Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 28, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | ELIEM THERAPEUTICS, INC. | ||
Entity Central Index Key | 0001768446 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Shell Company | false | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity File Number | 001-4078 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 83-2273741 | ||
Entity Address, Address Line One | 23515 NE Novelty Hill Road | ||
Entity Address, Address Line Two | Suite B221 #125 | ||
Entity Address, City or Town | Redmond | ||
Entity Address, State or Province | WA | ||
Entity Address, Postal Zip Code | 98053 | ||
City Area Code | 1-877 | ||
Local Phone Number | 354-3689 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Title of 12(b) Security | Common Stock, par value $0.0001 per share | ||
Trading Symbol | ELYM | ||
Security Exchange Name | NASDAQ | ||
Entity Common Stock, Shares Outstanding | 26,567,681 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
ICFR Auditor Attestation Flag | false | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s definitive proxy statement for its 2023 Annual Meeting of Stockholders, which the registrant intends to file pursuant to Regulation 14A with the Securities and Exchange Commission not later than 120 days after the registrant’s fiscal year ended December 31, 2022, are incorporated by reference into Part III of this Annual Report on Form 10-K. | ||
Auditor Name | PricewaterhouseCoopers LLP | ||
Auditor Location | Seattle, Washington | ||
Auditor Firm ID | 238 | ||
Entity Public Float | $ 13.9 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Cash and cash equivalents | $ 43,585 | $ 46,922 |
Short-term marketable securities | 79,981 | 89,558 |
Prepaid expenses and other current assets | 10,827 | 11,772 |
Total current assets | 134,393 | 148,252 |
Operating lease right-of-use assets | 471 | 0 |
Long-term marketable securities | 0 | 24,919 |
Other long term assets | 128 | 70 |
Total assets | 134,992 | 173,241 |
Current liabilities: | ||
Accounts payable | 750 | 1,404 |
Accrued expenses | 5,047 | 4,627 |
Operating lease liabilities | 300 | 0 |
Total current liabilities | 6,097 | 6,031 |
Other long-term liabilities | 0 | 7 |
Operating lease liabilities, net of current portion | 180 | 0 |
Total liabilities | 6,277 | 6,038 |
Commitments and contingencies (Note 7) | ||
Stockholders' equity | ||
Common stock, $0.0001 par value per share, 250,000,000 shares authorized; 26,567,681 shares issued and outstanding at December 31, 2022 and December 31, 2021 | 3 | 3 |
Additional paid-in capital | 249,930 | 242,939 |
Accumulated other comprehensive loss | (358) | (123) |
Accumulated deficit | (120,860) | (75,616) |
Total stockholders’ deficit | 128,715 | 167,203 |
Total liabilities and stockholders' equity | $ 134,992 | $ 173,241 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 26,567,681 | 26,567,681 |
Common stock, shares outstanding | 26,567,681 | 26,567,681 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating expenses: | ||
Research and development | $ 26,214 | $ 23,322 |
General and administrative | 18,921 | 12,350 |
Total operating expenses | 45,135 | 35,672 |
Loss from operations | (45,135) | (35,672) |
Other income (expense): | ||
Change in fair value of redeemable convertible preferred stock tranche liability | 0 | (11,718) |
Foreign currency loss | (1,484) | (170) |
Other Income, net | 1,375 | 80 |
Total other income (expense) | (109) | (11,808) |
Net loss | (45,244) | (47,480) |
Accretion of redeemable convertible preferred stock to redemption value and cumulative preferred stock dividends | 0 | (4,548) |
Net loss attributable to common stockholders | $ (45,244) | $ (52,028) |
Net loss per share attributable to common stockholders, diluted | $ (1.72) | $ (4.24) |
Net loss per share attributable to common stockholders, basic | $ (1.72) | $ (4.24) |
Weighted-average shares used in computing net loss per share attributable to common stockholders diluted | 26,311,554 | 12,260,551 |
Weighted-average shares used in computing net loss per share attributable to common stockholders basic | 26,311,554 | 12,260,551 |
Comprehensive loss: | ||
Net loss | $ (45,244) | $ (47,480) |
Other comprehensive loss: | ||
Unrealized loss on investments, net of tax of $0 | (235) | (123) |
Comprehensive loss | $ (45,479) | $ (47,603) |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
Income tax | $ 0 | $ 0 |
Consolidated Statements of Rede
Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' (Deficit) Equity - USD ($) $ in Thousands | Total | Redeemable Convertible Preferred Stock [Member] | Series B Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income [Member] | Accumulated Deficit [Member] |
Beginning balance at Dec. 31, 2020 | $ (24,983) | $ 1 | $ 3,152 | $ (28,136) | |||
Beginning balance (in shares) at Dec. 31, 2020 | 7,140,157 | ||||||
Beginning balance at Dec. 31, 2020 | $ 46,551 | ||||||
Beginning balance, (in shares) at Dec. 31, 2020 | 3,418,751 | ||||||
Reclassification Of Redeemable Convertible Preferred Stock Tranche Liability Upon Settlement | (12,269) | $ 12,269 | |||||
Conversion of redeemable convertible preferred stock to common stock upon initial public offering, Shares | (15,345,279) | 15,345,279 | |||||
Conversion of redeemable convertible preferred stock to common stock upon initial public offering | 152,759 | $ (152,759) | $ 1 | 152,758 | |||
Proceeds from issuance of common stock in initial public offering, Shares | 7,360,000 | ||||||
Proceeds from issuance of common stock in initial public offering | 83,144 | $ 1 | 83,143 | ||||
Issuance of Series A-1 Preferred Stock (net of issuance costs and tranche liability) | $ 33,978 | $ 59,961 | |||||
Issuance of Series A-1 Preferred Stock (net of issuance costs and tranche liability), shares | 4,358,972 | 3,846,150 | |||||
Exercise of stock options and vesting of restricted stock awards, shares | 111,287 | ||||||
Exercise of stock options and vesting of restricted stock awards | 149 | 149 | |||||
Stock-based compensation | 3,737 | 3,737 | |||||
Other Comprehensive Income (Loss), Net of Tax | (123) | $ (123) | |||||
Net loss | (47,480) | (47,480) | |||||
Ending balance at Dec. 31, 2021 | 167,203 | $ 3 | 242,939 | (123) | (75,616) | ||
Ending balance, (in shares) at Dec. 31, 2021 | 0 | ||||||
Ending balance at Dec. 31, 2021 | $ 0 | ||||||
Ending balance (in shares) at Dec. 31, 2021 | 26,235,317 | ||||||
Vesting of restricted stock awards, shares | 154,869 | ||||||
Stock-based compensation | 6,991 | 6,991 | |||||
Other Comprehensive Income (Loss), Net of Tax | (235) | (235) | |||||
Net loss | (45,244) | (45,244) | |||||
Ending balance at Dec. 31, 2022 | $ 128,715 | $ 3 | $ 249,930 | $ (358) | $ (120,860) | ||
Ending balance, (in shares) at Dec. 31, 2022 | 0 | ||||||
Ending balance at Dec. 31, 2022 | $ 0 | ||||||
Ending balance (in shares) at Dec. 31, 2022 | 26,390,186 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholder' (Deficit) Equity (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2021 USD ($) | |
Series A1 Preferred Stock [Member] | |
Stock issuance cost | $ 22 |
Series B Preferred Stock [Member] | |
Stock issuance cost | 39 |
Common Stock [Member] | |
Stock issuance cost | $ 8,856 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities | ||
Net loss | $ (45,244) | $ (47,480) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation | 6,991 | 3,737 |
Non-cash operating lease expense | 443 | 0 |
Change in fair value of redeemable convertible preferred stock tranche liability | 0 | 11,718 |
Accretion of discounts and amortization of premiums on investments, net | (177) | 370 |
Foreign currency loss (gain) from remeasurement | 408 | (245) |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other assets | 945 | (10,260) |
Long term assets | (60) | 2,563 |
Accounts payable | (653) | 318 |
Accrued liabilities | 425 | 3,200 |
Long-term liabilities | 0 | 7 |
Operating lease liabilities | (447) | 0 |
Net cash used in operating activities | (37,369) | (36,072) |
Cash flows from investing activities: | ||
Purchase of marketable securities | (87,963) | (114,970) |
Proceeds from maturities of marketable securities | 122,403 | 0 |
Net cash provided by (used in) investing activities | 34,440 | (114,970) |
Cash flows from financing activities: | ||
Proceeds from initial public offering, net issuance costs | 0 | 83,144 |
Proceeds from issuance of redeemable convertible preferred stock and related tranche rights, net of issuance costs | 0 | 93,939 |
Proceeds from exercise of stock options | 149 | |
Net cash provided by financing activities | 0 | 177,232 |
Effect of exchange rate changes on cash | (408) | 245 |
Net change in cash and cash equivalents | (3,337) | 26,435 |
Cash and cash equivalents at beginning of period | 46,922 | 20,487 |
Cash and cash equivalents at end of period | 43,585 | 46,922 |
Supplemental disclosure of cash flow information: | ||
Conversion of redeemable convertible preferred stock to common stock | 0 | 152,759 |
Cash paid for leases included in operating cash outflows | 462 | 0 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Right-of-use assets obtained in exchange for lease liabilities | $ 915 | $ 0 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Basis of Presentation | Note 1. Nature of Operations and Basis of Presentation Organization Eliem Therapeutics, Inc. (the Company) is a biotechnology company focused on developing novel therapies for neuronal excitability disorders to address unmet needs in psychiatry, epilepsy, chronic pain, and other disorders of the peripheral and central nervous systems. Headquartered in Redmond, Washington, the Company was incorporated on October 18, 2018 as a Delaware corporation. Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements of the Company and its wholly owned subsidiaries have been prepared in conformity with accounting principles generally accepted in the United States (U.S. GAAP). All intercompany transactions and balances have been eliminated in consolidation. Reverse Stock Split In July 2021, the Company's board of directors approved an amendment to the Company's certificate of incorporation to effect a reverse split of shares of the Company's common stock on a 1-for-2 basis, which was effected on July 29, 2021 (the Reverse Stock Split). The number of authorized shares and the par values of the common stock were not adjusted as a result of the Reverse Stock Split. In connection with the Reverse Stock Split, the number of authorized shares, outstanding shares, and the conversion ratio for the Company's redeemable convertible preferred stock was proportionately adjusted such that the common stock issuable upon conversion of such preferred stock was decreased in proportion to the Reverse Stock Split. All references to common stock and options to purchase common stock share data, per share data, and related information contained in the consolidated financial statements have been retroactively adjusted to reflect the effect of the Reverse Stock Split for all periods presented. Initial Public Offering On August 12, 2021, the Company completed its initial public offering (IPO) of 7,360,000 shares of common stock, including the underwriters' full exercise of their over-allotment option at the IPO price of $ 12.50 per share. Gross proceeds from the IPO were $ 92.0 million, and the net proceeds were $ 83.1 million, after deducting underwriting discounts of $ 6.4 million and $ 2.5 million of offering costs payable by the Company. At the closing of the IPO, all of the Company's then outstanding redeemable convertible preferred stock was automatically converted into an aggregate of 15,345,279 shares of common stock. The related carrying value of the redeemable convertible preferred stock of $ 152.8 million was reclassified to common stock and additional paid-in capital. Liquidity Since inception, the Company has experienced recurring losses from operations and generated negative cash flows from operations. The Company has an accumulated deficit of $ 120.9 million and expects to incur additional losses from operations in the future. The Company estimates the available cash, cash equivalents and marketable securities of $ 123.6 million as of December 31, 2022 will be sufficient to meet its projected operating requirements for at least the next twelve months from the filing date of these consolidated financial statements. The Company will need to obtain substantial additional funding to develop and commercialize the Company's clinical programs as currently contemplated. The Company expects to finance future cash needs through equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing and distribution arrangements. In addition, the Company expects to continue to rely on capital markets, and to a lesser extent, U.K. research and development tax credits and incentives for funding. There are no assurances that the Company will be able to raise sufficient amounts of funding in the future on acceptable terms, or at all. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies A summary of the significant accounting policies followed by the Company in the preparation of the accompanying consolidated financial statements follows: Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Estimates include those related to the accrual of research and development expenses, recoverable research and development tax credits, the valuation of stock-based awards, the valuation of common stock and redeemable convertible preferred stock, and the valuation of redeemable convertible preferred stock tranche liabilities. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ from those estimates . Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and marketable securities. The Company’s cash is held by two financial institutions in the U.S. and two financial institutions in the U.K. 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’s deposits held in the U.S. and U.K. may exceed the Federal Depository Insurance Corporation and Financial Services Compensation Scheme, respectively, insured limits. The Company has investments in money market funds, U.S. Treasury and government agency debt securities, commercial paper, and corporate bonds with high-quality accredited financial institutions. Comprehensive Loss Comprehensive loss consists of net loss and unrealized gains or losses on available-for-sale investments. The Company presents comprehensive loss and its components as part of the statements of operations and comprehensive loss. Risks and Uncertainties The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, protection of proprietary technology, dependence on key personnel, reliance on single-source vendors and collaborators, availability of raw materials, patentability of the Company’s products and processes and clinical efficacy and safety of the Company’s products under development, compliance with government regulations and the need to obtain additional financing to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical studies, clinical trials, and regulatory approval, prior to commercialization. These efforts will require significant amounts of additional capital, adequate personnel infrastructure and extensive compliance and reporting. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained or maintained, that any products developed will obtain necessary government regulatory approval or that any approved products will be commercially viable. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate revenue from product sales. The Company operates in an environment of rapid technological change and substantial competition from other pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees, consultants and other third parties. Segments Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker (the CODM). The Company’s CODM is its chief executive officer who reviews financial information together with certain operating metrics principally to make decisions about how to allocate resources and to measure the Company’s performance. Management has determined that the Company operates as a single operating and reportable segment. The Company’s CODM evaluates financial information on a consolidated basis. As the Company operates as one operating segment, all required segment financial information is found in the consolidated financial statements. Fair Value Measurement Assets and liabilities recorded at fair value on a recurring basis in the balance sheet are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The Company measures fair value based on a three-tier hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows: Level 1 —Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 —Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the assets or liabilities. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3 —Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. In determining fair value, the Company utilizes quoted market prices, or valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value. There were no transfers into or out of Level 3 for any of the periods presented. The Company’s fair value measurements as of December 31, 2022 and 2021 were as follows (in thousands): December 31, 2022 Level 1 Level 2 Level 3 Balance Assets: Cash equivalents: Money market funds $ 27,472 $ — $ — $ 27,472 Marketable securities: U.S. Treasury securities 30,451 — — 30,451 Commercial paper — 29,543 — 29,543 Corporate bonds — 16,626 — 16,626 U.S. government agency debt securities — 3,361 — 3,361 Total marketable securities 30,451 49,530 — 79,981 Total assets $ 57,923 $ 49,530 $ — $ 107,453 December 31, 2021 Level 1 Level 2 Level 3 Balance Assets: Cash equivalents: Money market funds $ 30,557 $ — $ — $ 30,557 Marketable securities: Corporate bonds — 56,135 — 56,135 Commercial paper — 54,363 — 54,363 U.S. Treasury securities 3,979 — — 3,979 Total marketable securities 3,979 110,498 — 114,477 Total assets $ 34,536 $ 110,498 $ — $ 145,034 Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents. As of December 31, 2022 and 2021, the Company's cash equivalents consisted of money market funds. Investments in Marketable Securities Marketable securities are classified as available-for-sale, primarily consisting of U.S. Treasury and government agency debt securities, commercial paper, and corporate bonds, and are reported at fair value. Unrealized holding gains and losses are reflected as a separate component of stockholders' equity in accumulated other comprehensive loss until realized. The cost of debt securities is adjusted for amortization of purchase premiums and accretion of discounts to maturity. Such amortization and accretion is included in interest income, net in the statements of operations and comprehensive loss. Realized gains and losses on the sale of these securities are recognized in interest income, net in the consolidated statement of operations and comprehensive loss. The cost of marketable securities sold is based on the specific identification method. The Company periodically reviews its available-for-sale securities to assess for credit impairment. Some of the factors considered in assessing impairment include the extent to which the fair value is less than the amortized cost basis, adverse conditions related to the security, an industry or geographic area, changes to security rating or sector credit ratings, and other relevant market data. Research and Development Expenses Research and development expenses consist primarily of research and development services and, to a lesser extent, personnel-related expenses such as salaries, bonuses, benefits, and stock-based compensation, professional service fees, and other related costs such as facility rent, partially offset by fully refundable U.K. research and development tax credits. Research and development expenses include estimates of the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs. Management estimates accrued expenses as of each balance sheet date in the consolidated financial statements based on facts and circumstances known at that time. Examples of estimated accrued research and development expenses include those related to fees paid to: • vendors in connection with preclinical development activities; • contract research organizations (CROs) in connection with preclinical studies and clinical trials; and • contract development and manufacturing organizations (CDMOs) in connection with the production of preclinical and clinical trial materials. All research and development costs are expensed in the period incurred, based on the estimates of the services received and efforts expended considering a number of factors, including, progress towards completion of the research, development and manufacturing activities, invoicing to date under the contracts, communication from the CROs, CDMOs and other companies of any actual costs incurred during the period that have not yet been invoiced and the costs included in the contracts and purchase orders. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which advance payments are made or payments made to vendors will exceed the level of services provided and result in a prepayment of the expense . Research and Development Tax Credits The Company receives tax credits from the U.K. government based on claims made under the Small Medium Enterprises (SME) research and development tax relief program. Qualifying expenditures largely relate to research and development activities performed by third parties on our behalf, as well as employment costs for research staff and consumables incurred. The research and development tax credits are recognized when the qualifying expenditure has been incurred and there is reasonable assurance that the reimbursement will be received. Each reporting period, the Company evaluates its eligibility for the SME program based on criteria established by HM Revenue and Customs (“HMRC”) and records a reduction to research and development expense for the amount of the credit estimated to be claimed based on qualifying expenses and information available at that time. The Company qualified for tax credits under the SME program for the year ended December 31, 2021 and expects to qualify for the year ending December 31, 2022. The following table outlines the changes to the research and development tax credit receivable, including amount recognized as an offset to research and development expense, during the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 2021 Balance at beginning of period $ 6,523 $ 2,633 Recognition of credit claims 6,683 6,596 Receipt of credit claims ( 5,462 ) ( 2,377 ) Foreign currency loss ( 1,252 ) ( 329 ) Balance at end of period $ 6,492 $ 6,523 As of December 31, 2022 and 2021, the tax credit receivable was $ 6.5 million and $ 6.5 million respectively, all of which is classified within the prepaid expenses and other current assets line item in the consolidated balance sheets. General and Administrative Expenses General and administrative expenses consist primarily of personnel-related expenses such as salaries, bonuses, benefits, and stock-based compensation, for our personnel in executive, finance and accounting, human resources, business development and other administrative functions. Other significant general and administrative expenses include legal fees relating to intellectual property and corporate matters, professional fees for accounting, tax and consulting services, insurance costs, as well as investor and public relations costs. General and administrative costs are expensed as incurred. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist primarily of receivables f rom refundable research and development tax credits from the U.K. government and operating expenses paid in advance. Leases The Company adopted ASU No. 2016-02, Leases (Topic 842) on January 1, 2022, as discussed below in the section titled “Recently Adopted Accounting Pronouncements”. Under Accounting Standards Codification (ASC) Topic 842, Leases, the Company determines if an arrangement is a lease at inception. The Company leases office space in the U.S. and the U.K. under non-cancelable operating leases. Operating lease right-of-use (ROU) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized based on the present value of lease payments over the lease term at the commencement date of the lease. ROU assets also include any initial direct costs incurred and any lease payments made at or before the lease commencement date, less any lease incentive received. The Company uses the rate implicit in the lease in determining the present value of lease payments and, if that rate is not readily determinable, the Company uses its incremental borrowing rate commensurate with the lease term based on the information available at the date of lease commencement. The incremental borrowing rate reflects the rate of interest that a lessee would have to pay to borrow, on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company does not have material short-term lease costs. Lease expense for lease payments is recognized on a straight-line basis over the lease term. For real estate leases, the Company does not separate lease and non-lease components. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company’s non-lease components are primarily related to property taxes, insurance, and common area maintenance, which vary based on future outcomes, and are recognized as rent expense when incurred. Accretion and Classification of Redeemable Convertible Preferred Stock The holders of the Company’s redeemable convertible preferred stock had the option to redeem their shares beginning in October 2026. As a result, these shares were considered probable of becoming redeemable since the redemption option depends solely on the passage of time. The Company accreted changes in the redemption value over the period from the date of issuance to the earliest redemption date of October 2026 . In October 2020, the Company amended the terms of its Certificate of Incorporation to remove the redemption option of their Series A and Series A-1 redeemable convertible preferred stock, which was accounted for as a modification, and the Company ceased accretion. Upon completion of the IPO on August 12, 2021, all of the Company's then outstanding redeemable convertible preferred stock were converted on a 1-for-1 basis to shares of common stock. As of December 31, 2022 and 2021, the Company had no redeemable convertible preferred stock outstanding. Redeemable Convertible Preferred Stock Tranche Liability The Company’s Series A-1 redeemable convertible preferred stock included tranche rights that were determined to be freestanding financial instruments that should be accounted for as a liability at fair value (Note 6). This redeemable convertible preferred stock tranche liability was revalued at each reporting period until settlement with changes in the fair value recorded as a change in redeemable convertible preferred stock tranche liability in the consolidated statements of operations and comprehensive loss. Upon the closing of the redeemable convertible preferred stock, the redeemable convertible preferred stock purchase rights liability was extinguished, and the mark-to-market fair value of the liability was included in the carrying value of the redeemable convertible preferred stock issued. The Series A-1 redeemable convertible preferred tranche liability was settled on March 9, 2021 with the achievement of milestones set forth in the Series A-1 stock purchase agreement . Stock-Based Compensation The Company measures its stock-based awards granted to employees, non-employee directors, consultants and independent advisors based on the estimated grant-date fair value of the awards. For awards with only service conditions, including stock options and restricted stock awards, compensation expense is recognized over the requisite service period using the straight-line method. For awards that include performance conditions, compensation expense is not recognized until the performance condition is probable to occur. The Company uses the Black-Scholes option pricing model to estimate the fair value of its stock option awards. The Black-Scholes option pricing model requires the Company to make assumptions and judgements about the variables used in the calculations, including the fair value of common stock, expected term, expected volatility of the Company’s common stock, risk-free interest rate and expected dividend yield. As the stock-based compensation is based on awards ultimately expected to vest, it is reduced by forfeitures, which the Company accounts for as they occur. Fair Value of Common Stock Following the closing of the Company’s IPO, the fair market value of the Company's common stock is based on its closing price as reported on the date of grant on the Nasdaq Global Market, on which the Company’s common stock is traded. Prior to the Company’s IPO, because there was no public market for the Company’s common stock, the estimated fair value of the Company’s common stock was determined by the board of directors as of the date of each option grant with input from management, considering the most recently available third-party valuation of common stock, and the board of directors’ assessment of additional objective and subjective factors that it believed were relevant and which may have changed from the date of the most recent valuation through the date of the grant. Management believes that the board of directors has the relevant experience and expertise to determine fair value of the common stock. Third-party valuations were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation . Management has considered numerous factors in determining the best estimate of fair value of our common stock, including the following: • valuations performed by independent third-party specialists; • the Company’s operating results, financial position, and capital resources; • the Company’s stage of development and material risks related to its business; • the progress of the Company’s research and development programs; • business conditions and projects; • the lack of marketability of the Company’s common stock and its redeemable convertible preferred stock as a private company; • the prices at which the Company sold shares of redeemable convertible preferred stock to outside investors in arms-length transactions; • the rights, preferences, and privileges of the Company’s redeemable convertible preferred stock relative to those of the Company’s common stock; • the analysis of IPOs and the market performance of similar companies in the biotechnology industry; • the likelihood of achieving a liquidity event for securityholders, such as an initial public offering or a sale of the Company, given prevailing market conditions; • the hiring of key personnel and the experience of management; • trends and developments in the industry; and • external market conditions affecting the life sciences and biotechnology industry sectors. For valuations performed prior to the completion of the IPO on August 12, 2021, in accordance with the Practice Aid, the Company determined that the Hybrid Method, was the most appropriate method for determining the fair value of its common stock based on its stage of development and other relevant factors. The Hybrid Method is a combination of an Option Pricing Method (OPM) scenario and one or more scenarios using a Probability Weighted Expected Return Method (PWERM). The Hybrid Method estimates the probability-weighted value across multiple scenarios, and uses the OPM to estimate the allocation of value within one or more of those scenarios. Weighting allocations are assigned to the OPM and PWERM methods factoring possible future liquidity events. The Company applied the Hybrid Method when it considered both an IPO and trade sale scenarios. The OPM uses option theory to value the various classes of a company’s securities in light of their respective claims to the enterprise value. Total stockholders’ deficit value is allocated to the various share classes based upon their respective claims on a series of call options with strike prices at various value levels depending upon the rights and preferences of each class. A Black-Scholes closed form option pricing model is employed in this analysis, with an option term assumption that is consistent with the expected time to a liquidity event and a volatility assumption based on the estimated stock price volatility of a peer group of comparable public companies over a similar term. The PWERM values each class of equity based on an analysis of the range of potential future enterprise values of the company and the manner in which those values would accrue to the owners of the different classes of equity. This method involves estimating the overall value of the subject company under various liquidity event scenarios and allocating the value to the various share classes based on their respective claim on the proceeds as of the date of each event. These different scenarios typically include an initial public offering, an acquisition, or a liquidation of the business, each resulting in a different value. For each scenario, the future value of each share class is calculated and discounted to a present value. The results of each scenario are then probability weighted in order to arrive at an estimate of fair value for each share class as of a current date. The assumptions underlying these valuations represented management’s best estimates, which involved inherent uncertainties and the application of management’s judgment. As a result, if the Company had used significantly different assumptions or estimates, the fair value of its common stock and stock-based compensation expense could have been materially different. Income Taxes Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts or existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period of enactment. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The Company recognizes the tax benefit from an uncertain tax position if it is more likely than not that the tax position will be sustained upon examination by the tax authorities, based on the merits of the position. The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense or benefit. To date, there have been no interest or penalties charged in relation to the unrecognized tax benefits. Foreign Currency The Company’s reporting currency is the U.S. dollar. The functional currency of the Company and its subsidiaries is the U.S. dollar. Monetary assets and liabilities resulting from transactions denominated in currencies other than the functional currency are remeasured in the functional currency at exchange rates prevailing at the balance sheet date, and income items and expenses are translated into U.S. dollars at the average exchange rate in effect during the period. Exchange gains and losses resulting from remeasurement and foreign currency transactions are included in the determination of net loss. Net Loss Per Share Basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, adjusted for outstanding shares that are subject to repurchase. Diluted net loss per share attributable to common stockholders is computed by giving effect to all potentially dilutive securities outstanding for the period using the treasury stock method or the if-converted method based on the nature of such securities. For periods in which the Company reports net losses, diluted net loss per common share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. Prior to completion of the IPO on August 12, 2021 (at which time the Company's then outstanding redeemable convertible preferred stock were converted on a 1-for-1 basis to shares of common stock, thereby eliminating the cumulative preferred stock dividend), basic net loss per share attributable to common stockholders was computed using the two-class method required for multiple classes of common stock and participating securities based upon their respective rights to receive dividends as if all income for the period has been distributed. The two-class method requires loss available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to share in undistributed earnings as if all loss for the period had been distributed. The Company’s participating securities included the Company’s redeemable convertible preferred stock, as the holders were entitled to receive dividends on a pari passu basis in the event that a dividend was paid on common stock. The holders of redeemable convertible preferred stock did not have a contractual obligation to share in losses of the Company, and therefore during periods of loss there was no allocation required under the two-class method. Emerging Growth Company Status The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (JOBS Act). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to avail itself of this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. Recently Adopted Accounting Pronouncements On January 1, 2022, the Company adopted ASU No. 2016-02, Leases (Topic 842) using the modified retrospective transition method (which permitted the Company to not restate the comparative period presented) and elected the package of practical expedients to not reassess whether any expired or existing contracts are or contain leases, carry forward its historical lease classification and not reassess initial direct costs for existing leases. The Company elected to not separate non-lease components from the associated lease components and to not recognize ROU assets and lease liabilities for leases with a term of twelve months or less. Upon adoption of ASC 842, the Company recorded operating ROU assets of $ 0.9 million, operating lease liabilities of $ 0.9 million, and derecognized deferred rent and other lease liabilities of $ 12,000 . There was no material impact to the Company’s statements of operations and comprehensive loss upon adoption. Results and disclosures for the year ended December 31, 2022 are presented under ASC 842. Prior period amounts before January 1, 2022 have not been adjusted and continue to be reported in accordance with the Company’s historical accounting under previous lease guidance, ASC 840: Leases (Topic 840). In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The standard simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and also improves consistent application by clarifying and amending existing guidance. The effective date of this update for non-public companies is for fiscal years beginning after December 15, 2021 and interim periods within fiscal years beginning after December 15, 2022. The Company adopted ASU 2019-12 on January 1, 2022, which did not have a material impact on its consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The standard changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The effective date of this update for non-public companies is for fiscal years beginning after December 15, 2022 and interim periods therein. The Company estimates that adoption will not have a material impact on its consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging —Contracts in Entity’s Own Equity (Subtopic 815 |
Investments
Investments | 12 Months Ended |
Dec. 31, 2022 | |
Investments [Abstract] | |
Investments | 3. Investments Investments consists of available-for-sale securities as follows (in thousands): December 31, 2022 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Short-term marketable securities: U.S. Treasury securities $ 30,628 $ — $ ( 177 ) $ 30,451 Commercial paper 29,543 — — 29,543 Corporate bonds 16,815 — ( 189 ) 16,626 U.S. government agency securities 3,353 8 — 3,361 Total short-term marketable securities $ 80,339 $ 8 $ ( 366 ) $ 79,981 December 31, 2021 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Short-term marketable securities: Commercial paper $ 54,363 $ — $ ( 1 ) $ 54,362 Corporate bonds 35,231 — ( 35 ) 35,196 Total short-term marketable securities $ 89,594 $ — $ ( 36 ) $ 89,558 Long-term marketable securities: Corporate bonds $ 21,010 $ — $ ( 70 ) $ 20,940 U.S. Treasury securities 3,996 — ( 17 ) 3,979 Total long-term marketable securities $ 25,006 $ — $ ( 87 ) $ 24,919 All the commercial paper, U.S. Treasury and government agency debt securities, and corporate bonds designated as short-term marketable securities have a contractual maturity date that is equal to or less than one year from the respective balance sheet date. Those that are designated as long-term marketable securities have a contractual maturity date that is more than one year from the respective balance sheet date. Accrued interest receivable is excluded from the amortized cost and estimated fair value of the Company's marketable securities. Accrued interest receivable of $ 0.1 million and $ 0.5 million as of December 31, 2022 and December 31, 2021, respectively, is presented separately within the prepaid expenses and other current assets line items in the Company's consolidated balance sheets. Investments in a continual unrealized loss position for less than 12 months consist of the following (in thousands): December 31, 2022 December 31, 2021 Fair Value Fair Value U.S. Treasury securities $ 26,506 $ — Corporate bonds 1,977 60,114 Commercial paper — 3,995 Total available-for-sale securities $ 28,483 $ 64,109 Investments in a continual unrealized loss position for greater than 12 months consist of the following (in thousands): December 31, 2022 December 31, 2021 Fair Value Fair Value Corporate bonds $ 14,649 $ — U.S. Treasury securities 3,945 — Total available-for-sale securities $ 18,594 $ — As of December 31, 2022, the Company did not intend, nor was the Company more likely than not to be required, to sell its available-for-sale investments before the recovery of the amortized cost basis, which may be maturity. Therefore, the Company believes it is more likely than not that its marketable securities in an unrealized loss position will be held until maturity or the recovery of the cost basis of the investment. Based on the Company's assessment, it concluded that none of the available-for-sale investments held as of December 31, 2022 were considered to be impaired, as such, no impairment loss related to other-than-temporary declines in market value was recorded for the year ended December 31, 2022. There was no material realized gain or loss on available-for-sale securities in the periods presented. |
Certain Balance Sheet Accounts
Certain Balance Sheet Accounts | 12 Months Ended |
Dec. 31, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
Certain Balance Sheet Accounts | 4. Certain Balance Sheet Accounts Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following (in thousands): December 31, 2022 December 31, 2021 Recoverable research and development tax credits $ 6,492 $ 6,523 Prepaid research and development expenses 2,549 2,906 Prepaid expenses 1,330 1,491 Other assets 456 852 Total prepaid expenses and other current assets $ 10,827 $ 11,772 Accrued Expenses Accrued expenses consist of the following (in thousands): December 31 2022 December 31, 2021 Accrued payroll $ 2,900 $ 2,220 Accrued research and development expenses 1,902 2,159 Other accrued expenses 245 248 Total accrued expenses $ 5,047 $ 4,627 |
Redeemable Convertible Preferre
Redeemable Convertible Preferred Stock | 12 Months Ended |
Dec. 31, 2022 | |
Temporary Equity Disclosure [Abstract] | |
Redeemable Convertible Preferred Stock | 5. Redeemable Convertible Preferred Stock Upon completion of the IPO on August 12, 2021, all of the Company’s then outstanding shares of redeemable convertible preferred stock were converted into an aggregate of 15,345,279 shares of common stock. As of December 31, 2022 and 2021, the Company had no redeemable convertible preferred stock outstanding. Prior to conversion, the holders of the Series A, Series A-1, and Series B redeemable convertible preferred stock had various rights, preferences, privileges, and restrictions, with respect to voting, dividends, liquidation, and conversion. In March 2021, Series A-1 preferred stockholders exercised their tranche rights in connection with milestone achievements related to Phase 1 clinical trial results of ETX-155. As a result, the Company issued an additional 4,358,972 shares of Series A-1 redeemable convertible preferred shares for gross proceeds of $ 34.0 million. Upon exercise of the tranche rights, the Company reclassified the $ 12.3 million in preferred stock tranche liability to Series A-1 redeemable convertible preferred stock on the consolidated balance sheet. In May 2021, the Company issued 3,846,150 shares of Series B redeemable convertible preferred stock for gross proceeds of $ 60.0 million. As of December 31, 2022 and 2021, the Company had no dividends in arrears as all shares of redeemable convertible preferred stock converted to common stock upon the completion of the IPO. |
Redeemable Convertible Prefer_2
Redeemable Convertible Preferred Stock Tranche Liability | 12 Months Ended |
Dec. 31, 2022 | |
Temporary Equity Disclosure [Abstract] | |
Redeemable Convertible Preferred Stock Tranche Liability | 6. Redeemable Convertible Preferred Stock Tranche Liability Upon issuance in October 2020, the purchasers of Series A-1 redeemable convertible preferred stock also received tranche rights (Series A-1 Tranche Rights), which provided them the right to purchase additional shares of Series A-1 redeemable convertible preferred stock in an additional future tranche. This tranche was for the purchase of Series A-1 and was valued based upon the Company achieving certain future milestones and utilized a valuation model that reflected both potential outcomes of success or failure to meet the milestone. The Series A-1 redeemable convertible preferred tranche liability was valued at $ 0.86 per share upon issuance. There was no change in value from the date of issuance and December 31, 2020. The Company estimated the fair value of the Series A-1 Tranche Rights using a probability-weighted present value model that considered the probability of triggering the Series A-1 Tranche Rights through achievement of the clinical development milestones specified in the Series A-1 purchase agreement. These estimates were based, in part, on subjective assumptions. Changes to these assumptions could have had a significant impact on the reported fair value of the Series A-1 Tranche Rights. The following reflects the significant quantitative inputs used in the valuation of the redeemable convertible preferred stock tranche liability: Series A-1 Tranche Call Option Estimated fair value of redeemable convertible preferred stock $ 6.94 - $ 11.10 Discount rate 0.10 % Dividend yield 0 % Expected term (years) 0.25 - 0.45 Expected volatility N/A Probability of milestone achievement 80 % - 100 % Strike price $ 7.80 Fair value of each tranche feature $ 0.86 - $ 3.32 The Series A-1 redeemable convertible preferred tranche liability was settled on March 9, 2021 with the achievement of milestones set forth in the Series A-1 stock purchase agreement. The fair value of the liability was remeasured prior to settlement, resulting in the Company recognizing a loss in the consolidated statement of operations and comprehensive loss of $ 11.7 million during the year ended December 31, 2021. Immediately thereafter, the balance of the redeemable convertible preferred stock tranche liability of $ 12.3 million was reclassified to Series A-1 redeemable convertible preferred stock. A rollforward of the redeemable convertible preferred stock tranche liability is as follows (in thousands): Balance at December 31, 2020 $ 551 Change in fair value 11,718 Settlement upon issuance of Series A-1 redeemable convertible preferred stock ( 12,269 ) Balance at December 31, 2021 $ — |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 7. Commitments and Contingencies Operating Leases The Company leases office space in the U.S. and U.K. under non-cancelable operating leases. In May 2021, the Company entered into an agreement for office space in Cambridge, U.K. The term of this lease is for a period of 24 months, which commenced on July 1, 2021. In November 2021, the Company entered into an agreement to lease approximately 5,000 square feet of office space in Bellevue, Washington. The term of this lease is for a period of 39 months, which commenced on November 1, 2021. The lease contains rent escalation clauses and an option to extend the term of the lease for an additional 3-year period at a market rate determined according to the lease. At the inception of the lease and as of December 31, 2022, the Company was not reasonably certain that it will exercise its option to extend the lease, therefore, the period covered by this option is not included within the lease term. As of December 31, 2022, the remaining weighted-average lease term was 1.6 years. The weighted-average incremental borrowing rate used to determine the operating lease liability was 7.5 %. The Company incurred $ 0.5 million and $ 0.2 million in rent expense for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, the annual future minimum lease payments due under the Company's non-cancelable operating leases are as follows: Amount (In thousands) 2023 $ 321 2024 172 2025 15 Total undiscounted lease payments $ 508 Present value adjustment ( 28 ) Total operating lease liabilities $ 480 Legal Proceedings From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made and that such expenditures can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount. As December 31, 2022, we are not party to any material legal matters or claims. Indemnification In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless, and defend an indemnified party for losses suffered or incurred by the indemnified party. Some of the provisions will limit losses to those arising from third-party actions. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. The Company has never incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. The Company intends to enter into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by Delaware corporate law. The Company currently has directors’ and officers’ insurance coverage that reduces its exposure and enables the Company to recover a portion of any future amounts paid. The Company believes the estimated fair value of these indemnification agreements in excess of applicable insurance coverage is immaterial. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 8. Stock-Based Compensation 2019 Plan In 2019, the Company adopted the 2019 Equity Incentive Plan (the 2019 Plan). The 2019 Plan provides for the Company to grant qualified stock options, non-qualified stock options, and restricted stock awards to employees, non-employee directors and consultants of the Company under terms and provisions established by the board of directors. Under the terms of the 2019 Plan, options are granted at an exercise price no less than fair value of the Company’s common stock on the grant date, except in certain cases related to employees outside of the U.S. However, for any employee who is a 10% or greater stockholder, options are granted at an exercise price no less than 110 % of the fair value of the Company’s common stock on the grant date. Option awards granted typically have 10-year terms measured from the option grant date. However, if any employee is a 10% or greater stockholder, the awards have 5-year terms measured from the option grant date. While no shares are available for future issuance under the 2019 Plan, it continues to govern outstanding equity awards granted thereunder. 2021 Plan and ESPP The compensation committee of the Company's board of directors adopted and the Company's stockholders approved the 2021 Equity Incentive Plan (2021 Plan) and the 2021 Employee Stock Purchase Plan (the ESPP), which became effective immediately prior to the effectiveness of the Company's IPO. The 2021 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units, stock appreciation rights and other stock-based awards. The Company's employees, officers, directors and consultants are eligible to receive awards under the 2021 Plan. Under the terms of the 2021 Plan, options are granted at an exercise price no less than fair value of the Company’s common stock on the grant date, except in certain cases related to significant corporate transactions. Option awards granted typically have 10-year terms measured from the option grant date. As of December 31, 2022, the total number of shares authorized for issuance under the 2021 Plan was 3,887,174 . In addition, the number of shares of common stock reserved for issuance under our 2021 Plan will automatically increase on January 1 of each year, beginning on January 1, 2022, and continuing through and including January 1, 2031, by 5 % of the total number of shares of common stock outstanding on December 31 of the immediately preceding calendar year, or a lesser number of shares determined by our board prior to the applicable January 1st. The ESPP allows employees, including executive officers, to contribute up to 15 % of their earnings, subject to certain limitations, for the purchase of the Company's common stock at a price per share equal to the lower of (a) 85 % of the fair market value of a share of common stock on the first day of the offering period, or (b) 85 % of the fair market value of a share of common stock on the last day of the offering period. As of December 31, 2022, there were 521,555 shares of common stock reserved for future issuance under our ESPP plan. The number of shares of common stock reserved for issuance under our ESPP will automatically increase on January 1 of each calendar year, beginning on January 1, 2022 and continuing through and including January 1, 2031, by the lesser of (1) 1 % of the total number of shares of our common stock outstanding on December 31 of the preceding calendar year or (2) a number of shares determined by our board. Shares subject to purchase rights granted under our ESPP that terminate without having been exercised in full will not reduce the number of shares available for issuance under the ESPP. As of December 31, 2022, no shares have been granted or purchased under the ESPP. Stock Options Awards with vesting conditions under both plans typically include either: (i) vesting 25 % on the first anniversary of the grant date with the remainder vesting monthly over the following three years or (ii) monthly vesting over four years . The activity for stock options is as follows: Weighted Average Weighted Remaining Aggregate Average Contract Intrinsic Options Exercise Terms Values Outstanding Price (in years) (in thousands) Balance as of December 31, 2021 2,922,135 $ 3.62 9.14 $ 21,144 Options granted 3,150,770 5.68 Options cancelled and forfeited ( 84,634 ) 3.87 Options exercised — — — Balance as of December 31, 2022 5,988,271 $ 4.70 8.83 5,699 Vested and expected to vest, December 31, 2022 (1) 5,943,271 $ 4.67 8.83 5,699 Options exercisable as of December 31, 2022 1,824,032 $ 3.69 8.25 3,078 (1) Excludes 45,000 stock options awards outstanding for the period ended December 31, 2022, subject to only performance conditions that have been assessed and deemed not probable . The aggregate intrinsic value disclosed in the above table is based on the difference between the exercise price of the stock option and the fair value of the Company’s common stock as of the respective period-end dates. The weighted-average grant-date fair value of stock options granted during the years ended December 31, 2022 and 2021 was $ 4.00 per share and $ 7.39 per share, respectively. The Black-Scholes option pricing model for employee and nonemployee stock options incorporates the following assumptions: • Fair Value of Common Stock — Prior to the completion of the Company's IPO, the fair value of the Company's common stock was determined by using straight-line interpolation between the value of common stock derived from valuations performed by independent third party specialists, further described in Note 2 to the consolidated financial statements Summary of Significant Accounting Policies – Fair Value of Common Stock . After the completion of the Company's IPO, the fair value of each share of common stock is based on the closing price of the Company's common stock on the date of grant as reported on the Nasdaq Global Market. • Volatility — The expected stock price volatilities are estimated based on the historical and implied volatilities of comparable publicly traded companies as the Company does not have sufficient history of trading its common stock. • Risk-free Interest Rate — The risk-free interest rates are based on US Treasury yields in effect at the grant date for notes with comparable terms as the awards. • Expected Term — The expected term represents the period that the Company’s stock options are expected to be outstanding and is determined using the simplified method (based on the mid-point between the vesting date and the end of the contractual term). • Dividend Yield — The expected dividend yield assumption is based on the Company’s current expectations about its anticipated dividend policy. The fair value of the Company’s stock option awards was estimated at the date of grant using a Black-Scholes option pricing model with the following assumptions for the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 2021 Expected term (in years) 5.50 - 6.50 5.78 - 6.08 Expected volatility 77.33 % - 91.74 % 77.19 % - 79.57 % Risk-free interest rate 1.69 % - 4.22 % 0.91 % - 1.84 % Expected dividend yield 0.00 % 0.00 % Restricted Stock The Company has restricted stock awards with service conditions that vest 25 % on the first anniversary of the grant date and monthly thereafter. The restricted stock awards are subject to repurchase by the Company at the original purchase price in the event that the award recipient’s employment or relationship is terminated prior to the shares vesting. The activity for restricted stock awards is as follows: Weighted-Average Number of Shares Value Unvested at December 31, 2021 332,364 $ 7.30 Granted — — Vested ( 154,869 ) 6.83 Forfeited — — Unvested at December 31, 2022 177,495 $ 8.32 The fair value of restricted stock awards vested during the years ended December 31, 2022 and 2021 was approximately $ 0.6 million and $ 0.1 million, respectively. The following table shows stock-based compensation for stock options and restricted stock awards included in the Company’s consolidated statements of operations and comprehensive loss (in thousands): Year Ended December 31, 2022 2021 Research and development expense $ 2,538 $ 987 General and administrative expense 4,453 2,750 Total stock-based compensation expense $ 6,991 $ 3,737 As of December 31, 2022, there was $ 18.1 million of unrecognized compensation cost related to unvested stock options and $ 1.5 million of unrecognized compensation cost related to unvested restricted stock awards granted, which is expected to be recognized over a weighted average period of 2.75 years and 2.34 years, respectively. |
Net Loss Per Share Attributable
Net Loss Per Share Attributable to Common Stockholders | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share Attributable to Common Stockholders | Note 9. Net Loss Per Share Attributable to Common Stockholders The following table shows the computation of basic and diluted net loss per share (in thousands, except share and per share data): Year Ended December 31, 2022 2021 Net loss $ ( 45,244 ) $ ( 47,480 ) Accretion of redeemable convertible preferred stock to redemption value and cumulative preferred stock dividends — ( 4,548 ) Net loss attributable to common stockholders $ ( 45,244 ) $ ( 52,028 ) Weighted-average shares used in computing net loss per share 26,311,554 12,260,551 Net loss per share attributable to common stockholders, basic $ ( 1.72 ) $ ( 4.24 ) The following outstanding shares of potentially dilutive securities were excluded from the computation of the diluted net loss per share attributable to common stockholders for the periods presented because their effect would have been anti-dilutive: Year Ended December 31, 2022 2021 Common stock options 5,988,271 2,922,135 Unvested restricted stock awards 177,495 332,364 Total potentially dilutive shares 6,165,766 3,254,499 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 10. Income Taxes The components of net loss before tax provision from income taxes are as follows (in thousands): Year Ended December 31, 2022 2021 United States $ ( 6,272 ) $ ( 13,310 ) United Kingdom ( 38,972 ) ( 34,170 ) Total $ ( 45,244 ) $ ( 47,480 ) The following table presents a reconciliation of the Company’s expected tax computed at the U.S. statutory federal income tax rate to the total provision for income taxes (in thousands): Year Ended December 31, 2022 2021 U.S. federal taxes at statutory rate $ ( 9,497 ) $ ( 9,959 ) State taxes, net of federal benefit 1 4 Foreign rate differential 471 397 Non-deductible expenses 1 ( 11 ) Research credit addback 4,220 4,154 Refundable tax credit ( 1,407 ) ( 1,385 ) Mark-to-market adjustment — 2,461 Stock-based compensation 742 480 Tax credits ( 110 ) ( 39 ) U.K. tax rate change impact on deferred income taxes ( 1,390 ) ( 1,845 ) Other, net ( 2 ) 219 Change in valuation allowance 6,971 5,524 Total $ — $ — The significant components of the Company's deferred tax assets and liabilities are presented below (in thousands): Year Ended December 31, 2022 2021 Deferred tax assets: Stock-based compensation $ 1,105 $ 385 Intangible asset 2,374 3,834 Accrued bonus 334 250 Accrued payroll taxes — 7 Accrued vacation — 19 Operating lease liabilities 70 — Net operating losses 12,413 5,866 Research credits 531 410 Total gross deferred tax assets 16,827 10,771 Deferred tax liabilities: Unrealized gain or loss 20 ( 89 ) Operating lease right-of-use assets ( 65 ) — Other ( 23 ) ( 11 ) Total gross deferred tax liabilities ( 68 ) ( 100 ) Valuation allowance ( 16,759 ) ( 10,671 ) Net deferred tax liabilities $ — $ — In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Due to the uncertainty of the business in which the Company operates, projections of future profitability are difficult and past profitability is not necessarily indicative of future profitability. The Company does not believe it is more likely than not that the deferred tax assets will be realized, and accordingly, the Company recorded a valuation allowance of $ 16.8 million and $ 10.7 million for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, the Company had net operating loss carryforward of approximately $ 7.1 million for federal income tax purposes, $ 41.6 million for foreign income tax purposes and $ 8.2 million for state income tax purposes. These may be used to offset future taxable income. The federal net operation loss carryforward can be carried forward indefinitely while the state net operating loss carryforward will begin to expire in varying amounts in 2039 . The Company also has research and development credits of approximately $ 0.5 million and $ 0.1 million for federal and state income taxes purposes, respectively. The federal credits may be used to offset future taxable income and will begin to expire in varying amounts in 2039 . The state credits may be used to offset future taxable income and will begin to expire in varying amounts in 2035 . The Company is subject to taxation in the U.S. (federal and various states) and the U.K. Currently, no historical years are under examination. The Company’s tax years starting in December 31, 2018 are open and subject to examination by the U.S. (federal and various states) and the U.K. taxing authorities due to the carryforward of utilized net operating losses and research and development credits. Uncertain tax positions are recorded when it is more likely than not that a given tax position would not be sustained upon examination by taxing authorities. The Company’s policy for recording interest and penalties related to income taxes, including uncertain tax positions, is to record such items as a component of the provision for income taxes. As of December 31, 2022 and 2021, the Company does no t have any uncertain tax positions. The Company has not completed a Section 382 study to assess whether an ownership change has occurred or whether there have been multiple ownership changes since the Company’s formation. Pursuant to Internal Revenue Code Sections 382 and 383, annual use of the Company’s net operating loss and research and development tax credit carryforwards may be limited in the event a cumulative change in ownership of more than 50 % occurs within a three-year period. If eliminated, the related asset would be removed from the deferred tax asset schedule with a corresponding reduction in the valuation allowance. Due to the existence of the valuation allowance, limitations created by future ownership changes, if any, will not impact the Company’s effective tax rate. |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Defined Contribution Plan | Note 11. Defined Contribution Plan The Company has a 401(k) defined contribution plan. Participation in the plan is available to substantially all US-based employees. Company contributions to the plan are discretionary. The Company made matching contributions of up to 4 % of each participating employee’s eligible compensation. For each of the years ended December 31, 2022 and 2021, total expense recognized from the 401(k) matching contributions was approximately $ 0.1 million. The Company also has a workplace pension contribution scheme for U.K.-based employees. For the years ended December 31, 2022 and 2021, the Company made contributions to the pension scheme of approximately $ 0.2 million and $ 0.1 million, respectively. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 12. Subsequent Events On February 7, 2023, the Company’s board of directors approved a restructuring plan (the Restructuring Plan) to conserve financial resources and better align the Company’s workforce with current business needs, as a result of the decision to pause development of ETX-155 and focus on the Company’s preclinical Kv7.2/3 program. As part of the Restructuring Plan, the Company will reduce its workforce by approximately 55 % in the first half of 2023. The Company estimates that it will incur approximately $ 17.1 million in charges in connection with the Restructuring Plan, which will be substantially incurred in 2023. These charges primarily relate to employee transition, severance payments, employee benefits, and stock-based compensation. Of the aggregate amount of charges that the Company estimates it will incur in connection with the Restructuring Plan, the Company expects that approximately $ 7.3 million will be in future cash expenditures. The actions associated with the Restructuring Plan are expected to be substantially complete by the third quarter of 2023, subject to local law and consultation requirements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Organization | Organization Eliem Therapeutics, Inc. (the Company) is a biotechnology company focused on developing novel therapies for neuronal excitability disorders to address unmet needs in psychiatry, epilepsy, chronic pain, and other disorders of the peripheral and central nervous systems. Headquartered in Redmond, Washington, the Company was incorporated on October 18, 2018 as a Delaware corporation. |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements of the Company and its wholly owned subsidiaries have been prepared in conformity with accounting principles generally accepted in the United States (U.S. GAAP). All intercompany transactions and balances have been eliminated in consolidation. |
Reverse Stock Split | Reverse Stock Split In July 2021, the Company's board of directors approved an amendment to the Company's certificate of incorporation to effect a reverse split of shares of the Company's common stock on a 1-for-2 basis, which was effected on July 29, 2021 (the Reverse Stock Split). The number of authorized shares and the par values of the common stock were not adjusted as a result of the Reverse Stock Split. In connection with the Reverse Stock Split, the number of authorized shares, outstanding shares, and the conversion ratio for the Company's redeemable convertible preferred stock was proportionately adjusted such that the common stock issuable upon conversion of such preferred stock was decreased in proportion to the Reverse Stock Split. All references to common stock and options to purchase common stock share data, per share data, and related information contained in the consolidated financial statements have been retroactively adjusted to reflect the effect of the Reverse Stock Split for all periods presented. |
Initial Public Offering | Initial Public Offering On August 12, 2021, the Company completed its initial public offering (IPO) of 7,360,000 shares of common stock, including the underwriters' full exercise of their over-allotment option at the IPO price of $ 12.50 per share. Gross proceeds from the IPO were $ 92.0 million, and the net proceeds were $ 83.1 million, after deducting underwriting discounts of $ 6.4 million and $ 2.5 million of offering costs payable by the Company. At the closing of the IPO, all of the Company's then outstanding redeemable convertible preferred stock was automatically converted into an aggregate of 15,345,279 shares of common stock. The related carrying value of the redeemable convertible preferred stock of $ 152.8 million was reclassified to common stock and additional paid-in capital. |
Liquidity | Liquidity Since inception, the Company has experienced recurring losses from operations and generated negative cash flows from operations. The Company has an accumulated deficit of $ 120.9 million and expects to incur additional losses from operations in the future. The Company estimates the available cash, cash equivalents and marketable securities of $ 123.6 million as of December 31, 2022 will be sufficient to meet its projected operating requirements for at least the next twelve months from the filing date of these consolidated financial statements. The Company will need to obtain substantial additional funding to develop and commercialize the Company's clinical programs as currently contemplated. The Company expects to finance future cash needs through equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing and distribution arrangements. In addition, the Company expects to continue to rely on capital markets, and to a lesser extent, U.K. research and development tax credits and incentives for funding. There are no assurances that the Company will be able to raise sufficient amounts of funding in the future on acceptable terms, or at all. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Estimates include those related to the accrual of research and development expenses, recoverable research and development tax credits, the valuation of stock-based awards, the valuation of common stock and redeemable convertible preferred stock, and the valuation of redeemable convertible preferred stock tranche liabilities. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ from those estimates |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and marketable securities. The Company’s cash is held by two financial institutions in the U.S. and two financial institutions in the U.K. 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’s deposits held in the U.S. and U.K. may exceed the Federal Depository Insurance Corporation and Financial Services Compensation Scheme, respectively, insured limits. The Company has investments in money market funds, U.S. Treasury and government agency debt securities, commercial paper, and corporate bonds with high-quality accredited financial institutions. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss consists of net loss and unrealized gains or losses on available-for-sale investments. The Company presents comprehensive loss and its components as part of the statements of operations and comprehensive loss. |
Risks And Uncertainties | Risks and Uncertainties The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, protection of proprietary technology, dependence on key personnel, reliance on single-source vendors and collaborators, availability of raw materials, patentability of the Company’s products and processes and clinical efficacy and safety of the Company’s products under development, compliance with government regulations and the need to obtain additional financing to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical studies, clinical trials, and regulatory approval, prior to commercialization. These efforts will require significant amounts of additional capital, adequate personnel infrastructure and extensive compliance and reporting. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained or maintained, that any products developed will obtain necessary government regulatory approval or that any approved products will be commercially viable. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate revenue from product sales. The Company operates in an environment of rapid technological change and substantial competition from other pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees, consultants and other third parties. |
Segments | Segments Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker (the CODM). The Company’s CODM is its chief executive officer who reviews financial information together with certain operating metrics principally to make decisions about how to allocate resources and to measure the Company’s performance. Management has determined that the Company operates as a single operating and reportable segment. The Company’s CODM evaluates financial information on a consolidated basis. As the Company operates as one operating segment, all required segment financial information is found in the consolidated financial statements. |
Fair Value Measurement | Fair Value Measurement Assets and liabilities recorded at fair value on a recurring basis in the balance sheet are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The Company measures fair value based on a three-tier hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows: Level 1 —Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 —Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the assets or liabilities. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3 —Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. In determining fair value, the Company utilizes quoted market prices, or valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value. There were no transfers into or out of Level 3 for any of the periods presented. The Company’s fair value measurements as of December 31, 2022 and 2021 were as follows (in thousands): December 31, 2022 Level 1 Level 2 Level 3 Balance Assets: Cash equivalents: Money market funds $ 27,472 $ — $ — $ 27,472 Marketable securities: U.S. Treasury securities 30,451 — — 30,451 Commercial paper — 29,543 — 29,543 Corporate bonds — 16,626 — 16,626 U.S. government agency debt securities — 3,361 — 3,361 Total marketable securities 30,451 49,530 — 79,981 Total assets $ 57,923 $ 49,530 $ — $ 107,453 December 31, 2021 Level 1 Level 2 Level 3 Balance Assets: Cash equivalents: Money market funds $ 30,557 $ — $ — $ 30,557 Marketable securities: Corporate bonds — 56,135 — 56,135 Commercial paper — 54,363 — 54,363 U.S. Treasury securities 3,979 — — 3,979 Total marketable securities 3,979 110,498 — 114,477 Total assets $ 34,536 $ 110,498 $ — $ 145,034 |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents. As of December 31, 2022 and 2021, the Company's cash equivalents consisted of money market funds. |
Investment In Marketable Securities | Investments in Marketable Securities Marketable securities are classified as available-for-sale, primarily consisting of U.S. Treasury and government agency debt securities, commercial paper, and corporate bonds, and are reported at fair value. Unrealized holding gains and losses are reflected as a separate component of stockholders' equity in accumulated other comprehensive loss until realized. The cost of debt securities is adjusted for amortization of purchase premiums and accretion of discounts to maturity. Such amortization and accretion is included in interest income, net in the statements of operations and comprehensive loss. Realized gains and losses on the sale of these securities are recognized in interest income, net in the consolidated statement of operations and comprehensive loss. The cost of marketable securities sold is based on the specific identification method. The Company periodically reviews its available-for-sale securities to assess for credit impairment. Some of the factors considered in assessing impairment include the extent to which the fair value is less than the amortized cost basis, adverse conditions related to the security, an industry or geographic area, changes to security rating or sector credit ratings, and other relevant market data. |
Research and Development Expenses | Research and Development Expenses Research and development expenses consist primarily of research and development services and, to a lesser extent, personnel-related expenses such as salaries, bonuses, benefits, and stock-based compensation, professional service fees, and other related costs such as facility rent, partially offset by fully refundable U.K. research and development tax credits. Research and development expenses include estimates of the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs. Management estimates accrued expenses as of each balance sheet date in the consolidated financial statements based on facts and circumstances known at that time. Examples of estimated accrued research and development expenses include those related to fees paid to: • vendors in connection with preclinical development activities; • contract research organizations (CROs) in connection with preclinical studies and clinical trials; and • contract development and manufacturing organizations (CDMOs) in connection with the production of preclinical and clinical trial materials. All research and development costs are expensed in the period incurred, based on the estimates of the services received and efforts expended considering a number of factors, including, progress towards completion of the research, development and manufacturing activities, invoicing to date under the contracts, communication from the CROs, CDMOs and other companies of any actual costs incurred during the period that have not yet been invoiced and the costs included in the contracts and purchase orders. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which advance payments are made or payments made to vendors will exceed the level of services provided and result in a prepayment of the expense |
Research and Development Tax Credits | Research and Development Tax Credits The Company receives tax credits from the U.K. government based on claims made under the Small Medium Enterprises (SME) research and development tax relief program. Qualifying expenditures largely relate to research and development activities performed by third parties on our behalf, as well as employment costs for research staff and consumables incurred. The research and development tax credits are recognized when the qualifying expenditure has been incurred and there is reasonable assurance that the reimbursement will be received. Each reporting period, the Company evaluates its eligibility for the SME program based on criteria established by HM Revenue and Customs (“HMRC”) and records a reduction to research and development expense for the amount of the credit estimated to be claimed based on qualifying expenses and information available at that time. The Company qualified for tax credits under the SME program for the year ended December 31, 2021 and expects to qualify for the year ending December 31, 2022. The following table outlines the changes to the research and development tax credit receivable, including amount recognized as an offset to research and development expense, during the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 2021 Balance at beginning of period $ 6,523 $ 2,633 Recognition of credit claims 6,683 6,596 Receipt of credit claims ( 5,462 ) ( 2,377 ) Foreign currency loss ( 1,252 ) ( 329 ) Balance at end of period $ 6,492 $ 6,523 As of December 31, 2022 and 2021, the tax credit receivable was $ 6.5 million and $ 6.5 million respectively, all of which is classified within the prepaid expenses and other current assets line item in the consolidated balance sheets. |
General And Administrative Expenses | General and Administrative Expenses General and administrative expenses consist primarily of personnel-related expenses such as salaries, bonuses, benefits, and stock-based compensation, for our personnel in executive, finance and accounting, human resources, business development and other administrative functions. Other significant general and administrative expenses include legal fees relating to intellectual property and corporate matters, professional fees for accounting, tax and consulting services, insurance costs, as well as investor and public relations costs. General and administrative costs are expensed as incurred. |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist primarily of receivables f rom refundable research and development tax credits from the U.K. government and operating expenses paid in advance. |
Leases | Leases The Company adopted ASU No. 2016-02, Leases (Topic 842) on January 1, 2022, as discussed below in the section titled “Recently Adopted Accounting Pronouncements”. Under Accounting Standards Codification (ASC) Topic 842, Leases, the Company determines if an arrangement is a lease at inception. The Company leases office space in the U.S. and the U.K. under non-cancelable operating leases. Operating lease right-of-use (ROU) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized based on the present value of lease payments over the lease term at the commencement date of the lease. ROU assets also include any initial direct costs incurred and any lease payments made at or before the lease commencement date, less any lease incentive received. The Company uses the rate implicit in the lease in determining the present value of lease payments and, if that rate is not readily determinable, the Company uses its incremental borrowing rate commensurate with the lease term based on the information available at the date of lease commencement. The incremental borrowing rate reflects the rate of interest that a lessee would have to pay to borrow, on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company does not have material short-term lease costs. Lease expense for lease payments is recognized on a straight-line basis over the lease term. For real estate leases, the Company does not separate lease and non-lease components. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company’s non-lease components are primarily related to property taxes, insurance, and common area maintenance, which vary based on future outcomes, and are recognized as rent expense when incurred. |
Accretion and Classification of Redeemable Convertible Preferred Stock | Accretion and Classification of Redeemable Convertible Preferred Stock The holders of the Company’s redeemable convertible preferred stock had the option to redeem their shares beginning in October 2026. As a result, these shares were considered probable of becoming redeemable since the redemption option depends solely on the passage of time. The Company accreted changes in the redemption value over the period from the date of issuance to the earliest redemption date of October 2026 . In October 2020, the Company amended the terms of its Certificate of Incorporation to remove the redemption option of their Series A and Series A-1 redeemable convertible preferred stock, which was accounted for as a modification, and the Company ceased accretion. Upon completion of the IPO on August 12, 2021, all of the Company's then outstanding redeemable convertible preferred stock were converted on a 1-for-1 basis to shares of common stock. As of December 31, 2022 and 2021, the Company had no redeemable convertible preferred stock outstanding. |
Redeemable Convertible Preferred Stock Tranche Liability | Redeemable Convertible Preferred Stock Tranche Liability The Company’s Series A-1 redeemable convertible preferred stock included tranche rights that were determined to be freestanding financial instruments that should be accounted for as a liability at fair value (Note 6). This redeemable convertible preferred stock tranche liability was revalued at each reporting period until settlement with changes in the fair value recorded as a change in redeemable convertible preferred stock tranche liability in the consolidated statements of operations and comprehensive loss. Upon the closing of the redeemable convertible preferred stock, the redeemable convertible preferred stock purchase rights liability was extinguished, and the mark-to-market fair value of the liability was included in the carrying value of the redeemable convertible preferred stock issued. The Series A-1 redeemable convertible preferred tranche liability was settled on March 9, 2021 with the achievement of milestones set forth in the Series A-1 stock purchase agreement |
Stock-Based Compensation | Stock-Based Compensation The Company measures its stock-based awards granted to employees, non-employee directors, consultants and independent advisors based on the estimated grant-date fair value of the awards. For awards with only service conditions, including stock options and restricted stock awards, compensation expense is recognized over the requisite service period using the straight-line method. For awards that include performance conditions, compensation expense is not recognized until the performance condition is probable to occur. The Company uses the Black-Scholes option pricing model to estimate the fair value of its stock option awards. The Black-Scholes option pricing model requires the Company to make assumptions and judgements about the variables used in the calculations, including the fair value of common stock, expected term, expected volatility of the Company’s common stock, risk-free interest rate and expected dividend yield. As the stock-based compensation is based on awards ultimately expected to vest, it is reduced by forfeitures, which the Company accounts for as they occur. |
Fair Value of Common Stock | Fair Value of Common Stock Following the closing of the Company’s IPO, the fair market value of the Company's common stock is based on its closing price as reported on the date of grant on the Nasdaq Global Market, on which the Company’s common stock is traded. Prior to the Company’s IPO, because there was no public market for the Company’s common stock, the estimated fair value of the Company’s common stock was determined by the board of directors as of the date of each option grant with input from management, considering the most recently available third-party valuation of common stock, and the board of directors’ assessment of additional objective and subjective factors that it believed were relevant and which may have changed from the date of the most recent valuation through the date of the grant. Management believes that the board of directors has the relevant experience and expertise to determine fair value of the common stock. Third-party valuations were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation . Management has considered numerous factors in determining the best estimate of fair value of our common stock, including the following: • valuations performed by independent third-party specialists; • the Company’s operating results, financial position, and capital resources; • the Company’s stage of development and material risks related to its business; • the progress of the Company’s research and development programs; • business conditions and projects; • the lack of marketability of the Company’s common stock and its redeemable convertible preferred stock as a private company; • the prices at which the Company sold shares of redeemable convertible preferred stock to outside investors in arms-length transactions; • the rights, preferences, and privileges of the Company’s redeemable convertible preferred stock relative to those of the Company’s common stock; • the analysis of IPOs and the market performance of similar companies in the biotechnology industry; • the likelihood of achieving a liquidity event for securityholders, such as an initial public offering or a sale of the Company, given prevailing market conditions; • the hiring of key personnel and the experience of management; • trends and developments in the industry; and • external market conditions affecting the life sciences and biotechnology industry sectors. For valuations performed prior to the completion of the IPO on August 12, 2021, in accordance with the Practice Aid, the Company determined that the Hybrid Method, was the most appropriate method for determining the fair value of its common stock based on its stage of development and other relevant factors. The Hybrid Method is a combination of an Option Pricing Method (OPM) scenario and one or more scenarios using a Probability Weighted Expected Return Method (PWERM). The Hybrid Method estimates the probability-weighted value across multiple scenarios, and uses the OPM to estimate the allocation of value within one or more of those scenarios. Weighting allocations are assigned to the OPM and PWERM methods factoring possible future liquidity events. The Company applied the Hybrid Method when it considered both an IPO and trade sale scenarios. The OPM uses option theory to value the various classes of a company’s securities in light of their respective claims to the enterprise value. Total stockholders’ deficit value is allocated to the various share classes based upon their respective claims on a series of call options with strike prices at various value levels depending upon the rights and preferences of each class. A Black-Scholes closed form option pricing model is employed in this analysis, with an option term assumption that is consistent with the expected time to a liquidity event and a volatility assumption based on the estimated stock price volatility of a peer group of comparable public companies over a similar term. The PWERM values each class of equity based on an analysis of the range of potential future enterprise values of the company and the manner in which those values would accrue to the owners of the different classes of equity. This method involves estimating the overall value of the subject company under various liquidity event scenarios and allocating the value to the various share classes based on their respective claim on the proceeds as of the date of each event. These different scenarios typically include an initial public offering, an acquisition, or a liquidation of the business, each resulting in a different value. For each scenario, the future value of each share class is calculated and discounted to a present value. The results of each scenario are then probability weighted in order to arrive at an estimate of fair value for each share class as of a current date. The assumptions underlying these valuations represented management’s best estimates, which involved inherent uncertainties and the application of management’s judgment. As a result, if the Company had used significantly different assumptions or estimates, the fair value of its common stock and stock-based compensation expense could have been materially different. |
Income Taxes | Income Taxes Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts or existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period of enactment. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The Company recognizes the tax benefit from an uncertain tax position if it is more likely than not that the tax position will be sustained upon examination by the tax authorities, based on the merits of the position. The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense or benefit. To date, there have been no interest or penalties charged in relation to the unrecognized tax benefits. |
Foreign Currency | Foreign Currency The Company’s reporting currency is the U.S. dollar. The functional currency of the Company and its subsidiaries is the U.S. dollar. Monetary assets and liabilities resulting from transactions denominated in currencies other than the functional currency are remeasured in the functional currency at exchange rates prevailing at the balance sheet date, and income items and expenses are translated into U.S. dollars at the average exchange rate in effect during the period. Exchange gains and losses resulting from remeasurement and foreign currency transactions are included in the determination of net loss. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, adjusted for outstanding shares that are subject to repurchase. Diluted net loss per share attributable to common stockholders is computed by giving effect to all potentially dilutive securities outstanding for the period using the treasury stock method or the if-converted method based on the nature of such securities. For periods in which the Company reports net losses, diluted net loss per common share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. Prior to completion of the IPO on August 12, 2021 (at which time the Company's then outstanding redeemable convertible preferred stock were converted on a 1-for-1 basis to shares of common stock, thereby eliminating the cumulative preferred stock dividend), basic net loss per share attributable to common stockholders was computed using the two-class method required for multiple classes of common stock and participating securities based upon their respective rights to receive dividends as if all income for the period has been distributed. The two-class method requires loss available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to share in undistributed earnings as if all loss for the period had been distributed. The Company’s participating securities included the Company’s redeemable convertible preferred stock, as the holders were entitled to receive dividends on a pari passu basis in the event that a dividend was paid on common stock. The holders of redeemable convertible preferred stock did not have a contractual obligation to share in losses of the Company, and therefore during periods of loss there was no allocation required under the two-class method. |
Emerging Growth Company Status | Emerging Growth Company Status The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (JOBS Act). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to avail itself of this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements On January 1, 2022, the Company adopted ASU No. 2016-02, Leases (Topic 842) using the modified retrospective transition method (which permitted the Company to not restate the comparative period presented) and elected the package of practical expedients to not reassess whether any expired or existing contracts are or contain leases, carry forward its historical lease classification and not reassess initial direct costs for existing leases. The Company elected to not separate non-lease components from the associated lease components and to not recognize ROU assets and lease liabilities for leases with a term of twelve months or less. Upon adoption of ASC 842, the Company recorded operating ROU assets of $ 0.9 million, operating lease liabilities of $ 0.9 million, and derecognized deferred rent and other lease liabilities of $ 12,000 . There was no material impact to the Company’s statements of operations and comprehensive loss upon adoption. Results and disclosures for the year ended December 31, 2022 are presented under ASC 842. Prior period amounts before January 1, 2022 have not been adjusted and continue to be reported in accordance with the Company’s historical accounting under previous lease guidance, ASC 840: Leases (Topic 840). In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The standard simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and also improves consistent application by clarifying and amending existing guidance. The effective date of this update for non-public companies is for fiscal years beginning after December 15, 2021 and interim periods within fiscal years beginning after December 15, 2022. The Company adopted ASU 2019-12 on January 1, 2022, which did not have a material impact on its consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The standard changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The effective date of this update for non-public companies is for fiscal years beginning after December 15, 2022 and interim periods therein. The Company estimates that adoption will not have a material impact on its consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging —Contracts in Entity’s Own Equity (Subtopic 815-40)—Accounting For Convertible Instruments and Contracts in an Entity’s Own Equity . The standard simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The standard also simplifies the diluted net income per share calculation in certain areas. The effective date of this update for non-public companies is for fiscal years beginning after December 15, 2023, including interim periods therein. Early adoption is permitted for fiscal years beginning after December 15, 2020 and interim periods therein. The Company estimates that adoption will not have a material impact on its consolidated financial statements. There were no other significant updates to the recently issued accounting standards other than as disclosed herewith for the year ended December 31, 2022. Although there are several other new accounting pronouncements issued or proposed by the FASB, the Company does not believe any of those accounting pronouncements have had or will have a material impact on its financial position or operating results. Reclassifications The Company reclassified certain prior period balances on its consolidated balance sheet, statements of operations and comprehensive loss, and statement of cash flows to conform to the current period presentation. These balances related to amounts incurred from related party transactions with Carnot Pharma, LLC. The services related to these transactions were completed in 2022 and the Company's services agreement with Carnot Pharma, LLC was terminated in 2022. These reclassifications had no effect on total liabilities, loss from operations, or net cash used in operating activities. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Fair Value Measurements | The Company’s fair value measurements as of December 31, 2022 and 2021 were as follows (in thousands): December 31, 2022 Level 1 Level 2 Level 3 Balance Assets: Cash equivalents: Money market funds $ 27,472 $ — $ — $ 27,472 Marketable securities: U.S. Treasury securities 30,451 — — 30,451 Commercial paper — 29,543 — 29,543 Corporate bonds — 16,626 — 16,626 U.S. government agency debt securities — 3,361 — 3,361 Total marketable securities 30,451 49,530 — 79,981 Total assets $ 57,923 $ 49,530 $ — $ 107,453 December 31, 2021 Level 1 Level 2 Level 3 Balance Assets: Cash equivalents: Money market funds $ 30,557 $ — $ — $ 30,557 Marketable securities: Corporate bonds — 56,135 — 56,135 Commercial paper — 54,363 — 54,363 U.S. Treasury securities 3,979 — — 3,979 Total marketable securities 3,979 110,498 — 114,477 Total assets $ 34,536 $ 110,498 $ — $ 145,034 |
Schedule Of Tax Credit Carry forwards | The following table outlines the changes to the research and development tax credit receivable, including amount recognized as an offset to research and development expense, during the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 2021 Balance at beginning of period $ 6,523 $ 2,633 Recognition of credit claims 6,683 6,596 Receipt of credit claims ( 5,462 ) ( 2,377 ) Foreign currency loss ( 1,252 ) ( 329 ) Balance at end of period $ 6,492 $ 6,523 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments [Abstract] | |
Investments consists of available-for-sale securities | Investments consists of available-for-sale securities as follows (in thousands): December 31, 2022 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Short-term marketable securities: U.S. Treasury securities $ 30,628 $ — $ ( 177 ) $ 30,451 Commercial paper 29,543 — — 29,543 Corporate bonds 16,815 — ( 189 ) 16,626 U.S. government agency securities 3,353 8 — 3,361 Total short-term marketable securities $ 80,339 $ 8 $ ( 366 ) $ 79,981 December 31, 2021 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Short-term marketable securities: Commercial paper $ 54,363 $ — $ ( 1 ) $ 54,362 Corporate bonds 35,231 — ( 35 ) 35,196 Total short-term marketable securities $ 89,594 $ — $ ( 36 ) $ 89,558 Long-term marketable securities: Corporate bonds $ 21,010 $ — $ ( 70 ) $ 20,940 U.S. Treasury securities 3,996 — ( 17 ) 3,979 Total long-term marketable securities $ 25,006 $ — $ ( 87 ) $ 24,919 |
Investments in a continual unrealized loss position | Investments in a continual unrealized loss position for less than 12 months consist of the following (in thousands): December 31, 2022 December 31, 2021 Fair Value Fair Value U.S. Treasury securities $ 26,506 $ — Corporate bonds 1,977 60,114 Commercial paper — 3,995 Total available-for-sale securities $ 28,483 $ 64,109 Investments in a continual unrealized loss position for greater than 12 months consist of the following (in thousands): December 31, 2022 December 31, 2021 Fair Value Fair Value Corporate bonds $ 14,649 $ — U.S. Treasury securities 3,945 — Total available-for-sale securities $ 18,594 $ — |
Certain Balance Sheet Accounts
Certain Balance Sheet Accounts (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
Summary of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of the following (in thousands): December 31, 2022 December 31, 2021 Recoverable research and development tax credits $ 6,492 $ 6,523 Prepaid research and development expenses 2,549 2,906 Prepaid expenses 1,330 1,491 Other assets 456 852 Total prepaid expenses and other current assets $ 10,827 $ 11,772 |
Summary of Accrued Expenses | Accrued expenses consist of the following (in thousands): December 31 2022 December 31, 2021 Accrued payroll $ 2,900 $ 2,220 Accrued research and development expenses 1,902 2,159 Other accrued expenses 245 248 Total accrued expenses $ 5,047 $ 4,627 |
Redeemable Convertible Prefer_3
Redeemable Convertible Preferred Stock Tranche Liability (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Temporary Equity Disclosure [Abstract] | |
Schedule of Valuation of the Redeemable Convertible Preferred Stock Tranche Liability | The following reflects the significant quantitative inputs used in the valuation of the redeemable convertible preferred stock tranche liability: Series A-1 Tranche Call Option Estimated fair value of redeemable convertible preferred stock $ 6.94 - $ 11.10 Discount rate 0.10 % Dividend yield 0 % Expected term (years) 0.25 - 0.45 Expected volatility N/A Probability of milestone achievement 80 % - 100 % Strike price $ 7.80 Fair value of each tranche feature $ 0.86 - $ 3.32 |
Schedule of the Roll Forward Redeemable Convertible Preferred Stock Tranche Liability | A rollforward of the redeemable convertible preferred stock tranche liability is as follows (in thousands): Balance at December 31, 2020 $ 551 Change in fair value 11,718 Settlement upon issuance of Series A-1 redeemable convertible preferred stock ( 12,269 ) Balance at December 31, 2021 $ — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Future Minimum Lease Payments Under Non-Cancelable Operating Leases | As of December 31, 2022, the annual future minimum lease payments due under the Company's non-cancelable operating leases are as follows: Amount (In thousands) 2023 $ 321 2024 172 2025 15 Total undiscounted lease payments $ 508 Present value adjustment ( 28 ) Total operating lease liabilities $ 480 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Stock Option Activities | Weighted Average Weighted Remaining Aggregate Average Contract Intrinsic Options Exercise Terms Values Outstanding Price (in years) (in thousands) Balance as of December 31, 2021 2,922,135 $ 3.62 9.14 $ 21,144 Options granted 3,150,770 5.68 Options cancelled and forfeited ( 84,634 ) 3.87 Options exercised — — — Balance as of December 31, 2022 5,988,271 $ 4.70 8.83 5,699 Vested and expected to vest, December 31, 2022 (1) 5,943,271 $ 4.67 8.83 5,699 Options exercisable as of December 31, 2022 1,824,032 $ 3.69 8.25 3,078 |
ScheduleOfShareBasedPaymentAwardStockOptionsValuationAssumptionsTableTextBlock | The fair value of the Company’s stock option awards was estimated at the date of grant using a Black-Scholes option pricing model with the following assumptions for the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 2021 Expected term (in years) 5.50 - 6.50 5.78 - 6.08 Expected volatility 77.33 % - 91.74 % 77.19 % - 79.57 % Risk-free interest rate 1.69 % - 4.22 % 0.91 % - 1.84 % Expected dividend yield 0.00 % 0.00 % |
Summary of Restricted Stock Awards | The activity for restricted stock awards is as follows: Weighted-Average Number of Shares Value Unvested at December 31, 2021 332,364 $ 7.30 Granted — — Vested ( 154,869 ) 6.83 Forfeited — — Unvested at December 31, 2022 177,495 $ 8.32 The fair value of restricted stock awards vested during the years ended December 31, 2022 and 2021 was approximately $ 0.6 million and $ 0.1 million, respectively. |
Summary of Share-based Compensation Expense | The following table shows stock-based compensation for stock options and restricted stock awards included in the Company’s consolidated statements of operations and comprehensive loss (in thousands): Year Ended December 31, 2022 2021 Research and development expense $ 2,538 $ 987 General and administrative expense 4,453 2,750 Total stock-based compensation expense $ 6,991 $ 3,737 |
Net Loss Per Share Attributab_2
Net Loss Per Share Attributable to Common Stockholders (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Loss Per Share | The following table shows the computation of basic and diluted net loss per share (in thousands, except share and per share data): Year Ended December 31, 2022 2021 Net loss $ ( 45,244 ) $ ( 47,480 ) Accretion of redeemable convertible preferred stock to redemption value and cumulative preferred stock dividends — ( 4,548 ) Net loss attributable to common stockholders $ ( 45,244 ) $ ( 52,028 ) Weighted-average shares used in computing net loss per share 26,311,554 12,260,551 Net loss per share attributable to common stockholders, basic $ ( 1.72 ) $ ( 4.24 ) |
Schedule of Antidilutive Securities Excluded from Computation of Net Loss Per Share Attributable To Common Stockholders | The following outstanding shares of potentially dilutive securities were excluded from the computation of the diluted net loss per share attributable to common stockholders for the periods presented because their effect would have been anti-dilutive: Year Ended December 31, 2022 2021 Common stock options 5,988,271 2,922,135 Unvested restricted stock awards 177,495 332,364 Total potentially dilutive shares 6,165,766 3,254,499 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Components of Net Loss Before Tax Provision from Income Taxes | The components of net loss before tax provision from income taxes are as follows (in thousands): Year Ended December 31, 2022 2021 United States $ ( 6,272 ) $ ( 13,310 ) United Kingdom ( 38,972 ) ( 34,170 ) Total $ ( 45,244 ) $ ( 47,480 ) |
Schedule of Reconciliation of Statutory Federal Income Tax Rate to Provision for Income Taxes | The following table presents a reconciliation of the Company’s expected tax computed at the U.S. statutory federal income tax rate to the total provision for income taxes (in thousands): Year Ended December 31, 2022 2021 U.S. federal taxes at statutory rate $ ( 9,497 ) $ ( 9,959 ) State taxes, net of federal benefit 1 4 Foreign rate differential 471 397 Non-deductible expenses 1 ( 11 ) Research credit addback 4,220 4,154 Refundable tax credit ( 1,407 ) ( 1,385 ) Mark-to-market adjustment — 2,461 Stock-based compensation 742 480 Tax credits ( 110 ) ( 39 ) U.K. tax rate change impact on deferred income taxes ( 1,390 ) ( 1,845 ) Other, net ( 2 ) 219 Change in valuation allowance 6,971 5,524 Total $ — $ — |
Schedule of Deferred Tax Assets and Liabilities | The significant components of the Company's deferred tax assets and liabilities are presented below (in thousands): Year Ended December 31, 2022 2021 Deferred tax assets: Stock-based compensation $ 1,105 $ 385 Intangible asset 2,374 3,834 Accrued bonus 334 250 Accrued payroll taxes — 7 Accrued vacation — 19 Operating lease liabilities 70 — Net operating losses 12,413 5,866 Research credits 531 410 Total gross deferred tax assets 16,827 10,771 Deferred tax liabilities: Unrealized gain or loss 20 ( 89 ) Operating lease right-of-use assets ( 65 ) — Other ( 23 ) ( 11 ) Total gross deferred tax liabilities ( 68 ) ( 100 ) Valuation allowance ( 16,759 ) ( 10,671 ) Net deferred tax liabilities $ — $ — |
Nature of Operations and Basi_2
Nature of Operations and Basis of Presentation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Aug. 12, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Subsidiary Sale Of Stock [Line Items] | |||
Entity incorporation date | Oct. 18, 2018 | ||
Reserve stock split, conversion ratio | 1-for-2 | ||
Convertible preferred stock, shares issued upon conversion | 152,800,000 | ||
Accumulated deficit | $ 120,860 | $ 75,616 | |
Cash, Cash Equivalents, and Short-term Investments | $ 123,600 | ||
IPO [Member] | |||
Subsidiary Sale Of Stock [Line Items] | |||
Proceeds from issuance of common stock in initial public offering, Shares | 7,360,000 | ||
Shares issued price per share | $ 12.50 | ||
Gross proceeds | $ 92,000 | ||
Proceeds from issuance initial public offering net | 83,100 | ||
Underwriting Discount | 6,400 | ||
Deferred offering costs | $ 2,500 | ||
Convertible preferred stock, shares issued upon conversion | 15,345,279 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Schedule of Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets: | ||
Assets Fair Value Disclosure | $ 107,453 | $ 145,034 |
Level 1 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 57,923 | 34,536 |
Level 2 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 49,530 | 110,498 |
Level 3 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 0 | 0 |
Money Market Funds [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 27,472 | 30,557 |
Money Market Funds [Member] | Level 1 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 27,472 | 30,557 |
Money Market Funds [Member] | Level 2 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 0 | 0 |
Money Market Funds [Member] | Level 3 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 0 | 0 |
US Government Debt Securities [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 30,451 | 3,979 |
US Government Debt Securities [Member] | Level 1 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 30,451 | 3,979 |
US Government Debt Securities [Member] | Level 2 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 0 | 0 |
US Government Debt Securities [Member] | Level 3 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 0 | 0 |
Commercial Paper [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 29,543 | 54,363 |
Commercial Paper [Member] | Level 1 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 0 | 0 |
Commercial Paper [Member] | Level 2 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 29,543 | 54,363 |
Commercial Paper [Member] | Level 3 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 0 | 0 |
Corporate Bond Securities [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 16,626 | 56,135 |
Corporate Bond Securities [Member] | Level 1 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 0 | 0 |
Corporate Bond Securities [Member] | Level 2 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 16,626 | 56,135 |
Corporate Bond Securities [Member] | Level 3 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 0 | 0 |
U.S. government agency debt securities [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 3,361 | |
U.S. government agency debt securities [Member] | Level 1 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 0 | |
U.S. government agency debt securities [Member] | Level 2 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 3,361 | |
U.S. government agency debt securities [Member] | Level 3 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 0 | |
Total Marketable Securities [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 79,981 | 114,477 |
Total Marketable Securities [Member] | Level 1 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 30,451 | 3,979 |
Total Marketable Securities [Member] | Level 2 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | 49,530 | 110,498 |
Total Marketable Securities [Member] | Level 3 [Member] | ||
Assets: | ||
Assets Fair Value Disclosure | $ 0 | $ 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Research and development tax credit receivable (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | ||
Balance at beginning of period | $ 6,523 | $ 2,633 |
Recognition of credit claims | 6,683 | 6,596 |
Receipt of credit claims | (5,462) | (2,377) |
Foreign currency loss | (1,252) | (329) |
Balance at end of period | $ 6,492 | $ 6,523 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands | 12 Months Ended | ||||
Jan. 01, 2022 USD ($) | Dec. 31, 2022 USD ($) Segments shares | Dec. 31, 2021 USD ($) shares | Aug. 12, 2021 USD ($) | Dec. 31, 2020 shares | |
Subsidiary Sale Of Stock [Line Items] | |||||
Number of Operating Segments | Segments | 1 | ||||
Tax Credits receivable | $ 6,500 | $ 6,500 | |||
Reserve stock split, conversion ratio | 1-for-2 | ||||
Common Stock, Conversion Basis | 1-for-1 | ||||
Interest and penalties | $ 0 | ||||
Redemption date | Oct. 31, 2026 | ||||
Right-of-use assets obtained in exchange for lease liabilities | $ 900 | $ 915 | $ 0 | ||
Operating lease liabilities | 900 | $ 480 | |||
Derecognized deferred rent and other lease liabilities | $ 12,000 | ||||
IPO [Member] | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Deferred offering costs | $ 2,500 | ||||
Redeemable Convertible Preferred Stock [Member] | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Temporary Equity, Shares Outstanding | shares | 0 | 0 | 7,140,157 | ||
Redeemable Convertible Preferred Stock [Member] | IPO [Member] | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Unit conversion ratio | 1-for-1 | ||||
Fair Value, Inputs, Level 1, 2 and 3 [Member] | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Fair value transfer amount | $ 0 | $ 0 |
Investments - Investments consi
Investments - Investments consists of available-for-sale securities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Short Term Marketable Securities [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | $ 80,339 | $ 89,594 |
Unrealized Gain | 8 | 0 |
Unrealized Loss | 366 | 36 |
Estimated Fair Value | 79,981 | 89,558 |
Short Term Marketable Securities [Member] | Commercial Paper [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 29,543 | 54,363 |
Unrealized Gain | 0 | 0 |
Unrealized Loss | 0 | 1 |
Estimated Fair Value | 29,543 | 54,362 |
Short Term Marketable Securities [Member] | U.S. Treasury securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 30,628 | |
Unrealized Gain | 0 | |
Unrealized Loss | 177 | |
Estimated Fair Value | 30,451 | |
Short Term Marketable Securities [Member] | Corporate Bond [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 16,815 | 35,231 |
Unrealized Gain | 0 | 0 |
Unrealized Loss | 189 | 35 |
Estimated Fair Value | 16,626 | 35,196 |
Short Term Marketable Securities [Member] | U.S. government agency debt securities [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 3,353 | |
Unrealized Gain | 8 | |
Unrealized Loss | 0 | |
Estimated Fair Value | $ 3,361 | |
Long Term Marketable Securities [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 25,006 | |
Unrealized Gain | 0 | |
Unrealized Loss | 87 | |
Estimated Fair Value | 24,919 | |
Long Term Marketable Securities [Member] | U.S. Treasury securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 3,996 | |
Unrealized Gain | 0 | |
Unrealized Loss | 17 | |
Estimated Fair Value | 3,979 | |
Long Term Marketable Securities [Member] | Corporate Bond [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 21,010 | |
Unrealized Gain | 0 | |
Unrealized Loss | 70 | |
Estimated Fair Value | $ 20,940 |
Investments - Additional Inform
Investments - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Summary Of Investment Holdings [Line Items] | ||
Impairment loss on available for sale investment | $ 0 | |
Realized gain or loss on available-for-sale securities | 0 | |
Prepaid Expenses and Other Current Assets | ||
Summary Of Investment Holdings [Line Items] | ||
Accrued interest receivable | $ 100 | $ 500 |
Investments - Investments in a
Investments - Investments in a continual unrealized loss position (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-Sale [Line Items] | ||
Continuous unrealized loss position, less than 12 months | $ 28,483 | $ 64,109 |
Continuous unrealized loss position, 12 months or longer | 18,594 | 0 |
Commercial Paper [Member] | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Continuous unrealized loss position, less than 12 months | 0 | 3,995 |
US Treasury Securities [Member] | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Continuous unrealized loss position, less than 12 months | 26,506 | 0 |
Continuous unrealized loss position, 12 months or longer | 3,945 | 0 |
Corporate Bond Securities [Member] | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Continuous unrealized loss position, less than 12 months | 1,977 | 60,114 |
Continuous unrealized loss position, 12 months or longer | $ 14,649 | $ 0 |
Certain Balance Sheet Account_2
Certain Balance Sheet Accounts - Summary of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Balance Sheet Related Disclosures [Abstract] | ||
Recoverable research and development tax credits | $ 6,492 | $ 6,523 |
Prepaid research and development expenses | 2,549 | 2,906 |
Prepaid expenses | 1,330 | 1,491 |
Other assets | 456 | 852 |
Total prepaid expenses and other current assets | $ 10,827 | $ 11,772 |
Certain Balance Sheet Account_3
Certain Balance Sheet Accounts - Summary of Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Balance Sheet Related Disclosures [Abstract] | ||
Accrued payroll | $ 2,900 | $ 2,220 |
Accrued research and development expenses | 1,902 | 2,159 |
Other accrued expenses | 245 | 248 |
Total accrued expenses | $ 5,047 | $ 4,627 |
Redeemable Convertible Prefer_4
Redeemable Convertible Preferred Stock - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
May 31, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Aug. 12, 2021 | Dec. 31, 2020 | |
Temporary Equity [Line Items] | ||||||
Proceeds from issuance of redeemable convertible preferred stock and related tranche rights, net of issuance costs | $ 0 | $ 93,939,000 | ||||
Redeemable convertible preferred stock tranche liability | $ 0 | $ 551,000 | ||||
Common stock, shares issued | 26,567,681 | 26,567,681 | ||||
Redemption date | Oct. 31, 2026 | |||||
Series A1 Redeemable Convertible Preferred Stock [Member] | ||||||
Temporary Equity [Line Items] | ||||||
Stock Issued During Period, Shares, New Issues | 4,358,972 | |||||
Proceeds from issuance of redeemable convertible preferred stock and related tranche rights, net of issuance costs | $ 34,000 | |||||
Redeemable convertible preferred stock tranche liability | $ 12,300,000 | |||||
Series B Redeemable Convertible Preferred Stock [Member] | ||||||
Temporary Equity [Line Items] | ||||||
Stock Issued During Period, Shares, New Issues | 3,846,150 | |||||
Proceeds from issuance of redeemable convertible preferred stock and related tranche rights, net of issuance costs | $ 60,000 | |||||
Redeemable Convertible Preferred Stock [Member] | ||||||
Temporary Equity [Line Items] | ||||||
Temporary Equity, Shares Outstanding | 0 | 0 | 7,140,157 | |||
Common stock, shares issued | 15,345,279 |
Redeemable Convertible Prefer_5
Redeemable Convertible Preferred Stock Tranche Liability - Additional Information - (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Oct. 31, 2020 | |
Temporary Equity [Line Items] | |||
Change in fair value of redeemable convertible preferred stock tranche liability | $ 0 | $ 11,718 | |
Series A1 Redeemable Convertible Preferred Tranche Liability | |||
Temporary Equity [Line Items] | |||
Temporary Equity, par value | $ 0.86 | ||
Change in fair value of redeemable convertible preferred stock tranche liability | $ 11,700 | ||
Series A1 Preferred Stock [Member] | |||
Temporary Equity [Line Items] | |||
Change in fair value of redeemable convertible preferred stock tranche liability | $ 12,300 |
Redeemable Convertible Prefer_6
Redeemable Convertible Preferred Stock Tranche Liability - Schedule of Valuation of The Redeemable Convertible Preferred Stock Tranche Liability (Details) - Series A1 Tranche Call Option [Member] | 12 Months Ended |
Dec. 31, 2022 $ / shares | |
Temporary Equity [Line Items] | |
Discount rate | 0.10% |
Dividend yield | 0% |
Strike price | $ 7.80 |
Minimum [Member] | |
Temporary Equity [Line Items] | |
Estimated fair value of redeemable convertible preferred stock | $ 6.94 |
Expected term (years) | 3 months |
Probability of milestone achievement | 80% |
Fair value of each tranche feature | $ 0.86 |
Maximum [Member] | |
Temporary Equity [Line Items] | |
Estimated fair value of redeemable convertible preferred stock | $ 11.10 |
Expected term (years) | 5 months 12 days |
Probability of milestone achievement | 100% |
Fair value of each tranche feature | $ 3.32 |
Redeemable Convertible Prefer_7
Redeemable Convertible Preferred Stock Tranche Liability - Schedule of The Roll Forward Redeemable Convertible Preferred Stock Tranche Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Temporary Equity Disclosure [Abstract] | ||
Beginning Balance | $ 0 | $ 551 |
Change in fair value of redeemable convertible preferred stock tranche liability | $ 0 | 11,718 |
Reclassification Of Redeemable Convertible Preferred Stock Tranche Liability Upon Settlement | (12,269) | |
Ending Balance | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | 1 Months Ended | 12 Months Ended | |
Nov. 30, 2021 SquareFeet | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |||
Rent expense | $ 500 | $ 200 | |
Operating lease, total space of the office | SquareFeet | 5,000 | ||
Operating lease, term of contract | 39 months | ||
Addional operating lease, term of contract | 3 years | ||
Operating Lease, Weighted Average Remaining Lease Term | 1 year 7 months 6 days | ||
Weighted Average Discount Rate | 7.50% | ||
Non-cash operating lease expense | $ 443,000 | $ 0 |
Commitments and Contingencies_2
Commitments and Contingencies - Future Minimum Lease Payments Under Non-Cancelable Operating Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jan. 01, 2022 |
Leases [Abstract] | ||
2023 | $ 321 | |
2024 | 172 | |
2025 | 15 | |
Total minimum lease commitments | 508 | |
Present value adjustment | (28) | |
Total operating lease liabilities | $ 480 | $ 900 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Employees Including Executive Officers Earning Contribution | 15% | ||
Percentage of fair market value, common stock | 85% | ||
Share-based payment award, option vesting period | 3 years | ||
Stock Options [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based payment award, award vesting rights, percentage | 25% | ||
Share-based payment award, option vesting period | 4 years | ||
Options grants in period, weighted average grant date fair value | $ 4 | $ 7.39 | |
Unrecognized compensation cost | $ 18,100 | ||
Unrecognized compensation, weighted average amortization period | 2 years 9 months | ||
Restricted Stock [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based payment award, award vesting rights, percentage | 25% | ||
Number of shares, Granted | 0 | ||
Unrecognized compensation cost | $ 1,500 | ||
Fair value of restricted stock vested | 600,000 | $ 100,000 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | $ 600,000 | $ 100,000 | |
Unvested restricted stock awards [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Unrecognized compensation, weighted average amortization period | 2 years 4 months 2 days | ||
2019 Equity Incentive Plan [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based payment award, description | Under the terms of the 2019 Plan, options are granted at an exercise price no less than fair value of the Company’s common stock on the grant date, except in certain cases related to employees outside of the U.S. However, for any employee who is a 10% or greater stockholder, options are granted at an exercise price no less than 110% of the fair value of the Company’s common stock on the grant date. Option awards granted typically have 10-year terms measured from the option grant date. However, if any employee is a 10% or greater stockholder, the awards have 5-year terms measured from the option grant date. While no shares are available for future issuance under the 2019 Plan, it continues to govern outstanding equity awards granted thereunder. | ||
Share based payment award, purchase price of common stock, percent | 110% | ||
Share-based payment award, expiration period | 5 years | 10 years | |
2021 Equity Incentive Plan [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based payment award, description | The compensation committee of the Company's board of directors adopted and the Company's stockholders approved the 2021 Equity Incentive Plan (2021 Plan) and the 2021 Employee Stock Purchase Plan (the ESPP), which became effective immediately prior to the effectiveness of the Company's IPO. The 2021 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units, stock appreciation rights and other stock-based awards. The Company's employees, officers, directors and consultants are eligible to receive awards under the 2021 Plan. Under the terms of the 2021 Plan, options are granted at an exercise price no less than fair value of the Company’s common stock on the grant date, except in certain cases related to significant corporate transactions. Option awards granted typically have 10-year terms measured from the option grant date. As of December 31, 2022, the total number of shares authorized for issuance under the 2021 Plan was 3,887,174. In addition, the number of shares of common stock reserved for issuance under our 2021 Plan will automatically increase on January 1 of each year, beginning on January 1, 2022, and continuing through and including January 1, 2031, by 5% of the total number of shares of common stock outstanding on December 31 of the immediately preceding calendar year, or a lesser number of shares determined by our board prior to the applicable January 1st. | ||
Share-based payment award, expiration period | 10 years | ||
Share-based payment award, number of shares authorized | 3,887,174 | ||
Number of shares of common stock outstanding percentage | 5% | ||
ESPP [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based payment award, description | The ESPP allows employees, including executive officers, to contribute up to 15% of their earnings, subject to certain limitations, for the purchase of the Company's common stock at a price per share equal to the lower of (a) 85% of the fair market value of a share of common stock on the first day of the offering period, or (b) 85% of the fair market value of a share of common stock on the last day of the offering period. As of December 31, 2022, there were 521,555 shares of common stock reserved for future issuance under our ESPP plan. The number of shares of common stock reserved for issuance under our ESPP will automatically increase on January 1 of each calendar year, beginning on January 1, 2022 and continuing through and including January 1, 2031, by the lesser of (1) 1% of the total number of shares of our common stock outstanding on December 31 of the preceding calendar year or (2) a number of shares determined by our board. Shares subject to purchase rights granted under our ESPP that terminate without having been exercised in full will not reduce the number of shares available for issuance under the ESPP.As of December 31, 2022, no shares have been granted or purchased under the ESPP. | ||
Number of shares of common stock outstanding percentage | 1% | ||
Common stock reserved for future issuance | 521,555 | ||
Number of shares, Granted | 0 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activities (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Share-Based Payment Arrangement [Abstract] | |||
Number of options outstanding, beginning of period | 2,922,135 | ||
Number of options granted | 3,150,770 | ||
Number of options, forfeited | (84,634) | ||
Number of options exercised | 0 | ||
Number of options outstanding, ending of period | 5,988,271 | 2,922,135 | |
Number of options, vested and expected to vest | [1] | 5,943,271 | |
Number of options exercisable, end of period | 1,824,032 | ||
Weighted average exercise price outstanding, beginning of period | $ 3.62 | ||
Weighted average exercise price, options granted | 5.68 | ||
Weighted average exercise price, options cancelled and forfeited | 3.87 | ||
Weighted average exercise price, options exercised | 0 | ||
Weighted average exercise price outstanding, end of period | 4.70 | $ 3.62 | |
Weighted average exercise price, options vested and expected to vest | [1] | 4.67 | |
Weighted average exercise price, options exercisable | $ 3.69 | ||
Weighted average remaining contracted terms (in years) outstanding, beginning of period | 8 years 9 months 29 days | ||
Weighted average remaining contracted terms (in years) outstanding, end of period | 9 years 1 month 20 days | ||
Weighted average remaining contracted terms (in years), vested and expected to vest | [1] | 8 years 9 months 29 days | |
Weighted average remaining contracted terms (in years), exercisable at end of period | 8 years 3 months | ||
Aggregate intrinsic value options exercised | $ 21,144 | ||
Aggregate intrinsic value options exercised | 0 | ||
Aggregate intrinsic value outstanding, end of period | 5,699 | $ 21,144 | |
Aggregate intrinsic value options vested and expected to vest | [1] | 5,699 | |
Aggregate intrinsic value options exercisable | $ 3,078 | ||
[1] (1) Excludes 45,000 stock options awards outstanding for the period ended December 31, 2022, subject to only performance conditions that have been assessed and deemed not probable |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options (Parenthetical) (Details) | 12 Months Ended |
Dec. 31, 2022 shares | |
Performance Shares [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Stock Option Award Outstanding | 45,000 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Assumptions Used in Black-Scholes Model (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Risk-free interest rate, Minimum | 1.69% | 0.91% |
Risk-free interest rate, Maximum | 4.22% | 1.84% |
Dividend yield | 0% | 0% |
Minimum [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (in years) | 5 years 6 months | 5 years 9 months 10 days |
Expected volatility, Minimum | 77.33% | 77.19% |
Maximum [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (in years) | 6 years 6 months | 6 years 29 days |
Expected volatility, Maximum | 91.74% | 79.57% |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Restricted Stock Awards (Details) - Restricted Stock [Member] | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of shares, Unvested | shares | 332,364 |
Number of shares, Granted | shares | 0 |
Number of shares, Vested | shares | (154,869) |
Number of shares, Forfeited | shares | 0 |
Number of shares, Unvested | shares | 177,495 |
Unvested, weighted average grant date fair value per share, beginning balance | $ / shares | $ 7.30 |
Granted, weighted average grant date fair value | $ / shares | 0 |
Vested, weighted average grant date fair value per share | $ / shares | 6.83 |
Forfeited, weighted average grant date fair value per share | $ / shares | 0 |
Unvested, weighted average grant date fair value per share, ending balance | $ / shares | $ 8.32 |
Stock-Based Compensation - Su_4
Stock-Based Compensation - Summary of Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 6,991 | $ 3,737 |
Research and Development Expense | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | 2,538 | 987 |
General and Administrative Expense | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 4,453 | $ 2,750 |
Net Loss Per Share Attributab_3
Net Loss Per Share Attributable to Common Stockholders - Schedule of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (45,244) | $ (47,480) |
Accretion of redeemable convertible preferred stock to redemption value and cumulative preferred stock dividends | 0 | (4,548) |
Net loss attributable to common stockholders | $ (45,244) | $ (52,028) |
Weighted-average shares used in computing net loss per share attributable to common stockholders diluted | 26,311,554 | 12,260,551 |
Net loss per share attributable to common stockholders, diluted | $ (1.72) | $ (4.24) |
Net loss per share attributable to common stockholders, basic | $ (1.72) | $ (4.24) |
Net Loss Per Share Attributab_4
Net Loss Per Share Attributable to Common Stockholders - Schedule of Antidilutive Securities Excluded from Computation of Net Loss Per Share Attributable To Common Stockholders (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Redeemable convertible preferred stock | 6,165,766 | 3,254,499 |
Common stock options [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Redeemable convertible preferred stock | 5,988,271 | 2,922,135 |
Unvested restricted stock awards [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Redeemable convertible preferred stock | 177,495 | 332,364 |
Income Taxes - Additional infor
Income Taxes - Additional information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating Loss Carryforwards [Line Items] | ||
Valuation Allowance | $ (16,759,000) | $ (10,671,000) |
Research and development credits | 531,000 | 410,000 |
Uncertain tax positions | $ 0 | $ 0 |
Cumulative change in ownership percentage | 50% | |
Earliest Tax Year | ||
Operating Loss Carryforwards [Line Items] | ||
Taxable years | Dec. 31, 2018 | |
Federal [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforward | $ 7,100 | |
Research and development credits | $ 500,000 | |
Tax credit carryforward expiration year | 2039 | |
State [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforward | $ 8,200 | |
Net operating loss carryforward expiration year | 2039 | |
Research and development credits | $ 100,000 | |
Tax credit carryforward expiration year | 2035 | |
Foreign [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforward | $ 41,600 |
Income Taxes - Components of Ne
Income Taxes - Components of Net Loss Before Tax Provision from Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating Loss Carryforwards [Line Items] | ||
Net loss | $ (45,244) | $ (47,480) |
United States | ||
Operating Loss Carryforwards [Line Items] | ||
Net loss | (6,272) | (13,310) |
United Kingdom | ||
Operating Loss Carryforwards [Line Items] | ||
Net loss | $ (38,972) | $ (34,170) |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Statutory Federal Income Tax Rate to Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
U.S. federal taxes at statutory rate | $ (9,497) | $ (9,959) |
State taxes, net of federal benefit | 1 | 4 |
Foreign rate differential | 471 | 397 |
Non-deductible expenses | (1) | (11) |
Research credit addback | 4,220 | 4,154 |
Refundable tax credit | (1,407) | (1,385) |
Mark-to-market adjustment | 0 | 2,461 |
Stock-based compensation | 742 | 480 |
Tax credits | (110) | (39) |
U.K. tax rate change impact on deferred income taxes | (1,390) | 1,845 |
Other, net | 2 | 219 |
Change in valuation allowance | 6,971 | 5,524 |
Total | $ 0 | $ 0 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Stock-based compensation | $ 1,105 | $ 385 |
Intangible asset | 2,374 | 3,834 |
Accrued bonus | 334 | 250 |
Accrued payroll taxes | 0 | 7 |
Accrued vacation | 0 | 19 |
Operating lease liabilities | 70 | 0 |
Net operating losses | 12,413 | 5,866 |
Research credits | 531 | 410 |
Total gross deferred tax assets | 16,827 | 10,771 |
Deferred tax liabilities: | ||
Unrealized gain or loss | (20) | (89) |
Operating lease right-of-use assets | (65) | 0 |
Other | (23) | (11) |
Total gross deferred tax liabilities | (68) | (100) |
Valuation Allowance | (16,759) | (10,671) |
Net deferred tax liabilities | $ 0 | $ 0 |
Asset Acquisitions with Related
Asset Acquisitions with Related Parties - Additional Information (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Asset Acquisition [Line Items] | ||
Reserve stock split, conversion ratio | 1-for-2 | |
Common stock, shares issued | 26,567,681 | 26,567,681 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Defined Contribution Plan - Add
Defined Contribution Plan - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Total expense recognized from matching contributions | $ 0.1 | $ 0.1 |
Total contribution amount | $ 0.2 | $ 0.1 |
Maximum [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined contribution plan, employer matching contribution, percentage of employee's eligilble compensation | 4% |
Subsequent events - Additional
Subsequent events - Additional Information (Details) - Subsequent Event [Member] - Restructuing Plan [Member] $ in Millions | Feb. 07, 2023 USD ($) |
Restructuring Cost and Reserve [Line Items] | |
Restructuring plan ,percentage of workforce or reduced | 55% |
Restructuring and Related Cost Ex pected cost 1 | $ 17.1 |
Restructuring Charges Cash | $ 7.3 |