 9.7%, which resulted in a reduction of the ROU asset of $21.4 million and a reduction in the operating lease liabilities of $23.5 million. The Company recorded the resulting gain of approximately $2.1 million as a component of operating expenses in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2020. On September 15, 2020 the Company entered into the Second Lease Amendment to its Head Lease. The Second Lease Amendment partially terminated the Company’s rights and obligations with respect to approximately 17,000 rentable square feet (the “Surrender Space”), including 15,700 rentable square feet subleased by the Company to a subtenant. The Company continues to lease approximately 57,000 square feet of space, under terms of the Second Lease Amendment. The Company reduced its remaining lease payments through June 2029 by approximately $16.9 million. The Company paid no termination or other initial direct costs related to the execution of the Second Lease Amendment. The Company’s security deposit was reduced by approximately $1.2 million to approximately $3.8 million, which is classified as restricted cash on the Company’s consolidated balance sheet as of March 31, 2021. The Second Lease Amendment was determined to be a lease modification that qualified as a change of accounting on the existing lease and not a separate contract. As such, the ROU assets and operating lease liabilities were remeasured using an incremental borrowing rate at the date of modification of 6.1%, which resulted in a reduction of the ROU asset of $5.9 million and a reduction in the operating lease liabilities of $5.5 million. The Company recorded the resulting loss of approximately $0.4 million as a component of operating expenses in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2020. The Company had an operating lease ROU asset of approximately $42.4 million and $43.4 million related to the amended Head Lease recorded in its condensed consolidated balance sheets as of March 31, 2021 and December 31, 2020, respectively. The Company had current operating lease liabilities of approximately $3.4 million and $3.3 million, and noncurrent operating lease liabilities of approximately $38.1 million and $38.9 million, related to the amended Head Lease recorded in its consolidated balance sheets as of March 31, 2021 and December 31, 2020, respectively. Lease cost is recognized on a straight-line basis over the lease term. For the three months ended March 31, 2021, the Company recognized a total of approximately $1.6 million of total lease costs. Variable lease costs not subject to an index or rate are recognized as incurred. For the three months ended March 31, 2021, the Company recognized a total of approximately $0.5 million of variable lease costs related to the Head Lease, as amended. For the three months ended March 31, 2020, the Company recognized a total of approximately $2.7 million and 1.0 million in total lease costs and variable lease costs, respectively related to the Head Lease, as amended Supplemental cash flow information related to leases for the three months ended March 31, 2021 and 2020 as follows: Three Months Ended March 31, 2021 2020 Decrease in right-of-use assets related to lease modifications $ — $ 21,386 Decrease in operating lease liabilities due to lease modifications $ — $ 23,499 Cash paid for amounts included in the measurement of lease liabilities (in thousands) $ 1,405 $ 2,421 Weighted-average remaining lease term of operating leases (in years) 8.3 9.3 Weighted-average discount rate of operating leases 6.1 % 9.7 % On October 18, 2019, the Company entered into an agreement with a third party to sublease 15,700 rentable square feet of its lease premises under the Head Lease. The sublease was scheduled to expire on June 30, 2029, unless earlier terminated in accordance with the sublease agreement, and had no extension options. The sublease provided for annual base rent of approximately $1.5 million in the first year, which increased on a yearly basis by 3.0% (subject to an abatement of base rent of approximately $0.7 million for the first six months of the sublease). As part of the consideration for the sublease, the sublessee agreed to provide licensed rooms and services within the sublease premises to the Company over the sublease term free of charge. In addition, the sublessee was responsible for its pro rata share of certain costs, taxes and operating expenses related to the subleased space, the consideration for which is variable and is based on the actual operating costs of the lessor. The Company allocated the total consideration in the sublease agreement between the lease and non-lease components in the contract based on their relative standalone prices. The Company determined that the variable consideration related exclusively to non-lease components and would be recognized as incurred. The sublease included an initial security deposit of $0.5 million, which was provided by the sublessee in the form of a letter of credit, and an additional security deposit of $0.4 million within nine months of the sublease commencement. For the three months ended March 31, 2020, gross sublease income of $0.5 million was recorded related to the sublease. Net sublease income of approximately $0.1 million was recorded in interest and other income in the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2020. On September 15, 2020, concurrent with execution of the Second Lease Amendment, the Company entered into the Sublease Termination Agreement to terminate its sublease of 15,700 rentable square feet. Under the terms of the Sublease Termination Agreement, the subtenant was relieved of its obligation to provide future cash rental payments to the Company. The agreements requiring the former subtenant to provide licensed rooms and services to the Company free of charge through the original sublease term survived the sublease termination. The Company expects to receive the benefit of the licensed rooms and services beginning in the third quarter of 2021. The letter of credit security deposit related to the sublease was released. The Company determined that the Sublease Termination Agreement constitutes a non-monetary exchange under ASC 845 Nonmonetary Transactions (“ASC 845”) where, in return for the free rooms and the services, the Company agreed to terminate its rights and obligations under the sublease agreement. In accordance with ASC 845, the Company determined that the accounting for the transaction should be based on the fair value of assets or services involved. The Company estimated the fair value of the rooms and services to be approximately $1.5 million and $2.9 million, respectively. Accordingly, prepaid rooms and services of $4.4 million were recorded upon the sublease termination, of which $1.7 million is recorded in other current assets and $2.7 million is recorded in other assets in the condensed consolidated balance sheets as of March 31, 2021. During the year-ended December 31, 2020, termination fee income of $3.1 million was recognized related to the rooms and services, after considering the rent receivable balance of $1.3 million outstanding from the subtenant. The remaining unamortized direct costs of $0.2 million were written off. The Company determined that the licensed rooms represent a lease under ASC 842. Once the Company obtains control of the rooms, the prepaid rooms balance will be reclassified from other assets to a ROU asset, and the related lease expense will be recorded on a straight-line basis over the lease term. The Company determined that the licensed services represent a non-lease component, which will be recognized separately from the lease component for this asset class. The expense related to the licensed services will be recognized on a straight-line basis over the period the services are received. Both the lease expense and services expense will be recognized as a component of research and development costs in the consolidated statements of operations and comprehensive loss. Future minimum lease payments under non-cancelable operating leases under ASC 842 as of March 31, 2021 are as follows: Operating Lease Payments 2021 (remaining nine months) $ 4,337 2022 5,908 2023 6,080 2024 6,256 2025 6,438 2026 and thereafter 24,047 Total future minimum lease payments (receipts) 53,066 Less: present value adjustment 11,614 Operating lease liabilities at March 31, 2021 41,452 Less: current portion of operating lease liabilities 3,385 Operating lease liabilities, net of current portion $ 38,067 |
Share-based Compensation Plans
Share-based Compensation Plans | 3 Months Ended |
Mar. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-based Compensation Plans | 9. Share-based Compensation Plans In 2019, Cyclerion adopted share-based compensation plans. Specifically, Cyclerion adopted the 2019 Employee Stock Purchase Plan (“2019 ESPP”) and the 2019 Equity Incentive Plan (“2019 Equity Plan”). Under the 2019 ESPP, eligible employees may use payroll deductions to purchase shares of stock in offerings under the plan, and thereby acquire an interest in the future of the Company. The 2019 Equity Plan provides for stock options and restricted stock units (“RSUs”). Cyclerion also mirrored two of Ironwood’s existing plans, the Amended and Restated 2005 Stock Incentive Plan (“2005 Equity Plan”) and the Amended and Restated 2010 Employee, Director and Consultant Equity Incentive Plan (“2010 Equity Plan). These mirror plans were adopted to facilitate the exchange of Ironwood equity awards for Cyclerion equity awards upon the Separation as part of the equity conversion. As a result of the Separation and in accordance with the EMA, employees of both companies retained their existing Ironwood vested options and received a pro-rata share of Cyclerion options, regardless of which company employed them post-Separation. For employees that were ultimately employed by Cyclerion, unvested Ironwood options and RSUs were converted to unvested Cyclerion options and RSUs. The conversion of equity awards resulting from the Separation impacted approximately 143 employees and was treated as a Type 1 modification under ASC Topic 718, Share Based Payments, The following table provides share-based compensation reflected in the Company’s consolidated statements of operations and comprehensive loss for the three months ended March 31, 2021 and 2020 (in thousands): Three Months Ended March 31, 2021 2020 Research and development $ 982 $ 1,921 General and administrative 1,330 2,115 $ 2,312 $ 4,036 A summary of stock option activity for the three months ended March 31, 2021 is as follows: Weighted Weighted Average Average Average Remaining Intrinsic Number Exercise Contractual Value (in of Options Price Term (Years) thousands) Outstanding as of December 31, 2020 7,426,356 $ 11.87 7.0 1,178 Granted 400,000 3.04 — — Exercised (12,404 ) 2.14 — — Cancelled or forfeited (917,702 ) 9.49 — — Outstanding as of March 31, 2021 6,896,250 $ 11.69 6.8 $ 551 Exercisable at March 31, 2021 3,973,588 $ 14.21 5.5 $ 162 As of March 31, 2021, the unrecognized share-based compensation expense, net of estimated forfeitures, related to all unvested time-based stock options held by the Company’s employees is $11.3 million and the weighted-average period over which that expense is expected to be recognized is 3.33 years. A summary of RSU activity for the three months ended March 31, 2021 is as follows: Weighted Average Number Grant Date of Shares Fair Value Unvested as of December 31, 2020 294,913 $ 14.52 Vested (70,221 ) 15.71 Forfeited (93,672 ) 14.41 Unvested as of March 31, 2021 131,020 $ 13.95 As of March 31, 2021, the unrecognized share-based compensation expense, net of estimated forfeitures, related to all unvested restricted stock units by the Company’s employees is $1.7 million and the weighted-average period over which that expense is expected to be recognized is 1.76 years. The Company has granted to certain employees performance-based options to purchase shares of common stock. These options are subject to performance-based milestone vesting. During the three months ended March 31, 2021 and 2020 there were no shares that vested as a result of performance milestone achievements. The Company recorded no share-based compensation expense related to these performance-based options for the three months ended March 31, 2021 and 2020. The Company also has granted to certain employees stock options containing market conditions that vest upon the achievement of specified price targets of the Company’s share price for a period through December 31, 2024. Vesting is measured based upon the average closing price of the Company’s share price for any thirty consecutive trading days, subject to certain service requirements. Stock compensation cost is expensed on a straight-line basis over the derived service period for each stock price target within the award, ranging from approximately 4.0 to 4.6 years. The Company accelerates expense when a stock price target is achieved prior to the derived service period. The Company does not reverse expense recognized if the share price target(s) are ultimately not achieved but expense is reversed when a stock award recipient has a break in service prior to the completion of the derived service period. For each of the three months ended March 31, 2021 and 2020, the Company recorded a de minimis amount of share-based compensation expense, respectively related to these stock options containing market conditions. During the three months ended March 31, 2021, 150,000 stock options containing market conditions were forfeited with a weighted average exercise price of $2.01. As of March 31, 2021, there were 450,000 outstanding stock options containing market conditions with a weighted average exercise price of $2.01. As of March 31, 2021, there was $0.2 million of unrecognized compensation costs related to stock options containing market conditions, which is expected to be recognized over a weighted-average period of 2.91 years. |
Loss per share
Loss per share | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Loss per share | 10. Loss per share Basic and diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period as follows: Three Months Ended March 31, 2021 2020 Numerator: Net loss (in thousands) $ (13,399 ) $ (20,228 ) Denominator: Weighted average shares used in calculating net loss per share — basic and diluted (in thousands) 34,081 27,669 Net loss per share — basic and diluted $ (0.39 ) $ (0.73 ) For the three months ended March 31, 2021, there were 7,346,250 shares of common stock related to stock options and 131,020 shares of common stock related to RSUs were excluded from the calculation of diluted net loss per share since the inclusion of such shares would be anti-dilutive. For the three months ended March 31, 2020, 7,936,087 shares of common stock related to stock options and 499,644 shares of common stock related to RSUs were excluded from the calculation of diluted net loss per share since the inclusion of such shares would be anti-dilutive |
Defined Contribution Plan
Defined Contribution Plan | 3 Months Ended |
Mar. 31, 2021 | |
Compensation And Retirement Disclosure [Abstract] | |
Defined Contribution Plan | 11. Defined Contribution Plan Prior to the Separation, Ironwood maintained a defined contribution 401(k) Savings Plan in the form of a qualified 401(k) plan for the benefit of substantially all of its employees, which included Ironwood employees who became Cyclerion employees. Compensation expense related to the 401(k) match was allocated to Cyclerion using a pro-rata method based on project-related costs and headcount that management believes are consistent and reasonable. Subsequent to the Separation, Cyclerion adopted a defined contribution 401(k) Savings Plan similar to the plan in place at Ironwood. The plan assets under the Ironwood defined contribution 401(k) Savings Plan were transferred to the Cyclerion plan. Subject to certain IRS limits, eligible employees may elect to contribute from 1% to 100% of their compensation. Cyclerion contributions to the plan are at the sole discretion of the board of directors. Currently, Cyclerion provides a matching contribution of 75% of the employee’s contributions, up to $6,000 annually. Included in compensation expense is approximately $0.2 million and $0.3 million related to the defined contribution 401(k) Savings Plan for the three months ended March 31, 2021, and 2020, respectively. |
Workforce Reduction
Workforce Reduction | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring And Related Activities [Abstract] | |
Workforce Reduction | 12. Workforce Reduction 2019 Workforce Reduction On October 30, 2019, the Company began a reduction of its current workforce by approximately thirty (30) full-time employees to align its resources with its ongoing clinical and preclinical programs, innovation strategy and partnering efforts. The total one-time costs related to the workforce reduction were approximately $3.0 million. The workforce reduction was substantially completed during the year ended December 31, 2019, in which the Company recorded approximately $2.8 million of severance and benefits costs. The workforce reduction was finalized during the three months ended March 31, 2020, in which the Company recorded approximately $0.2 million in additional severance and benefits costs. The following table summarizes the accrued liabilities activity recorded in connection with the reduction in workforce for the three months ended March 31, 2020 (in thousands): Amounts accrued at December 31, 2019 Charges Amount paid Adjustments Amounts accrued at March 31, 2020 October 2019 workforce reduction $ 2,009 $ 158 $ 1,491 $ — $ 676 Total $ 2,009 $ 158 $ 1,491 $ — $ 676 2020 Workforce Reduction On November 5, 2020, the Company began a reduction of its current workforce by approximately forty-eight (48) full-time employees to align its resources with its current priorities of focusing on the MELAS study, the planned ADv study and further characterization of CY6463 novel pharmacology. The total one-time costs related to the 2020 Workforce Reduction were approximately $5.0 million, including approximately $0.1 million in stock-based compensation from the modification of certain share-based equity awards. The Company reduced its workforce by approximately thirty-one (31) employees in the fourth quarter of 2020 and recorded approximately $4.1 million of severance and benefits costs in accordance with ASC Topic 420, Exit or Disposal Cost Obligations The following table summarizes the accrued liabilities activity recorded in connection with the reduction in workforce for the three months ended March 31, 2021 (in thousands): Amounts accrued at December 31, 2020 Charges Amount paid Adjustments Amounts accrued at March 31, 2021 2020 workforce reduction $ 3,640 $ 901 $ 2,762 $ — $ 1,779 Total $ 3,640 $ 901 $ 2,762 $ — $ 1,779 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. Subsequent Events On April 30, 2021, the Company signed and executed a lease termination agreement with its lessor to terminate its Head Lease. The original lease termination date was June 30, 2029. As of the lease termination date, the fair value of the right of use lease liability related to the Head Lease was approximately $42.1 million. The Company is evaluating the impact of the early lease termination on its condensed consolidated financial statements but expects to write-off the right of use asset and liability balances as of the lease termination date. Upon lease termination, the Company will also cancel the letter of credit related to the lease, which is recorded as restricted cash of approximately $3.8 million on the Company’s condensed consolidated balance sheet. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements and the related disclosures are unaudited and have been prepared in accordance with accounting principles generally accepted in the U.S. Additionally, certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the Securities and Exchange Commission on February 25, 2021. In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all normal recurring adjustments considered necessary for a fair presentation of the Company’s financial position and the results of its operations for the interim periods presented. The results of operations for the three months ended March 31, 2021 and 2020 are not necessarily indicative of the results that may be expected for the full year or any other subsequent interim period. The condensed consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries, Cyclerion GmbH, and Cyclerion Securities Corporation. All significant intercompany accounts and transactions have been eliminated in the preparation of the accompanying condensed consolidated financial statements. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in accordance with U.S. GAAP requires the Company’s management to make estimates and judgments that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the amounts of expenses during the reported periods. On an ongoing basis, the Company’s management evaluates its estimates, judgments, and methodologies. Significant estimates and assumptions in the consolidated financial statements include those related to revenue, impairment of long-lived assets, valuation procedures for right-of-use assets and operating lease liabilities, income taxes, including the valuation allowance for deferred tax assets, research and development expenses, contingencies, and share-based compensation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ materially from these estimates under different assumptions or conditions. Changes in estimates are reflected in reported results in the period in which they become known. |
New Accounting Pronouncements | New Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by the Company as of the specified effective date. Except as discussed elsewhere in the notes to the consolidated financial statements, the Company did not adopt any new accounting pronouncements during the three months ended March 31, 2021 that had a material effect on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses. This standard requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. As a smaller reporting company, ASU 2016-13 will become effective for the Company for fiscal years beginning after December 15, 2022, and early adoption is permitted. The Company is currently evaluating the impact that ASU 2016-13 will have on its financial statements and related disclosures. No other accounting standards known by the Company to be applicable to it that have been issued by the FASB or other standard-setting bodies and that do not require adoption until a future date are expected to have a material impact on the Company’s consolidated financial statements upon adoption. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets measured at fair value on a recurring basis and indicating the level of the fair value hierarchy | The Company’s cash equivalents are generally classified within Level 1 of the fair value hierarchy. The following tables present information about the Company’s financial assets measured at fair value on a recurring basis and indicate the level of the fair value hierarchy used to determine such fair values as of March 31, 2021 and December 31, 2020 (in thousands): Fair Value Measurements as of March 31, 2021 Using: Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 40,310 $ — $ — $ 40,310 Cash equivalents $ 40,310 $ — $ — $ 40,310 Fair Value Measurements as of December 31, 2020 Using: Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 53,240 $ — $ — $ 53,240 Cash equivalents $ 53,240 $ — $ — $ 53,240 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Property Plant And Equipment [Abstract] | |
Schedule of property and equipment, net | Property and equipment, net consisted of the following (in thousands): March 31, December 31, 2021 2020 Software $ 2,214 $ 2,214 Computer and office equipment 44 44 Leasehold improvements 14,894 14,894 Property and equipment, gross 17,152 17,152 Less: accumulated depreciation and amortization (10,545 ) (10,287 ) Property and equipment, net $ 6,607 $ 6,865 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accrued Liabilities And Other Liabilities [Abstract] | |
Schedule of accrued expenses and other current liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands): March 31, December 31, 2021 2020 Accrued incentive compensation $ 368 $ 1,720 Salaries 457 514 Accrued vacation 351 555 Professional fees 528 689 Accrued severance and benefit costs 1,779 3,640 Other 375 176 Accrued expenses and other current liabilities $ 3,858 $ 7,294 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Schedule of supplemental cash flow information related to leases | Supplemental cash flow information related to leases for the three months ended March 31, 2021 and 2020 as follows: Three Months Ended March 31, 2021 2020 Decrease in right-of-use assets related to lease modifications $ — $ 21,386 Decrease in operating lease liabilities due to lease modifications $ — $ 23,499 Cash paid for amounts included in the measurement of lease liabilities (in thousands) $ 1,405 $ 2,421 Weighted-average remaining lease term of operating leases (in years) 8.3 9.3 Weighted-average discount rate of operating leases 6.1 % 9.7 % |
Future minimum lease payments under non-cancelable operating leases under ASC 842 | Future minimum lease payments under non-cancelable operating leases under ASC 842 as of March 31, 2021 are as follows: Operating Lease Payments 2021 (remaining nine months) $ 4,337 2022 5,908 2023 6,080 2024 6,256 2025 6,438 2026 and thereafter 24,047 Total future minimum lease payments (receipts) 53,066 Less: present value adjustment 11,614 Operating lease liabilities at March 31, 2021 41,452 Less: current portion of operating lease liabilities 3,385 Operating lease liabilities, net of current portion $ 38,067 |
Share-based Compensation Plans
Share-based Compensation Plans (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Schedule of share-based compensation expense | The following table provides share-based compensation reflected in the Company’s consolidated statements of operations and comprehensive loss for the three months ended March 31, 2021 and 2020 (in thousands): Three Months Ended March 31, 2021 2020 Research and development $ 982 $ 1,921 General and administrative 1,330 2,115 $ 2,312 $ 4,036 |
Schedule of stock option activity | A summary of stock option activity for the three months ended March 31, 2021 is as follows: Weighted Weighted Average Average Average Remaining Intrinsic Number Exercise Contractual Value (in of Options Price Term (Years) thousands) Outstanding as of December 31, 2020 7,426,356 $ 11.87 7.0 1,178 Granted 400,000 3.04 — — Exercised (12,404 ) 2.14 — — Cancelled or forfeited (917,702 ) 9.49 — — Outstanding as of March 31, 2021 6,896,250 $ 11.69 6.8 $ 551 Exercisable at March 31, 2021 3,973,588 $ 14.21 5.5 $ 162 |
Summary of RSU activity | A summary of RSU activity for the three months ended March 31, 2021 is as follows: Weighted Average Number Grant Date of Shares Fair Value Unvested as of December 31, 2020 294,913 $ 14.52 Vested (70,221 ) 15.71 Forfeited (93,672 ) 14.41 Unvested as of March 31, 2021 131,020 $ 13.95 |
Loss per share (Tables)
Loss per share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted earnings per share | Basic and diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period as follows: Three Months Ended March 31, 2021 2020 Numerator: Net loss (in thousands) $ (13,399 ) $ (20,228 ) Denominator: Weighted average shares used in calculating net loss per share — basic and diluted (in thousands) 34,081 27,669 Net loss per share — basic and diluted $ (0.39 ) $ (0.73 ) |
Workforce Reduction (Tables)
Workforce Reduction (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring And Related Activities [Abstract] | |
Schedule of accrued liabilities activity allocated to Cyclerion in connection with the reduction in workforce | The following table summarizes the accrued liabilities activity recorded in connection with the reduction in workforce for the three months ended March 31, 2020 (in thousands): Amounts accrued at December 31, 2019 Charges Amount paid Adjustments Amounts accrued at March 31, 2020 October 2019 workforce reduction $ 2,009 $ 158 $ 1,491 $ — $ 676 Total $ 2,009 $ 158 $ 1,491 $ — $ 676 The following table summarizes the accrued liabilities activity recorded in connection with the reduction in workforce for the three months ended March 31, 2021 (in thousands): Amounts accrued at December 31, 2020 Charges Amount paid Adjustments Amounts accrued at March 31, 2021 2020 workforce reduction $ 3,640 $ 901 $ 2,762 $ — $ 1,779 Total $ 3,640 $ 901 $ 2,762 $ — $ 1,779 |
Nature of Business (Details)
Nature of Business (Details) $ in Millions | Sep. 03, 2020USD ($) | Apr. 01, 2019 | Mar. 31, 2021USD ($)shares | Jul. 24, 2020USD ($) | Nov. 15, 2019employee | May 03, 2019employee |
Nature of Business | ||||||
Health care trust fund, Description | We have initiated our CY6463 Phase 2a clinical trial in adult participants with MELAS. Startup activities are ongoing for our Phase 2a clinical trial in ADv, with enrollment expected to begin in mid-2021.The ADv study will be supported in part by a grant from the Alzheimer’s Association’s Part the Cloud-Gates Partnership Grant Program, which provides Cyclerion with $2 million of funding over two years | |||||
Common stock dividend issued (shares of Cyclerion per ten shares of Ironwood) | 0.1 | |||||
IPO | ||||||
Nature of Business | ||||||
Maximum amount of Aggregate initial offering price | $ 150 | |||||
2020/2019 Equity Private Placement | ||||||
Nature of Business | ||||||
Net proceeds from issuance of shares to accredited investors | $ 189.3 | |||||
Jefferies LLC | ATM Offering | ||||||
Nature of Business | ||||||
Cash commission of gross proceeds of sales of common stock, percentage | 3.00% | |||||
Number of shares issued in private placement | shares | 0 | |||||
Maximum | Jefferies LLC | ATM Offering | ||||||
Nature of Business | ||||||
Issuance of common stock - 2019/2020 private placement, net of fees | $ 50 | |||||
Cyclerion GmbH | ||||||
Nature of Business | ||||||
Number of employees | employee | 1 | |||||
Cyclerion Securities Corporation | ||||||
Nature of Business | ||||||
Number of employees | employee | 0 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Ironwood | Development agreement | |
Related Party Transaction [Line Items] | |
Revenue from related party | $ 1 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - Recurring - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Cash equivalents: | ||
Total cash equivalents | $ 40,310 | $ 53,240 |
Level 1 | ||
Cash equivalents: | ||
Total cash equivalents | 40,310 | 53,240 |
Money market funds | ||
Cash equivalents: | ||
Total cash equivalents | 40,310 | 53,240 |
Money market funds | Level 1 | ||
Cash equivalents: | ||
Total cash equivalents | $ 40,310 | $ 53,240 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Property and Equipment | |||
Property and equipment. gross | $ 17,152 | $ 17,152 | |
Less: accumulated depreciation and amortization | (10,545) | (10,287) | |
Property and equipment, net | 6,607 | 6,865 | |
Depreciation and amortization | 258 | $ 626 | |
Software | |||
Property and Equipment | |||
Property and equipment. gross | 2,214 | 2,214 | |
Computer and office equipment | |||
Property and Equipment | |||
Property and equipment. gross | 44 | 44 | |
Leasehold improvements | |||
Property and Equipment | |||
Property and equipment. gross | $ 14,894 | $ 14,894 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Accrued Liabilities And Other Liabilities [Abstract] | ||
Accrued incentive compensation | $ 368 | $ 1,720 |
Salaries | 457 | 514 |
Accrued vacation | 351 | 555 |
Professional fees | 528 | 689 |
Accrued severance and benefit costs | 1,779 | 3,640 |
Other | 375 | 176 |
Accrued expenses and other current liabilities | $ 3,858 | $ 7,294 |
Leases - Summary (Details)
Leases - Summary (Details) $ in Thousands | Sep. 15, 2020USD ($)ft² | Feb. 28, 2020USD ($)ft² | Apr. 01, 2019USD ($)ft²item | Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Oct. 18, 2019ft² |
Leases | |||||||
Rentable space terminated from lease agreement (in square feet) | ft² | 15,700 | ||||||
Decrease in right-of-use assets related to lease modification | $ 21,386 | ||||||
Decrease in operating lease liabilities due to lease modification | 23,499 | ||||||
Gain (loss) on lease modification | 2,113 | ||||||
Current portion of operating lease liabilities | $ 3,385 | $ 3,293 | |||||
Noncurrent lease liability | 38,067 | 38,933 | |||||
Operating lease right-of-use asset | 42,396 | 43,402 | |||||
Total lease costs | 1,600 | 2,700 | |||||
Head Lease | |||||||
Leases | |||||||
Rented space (in square feet) | ft² | 114,000 | ||||||
Term of lease | 123 months | ||||||
Number of extension option | item | 2 | ||||||
Renewal term | 5 years | ||||||
Letter of credit posted with the landlord as a security deposit | $ 7,700 | ||||||
Space subleased to subtenant (in square feet) | ft² | 15,700 | ||||||
Lease Amendment | |||||||
Leases | |||||||
Rented space (in square feet) | ft² | 74,000 | ||||||
Letter of credit posted with the landlord as a security deposit | $ 5,000 | ||||||
Rentable space terminated from lease agreement (in square feet) | ft² | 40,000 | ||||||
Decrease in security deposit | $ 2,700 | ||||||
Decrease in remaining operating lease payments | 41,900 | ||||||
Cash paid for lease termination fees | 6,300 | ||||||
Cash paid for initial direct costs of lease modification | $ 200 | ||||||
Incremental borrowing rate (as a percent) | 9.70% | ||||||
Decrease in right-of-use assets related to lease modification | $ 21,400 | ||||||
Decrease in operating lease liabilities due to lease modification | $ 23,500 | ||||||
Gain (loss) on lease modification | 2,100 | ||||||
Second Lease Amendment | |||||||
Leases | |||||||
Rented space (in square feet) | ft² | 57,000 | ||||||
Letter of credit posted with the landlord as a security deposit | 3,800 | ||||||
Rentable space terminated from lease agreement (in square feet) | ft² | 17,000 | ||||||
Decrease in security deposit | 1,200 | ||||||
Decrease in remaining operating lease payments | $ 16,900 | ||||||
Cash paid for lease termination fees | 0 | ||||||
Cash paid for initial direct costs of lease modification | $ 0 | ||||||
Incremental borrowing rate (as a percent) | 6.10% | ||||||
Decrease in right-of-use assets related to lease modification | $ 5,900 | ||||||
Decrease in operating lease liabilities due to lease modification | $ 5,500 | ||||||
Gain (loss) on lease modification | (400) | ||||||
Space subleased to subtenant (in square feet) | ft² | 15,700 | ||||||
Current portion of operating lease liabilities | 3,400 | 3,300 | |||||
Noncurrent lease liability | 38,100 | 38,900 | |||||
Operating lease right-of-use asset | 42,400 | $ 43,400 | |||||
Variable lease costs | $ 500 | $ 1,000 |
Leases - Schedule of supplement
Leases - Schedule of supplemental cash flow information related to leases (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Leases [Abstract] | ||
Decrease in right-of-use assets related to lease modification | $ 21,386 | |
Decrease in operating lease liabilities due to lease modification | 23,499 | |
Cash paid for amounts included in the measurement of lease liabilities (in thousands) | $ 1,405 | $ 2,421 |
Weighted-average remaining lease term of operating leases (in years) | 8 years 3 months 18 days | 9 years 3 months 18 days |
Weighted-average discount rate of operating leases | 6.10% | 9.70% |
Leases - Sublease as Lessor (De
Leases - Sublease as Lessor (Details) $ in Thousands | Oct. 18, 2019USD ($)ft²item | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Mar. 31, 2021USD ($) | Sep. 15, 2020ft² |
Sublease as lessor | |||||
Gross sublease income, net of rent expense | $ 500 | ||||
Net sublease income | 100 | ||||
Rentable space terminated from lease agreement (in square feet) | ft² | 15,700 | ||||
Sublease termination agreement estimated fair value of rooms | $ 1,500 | ||||
Sublease termination agreement estimated fair value of services | 2,900 | ||||
Sublease termination agreement prepaid rooms and services | 4,400 | ||||
Other current assets | $ 3,163 | 1,804 | |||
Gain (loss) on lease modification | $ 2,113 | ||||
Head Lease | |||||
Sublease as lessor | |||||
Space subleased to subtenant (in square feet) | ft² | 15,700 | ||||
Sublease, Annual base rent | $ 1,500 | ||||
Sublease, Increase in base rent over the term of the lease (as a percent) | 3.00% | ||||
Sublease, Abatement of base rent | $ 700 | ||||
Sublease, Abatement period | 6 months | ||||
Sublease, Number of extension options | item | 0 | ||||
Sublease, Initial security deposit received | $ 500 | ||||
Sublease, Additional security deposit to be received | $ 400 | ||||
Sublease, additional security deposit period | 9 months | ||||
Sublease Termination Agreement | |||||
Sublease as lessor | |||||
Other current assets | 1,700 | ||||
Other assets | $ 2,700 | ||||
Gain (loss) on lease modification | 3,100 | ||||
Rent receivables outstanding from subtenant | 1,300 | ||||
Write off lease unamortized direct cost | $ 200 |
Leases - Future minimum lease o
Leases - Future minimum lease operating payments (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Future minimum lease payments under non-cancelable operating leases under ASC 842 | ||
2021 (remaining nine months) | $ 4,337 | |
2022 | 5,908 | |
2023 | 6,080 | |
2024 | 6,256 | |
2025 | 6,438 | |
2026 and thereafter | 24,047 | |
Total future minimum lease payments (receipts) | 53,066 | |
Less: present value adjustment | 11,614 | |
Operating lease liabilities | 41,452 | |
Less: current portion of operating lease liabilities | 3,385 | $ 3,293 |
Operating lease liabilities, net of current portion | $ 38,067 | $ 38,933 |
Share-based Compensation Plan_2
Share-based Compensation Plans (Details) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021USD ($)employeeTradingDay$ / sharesshares | Mar. 31, 2020USD ($)shares | Dec. 31, 2019USD ($) | Dec. 31, 2020$ / sharesshares | |
Share-based Compensation Plans | ||||
Number of employees impacted | employee | 143 | |||
Share-based compensation | $ 2,312,000 | $ 4,036,000 | ||
Expected period to recognize the expense | 2 years 10 months 28 days | |||
unrecognized share-based compensation expense | $ | $ 200,000 | |||
Cancelled or forfeited (in shares) | shares | 150,000 | |||
Cancelled or forfeited (in dollars per share) | $ / shares | $ 2.01 | |||
outstanding stock options | shares | 450,000 | |||
weighted average exercise price | $ / shares | $ 2.01 | |||
unrecognized share-based compensation expense | $ | $ 200,000 | |||
Research and development | ||||
Share-based Compensation Plans | ||||
Share-based compensation | 982,000 | 1,921,000 | ||
General and administrative | ||||
Share-based Compensation Plans | ||||
Share-based compensation | 1,330,000 | 2,115,000 | ||
Restricted Stock Units | ||||
Share-based Compensation Plans | ||||
Incremental compensation expense due to modification | $ 0 | |||
Expected period to recognize the expense | 1 year 9 months 3 days | |||
Unrecognized share-based compensation expense | $ 1,700,000 | |||
Vested stock options | ||||
Share-based Compensation Plans | ||||
Incremental compensation expense due to modification | $ 300,000 | |||
Unvested stock options | ||||
Share-based Compensation Plans | ||||
Incremental compensation expense due to modification | $ 7,500,000 | |||
Stock options | ||||
Share-based Compensation Plans | ||||
Expected period to recognize the expense | 3 years 3 months 29 days | |||
unrecognized share-based compensation expense | $ | $ 11,300,000 | |||
Cancelled or forfeited (in shares) | shares | 917,702 | |||
Cancelled or forfeited (in dollars per share) | $ / shares | $ 9.49 | |||
outstanding stock options | shares | 6,896,250 | 7,426,356 | ||
weighted average exercise price | $ / shares | $ 11.69 | $ 11.87 | ||
Performance stock options | ||||
Share-based Compensation Plans | ||||
Share-based compensation | $ 0 | $ 0 | ||
Number of shares vested | shares | 0 | 0 | ||
Threshold consecutive trading days, used as a base for measurement of vesting of stock awards | TradingDay | 30 | |||
Performance stock options | Minimum [Member] | ||||
Share-based Compensation Plans | ||||
Expected option term (in years) | 4 years | |||
Performance stock options | Maximum | ||||
Share-based Compensation Plans | ||||
Expected option term (in years) | 4 years 7 months 6 days |
Share-based Compensation Plan_3
Share-based Compensation Plans - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Number of Options | ||
Cancelled or forfeited (in shares) | (150,000) | |
Outstanding at end of the year (in shares) | 450,000 | |
Weighted Average Exercise Price | ||
Cancelled or forfeited (in dollars per share) | $ 2.01 | |
Outstanding at end of the year (in dollars per share) | $ 2.01 | |
Weighted Average Remaining Contractual Term (years) | ||
Cancelled or forfeited (in shares) | 150,000 | |
Stock options | ||
Number of Options | ||
Outstanding at beginning of the year (in shares) | 7,426,356 | |
Granted (in shares) | 400,000 | |
Exercised (in shares) | (12,404) | |
Cancelled or forfeited (in shares) | (917,702) | |
Outstanding at end of the year (in shares) | 6,896,250 | 7,426,356 |
Exercisable (in shares) | 3,973,588 | |
Weighted Average Exercise Price | ||
Outstanding at beginning of the year (in dollars per share) | $ 11.87 | |
Granted (in dollars per share) | 3.04 | |
Exercised (in dollars per share) | 2.14 | |
Cancelled or forfeited (in dollars per share) | 9.49 | |
Outstanding at end of the year (in dollars per share) | 11.69 | $ 11.87 |
Exercisable (in dollars per share) | $ 14.21 | |
Weighted Average Remaining Contractual Term (years) | ||
Weighted Average Remaining Contractual Term (years) | 6 years 9 months 18 days | 7 years |
Exercised (in shares) | 12,404 | |
Cancelled or forfeited (in shares) | 917,702 | |
Weighted Average Remaining Contractual Term (years) | 5 years 6 months | |
Aggregate Intrinsic Value, Outstanding | $ 551 | $ 1,178 |
Aggregate Intrinsic Value, Exercisable | $ 162 |
Share-based Compensation Plan_4
Share-based Compensation Plans - Restricted Stock Units and Restricted Stock Awards (Details) - Restricted Stock Units | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Number of Shares | |
Unvested at the beginning of the period (in shares) | shares | 294,913 |
Vested (in shares) | shares | (70,221) |
Forfeited (in shares) | shares | (93,672) |
Unvested the end of the period (in shares) | shares | 131,020 |
Weighted-Average Grant Date Fair Value | |
Unvested at the beginning of the period (in shares | $ / shares | $ 14.52 |
Vested (in dollars per share) | $ / shares | 15.71 |
Forfeited (in dollars per share) | $ / shares | 14.41 |
Unvested restricted common stock at the end of the period (in dollars per share) | $ / shares | $ 13.95 |
Loss per share (Details)
Loss per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Numerator: | ||
Net loss | $ (13,399) | $ (20,228) |
Denominator: | ||
Weighted average shares used in calculating net loss per share — basic and diluted (in thousands) | 34,081,000 | 27,669,000 |
Net loss per share — basic and diluted | $ (0.39) | $ (0.73) |
Stock options | ||
Denominator: | ||
Anti-dilutive securities excluded from the calculation of diluted loss per share | 7,346,250 | 7,936,087 |
Restricted Stock Units | ||
Denominator: | ||
Anti-dilutive securities excluded from the calculation of diluted loss per share | 131,020 | 499,644 |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Defined Contribution Plan | ||
401 (k) Savings Plan | us-gaap:QualifiedPlanMember | |
Matching contribution (as a percent of employee's contributions) | 75.00% | |
Maximum amount of employer matching contribution | $ 6,000 | |
Compensation expense related to the defined contribution 401(k) Savings Plan | $ 200,000 | $ 300,000 |
Minimum | ||
Defined Contribution Plan | ||
Percent of compensation eligible employees may elect to contribute | 1.00% | |
Maximum | ||
Defined Contribution Plan | ||
Percent of compensation eligible employees may elect to contribute | 100.00% |
Workforce Reduction (Details)
Workforce Reduction (Details) $ in Thousands | Nov. 05, 2020USD ($)employee | Oct. 30, 2019USD ($)employee | Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($)employee | Dec. 31, 2019USD ($) |
October 2019 Workforce Reduction | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Beginning of period | $ 2,009 | $ 2,009 | ||||
Charges | 158 | |||||
Amount paid | 1,491 | |||||
End of period | 676 | $ 2,009 | ||||
November 2020 Workforce Reduction | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Stock-based compensation from the modification of share based equity awards | $ 100 | |||||
2020 Workforce Reduction | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Beginning of period | $ 3,640 | |||||
Charges | 901 | |||||
Amount paid | 2,762 | |||||
End of period | $ 1,779 | $ 3,640 | ||||
Current workforce reductions | October 2019 Workforce Reduction | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Reduction in workforce, number of employees | employee | 30 | |||||
Restructuring costs | $ 3,000 | |||||
Severance and benefits costs | $ 200 | $ 2,800 | ||||
Current workforce reductions | November 2020 Workforce Reduction | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Reduction in workforce, number of employees | employee | 48 | 31 | ||||
Restructuring costs | $ 5,000 | |||||
Severance and benefits costs | $ 4,100 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
Apr. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | |
Subsequent Event [Line Items] | |||
Restricted cash, net of current portion | $ 3,837 | $ 3,837 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Lease termination date | Jun. 30, 2029 | ||
Fair value of the right of use lease liability | $ 42,100 |