Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 03, 2023 | Jun. 30, 2022 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Year Focus | 2022 | ||
Document Transition Report | false | ||
Entity File Number | 001-40523 | ||
Entity Registrant Name | ELEVATION ONCOLOGY, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 84-1771427 | ||
Entity Address, Address Line One | 888 Seventh Ave | ||
Entity Address, Address Line Two | 12th Floor | ||
Entity Address, City or Town | New York | ||
Entity Address State Or Province | NY | ||
Entity Address, Postal Zip Code | 10106 | ||
City Area Code | 716 | ||
Local Phone Number | 371-1125 | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Title of 12(b) Security | Common stock, par value $0.0001 per share | ||
Trading Symbol | ELEV | ||
Security Exchange Name | NASDAQ | ||
ICFR Auditor Attestation Flag | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 22.3 | ||
Entity Common Stock, Shares Outstanding | 23,666,326 | ||
Auditor Name | CohnReznick LLP | ||
Auditor Firm ID | 596 | ||
Auditor Location | Tysons, Virginia, United States | ||
Entity Central Index Key | 0001783032 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 45,917 | $ 146,284 |
Marketable securities, available for sale | 44,363 | 0 |
Prepaid expenses and other current assets | 2,697 | 3,140 |
Total current assets | 92,977 | 149,424 |
Property and equipment, net | 98 | 38 |
Other assets, net | 1,086 | 32 |
Total assets | 94,161 | 149,494 |
Current liabilities: | ||
Accounts payable | 6,362 | 5,648 |
Accrued expenses | 9,330 | 3,141 |
Total current liabilities | 15,692 | 8,789 |
Non-current liabilities: | ||
Long-term debt, net of discount | 29,435 | 0 |
Restricted stock repurchase liability | 2 | 8 |
Total liabilities | 45,129 | 8,797 |
Commitments and contingencies (see note 12) | ||
Stockholders' equity: | ||
Preferred stock, $0.0001 par value; 10,000,000 shares authorized as of December 31, 2022 and 2021; no shares issued or outstanding as of December 31, 2022 and 2021, respectively | 0 | 0 |
Common stock, $0.0001 par value; 500,000,000 shares authorized as of December 31, 2022 and 2021, respectively; 23,321,247 and 23,225,637 issued as of December 31, 2022 and 2021, respectively; 23,312,529 and 23,205,915 outstanding as of December 31, 2022 and 2021, respectively | 2 | 2 |
Additional paid-in capital | 199,492 | 195,881 |
Accumulated other comprehensive loss | (161) | 0 |
Treasury stock; 28,641 shares as of December 31, 2022; at cost | (35) | 0 |
Accumulated deficit | (150,266) | (55,186) |
Total stockholders' equity | 49,032 | 140,697 |
Total liabilities, convertible preferred stock and stockholders' equity | $ 94,161 | $ 149,494 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Consolidated Balance Sheets | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 23,321,247 | 23,225,637 |
Common stock, shares outstanding | 23,312,529 | 23,205,915 |
Treasury Stock, Common, Shares | 28,641 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating expenses: | ||
Research and development | $ 78,717 | $ 23,595 |
General and administrative | 15,832 | 8,451 |
Total operating expenses | 94,549 | 32,046 |
Loss from operations | (94,549) | (32,046) |
Other income (expenses), net | (506) | 7 |
Loss before income taxes | (95,055) | (32,039) |
Income tax expenses | 25 | 0 |
Net loss | $ (95,080) | $ (32,039) |
Net loss per share, basic (in dollars per share) | $ (4.09) | $ (2.64) |
Net loss per share, diluted (in dollars per share) | $ (4.09) | $ (2.64) |
Weighted average common shares outstanding, basic (in shares) | 23,267,120 | 12,132,610 |
Weighted average common shares outstanding, diluted (in shares) | 23,267,120 | 12,132,610 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Consolidated Statements of Comprehensive Loss | ||
Net loss | $ (95,080) | $ (32,039) |
Other comprehensive loss: | ||
Unrealized loss on marketable securities | (161) | 0 |
Total other comprehensive loss | (161) | 0 |
Total comprehensive loss | $ (95,241) | $ (32,039) |
Consolidated Statements of Conv
Consolidated Statements of Convertible Preferred Stock and Stockholders Equity - USD ($) $ in Thousands | Series A Convertible Preferred Stock Preferred Stock | Series B Convertible Preferred Stock Preferred Stock | Common Stock | Additional Paid-in Capital | Treasury Stock, Common | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total |
Stockholders equity, Beginning balance at Dec. 31, 2020 | $ 32,373 | $ 64,815 | $ 0 | $ 66 | $ 0 | $ 0 | $ (23,147) | $ (23,081) |
Stockholders equity, Beginning balance (in shares) at Dec. 31, 2020 | 32,450,000 | 34,043,889 | 800,679 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Vesting of restricted common stock | $ 0 | $ 0 | $ 0 | 7 | 0 | 0 | 0 | 7 |
Vesting of restricted common stock (in shares) | 15,776 | |||||||
Stock-based compensation | 0 | 0 | $ 0 | 1,571 | 0 | 0 | 0 | 1,571 |
Issuance of initial public offering common stock, net | $ (32,373) | $ (64,815) | $ 2 | 194,237 | 0 | 0 | 0 | 194,239 |
Issuance of initial public offering common stock, net (in shares) | (32,450,000) | (34,043,889) | 22,389,460 | |||||
Unrealized loss on marketable securities | 0 | |||||||
Net loss | $ 0 | $ 0 | $ 0 | 0 | 0 | 0 | (32,039) | (32,039) |
Stockholders equity, Ending balance at Dec. 31, 2021 | 0 | 0 | $ 2 | 195,881 | 0 | 0 | (55,186) | 140,697 |
Stockholders equity, Ending balance (in shares) at Dec. 31, 2021 | 23,205,915 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Vesting of restricted common stock | 0 | 0 | $ 0 | 6 | 0 | 0 | 0 | 6 |
Vesting of restricted common stock (in shares) | 15,777 | |||||||
Issuance of common stock upon stock option exercises | 0 | 0 | $ 0 | 19 | 0 | 0 | 0 | $ 19 |
Issuance of common stock upon stock option exercises (in shares) | 44,105 | 44,105 | ||||||
Stock-based compensation | 0 | 0 | $ 0 | 3,206 | 0 | 0 | 0 | $ 3,206 |
Common stock repurchase | 0 | 0 | $ 0 | 0 | (35) | 0 | 0 | (35) |
Common stock repurchase (in shares) | 46,732 | |||||||
Warrant issuance | 0 | 0 | $ 0 | 380 | 0 | 0 | 0 | 380 |
Unrealized loss on marketable securities | 0 | 0 | 0 | 0 | 0 | (161) | 0 | (161) |
Net loss | 0 | 0 | 0 | 0 | 0 | 0 | (95,080) | (95,080) |
Stockholders equity, Ending balance at Dec. 31, 2022 | $ 0 | $ 0 | $ 2 | $ 199,492 | $ (35) | $ (161) | $ (150,266) | $ 49,032 |
Stockholders equity, Ending balance (in shares) at Dec. 31, 2022 | 23,312,529 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating activities | ||
Net loss | $ (95,080) | $ (32,039) |
Reconciliation of net loss to net cash used in operating activities: | ||
Stock-based compensation | 3,206 | 1,571 |
Non-cash interest expense | 285 | 0 |
Accretion of premium and interest on marketable securities | (211) | 0 |
Depreciation expense | 27 | 18 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | (610) | (1,722) |
Accounts payable | 711 | (30) |
Accrued expenses | 6,189 | 2,035 |
Net cash used in operating activities | (85,483) | (30,167) |
Investing activities | ||
Purchases of property and equipment | (86) | 0 |
Purchase of marketable securities | (112,312) | 0 |
Proceeds from sales and maturities of marketable securities | 68,000 | 0 |
Net cash used in investing activities | (44,398) | 0 |
Financing activities | ||
Proceeds from the issuance of restricted common stock | 0 | 97,062 |
Proceeds from issuance of long-term debt | 30,000 | 0 |
Payment of debt issuance cost | (470) | 0 |
Cash paid for issuance costs of convertible preferred stock | 0 | (11) |
Proceeds from issuance of common stock upon stock option exercises | 19 | 0 |
Common stock repurchase | (35) | 0 |
Net cash provided by financing activities | 29,514 | 97,051 |
(Decrease) increase in cash and cash equivalents | (100,367) | 66,884 |
Cash and cash equivalents, beginning of year | 146,284 | 79,400 |
Cash and cash equivalents, end of year | 45,917 | 146,284 |
Supplemental disclosure of cash flow information | ||
Interest paid | 975 | 0 |
Supplemental disclosure of non-cash financing activities | ||
Conversion of convertible preferred stock upon IPO | $ 0 | $ 97,188 |
NATURE OF BUSINESS
NATURE OF BUSINESS | 12 Months Ended |
Dec. 31, 2022 | |
NATURE OF BUSINESS | |
NATURE OF BUSINESS | 1. NATURE OF BUSINESS Elevation Oncology, Inc. (the “Company” or “Elevation”), which was formerly known as 14ner, Inc., was incorporated under the laws of the State of Delaware on April 29, 2019 (“Inception”). The Company is an innovative oncology company focused on the discovery and development of selective cancer therapies to treat patients across a range of solid tumors with significant unmet medical needs. The Company is rethinking drug development by seeking innovative, selective cancer therapies that can be matched to a patient’s unique tumor characteristics. The Company obtained exclusive worldwide rights outside Greater China (the People’s Republic of China, Hong Kong, Macau and Taiwan) to develop and commercialize EO-3021, a clinical stage antibody drug conjugate targeting Claudin 18.2, pursuant to a license agreement executed with CSPC Megalith Biopharmaceutical Co., Ltd., a subsidiary of CSPC Pharmaceutical Group Limited, during the year ended December 31, 2022 (see Note 12). In January 2023, the Company announced that it has paused further investment in the clinical development of seribantumab, an anti-HER3 monoclonal antibody for solid tumors driven by neuregulin-1, or NRG1 fusions, a type of genomic alteration and oncogenic driver in solid tumors. As a result, further enrollment in the Phase 2 CRESTONE study of seribantumab has been paused. Long-term follow-up of all patients who have been treated with seribantumab to date remains ongoing. The Company intends to pursue further clinical development of seribantumab only in collaboration with a partner. The Company is exploring opportunities through new or existing partnerships and business development opportunities to expand its novel oncology pipeline. 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, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. Product candidates currently under development will require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure, and extensive compliance-reporting capabilities. There can be no assurance that the Company’s research and development of its product candidates will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained, 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 significant revenue from product sales. The Company operates in an environment of rapid change in technology and substantial competition from pharmaceutical and biotechnology companies. The ongoing COVID-19 pandemic has presented a substantial public health and economic challenge around the world and is affecting the Company’s employees, patients, communities and business operations, as well as contributing to significant volatility and negative pressure on the U.S. economy and in financial markets. The extent of the impact of COVID-19 on the Company’s operational and financial performance will continue to depend on certain developments, including the duration and spread of the outbreak, new variants, the vaccination and booster rate, impact on the Company’s clinical studies, employee or industry events, and effect on the Company’s suppliers and manufacturers, all of which are uncertain and cannot be predicted. COVID-19 has not had a significant impact on the operations or financial results of the Company to date. Liquidity In July 2022, the Company entered into the Loan Agreement with K2HV, as administrative agent for the Lenders, and Ankura Trust Company, LLC, as collateral agent for the Lenders. The Loan Agreement provides up to $50.0 million principal in the Term Loan consisting of a first tranche of $30.0 million funded at closing and a subsequent second tranche of up to $20.0 million upon the Company’s request, subject to review by the Lenders of certain information from us and discretionary approval by the Lenders. As of December 31, 2022, the Company had drawn down the first tranche and received net proceeds of $29.5 million. The Company has historical losses from operations and anticipates that it will continue to incur losses for the foreseeable future as it continues the research and development of its product candidates. The Company incurred net losses of $95.1 million and $32.0 million for the years ended December 31, 2022 and 2021, respectively, and had an accumulated deficit of $150.3 million as of December 31, 2022. Through December 31, 2022, the Company has funded its operations with proceeds from the sale of convertible preferred stock, proceeds from its IPO, and borrowings under loan agreements. The Company expects that its cash and cash equivalents will be sufficient to fund its operating expenses and capital expenditure requirements through at least 12 months from the issuance date of the consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Elevation Oncology Securities Corporation, which was established on November 19, 2021. All significant intercompany balances and transaction have been eliminated in consolidation. Use of Estimates The preparation of financial statements in accordance with GAAP requires the use of estimates and assumptions, based on judgments considered reasonable, which affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. The Company bases its estimates and assumptions on known trends and events and various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the accruals for research and development expenses, the valuation of common stock and the assumptions used in the valuation of share-based compensation awards. Changes in estimates are recorded in the period in which they become known. Due to the risks and uncertainties involved in the Company’s business and evolving market conditions and, given the subjective element of the estimates and assumptions made, actual results may differ from estimated results. Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available and regularly reviewed by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment, which is the discovery and development of cancer therapies for patient populations with significant unmet medical needs. All material long-lived assets of the Company reside in the United States. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. As of December 31, 2022 and 2021, cash equivalents consisted of money market funds. The Company places its cash with a high-credit-quality financial institution domiciled in the United States. Deferred Financing Costs The incremental cost, including the fair value of warrants, directly associated with obtaining debt financing is capitalized as deferred financing costs upon the issuance of the debt and amortized over the term of the related debt agreement using the effective-interest method with such amortized amounts included as a component of interest expense in the consolidated statements of operations. Unamortized deferred financing costs are presented on the consolidated balance sheets as a direct deduction from the carrying amount of the related debt obligation. Concentrations of Credit Risk and Significant Suppliers Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents. The Company’s money market funds are invested in highly rated funds. Periodically, the Company maintains deposits in accredited financial institutions in excess of federally insured limits. The Company has not experienced any losses on its deposits of cash and cash equivalents and does not believe that it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships. The Company is dependent on third-party manufacturers to supply products for research and development activities of its programs, including preclinical and clinical testing. These programs could be adversely affected by a significant interruption in the supply of such drug substance and drug products. During the years ended December 31, 2022 and 2021, the Company had three and two vendors that accounted for approximately 78% and 61% of its research and development expense, respectively. As of December 31, 2022 and 2021, the Company had two and one vendor(s) that accounted for approximately 87% and 74% of the total accounts payable, respectively. Property and Equipment Property and equipment consist of computer software that is recorded at cost and depreciated on a straight-line basis over the estimated useful lives of the assets. Upon retirement or sale, the cost of the disposed asset and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized. The Company reviews its long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying value of assets may not be recoverable. Recoverability is measured by comparison of the asset’s book value to future net undiscounted cash flows that the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the book value of the assets exceed their fair value, which is measured based on the projected discounted future net cash flows arising from the assets. No impairment losses have been recorded through December 31, 2022. Cloud Computing Arrangements The Company defers implementation costs incurred in cloud computing hosting arrangements in accordance with Accounting Standards Update (“ASU”) 2018-15 and amortizes these costs over the noncancelable term of the cloud computing arrangement, plus any optional renewal periods (1) that are reasonably certain to be exercised by the Company or (2) for which exercises of the renewal option is controlled by the cloud service provider. Costs incurred during the application development stage are capitalized within either prepaid expenses and other current assets, or in other assets, net on the Company’s balance sheet. Amortization of implementation costs is on a straight-line basis over the related hosting arrangement term and is reflected in research and development expenses in the consolidated statements of operations. Classification and Accretion of Convertible Preferred Stock Prior to the Company’s Initial Public Offering (“IPO”), the Company’s convertible preferred stock was classified outside of stockholders’ deficit on the balance sheet because the holders of such shares had liquidation rights in the event of a deemed liquidation that, in certain situations, were not solely within the control of the Company and would require the redemption of the then-outstanding convertible preferred stock. The convertible preferred stock was not redeemable, except in the event of a deemed liquidation (see Note 7). Because the occurrence of a deemed liquidation event was not considered probable, the carrying values of the convertible preferred stock were not being accreted to their redemption values. Upon the closing the Company’s IPO in June 2021, all outstanding convertible preferred stock automatically converted into shares of common stock. Fair Value Measurements Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) 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. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: ● Level 1—Quoted prices in active markets for identical assets or liabilities. ● Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. ● Level 3—Non-observable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The Company’s cash equivalents are carried at fair value, determined according to the fair value hierarchy described above (see Note 3). Marketable Securities, Available for Sale All marketable securities have been classified as “available-for-sale” and are carried at fair value, based upon quoted market prices. The Company considers its available-for-sale portfolio as available for use in current operations. Accordingly, the Company may classify certain investments as short-term marketable securities, even though the stated maturity date may be one year or more beyond the current balance sheet date. Unrealized gains and losses, net of any related tax effects, are excluded from earnings and are included in other comprehensive income (loss) and reported as a separate component of stockholders’ equity (deficit) until realized. Interest income, realized gains and losses, and declines in value judged to be other than temporary, if any, on available-for-sale securities are included in other income, net. The cost of securities sold is based on the specific-identification method. The amortized cost of securities is adjusted for accretion of premiums and amortization of discounts to maturity. In accordance with the Company’s investment policy, management invests in money market funds, corporate bonds, commercial paper, asset-backed securities and government securities. The Company has not realized any losses on its marketable securities to date. Comprehensive Income (Loss) The Company’s only element of other comprehensive income (loss) is unrealized gains and losses on available-for-sale marketable securities. Patent Costs The legal and professional costs incurred by the Company to maintain its patent rights have been expensed as part of general and administrative expenses since inception. As of December 31, 2022 and 2021, the Company has determined that these expenses have not met the criteria to be capitalized. Intellectual property-related expenses for the years ended December 31, 2022 and 2021 were $0.3 million and $0.2 million, respectively. Research and Development Costs Research and development costs consist of salaries and benefits, including associated stock-based compensation, and fees paid to other entities that conduct certain research and development activities on the Company’s behalf. Research and development costs are expensed as incurred. The Company estimates preclinical study and clinical trial expenses based on the services performed pursuant to contracts with research institutions and contract research organizations and clinical manufacturing organizations that conduct and manage preclinical studies and clinical trials on the Company’s behalf based on actual time and expenses incurred by them. Further, the Company accrues expenses related to clinical trials based on the level of patient activity according to the related agreement. The Company monitors patient enrollment levels and related activity to the extent reasonably possible and adjusts estimates accordingly. The Company accounts for nonrefundable advance payments for goods and services that will be used in future research and development activities as expenses when the services have been performed or when the goods have been received rather than when the payment is made. Although the Company does not expect its estimates to be materially different from amounts actually incurred, its understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period. To date, there have not been any material adjustments to the Company’s prior estimates of accrued research and development expenses. Stock-Based Compensation The Company measures stock-based compensation cost at the accounting measurement date based on the fair value of the award and recognizes the expense on a straight-line basis over the requisite service period of the award, which is typically the vesting period. Compensation expense is measured using the fair value of the award at the grant date and is adjusted to reflect actual forfeitures as they occur. The Company estimates the fair value of stock options using the Black-Scholes option pricing model that takes into account the exercise price, the fair value of the Company’s common stock, the expected term of the option, the expected volatility of the Company’s common stock, expected dividends on the Company’s common stock, and the risk-free interest rate over the expected life of the option. Fair value of common stock— Expected term— Expected volatility— Risk-free interest rate— Expected dividend— The Company classifies stock-based compensation expense in its consolidated statements of operations in the same manner in which the award recipient’s payroll costs or service payments are classified. Net Loss per Common Share Basic net loss per share is computed using the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed using the sum of the weighted average number of common shares outstanding during the period and the effect of dilutive securities. The Company applies the two-class method to calculate its basic and diluted net loss per share as the Company has issued shares that meet the definition of participating securities. The two-class method is an earnings allocation formula that treats a participating security as having rights to earnings that otherwise would have been available to common stockholders. The Company’s participating securities contractually entitle the holders of such shares to participate in dividends; but do not contractually require the holders of such shares to participate in losses of the Company. Accordingly, in periods in which the Company reports a net loss, diluted net loss per share is the same as basic net loss per share, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. Income Taxes The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company’s tax returns. Deferred tax assets and liabilities are determined on the basis of the differences between the consolidated financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. 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. The Company accounts for uncertainty in income taxes recognized. If the tax position is deemed more likely than not to be sustained, it would then be assessed to determine the amount of benefit to recognize in the consolidated financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. To date the Company has no uncertain tax positions and there have been no interest and penalties. Recently issued accounting pronouncements In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments – Credit Losses (Topic 326) Measurement of Credit Losses on Financial Statements Financial Instruments-Overall In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes interim period and use that rate to calculate its income In August 2020, the FASB issued ASU 2020-06, ASC Subtopic 470-20 “ Debt-Debt with Conversion and Other Options Hedging-Contracts in Entity’s Own Equity |
FAIR VALUE MEASUREMENTS OF FINA
FAIR VALUE MEASUREMENTS OF FINANCIAL ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS OF FINANCIAL ASSETS | |
FAIR VALUE MEASUREMENTS OF FINANCIAL ASSETS | 3. FAIR VALUE MEASUREMENTS OF FINANCIAL ASSETS The Company’s financial assets subject to fair value measurements on a recurring basis and the level of inputs used for such measurements were as follows: As of December 31, 2022 Level 1 Level 2 Level 3 Total (in thousands) Cash and Cash Equivalent Money market funds $ 3,298 $ — $ — $ 3,298 $ 3,298 $ — $ — $ 3,298 Marketable Securities Corporate debt securities $ — $ 15,460 $ — $ 15,460 Commercial paper — 14,999 — 14,999 U.S. Government debt securities — 13,904 — 13,904 Total $ — $ 44,363 $ — $ 44,363 As of December 31, 2021 Level 1 Level 2 Level 3 Total (in thousands) Money market funds included in cash and cash equivalents $ 106,000 $ — $ — $ 106,000 During the years ended December 31, 2022 and 2021, the Company had no transfers between Level 1, Level 2 or Level 3 financial assets. |
Marketable Securities
Marketable Securities | 12 Months Ended |
Dec. 31, 2022 | |
Marketable Securities | |
Marketable Securities | 4. MARKETABLE SECURITIES The following table summarizes the Company’s marketable securities as of December 31, 2022. The Company did not hold any marketable securities as of December 31, 2021. As of December 31, 2022 Amortized Unrealized Unrealized Fair Cost gains losses value (in thousands) Marketable Securities: Corporate debt securities $ 15,627 $ — $ (167) $ 15,460 Commercial paper 14,999 — — 14,999 U.S. Government debt securities 13,898 6 — 13,904 Total $ 44,524 $ 6 $ (167) $ 44,363 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY AND EQUIPMENT, NET | |
PROPERTY AND EQUIPMENT, NET | 5. PROPERTY AND EQUIPMENT, NET Property and equipment, net, consisted of the following: Estimated December 31, Useful Life 2022 2021 (in thousands) Computer software 4 years $ 157 $ 71 Less: Accumulated depreciation (59) (33) Property and equipment, net $ 98 $ 38 The Company recorded less than $0.1 million of depreciation expense during the years ended December 31, 2022 and 2021. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2022 | |
ACCRUED EXPENSES | |
ACCRUED EXPENSES | 6. ACCRUED EXPENSES Accrued expenses consist of the following: December 31, 2022 2021 (in thousands) Accrued preclinical and clinical trial costs $ 6,174 $ 1,260 Accrued compensation 2,498 1,059 Accrued consulting 75 77 Accrued professional services 218 499 Accrued other 365 246 Total accrued expenses $ 9,330 $ 3,141 |
CONVERTIBLE PREFERRED STOCK
CONVERTIBLE PREFERRED STOCK | 12 Months Ended |
Dec. 31, 2022 | |
Convertible Preferred Stock | |
Convertible Preferred Stock | 7. CONVERTIBLE PREFERRED STOCK As of November 20, 2020, the Company had issued Series A and Series B convertible preferred stock (collectively, the “Convertible Preferred Stock”). On June 29, 2021, upon the closing of the Company’s IPO, all outstanding convertible preferred stock automatically converted into shares of common stock. |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2022 | |
DEBT | |
DEBT | 8. DEBT K2 HealthVentures Loan and Security Agreement In July 2022, the Company entered into a loan and security agreement (the “Loan Agreement”) with K2 HealthVentures LLC (together with its affiliates, “K2HV”, and together with any other lender from time to time party thereto, the “Lenders”), as administrative agent for the Lenders, and Ankura Trust Company, LLC, as collateral agent for the Lenders. The Loan Agreement provides up to $50.0 million principal in term loans (the “Term Loan”) consisting of a first tranche of $30.0 million funded at closing and a subsequent second tranche of up to $20.0 million upon the Company’s request before March 1, 2025, subject to review by the Lenders of certain information from the Company and discretionary approval by the Lenders. In connection with entering into the Loan Agreement, the Company also issued to K2HV a warrant to purchase shares of common stock (see Note 9), which was an incremental cost to the Loan Agreement; thus, the allocated fair value of the warrant was recorded as part of the issuance cost (see Note 2) . The Term Loan will mature on August 1, 2026, with interest only payments for 30 months, and thereafter interest and principal payments for the remaining 18 months. It bears a variable interest rate equal to the greater of (i) 7.95% and (ii) the sum of (A) the prime rate last quoted in The Wall Street Journal (or a comparable replacement rate, as determined by the Lenders, if The Wall Street Journal ceases to quote such rate) and (B) 3.20%. Upon the final payment under the Loan Agreement, the Lenders are entitled to an end of term charge equal to 6.45% of the aggregate original principal amount of the term loans made pursuant to the Loan Agreement. The final payment fee is being accreted and amortized into interest expense using the effective interest rate method over the term of the loan. The effective interest is 11.19% for the first tranche. This could change given it is a variable interest rate facility. The Company may prepay, at its option, all, but not less than all, of the outstanding principal balance and all accrued and unpaid interest with respect to the principal balance being prepaid of the term loans, subject to a prepayment premium as follows: 3% of the loan amounts prepaid if such prepayment occurs in the first year after funding; 2% if such prepayment occurs in the second year after funding; 1% if such prepayment occurs in the third year after funding; and 0% thereafter. The Lenders may elect at any time following the closing and prior to the full repayment of the term loans to convert any portion of the principal amount of the term loans then outstanding, up to an aggregate of $3.25 million in principal amount, into shares of the Company’s common stock, $0.0001 par value per share, at a conversion price of $2.6493, subject to customary 19.99% Nasdaq beneficial ownership limitations. The Company also granted registration rights to the Lenders with respect to shares received upon such conversion. Further, the Lenders may elect to invest up to $5.0 million in future equity financings of the Company, provided such investment is limited to no more than 10% of the total amount raised in such equity financing. The Loan Agreement contains customary representations and warranties, events of default and affirmative and negative covenants, including covenants that limit or restrict the Company’s ability to, among other things, dispose of assets, make changes to the Company’s business, management, ownership or business locations, merge or consolidate, incur additional indebtedness, pay dividends or other distributions or repurchase equity, make investments, and enter into certain transactions with affiliates, in each case subject to certain exceptions. The Loan Agreement also contains covenants requiring that the Company maintain cash, cash equivalents and marketable securities balance of at least $25.0 million so long as the Company’s total market capitalization is less than $250.0 million. As security for its obligations under the Loan Agreement, the Company granted the Lenders a first priority security interest on substantially all of the Company’s assets (other than intellectual property), subject to certain exceptions. The Company capitalized $0.9 million of debt issuance costs which consist of incremental costs incurred for the Lenders and third-party legal firms as well as the fair value of the warrant issued in conjunction with the origination of the term loan. The book value of debt approximates its fair value given the variable interest rate. Long-term debt and the unamortized discount balances are as follows: December 31, 2022 (in thousands) Outstanding principal amount $ 30,000 Add: accreted liability of final payment fee (763) Less: unamortized debt discount 198 Long-term debt, net of discount $ 29,435 The Company's total interest expense was $1.5 million for the year ended December 31, 2022. The following Year Ended December 31, 2022 (in thousands) Interest paid or accrued $ 1,246 Non-cash amortization of debt discount (including warrant) 87 Non-cash accrued back-end fee 198 $ 1,531 Scheduled future principal payments on total outstanding debt, as of December 31, 2022, are as follows: Total (in thousands) 2023 $ — 2024 — 2025 17,740 2026 12,260 $ 30,000 The Company was in compliance with all covenants and requirements of its financing arrangements as of December 31, 2022. |
WARRANT
WARRANT | 12 Months Ended |
Dec. 31, 2022 | |
WARRANT | |
WARRANT | 9. WARRANT In connection with the Term Loan and Loan Agreement (see Note 8), the Company issued warrants to purchase 339,725 shares of the Company’s common stock with an exercise price of $1.3246 (the “Warrant”). K2HV may at any time and from time to time exercise this Warrant, in whole or in part, by delivering to the Company the original of this Warrant together with a duly executed Notice of Exercise. The Company also granted registration rights to the Lenders with respect to shares issuable upon exercise of the Warrant. All of the 339,725 shares are outstanding as of December 31, 2022. Shares Initial Recognition Date Exercise Price Expiration Date Warrant 339,725 July 27, 2022 $ 1.3246 July 27, 2032 The Warrant’s allocated fair value upon issuance was estimated to be approximately $0.4 million, and was measured using a Black-Scholes option-pricing model with the following assumptions: Stock price $1.41 Strike price $1.32 Volatility (annual) 75.30% Risk-free rate 2.74% Estimated time to expiration (years) 10 Dividend yield —% |
EQUITY
EQUITY | 12 Months Ended |
Dec. 31, 2022 | |
EQUITY | |
EQUITY | 10. EQUITY Preferred stock The Company has authorized preferred stock amounting to 10,000,000 shares as of December 31, 2022 and 2021, respectively. Common stock As of December 31, 2022, the Company’s certificate of incorporation, as amended and restated, authorized the Company to issue 500,000,000 shares of $0.0001 par value common stock. Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, as may be declared by the board of directors, if any. No dividends have been declared or paid At-the-Market Offering In July 2022, the Company entered into a Sales Agreement (the “Sales Agreement”) with Cowen and Company, LLC (“Cowen”), under which the Company may offer and sell, from time to time, shares of common stock having aggregate gross proceeds of up to $50.0 million (the “ATM Shares”). The Company will pay Cowen a commission of up to 3% of the gross proceeds of any sales of the ATM Shares pursuant to the Sales Agreement. As of December 31, 2022, the Company has not sold any shares under the Sales Agreement. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2022 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 11. STOCK-BASED COMPENSATION Stock-based compensation expense as reflected in the Company’s consolidated statements of operations was as follows: Year Ended December 31, 2022 2021 (in thousands) Research and development $ 669 $ 244 General and administrative 2,537 1,327 Stock-based compensation expense included in operating expenses $ 3,206 $ 1,571 2021 Equity Incentive Plan The Company has two equity incentive plans: the 2019 Equity Incentive Plan (“2019 Plan”), and the 2021 Equity Incentive Plan (“2021 Plan”). New awards can only be granted under the 2021 Plan, under which the Company is able to issue equity awards to employees, board members, consultants, and advisors. The 2021 Plan became effective on June 24, 2021, the date the prospectus related to the Company's IPO was deemed effective by the SEC. The 2021 Plan authorizes the award of stock options, restricted stock awards (“RSAs”), stock appreciation rights (“SARs”), restricted stock units (“RSUs”), cash awards, performance awards and stock bonus awards. The Company initially reserved 1,483,445 shares of its common stock, plus any reserved shares not issued or subject to outstanding grants under the 2019 Plan on the effective date of the 2021 Plan, for issuance pursuant to awards granted under the 2021 Plan. The number of shares reserved for issuance under the 2021 Plan will increase automatically on January 1 of 2022 through 2031 by the number of shares equal to the lesser of 5% of the aggregate number of outstanding shares of the Company’s common stock as of the immediately preceding December 31, or a number as may be determined by the Company’s board of directors in any particular year. As such, 1,165,626 shares were added to the Plan in January 2023. As of December 31, 2022, 1,450,007 shares remained available for future issuance under the 2021 Plan. 2021 Employee Stock Purchase Plan The Company has adopted the Employee Stock Purchase Plan (“ESPP”) which became effective June 24, 2021, the date the prospectus related to the Company's IPO was deemed effective by the SEC, to enable eligible employees to purchase shares of its common stock with accumulated payroll deductions at a discount beginning on a date to be determined by the board of directors or compensation committee. The ESPP is intended to qualify under Section 423 of the Code. The Company initially reserved 228,222 shares of its common stock for sale under the ESPP. The aggregate number of shares reserved for sale under the ESPP will increase automatically on January 1st of 2022 through 2031 by the number of shares equal to the lesser of 1% of the total outstanding shares of the Company’s common stock as of the immediately preceding December 31 (rounded to the nearest whole share) or a number of shares as may be determined by the Company’s board of directors in any particular year. As such, 233,125 shares were added to the Plan in January 2023. As of December 31, 2022, no offering periods have commenced, and 460,281 shares remained available for future issuance under the ESPP. The aggregate number of shares issued over the term of the ESPP, subject to stock splits, recapitalizations or similar events, may not exceed 4,564,440 shares of the Company’s common stock. Stock Options A summary of stock option activity for employee and nonemployee awards under the 2021 Plan is presented below: Weighted Weighted Average Average Remaining Contractual Aggregate Options Exercise Price Term Intrinsic Value (in years) (in thousands) Outstanding at December 31, 2021 3,021,799 $ 3.71 8.94 $ 10,903 Granted 1,734,295 $ 7.80 Exercised (44,105) $ 0.43 Cancelled (303,715) 3.65 Outstanding at December 31, 2022 4,408,274 $ 3.44 8.52 $ 350 Vested at December 31, 2022 1,445,327 $ 2.97 7.77 $ 268 Vested and expected to vest at December 31, 2022 4,408,274 $ 3.44 8.52 $ 350 The weighted average grant-date fair value of stock options granted during the years ended December 31, 2022 and 2021 was $1.96 and $4.60 per share, respectively. The fair value of each stock option was estimated using a Black-Scholes option-pricing model with the following assumptions: Year Ended December 31, 2022 2021 Risk-free interest rate 1.62 - 4.37 % 0.95 - 1.35 % Volatility 72-80 % 75-77 % Dividend yield — % — % Expected term (years) 6 6 The fair value of options that vested during the years ended December 31, 2022 and 2021 was $2.8 million and $0.6 million, respectively. The Company recorded stock-based compensation expense associated with stock option awards of $2.4 million and $1.1 million during the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, there was Restricted Common Stock The terms of the 2019 Plan permitted certain option holders to exercise options before their options were vested, subject to certain limitations. Upon early exercise, the awards become subject to a restricted stock agreement and are subject to the same vesting provisions in the original stock option awards. Shares issued as a result of early exercise that have not vested are subject to repurchase by the Company upon termination of the purchaser’s employment, at the lesser of the price paid by the purchaser or the fair value of the shares at the time of repurchase. Such shares are not deemed to be issued for accounting purposes until they vest and are therefore excluded from shares outstanding until the repurchase right lapses and the shares are no longer subject to the repurchase feature. The liability is reclassified into common stock and additional paid-in capital as the shares vest and the repurchase right lapses. Accordingly, the Company has recorded the unvested portion of the exercise proceeds of less than $0.01 million as a liability from the early exercise in the accompanying consolidated balance sheets as of December 31, 2022 and 2021, respectively. The Company recorded stock-based compensation expense associated with restricted common stock of less than $0.1 million during the years ended December 31, 2022 and 2021. Restricted Stock Units The Company issues RSUs to employees that generally vest over a four-year period with 25% of awards vesting after one year and then quarterly thereafter. Any unvested shares will be forfeited upon termination of services. The fair value of an RSU is equal to the fair market value price of the Company’s common stock on the date of grant. RSU expense is amortized straight-line over the vesting period. The following table summarizes activity related to restricted stock units: Weighted Average Grant Date Number of shares Fair Value Unvested at December 31, 2021 200,996 $ 16.00 Vested (75,374) $ 16.00 Unvested at December 31, 2022 125,622 $ 16.00 The Company recorded stock-based compensation expense of $0.8 million and $0.4 million for the years ended December 31, 2022 and 2021, respectively, related to RSUs. As of December 31, 2022, the total unrecognized expense related to all RSUs was $2.0 million, which the Company expects to recognize over a weighted-average period of 2.4 years. |
ASSET PURCHASE AND LICENSE AGRE
ASSET PURCHASE AND LICENSE AGREEMENTS | 12 Months Ended |
Dec. 31, 2022 | |
ASSET PURCHASE AND LICENSE AGREEMENTS | |
ASSET PURCHASE AND LICENSE AGREEMENTS | 12. ASSET PURCHASE AND LICENSE AGREEMENTS In May 2019, the Company entered into an asset purchase agreement with the previous sponsor, pursuant to which it acquired all rights and interest to patents, know-how, and inventory for assets related to seribantumab, a fully humanized immunoglobulin G2 monoclonal antibody against HER3. Pursuant to the asset purchase agreement, the Company made an upfront, non-refundable payment of $3.5 million at closing. If the Company succeeds in finding a partner to develop and commercialize seribantumab, the Company may be obligated to pay the previous sponsor up to $54.5 million in development, regulatory and sales milestone payments. Under the terms of the asset purchase agreement, the Company assumed the rights and obligations of the following collaboration and license agreements previously held by the previous sponsor: ● Dyax— The Company assumed all rights and obligations provided for under the amended and restated collaboration agreement executed between Dyax Corp. (“Dyax”) and the previous sponsor (the “Dyax Agreement”). Pursuant to the Dyax Agreement, Dyax utilized its proprietary phage technology to identify antibodies that would bind to targets of interest to the previous sponsor. Additionally, Dyax granted to the previous sponsor a world-wide, non-exclusive, royalty free right to use and make any and all of the antibodies identified by Dyax for certain research purposes. Seribantumab was identified as a result of the research activities performed under the Dyax Agreement. Pursuant to the terms of the Dyax Agreement, the Company may be obligated to pay Dyax milestone payments of up to approximately $9.3 million if certain development and regulatory milestones are achieved. In addition, Dyax is entitled to mid-single digit royalties based on net sales of seribantumab. The Company’s obligation to pay royalties to Dyax continues on a product-by-product and country-by-country basis until the later of a specified number of years after the first commercial sale in such country and the expiration of the patent rights covering seribantumab in such country. The Dyax Agreement will remain in effect, unless earlier terminated, for so long as the Company continues to develop or commercialize seribantumab. Either party may terminate the agreement in the event of an uncured material breach by the other party. The Company also has the right to terminate the agreement in its entirety or on a product-by-product basis at any time upon 90 days’ prior written notice. ● Ligand Pharmaceuticals— The Company assumed all rights and obligations provided for under the amended commercial license agreement executed between Selexis SA (“Selexis”) and the previous sponsor (the “Selexis Agreement”). Pursuant to the Selexis Agreement, the Company received non-exclusive rights to technology for use in the manufacture of seribantumab and may be required to make milestone payments of up to approximately €900 , per licensed product, if certain development and regulatory milestones are achieved. Additionally, Selexis may have the right to obtain a royalty of the greater of €0.2 million annually and less than one percent on net sales of seribantumab. The obligation to pay royalties with respect to each product sold in a country continues until the expiration of the patent rights covering the product in such country. Either party may terminate the agreement in the event of an uncured material breach by the other party. The Company also has the right to terminate the agreement at any time upon 60 days ’ prior written notice. In November of 2021, the Selexis agreement was assigned to Ligand Pharmaceuticals Incorporated. ● National Institute of Health —The Company assumed all rights and obligations provided for under the amended commercial license agreement executed between the U.S. Public Health Service, a division of the U.S. Department of Health and Human Services (the “NIH”) and the previous sponsor (the “NIH Agreement”). Pursuant to the NIH Agreement, the Company received non-exclusive rights in the United States to patents related to certain antibodies associated with seribantumab. If certain development and regulatory milestones are achieved, the Company may be obligated to pay NIH additional milestone payments of up to approximately $0.4 million per licensed product. The Company evaluated the asset purchase agreement with the previous sponsor under ASC Topic 805 , Business Combinations, CSPC License Agreement In July 2022, the Company entered into a license agreement (the “CSPC License Agreement”) with CSPC Megalith Biopharmaceutical Co., Ltd., a subsidiary of CSPC Pharmaceutical Group Limited (the “Licensor”), with an effective date of July 27, 2022 (the “Effective Date”), pursuant to which the Licensor granted to the Company a worldwide exclusive right and license (outside of the People’s Republic of China, Hong Kong, Taiwan, and Macau) under certain patents identified in the CSPC License Agreement (the “Licensed Patents”) and know-how (collectively, the “Licensed IP”) to develop and commercialize products (“Licensed Products”) containing EO-3021 (SYSA1801) (the “Licensed Compound”) in the treatment of cancer (the “Field”). Subject to certain conditions set forth in the CSPC License Agreement, the Company may grant sublicenses (including the right to grant further sublicenses) to its rights under the CSPC License Agreement to any of its affiliates or any third party. Either party to the CSPC License Agreement may assign its rights under the CSPC License Agreement (i) in connection with the sale or transfer of all or substantially all of its assets to a third party, (ii) in the event of a merger or consolidation with a third party or (iii) to an affiliate; in each case contingent upon the assignee assuming in writing all of the obligations of its assignor under the CSPC License Agreement. Under the terms of CSPC License Agreement, the Company paid to the Licensor a one-time upfront license fee of $27.0 million, and is required to pay to the Licensor milestone payments of up to $148.0 million following the achievement of certain development and regulatory milestones and additional milestone payments of up to approximately $1.0 billion following the achievement of certain commercial milestones. During the Term (as defined below), the Company is also required to pay to the Licensor (i) royalties ranging from mid-single digits through low double digits on net sales of each Licensed Product and (ii) a percentage of non-royalty sublicense income received by the Company of up to an aggregate of $50.0 million. Under the terms of the CSPC License Agreement, the development of the Licensed Compound and the first Licensed Product will be governed by a clinical development plan, including anticipated timeline goals in connection with the clinical trials for the first Licensed Product (the “Development Plan”). The Development Plan may be amended by a joint steering committee established by the Company and the Licensor. The Company will purchase Licensed Products for any clinical or commercial supply from the Licensor under the terms of a supply agreement. Until the Company has completed the first Phase 2 clinical trial for the first Licensed Product in the United States, the Licensor shall supply the Licensed Compound to the Company for clinical purposes as the Company requests, but only to the extent necessary for the Company to conduct such clinical trial, at no cost to the Company. The CSPC License Agreement will expire automatically upon the expiration of the last royalty term of the last Licensed Product (the “Term”), with each royalty term expiring on a country-by-country basis upon the later of: (i) the expiration or abandonment of the last-to-expire Licensed Patent covering a Licensed Product; (ii) 10 years after the date of first commercial sale in the applicable country; and (iii) expiration of regulatory exclusivity for the Licensed Product in the applicable country. Following the expiration of the Term, the License will become non-exclusive and fully-paid. The CSPC License Agreement may be terminated by the Company for any reason upon 180 days prior written notice to the Licensor. The Licensor may terminate the CSPC License Agreement if the Company or any sublicensee commences an action challenging the Licensed Patents or following the occurrence of certain change of control transactions. Either party may terminate the CSPC License Agreement (i) for an uncured material breach of the CSPC License Agreement by the other party or (ii) if, at any time, the other party undergoes certain bankruptcy, insolvency or dissolution proceedings. Other Research Arrangements In June 2021, the Company entered into a collaboration agreement with Caris (the “Caris Agreement”). Under the terms of the Caris Agreement, Caris will identify targets for the collaboration and provide those targets to the Company at regular intervals for review and approval. Once a target is selected by the collaboration’s joint steering committee, the collaboration will retain access to the selected targets. The financial terms surrounding development and commercialization of each product candidate identified for the collaboration and included in the Caris Agreement vary based on the level of participation elected by each party in the development and commercialization efforts following identification of a target. There are no upfront or milestone payments or royalties due to either party under the collaboration. With respect to proceeds from any potential commercial transaction related to a product resulting from the collaboration, Caris will be entitled to a tiered initial percentage ranging from the mid-single digits to low teens based on the product candidate’s potential peak sales revenue with the remaining proceeds allocated based on each party’s pro rata share of expenses incurred in development of the product. In the case of an out-licensing transaction of an asset instead of a sale, Caris and the Company will split all consideration received in the transaction in a similar manner. The Caris Agreement provides flexibility for Caris and the Company to jointly develop and commercialize, or for either the Company or Caris to incur development and commercialization expenses. The ultimate percentage of proceeds payable to the Company and Caris will depend on the level of development and commercialization participation elected by each party. The Company will own the intellectual property rights to the therapeutics developed under the collaboration, and Caris will own the intellectual property rights to the diagnostics developed under the collaboration. Either party may terminate the Caris Agreement for uncured material breach by the other party or in the case of the other party’s insolvency. The term of the Caris Agreement is three years, automatically renewing for one-year terms. Either party may terminate the agreement at the end of a term by written notice to the other, subject to the continuation of exclusivity with respect to any target selected by the Joint Steering Committee, so long as commercially reasonable efforts are used to discover, identify, develop and/or commercialize a therapeutic related to such target. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 13. COMMITMENTS AND CONTINGENCIES The Company, from time to time, may be involved in legal proceedings, regulatory actions, claims and litigation arising in the ordinary course of business. The Company was not a defendant in any lawsuits from Inception to the date of these consolidated financial statements. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
INCOME TAXES | 14. INCOME TAXES No provision for income taxes was recorded for the years ended December 31, 2022 and 2021. The Company has incurred net pre-tax losses in the United States only for all periods presented. The Company has not reflected any benefit of such net operating loss (“NOL”) carryforwards in the accompanying consolidated financial statements. The provision for income taxes differs from the amount expected by applying the federal statutory rate to the loss before taxes as follows: Year Ended December 31, 2022 2021 Profit before tax at federal statutory rate 21.0 % 21.0 % State tax benefit, net of federal benefit 0.6 % 0.4 % Research and development credit carryovers 2.9 % 4.4 % Permanent differences (1.1) % (1.4) % Return to Provision True Ups 0.1 % 0.1 % Change in valuation allowance (23.5) % (24.5) % Effective income tax rate — % — % In assessing the realizability of the net deferred tax assets, the Company considers all relevant positive and negative evidence in determining whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The realization of the gross deferred tax assets is dependent on several factors, including the generation of sufficient taxable income prior to the expiration of the NOL carryforwards. The Company has recorded a valuation allowance against its deferred tax assets on December 31, 2022 and 2021 because the Company’s management believes that it is more likely than not that these assets will not be fully realized in the near future. The increase in the valuation allowance of approximately $22.3 million in the year ended December 31, 2022 primarily relates to the generation of net operating losses and research and development credits, and the capitalization of research and development costs that will be amortized in the future. The Tax Cuts & Jobs Act (TCJA) requires taxpayers to capitalize and amortize research and development costs under Section 174 effective for tax years beginning on or after January 1, 2022. As a result, the Company capitalized $55.5M of research and development costs that will be amortized for tax purposes over 5 years if performed in the U.S. and over 15 years if performed outside of the U.S. As of December 31, 2022, the Company had federal NOL carryforwards of approximately $58.0 million, all of which can be carried forward indefinitely, and state NOL carryforwards of $4.5 million, which begin to expire in 2040. The Company also has federal tax credits of $4.2 million and state tax credits of $0.5 million which may be used to offset future tax liabilities and will begin to expire in 2040. NOL and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. Net deferred tax asset (liability) in the accompanying consolidated balance sheets consists of the following: December 31, 2022 2021 (in thousands) Deferred tax assets and (liabilities) Net operating losses $ 12,427 $ 10,303 Research and development expenses 10,945 — Research and development credit 4,645 1,697 Accrued expenses 711 130 Stock-based compensation 411 151 Other 135 — Intangible assets 5,944 666 Gross deferred tax asset 35,218 12,947 Valuation allowance (35,210) (12,945) Net deferred tax asset 8 2 Stock-based compensation — — Fixed assets (8) (2) Deferred tax liabilities (8) (2) Net deferred tax asset (liability) $ — $ — Subsequent ownership changes may further affect the limitation in future years. The Company has not conducted a study to assess whether a change of ownership has occurred or whether there have been multiple changes of ownership since Inception due to the significant complexity and cost associated with such a study. If the Company has experienced a change of ownership, as defined by Section 382 and 383 of the Internal Revenue Code, at any time since Inception, utilization of the NOL carryforwards or research and development tax credit carryforwards would be subject to the annual limitations under Section 382 and 383 of the Internal Revenue Code. The Company will recognize both accrued interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2021, the Company had no accrued interest or penalties related to uncertain tax positions and no amounts have been recognized in the Company’s statements of operations. Since the Company is in a loss carryforward position, the Company is generally subject to examination by the U.S. federal, state and local income tax authorities for all tax years in which a loss carryforward is available. As of December 31, 2022, all tax returns remain open. In response to the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security Act (“the CARES Act”), was signed into law in March 2020. The CARES Act lifts certain deduction limitations originally imposed by the Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”). Corporate taxpayers may carryback NOLs originating during 2018 through 2020 for up to five years, which was not previously allowed under the 2017 Tax Act. The CARES Act also eliminates the 80% of taxable income limitations by allowing corporate entities to fully utilize NOL carryforwards to offset taxable income in 2018, 2019 or 2020. Taxpayers may generally deduct interest up to the sum of 50% of adjusted taxable income plus business interest income (30% limit under the 2017 Tax Act) for tax years beginning January 1, 2019 and 2020. The CARES Act allows taxpayers with alternative minimum tax credits to claim a refund in 2020 for the entire amount of the credits instead of recovering the credits through refunds over a period of years, as originally enacted by the 2017 Tax Act. The Company notes that these provisions did not have a material impact to the amounts recorded within this footnote. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
NET LOSS PER SHARE | |
NET LOSS PER SHARE | 15. NET LOSS PER SHARE The following table summarizes the computation of basic and diluted net loss per share of the Company (in thousands, except share and per share amounts): Year Ended December 31, 2022 2021 Net loss $ (95,080) $ (32,039) Weighted average common stock outstanding, basic and diluted 23,267,120 12,132,610 Net loss per share, basic and diluted $ (4.09) $ (2.64) The Company’s potentially dilutive securities, which include convertible preferred stock, options to purchase common stock and unvested restricted stock, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share is the same. The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect: December 31, 2022 2021 Outstanding stock options 4,408,274 3,021,799 Unvested restricted stock 3,945 19,721 Unvested RSUs 125,622 200,996 Warrant 339,725 — 4,877,566 3,242,516 |
DEFINED CONTRIBUTION PLAN
DEFINED CONTRIBUTION PLAN | 12 Months Ended |
Dec. 31, 2022 | |
DEFINED CONTRIBUTION PLAN | |
DEFINED CONTRIBUTION PLAN | 16. DEFINED CONTRIBUTION PLAN The Company has a defined-contribution plan under Section 401(k) of the Internal Revenue Code (the “401(k) Plan”). The 401(k) Plan covers all employees who meet defined minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. As currently established, the Company is not required to make contributions to the 401(k) Plan. The Company made matching contributions of $0.2 million and $0.1 million for the years ended December 31, 2022 and 2021, respectively. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events | |
Subsequent Events | 17. SUBSEQUENT EVENTS On January 5, 2023, the Company announced a pipeline prioritization and realignment of resources to advance its EO-3021 product candidate. The Company is pausing further investment in the clinical development of its seribantumab product candidate and realigning its resources to focus on advancing EO-3021 and other pipeline programs. The Company intends to pursue further development of seribantumab only in collaboration with a partner. Concurrently with this announcement, the Board of Directors of the Company (the “Board”) approved a reduction of the Company’s workforce across all areas of the Company. The workforce reduction was substantially completed in January 2023 and is expected to be fully complete by April 2023. These actions reflect the Company’s determination to refocus its strategic priorities around EO-3021 and other pipeline programs. Additionally, on January 5, 2023, the Company and Shawn M. Leland, the former President and Chief Executive Officer (“the former CEO”) of the Company, entered into a Separation Agreement (the “Separation Agreement”) following the mutual agreement between the Board and the former CEO regarding his departure from his positions with the Company. Pursuant to the Separation Agreement, the former CEO ceased his role as the Company’s President and CEO and resigned as a director of the Board, effective January 5, 2023. The workforce reduction is expected to include total restructuring charges of approximately $2.7 million which includes $1.6 million of one-time termination benefits and contractual termination benefits for severance, healthcare and related benefits. The one-time termination benefits were recorded in January 2023 under the provisions of ASC 420, Exit or Disposal Cost Obligation, as this is the period the termination plan was both approved and communicated to the impacted employees. The contractual termination benefits were recorded in January 2023 under the provisions of ASC 712, Compensation-Nonretirement Postemployment Benefits , which is the period in which the contractual postemployment benefits became probable of recognition. Please see the Company's Current Report on Form 8-K filed on January 6, 2023 for further information relating to the Company's workforce reduction and the former CEO's resignation |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Elevation Oncology Securities Corporation, which was established on November 19, 2021. All significant intercompany balances and transaction have been eliminated in consolidation. |
Use of estimates | Use of Estimates The preparation of financial statements in accordance with GAAP requires the use of estimates and assumptions, based on judgments considered reasonable, which affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. The Company bases its estimates and assumptions on known trends and events and various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the accruals for research and development expenses, the valuation of common stock and the assumptions used in the valuation of share-based compensation awards. Changes in estimates are recorded in the period in which they become known. Due to the risks and uncertainties involved in the Company’s business and evolving market conditions and, given the subjective element of the estimates and assumptions made, actual results may differ from estimated results. |
Segment Information | Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available and regularly reviewed by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment, which is the discovery and development of cancer therapies for patient populations with significant unmet medical needs. All material long-lived assets of the Company reside in the United States. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. As of December 31, 2022 and 2021, cash equivalents consisted of money market funds. The Company places its cash with a high-credit-quality financial institution domiciled in the United States. |
Concentrations of credit risk and significant suppliers | Deferred Financing Costs The incremental cost, including the fair value of warrants, directly associated with obtaining debt financing is capitalized as deferred financing costs upon the issuance of the debt and amortized over the term of the related debt agreement using the effective-interest method with such amortized amounts included as a component of interest expense in the consolidated statements of operations. Unamortized deferred financing costs are presented on the consolidated balance sheets as a direct deduction from the carrying amount of the related debt obligation. Concentrations of Credit Risk and Significant Suppliers Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents. The Company’s money market funds are invested in highly rated funds. Periodically, the Company maintains deposits in accredited financial institutions in excess of federally insured limits. The Company has not experienced any losses on its deposits of cash and cash equivalents and does not believe that it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships. The Company is dependent on third-party manufacturers to supply products for research and development activities of its programs, including preclinical and clinical testing. These programs could be adversely affected by a significant interruption in the supply of such drug substance and drug products. During the years ended December 31, 2022 and 2021, the Company had three and two vendors that accounted for approximately 78% and 61% of its research and development expense, respectively. As of December 31, 2022 and 2021, the Company had two and one vendor(s) that accounted for approximately 87% and 74% of the total accounts payable, respectively. |
Property and Equipment | Property and Equipment Property and equipment consist of computer software that is recorded at cost and depreciated on a straight-line basis over the estimated useful lives of the assets. Upon retirement or sale, the cost of the disposed asset and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized. The Company reviews its long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying value of assets may not be recoverable. Recoverability is measured by comparison of the asset’s book value to future net undiscounted cash flows that the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the book value of the assets exceed their fair value, which is measured based on the projected discounted future net cash flows arising from the assets. No impairment losses have been recorded through December 31, 2022. |
Cloud Computing Arrangements | Cloud Computing Arrangements The Company defers implementation costs incurred in cloud computing hosting arrangements in accordance with Accounting Standards Update (“ASU”) 2018-15 and amortizes these costs over the noncancelable term of the cloud computing arrangement, plus any optional renewal periods (1) that are reasonably certain to be exercised by the Company or (2) for which exercises of the renewal option is controlled by the cloud service provider. Costs incurred during the application development stage are capitalized within either prepaid expenses and other current assets, or in other assets, net on the Company’s balance sheet. Amortization of implementation costs is on a straight-line basis over the related hosting arrangement term and is reflected in research and development expenses in the consolidated statements of operations. |
Classification and Accretion of Convertible Preferred Stock | Classification and Accretion of Convertible Preferred Stock |
Fair value measurements | Prior to the Company’s Initial Public Offering (“IPO”), the Company’s convertible preferred stock was classified outside of stockholders’ deficit on the balance sheet because the holders of such shares had liquidation rights in the event of a deemed liquidation that, in certain situations, were not solely within the control of the Company and would require the redemption of the then-outstanding convertible preferred stock. The convertible preferred stock was not redeemable, except in the event of a deemed liquidation (see Note 7). Because the occurrence of a deemed liquidation event was not considered probable, the carrying values of the convertible preferred stock were not being accreted to their redemption values. Upon the closing the Company’s IPO in June 2021, all outstanding convertible preferred stock automatically converted into shares of common stock. Fair Value Measurements Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) 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. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: ● Level 1—Quoted prices in active markets for identical assets or liabilities. ● Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. ● Level 3—Non-observable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The Company’s cash equivalents are carried at fair value, determined according to the fair value hierarchy described above (see Note 3). |
Marketable Securities, Available for Sale | Marketable Securities, Available for Sale All marketable securities have been classified as “available-for-sale” and are carried at fair value, based upon quoted market prices. The Company considers its available-for-sale portfolio as available for use in current operations. Accordingly, the Company may classify certain investments as short-term marketable securities, even though the stated maturity date may be one year or more beyond the current balance sheet date. Unrealized gains and losses, net of any related tax effects, are excluded from earnings and are included in other comprehensive income (loss) and reported as a separate component of stockholders’ equity (deficit) until realized. Interest income, realized gains and losses, and declines in value judged to be other than temporary, if any, on available-for-sale securities are included in other income, net. The cost of securities sold is based on the specific-identification method. The amortized cost of securities is adjusted for accretion of premiums and amortization of discounts to maturity. In accordance with the Company’s investment policy, management invests in money market funds, corporate bonds, commercial paper, asset-backed securities and government securities. The Company has not realized any losses on its marketable securities to date. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) The Company’s only element of other comprehensive income (loss) is unrealized gains and losses on available-for-sale marketable securities. |
Patent costs | Patent Costs The legal and professional costs incurred by the Company to maintain its patent rights have been expensed as part of general and administrative expenses since inception. As of December 31, 2022 and 2021, the Company has determined that these expenses have not met the criteria to be capitalized. Intellectual property-related expenses for the years ended December 31, 2022 and 2021 were $0.3 million and $0.2 million, respectively. |
Research and Development Costs | Research and Development Costs Research and development costs consist of salaries and benefits, including associated stock-based compensation, and fees paid to other entities that conduct certain research and development activities on the Company’s behalf. Research and development costs are expensed as incurred. The Company estimates preclinical study and clinical trial expenses based on the services performed pursuant to contracts with research institutions and contract research organizations and clinical manufacturing organizations that conduct and manage preclinical studies and clinical trials on the Company’s behalf based on actual time and expenses incurred by them. Further, the Company accrues expenses related to clinical trials based on the level of patient activity according to the related agreement. The Company monitors patient enrollment levels and related activity to the extent reasonably possible and adjusts estimates accordingly. The Company accounts for nonrefundable advance payments for goods and services that will be used in future research and development activities as expenses when the services have been performed or when the goods have been received rather than when the payment is made. Although the Company does not expect its estimates to be materially different from amounts actually incurred, its understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period. To date, there have not been any material adjustments to the Company’s prior estimates of accrued research and development expenses. |
Stock-Based Compensation | Stock-Based Compensation The Company measures stock-based compensation cost at the accounting measurement date based on the fair value of the award and recognizes the expense on a straight-line basis over the requisite service period of the award, which is typically the vesting period. Compensation expense is measured using the fair value of the award at the grant date and is adjusted to reflect actual forfeitures as they occur. The Company estimates the fair value of stock options using the Black-Scholes option pricing model that takes into account the exercise price, the fair value of the Company’s common stock, the expected term of the option, the expected volatility of the Company’s common stock, expected dividends on the Company’s common stock, and the risk-free interest rate over the expected life of the option. Fair value of common stock— Expected term— Expected volatility— Risk-free interest rate— Expected dividend— The Company classifies stock-based compensation expense in its consolidated statements of operations in the same manner in which the award recipient’s payroll costs or service payments are classified. |
Net Loss per Common Share | Net Loss per Common Share Basic net loss per share is computed using the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed using the sum of the weighted average number of common shares outstanding during the period and the effect of dilutive securities. The Company applies the two-class method to calculate its basic and diluted net loss per share as the Company has issued shares that meet the definition of participating securities. The two-class method is an earnings allocation formula that treats a participating security as having rights to earnings that otherwise would have been available to common stockholders. The Company’s participating securities contractually entitle the holders of such shares to participate in dividends; but do not contractually require the holders of such shares to participate in losses of the Company. Accordingly, in periods in which the Company reports a net loss, diluted net loss per share is the same as basic net loss per share, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company’s tax returns. Deferred tax assets and liabilities are determined on the basis of the differences between the consolidated financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. 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. The Company accounts for uncertainty in income taxes recognized. If the tax position is deemed more likely than not to be sustained, it would then be assessed to determine the amount of benefit to recognize in the consolidated financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. To date the Company has no uncertain tax positions and there have been no interest and penalties. |
Recently issued accounting pronouncements | Recently issued accounting pronouncements In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments – Credit Losses (Topic 326) Measurement of Credit Losses on Financial Statements Financial Instruments-Overall In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes interim period and use that rate to calculate its income In August 2020, the FASB issued ASU 2020-06, ASC Subtopic 470-20 “ Debt-Debt with Conversion and Other Options Hedging-Contracts in Entity’s Own Equity |
FAIR VALUE MEASUREMENTS OF FI_2
FAIR VALUE MEASUREMENTS OF FINANCIAL ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS OF FINANCIAL ASSETS | |
Schedule of fair value measurements of financial assets | The Company’s financial assets subject to fair value measurements on a recurring basis and the level of inputs used for such measurements were as follows: As of December 31, 2022 Level 1 Level 2 Level 3 Total (in thousands) Cash and Cash Equivalent Money market funds $ 3,298 $ — $ — $ 3,298 $ 3,298 $ — $ — $ 3,298 Marketable Securities Corporate debt securities $ — $ 15,460 $ — $ 15,460 Commercial paper — 14,999 — 14,999 U.S. Government debt securities — 13,904 — 13,904 Total $ — $ 44,363 $ — $ 44,363 As of December 31, 2021 Level 1 Level 2 Level 3 Total (in thousands) Money market funds included in cash and cash equivalents $ 106,000 $ — $ — $ 106,000 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Marketable Securities | |
Schedule of marketable securities | As of December 31, 2022 Amortized Unrealized Unrealized Fair Cost gains losses value (in thousands) Marketable Securities: Corporate debt securities $ 15,627 $ — $ (167) $ 15,460 Commercial paper 14,999 — — 14,999 U.S. Government debt securities 13,898 6 — 13,904 Total $ 44,524 $ 6 $ (167) $ 44,363 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY AND EQUIPMENT, NET | |
Schedule of property and equipment, net | Property and equipment, net, consisted of the following: Estimated December 31, Useful Life 2022 2021 (in thousands) Computer software 4 years $ 157 $ 71 Less: Accumulated depreciation (59) (33) Property and equipment, net $ 98 $ 38 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
ACCRUED EXPENSES | |
Schedule of accrued expenses | Accrued expenses consist of the following: December 31, 2022 2021 (in thousands) Accrued preclinical and clinical trial costs $ 6,174 $ 1,260 Accrued compensation 2,498 1,059 Accrued consulting 75 77 Accrued professional services 218 499 Accrued other 365 246 Total accrued expenses $ 9,330 $ 3,141 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
DEBT | |
Schedule of long term debt and unamortized discount balances | December 31, 2022 (in thousands) Outstanding principal amount $ 30,000 Add: accreted liability of final payment fee (763) Less: unamortized debt discount 198 Long-term debt, net of discount $ 29,435 |
Schedule of interest expense | Year Ended December 31, 2022 (in thousands) Interest paid or accrued $ 1,246 Non-cash amortization of debt discount (including warrant) 87 Non-cash accrued back-end fee 198 $ 1,531 |
Schedule of future principal payments | Total (in thousands) 2023 $ — 2024 — 2025 17,740 2026 12,260 $ 30,000 |
WARRANT (Tables)
WARRANT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
WARRANT | |
Schedule of warrant outstanding | Shares Initial Recognition Date Exercise Price Expiration Date Warrant 339,725 July 27, 2022 $ 1.3246 July 27, 2032 |
Schedule of fair value assumptions | Stock price $1.41 Strike price $1.32 Volatility (annual) 75.30% Risk-free rate 2.74% Estimated time to expiration (years) 10 Dividend yield —% |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
STOCK-BASED COMPENSATION | |
Schedule of stock-based compensation expense | Stock-based compensation expense as reflected in the Company’s consolidated statements of operations was as follows: Year Ended December 31, 2022 2021 (in thousands) Research and development $ 669 $ 244 General and administrative 2,537 1,327 Stock-based compensation expense included in operating expenses $ 3,206 $ 1,571 |
Summary of stock option activity | A summary of stock option activity for employee and nonemployee awards under the 2021 Plan is presented below: Weighted Weighted Average Average Remaining Contractual Aggregate Options Exercise Price Term Intrinsic Value (in years) (in thousands) Outstanding at December 31, 2021 3,021,799 $ 3.71 8.94 $ 10,903 Granted 1,734,295 $ 7.80 Exercised (44,105) $ 0.43 Cancelled (303,715) 3.65 Outstanding at December 31, 2022 4,408,274 $ 3.44 8.52 $ 350 Vested at December 31, 2022 1,445,327 $ 2.97 7.77 $ 268 Vested and expected to vest at December 31, 2022 4,408,274 $ 3.44 8.52 $ 350 |
Schedule of assumptions used in estimation of fair value | The weighted average grant-date fair value of stock options granted during the years ended December 31, 2022 and 2021 was $1.96 and $4.60 per share, respectively. The fair value of each stock option was estimated using a Black-Scholes option-pricing model with the following assumptions: Year Ended December 31, 2022 2021 Risk-free interest rate 1.62 - 4.37 % 0.95 - 1.35 % Volatility 72-80 % 75-77 % Dividend yield — % — % Expected term (years) 6 6 |
Summary of restricted stock units activity | The following table summarizes activity related to restricted stock units: Weighted Average Grant Date Number of shares Fair Value Unvested at December 31, 2021 200,996 $ 16.00 Vested (75,374) $ 16.00 Unvested at December 31, 2022 125,622 $ 16.00 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
Schedule of effective income tax rate reconciliation | Year Ended December 31, 2022 2021 Profit before tax at federal statutory rate 21.0 % 21.0 % State tax benefit, net of federal benefit 0.6 % 0.4 % Research and development credit carryovers 2.9 % 4.4 % Permanent differences (1.1) % (1.4) % Return to Provision True Ups 0.1 % 0.1 % Change in valuation allowance (23.5) % (24.5) % Effective income tax rate — % — % |
Schedule of net deferred tax asset (liability) | December 31, 2022 2021 (in thousands) Deferred tax assets and (liabilities) Net operating losses $ 12,427 $ 10,303 Research and development expenses 10,945 — Research and development credit 4,645 1,697 Accrued expenses 711 130 Stock-based compensation 411 151 Other 135 — Intangible assets 5,944 666 Gross deferred tax asset 35,218 12,947 Valuation allowance (35,210) (12,945) Net deferred tax asset 8 2 Stock-based compensation — — Fixed assets (8) (2) Deferred tax liabilities (8) (2) Net deferred tax asset (liability) $ — $ — |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
NET LOSS PER SHARE | |
Summary of computation of basic and diluted net loss per share | The following table summarizes the computation of basic and diluted net loss per share of the Company (in thousands, except share and per share amounts): Year Ended December 31, 2022 2021 Net loss $ (95,080) $ (32,039) Weighted average common stock outstanding, basic and diluted 23,267,120 12,132,610 Net loss per share, basic and diluted $ (4.09) $ (2.64) |
Schedule of antidilutive securities excluded from computation of diluted net loss per share | December 31, 2022 2021 Outstanding stock options 4,408,274 3,021,799 Unvested restricted stock 3,945 19,721 Unvested RSUs 125,622 200,996 Warrant 339,725 — 4,877,566 3,242,516 |
NATURE OF BUSINESS - Liquidity
NATURE OF BUSINESS - Liquidity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Jul. 31, 2022 | |
Debt | |||
Net loss | $ 95,080 | $ 32,039 | |
Accumulated deficit | 150,266 | 55,186 | |
Proceeds from issuance of long-term debt | 30,000 | $ 0 | |
Term loan | K2 HealthVentures LLC | |||
Debt | |||
Principal amount | $ 50,000 | ||
Term loan tranche one | |||
Debt | |||
Proceeds from issuance of long-term debt | $ 29,500 | ||
Term loan tranche one | K2 HealthVentures LLC | |||
Debt | |||
Principal amount | 30,000 | ||
Term loan tranche two | K2 HealthVentures LLC | |||
Debt | |||
Principal amount | $ 20,000 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) item segment | Dec. 31, 2021 USD ($) item | |
Summary of significant accounting policies | ||
Number of operating segments | segment | 1 | |
Impairment losses | $ 0 | |
Legal and professional costs | 300 | $ 200 |
Uncertain tax positions | 0 | |
Interest and penalties | $ 0 | $ 0 |
Percentage of dividend yielded | 0 | |
Accounts payable | Major suppliers | Supplier Concentration Risk | ||
Summary of significant accounting policies | ||
Number of vendors | item | 2 | 1 |
Concentration risk | 87% | 74% |
Research and development | Major suppliers | Supplier Concentration Risk | ||
Summary of significant accounting policies | ||
Number of vendors | item | 3 | 2 |
Concentration risk | 78% | 61% |
FAIR VALUE MEASUREMENTS OF FI_3
FAIR VALUE MEASUREMENTS OF FINANCIAL ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair value measurements of financial assets | ||
Transfers from Level 1 to Level 2, Assets | $ 0 | $ 0 |
Transfers from Level 2 to Level 1, Assets | 0 | 0 |
Transfers into (out of) Level 3, Assets | 0 | 0 |
Recurring | ||
Fair value measurements of financial assets | ||
Marketable Securities | 44,363 | |
Recurring | Level 1 | ||
Fair value measurements of financial assets | ||
Marketable Securities | 0 | |
Recurring | Level 2 | ||
Fair value measurements of financial assets | ||
Marketable Securities | 44,363 | |
Recurring | Level 3 | ||
Fair value measurements of financial assets | ||
Marketable Securities | 0 | |
Recurring | Corporate Debt Securities | ||
Fair value measurements of financial assets | ||
Marketable Securities | 15,460 | |
Recurring | Corporate Debt Securities | Level 1 | ||
Fair value measurements of financial assets | ||
Marketable Securities | 0 | |
Recurring | Corporate Debt Securities | Level 2 | ||
Fair value measurements of financial assets | ||
Marketable Securities | 15,460 | |
Recurring | Corporate Debt Securities | Level 3 | ||
Fair value measurements of financial assets | ||
Marketable Securities | 0 | |
Recurring | Commercial Paper | ||
Fair value measurements of financial assets | ||
Marketable Securities | 14,999 | |
Recurring | Commercial Paper | Level 1 | ||
Fair value measurements of financial assets | ||
Marketable Securities | 0 | |
Recurring | Commercial Paper | Level 2 | ||
Fair value measurements of financial assets | ||
Marketable Securities | 14,999 | |
Recurring | U.S. Government Debt Securities | ||
Fair value measurements of financial assets | ||
Marketable Securities | 13,904 | |
Recurring | U.S. Government Debt Securities | Level 1 | ||
Fair value measurements of financial assets | ||
Marketable Securities | 0 | |
Recurring | U.S. Government Debt Securities | Level 2 | ||
Fair value measurements of financial assets | ||
Marketable Securities | $ 13,904 | |
Recurring | Money Market Funds | ||
Fair value measurements of financial assets | ||
Cash Equivalents | 106,000 | |
Recurring | Money Market Funds | Level 1 | ||
Fair value measurements of financial assets | ||
Cash Equivalents | 106,000 | |
Recurring | Money Market Funds | Level 2 | ||
Fair value measurements of financial assets | ||
Cash Equivalents | 0 | |
Recurring | Money Market Funds | Level 3 | ||
Fair value measurements of financial assets | ||
Cash Equivalents | $ 0 |
Marketable Securities - Fair Va
Marketable Securities - Fair Value (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Marketable Securities | |
Amortized Cost | $ 44,524 |
Unrealized gains | 6 |
Unrealized losses | (167) |
Fair value | 44,363 |
Corporate Debt Securities | |
Marketable Securities | |
Amortized Cost | 15,627 |
Unrealized gains | 0 |
Unrealized losses | (167) |
Fair value | 15,460 |
Commercial Paper | |
Marketable Securities | |
Amortized Cost | 14,999 |
Unrealized gains | 0 |
Unrealized losses | 0 |
Fair value | 14,999 |
U.S. Government Debt Securities | |
Marketable Securities | |
Amortized Cost | 13,898 |
Unrealized gains | 6 |
Unrealized losses | 0 |
Fair value | $ 13,904 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property and equipment, net | ||
Less: Accumulated depreciation | $ (59) | $ (33) |
Property and equipment, net | 98 | 38 |
Depreciation expense | 27 | 18 |
Maximum | ||
Property and equipment, net | ||
Depreciation expense | $ 100 | |
Computer software | ||
Property and equipment, net | ||
Estimated Useful Life | 4 years | |
Property, Plant and Equipment, Gross | $ 157 | $ 71 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
ACCRUED EXPENSES | ||
Accrued preclinical and clinical trial costs | $ 6,174 | $ 1,260 |
Accrued compensation | 2,498 | 1,059 |
Accrued consulting | 75 | 77 |
Accrued professional services | 218 | 499 |
Accrued other | 365 | 246 |
Total accrued expenses | $ 9,330 | $ 3,141 |
DEBT- Narrative (Details)
DEBT- Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |
Jul. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Debt | |||
Common stock, par value | $ 0.0001 | $ 0.0001 | |
Interest expense | $ 1,500 | ||
K2 HealthVentures LLC | Maximum | |||
Debt | |||
Investment from lenders in future equity financings | $ 5,000 | ||
Percent of equity investment from lenders | 10% | ||
Term loan | K2 HealthVentures LLC | |||
Debt | |||
Principal amount | $ 50,000 | ||
Interest rate (as a percent) | 7.95% | ||
Interest only payments term | 30 months | ||
Period of interest and principal payments | 18 months | ||
Threshold interest rate | 3.20% | ||
End of term charge (as a percent) | 6.45% | ||
Effective interest rate | 11.19% | ||
Principal amount for debt conversion | $ 3,250 | ||
Common stock, par value | $ 0.0001 | ||
Conversion price | $ 2.6493 | ||
Nasdaq beneficial ownership limitations, percentage | 19.99% | ||
Debt issuance costs | $ 900 | ||
Interest expense | $ 1,531 | ||
Term loan | K2 HealthVentures LLC | Repayment in first year after funding | |||
Debt | |||
Percent of prepayment premium | 3% | ||
Term loan | K2 HealthVentures LLC | Repayment in second year after funding | |||
Debt | |||
Percent of prepayment premium | 2% | ||
Term loan | K2 HealthVentures LLC | Repayment in third year after funding | |||
Debt | |||
Percent of prepayment premium | 1% | ||
Term loan | K2 HealthVentures LLC | Repayment after third year of funding | |||
Debt | |||
Percent of prepayment premium | 0% | ||
Term loan | K2 HealthVentures LLC | Minimum | |||
Debt | |||
Cash, cash equivalents and marketable securities balances to be maintained | $ 25,000 | ||
Term loan | K2 HealthVentures LLC | Maximum | |||
Debt | |||
Total market capitalization | 250,000 | ||
Term loan tranche one | K2 HealthVentures LLC | |||
Debt | |||
Principal amount | 30,000 | ||
Term loan tranche two | K2 HealthVentures LLC | |||
Debt | |||
Principal amount | $ 20,000 |
DEBT- Long term debt and unamor
DEBT- Long term debt and unamortized discount balances (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt | ||
Long-term debt, net of discount | $ 29,435 | $ 0 |
Term loan | K2 HealthVentures LLC | ||
Debt | ||
Outstanding principal amount | 30,000 | |
Add: accreted liability of final payment fee | (763) | |
Less: unamortized debt discount, long term | 198 | |
Long-term debt, net of discount | $ 29,435 |
DEBT- Interest expense (Details
DEBT- Interest expense (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Components of interest expense | |
Interest expense | $ 1,500 |
Term loan | K2 HealthVentures LLC | |
Components of interest expense | |
Interest Paid or Accrued | 1,246 |
Non-Cash amortization of Debt discount (Including Warrants) | 87 |
Non-Cash accrued Back-end fee | 198 |
Interest expense | $ 1,531 |
DEBT- Future principal payments
DEBT- Future principal payments schedule (Details) - Term loan - K2 HealthVentures LLC $ in Thousands | Dec. 31, 2022 USD ($) |
Future principal payments schedule | |
2023 | $ 0 |
2024 | 0 |
2025 | 17,740 |
2026 | 12,260 |
Total | $ 30,000 |
WARRANT - Narrative (Details)
WARRANT - Narrative (Details) - K2 HealthVentures LLC - $ / shares | Dec. 31, 2022 | Jul. 31, 2022 |
Class of Warrant or Right [Line Items] | ||
Number of shares purchased by warrants | 339,725 | 339,725 |
Warrants exercise price | $ 1.3246 | $ 1.3246 |
Warrant outstanding | 339,725 |
WARRANT - Fair value assumption
WARRANT - Fair value assumptions (Details) $ in Millions | Dec. 31, 2022 USD ($) Y $ / shares |
Warrant | |
Fair value of warrants | $ | $ 0.4 |
Stock price | |
Warrant | |
Warrants, measurement input | 1.41 |
Strike price | |
Warrant | |
Warrants, measurement input | 1.32 |
Volatility (annual) | |
Warrant | |
Warrants, measurement input | 0.7530 |
Risk-free rate | |
Warrant | |
Warrants, measurement input | 0.0274 |
Estimated time to expiration (years) | |
Warrant | |
Warrants, measurement input | Y | 10 |
Dividend yield | |
Warrant | |
Warrants, measurement input | 0 |
EQUITY - (Details)
EQUITY - (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | |
Jul. 31, 2022 USD ($) | Dec. 31, 2022 Vote $ / shares shares | Dec. 31, 2021 $ / shares shares | |
Equity | |||
Preferred stock, shares authorized | shares | 10,000,000 | 10,000,000 | |
Common stock, shares authorized | shares | 500,000,000 | 500,000,000 | |
Common stock, par value | $ 0.0001 | $ 0.0001 | |
Number of votes per common stock | Vote | 1 | ||
Dividends declared | $ 0 | ||
Dividends paid | $ 0 | ||
Cowen and Company, LLC | At-The-Market offering | |||
Equity | |||
Gross proceeds | $ | $ 50 |
STOCK-BASED COMPENSATION - Expe
STOCK-BASED COMPENSATION - Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Stock-based compensation | ||
Stock-based compensation expense included in operating expenses | $ 3,206 | $ 1,571 |
Research and development | ||
Stock-based compensation | ||
Stock-based compensation expense included in operating expenses | 669 | 244 |
General and administrative | ||
Stock-based compensation | ||
Stock-based compensation expense included in operating expenses | $ 2,537 | $ 1,327 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock incentive plan (Details) - shares | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2022 | Dec. 31, 2022 | Jun. 24, 2021 | |
2021 Equity Incentive Plan | |||
Stock-based compensation | |||
Number of shares authorized | 1,483,445 | ||
Shares available for issuance | 1,450,007 | ||
Additional number of shares authorized (as a percent) | 5% | ||
Additional number of shares authorized | 1,165,626 | ||
2021 Employee Stock Purchase Plan | |||
Stock-based compensation | |||
Number of shares authorized | 228,222 | ||
Shares available for issuance | 460,281 | ||
Additional number of shares authorized | 233,125 | ||
2021 Employee Stock Purchase Plan | Maximum | |||
Stock-based compensation | |||
Number of shares authorized | 4,564,440 | ||
Additional number of shares authorized (as a percent) | 1% |
STOCK-BASED COMPENSATION - St_2
STOCK-BASED COMPENSATION - Stock options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Options | ||
Outstanding at beginning of period (in shares) | 3,021,799 | |
Granted (in shares) | 1,734,295 | |
Exercised (in shares) | (44,105) | |
Cancelled (in shares) | (303,715) | |
Outstanding at end of period (in shares) | 4,408,274 | 3,021,799 |
Vested at end of period (in shares) | 1,445,327 | |
Vested and expected to vest at end of period (in shares) | 4,408,274 | |
Weighted average exercise price | ||
Outstanding at beginning of period (in dollars per share) | $ 3.71 | |
Granted (in dollars per share) | 7.80 | |
Exercised (in dollars per share) | 0.43 | |
Cancelled (in dollars per share) | 3.65 | |
Outstanding at end of period (in dollars per share) | 3.44 | $ 3.71 |
Vested at end of period (in dollars per share) | 2.97 | |
Vested and expected to vest at end of period (in dollars per share) | $ 3.44 | |
Weighted-average remaining contractual term and Aggregate intrinsic value | ||
Outstanding at end of period (in years) | 8 years 6 months 7 days | 8 years 11 months 8 days |
Vested at end of period (in years) | 7 years 9 months 7 days | |
Vested and expected to vest at end of period (in years) | 8 years 6 months 7 days | |
Outstanding at beginning of period (in dollars) | $ 10,903 | |
Outstanding at end of period (in dollars) | 350 | $ 10,903 |
Vested at end of period (in dollars) | 268 | |
Vested and expected to vest at end of period (in dollars) | $ 350 | |
Weighted average grant-date fair value of stock options granted | $ 1.96 | $ 4.60 |
STOCK-BASED COMPENSATION - Assu
STOCK-BASED COMPENSATION - Assumptions (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair value assumptions | ||
Fair value of options vested | $ 2,800 | $ 600 |
Stock-based compensation expense | 3,206 | $ 1,571 |
Unrecognized compensation cost | $ 6,500 | |
Expected remaining weighted-average period for recognition | 2 years 7 months 6 days | |
Outstanding stock options | ||
Fair value assumptions | ||
Risk-free interest rate, Minimum | 1.62% | 0.95% |
Risk-free interest rate, Maximum | 4.37% | 1.35% |
Volatility, Minimum | 72% | 75% |
Volatility, Maximum | 80% | 77% |
Dividend yield | 0% | 0% |
Expected term (years) | 6 years | 6 years |
Stock-based compensation expense | $ 2,400 | $ 1,100 |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Common Stock (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Stock-based compensation | ||
Liability from the early exercise | $ 2 | $ 8 |
Stock-based compensation expense | 3,206 | 1,571 |
Unvested restricted stock | Maximum | ||
Stock-based compensation | ||
Liability from the early exercise | 10 | |
Stock-based compensation expense | $ 100 | $ 100 |
STOCK-BASED COMPENSATION - Re_2
STOCK-BASED COMPENSATION - Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Weighted-average grant date fair value | ||
Stock-based compensation expense | $ 3,206 | $ 1,571 |
Expected remaining weighted-average period for recognition | 2 years 7 months 6 days | |
Treasury stock, common (in shares) | 28,641 | |
Treasury stock, common, value | $ 35 | $ 0 |
Restricted Stock Units | ||
Stock-based compensation | ||
Vesting period | 4 years | |
Vesting percentage | 25% | |
Number of shares | ||
Unvested at beginning of period (in shares) | 200,996 | |
Vested (in shares) | (75,374) | |
Unvested at end of period (in shares) | 125,622 | 200,996 |
Weighted-average grant date fair value | ||
Unvested at beginning of period (in dollars per share) | $ 16 | |
Vested (in dollars per share) | 16 | |
Unvested at end of period (in dollars per share) | $ 16 | $ 16 |
Stock-based compensation expense | $ 800 | $ 400 |
Unrecognized compensation cost | $ 2,000 | |
Expected remaining weighted-average period for recognition | 2 years 4 months 24 days |
ASSET PURCHASE AND LICENSE AG_2
ASSET PURCHASE AND LICENSE AGREEMENTS - (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | 24 Months Ended | ||
May 31, 2019 USD ($) | May 31, 2019 EUR (€) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) | |
Asset Acquisition [Line Items] | |||||
Research and development | $ 78,717 | $ 23,595 | |||
Asset Purchase Agreement relating to Seribantumab | |||||
Asset Acquisition [Line Items] | |||||
Upfront payment | $ 3,500 | ||||
Research and development | 3,500 | ||||
Milestone payments paid | $ 0 | $ 0 | |||
Asset Purchase Agreement relating to Seribantumab | Maximum | |||||
Asset Acquisition [Line Items] | |||||
Milestone payments payable | $ 54,500 | ||||
Dyax | |||||
Asset Acquisition [Line Items] | |||||
Number of days written prior notice to terminate agreement | 90 days | 90 days | |||
Dyax | Maximum | |||||
Asset Acquisition [Line Items] | |||||
Milestone payments payable | $ 9,300 | ||||
Selexis | |||||
Asset Acquisition [Line Items] | |||||
Number of days written prior notice to terminate agreement | 60 days | 60 days | |||
Royalty payments payable | € | € 200,000 | ||||
Percentage of royalty on net sales of licensed products | 1% | 1% | |||
Selexis | Maximum | |||||
Asset Acquisition [Line Items] | |||||
Milestone payments payable, per licensed product | € | € 900 | ||||
National Institute of Health | Maximum | |||||
Asset Acquisition [Line Items] | |||||
Milestone payments payable | $ 400 |
ASSET PURCHASE AND LICENSE AG_3
ASSET PURCHASE AND LICENSE AGREEMENTS - CSPC License Agreement (Details) - License Agreement - CSPC Megalith Biopharmaceutical Co., Ltd $ in Millions | 1 Months Ended |
Jul. 31, 2022 USD ($) | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Upfront license fee | $ 27 |
Term of agreement (in years) | 10 years |
Number of days written prior notice to terminate agreement | 180 days |
Maximum | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Development and regulatory milestone payments | $ 148 |
Commercial milestone payments | 1,000 |
Payments as percentage of non-royalty sublicense income | $ 50 |
ASSET PURCHASE AND LICENSE AG_4
ASSET PURCHASE AND LICENSE AGREEMENTS - Other Research Arrangements (Details) - Caris Agreement - Caris | 12 Months Ended |
Dec. 31, 2022 | |
Other Research Arrangements | |
Term of agreement (in years) | 3 years |
Renewal term (in years) | 1 year |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | 24 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | |
INCOME TAXES | |||
Provision for income taxes | $ 25 | $ 0 | $ 0 |
INCOME TAXES - Schedule of effe
INCOME TAXES - Schedule of effective income tax rate reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | ||
Profit before tax at federal statutory rate | 21% | 21% |
State tax benefit, net of federal benefit | 0.60% | 0.40% |
Research and development credit carryovers | 2.90% | 4.40% |
Permanent differences | (1.10%) | (1.40%) |
Return to Provision True Ups | 0.10% | 0.10% |
Change in valuation allowance | (23.50%) | (24.50%) |
Effective income tax rate | 0% | 0% |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Operating Loss Carryforwards [Line Items] | |
Increase in valuation allowance | $ 22.3 |
Federal | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carry forwards | 58 |
Tax credits | 4.2 |
State | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carry forwards | 4.5 |
Tax credits | $ 0.5 |
INCOME TAXES - Schedule of net
INCOME TAXES - Schedule of net deferred tax asset (liability) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Deferred tax assets and (liabilities) | ||
Net operating losses | $ 12,427 | $ 10,303 |
Research and development expenses | 10,945 | 0 |
Research and development credit | 4,645 | 1,697 |
Accrued Expenses | 711 | 130 |
Stock-based compensation | 411 | 151 |
Other | 135 | 0 |
Intangible assets | 5,944 | 666 |
Gross deferred tax asset | 35,218 | 12,947 |
Valuation allowance | (35,210) | (12,945) |
Net deferred tax asset | 8 | 2 |
Stock-based compensation | 0 | 0 |
Fixed assets | (8) | (2) |
Deferred tax liabilities | (8) | (2) |
Net deferred tax asset (liability) | 0 | 0 |
Accrued interest and penalties | 0 | |
Unrecognized tax benefits, income tax penalties and interest expense | $ 0 | $ 0 |
NET LOSS PER SHARE (Details)
NET LOSS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
NET LOSS PER SHARE | ||
Net loss | $ (95,080) | $ (32,039) |
Weighted average common stock outstanding, basic (in shares) | 23,267,120 | 12,132,610 |
Weighted average common stock outstanding, diluted (in shares) | 23,267,120 | 12,132,610 |
Net loss per share, basic (in dollars per share) | $ (4.09) | $ (2.64) |
Net loss per share, diluted (in dollars per share) | $ (4.09) | $ (2.64) |
NET LOSS PER SHARE - Antidiluti
NET LOSS PER SHARE - Antidilutive securities (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive securities | ||
Antidilutive securities excluded from computation (in shares) | 4,877,566 | 3,242,516 |
Outstanding stock options | ||
Antidilutive securities | ||
Antidilutive securities excluded from computation (in shares) | 4,408,274 | 3,021,799 |
Unvested restricted stock | ||
Antidilutive securities | ||
Antidilutive securities excluded from computation (in shares) | 3,945 | 19,721 |
Restricted Stock Units | ||
Antidilutive securities | ||
Antidilutive securities excluded from computation (in shares) | 125,622 | 200,996 |
Warrant | ||
Antidilutive securities | ||
Antidilutive securities excluded from computation (in shares) | 339,725 |
DEFINED CONTRIBUTION PLAN (Deta
DEFINED CONTRIBUTION PLAN (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
DEFINED CONTRIBUTION PLAN | ||
Matching contributions | $ 0.2 | $ 0.1 |