Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 29, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-39186 | |
Entity Registrant Name | ARCUTIS BIOTHERAPEUTICS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 81-2974255 | |
Entity Address, Address Line One | 3027 Townsgate Road | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | Westlake Village | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 91361 | |
City Area Code | 805 | |
Local Phone Number | 418-5006 | |
Title of 12(b) Security | Common Stock, par value $0.0001 | |
Trading Symbol | ARQT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 51,417,963 | |
Entity Central Index Key | 0001787306 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 69,795 | $ 96,449 |
Restricted cash | 1,234 | 1,542 |
Marketable securities | 273,806 | 290,610 |
Prepaid expenses and other current assets | 14,083 | 14,172 |
Total current assets | 358,918 | 402,773 |
Property, plant, and equipment, net | 2,152 | 2,261 |
Operating lease right-of-use asset | 2,961 | 3,040 |
Other assets | 78 | 78 |
Total assets | 364,109 | 408,152 |
Current liabilities: | ||
Accounts payable | 12,466 | 7,353 |
Accrued liabilities | 19,990 | 25,540 |
Operating lease liability | 507 | 433 |
Total current liabilities | 32,963 | 33,326 |
Operating lease liability, noncurrent | 4,613 | 4,774 |
Long-term debt, net | 72,742 | 72,350 |
Other long-term liabilities | 19 | 25 |
Total liabilities | 110,337 | 110,475 |
Commitments and Contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.0001 par value; 10,000,000 shares authorized at March 31, 2022 and December 31, 2021; no shares issued and outstanding at March 31, 2022 and December 31, 2021; | 0 | 0 |
Common stock, $0.0001 par value; 300,000,000 shares authorized at March 31, 2022 and December 31, 2021; 51,410,463 and 50,345,755 shares issued at March 31, 2022 and December 31, 2021, respectively; 51,360,348 and 50,255,614 shares outstanding at March 31, 2022 and December 31, 2021, respectively | 5 | 5 |
Additional paid-in capital | 727,417 | 706,233 |
Accumulated other comprehensive loss | (1,020) | (255) |
Accumulated deficit | (472,630) | (408,306) |
Total stockholders’ equity | 253,772 | 297,677 |
Total liabilities and stockholders’ equity | $ 364,109 | $ 408,152 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares, issued (in shares) | 51,410,463 | 50,345,755 |
Common stock, shares outstanding (in shares) | 51,360,348 | 50,255,614 |
Condensed Statements of Operati
Condensed Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating expenses: | ||
Research and development | $ 40,622 | $ 21,631 |
General and administrative | 22,006 | 14,454 |
Total operating expenses | 62,628 | 36,085 |
Loss from operations | (62,628) | (36,085) |
Other income (expense): | ||
Other income, net | 142 | 43 |
Interest expense | (1,838) | 0 |
Total other income (expense) | (1,696) | 43 |
Net loss | (64,324) | (36,042) |
Other comprehensive income (loss): | ||
Unrealized gain (loss) on marketable securities | (765) | 44 |
Comprehensive loss | $ (65,089) | $ (35,998) |
Per share information: | ||
Net loss per share, basic (in USD per share) | $ (1.27) | $ (0.76) |
Net loss per share, diluted (in USD per share) | $ (1.27) | $ (0.76) |
Weighted-average shares used in computing net loss per share, basic (in shares) | 50,513,524 | 47,280,769 |
Weighted-average shares used in computing net loss per share, diluted (in shares) | 50,513,524 | 47,280,769 |
Condensed Statements of Convert
Condensed Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) - USD ($) $ in Thousands | Total | IPO | Common Stock | Common StockIPO | Additional Paid-In Capital | Additional Paid-In CapitalIPO | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Beginning balance, convertible preferred stock (in shares) at Dec. 31, 2020 | 0 | |||||||
Beginning Balance at Dec. 31, 2020 | $ 0 | |||||||
Ending balance, convertible preferred stock (in shares) at Mar. 31, 2021 | 0 | |||||||
Ending Balance at Mar. 31, 2021 | $ 0 | |||||||
Beginning balance (in shares) at Dec. 31, 2020 | 43,338,438 | |||||||
Beginning Balance at Dec. 31, 2020 | 270,621 | $ 4 | $ 472,569 | $ (2) | $ (201,950) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of shares of common stock for public offering, net of issuance costs (in shares) | 6,325,000 | |||||||
Issuance of shares of common stock for public offering, net of issuance costs | $ 207,490 | $ 1 | $ 207,489 | |||||
Issuance of common stock upon the exercise of stock options (in shares) | 111,282 | |||||||
Issuance of common stock upon the exercise of stock options | 325 | 325 | ||||||
Issuance of common stock upon the vesting of restricted stock units (in shares) | 32,362 | |||||||
Lapse of repurchase rights related to common stock issued pursuant to early exercises (in shares) | 79,925 | |||||||
Lapse of repurchase rights related to common stock issued pursuant to early exercises | 53 | 53 | ||||||
Stock-based compensation expense | 8,503 | 8,503 | ||||||
Unrealized gain on marketable securities | 44 | 44 | ||||||
Net loss | (36,042) | (36,042) | ||||||
Ending Balance at Mar. 31, 2021 | $ 450,994 | $ 5 | 688,939 | 42 | (237,992) | |||
Ending balance (in shares) at Mar. 31, 2021 | 49,887,007 | |||||||
Beginning balance, convertible preferred stock (in shares) at Dec. 31, 2021 | 0 | |||||||
Beginning Balance at Dec. 31, 2021 | $ 0 | |||||||
Ending balance, convertible preferred stock (in shares) at Mar. 31, 2022 | 0 | |||||||
Ending Balance at Mar. 31, 2022 | $ 0 | |||||||
Beginning balance (in shares) at Dec. 31, 2021 | 50,255,614 | |||||||
Beginning Balance at Dec. 31, 2021 | 297,677 | $ 5 | 706,233 | (255) | (408,306) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of shares of common stock for public offering, net of issuance costs (in shares) | 882,353 | |||||||
Issuance of shares of common stock for public offering, net of issuance costs | $ 14,366 | 14,366 | ||||||
Issuance of common stock upon the exercise of stock options (in shares) | 102,935 | 102,935 | ||||||
Issuance of common stock upon the exercise of stock options | $ 260 | 260 | ||||||
Issuance of common stock upon the vesting of restricted stock units (in shares) | 79,421 | |||||||
Lapse of repurchase rights related to common stock issued pursuant to early exercises (in shares) | 40,025 | |||||||
Lapse of repurchase rights related to common stock issued pursuant to early exercises | 25 | 25 | ||||||
Stock-based compensation expense | 6,533 | 6,533 | ||||||
Unrealized gain on marketable securities | (765) | (765) | ||||||
Net loss | (64,324) | (64,324) | ||||||
Ending Balance at Mar. 31, 2022 | $ 253,772 | $ 5 | $ 727,417 | $ (1,020) | $ (472,630) | |||
Ending balance (in shares) at Mar. 31, 2022 | 51,360,348 |
Condensed Statements of Conve_2
Condensed Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Common Stock | ||
Stock issuance costs | $ 634 | $ 603 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (64,324) | $ (36,042) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 150 | 98 |
Non-cash lease expense | 79 | 80 |
Net amortization/accretion on marketable securities | 618 | 616 |
Non-cash interest expense | 392 | 0 |
Stock-based compensation expense | 6,533 | 8,503 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | 0 | (12,663) |
Accounts payable | 5,196 | (3,880) |
Accrued liabilities | (5,532) | (3,001) |
Operating lease liabilities | (87) | 86 |
Net cash used in operating activities | (56,975) | (46,203) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of marketable securities | (55,504) | 0 |
Proceeds from maturities of marketable securities | 70,925 | 62,550 |
Purchases of property and equipment | (124) | (554) |
Net cash provided by investing activities | 15,297 | 61,996 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of common stock upon exercise of stock options | 260 | 325 |
Proceeds from issuance of shares under ATM, net of issuance costs | 14,456 | 0 |
Proceeds from issuance of common stock, net of issuance costs | 0 | 207,490 |
Net cash provided by financing activities | 14,716 | 207,815 |
Net increase (decrease) in cash, cash equivalents, and restricted cash | (26,962) | 223,608 |
Cash, cash equivalents, and restricted cash at beginning of period | 97,991 | 66,624 |
Cash, cash equivalents, and restricted cash at end of period | 71,029 | 290,232 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING INFORMATION: | ||
Interest expense paid in cash | $ 1,425 | $ 0 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business Arcutis Biotherapeutics, Inc., or the Company, is a late-stage biopharmaceutical company focused on developing and commercializing treatments for dermatological diseases with high unmet medical needs. The Company's current portfolio is comprised of highly differentiated topical treatments with significant potential to treat immune-mediated dermatological diseases and conditions. The Company believes it has built the industry's leading platform for dermatologic product development. The Company’s strategy is to focus on validated biological targets and to use our drug development platform and deep dermatology expertise to develop differentiated products that have the potential to address the major shortcomings of existing therapies in its targeted indications. The Company believes this strategy uniquely positions it to rapidly advance its goal of bridging the treatment innovation gap in dermatology, while maximizing its probability of technical success. Initial Public Offering and Follow-On Financings On February 4, 2020, the Company closed an initial public offering (IPO) issuing and selling 10,781,250 shares of common stock at a public offering price of $17.00 per share, including 1,406,250 shares sold pursuant to the underwriters’ full exercise of their option to purchase additional shares. The aggregate net proceeds received by the Company from the offering were approximately $167.2 million, after deducting underwriting discounts, commissions, and offering related transaction costs . Upon the closing of the IPO, all of the outstanding shares of convertible preferred stock automatically converted into shares of common stock. Subsequent to the closing of the IPO, there were no shares of convertible preferred stock outstanding. On October 6, 2020, the Company completed a public offering of 4,000,000 shares of common stock at an offering price of $25.00 per share, receiving aggregate net proceeds of approximately $93.4 million after deducting the underwriting discounts, commissions, and offering related transaction costs. In addition, the Company concurrently sold 1,400,000 shares of common stock in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended, at a price per share equal to the public offering price, receiving net proceeds of $35.0 million. On February 5, 2021, the Company completed a public offering of 6,325,000 shares of stock at an offering price of $35.00 per share, including 825,000 shares sold pursuant to the underwriters full exercise of their option to purchase additional shares. The aggregate net proceeds received by the Company were approximately $207.5 million, after deducting underwriting discounts, commissions, and offering related transaction costs. At-the-Market (ATM) Offerings On May 6, 2021, the Company entered into a sales agreement (Sales Agreement) with Cowen and Company, LLC (Cowen), under which the Company may from time to time issue and sell shares of its common stock through ATM offerings for an aggregate offering price of up to $100.0 million. Cowen will act as the Company's sales agent for the ATM program and is entitled to compensation for its services equal to 3% of the gross proceeds of any shares of common stock sold under the Sales Agreement. In March 2022, the Company sold 882,353 shares under the ATM for $17.00 per share and received $14.5 million in net proceeds. Liquidity The Company has incurred significant losses and negative cash flows from operations since its inception and had an accumulated deficit of $472.6 million and $408.3 million as of March 31, 2022 and December 31, 2021, respectively. The Company had cash, cash equivalents, restricted cash, and marketable securities of $344.8 million and $388.6 million as of March 31, 2022 and December 31, 2021, respectively. As of March 31, 2022, the Company had $75.0 million outstanding under the Loan Agreement and has an aggregate of up to $150.0 million in additional funding that may become available subject to the satisfaction of specified conditions. Prior to selling common stock in its IPO, the Company had historically financed its operations primarily through the sale of its convertible preferred stock. Management expects operating losses to continue for the foreseeable future. The Company believes that its existing capital resources will be sufficient to meet the projected operating requirements for at least 12 months from the date of issuance of its financial statements. The Company will be required to raise additional capital to fund future operations. However, no assurance can be given as to whether additional needed financing will be available on terms acceptable to the Company, if at all. If sufficient funds on acceptable terms are not available when needed, the Company may be required to curtail planned activities to significantly reduce its operating expenses. Failure to manage discretionary spending or raise additional financing, as needed, may adversely impact the Company’s ability to achieve its intended business objectives and have an adverse effect on its results of operations and future prospects. Coronavirus Outbreak In March 2020, the World Health Organization declared a pandemic related to the global novel coronavirus disease 2019 (COVID-19) outbreak. The Company is monitoring the impact COVID-19 may have on the clinical development of its product candidates, including potential delays or modifications to its ongoing and planned trials, as well as its planned commercial activities. The Company believes that the rapid spread of the Omicron variant in late 2021 and early 2022 likely had a minor impact on the enrollment of our clinical trials. Because of this likely impact along with the inherent challenges of enrolling young children in clinical trials, the Company has updated its expected timeline for providing topline data for the INTEGUMENT-PED trial, in atopic dermatitis subjects between two and five years of age, to 2023. The Company cannot at this time predict the specific extent, duration, or full impact that the COVID-19 outbreak will have on its financial condition and operations, including ongoing and planned clinical trials. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The Company’s condensed financial statements have been prepared in accordance with United States generally accepted accounting principles (U.S. GAAP). Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed financial statements and accompanying notes. On an ongoing basis, management evaluates such estimates and assumptions for continued reasonableness. In particular, management makes estimates with respect to accruals for research and development activities, fair value of common stock and convertible preferred stock (prior to the IPO completed in January 2020), stock-based compensation expense, and income taxes. Appropriate adjustments, if any, to the estimates used are made prospectively based upon such periodic evaluation. Actual results could differ from those estimates. Segments To date, the Company has viewed its financial information on an aggregate basis for the purposes of evaluating financial performance and allocating the Company’s resources. Accordingly, the Company has determined that it operates in one segment. Unaudited Interim Condensed Financial Statements The interim condensed balance sheet as of March 31, 2022, the interim condensed statements of operations and comprehensive loss, and the condensed changes in convertible preferred stock and stockholders’ equity (deficit) and cash flows for the three months ended March 31, 2022 and 2021 are unaudited. These unaudited interim condensed financial statements have been prepared on the same basis as the Company’s audited annual financial statements and, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair statement of the Company’s financial information. The financial data and the other financial information disclosed in these notes to the condensed financial statements related to the three month periods are also unaudited. The condensed results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any other future annual or interim period. The condensed balance sheet as of December 31, 2021 included herein was derived from the audited financial statements as of that date. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Therefore, these unaudited interim condensed financial statements should be read in conjunction with the Company’s audited financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2021. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents. Cash equivalents consist primarily of money market funds, commercial paper, U.S. Treasury securities, and short-term corporate debt securities. Restricted Cash As of March 31, 2022 and December 31, 2021, the Company held $1.2 million and $1.5 million, respectively, of restricted cash as collateral for a letter of credit related to our amended office space lease. See Note 7. Marketable Securities Marketable securities consist of investment grade short to intermediate-term fixed income investments that have been classified as available-for-sale and are carried at estimated fair value as determined based upon quoted market prices or pricing models for similar securities. Management determines the appropriate classification of its investments in fixed income securities at the time of purchase. Available-for-sale securities with original maturities beyond three months at the date of purchase, including those that have maturity dates beyond one year from the balance sheet date, are classified as current assets on the condensed balance sheets due to their highly liquid nature and availability for use in current operations. Unrealized gains and losses are excluded from earnings and are reported as a component of other comprehensive income (loss). Realized gains and losses as well as credit losses, if any, on marketable securities are included in other income, net. The Company evaluated the underlying credit quality and credit ratings of the issuers during the period. To date, no such credit losses have occurred or have been recorded. The cost of investments sold is based on the specific-identification method. Unrealized gains and losses on marketable securities are reported as a component of accumulated other comprehensive income (loss) on the condensed balance sheets. Interest on marketable securities is included in other income, net. Concentration of Credit Risk and Other Risks and Uncertainties Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, and marketable securities. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company is exposed to credit risk in the event of a default by the financial institutions holding its cash to the extent recorded on the condensed balance sheets. Management believes the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. Fair Value Measurement The Company’s financial instruments, in addition to those presented in Note 3, include cash equivalents, accounts payable, accrued liabilities, and long-term debt. The carrying amount of cash equivalents, accounts payable, and accrued liabilities approximate their fair values due to their short maturities. As the long-term debt is subject to variable interest rates that are based on market rates which regularly reset, the Company believes that the carrying value of the long-term debt approximates its fair value. Assets and liabilities recorded at fair value on a recurring basis on the condensed balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows: Level 1—Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets which range from two Leases The Company determines if an arrangement is or contains a lease at inception. Right-of-use (ROU) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The classification of the Company’s leases as operating or finance leases, along with the initial measurement and recognition of the associated ROU assets and lease liabilities, is performed at the lease commencement date. The measurement of lease liabilities is based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate, based on the information available at commencement date, to determine the present value of lease payments when its leases do not provide an implicit rate. The Company uses the implicit rate when readily determinable. The ROU asset is based on the measurement of the lease liability, includes any lease payments made prior to or on lease commencement and is adjusted for lease incentives and initial direct costs incurred, as applicable. Lease expense for the Company’s operating leases is recognized on a straight-line basis over the lease term. The Company considers a lease term to be the non-cancelable period that it has the right to use the underlying asset, including any periods where it is reasonably assured the Company will exercise the option to extend the contract. Periods covered by an option to extend are included in the lease term if the lessor controls the exercise of that option. The Company’s lease agreements includes lease and non-lease components and the Company has elected to not separate such components for all classes of assets. Further, the Company elected the short-term lease exception policy, permitting it to not apply the recognition requirements of this standard to leases with terms of 12 months or less (short-term leases) for all classes of assets. Nonclinical and Clinical Accruals and Costs The Company records accrued liabilities for estimated costs of research and development activities conducted by third-party service providers, which include the conduct of nonclinical studies, clinical trials, and contract manufacturing activities. These costs are a significant component of the Company’s research and development expenses. The Company accrues for these costs based on factors such as estimates of the work completed and in accordance with agreements established with its third-party service providers under the service agreements. The Company makes significant judgments and estimates in determining the accrued liabilities balance in each reporting period. As actual costs become known, the Company adjusts its accrued liabilities. For the three months ended March 31, 2022 and 2021, the Company has not experienced any material differences between accrued costs and actual costs incurred. Convertible Preferred Stock Prior to its IPO, the Company classified its outstanding convertible preferred stock outside of stockholders’ equity (deficit) on its condensed balance sheets as the requirements of triggering a deemed liquidation event, as defined within its amended and restated certificate of incorporation, were not entirely within the Company’s control. In the event of such a deemed liquidation event, the proceeds from the event were to be distributed in accordance with the liquidation preferences, provided that the holders of convertible preferred stock had not converted their shares into common stock. The Company recorded the issuance of convertible preferred stock at the issuance price less related issuance costs. The Company did not adjust the carrying values of the convertible preferred stock to the liquidation preferences of such shares because of the uncertainty as to whether or when a deemed liquidation event may have occurred. In connection with the IPO in February 2020, the Company’s outstanding shares of convertible preferred stock were automatically converted into 24,385,388 shares of common stock. Research and Development Research and development expenses include costs directly attributable to the conduct of research and development programs, including the cost of salaries, payroll taxes, employee benefits, license fees, stock-based compensation expense, materials, supplies, and the cost of services provided by outside contractors. All costs associated with research and development are expensed as incurred. Payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods are received or services are rendered. Such payments are evaluated for current or long-term classification based on when they will be realized. The Company has entered into, and may continue to enter into, license agreements to access and utilize certain technology. In each case, the Company evaluates if the license agreement results in the acquisition of an asset or a business. To date, none of the Company’s license agreements have been considered an acquisition of a business. For asset acquisitions, the upfront payments to acquire such licenses, as well as any future milestone payments made before product approval that do not meet the definition of a derivative, are immediately recognized as research and development expense when paid or become payable, provided there is no alternative future use of the rights in other research and development projects. Stock-Based Compensation The Company accounts for share-based payments at fair value. The fair value of stock options is measured using the Black-Scholes option-pricing model. For share-based awards that vest subject to the satisfaction of a service requirement, the fair value measurement date for such awards is the date of grant and the expense is recognized on a straight-line basis, over the expected vesting period. For share-based awards that vest subject to a performance condition, the Company will recognize compensation cost for awards if and when the Company concludes that it is probable that the awards with a performance condition will be achieved on an accelerated attribution method. The Company accounts for forfeitures as they occur. Income Taxes Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period of enactment. The Company records a valuation allowance to reduce deferred tax assets to an amount for which realization is more likely than not. Due to the Company’s historical operating performance and the recorded cumulative net losses in prior fiscal periods, the net deferred tax assets have been fully offset by a valuation allowance. The Company recognizes the tax benefit from an uncertain tax position if it is more likely than not that the tax position will be sustained upon examination by the tax authorities, based on the merits of the position. The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense or benefit. To date, there have been no interest or penalties incurred in relation to the unrecognized tax benefits. The U.S. Congress enacted the American Rescue Plan Act on March 10, 2021, Families First Coronavirus Response Act (FFCR Act) on March 18, 2020, and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) on March 27, 2020. The American Rescue Plan Act is a follow-up to the CARES Act, which continue the emergency economic stimulus package and includes spending and tax breaks to strengthen the U.S. economy and fund a nationwide effort to curtail the effect of COVID-19. The American Rescue Plan Act, FFCR Act, and CARES Act include numerous tax-related provisions, including modifications to the limitations on business interest expense and net operating losses (NOLs), certain refundable employee retention credits, as well as a payment delay of employer payroll taxes in 2020 after the date of enactment. On June 29, 2020, the California State Assembly Bill 85 (Trailer Bill) was enacted which suspends the use of California NOL deductions and certain tax credits, including research and development credits, for the 2020, 2021, and 2022 tax years. The Company does not expect the American Rescue Plan Act, FFCR Act, CARES Act, or Trailer Bill to have a material impact on the Company’s financial statements. Variable Interest Entities The Company reviews agreements it enters into with third-party entities, pursuant to which the Company may have a variable interest in the entity, in order to determine if the entity is a variable interest entity (VIE). If the entity is a VIE, the Company assesses whether or not it is the primary beneficiary of that entity. In determining whether the Company is the primary beneficiary of an entity, the Company applies a qualitative approach that determines whether it has both (i) the power to direct the economically significant activities of the entity and (ii) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to that entity. If the Company determines it is the primary beneficiary of a VIE, it consolidates that VIE into the Company’s financial statements. The Company’s determination about whether it should consolidate such VIEs is made continuously as changes to existing relationships or future transactions may result in a consolidation or deconsolidation event. The Company currently does not consolidate any VIEs. Net Loss Per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period, without consideration for potential dilutive shares of common stock. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common share equivalents outstanding for the period determined using the treasury-stock method. Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share since the effects of potentially dilutive securities are antidilutive. Shares of common stock subject to repurchase are excluded from the weighted-average shares. Recently Adopted Accounting Pronouncements There have been no new accounting pronouncements issued or effective that are expected to have a material impact on the Company's condensed financial statements. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands): March 31, 2022 Level 1 Level 2 Level 3 Total Assets: Money market funds (1) $ 69,795 $ — $ — $ 69,795 Commercial paper — 74,468 — 74,468 Corporate debt securities — 91,860 — 91,860 U.S. Treasury securities 107,478 — — 107,478 Total assets $ 177,273 $ 166,328 $ — $ 343,601 ______________ (1) This balance includes cash requirements settled on a nightly basis. December 31, 2021 Level 1 Level 2 Level 3 Total Assets: Money market funds (1) $ 95,145 $ — $ — $ 95,145 Commercial paper — 119,413 — 119,413 Corporate debt securities — 114,324 — 114,324 U.S. Treasury securities 58,177 — — 58,177 Total assets $ 153,322 $ 233,737 $ — $ 387,059 ______________ (1) This balance includes cash requirements settled on a nightly basis. Money market funds and U.S. Treasury securities are valued based on quoted market prices in active markets, with no valuation adjustment. Commercial paper and corporate debt securities are valued taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities; issuer credit spreads; benchmark securities; prepayment/default projections based on historical data; and other observable inputs. The following table summarizes the estimated value of the Company’s cash, cash equivalents and marketable securities, and the gross unrealized holding gains and losses (in thousands): March 31, 2022 Amortized Unrealized Unrealized Estimated Cash and cash equivalents: Money market funds (1) $ 69,795 $ — $ — $ 69,795 Total cash and cash equivalents $ 69,795 $ — $ — $ 69,795 Marketable securities: Commercial paper $ 74,468 $ — $ — $ 74,468 Corporate debt securities 92,162 2 (304) 91,860 U.S. Treasury securities 108,196 — (718) 107,478 Total marketable securities $ 274,826 $ 2 $ (1,022) $ 273,806 ______________ (1) This balance includes cash requirements settled on a nightly basis. December 31, 2021 Amortized Unrealized Unrealized Estimated Cash and cash equivalents: Money market funds (1) $ 95,145 $ — $ — $ 95,145 Corporate debt securities 1,304 — — 1,304 Total cash and cash equivalents $ 96,449 $ — $ — $ 96,449 Marketable securities: Commercial paper $ 119,413 $ — $ — $ 119,413 Corporate debt securities 113,145 — (125) 113,020 U.S. Treasury securities 58,307 — (130) 58,177 Total marketable securities $ 290,865 $ — $ (255) $ 290,610 ______________ (1) This balance includes cash requirements settled on a nightly basis. Realized gains or losses on investments for the three months ended March 31, 2022 and 2021 were not material. As of March 31, 2022 and December 31, 2021, unrealized credit losses on marketable securities were not material, and accordingly, no allowance for credit losses were recorded. As of March 31, 2022 and December 31, 2021, all securities have a maturity of 18 months or less and all securities with gross unrealized losses have been in a continuous loss position for less than one year. |
Balance Sheet Components
Balance Sheet Components | 3 Months Ended |
Mar. 31, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Components | Balance Sheet Components Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following (in thousands): March 31, 2022 December 31, 2021 Prepaid insurance $ 2,721 $ 518 Prepaid clinical trial costs 2,362 5,629 Tax credits 362 362 Other prepaid expenses and current assets 8,638 7,663 Total prepaid expenses and other current assets $ 14,083 $ 14,172 Accrued Liabilities Accrued liabilities consist of the following (in thousands): March 31, 2022 December 31, 2021 Clinical trial accruals $ 11,308 $ 13,217 Accrued compensation 3,469 9,130 Accrued expenses and other current liabilities 5,213 3,193 Total accrued liabilities $ 19,990 $ 25,540 |
Property and Equipment, net
Property and Equipment, net | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net Property and equipment, net consists of the following (in thousands): March 31, 2022 December 31, 2021 Computer hardware $ 775 $ 775 Furniture and fixtures 379 346 Software 104 104 Construction in process 8 — Leasehold improvements 1,568 1,568 Property and equipment, gross 2,834 2,793 Less accumulated depreciation (682) (532) Property and equipment, net $ 2,152 $ 2,261 Depreciation expense was $150,000 and $98,000 for the three months ended March 31, 2022 and 2021, respectively. Leasehold improvements are depreciated over the term of the lease, which is the shorter of the improvements' expected useful lives and the lease term. All other fixed asset depreciation is recorded using the straight-line method over the estimated useful lives of the assets ( two |
License Agreements
License Agreements | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
License Agreements | License Agreements AstraZeneca License Agreement In July 2018, the Company entered into an exclusive license agreement, or the AstraZeneca License Agreement, with AstraZeneca AB (AstraZeneca), granting the Company a worldwide exclusive license, with the right to sublicense through multiple tiers, under certain AstraZeneca-controlled patent rights, know-how and regulatory documentation, to research, develop, manufacture, commercialize, and otherwise exploit products containing roflumilast in topical forms, as well as delivery systems sold with or for the administration of roflumilast, or collectively, the AZ-Licensed Products, for all diagnostic, prophylactic, and therapeutic uses for human dermatological indications, or the Dermatology Field. Under this agreement, the Company has sole responsibility for development, regulatory, and commercialization activities for the AZ-Licensed Products in the Dermatology Field, at its expense, and it shall use commercially reasonable efforts to develop, obtain, and maintain regulatory approvals for, and commercialize the AZ-Licensed Products in the Dermatology Field in each of the United States, Italy, Spain, Germany, the United Kingdom, France, China, and Japan. The Company paid AstraZeneca an upfront non-refundable cash payment of $1.0 million and issued 484,388 shares of Series B convertible preferred stock, valued at $3.0 million on the date of the AstraZeneca License Agreement, which were both recorded in research and development expense. The Company subsequently paid AstraZeneca the first milestone cash payment of $2.0 million upon the completion of a Phase 2b study of roflumilast cream in plaque psoriasis in August 2019 for the achievement of positive Phase 2 data for an AZ-Licensed Product, which was recorded in research and development expense. The Company has agreed to make additional cash payments to AstraZeneca of up to an aggregate of $12.5 million upon the achievement of specified regulatory approval milestones with respect to the AZ-Licensed Products, which includes $7.5 million upon U.S. Food and Drug Administration (FDA) approval of the Company's first product, and payments up to an additional aggregate amount of $15.0 million upon the achievement of certain aggregate worldwide net sales milestones. With respect to any AZ-Licensed Products the Company commercializes under the AstraZeneca License Agreement, it will pay AstraZeneca a low to high single-digit percentage royalty rate on the Company’s, its affiliates’ and its sublicensees’ net sales of such AZ-Licensed Products, subject to specified reductions, until, as determined on an AZ-Licensed Product-by-AZ-Licensed Product and country-by-country basis, the later of the date of the expiration of the last-to-expire AstraZeneca-licensed patent right containing a valid claim in such country and ten years from the first commercial sale of such AZ-Licensed Product in such country. There were no payments made or due in connection with AZ-Licensed Products for the three months ended March 31, 2022 and 2021. Hengrui Exclusive Option and License Agreement In January 2018, the Company entered into an exclusive option and license agreement, or the Hengrui License Agreement, with Jiangsu Hengrui Medicine Co., Ltd. (Hengrui), whereby Hengrui granted the Company an exclusive option to obtain certain exclusive rights to research, develop, and commercialize products containing the compound designated by Hengrui as SHR0302, a Janus kinase type 1 inhibitor, in topical formulations for the treatment of skin diseases, disorders, and conditions in the United States, Japan, Canada, and the European Union (including for clarity the United Kingdom). The Company made a $0.4 million upfront non-refundable cash payment to Hengrui upon execution of the Hengrui Option and License Agreement, which was recorded as research and development expense. In December 2019, the Company exercised its exclusive option under the agreement, for which it made a $1.5 million cash payment, which was recorded in research and development expense, and also contemporaneously amended the agreement to expand the territory to additionally include Canada. In addition, the Company has agreed to make cash payments of up to an aggregate of $20.5 million upon achievement of specified clinical development and regulatory approval milestones with respect to the licensed products and cash payments of up to an additional aggregate of $200.0 million in sales-based milestones based on certain aggregate annual net sales volumes with respect to a licensed product. With respect to any products the Company commercializes under the Hengrui License Agreement, it will pay tiered royalties to Hengrui on net sales of each licensed product by the Company, or its affiliates, or its sublicensees, ranging from mid single-digit to sub-teen percentage rates based on tiered annual net sales bands subject to specified reductions. The Company is obligated to pay royalties until the later of (1) expiration of the last valid claim of the licensed patent rights covering such licensed product in such country and (2) expiration of regulatory exclusivity for the relevant licensed product in the relevant country, on a licensed product-by-licensed product and country-by-country basis. Additionally, the Company is obligated to pay Hengrui a specified percentage, ranging from the low-thirties to the sub-teens, of certain non-royalty sublicensing income it receives from sublicensees of its rights to the licensed products, such percentage decreasing as the development stage of the licensed products advance. There were no payments made or due in connection with Hengrui for the three months ended March 31, 2022 and 2021. Hawkeye Collaboration Agreement In June 2019, the Company entered into a collaboration agreement, or Hawkeye Agreement, with Hawkeye Therapeutics, Inc. (Hawkeye), a related party with common ownership, for the development of one or more new applications of roflumilast. The Hawkeye Agreement grants Hawkeye an exclusive license to certain intellectual property developed under the agreement as it relates to the applications. Contemporaneously with the execution of the Hawkeye Agreement, the Company entered into a stock purchase agreement, purchasing 995,000 shares of Hawkeye’s common stock at $0.0001 per share, representing 19.9% of the outstanding common stock of Hawkeye at the time of the purchase. In the event that Hawkeye issues shares of Series A convertible preferred stock with proceeds over $5.0 million, Hawkeye is required to issue to the Company a number of fully-paid fully-vested shares of common stock determined by dividing (i) $2,000,000 by (ii) an amount equal to the cash price per share for Series A convertible preferred stock. Other than the potential issuance of this common stock, there are no upfront payments, milestones, or royalties pursuant to the Hawkeye Agreement. The Company determined that Hawkeye is a VIE for which consolidation is not required as it is not the primary beneficiary. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Lease The Company leases a facility in Westlake Village, California under an operating lease that commenced in February 2019 and was amended in April 2020 in order to relocate to a new expanded space comprising 22,643 square feet. The Company recognized the ROU asset and lease liability for the new space on May 1, 2020. The lease payment term for the new space began on December 30, 2020. The lease payments terminate 91 months thereafter, with a renewal option for a term of five years. The Company will have a one-time option to cancel the lease after month 67. The renewal and one-time cancellation options have not been considered in the determination of the ROU asset or lease liability as the Company did not consider it reasonably certain it would exercise these options. The lease is subject to fixed rate escalation increases with an initial base rent of $76,000 per month, and includes rent free periods aggregating approximately one year. As a result, the Company recognizes rent expense on a straight-line basis for the full amount of the commitment including the minimum rent increases over the life of the lease and the free rent period. The amended lease agreement provided for a leasehold improvement allowance up to $1.25 million, which the Company fully utilized by incurring related costs. This amount, along with $320,000 of additional costs incurred for leasehold improvements beyond the allowance, were capitalized and included in property and equipment as of December 31, 2020. The amended lease agreement also required the Company to have an available letter of credit of $1.5 million upon occupying the space, which is allowed to be reduced throughout the lease period as rent obligations are met. Accordingly, in November 2020, the Company entered into a letter of credit for $1.5 million, which it secured with a restricted cash account in the same amount. In March 2022, the Company reduced the line of credit and related restricted cash account to $1.2 million. All leasehold improvements will be depreciated over the remaining term of the lease. The minimum annual rental payments of the Company’s operating lease liability as of March 31, 2022 are as follows (in thousands): Amounts 2022 (April through December) $ 605 2023 964 2024 994 2025 1,025 2026 1,054 Thereafter 1,740 Total minimum lease payments $ 6,382 Less: Amounts representing interest (1,262) Present value of future minimum lease payments $ 5,120 Current portion operating lease liability 507 Operating lease liability, noncurrent 4,613 Total operating lease liability $ 5,120 Straight-line rent expense recognized for operating leases was $171,000 and $175,000 for the three months ended March 31, 2022 and 2021, respectively. There were no significant variable lease payments, including non-lease components such as common area maintenance fees, recognized as rent expense for operating leases for the three months ended March 31, 2022 and 2021. The following information represents supplemental disclosure for the condensed statements of cash flows related to the Company’s operating lease (in thousands): Three Months Ended March 31, 2022 2021 Cash flows from operating activities Cash paid for amounts included in the measurement of lease liabilities $ 176 $ — The following summarizes additional information related to the operating lease: March 31, 2022 Weighted-average remaining lease term (in years) 6.3 Weighted-average discount rate 7.0 % Manufacturing Agreements The Company has entered into manufacturing supply agreements for the commercial supply of topical roflumilast cream which include certain minimum purchase commitments. Firm future purchase commitments under these agreements are approximately $9.3 million within the next 9 months and then approximately $0.6 million per year for 2023, 2024, and 2025. This amount does not represent all of the Company’s anticipated purchases, but instead represents only the contractually obligated minimum purchases or firm commitments of non-cancelable minimum amounts. Indemnification In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless, and defend an indemnified party for losses suffered or incurred by the indemnified party. Some of the provisions will limit losses to those arising from third party actions. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. The Company has never incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. The Company has also entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by the provisions of the Company's Bylaws and the Delaware General Corporation Law. The Company currently has directors’ and officers’ insurance coverage that reduces its exposure and enables the Company to recover a portion of any future amounts paid. The Company believes any potential loss exposure under these indemnification agreements in excess of applicable insurance coverage is minimal. The terms of certain of our license agreements require us to pay potential future milestone payments based on product development success. The amount and timing of such obligations are unknown or uncertain. |
Long-term debt
Long-term debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term debt On December 22, 2021, the Company entered into a Loan Agreement with SLR Investment Corp. ("SLR") and the lenders party thereto. The lenders agreed to extend term loans to the Company in an aggregate principal amount of up to $225.0 million, comprised of (i) a tranche A term loan of $75.0 million, (ii) a tranche B-1 term loan of $50.0 million, (iii) a tranche B-2 term loan of up to $75.0 million, available in minimum increments of $15.0 million, and (iv) a tranche C term loan of up to $25.0 million (Term Loans). As security for the obligations under the Loan Agreement, the Company granted SLR, for the benefit of the lenders, a continuing security interest in substantially all of the Company's assets, including its intellectual property, subject to certain exceptions. The tranche A term loan under the Loan Agreement was funded on December 22, 2021 in the amount of $75.0 million. Each tranche B term loan is available following delivery to SLR of satisfactory evidence that the Company has received FDA approval of roflumilast cream for an indication relating to the treatment of patients with plaque psoriasis (FDA Approval). The tranche B-1 term loan will remain available for funding until the earlier of (i) 15 days after the Company has received FDA Approval and (ii) June 30, 2023. The tranche B-2 term loan will remain available for funding until June 30, 2023. The tranche C term loan is available following the achievement of a net product revenue milestone of $110.0 million, calculated on a trailing six month basis. The tranche C term loan will remain available for funding until September 30, 2024. Principal amounts outstanding under the Term Loans will accrue interest at a floating rate equal to the applicable rate in effect from time to time, as determined by SLR on the third business day prior to the funding date of the applicable Term Loan and on the first business day of the month prior to each payment date of each Term Loan. The applicable rate is a per annum interest rate equal to 7.45% plus the greater of (a) 0.10% and (b) the per annum rate published by the Intercontinental Exchange Benchmark Administration Ltd. (or on any successor or substitute published rate) for a term of one month, subject to a replacement with an alternate benchmark rate and spread in certain circumstances. On March 31, 2022, the rate was 7.68%. The maturity date for each term loan is January 1, 2027. Commencing on February 1, 2022, interest payments are payable monthly following the funding of any Term Loan. Any principal amounts outstanding under the Term Loans, if not repaid sooner, are due and payable on January 1, 2027, or the Maturity Date. The Company may voluntarily prepay principal amounts outstanding under the Term Loans in minimum increments of $5.0 million, subject to a prepayment premium of (i) 3.0% of the principal amount of such Term Loan so prepaid prior to December 22, 2022, (ii) 2.0% of the principal amount of such Term Loan so prepaid after December 22, 2022 and prior to December 22, 2023, or (iii) 1.0% of the principal amount of such Term Loan so prepaid after December 22, 2023 and prior to December 22, 2025. If the Term Loans are accelerated due to, among others, the occurrence of a bankruptcy or insolvency event, the Company is required to make mandatory prepayments of (i) all principal amounts outstanding under the Term Loans, plus accrued and unpaid interest thereon through the prepayment date, (ii) any fees applicable by reason of such prepayment, (iii) the prepayment premiums set forth in the paragraph above, plus (iv) all other obligations that are due and payable, including expenses and interest at the Default Rate (as defined below) with respect to any past due amounts. The Loan Agreement contains customary representations and warranties and customary affirmative and negative covenants, including, among others, requirements as to financial reporting and insurance and restrictions on the Company’s ability to dispose of its business or property, to change its line of business, to liquidate or dissolve, to enter into any change in control transaction, to merge or consolidate with any other entity or to acquire all or substantially all the capital stock or property of another entity, to incur additional indebtedness, to incur liens on its property, to pay any dividends or other distributions on capital stock other than dividends payable solely in capital stock or to redeem capital stock. The Company has also agreed to a financial covenant whereby, beginning with the month ending December 31, 2023, the Company must generate net product revenue in excess of specified amounts for applicable measuring periods; provided, however, that such financial covenant shall not apply if the Company’s average market capitalization over the trailing five day period prior to the last day of any measurement month is equal to or in excess of $400.0 million. The Company was in compliance with all covenants under the Loan Agreement as of March 31, 2022. In addition, the Loan Agreement contains customary events of default that entitle the lenders to cause any indebtedness under the Loan Agreement to become immediately due and payable, and to exercise remedies against us and the collateral securing the Term Loans. Under the Loan Agreement, an event of default will occur if, among other things, the Company fails to make payments under the Loan Agreement, the Company breaches any of our covenants under the Loan Agreement, subject to specified cure periods with respect to certain breaches, the lenders determine that a material adverse change has occurred, or the Company or the Company's assets become subject to certain legal proceedings, such as bankruptcy proceedings. Upon the occurrence and for the duration of an event of default, an additional default interest rate, or the Default Rate, equal to 4.0% per annum will apply to all obligations owed under the Loan Agreement. The prepayment upon default and other potential additional interest provisions under the Loan Agreement were determined to be a compound embedded derivative instrument to be bifurcated from the loan and accounted for as a separate liability for accounting purposes under the guidance in ASC 815, Derivatives and Hedging. At the inception of the Loan Agreement and through March 31, 2022, the fair value of the embedded derivative was determined to be immaterial and will be remeasured at fair value each reporting period with any future changes in fair value reported in earnings. I n connection with the Loan Agreement, the Company paid a closing fee of $1.0 million on December 22, 2021, and is further obligated to pay (i) a final fee equal to 6.95% of the aggregate original principal amount of the Term Loans funded upon the earliest to occur of the Maturity Date, the acceleration of any Term Loan and the prepayment, refinancing, substitution, or replacement of any Term Loan and (ii) a certain amount of lenders’ expenses incurred in connection with the execution of the Loan Agreement. Additionally, in connection with the Loan Agreement, the Company entered into an Exit Fee Agreement, whereby the Company agreed to pay an exit fee in the amount 3.0% of each Term Loan funded upon (i) any change of control transaction or (ii) a revenue milestone, calculated on a trailing six month basis. Notwithstanding the prepayment or termination of the Term Loan, the exit fee will expire 10 years from the date of the Loan Agreement. The debt issuance costs have been recorded as a debt discount which are being accreted to interest expense through the maturity date of the term loan. Interest expense is calculated using the effective interest method, and is inclusive of non-cash amortization of debt issuance costs. The final maturity payment of $5.2 million is recognized over the life of the term loan through interest expense. At March 31, 2022, the effective interest rate was 9.97%. Interest expense relating to the term loan for the three months ended March 31, 2022 was $1.8 million. The carrying value of the Term Loans consists of the following (in thousands): March 31, 2022 December 31, 2021 Principal loan balance $ 75,000 $ 75,000 Accrued final fee 261 — Unamortized debt issuance costs (2,519) (2,650) Long-term debt, net $ 72,742 $ 72,350 |
Convertible Preferred Stock and
Convertible Preferred Stock and Stockholders' Equity | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Convertible Preferred Stock and Stockholders' Equity | Convertible Preferred Stock and Stockholders’ Equity Convertible Preferred Stock In connection with the Company's IPO in February 2020, all of the Company’s outstanding shares of convertible preferred stock were automatically converted into 24,385,388 shares of common stock. Common Stock The holders of the Company’s common stock have one vote for each share of common stock. Common stockholders are entitled to dividends when, as, and if declared by the board of directors. The holders have no preemptive or other subscription rights and there are no redemption or sinking fund provisions with respect to such shares. As of March 31, 2022, no dividends had been declared by the board of directors. The Company reserved the following shares of common stock for issuance as follows: March 31, 2022 December 31, 2021 Options issued and outstanding 6,911,228 5,757,957 Common stock awards available for grant under employee incentive plans 3,575,485 2,068,004 Restricted stock units outstanding 1,259,375 335,196 Total common stock reserved 11,746,088 8,161,157 Authorized Share Capital On February 4, 2020, the Company’s certificate of incorporation was amended and restated to provide for 300,000,000 authorized shares of common stock with a par value of $0.0001 per share and 10,000,000 authorized shares of preferred stock with a par value of $0.0001 per share. There were no shares of preferred stock outstanding as of March 31, 2022 and December 31, 2021. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation In January 2020, the Company’s board of directors approved the 2020 Equity Incentive Plan (2020 Plan), which became effective January 30, 2020 in connection with the IPO. The 2020 Plan serves as the successor incentive award plan to the Company’s 2017 Equity Incentive Plan (2017 Plan) and has 2,134,000 shares of common stock available for issuance pursuant to a variety of stock-based compensation awards, including stock options, stock appreciation rights, restricted stock awards, restricted stock unit (RSU) awards, and other stock-based awards, plus 1,550,150 shares of common stock that were reserved for issuance pursuant to future awards under the 2017 Plan at the time the 2020 Plan became effective, plus shares represented by awards outstanding under the 2017 Plan that are forfeited or lapsed unexercised and which following the effective date of the 2020 Plan are not issued under the 2017 Plan. In addition, the 2020 Plan reserve will increase on January 1 of each year beginning in 2021 through 2030, by an amount equal to the lesser of (a) four percent of the shares of stock outstanding (on an as converted basis) on the day immediately prior to the date of increase and (b) such smaller number of shares of stock as determined by our board of directors; provided, however, that no more than 11,000,000 shares of stock may be issued upon the exercise of incentive stock options. Accordingly, on January 1, 2022 and 2021, the plan reserve increased by 2,013,830 and 1,747,112 shares, respectively. As of March 31, 2022, the Company had 1,184,753 shares available for future grant under the 2020 Plan. The 2020 Plan provides for the Company to sell or issue common stock or restricted common stock, or to grant incentive stock options or nonqualified stock options for the purchase of common stock, to employees, members of the board of directors, and consultants of the Company under terms and provisions established by the board of directors. Under the terms of the 2020 Plan, options may be granted at an exercise price not less than fair market value. The Company generally grants stock-based awards with service conditions. Options granted typically vest over a four-year period but may be granted with different vesting terms. Following the Company’s IPO and in connection with the effectiveness of the Company’s 2020 Plan, the 2017 Plan terminated and no further awards will be granted under that plan. However, all outstanding awards under the 2017 Plan will continue to be governed by their existing terms. In December 2021, the Company’s board of directors approved the 2022 Employment Inducement Incentive Plan (2022 Plan). The 2022 Plan has 1,250,000 shares of common stock available for issuance pursuant to a variety of stock-based compensation awards, including stock options, stock appreciation rights, restricted stock awards, RSU awards, and other stock-based awards. The Company began granting out of the 2022 Plan in the first quarter of 2022 and has 1,182,200 shares available for future grant under the plan as of March 31, 2022. Stock Option Activity The following summarizes option activity (in thousands, except share amounts): Number of Options Weighted- Average Exercise Price Remaining Contractual Term (Years) Aggregate Intrinsic Value Balance—December 31, 2021 5,757,957 $ 19.06 8.37 $ 34,887 Granted 1,289,200 $ 18.53 Exercised (102,935) $ 2.53 Forfeited (28,800) $ 29.46 Expired (4,194) $ 27.42 Balance—March 31, 2022 6,911,228 $ 19.16 8.48 $ 31,704 Exercisable—March 31, 2022 (1) 2,615,847 $ 12.50 7.36 $ 26,106 ______________ (1) Options exercisable includes early exercisable options. The aggregate intrinsic value is calculated as the difference between the exercise price of the options and the fair value of the Company’s common stock as of March 31, 2022. The intrinsic value of options exercised for the three months ended March 31, 2022 was $1.4 million. The total grant-date fair value of the options vested during the three months ended March 31, 2022 was $5.0 million. The weighted-average grant-date fair value of employee options granted during the three months ended March 31, 2022 was $12.94. Restricted Stock Unit Activity The following table summarizes information regarding our RSUs: Number of Units Weighted-Average Balance—December 31, 2021 335,196 $ 29.26 Granted 1,012,500 $ 18.06 Vested (79,421) $ 29.98 Forfeited (8,900) $ 17.67 Unvested Balance—March 31, 2022 1,259,375 $ 20.30 The grant date fair value of an RSU equals the closing price of our common stock on the grant date. RSUs generally vest equally over four years. There were no RSU grants prior to January 1, 2020. Stock-Based Compensation Expense Stock-based compensation expense included in the condensed statements of operations and comprehensive loss was as follows (in thousands): Three Months Ended March 31, 2022 2021 Research and development $ 2,734 $ 1,520 General and administrative 3,799 6,983 Total stock-based compensation expense $ 6,533 $ 8,503 As of March 31, 2022, there was $64.9 million of total unrecognized compensation cost related to unvested options that are expected to vest, which is expected to be recognized over a weighted-average period of 3.1 years. As of March 31, 2022, there was $24.1 million of total unrecognized compensation cost related to RSUs that is expected to vest, which is expected to be recognized over a weighted-average period of 3.6 years. In March 2021, in connection with the retirement of the former Chief Financial Officer, the Company modified the terms of this individual’s historical stock awards. As a result of the modifications, the Company recognized approximately $5.3 million of incremental stock-based compensation expense during the period, which is included in general and administrative expenses. In determining the fair value of the stock options granted, the Company uses the Black-Scholes option-pricing model and assumptions discussed below. Each of these inputs is subjective and generally requires significant judgment. Fair value of common stock — The Company uses its closing stock price as reported on Nasdaq on the grant date for the fair value of its stock. Expected Term — The Company’s expected term represents the period that the Company’s stock-based awards are expected to be outstanding. The Company uses the simplified method (based on the mid-point between the vesting date and the end of the contractual term) to determine the expected term. Expected Volatility — Prior to 2022, the Company did not have sufficient trading history for its common stock to solely use its own historical volatility. Therefore, the expected volatility was estimated based on a combination of its own historical common stock volatility as well as the average historical volatilities for comparable publicly traded pharmaceutical companies over a period equal to the expected term of the stock option grants. The comparable companies were chosen based on their similar size, stage in the life cycle, and area of specialty. The Company applied that process until a sufficient amount of historical information regarding the volatility of its own stock price became available. Beginning in 2022, having over two years of trading history, the Company began using solely its own historical stock price for expected volatility. Risk-Free Interest Rate —The risk-free interest rate is based on the U.S. Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term of option. Dividend Yield —The Company has never paid dividends on its common stock and has no plans to pay dividends on its common stock. Therefore, the Company used an expected dividend yield of zero. The fair value of stock option awards granted was estimated at the date of grant using a Black-Scholes option-pricing model with the following assumptions: Three Months Ended March 31, 2022 Year Ended Expected term (in years) 6.0 – 6.1 5.5 – 6.2 Expected volatility 81.0 – 82.1% 80.6 – 85.2% Risk-free interest rate 1.4 – 2.0% 0.6 – 1.3% Dividend yield —% —% Early Exercise of Employee Options The terms of the 2017 and 2020 Plans permit certain option holders to exercise options before their options are vested, subject to certain limitations. Upon early exercise, the awards become subject to a restricted stock agreement. The shares of restricted stock granted upon early exercise of the options 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 price paid by the purchaser. While such shares have been issued, they are not considered outstanding for accounting purposes until they vest and are therefore excluded from shares used in determining loss per share 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 $58,000 and $82,000 as a liability from the early exercise in the accompanying condensed balance sheets as of March 31, 2022 and December 31, 2021, respectively. As of March 31, 2022 and December 31, 2021, there were $39,000 and $57,000 recorded in accrued liabilities, respectively, and $19,000 and $25,000 recorded in other long-term liabilities, respectively related to shares that were subject to repurchase. 2020 Employee Stock Purchase Plan The Company adopted the 2020 Employee Stock Purchase Plan, or the ESPP, which became effective on January 30, 2020 in connection with the IPO. The ESPP is designed to allow the Company’s eligible employees to purchase shares of the Company’s common stock, at semi-annual intervals, with their accumulated payroll deductions. Under the ESPP, participants are offered the option to purchase shares of the Company’s common stock at a discount during a series of successive offering periods. The option purchase price will be the lower of 85% of the closing trading price per share of the Company’s common stock on the first trading date of an offering period in which a participant is enrolled or 85% of the closing trading price per share on the purchase date, which will occur on the last trading day of each offering period. |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share The following outstanding potentially dilutive shares have been excluded from the calculation of diluted net loss per share for the periods presented due to their anti-dilutive effect: As of March 31, 2022 2021 Stock options to purchase common stock 6,911,228 4,540,255 Early exercised options subject to future vesting 50,121 259,460 RSU's subject to future vesting 1,259,375 310,068 ESPP shares subject to future issuance 53,610 3,733 Total 8,274,334 5,113,516 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s condensed financial statements have been prepared in accordance with United States generally accepted accounting principles (U.S. GAAP). |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed financial statements and accompanying notes. On an ongoing basis, management evaluates such estimates and assumptions for continued reasonableness. In particular, management makes estimates with respect to accruals for research and development activities, fair value of common stock and convertible preferred stock (prior to the IPO completed in January 2020), stock-based compensation expense, and income taxes. Appropriate adjustments, if any, to the estimates used are made prospectively based upon such periodic evaluation. Actual results could differ from those estimates. |
Segments | Segments To date, the Company has viewed its financial information on an aggregate basis for the purposes of evaluating financial performance and allocating the Company’s resources. Accordingly, the Company has determined that it operates in one segment. |
Unaudited Interim Condensed Financial Statements | Unaudited Interim Condensed Financial Statements The interim condensed balance sheet as of March 31, 2022, the interim condensed statements of operations and comprehensive loss, and the condensed changes in convertible preferred stock and stockholders’ equity (deficit) and cash flows for the three months ended March 31, 2022 and 2021 are unaudited. These unaudited interim condensed financial statements have been prepared on the same basis as the Company’s audited annual financial statements and, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair statement of the Company’s financial information. The financial data and the other financial information disclosed in these notes to the condensed financial statements related to the three month periods are also unaudited. The condensed results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any other future annual or interim period. The condensed balance sheet as of December 31, 2021 included herein was derived from the audited financial statements as of that date. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Therefore, these unaudited interim condensed financial statements should be read in conjunction with the Company’s audited financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2021. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents. Cash equivalents consist primarily of money market funds, commercial paper, U.S. Treasury securities, and short-term corporate debt securities. Restricted Cash |
Marketable Securities | Marketable Securities Marketable securities consist of investment grade short to intermediate-term fixed income investments that have been classified as available-for-sale and are carried at estimated fair value as determined based upon quoted market prices or pricing models for similar securities. Management determines the appropriate classification of its investments in fixed income securities at the time of purchase. Available-for-sale securities with original maturities beyond three months at the date of purchase, including those that have maturity dates beyond one year from the balance sheet date, are classified as current assets on the condensed balance sheets due to their highly liquid nature and availability for use in current operations. |
Concentration of Credit Risk and Other Risks and Uncertainties | Concentration of Credit Risk and Other Risks and Uncertainties Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, and marketable securities. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company is exposed to credit risk in the event of a default by the financial institutions holding its cash to the extent recorded on the condensed balance sheets. Management believes the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. |
Fair Value Measurement | Fair Value Measurement The Company’s financial instruments, in addition to those presented in Note 3, include cash equivalents, accounts payable, accrued liabilities, and long-term debt. The carrying amount of cash equivalents, accounts payable, and accrued liabilities approximate their fair values due to their short maturities. As the long-term debt is subject to variable interest rates that are based on market rates which regularly reset, the Company believes that the carrying value of the long-term debt approximates its fair value. Assets and liabilities recorded at fair value on a recurring basis on the condensed balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows: Level 1—Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
Property and Equipment | Property and EquipmentProperty and equipment are stated at cost less accumulated depreciation. Depreciation on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets which range from two |
Leases | Leases The Company determines if an arrangement is or contains a lease at inception. Right-of-use (ROU) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The classification of the Company’s leases as operating or finance leases, along with the initial measurement and recognition of the associated ROU assets and lease liabilities, is performed at the lease commencement date. The measurement of lease liabilities is based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate, based on the information available at commencement date, to determine the present value of lease payments when its leases do not provide an implicit rate. The Company uses the implicit rate when readily determinable. The ROU asset is based on the measurement of the lease liability, includes any lease payments made prior to or on lease commencement and is adjusted for lease incentives and initial direct costs incurred, as applicable. Lease expense for the Company’s operating leases is recognized on a straight-line basis over the lease term. The Company considers a lease term to be the non-cancelable period that it has the right to use the underlying asset, including any periods where it is reasonably assured the Company will exercise the option to extend the contract. Periods covered by an option to extend are included in the lease term if the lessor controls the exercise of that option. The Company’s lease agreements includes lease and non-lease components and the Company has elected to not separate such components for all classes of assets. Further, the Company elected the short-term lease exception policy, permitting it to not apply the recognition requirements of this standard to leases with terms of 12 months or less (short-term leases) for all classes of assets. |
Nonclinical and Clinical Accruals and Costs | Nonclinical and Clinical Accruals and CostsThe Company records accrued liabilities for estimated costs of research and development activities conducted by third-party service providers, which include the conduct of nonclinical studies, clinical trials, and contract manufacturing activities. These costs are a significant component of the Company’s research and development expenses. The Company accrues for these costs based on factors such as estimates of the work completed and in accordance with agreements established with its third-party service providers under the service agreements. The Company makes significant judgments and estimates in determining the accrued liabilities balance in each reporting period. As actual costs become known, the Company adjusts its accrued liabilities. |
Convertible Preferred Stock | Convertible Preferred StockPrior to its IPO, the Company classified its outstanding convertible preferred stock outside of stockholders’ equity (deficit) on its condensed balance sheets as the requirements of triggering a deemed liquidation event, as defined within its amended and restated certificate of incorporation, were not entirely within the Company’s control. In the event of such a deemed liquidation event, the proceeds from the event were to be distributed in accordance with the liquidation preferences, provided that the holders of convertible preferred stock had not converted their shares into common stock. The Company recorded the issuance of convertible preferred stock at the issuance price less related issuance costs. The Company did not adjust the carrying values of the convertible preferred stock to the liquidation preferences of such shares because of the uncertainty as to whether or when a deemed liquidation event may have occurred. |
Research and Development | Research and Development Research and development expenses include costs directly attributable to the conduct of research and development programs, including the cost of salaries, payroll taxes, employee benefits, license fees, stock-based compensation expense, materials, supplies, and the cost of services provided by outside contractors. All costs associated with research and development are expensed as incurred. Payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods are received or services are rendered. Such payments are evaluated for current or long-term classification based on when they will be realized. The Company has entered into, and may continue to enter into, license agreements to access and utilize certain technology. In each case, the Company evaluates if the license agreement results in the acquisition of an asset or a business. To date, none of the Company’s license agreements have been considered an acquisition of a business. For asset acquisitions, the upfront payments to acquire such licenses, as well as any future milestone payments made before product approval that do not meet the definition of a derivative, are immediately recognized as research and development expense when paid or become payable, provided there is no alternative future use of the rights in other research and development projects. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for share-based payments at fair value. The fair value of stock options is measured using the Black-Scholes option-pricing model. For share-based awards that vest subject to the satisfaction of a service requirement, the fair value measurement date for such awards is the date of grant and the expense is recognized on a straight-line basis, over the expected vesting period. For share-based awards that vest subject to a performance condition, the Company will recognize compensation cost for awards if and when the Company concludes that it is probable that the awards with a performance condition will be achieved on an accelerated attribution method. The Company accounts for forfeitures as they occur. |
Income Taxes | Income Taxes Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period of enactment. The Company records a valuation allowance to reduce deferred tax assets to an amount for which realization is more likely than not. Due to the Company’s historical operating performance and the recorded cumulative net losses in prior fiscal periods, the net deferred tax assets have been fully offset by a valuation allowance. The Company recognizes the tax benefit from an uncertain tax position if it is more likely than not that the tax position will be sustained upon examination by the tax authorities, based on the merits of the position. The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense or benefit. To date, there have been no interest or penalties incurred in relation to the unrecognized tax benefits. The U.S. Congress enacted the American Rescue Plan Act on March 10, 2021, Families First Coronavirus Response Act (FFCR Act) on March 18, 2020, and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) on March 27, 2020. The American Rescue Plan Act is a follow-up to the CARES Act, which continue the emergency economic stimulus package and includes spending and tax breaks to strengthen the U.S. economy and fund a nationwide effort to curtail the effect of COVID-19. The American Rescue Plan Act, FFCR Act, and CARES Act include numerous tax-related provisions, including modifications to the limitations on business interest expense and net operating losses (NOLs), certain refundable employee retention credits, as well as a payment delay of employer payroll taxes in 2020 after the date of enactment. On June 29, 2020, the California State Assembly Bill 85 (Trailer Bill) was enacted which suspends the use of California NOL deductions and certain tax credits, including research and development credits, for the 2020, 2021, and 2022 tax years. The Company does not expect the American Rescue Plan Act, FFCR Act, CARES Act, or Trailer Bill to have a material impact on the Company’s financial statements. |
Variable Interest Entities | Variable Interest Entities The Company reviews agreements it enters into with third-party entities, pursuant to which the Company may have a variable interest in the entity, in order to determine if the entity is a variable interest entity (VIE). If the entity is a VIE, the Company assesses whether or not it is the primary beneficiary of that entity. In determining whether the Company is the primary beneficiary of an entity, the Company applies a qualitative approach that determines whether it has both (i) the power to direct the economically significant activities of the entity and (ii) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to that entity. If the Company determines it is the primary beneficiary of a VIE, it consolidates that VIE into the Company’s financial statements. The Company’s determination about whether it should consolidate such VIEs is made continuously as changes to existing relationships or future transactions may result in a consolidation or deconsolidation event. The Company currently does not consolidate any VIEs. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period, without consideration for potential dilutive shares of common stock. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common share equivalents outstanding for the period determined using the treasury-stock method. Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share since the effects of potentially dilutive securities are antidilutive. Shares of common stock subject to repurchase are excluded from the weighted-average shares. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements There have been no new accounting pronouncements issued or effective that are expected to have a material impact on the Company's condensed financial statements. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Assets Measured on a Recurring Basis | The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands): March 31, 2022 Level 1 Level 2 Level 3 Total Assets: Money market funds (1) $ 69,795 $ — $ — $ 69,795 Commercial paper — 74,468 — 74,468 Corporate debt securities — 91,860 — 91,860 U.S. Treasury securities 107,478 — — 107,478 Total assets $ 177,273 $ 166,328 $ — $ 343,601 ______________ (1) This balance includes cash requirements settled on a nightly basis. December 31, 2021 Level 1 Level 2 Level 3 Total Assets: Money market funds (1) $ 95,145 $ — $ — $ 95,145 Commercial paper — 119,413 — 119,413 Corporate debt securities — 114,324 — 114,324 U.S. Treasury securities 58,177 — — 58,177 Total assets $ 153,322 $ 233,737 $ — $ 387,059 ______________ (1) This balance includes cash requirements settled on a nightly basis. |
Summary of Marketable Securities | The following table summarizes the estimated value of the Company’s cash, cash equivalents and marketable securities, and the gross unrealized holding gains and losses (in thousands): March 31, 2022 Amortized Unrealized Unrealized Estimated Cash and cash equivalents: Money market funds (1) $ 69,795 $ — $ — $ 69,795 Total cash and cash equivalents $ 69,795 $ — $ — $ 69,795 Marketable securities: Commercial paper $ 74,468 $ — $ — $ 74,468 Corporate debt securities 92,162 2 (304) 91,860 U.S. Treasury securities 108,196 — (718) 107,478 Total marketable securities $ 274,826 $ 2 $ (1,022) $ 273,806 ______________ (1) This balance includes cash requirements settled on a nightly basis. December 31, 2021 Amortized Unrealized Unrealized Estimated Cash and cash equivalents: Money market funds (1) $ 95,145 $ — $ — $ 95,145 Corporate debt securities 1,304 — — 1,304 Total cash and cash equivalents $ 96,449 $ — $ — $ 96,449 Marketable securities: Commercial paper $ 119,413 $ — $ — $ 119,413 Corporate debt securities 113,145 — (125) 113,020 U.S. Treasury securities 58,307 — (130) 58,177 Total marketable securities $ 290,865 $ — $ (255) $ 290,610 ______________ (1) This balance includes cash requirements settled on a nightly basis. |
Summary of Cash and Cash Equivalents | The following table summarizes the estimated value of the Company’s cash, cash equivalents and marketable securities, and the gross unrealized holding gains and losses (in thousands): March 31, 2022 Amortized Unrealized Unrealized Estimated Cash and cash equivalents: Money market funds (1) $ 69,795 $ — $ — $ 69,795 Total cash and cash equivalents $ 69,795 $ — $ — $ 69,795 Marketable securities: Commercial paper $ 74,468 $ — $ — $ 74,468 Corporate debt securities 92,162 2 (304) 91,860 U.S. Treasury securities 108,196 — (718) 107,478 Total marketable securities $ 274,826 $ 2 $ (1,022) $ 273,806 ______________ (1) This balance includes cash requirements settled on a nightly basis. December 31, 2021 Amortized Unrealized Unrealized Estimated Cash and cash equivalents: Money market funds (1) $ 95,145 $ — $ — $ 95,145 Corporate debt securities 1,304 — — 1,304 Total cash and cash equivalents $ 96,449 $ — $ — $ 96,449 Marketable securities: Commercial paper $ 119,413 $ — $ — $ 119,413 Corporate debt securities 113,145 — (125) 113,020 U.S. Treasury securities 58,307 — (130) 58,177 Total marketable securities $ 290,865 $ — $ (255) $ 290,610 ______________ (1) This balance includes cash requirements settled on a nightly basis. |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of the following (in thousands): March 31, 2022 December 31, 2021 Prepaid insurance $ 2,721 $ 518 Prepaid clinical trial costs 2,362 5,629 Tax credits 362 362 Other prepaid expenses and current assets 8,638 7,663 Total prepaid expenses and other current assets $ 14,083 $ 14,172 |
Summary of Accrued Liabilities | Accrued liabilities consist of the following (in thousands): March 31, 2022 December 31, 2021 Clinical trial accruals $ 11,308 $ 13,217 Accrued compensation 3,469 9,130 Accrued expenses and other current liabilities 5,213 3,193 Total accrued liabilities $ 19,990 $ 25,540 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment, net consists of the following (in thousands): March 31, 2022 December 31, 2021 Computer hardware $ 775 $ 775 Furniture and fixtures 379 346 Software 104 104 Construction in process 8 — Leasehold improvements 1,568 1,568 Property and equipment, gross 2,834 2,793 Less accumulated depreciation (682) (532) Property and equipment, net $ 2,152 $ 2,261 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating Lease Payments | The minimum annual rental payments of the Company’s operating lease liability as of March 31, 2022 are as follows (in thousands): Amounts 2022 (April through December) $ 605 2023 964 2024 994 2025 1,025 2026 1,054 Thereafter 1,740 Total minimum lease payments $ 6,382 Less: Amounts representing interest (1,262) Present value of future minimum lease payments $ 5,120 Current portion operating lease liability 507 Operating lease liability, noncurrent 4,613 Total operating lease liability $ 5,120 |
Operating Lease Supplemental Cash Flow Information | The following information represents supplemental disclosure for the condensed statements of cash flows related to the Company’s operating lease (in thousands): Three Months Ended March 31, 2022 2021 Cash flows from operating activities Cash paid for amounts included in the measurement of lease liabilities $ 176 $ — The following summarizes additional information related to the operating lease: March 31, 2022 Weighted-average remaining lease term (in years) 6.3 Weighted-average discount rate 7.0 % |
Long-term debt (Tables)
Long-term debt (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Summary of Long-Term Debt | The carrying value of the Term Loans consists of the following (in thousands): March 31, 2022 December 31, 2021 Principal loan balance $ 75,000 $ 75,000 Accrued final fee 261 — Unamortized debt issuance costs (2,519) (2,650) Long-term debt, net $ 72,742 $ 72,350 |
Convertible Preferred Stock a_2
Convertible Preferred Stock and Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Components of Shares of Stock for Issuance | The Company reserved the following shares of common stock for issuance as follows: March 31, 2022 December 31, 2021 Options issued and outstanding 6,911,228 5,757,957 Common stock awards available for grant under employee incentive plans 3,575,485 2,068,004 Restricted stock units outstanding 1,259,375 335,196 Total common stock reserved 11,746,088 8,161,157 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Stock Option Activity | The following summarizes option activity (in thousands, except share amounts): Number of Options Weighted- Average Exercise Price Remaining Contractual Term (Years) Aggregate Intrinsic Value Balance—December 31, 2021 5,757,957 $ 19.06 8.37 $ 34,887 Granted 1,289,200 $ 18.53 Exercised (102,935) $ 2.53 Forfeited (28,800) $ 29.46 Expired (4,194) $ 27.42 Balance—March 31, 2022 6,911,228 $ 19.16 8.48 $ 31,704 Exercisable—March 31, 2022 (1) 2,615,847 $ 12.50 7.36 $ 26,106 ______________ (1) Options exercisable includes early exercisable options. |
Restricted Stock Unit Activity | The following table summarizes information regarding our RSUs: Number of Units Weighted-Average Balance—December 31, 2021 335,196 $ 29.26 Granted 1,012,500 $ 18.06 Vested (79,421) $ 29.98 Forfeited (8,900) $ 17.67 Unvested Balance—March 31, 2022 1,259,375 $ 20.30 |
Stock-Based Compensation Expense | Stock-based compensation expense included in the condensed statements of operations and comprehensive loss was as follows (in thousands): Three Months Ended March 31, 2022 2021 Research and development $ 2,734 $ 1,520 General and administrative 3,799 6,983 Total stock-based compensation expense $ 6,533 $ 8,503 |
Assumptions in Calculating Stock Option Awards | The fair value of stock option awards granted was estimated at the date of grant using a Black-Scholes option-pricing model with the following assumptions: Three Months Ended March 31, 2022 Year Ended Expected term (in years) 6.0 – 6.1 5.5 – 6.2 Expected volatility 81.0 – 82.1% 80.6 – 85.2% Risk-free interest rate 1.4 – 2.0% 0.6 – 1.3% Dividend yield —% —% |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Potentially Antidilutive Shares Excluded from the Calculation of Diluted Net Loss Per Share | The following outstanding potentially dilutive shares have been excluded from the calculation of diluted net loss per share for the periods presented due to their anti-dilutive effect: As of March 31, 2022 2021 Stock options to purchase common stock 6,911,228 4,540,255 Early exercised options subject to future vesting 50,121 259,460 RSU's subject to future vesting 1,259,375 310,068 ESPP shares subject to future issuance 53,610 3,733 Total 8,274,334 5,113,516 |
Organization and Description _2
Organization and Description of Business (Details) $ / shares in Units, $ in Thousands | May 06, 2021USD ($) | Feb. 05, 2021USD ($)$ / sharesshares | Oct. 06, 2020USD ($)$ / sharesshares | Feb. 04, 2020USD ($)$ / sharesshares | Mar. 31, 2022USD ($)$ / sharesshares | Mar. 31, 2022USD ($)$ / sharesshares | Mar. 31, 2021USD ($)shares | Dec. 31, 2021USD ($)shares | Dec. 31, 2020shares | Feb. 05, 2020shares |
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Convertible preferred stock, shares outstanding (in shares) | shares | 0 | 0 | 0 | 0 | 0 | 0 | ||||
Proceeds from issuance of common stock | $ 0 | $ 207,490 | ||||||||
Accumulated deficit | $ (472,630) | (472,630) | $ (408,306) | |||||||
Cash, cash equivalents, restricted cash and marketable securities | 344,800 | 344,800 | 388,600 | |||||||
Long-term debt, gross | 75,000 | 75,000 | $ 75,000 | |||||||
Loan agreement | Line of credit | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Remaining borrowing capacity | 150,000 | 150,000 | ||||||||
Long-term debt, gross | $ 75,000 | $ 75,000 | ||||||||
IPO | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Proceeds from issuance of shares under ATM, net of issuance costs | $ 167,200 | |||||||||
IPO | Common Stock | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Number of shares issued in transaction (in shares) | shares | 10,781,250 | |||||||||
Stock price (in USD per share) | $ / shares | $ 17 | |||||||||
Underwriters' option | Common Stock | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Number of shares issued in transaction (in shares) | shares | 825,000 | 1,406,250 | ||||||||
Secondary Equity Public Offering | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Proceeds from issuance of common stock | $ 93,400 | |||||||||
Secondary Equity Public Offering | Common Stock | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Number of shares issued in transaction (in shares) | shares | 4,000,000 | |||||||||
Stock price (in USD per share) | $ / shares | $ 25 | |||||||||
Private placement | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Proceeds from issuance of common stock | $ 35,000 | |||||||||
Private placement | Common Stock | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Number of shares issued in transaction (in shares) | shares | 1,400,000 | |||||||||
Third Equity Public Offering | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Proceeds from issuance of common stock | $ 207,500 | |||||||||
Third Equity Public Offering | Common Stock | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Number of shares issued in transaction (in shares) | shares | 6,325,000 | |||||||||
Stock price (in USD per share) | $ / shares | $ 35 | |||||||||
At-The-Market | Cowen | Common Stock | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Number of shares issued in transaction (in shares) | shares | 882,353 | |||||||||
Stock price (in USD per share) | $ / shares | $ 17 | $ 17 | ||||||||
Proceeds from issuance of common stock | $ 14,500 | |||||||||
Issuance of shares of common stock for sales agreement | $ 100,000 | |||||||||
Share sales agreement, percentage of gross sales price | 0.03 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 1 Months Ended | 3 Months Ended | ||
Feb. 29, 2020shares | Mar. 31, 2022USD ($)segment | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | |
Property, Plant and Equipment [Line Items] | ||||
Number of operating segments (segment) | segment | 1 | |||
Restricted cash | $ 1,234,000 | $ 1,542,000 | ||
Allowance for credit loss | 0 | $ 0 | ||
Tangible asset impairment charges | 0 | $ 0 | ||
Unrecognized tax benefits, income tax penalties and interest expense | $ 0 | $ 0 | ||
Common Stock | ||||
Property, Plant and Equipment [Line Items] | ||||
Shares issued as a result of conversion of promissory notes (in shares) | shares | 24,385,388 | |||
Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life | 2 years | |||
Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life | 5 years |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Assets Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | $ 69,795 | $ 96,449 |
Total assets | 343,601 | 387,059 |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents and debt securities, available for sale | 74,468 | 119,413 |
Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents and debt securities, available for sale | 91,860 | 114,324 |
U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents and debt securities, available for sale | 107,478 | 58,177 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 69,795 | 95,145 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 177,273 | 153,322 |
Level 1 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents and debt securities, available for sale | 0 | 0 |
Level 1 | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents and debt securities, available for sale | 0 | 0 |
Level 1 | U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents and debt securities, available for sale | 107,478 | 58,177 |
Level 1 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 69,795 | 95,145 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 166,328 | 233,737 |
Level 2 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents and debt securities, available for sale | 74,468 | 119,413 |
Level 2 | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents and debt securities, available for sale | 91,860 | 114,324 |
Level 2 | U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents and debt securities, available for sale | 0 | 0 |
Level 2 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
Level 3 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents and debt securities, available for sale | 0 | 0 |
Level 3 | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents and debt securities, available for sale | 0 | 0 |
Level 3 | U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents and debt securities, available for sale | 0 | 0 |
Level 3 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | $ 0 | $ 0 |
Fair Value Measurements - Estim
Fair Value Measurements - Estimated Value of Cash and Cash Equivalents and Marketable Securities (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Cash and Cash Equivalents [Line Items] | |||
Cash and cash equivalents | $ 69,795,000 | $ 96,449,000 | |
Cash and cash equivalents, estimated fair value | 69,795,000 | 96,449,000 | |
Debt Securities, Available-for-sale [Line Items] | |||
Amortized cost | 274,826,000 | 290,865,000 | |
Unrealized gains | 2,000 | 0 | |
Unrealized losses | (1,022,000) | (255,000) | |
Estimated fair value | 273,806,000 | 290,610,000 | |
Realized gains (losses) on investments | 0 | $ 0 | |
Unrealized loss on marketable securities | 0 | 0 | |
Allowance for credit loss | 0 | 0 | |
Commercial paper | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized cost | 74,468,000 | 119,413,000 | |
Unrealized gains | 0 | 0 | |
Unrealized losses | 0 | 0 | |
Estimated fair value | 74,468,000 | 119,413,000 | |
Corporate debt securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized cost | 92,162,000 | 113,145,000 | |
Unrealized gains | 2,000 | 0 | |
Unrealized losses | (304,000) | (125,000) | |
Estimated fair value | 91,860,000 | 113,020,000 | |
U.S. Treasury securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized cost | 108,196,000 | 58,307,000 | |
Unrealized gains | 0 | 0 | |
Unrealized losses | (718,000) | (130,000) | |
Estimated fair value | 107,478,000 | 58,177,000 | |
Money market funds | |||
Cash and Cash Equivalents [Line Items] | |||
Cash and cash equivalents | 69,795,000 | 95,145,000 | |
Cash and cash equivalents, estimated fair value | $ 69,795,000 | 95,145,000 | |
Corporate debt securities | |||
Cash and Cash Equivalents [Line Items] | |||
Cash and cash equivalents | 1,304,000 | ||
Cash and cash equivalents, estimated fair value | $ 1,304,000 |
Balance Sheet Components - Prep
Balance Sheet Components - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Balance Sheet Related Disclosures [Abstract] | ||
Prepaid insurance | $ 2,721 | $ 518 |
Prepaid clinical trial costs | 2,362 | 5,629 |
Tax credits | 362 | 362 |
Other prepaid expenses and current assets | 8,638 | 7,663 |
Total prepaid expenses and other current assets | $ 14,083 | $ 14,172 |
Balance Sheet Components - Accr
Balance Sheet Components - Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Balance Sheet Related Disclosures [Abstract] | ||
Clinical trial accruals | $ 11,308 | $ 13,217 |
Accrued compensation | 3,469 | 9,130 |
Accrued expenses and other current liabilities | 5,213 | 3,193 |
Total accrued liabilities | $ 19,990 | $ 25,540 |
Property and Equipment, net - S
Property and Equipment, net - Summary (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,834 | $ 2,793 |
Less accumulated depreciation | (682) | (532) |
Property and equipment, net | 2,152 | 2,261 |
Computer hardware | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 775 | 775 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 379 | 346 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 104 | 104 |
Construction in process | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 8 | 0 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,568 | $ 1,568 |
Property and Equipment, net - N
Property and Equipment, net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation | $ 150 | $ 98 |
Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 2 years | |
Minimum | Property, plant and equipment, excluding leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 2 years | |
Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 5 years | |
Maximum | Property, plant and equipment, excluding leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 5 years |
License Agreements - AstraZenec
License Agreements - AstraZeneca (Details) - AstraZeneca - USD ($) | 1 Months Ended | 3 Months Ended | ||
Aug. 31, 2019 | Jul. 31, 2018 | Mar. 31, 2022 | Mar. 31, 2021 | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||
License agreement, cash payment | $ 2,000,000 | $ 1,000,000 | $ 0 | $ 0 |
Maximum milestone payments for licensed products | 12,500,000 | |||
Maximum product milestone payments upon first product approval | 7,500,000 | |||
Maximum milestone payments for net worldwide sales | $ 15,000,000 | |||
Series B Preferred Stock | ||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||
Preferred stock issued (in shares) | 484,388 | |||
Preferred stock issued | $ 3,000,000 |
License Agreements - Hengrui (D
License Agreements - Hengrui (Details) - Hengrui - USD ($) | 1 Months Ended | 3 Months Ended | ||
Dec. 31, 2019 | Jan. 31, 2018 | Mar. 31, 2022 | Mar. 31, 2021 | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||
License agreement, cash payment | $ 1,500,000 | $ 400,000 | $ 0 | $ 0 |
Maximum milestone payments for licensed products | 20,500,000 | |||
Maximum milestone payments for net worldwide sales | $ 200,000,000 |
License Agreements - Hawkeye (D
License Agreements - Hawkeye (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Jun. 30, 2019 | Mar. 31, 2022 | Dec. 31, 2021 | Feb. 04, 2020 | |
Variable Interest Entity [Line Items] | ||||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Hawkeye | ||||
Variable Interest Entity [Line Items] | ||||
Number of shares held in VIE (in shares) | 995,000 | |||
Ownership percentage of VIE | 19.90% | |||
Collaboration agreement, threshold of proceeds from stock issuance for additional consideration | $ 5,000,000 | |||
Collaborative arrangement, numerator for determining additional consideration | $ 2,000,000 | |||
Payments, milestones or royalties | $ 0 | |||
Hawkeye | ||||
Variable Interest Entity [Line Items] | ||||
Common stock, par value (in USD per share) | $ 0.0001 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Apr. 30, 2020USD ($)ft² | Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2021USD ($) | Nov. 30, 2020USD ($) | |
Lessee, Lease, Description [Line Items] | ||||||
Restricted cash | $ 1,234 | $ 1,542 | ||||
Straight-line rent expense | 171 | $ 175 | ||||
Variable lease cost | 0 | $ 0 | ||||
Purchase obligation, remainder of current year | 9,300 | |||||
Purchase obligation, next year | 600 | |||||
Purchase obligation, year two | 600 | |||||
Purchase obligation, year three | 600 | |||||
Westlake Village, California Lease Arrangement | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Square footage of leased space (in square feet) | ft² | 22,643 | |||||
Lease term (in months) | 91 months | |||||
Renewal term | 5 years | |||||
Lease term prior to termination option | 67 months | |||||
Initial base rent | $ 76 | |||||
Free rent period | 1 year | |||||
Capitalization of leasehold improvements | $ 320 | |||||
Tenant improvement allowance | $ 1,250 | |||||
Available letter of credit | $ 1,500 | |||||
Restricted cash | $ 1,200 | $ 1,500 |
Commitments and Contingencies_2
Commitments and Contingencies - Operating Lease Payments (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | ||
2022 (April through December) | $ 605 | |
2023 | 964 | |
2024 | 994 | |
2025 | 1,025 | |
2026 | 1,054 | |
Thereafter | 1,740 | |
Total minimum lease payments | 6,382 | |
Less: Amounts representing interest | (1,262) | |
Present value of future minimum lease payments | 5,120 | |
Current portion operating lease liability | 507 | $ 433 |
Operating lease liability, noncurrent | 4,613 | $ 4,774 |
Total operating lease liability | $ 5,120 |
Commitments and Contingencies_3
Commitments and Contingencies - Operating Lease Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 176 | $ 0 |
Commitments and Contingencies_4
Commitments and Contingencies - Operating Lease Additional Information (Details) | Mar. 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | |
Weighted-average remaining lease term (in years) | 6 years 3 months 18 days |
Weighted-average discount rate | 7.00% |
Long-term debt - Narrative (Det
Long-term debt - Narrative (Details) - USD ($) $ in Thousands | Dec. 22, 2021 | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 75,000 | $ 75,000 | |
Debt issuance costs | 2,519 | 2,650 | |
Long-term debt | $ 72,742 | $ 72,350 | |
Secured debt | Loan agreement | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 225,000 | ||
Milestone period | 6 months | ||
Stated interest rate | 7.45% | ||
Basis spread on variable rate | 0.10% | ||
Interest rate at end of period | 7.68% | ||
Market capitalization | $ 400,000 | ||
Debt issuance costs | $ 1,000 | ||
Default rate | 4.00% | ||
Final fee | 6.95% | ||
Exit fee | 3.00% | ||
Exit fee expiration period | 10 years | ||
Effective interest rate | 9.97% | ||
Deferred final fee | $ 5,200 | ||
Interest expense | $ 1,800 | ||
Secured debt | Loan agreement | Tranche A term loan | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 75,000 | ||
Proceeds from issuance of debt | 75,000 | ||
Secured debt | Loan agreement | Tranche B-1 term loan | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 50,000 | ||
Days after FDA approval | 15 days | ||
Secured debt | Loan agreement | Tranche B-2 term loan | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 75,000 | ||
Incremental amount available for borrowing | 15,000 | ||
Secured debt | Loan agreement | Tranche C term loan | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 25,000 | ||
Net product revenue milestone | $ 110,000 | ||
Milestone period | 6 months | ||
Secured debt | Loan agreement | Prior to December 22, 2022 | |||
Debt Instrument [Line Items] | |||
Prepayment premium | 3.00% | ||
Secured debt | Loan agreement | After December 22, 2002 and prior to December 22, 2023 | |||
Debt Instrument [Line Items] | |||
Prepayment premium | 2.00% | ||
Secured debt | Loan agreement | After December 22, 2023 and prior to December 22, 2025 | |||
Debt Instrument [Line Items] | |||
Prepayment premium | 1.00% | ||
Secured debt | Loan agreement | Minimum | |||
Debt Instrument [Line Items] | |||
Periodic principal payment | $ 5,000 |
Long-term debt - Summary of Lon
Long-term debt - Summary of Long-Term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | ||
Long-term debt, gross | $ 75,000 | $ 75,000 |
Accrued final fee | 261 | 0 |
Debt issuance costs | (2,519) | (2,650) |
Long-term debt, net | $ 72,742 | $ 72,350 |
Convertible Preferred Stock a_3
Convertible Preferred Stock and Stockholders' Equity - Narrative (Details) | 1 Months Ended | |||
Feb. 29, 2020shares | Mar. 31, 2022USD ($)vote$ / sharesshares | Dec. 31, 2021$ / sharesshares | Feb. 04, 2020$ / sharesshares | |
Class of Stock [Line Items] | ||||
Votes per share of common stock | vote | 1 | |||
Dividends declared | $ | $ 0 | |||
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 | 300,000,000 | |
Common stock, par value (in USD per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Convertible preferred stock, shares authorized (in shares) | 10,000,000 | |||
Convertible preferred stock, par value (In USD per share) | $ / shares | $ 0.0001 | |||
Preferred stock, shares outstanding (in shares) | 0 | 0 | ||
Common Stock | ||||
Class of Stock [Line Items] | ||||
Conversion of preferred stock into common stock upon initial public offering (in shares) | 24,385,388 |
Convertible Preferred Stock a_4
Convertible Preferred Stock and Stockholders' Equity - Shares of Common Stock for Issuance (Details) - shares | Mar. 31, 2022 | Dec. 31, 2021 |
Class of Stock [Line Items] | ||
Common stock reserved (in shares) | 11,746,088 | 8,161,157 |
Options issued and outstanding | ||
Class of Stock [Line Items] | ||
Common stock reserved (in shares) | 6,911,228 | 5,757,957 |
Common stock awards available for grant under employee incentive plans | ||
Class of Stock [Line Items] | ||
Common stock reserved (in shares) | 3,575,485 | 2,068,004 |
Restricted stock units outstanding | ||
Class of Stock [Line Items] | ||
Common stock reserved (in shares) | 1,259,375 | 335,196 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 01, 2022 | Jan. 01, 2021 | Jan. 30, 2020 | Mar. 31, 2021 | Aug. 31, 2016 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Common stock reserved (in shares) | 11,746,088 | 8,161,157 | |||||||
Intrinsic value of options exercised during the period | $ 1,400 | ||||||||
Grant date fair value of options vested during the period | $ 5,000 | ||||||||
Grant date fair value of options vested during the period (in USD per share) | $ 12.94 | ||||||||
Stock-based compensation expense | $ 6,533 | $ 8,503 | |||||||
Stock Options | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Unrecognized compensation cost | $ 64,900 | ||||||||
Recognition period for unrecognized compensation costs related to unvested options expected to vest | 3 years 1 month 6 days | ||||||||
Expected dividend yield | 0.00% | 0.00% | |||||||
RSU's subject to future vesting | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Common stock reserved (in shares) | 1,259,375 | 335,196 | |||||||
Vesting period of stock-based awards granted | 4 years | ||||||||
Granted (in shares) | 1,012,500 | 0 | |||||||
Unrecognized compensation cost | $ 24,100 | ||||||||
Recognition period for unrecognized compensation costs related to unvested options expected to vest | 3 years 7 months 6 days | ||||||||
Restricted common stock vested (in shares) | 79,421 | ||||||||
Restricted stock | First anniversary date | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting rights, percentage | 25.00% | ||||||||
Employee Stock Purchase Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Increase in shares available for grant, percentage of shares outstanding | 1.00% | ||||||||
Purchase price of common stock, as a percentage of closing trading price per share | 85.00% | ||||||||
Stock-based compensation expense | $ 209 | $ 117 | |||||||
Employee Stock Purchase Plan | Common Stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of additional shares authorized (in shares) | 503,457 | 436,778 | |||||||
Shares available for grant | 1,208,532 | ||||||||
Number of shares authorized for sale under the ESPP (in shares) | 351,000 | ||||||||
Maximum shares to be issued | 5,265,000 | ||||||||
Stock options to purchase common stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Incremental cost of plan modification | $ 5,300 | ||||||||
2020 Equity Incentive Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Common stock reserved (in shares) | 2,134,000 | ||||||||
Increase in shares available for grant, percentage of shares outstanding | 4.00% | ||||||||
Based number of options issuable (in shares) | 11,000,000 | ||||||||
Number of additional shares authorized (in shares) | 2,013,830 | 1,747,112 | |||||||
Shares available for grant | 1,184,753 | ||||||||
Expected dividend yield | 0.00% | ||||||||
2020 Equity Incentive Plan | Stock Options | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period of stock-based awards granted | 4 years | ||||||||
2017 Equity Incentive Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Common stock reserved (in shares) | 1,550,150 | ||||||||
Early exercise liability | $ 58 | $ 82 | |||||||
Early exercise liability, current | 39 | 57 | |||||||
Early exercise liability, noncurrent | $ 19 | $ 25 | |||||||
2022 Employment Inducement Incentive Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Common stock reserved (in shares) | 1,250,000 | ||||||||
Shares available for grant | 1,182,200 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Number of Options | ||
Beginning balance, number of options (in shares) | 5,757,957 | |
Granted (in shares) | 1,289,200 | |
Exercised (in shares) | (102,935) | |
Forfeited (in shares) | (28,800) | |
Expired (in shares) | (4,194) | |
Ending balance, number of options (in shares) | 6,911,228 | 5,757,957 |
Weighted- Average Exercise Price | ||
Beginning balance, weighted-average exercise price (in USD per share) | $ 19.06 | |
Granted (in USD per share) | 18.53 | |
Exercised (in USD per share) | 2.53 | |
Forfeited (in USD per share) | 29.46 | |
Expired (in USD per share) | 27.42 | |
Ending balance, weighted-average exercise price (in USD per share) | $ 19.16 | $ 19.06 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Exercisable (in shares) | 2,615,847 | |
Exercisable, Weighted-Average Exercise Price (in USD per share) | $ 12.50 | |
Remaining Contractual Term (Years) | 8 years 5 months 23 days | 8 years 4 months 13 days |
Remaining contractual term, exercisable (years) | 7 years 4 months 9 days | |
Aggregate Intrinsic Value | $ 31,704 | $ 34,887 |
Intrinsic value, exercisable | $ 26,106 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Unit Activity (Details) - RSU's subject to future vesting - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2019 | |
Number of Units | ||
Beginning balance (in shares) | 335,196 | |
Granted (in shares) | 1,012,500 | 0 |
Vested (in shares) | (79,421) | |
Forfeited (in shares) | (8,900) | |
Ending balance (in shares) | 1,259,375 | |
Weighted-Average Grant Date Fair Value | ||
Beginning balance (in USD per share) | $ 29.26 | |
Granted (in USD per share) | 18.06 | |
Vested (in USD per share) | 29.98 | |
Forfeited (in USD per share) | 17.67 | |
Ending balance (in USD per share) | $ 20.30 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | $ 6,533 | $ 8,503 |
Research and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | 2,734 | 1,520 |
General and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | $ 3,799 | $ 6,983 |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions in Calculating Stock Option Awards (Details) - Stock Options | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility, minimum | 81.00% | 80.60% |
Expected volatility, maximum | 82.10% | 85.20% |
Risk-free interest rate, minimum | 1.40% | 0.60% |
Risk-free interest rate, maximum | 2.00% | 1.30% |
Dividend yield | 0.00% | 0.00% |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 6 years | 5 years 6 months |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 6 years 1 month 6 days | 6 years 2 months 12 days |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially antidilutive shares excluded from the calculation of net loss per share (in shares) | 8,274,334 | 5,113,516 |
Stock options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially antidilutive shares excluded from the calculation of net loss per share (in shares) | 6,911,228 | 4,540,255 |
Early exercised options subject to future vesting | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially antidilutive shares excluded from the calculation of net loss per share (in shares) | 50,121 | 259,460 |
RSU's subject to future vesting | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially antidilutive shares excluded from the calculation of net loss per share (in shares) | 1,259,375 | 310,068 |
ESPP shares subject to future issuance | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially antidilutive shares excluded from the calculation of net loss per share (in shares) | 53,610 | 3,733 |