10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2022

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-39321

Avidity Biosciences, Inc.

(Exact name of registrant as specified in its charter)

Delaware	46-1336960
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
10578 Science Center Drive, Suite 125 San Diego, California	92121
(Address of principal executive offices)	(Zip Code)

(858) 401-7900

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value	RNA	The Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).      Yes ☐    No ☒

As of July 25, 2022, the registrant had 52,127,032 shares of common stock outstanding.

Avidity Biosciences, Inc.

FORM 10-Q

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION
Item 1.	Condensed Financial Statements (unaudited)	3
	Condensed Balance Sheets (unaudited)	3
	Condensed Statements of Operations and Comprehensive Loss (unaudited)	4
	Condensed Statements of Stockholders' Equity (unaudited)	5
	Condensed Statements of Cash Flows (unaudited)	7
	Notes to Condensed Financial Statements (unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	29
SIGNATURES		30

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PART I - FINANCIAL INFORMATION

Item 1.  Condensed Financial Statements (unaudited)

Avidity Biosciences, Inc.

Condensed Balance Sheets

(in thousands, except par value)

	June 30, 2022			December 31, 2021
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	125,106		$	320,448
Marketable securities		273,112			85,095
Prepaid and other assets		6,033			5,598
Total current assets		404,251			411,141
Property and equipment, net		6,137			4,805
Restricted cash		251			251
Right-of-use asset		9,747			10,784
Other assets		415			599
Total assets	$	420,801		$	427,580
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	20,552		$	14,085
Accrued compensation		4,687			8,940
Lease liabilities, current portion		3,068			1,769
Deferred revenue, current portion		5,380			4,864
Total current liabilities		33,687			29,658
Lease liabilities, net of current portion		8,753			9,960
Deferred revenue, net of current portion		4,010			6,532
Total liabilities		46,450			46,150
Commitments and contingencies (Note 7)
Stockholders’ equity:
Common stock, $0.0001 par value; authorized shares – 400,000; issued and    outstanding shares – 52,081 and 47,754 at June 30, 2022 and    December 31, 2021, respectively		5			5
Additional paid-in capital		641,806			566,161
Accumulated other comprehensive loss		(2,986	)		(187	)
Accumulated deficit		(264,474	)		(184,549	)
Total stockholders’ equity		374,351			381,430
Total liabilities and stockholders’ equity	$	420,801		$	427,580

See accompanying notes.

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Avidity Biosciences, Inc.

Condensed Statements of Operations and Comprehensive Loss

(in thousands, except per share data)

(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Collaboration revenue	$	2,178		$	2,607		$	3,973		$	5,311
Operating expenses:
Research and development		39,789			22,706			67,477			43,383
General and administrative		8,688			6,268			17,255			12,152
Total operating expenses		48,477			28,974			84,732			55,535
Loss from operations		(46,299	)		(26,367	)		(80,759	)		(50,224	)
Other income (expense):
Interest income		611			16			861			32
Other expense		(2	)		(2	)		(27	)		(5	)
Total other income		609			14			834			27
Net loss		(45,690	)		(26,353	)		(79,925	)		(50,197	)
Other comprehensive income (loss):
Net unrealized (losses) gains on marketable    securities		(960	)		3			(2,799	)		5
Comprehensive loss	$	(46,650	)	$	(26,350	)	$	(82,724	)	$	(50,192	)
Net loss per share, basic and diluted	$	(0.92	)	$	(0.70	)	$	(1.63	)	$	(1.34	)
Weighted-average shares outstanding, basic and    diluted		49,927			37,583			49,091			37,552

See accompanying notes.

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Avidity Biosciences, Inc.

Condensed Statements of Stockholders' Equity

(in thousands)

(unaudited)

	Common Stock				Additional Paid-in		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital		Loss			Deficit			Equity
Balance at December 31, 2021		47,754	$	5	$	566,161	$	(187	)	$	(184,549	)	$	381,430
Issuance of common stock upon exercise    of stock options		7		—		10		—			—			10
Vesting of early exercise options		—		—		1		—			—			1
Issuance of common stock in public offerings,    net of issuance costs of $745		1,520		—		24,103		—			—			24,103
Stock-based compensation		—		—		6,238		—			—			6,238
Net loss		—		—		—		—			(34,235	)		(34,235	)
Other comprehensive loss		—		—		—		(1,839	)		—			(1,839	)
Balance at March 31, 2022		49,281	$	5	$	596,513	$	(2,026	)	$	(218,784	)	$	375,708
Issuance of common stock upon exercise    of stock options		5		—		4		—			—			4
Issuance of common stock in public offerings,    net of issuance costs of $1,184		2,746		—		38,281		—			—			38,281
Issuance of common stock under employee    stock purchase plan		49		—		499		—			—			499
Vesting of early exercise options		—		—		1		—			—			1
Stock-based compensation		—		—		6,508		—			—			6,508
Net loss		—		—		—		—			(45,690	)		(45,690	)
Other comprehensive loss		—		—		—		(960	)		—			(960	)
Balance at June 30, 2022		52,081	$	5	$	641,806	$	(2,986	)	$	(264,474	)	$	374,351

See accompanying notes.

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Avidity Biosciences, Inc.

Condensed Statements of Stockholders' Equity

(in thousands)

(unaudited)

	Common Stock				Additional Paid-in		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital		Loss			Deficit			Equity
Balance at December 31, 2020		37,569	$	4	$	372,764	$	(5	)	$	(66,540	)	$	306,223
Issuance of common stock upon exercise    of stock options		31		—		24		—			—			24
Vesting of early exercise options		—		—		10		—			—			10
Stock-based compensation		—		—		3,701		—			—			3,701
Net loss		—		—		—		—			(23,844	)		(23,844	)
Other comprehensive gain		—		—		—		2			—			2
Balance at March 31, 2021		37,600	$	4	$	376,499	$	(3	)	$	(90,384	)	$	286,116
Issuance of common stock upon exercise    of stock options		51		—		98		—			—			98
Issuance of common stock under employee    stock purchase plan		14		—		318		—			—			318
Vesting of early exercise options		—		—		9		—			—			9
Stock-based compensation		—		—		4,289		—			—			4,289
Net loss		—		—		—		—			(26,353	)		(26,353	)
Other comprehensive gain		—		—		—		3			—			3
Balance at June 30, 2021		37,665	$	4	$	381,213	$	—		$	(116,737	)	$	264,480

See accompanying notes.

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Avidity Biosciences, Inc.

Condensed Statements of Cash Flows

(in thousands)

(unaudited)

	Six Months Ended June 30,
	2022			2021
Cash flows from operating activities
Net loss	$	(79,925	)	$	(50,197	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		636			255
Stock-based compensation expense		12,746			7,990
Amortization of premiums and discounts on marketable securities, net		223			69
Gain on disposal of property and equipment		—			(16	)
Changes in operating assets and liabilities:
Prepaid and other assets		(251	)		(4,394	)
Accounts payable and accrued liabilities		6,582			579
Accrued compensation		(4,253	)		151
Operating lease right-of-use assets and liabilities, net		1,128			299
Deferred revenue		(2,006	)		(2,552	)
Net cash used in operating activities		(65,120	)		(47,816	)
Cash flows from investing activities
Maturities of marketable securities		21,525			3,580
Purchases of marketable securities		(212,564	)		—
Purchases of property and equipment		(2,080	)		(1,233	)
Net cash (used in) provided by investing activities		(193,119	)		2,347
Cash flows from financing activities
Proceeds from issuance of common stock in public offerings, gross		64,313			—
Payment of issuance costs related to public offerings		(1,929	)		—
Proceeds from issuance of common stock under employee stock   purchase plan		499			318
Proceeds from exercise of stock options		14			122
Payment of deferred financing costs		—			(10	)
Net cash provided by financing activities		62,897			430
Net decrease in cash, cash equivalents and restricted cash		(195,342	)		(45,039	)
Cash, cash equivalents and restricted cash at beginning of period		320,699			321,713
Cash, cash equivalents and restricted cash at end of period	$	125,357		$	276,674
Supplemental schedule of noncash investing and financing activities:
Costs incurred, but not paid, in connection with deferred financing costs    included in accounts payable and accrued liabilities	$	—		$	90
Costs incurred, but not paid, in connection with purchases of property    and equipment included in accounts payable and accrued liabilities	$	—		$	94

See accompanying notes.

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Avidity Biosciences, Inc.

Notes to Unaudited Condensed Financial Statements

1. Description of Business and Basis of Presentation

Description of Business

Avidity Biosciences, Inc. (the Company or Avidity) is a biopharmaceutical company committed to delivering a new class of RNA therapeutics called Antibody Oligonucleotide Conjugates (AOCs). The Company’s proprietary AOC platform is designed to combine the specificity of monoclonal antibodies with the precision of RNA therapeutics to target the root cause of diseases previously untreatable with such therapeutics.

Liquidity

On June 16, 2020, the Company completed its initial public offering (IPO) in which it sold 16,560,000 shares of common stock at an offering price of $18.00 per share. Proceeds from the IPO, net of underwriting discounts, commissions and offering costs, were $274.1 million. On August 6, 2021, the Company completed a public offering of 9,200,000 shares of its common stock at a public offering price of $18.00 per share. The net proceeds from the offering were $155.1 million, after deducting underwriting discounts, commissions and offering costs. On July 2, 2021, the Company entered into a sales agreement (the Sales Agreement) with Cowen and Company, LLC (the Sales Agent), under which the Company may, from time to time, sell shares of its common stock having an aggregate offering price of up to $150.0 million through the Sales Agent. Through June 30, 2022, the Company has sold 5,046,860 shares of its common stock pursuant to the Sales Agreement and received net proceeds of $82.0 million, after deducting offering-related transaction costs and commissions. See Note 8 (Stockholders Equity) for more information on the Company’s equity offerings.

To date, the Company has devoted substantially all of its resources to organizing and staffing the Company, business planning, raising capital, developing its proprietary AOC platform, identifying potential product candidates, establishing its intellectual property portfolio, conducting research, preclinical and clinical studies, and providing other general and administrative support for these operations. In addition, the Company has a limited operating history, has incurred operating losses since inception and expects that it will continue to incur net losses into the foreseeable future as it continues the development of its product candidates and development programs. As of June 30, 2022, the Company had an accumulated deficit of $264.5 million and cash, cash equivalents and marketable securities of $398.2 million.

The Company believes that existing cash, cash equivalents and marketable securities will be sufficient to fund the Company’s operations for at least 12 months from the date of the filing of this Form 10-Q. The Company plans to finance its future cash needs through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. If the Company is not able to secure adequate additional funding, it may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, and/or delay or reduce the scope of its planned development programs. Any of these actions could materially harm the Company’s business, results of operations and future prospects.

Basis of Presentation

The accompanying unaudited interim condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) and the rules and regulations of the Securities and Exchange Commission (SEC) related to a quarterly report on Form 10-Q. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations. The unaudited interim condensed financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results for the periods presented. All such adjustments are of a normal and recurring nature. The operating results presented in these unaudited interim condensed financial statements are not necessarily indicative of the results that may be expected for any future periods. These unaudited interim condensed financial statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended December 31, 2021 included in the Company’s annual report on Form 10-K filed with the SEC on March 1, 2022.

2. Summary of Significant Accounting Policies

Use of Estimates

The Company’s condensed financial statements are prepared in accordance with GAAP, which requires the Company to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in the condensed financial statements and

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accompanying notes. The most significant estimates in the Company’s condensed financial statements relate to revenue recognition, stock-based compensation, and accrued research and development costs. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with original maturities of three months or less from the date of purchase to be cash equivalents. Cash and cash equivalents include cash in readily available checking and money market accounts. Restricted cash represents cash held as collateral for the letter of credit required under the Company’s facility lease and is reported as a long-term asset in the accompanying condensed balance sheets.

Marketable Securities

The Company’s marketable securities primarily consist of U.S. Government and corporate debt securities. The Company classifies its marketable securities as available-for-sale and records such assets at estimated fair value in the condensed balance sheets, with unrealized gains and losses, if any, reported as a component of other comprehensive income (loss) within the condensed statements of operations and comprehensive loss and as a separate component of stockholders’ equity. The Company classifies marketable securities with remaining maturities greater than one year as current assets because such marketable securities are available to fund the Company’s current operations. Realized gains and losses are calculated on the specific identification method and recorded as interest income. There were no realized gains and losses during any of the periods presented.

At each balance sheet date, the Company assesses available-for-sale securities in an unrealized loss position to determine whether the unrealized loss is other-than-temporary. When the Company determines that a decline in the fair value below its cost basis is other-than-temporary, the Company recognizes an impairment loss in the period in which the other-than-temporary decline occurred. There have been no other-than-temporary impairments recognized during any of the periods presented.

See Note 4 (Marketable Securities) for further information.

Concentration of Credit Risk

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 has not experienced any losses in such accounts and believes it is not exposed to significant risk on its cash balances due to the financial position of the depository institutions in which those deposits are held. Additionally, the Company has established guidelines regarding approved investments, credit quality, diversification, liquidity and maturities of investments, which are designed to maintain safety and liquidity.

Fair Value of Financial Instruments

Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

• Level 1—Quoted prices in active markets for identical assets or liabilities.

• Level 2—Observable inputs, such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

• Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

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The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

None of the Company’s non-financial assets are recorded at fair value on a non-recurring basis. The carrying amounts reflected in the Company’s condensed balance sheets for prepaid and other assets and accounts payable and accrued liabilities approximate their fair values due to their short-term nature. The Company recognizes transfers between levels of the fair value hierarchy on the date of the event or change in circumstances that caused the transfer. No transfers between levels have occurred during the periods presented.

See Note 3 (Fair Value Measurements) for information on assets measured at fair value.

Property and Equipment, net

Property and equipment, including leasehold improvements, are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are recorded using the straight-line method over the estimated useful lives of the related assets, which ranges from three to five years. Leasehold improvements are amortized on a straight-line basis over the shorter of the estimated useful lives of the assets or the remaining lease term. Repairs and maintenance charges that do not increase the useful life of the assets are charged to operating expenses as incurred.

Impairment of Long-Lived Assets

Long-lived assets consist of property and equipment. An impairment loss is recorded if and when events and circumstances indicate that assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets. The Company has not recognized any impairment losses in any of the periods presented in these condensed financial statements.

Segment Information

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by management in making decisions regarding resource allocation and assessing performance. The Company manages its operations as a single operating segment in the United States for the purposes of assessing performance and making operating decisions.

Revenue Recognition

To date, all the Company’s revenue has been derived from collaboration and research agreements. The terms of these arrangements include the following types of payments to the Company: non-refundable, upfront license fees; development, regulatory and commercial milestone payments; payments for research and development services provided by the Company or for manufacturing supply services the Company provides through its contract manufacturers; and royalties on net sales of licensed products.  

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The Company performs the following steps in determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of these agreements: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when, or as, the Company satisfies each performance obligation.

The Company receives payments from its collaborators based on billing schedules established in each contract. Upfront and other payments may require deferral of revenue recognition to a future period until the Company performs its obligations under its research and collaboration arrangements. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional.

See Note 5 (Collaboration, License and Research Agreements) for further information.

Research and Development Costs

Research and development costs are expensed as incurred and include salaries, benefits and stock-based compensation associated with research and development personnel, third-party research and development expenses, license fees, laboratory supplies, facilities, overhead costs, and consultants. Nonrefundable advance payments for goods and services that will be used in future research and development activities are capitalized and recorded as expense in the period that the Company receives the goods or when services are performed.

Upfront and milestone payments to acquire contractual rights to licensed technology are expensed when incurred if there is uncertainty in the Company receiving future economic benefit from the acquired contractual rights.

Patent Costs

Costs related to filing and pursuing patent applications are recorded as general and administrative expense and expensed as incurred since recoverability of such expenditures is uncertain.

Income Taxes

The Company accounts for income taxes in accordance with Accounting Standards Codification (ASC) 740, Income Taxes, which provides for deferred taxes using the asset and liability method. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit would more likely than not be realized assuming examination by the taxing authority. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances.

The Company is subject to taxation in the United States and various state jurisdictions. As of December 31, 2021, the Company’s tax years since conversion to a corporation in 2019 are subject to examination by taxing authorities.

Stock-Based Compensation

Stock-based compensation expense for employee and non-employee stock option grants is recorded at the estimated fair value of the award as of the grant date and is recognized as expense on a straight-line basis over the requisite service period (usually the vesting period) of the stock-based award, and forfeitures are recognized as incurred. Stock-based compensation expense for employee stock purchases under the Company’s Employee Stock Purchase Plan (the ESPP) is recorded at the estimated fair value of the purchase as of the plan enrollment date and is recognized as expense on a straight-line basis over the applicable six-month ESPP offering period. The estimation of fair value for stock-based compensation requires management to make estimates and judgments about, among other things, the estimated life of options and volatility of the Company’s common stock. The judgments directly affect the amount of compensation expense that will be recognized.

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Comprehensive Loss

Comprehensive loss is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources, including unrealized gains and losses on marketable securities. Comprehensive gains (losses) have been reflected in the statements of operations and comprehensive loss for all periods presented.

Net Loss Per Share

Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding for the period, adjusted for the weighted-average number of common shares outstanding that are subject to repurchase or forfeiture. The Company has excluded 11,449 and 38,118 weighted-average shares subject to repurchase or forfeiture from the weighted-average number of common shares outstanding for the three months ended June 30, 2022 and 2021, respectively, and 12,705 and 48,080 weighted-average shares subject to repurchase or forfeiture from the weighted-average number of common shares outstanding for the six months ended June 30, 2022 and 2021, respectively. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and dilutive common stock equivalents outstanding for the period determined using the treasury-stock and if-converted methods. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding as inclusion of the potentially dilutive securities would be anti-dilutive.

Potentially dilutive securities not included in the calculation of diluted net loss per share, because to do so would be anti-dilutive, are as follows (in common stock equivalent shares; in thousands):

	June 30,
	2022		2021
Common stock options issued and outstanding		8,636		5,766
Common stock subject to repurchase or forfeiture		10		30
ESPP shares pending issuance		4		2
Total		8,650		5,798

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

Accounting Standards Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Statements (Topic 326), which intends to improve financial reporting by requiring earlier recognition of credit losses on certain financial assets, such as available-for-sale debt securities. Subsequent to the issuance of ASU 2016-13, the FASB issued several additional Accounting Standard Updates (ASUs) to clarify implementation guidance, provide narrow-scope improvements and provide additional disclosure guidance. In November 2019, the FASB issued an amendment making this ASU effective for fiscal years beginning after December 15, 2022 for smaller reporting companies. The Company was a smaller reporting company at the determination date, and therefore the new standard will be effective for the Company on January 1, 2023. The Company is currently evaluating the potential impact that the adoption of ASU 2016-13 may have on its financial statements and related disclosures.

3. Fair Value Measurements

The Company determines the fair value of its marketable securities based on one or more valuations from its investment accounting and reporting service provider. The investment service provider values the securities using a hierarchical security pricing model that relies primarily on valuations provided by an industry-recognized valuation service. Such valuations may be based on trade prices in active markets for identical assets (Level 1 inputs) or valuation models using inputs that are observable either directly or indirectly (Level 2 inputs), such as quoted prices for similar assets, yield curves, volatility factors, credit spreads, default rates, loss severity, current market and contractual prices for the underlying instruments or debt, and broker and dealer quotes, as well as other relevant economic measures.

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The following tables summarize the Company’s marketable securities measured at fair value (in thousands):

			Fair Value Measurements Using
As of June 30, 2022	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Marketable securities:
U.S. Treasury securities	$	247,249	$	247,249	$	—	$	—
U.S. Government agency securities		4,928		—		4,928		—
Negotiable certificates of deposit		3,798		—		3,798		—
Corporate debt securities		17,137		—		17,137		—
Total	$	273,112	$	247,249	$	25,863	$	—

			Fair Value Measurements Using
As of December 31, 2021	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Marketable securities:
U.S. Treasury securities	$	65,372	$	65,372	$	—	$	—
Negotiable certificates of deposit		3,873		—		3,873		—
Corporate debt securities		15,850		—		15,850		—
Total	$	85,095	$	65,372	$	19,723	$	—

4. Marketable Securities

The Company’s marketable securities, which consist of highly liquid marketable debt securities, are classified as available-for-sale and are stated at fair value. The following tables summarize the Company’s marketable securities (in thousands):

As of June 30, 2022	Maturity (in years)	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
U.S. Treasury securities	1 or less	$	197,630	$	—	$	(1,395	)	$	196,235
U.S. Government agency securities	1 or less		5,000		—		(72	)		4,928
Negotiable certificates of deposit	1 or less		2,647		—		(34	)		2,613
Corporate debt securities	1 or less		12,839		—		(211	)		12,628
U.S. Treasury securities	1 - 2		52,114		—		(1,100	)		51,014
Negotiable certificates of deposit	1 - 2		1,224		—		(39	)		1,185
Corporate debt securities	1 - 2		4,644		—		(135	)		4,509
Total		$	276,098	$	—	$	(2,986	)	$	273,112

As of December 31, 2021	Maturity (in years)	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
U.S. Treasury securities	1 or less	$	2,492	$	—	$	(1	)	$	2,491
Negotiable certificates of deposit	1 or less		1,190		—		(1	)		1,189
U.S. Treasury securities	1 - 2		63,034		—		(153	)		62,881
Negotiable certificates of deposit	1 - 2		2,687		—		(3	)		2,684
Corporate debt securities	1 - 2		15,879		—		(29	)		15,850
Total		$	85,282	$	—	$	(187	)	$	85,095

The unrealized losses on the Company’s marketable securities of $3.0 million as of June 30, 2022 were caused by interest rate increases which resulted in the decrease in market value of these securities. Because the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those marketable securities to be other-than-temporarily impaired at June 30, 2022. None of the Company’s marketable securities have been in a continuous unrealized loss position for 12 months or greater as of June 30, 2022.

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5. Collaboration, License and Research Agreements

Research Collaboration and License Agreement with Eli Lilly and Company

In April 2019, the Company entered into a Research Collaboration and License Agreement (the Lilly Agreement) with Eli Lilly and Company (Lilly) for the discovery, development and commercialization of AOC products directed against certain targets in immunology and other select indications on a worldwide basis. Under the Lilly Agreement, the Company granted Lilly an exclusive, worldwide, royalty-bearing license, with the right to sublicense (subject to certain conditions), under the Company’s technology to research, develop, manufacture and sell products containing AOCs that are directed to up to six mRNA targets. The Company retains the right to use its technology to perform its obligations under the Lilly Agreement and for all purposes not granted to Lilly. The Company agreed that it will not, itself or with a third party, research, develop, manufacture or commercialize or otherwise exploit any compound or product directed against targets subject to the Lilly Agreement.

In consideration of the rights granted to Lilly under the Lilly Agreement, the Company received a one-time upfront fee of $20.0 million and is eligible to receive up to $60.0 million in development milestone payments, up to $140.0 million in regulatory milestone payments and up to $205.0 million in commercialization milestone payments per target. In addition, Lilly is obligated to reimburse the Company for research expenses, as defined in and incurred under the Lilly Agreement. Lilly is obligated to pay the Company a tiered royalty ranging from the mid-single to low-double digits on worldwide annual net sales of licensed products, subject to specified and capped reductions for the market entry of biosimilar products, loss of patent coverage of licensed products and for payments owed to third parties for additional rights necessary to commercialize licensed products in the territory. Lilly’s royalty obligations and the Lilly Agreement will expire on a licensed product-by-licensed product and country-by-country basis on the later of ten years from the date of the first commercial sale or when there is no longer a valid patent claim covering such licensed product in such country.

The Company has identified multiple promises to deliver goods and services, which include at inception of the agreement: (i) a license to technology and patents, information and know-how; and (ii) collaboration, including research services, technical and regulatory support provided by the Company. At inception and through June 30, 2022, the Company has identified one performance obligation for all the deliverables under the Lilly Agreement since the delivered elements are either not capable of being distinct or are not distinct within the context of the contract. Accordingly, the Company will recognize revenue for the fixed or determinable collaboration in an amount proportional to the collaboration expenses incurred and the total estimated collaboration expenses over the five-year period over which it expects to deliver its performance obligations. The Company periodically reviews and updates the estimated collaboration expenses, when appropriate, which adjusts the percentage of revenue that is recognized for the period. In connection with the Lilly Agreement, the Company recognized revenue of $2.1 million and $2.5 million for the three months ended June 30, 2022 and 2021, respectively, and $3.8 million and $5.1 million for the six months ended June 30, 2022 and 2021, respectively, and had deferred revenue of $9.2 million and $11.1 million as of June 30, 2022 and December 31, 2021, respectively. Collaboration receivables related to the Lilly Agreement were $1.1 million and $0.9 million as of June 30, 2022 and December 31, 2021, respectively, which are included in prepaid and other assets on the condensed balance sheets.

A reconciliation of the closing balance of deferred revenue related to the Lilly Agreement is as follows (in thousands):

Balance at December 31, 2021	$	11,108
Revenue recognized		(1,875	)
Balance at June 30, 2022	$	9,233

Research Agreement with MyoKardia, Inc.

In December 2020, the Company entered into a research collaboration (the MyoKardia Agreement) with MyoKardia, Inc. (MyoKardia), a wholly-owned subsidiary of Bristol Myers Squibb, to demonstrate the potential utility of AOCs in cardiac tissue by leveraging MyoKardia’s genetic cardiomyopathy platform including, among other aspects, its novel target discovery engine and proprietary cardiac disease models. In connection with the MyoKardia Agreement, the Company recognized revenue of $40.5 thousand and $0.1 million for the three months ended June 30, 2022 and 2021, respectively, and $0.1 million and $0.2 million for the six months ended June 30, 2022 and 2021, respectively.

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6. Property and Equipment, net

Property and equipment consist of the following (in thousands):

	June 30, 2022			December 31, 2021
Laboratory equipment	$	5,566		$	4,775
Computers and software		116			116
Office furniture and equipment		2,575			1,398
Leasehold improvements		249			249
Property and equipment, gross		8,506			6,538
Less accumulated depreciation		(2,369	)		(1,733	)
Total property and equipment, net	$	6,137		$	4,805

Depreciation expense related to property and equipment was $0.3 million and $0.1 million for the three months ended June 30, 2022 and 2021, respectively, and $0.6 million and $0.3 million for the six months ended June 30, 2022 and 2021, respectively.

7. Commitments and Contingencies

Lease Agreements

The Company determines if an arrangement is a finance lease, operating lease or short-term lease at inception, or as applicable, and accounts for the arrangement under the relevant accounting literature. During the periods presented, the Company was party to various non-cancellable office and laboratory space operating leases and short-term leases. Currently, the Company is only party to a non-cancellable office and laboratory space operating lease. Under the relevant guidance, the Company recognizes operating lease right-of-use (ROU) assets and liabilities based on the present value of the future minimum lease payments over the lease term at the commencement date, using the Company’s assumed incremental borrowing rate, and amortizes the ROU assets and liabilities over the lease term. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Short-term leases are not subject to recognition of an ROU asset or liability or straight-line lease expense requirements.

As of June 30, 2022, future minimum payments for the Company’s operating lease liabilities are as follows (in thousands):

Year ending December 31,
2022 (remaining)	$	1,519
2023		3,113
2024		3,207
2025		3,303
2026		3,111
Total lease payments		14,253
Less imputed interest		(2,432	)
Total operating lease liabilities		11,821
Less lease liabilities, current portion		(3,068	)
Lease liabilities, net of current portion	$	8,753

Supplemental cash flow information related to cash paid for amounts included in the measurement of operating lease liabilities was as follows (in thousands):

	Six Months Ended June 30,
	2022		2021
Cash paid included in operating cash flows	$	251	$	—

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Rent expense was as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Operating leases	$	690	$	149	$	1,379	$	299
Short-term leases		—		72		—		81
Total rent expense	$	690	$	221	$	1,379	$	380

Litigation

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. There are no matters currently outstanding for which any liabilities have been accrued.

8. Stockholders’ Equity

Amended and Restated Certificate of Incorporation

On June 16, 2020, the Company’s certificate of incorporation was amended and restated to authorize 400,000,000 shares of common stock and 40,000,000 shares of undesignated preferred stock, each with a par value of $0.0001 per share. There was no preferred stock issued for any of the periods presented in the condensed financial statements.

Common Stock

On June 16, 2020, the Company completed its IPO in which it sold 16,560,000 shares of common stock at an offering price of $18.00 per share. Proceeds from the IPO, net of underwriting discounts, commissions and offering costs, were $274.1 million.

On July 2, 2021, the Company entered into the Sales Agreement with the Sales Agent, under which the Company may, from time to time, sell shares of its common stock having an aggregate offering price of up to $150.0 million through the Sales Agent. Sales of the Company’s common stock made pursuant to the Sales Agreement are made under the Company’s shelf registration statement on Form S-3, which became automatically effective upon filing on July 2, 2021 (the Shelf Registration Statement). In addition, the Sales Agreement may be terminated by the Company or the Sales Agent at any time upon ten days’ notice to the other party, or by the Sales Agent, with respect to itself, at any time in certain circumstances, including the occurrence of a material adverse change. During the six months ended June 30, 2022, the Company sold 4,266,311 shares of its common stock pursuant to the Sales Agreement and received net proceeds of $62.4 million, after deducting offering-related transaction costs and commissions. Through June 30, 2022, the Company has sold 5,046,860 shares of its common stock pursuant to the Sales Agreement and received net proceeds of $82.0 million, after deducting offering-related transaction costs and commissions. See Note 10 (Subsequent Events) for information on additional shares sold after June 30, 2022.

On August 6, 2021, the Company completed a public offering of 9,200,000 shares of its common stock at a public offering price of $18.00 per share. The net proceeds from the offering were $155.1 million, after deducting underwriting discounts, commissions and offering costs. The shares sold in the offering were registered pursuant to the Company’s Shelf Registration Statement.

Equity Incentive Plans

In January 2013, the Company adopted the 2013 Equity Incentive Plan (the 2013 Plan). The 2013 Plan provided for the issuance of incentive units to employees and nonemployees of the Company and non‑statutory unit options, restricted unit awards, unit appreciation rights, and unit bonuses to directors, employees and consultants of the Company. Under the 2013 Plan, 2,127,013 units were initially reserved for issuance. Upon the conversion of the Company to a C corporation, the 2013 Plan continued on the same terms and conditions. In 2019, the number of shares reserved under the 2013 Plan was increased to 4,771,615 shares.

In June 2020, the Company’s board of directors adopted, and the Company’s stockholders approved, the 2020 Incentive Award Plan (the 2020 Plan), which became effective in connection with the IPO. Pursuant to the 2020 Plan, the Company ceased granting awards under the 2013 Plan. Under the 2020 Plan, the Company may grant stock options, restricted stock, dividend equivalents, restricted stock units, stock appreciation rights, and other stock or cash-based awards to individuals who are then employees, officers, non-employee directors or consultants of the Company. A total of 3,900,000 shares of common stock were initially reserved for issuance under the 2020 Plan. In addition, the number of shares of

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common stock available for issuance under the 2020 Plan will be increased annually on the first day of each fiscal year during the term of the 2020 Plan, beginning with the 2021 fiscal year, by an amount equal to the lesser of (a) 5% of the shares of common stock outstanding on the final day of the immediately preceding calendar year or (b) such smaller number of shares as determined by the Company’s board of directors. At June 30, 2022, 2,092,732 shares remain available for issuance under the 2020 Plan.

Stock Options

Options granted from the 2013 Plan and 2020 Plan are exercisable at various dates and will expire no more than ten years from their date of grant. Options generally vest over a four-year period. Prior to the IPO, the exercise price of options was determined by the Company’s board of directors. Following the IPO, the Company grants options with an exercise price equal to the fair market value of the Company’s stock on the date of the option grant.

Stock option activity for employee and nonemployee awards and related information is as follows (in thousands, except per share data):

	Number of Options			Weighted- Average Exercise Price Per Share
Outstanding at December 31, 2021		5,778		$	14.49
Granted		3,028			14.95
Exercised		(12	)		1.19
Forfeited/expired		(158	)		22.02
Outstanding at June 30, 2022		8,636		$	14.53

The weighted-average grant date fair value of options granted during the six months ended June 30, 2022 and 2021 were $10.71 and $17.08 per share, respectively.

Employee Stock Purchase Plan

In June 2020, the Company adopted the ESPP, which permits participants to contribute up to 15% of their eligible compensation during defined rolling six-month periods to purchase the Company’s common stock. The purchase price of the shares will be 85% of the lower of the fair market value of the Company’s common stock on the first day of trading of the offering period or on the applicable purchase date. The Company issued 48,760 and 14,235 shares of common stock under the ESPP during the six months ended June 30, 2022 and 2021, respectively. The Company had an outstanding liability of $40.2 thousand at June 30, 2022, which is included in accounts payable and accrued liabilities on the condensed balance sheet, for employee contributions to the ESPP for shares pending issuance at the end of the offering period. As of June 30, 2022, 589,803 shares of common stock were available for issuance under the ESPP.

Stock-Based Compensation Expense

The assumptions used in the Black-Scholes model to determine the fair value of stock option grants and shares purchasable under the ESPP were as follows:

	Six Months Ended June 30,
Stock Option Grants	2022	2021
Risk-free interest rate	1.5%-3.4%	0.5% - 1.2%
Expected volatility	85%	87%-88%
Expected term (in years)	5.5-6.1	5.5 - 6.1
Expected dividend yield	—%	—%

	Six Months Ended June 30,
ESPP	2022	2021
Risk-free interest rate	2.2%	0.1%
Expected volatility	79%	75%
Expected term (in years)	0.5	0.5
Expected dividend yield	—%	—%

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The allocation of stock-based compensation expense was as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Research and development expense	$	3,531	$	2,487	$	6,797	$	4,497
General and administrative expense		2,977		1,802		5,949		3,493
Total stock-based compensation expense	$	6,508	$	4,289	$	12,746	$	7,990

As of June 30, 2022, the unrecognized compensation cost related to outstanding time-based options was $65.8 million, which is expected to be recognized over a weighted-average period of 2.8 years. As of June 30, 2022, the unrecognized compensation cost related to stock purchase rights under the ESPP was $0.2 million, which is expected to be recognized over a weighted-average period of 0.5 years.

9. COVID-19

The COVID-19 outbreak in the United States has caused significant business disruption. The extent of the impact of COVID-19 on the Company’s operational and financial performance will depend on certain developments, including the continued spread of COVID-19 and the measures taken by the governmental authorities, and its impact on the Company’s preclinical studies and clinical trials, employees and vendors, all of which are uncertain and cannot be predicted, particularly as the Company advances its product candidates into and through clinical development. In December 2021, the Company transitioned to a hybrid model with its employees generally working both remotely and onsite, and the Company anticipates it will continue to use this model going forward. To date, the Company has not experienced material disruptions in its business operations. However, a prolonged outbreak could have a material adverse impact on the financial results and business operations of the Company, including the timing and ability of the Company to complete certain clinical trials and other efforts required to advance the development of its product candidates and raise additional capital.

10.    Subsequent Events

From July 1, 2022 through August 9, 2022, the Company sold 1,042,300 shares of its common stock pursuant to the Sales Agreement and received net proceeds of $18.7 million, after deducting offering-related transaction costs and commissions.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed financial statements and related notes thereto included elsewhere in this quarterly report on Form 10-Q and with our audited financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations, both of which are contained in our annual report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission, or SEC, on March 1, 2022.

Cautionary Note Regarding Forward-Looking Statements

This quarterly report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical facts contained in this quarterly report, including statements regarding our future results of operations and financial position, business strategies and plans, research and development plans, the anticipated timing, costs, design and conduct of our ongoing and planned preclinical studies and clinical trials for our product candidates, the timing and likelihood of regulatory filings and approvals for our product candidates, the impact of COVID-19 on our business, the timing and likelihood of success, plans and objectives of management for future operations and future results of anticipated product development efforts, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” or the negative of these terms or other comparable terminology. These forward-looking statements are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this quarterly report and are subject to a number of risks, uncertainties and assumptions, including those described in Part II, Item 1A, “Risk Factors.” The events and circumstances reflected in our forward-looking statements may not be achieved or occur, and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

Overview

We are a biopharmaceutical company committed to delivering a new class of RNA therapeutics called Antibody Oligonucleotide Conjugates, or AOCs. Our proprietary AOC platform is designed to combine the specificity of monoclonal antibodies, or mAbs, with the precision of RNA therapeutics to target the root cause of diseases previously untreatable with such therapeutics. We are initially focused on muscle diseases to demonstrate the capabilities of our AOCs, and we expect to have three muscle programs in clinical development by the end of 2022. Our lead product candidate, AOC 1001, is designed to treat myotonic dystrophy type 1, or DM1, a rare monogenic muscle disease. AOC 1001 is currently in clinical testing with the ongoing Phase 1/2 MARINA trial, a trial designed to evaluate the safety and tolerability of single and multiple ascending doses of AOC 1001 administered intravenously in adults with DM1. The Part A single dose cohort of MARINA is fully enrolled, and dosing is complete. In Part A, there were no serious adverse events observed and any adverse events were mild to moderate. We are continuing to enroll patients in the Part B multidose cohort. In the fourth quarter of 2022, we plan to conduct a preliminary assessment of safety, tolerability and key biomarkers in approximately half of the trial participants from the MARINA study. In July, we announced the initiation of the Phase 2 MARINA open-label extension study, or MARINA-OLE. The MARINA-OLE is a two-year study that will continue to evaluate the safety, tolerability, pharmacokinetics, pharmacodynamics, and efficacy of AOC 1001 in patients that previously enrolled in the Phase 1/2 MARINA trial. The U.S. Food and Drug Administration, or FDA, and European Medicines Agency, or EMA, have granted Orphan Designation for AOC 1001. The FDA has also granted Fast Track Designation to AOC 1001 for the treatment of DM1.  

Our advancing and expanding pipeline also includes AOC 1044, the lead of three programs for the treatment of Duchenne Muscular Dystrophy, or DMD, and AOC 1020, designed to treat facioscapulohumeral muscular dystrophy, or FSHD. We anticipate that both AOC 1044 and AOC 1020 will enter the clinic by the end of 2022 following additional preparatory preclinical studies and regulatory clearance. In addition to our muscle franchise, we are also broadening the development of AOCs beyond muscle tissues through both internal discovery efforts and key partnerships that are focused on immune cells, cardiac tissue and other cell types.

Since our inception in 2012, we have devoted substantially all of our resources to organizing and staffing our company, business planning, raising capital, developing our proprietary AOC platform, identifying potential product candidates, establishing our intellectual property portfolio, conducting research, preclinical and clinical studies, and providing other

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general and administrative support for these operations. We have not generated any revenue from product sales. In June 2020, we completed our initial public offering, or IPO, of 16,560,000 shares of our common stock at a price to the public of $18.00 per share, including the exercise in full by the underwriters of their option to purchase 2,160,000 additional shares of our common stock. Including the option exercise, our aggregate net proceeds from the offering were $274.1 million, net of underwriting discounts, commissions and offering costs. In August 2021, we completed a public offering of 9,200,000 shares of our common stock at a public offering price of $18.00 per share, for aggregate net proceeds of $155.1 million, after deducting underwriting discounts, commissions and offering costs. In July 2021, we entered into a sales agreement, or the Sales Agreement, with Cowen and Company, LLC, or the Sales Agent, under which we may, from time to time, sell shares of common stock having an aggregate offering price of up to $150.0 million through the Sales Agent. Through June 30, 2022, we have sold 5,046,860 shares of our common stock pursuant to the Sales Agreement and received net proceeds of $82.0 million, after deducting offering-related transaction costs and commissions. Since our inception through June 30, 2022, other significant sources of capital raised to fund our operations were comprised of aggregate gross proceeds of $131.6 million from the sale and issuance of convertible preferred stock/units and convertible notes and $37.0 million from funding under collaboration and research services agreements. As of June 30, 2022, we had cash, cash equivalents and marketable securities of $398.2 million.

We have incurred operating losses in each year since inception. Our net losses were $118.0 million and $44.4 million for the years ended December 31, 2021 and 2020, respectively, and $79.9 million for the six months ended June 30, 2022. As of June 30, 2022, we had an accumulated deficit of $264.5 million. We expect our expenses and operating losses will increase substantially as we conduct our ongoing and planned preclinical studies and clinical trials, continue our research and development activities, utilize third parties to manufacture our product candidates and related raw materials, hire additional personnel and protect our intellectual property. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our preclinical studies and clinical trials and our expenditures on other research and development activities, as well as the generation of any collaboration and services revenue.

Based upon our current operating plans, we believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our operations for at least 12 months from the date of the filing of this Form 10-Q. While we may generate revenue under our current and/or future collaboration agreements, we do not expect to generate any revenues from product sales until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which we expect will take a number of years and may never occur. If we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. Accordingly, until such time as we can generate significant revenue from sales of our product candidates, if ever, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed, on favorable terms or at all. Our failure to raise capital or enter into such other arrangements when needed would have a negative impact on our financial condition and could force us to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

COVID-19

The COVID-19 outbreak in the United States has caused significant business disruption. The extent of the impact of COVID-19 on our operational and financial performance will depend on certain developments, including the continued spread of COVID-19 and the measures taken by the governmental authorities, and its impact on our preclinical studies and clinical trials, employees and vendors, all of which are uncertain and cannot be predicted, particularly as we advance our product candidates into and through clinical development. In December 2021, we transitioned to a hybrid model with our employees generally working both remotely and onsite, and we anticipate we will continue to use this model going forward. To date, we have not experienced material disruptions in our business operations. However, a prolonged outbreak could have a material adverse impact on our financial results and business operations, including the timing of and our ability to complete certain clinical trials and other efforts required to advance the development of our product candidates and raise additional capital.

Research Collaboration and License Agreement with Eli Lilly and Company

In April 2019, we entered into a Research Collaboration and License Agreement, or the Lilly Agreement, with Eli Lilly and Company, or Lilly, for the discovery, development and commercialization of AOC products in immunology and other select indications on a worldwide basis. Under the Lilly Agreement, we and Lilly will collaborate on preclinical research and discovery activities for such products, with Lilly being responsible for funding the cost of such activities by both parties. Lilly will also lead the clinical development, regulatory approval and commercialization of all such products, at its sole cost. We granted Lilly an exclusive, worldwide, royalty-bearing license, with the right to sublicense, under our technology to research,

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develop, manufacture, and sell products containing AOCs that are directed to up to six mRNA targets. We retain the right to use our technology to perform our obligations under the agreement and for all purposes not granted to Lilly. Lilly paid us an upfront license fee of $20.0 million in 2019, and we are eligible to receive up to $60.0 million in development milestone payments, up to $140.0 million in regulatory milestone payments and up to $205.0 million in commercialization milestone payments per target. We are eligible to receive a tiered royalty ranging from the mid-single to low-double digits from Lilly on worldwide annual net sales of licensed products, subject to specified and capped reductions for the market entry of biosimilar products, loss of patent coverage of licensed products and for payments owed to third parties for additional rights necessary to commercialize licensed products in the territory.

Components of Results of Operations

Revenue

Our revenue to date has been derived from payments received under the Lilly Agreement and other license and research agreements. For the foreseeable future, we may generate revenue from reimbursements of services under the Lilly Agreement, as well as a combination of upfront payments and milestone payments under our current and/or future collaboration agreements. We do not expect to generate any revenue from the sale of products unless and until such time that our product candidates have advanced through clinical development and regulatory approval, if ever. We expect that any revenue we generate, if at all, will fluctuate from quarter-to-quarter as a result of the timing and amount of payments relating to such services and milestones and the extent to which any of our products are approved and successfully commercialized. If we fail to complete preclinical and clinical development of product candidates or obtain regulatory approval for them, our ability to generate future revenues and our results of operations and financial position would be adversely affected.

Operating Expenses

Research and Development

Research and development expenses consist of external and internal costs associated with our research and development activities, including our discovery and research efforts, and the preclinical and clinical development of our product candidates. Our research and development expenses include:

• external costs, including expenses incurred under arrangements with third parties, such as contract research organizations, contract manufacturers, consultants and our scientific advisors; and

• internal costs, including;

• employee-related expenses, including salaries, benefits and stock-based compensation;

• the costs of laboratory supplies and acquiring, developing and manufacturing preclinical study materials; and

• facilities, information technology and depreciation, which include direct and allocated expenses for rent and maintenance of facilities and depreciation of leasehold improvements and equipment.

Research and development costs, including costs reimbursed under the Lilly Agreement, are expensed as incurred, with reimbursements of such amounts being recognized as revenue. We account for nonrefundable advance payments for goods and services that will be used in future research and development activities as expenses when the service has been performed or when the goods have been received.

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At any one time, we are working on multiple programs. Our internal resources, employees and infrastructure are not directly tied to any one research or drug discovery program and are typically deployed across multiple programs. As such, we do not track internal costs on a specific program basis. The following table summarizes our external costs and internal costs for the periods presented (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
External costs	$	24,125	$	12,304	$	38,708	$	24,682
Internal costs:
Employee-related expenses		10,991		7,561		21,173		14,034
Facilities, lab supplies and other costs		4,673		2,841		7,596		4,667
Total internal costs		15,664		10,402		28,769		18,701
Total research and development expenses	$	39,789	$	22,706	$	67,477	$	43,383

We expect our research and development expenses to increase for the foreseeable future as we continue to conduct our ongoing research and development activities, advance our preclinical research programs toward clinical development, including conducting IND-enabling studies, and conduct clinical trials. The process of conducting preclinical studies and clinical trials necessary to obtain regulatory approval is costly and time consuming. We may never succeed in achieving marketing approval for any of our product candidates.

The timelines and costs associated with research and development activities are uncertain, can vary significantly for each product candidate and development program, and are difficult to predict. We anticipate we will make determinations as to which programs to pursue and how much funding to direct to each program on an ongoing basis in response to preclinical and clinical results, regulatory developments, ongoing assessments as to each program’s commercial potential, and our ability to maintain or enter into new collaborations, to the extent we determine the resources or expertise of a collaborator would be beneficial for a given program. We will need to raise substantial additional capital in the future. In addition, we cannot forecast which development programs may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.

Our development costs may vary significantly based on factors such as:

• the number and scope of clinical, preclinical and IND-enabling studies;

• per patient trial costs;

• the number of trials required for approval;

• the number of sites included in the trials;

• the countries in which the trials are conducted;

• the length of time required to enroll eligible patients;

• the number of patients that participate in the trials;

• the number of doses that patients receive;

• the drop-out or discontinuation rates of patients;

• potential additional safety monitoring requested by regulatory agencies;

• the duration of patient participation in the trials and follow-up;

• the cost and timing of manufacturing our product candidates;

• the phase of development of our product candidates; and

• the efficacy and safety profile of our product candidates.

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General and Administrative

General and administrative expenses consist primarily of employee-related expenses, including salaries, benefits and stock-based compensation, for employees in our executive, finance, accounting, legal, business development and support functions. Other general and administrative expenses include allocated facility, information technology and depreciation related costs not otherwise included in research and development expenses and professional fees for auditing, tax, intellectual property and legal services. Costs related to filing and pursuing patent applications are recognized as general and administrative expenses as incurred since recoverability of such expenditures is uncertain.

We expect our general and administrative expenses will increase for the foreseeable future to support our increased research and development and other corporate activities.

Other Income (Expense)

Interest Income

Interest income consists primarily of interest earned on our cash, cash equivalents and marketable securities.

Results of Operations

Comparison of the Three Months Ended June 30, 2022 and 2021

The following table summarizes our results of operations for the periods presented (in thousands):

	Three Months Ended June 30,				Increase
	2022		2021		(decrease)
Revenue	$	2,178	$	2,607	$	(429	)
Research and development expenses		39,789		22,706		17,083
General and administrative expenses		8,688		6,268		2,420
Other income		609		14		595

Revenue

Revenue was $2.2 million for the three months ended June 30, 2022 compared to $2.6 million for the three months ended June 30, 2021. Revenue during both periods was primarily derived from the Lilly Agreement. The decrease was primarily due to a decrease in direct reimbursable collaboration-related expenses resulting in lower corresponding revenue under the Lilly Agreement.

Research and Development Expenses

Research and development expenses were $39.8 million for the three months ended June 30, 2022 compared to $22.7 million for the three months ended June 30, 2021. The increase was primarily driven by the advancement of AOC 1001, AOC 1044 and AOC 1020, as well as internal and external costs related to the expansion of our overall research capabilities.

General and Administrative Expenses

General and administrative expenses were $8.7 million for the three months ended June 30, 2022 compared to $6.3 million for the three months ended June 30, 2021. The increase was primarily due to higher personnel costs and professional fees as well as facilities costs to support our expanded operations.

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Comparison of the Six Months Ended June 30, 2022 and 2021

The following table summarizes our results of operations for the periods presented (in thousands):

	Six Months Ended June 30,				Increase
	2022		2021		(decrease)
Revenue	$	3,973	$	5,311	$	(1,338	)
Research and development expenses		67,477		43,383		24,094
General and administrative expenses		17,255		12,152		5,103
Other income		834		27		807

Revenue

Revenue was $4.0 million for the six months ended June 30, 2022 compared to $5.3 million for the six months ended June 30, 2021. Revenue during both periods was primarily derived from the Lilly Agreement. The decrease was primarily due to a decrease in direct reimbursable collaboration-related expenses resulting in lower corresponding revenue under the Lilly Agreement.

Research and Development Expenses

Research and development expenses were $67.5 million for the six months ended June 30, 2022 compared to $43.4 million for the six months ended June 30, 2021. The increase was primarily driven by the advancement of AOC 1001, AOC 1044 and AOC 1020, as well as internal and external costs related to the expansion of our overall research capabilities.

General and Administrative Expenses

General and administrative expenses were $17.3 million for the six months ended June 30, 2022 compared to $12.2 million for the six months ended June 30, 2021. The increase was primarily due to higher personnel costs and professional fees as well as facilities costs to support our expanded operations.

Liquidity and Capital Resources

Sources of Liquidity

In June 2020, we completed our IPO of 16,560,000 shares of our common stock at a price to the public of $18.00 per share, including the exercise in full by the underwriters of their option to purchase 2,160,000 additional shares of our common stock. Including the option exercise, our aggregate net proceeds from the offering were $274.1 million, net of underwriting discounts, commissions and offering costs. In August 2021, we completed a public offering of 9,200,000 shares of our common stock at a public offering price of $18.00 per share, for aggregate net proceeds of $155.1 million, after deducting underwriting discounts, commissions and offering costs.

In July 2021, we entered into the Sales Agreement with the Sales Agent, under which we may, from time to time, sell shares of common stock having an aggregate offering price of up to $150.0 million through the Sales Agent. Through June 30, 2022, we have sold 5,046,860 shares of our common stock pursuant to the Sales Agreement and received net proceeds of $82.0 million, after deducting offering-related transaction costs and commissions. From July 1, 2022 through August 9, 2022, we sold 1,042,300 shares of our common stock pursuant to the Sales Agreement and received net proceeds of $18.7 million, after deducting offering-related transaction costs and commissions. Since our inception through June 30, 2022, other significant sources of capital raised to fund our operations were comprised of aggregate gross proceeds of $131.6 million from the sale and issuance of convertible preferred stock/units and convertible notes and $37.0 million from funding under collaboration and research services agreements.

Future Capital Requirements

As of June 30, 2022, we had cash, cash equivalents and marketable securities of $398.2 million. Based upon our current operating plans, we believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our operations for at least 12 months from the date of the filing of this Form 10-Q. However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect. Additionally, the process of conducting preclinical studies and testing product candidates in clinical trials is costly, and the timing of progress and expenses in these studies and trials is uncertain.

24

Our future capital requirements are difficult to forecast and will depend on many factors, including but not limited to:

• the type, number, scope, progress, expansions, results, costs and timing of discovery, preclinical studies and clinical trials of our product candidates that we are pursuing or may choose to pursue in the future;

• the costs and timing of manufacturing for our product candidates and commercial manufacturing if any product candidate is approved;

• the costs, timing and outcome of regulatory review of our product candidates;

• the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements;

• the costs of obtaining, maintaining and enforcing our patents and other intellectual property rights;

• the costs associated with hiring additional personnel and consultants as our preclinical and clinical activities increase;

• the timing and amount of the milestone or other payments made to us under the Lilly Agreement or any future collaboration agreements;

• the costs and timing of establishing or securing sales and marketing capabilities if any product candidate is approved;

• our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products; and

• costs associated with any products or technologies that we may in-license or acquire.

While we may generate revenue under our current and/or future collaboration agreements, we do not expect to generate any revenues from product sales until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which we expect will take a number of years and may never occur. If we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. Accordingly, until such time as we can generate significant revenue from sales of our product candidates, if ever, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including current and potential future collaborations, licenses and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed, on favorable terms or at all. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. Our failure to raise capital or enter into such other arrangements when needed would have a negative impact on our financial condition and could force us to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Cash Flows

The following table summarizes our cash flows for the periods presented (in thousands):

	Six Months Ended June 30,
	2022			2021
Net cash provided by (used in):
Operating activities	$	(65,120	)	$	(47,816	)
Investing activities		(193,119	)		2,347
Financing activities		62,897			430
Net decrease in cash, cash equivalents    and restricted cash	$	(195,342	)	$	(45,039	)

Operating Activities

Net cash used in operating activities was $65.1 million for the six months ended June 30, 2022, which consisted primarily of cash used to fund our operations related to the development of AOC 1001, AOC 1044 and AOC 1020. Net cash used in operating activities was $47.8 million for the six months ended June 30, 2021, which consisted primarily of cash used to fund our operations related to the development of AOC 1001, AOC 1044 and AOC 1020. The change in cash used in operating activities is due to increased research and development as well as general and administrative expenses as described under Results of Operations section above.

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Investing Activities

Net cash used in investing activities was $193.1 million for the six months ended June 30, 2022, which consisted primarily of cash used to purchase marketable securities and property and equipment partially offset by proceeds from maturities of marketable securities. Net cash provided by investing activities was $2.3 million for the six months ended June 30, 2021, which consisted primarily of proceeds from maturities of marketable securities, partially offset by cash used to purchase property and equipment.

Financing Activities

Net cash provided by financing activities was $62.9 million for the six months ended June 30, 2022, which consisted primarily of net proceeds from sales of our common stock made pursuant to the Sales Agreement. Net cash provided by financing activities was $0.4 million for the six months ended June 30, 2021, which consisted primarily of proceeds from the issuance of common stock under the ESPP and exercise of stock options.

Critical Accounting Policies and Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP. The preparation of these condensed financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses. On an ongoing basis, we evaluate these estimates and judgments. We base our estimates on historical experience and on various assumptions that we believe to be reasonable under the circumstances. These estimates and assumptions form the basis for making judgments about the carrying values of assets and liabilities and the recording of revenue and expenses that are not readily apparent from other sources. Actual results may differ materially from these estimates. As of June 30, 2022, there have been no material changes to our critical accounting policies and estimates from those disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates,” included in our annual report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 1, 2022.

Contractual Obligations and Commitments

As of June 30, 2022, there have been no material changes outside the ordinary course of our business to the contractual obligations we reported in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Contractual Obligations and Commitments,” included in our annual report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 1, 2022.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of June 30, 2022, there have been no material changes in our market risk from that described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Quantitative and Qualitative Disclosures About Market Risk,” included in our annual report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 1, 2022.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our periodic and current reports that we file with the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives. In reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. In addition, the design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated, as of the end of the period covered by this quarterly report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on such evaluation, our principal executive officer and principal financial officer have concluded that, as of June 30, 2022, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

We are not currently subject to any material legal proceedings. From time to time, we may be involved in legal proceedings or subject to claims incident to the ordinary course of business. Regardless of the outcome, such proceedings or claims can have an adverse impact on us because of defense and settlement costs, diversion of resources and other factors, and there can be no assurances that favorable outcomes will be obtained.

Item 1A. Risk Factors

There have been no material changes to the risk factors set forth in Part I, Item 1A of our annual report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 1, 2022.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

None.

Use of Proceeds

On June 11, 2020, the SEC declared effective our registration statement on Form S-1 (File No. 333-238612), as amended, filed in connection with our IPO. Our IPO closed on June 16, 2020, and we issued and sold 16,560,000 shares of our common stock at a price to the public of $18.00 per share, which included the exercise in full of the underwriters’ option to purchase additional shares. We received gross proceeds from our IPO of $298.1 million, before deducting underwriting discounts, commissions and offering costs of $24.0 million. The managing underwriters of the offering were Cowen and Company, LLC, SVB Leerink LLC, Credit Suisse Securities (USA) LLC and Wells Fargo Securities, LLC. No offering costs were paid or are payable, directly or indirectly, to our directors or officers, to persons owning 10% or more of any class of our equity securities or to any of our affiliates.

As of June 30, 2022, we have used approximately $116.4 million of the proceeds from our IPO for general corporate purposes, including the advancement of our development programs. There has been no material change in our planned use of such proceeds from that described in the prospectus for our IPO dated June 11, 2020. We have invested a portion of the remaining proceeds from our IPO in short- and intermediate-term, investment-grade, interest-bearing securities.

Issuer Repurchases of Equity Securities

None.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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Item 6. Exhibits

Exhibit Number	Exhibit Description	Incorporated by Reference			Filed Herewith
		Form	Date	Number
3.1	Amended and Restated Certificate of Incorporation	8-K	6/16/2020	3.1
3.2	Amended and Restated Bylaws	8-K	6/16/2020	3.2
4.1	Form of Common Stock Certificate	S-1	5/22/2020	4.1
4.2	Amended and Restated Registration Rights Agreement, dated November 8, 2019, by and among Avidity Biosciences, Inc. and certain of its stockholders	S-1	5/22/2020	4.2
10.1#	Amended and Restated Non-Employee Director Compensation Policy.				X
31.1	Certification of Chief Executive Officer of Avidity Biosciences, Inc., as required by Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X
31.2	Certification of Chief Financial Officer of Avidity Biosciences, Inc., as required by Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X
32.1*	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				X
32.2*	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				X
101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.				X
101.SCH	Inline XBRL Taxonomy Extension Schema Document				X
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document				X
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document				X
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document				X
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document				X
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)				X

# Indicates management contract or compensatory plan.

* This certification is deemed not filed for purpose of section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

29

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Avidity Biosciences, Inc.
Date: August 9, 2022	By:	/s/ Sarah Boyce
		Sarah Boyce
		President, Chief Executive Officer and Director (Principal Executive Officer)
Date: August 9, 2022	By:	/s/ Michael F. MacLean
		Michael F. MacLean
		Chief Financial and Chief Business Officer (Principal Financial and Accounting Officer)

30

EX-10.1

Exhibit 10.1

AVIDITY BIOSCIENCES, INC.

NON-EMPLOYEE DIRECTOR COMPENSATION PROGRAM

(As Amended and Restated Effective June 2, 2022)

Non-employee members of the board of directors (the “Board”) of Avidity Biosciences, Inc. (the “Company”) shall receive cash and equity compensation as set forth in this Non-Employee Director Compensation Program (as amended to date, this “Program”).  This Program has been adopted under the Company’s 2020 Incentive Award Plan (the “Equity Plan”).  The cash and equity compensation described in this Program shall be paid or be made, as applicable, automatically and without further action of the Board, to each member of the Board who is not an employee of the Company or any parent or subsidiary of the Company (each, a “Non-Employee Director”) who is entitled to receive such cash or equity compensation, unless such Non-Employee Director declines the receipt of such cash or equity compensation by written notice to the Company.  This Program shall remain in effect until it is revised or rescinded by further action of the Board.  This Program may be amended, modified or terminated by the Board at any time in its sole discretion.  The terms and conditions of this Program shall supersede any prior cash and/or equity compensation arrangements for service as a member of the Board between the Company and any of its Non-Employee Directors.  No Non-Employee Director shall have any rights hereunder, except with respect to stock options granted pursuant to the Program.  Capitalized terms not otherwise defined herein shall have the meanings ascribed in the Equity Plan.

1.Cash Compensation.

(a)Annual Retainers.  

(i)Non-Employee Director.  Each Non-Employee Director (other than the Executive Chairman) shall receive an annual retainer of $40,000 for service on the Board.

(ii)Chairman of the Board.  A Non-Employee Director serving as Chairman of the Board shall receive, in lieu of the annual retainer in clause (i) above, an annual retainer of $65,000 for such service.

(b)Additional Annual Retainers.  In addition, each Non-Employee Director shall receive the following additional annual retainers, as applicable:

(i)Audit Committee.   A Non-Employee Director serving as Chairperson of the Audit Committee shall receive an additional annual retainer of $15,000 for such service.  A Non-Employee Director serving as a member of the Audit Committee (other than the Chairperson) shall receive an additional annual retainer of $7,500 for such service.

(ii)Compensation Committee.  A Non-Employee Director serving as Chairperson of the Compensation Committee shall receive an additional annual retainer of $10,000 for such service.  A Non-Employee Director serving as a member of the Compensation Committee (other than the Chairperson) shall receive an additional annual retainer of $5,000 for such service.

(iii)Nominating and Corporate Governance Committee.   A Non-Employee Director serving as Chairperson of the Nominating and Corporate Governance Committee shall receive an additional annual retainer of $8,000 for such service.  A Non-Employee Director serving as a member of the Nominating and Corporate Governance Committee (other than the Chairperson) shall receive an additional annual retainer of $4,000 for such service.

(c)Payment of Retainers.  The annual retainers described in Sections 1(a) and 1(b) shall be earned on a quarterly basis based on a calendar quarter and shall be paid by the Company in arrears not later than the fifteenth day following the end of each calendar quarter.  In the event a Non-Employee Director does not serve as a Non-Employee Director, or in the applicable positions described in Sections 1(a) or 1(b), for an entire calendar quarter, the retainer paid to such Non-Employee Director shall be prorated for the portion of such calendar quarter actually served as a Non-Employee Director, or in such position, as applicable.  

2.Equity Compensation.  Non-Employee Directors shall be granted the equity awards described below.  The awards described below shall be granted under and shall be subject to the terms and provisions of the Equity Plan, or any other applicable Company equity incentive plan then-maintained by the Company, and shall be granted subject to the execution and delivery of award agreements, including attached exhibits, in substantially the forms previously approved by the Board.  All applicable terms of the Equity Plan apply to this Program as if fully set forth herein, and all grants of stock options hereby are subject in all respects to the terms of the Equity Plan and the applicable award agreement.  For the avoidance of doubt, the share numbers in this Section 2 shall be subject to adjustment as provided in the Equity Plan.

(a)Initial Awards.  Each Non-Employee Director who is initially elected or appointed to the Board shall receive an option under the Equity Plan, or any other applicable Company equity incentive plan then-maintained by the Company, to purchase 44,000 shares of the Company’s common stock on the date of such initial election or appointment.  The awards described in this Section 2(a) shall be referred to as “Initial Awards.”  No Non-Employee Director shall be granted more than one Initial Award.

(b)Subsequent Awards.  A Non-Employee Director who (i) is serving on the Board as of the date of any annual meeting of the Company’s stockholders and has been serving as a Non-Employee Director for at least six months as of the date of such meeting, and (ii) will continue to serve as a Non-Employee Director immediately following such meeting, shall be automatically granted an option under the Equity Plan, or any other applicable Company equity incentive plan then-maintained by the Company, to purchase 22,000 of the Company’s common stock on the date of such annual meeting.  The awards described in this Section 2(b) shall be referred to as “Subsequent Awards.”  For the avoidance of doubt, a Non-Employee Director elected for the first time to the Board at an annual meeting of the Company’s stockholders shall only receive an Initial Award in connection with such election, and shall not receive any Subsequent Award on the date of such meeting as well.  

(c)Termination of Employment of Employee Directors.  Members of the Board who are employees of the Company or any parent or subsidiary of the Company who subsequently terminate their employment with the Company and any parent or subsidiary of the Company and remain on the Board will not receive an Initial Award pursuant to Section 2(a) above, but to the extent that they are otherwise entitled, will receive, after termination from employment with the Company and any parent or subsidiary of the Company, Subsequent Awards as described in Section 2(b) above.  

(d)Terms of Awards Granted to Non-Employee Directors

(i)Purchase Price.  The per share exercise price of each option granted to a Non-Employee Director shall equal the Fair Market Value of a share of common stock on the date the option is granted.

(ii)Vesting.  Each Initial Award shall vest and become exercisable in substantially equal monthly installments over the three years following the date of the Non-Employee Director’s election or appointment to the Board, subject to the Non-Employee Director continuing in service on the Board through each such vesting date.  Each Subsequent Award shall vest and/or become exercisable on the first to occur of (A) the first anniversary of the date of grant or (B) the next occurring annual meeting of the Company’s stockholders, subject to the Non-Employee Director continuing in service on the Board through such vesting date.  Unless the Board otherwise determines, no portion of an Initial Award or Subsequent Award which is unvested and/or exercisable at the time of a Non-Employee Director’s termination of service on the Board shall become vested and/or exercisable thereafter.  Upon a Change of Control, all outstanding equity awards granted under the Equity Plan, and any other equity incentive plan maintained by the Company, that are held by a Non-Employee Director shall become fully vested and/or exercisable, irrespective of any other provisions of the Equity Plan or any award agreement.

(iii)Term.  The term of each stock option granted to a Non-Employee Director shall be ten years from the date the option is granted.

3.Compensation Limits.  Notwithstanding anything to the contrary in this Program, all compensation payable under this Program will be subject to any limits on the maximum amount of Non-Employee Director compensation set forth in the Equity Plan, as in effect from time to time.

4.Reimbursements. The Company shall reimburse each Non-Employee Director for all reasonable, documented, out-of-pocket travel and other business expenses incurred by such Non-Employee Director in the performance of his or her duties to the Company in accordance with the Company’s applicable expense reimbursement policies and procedures as in effect from time to time.

* * * * *

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Sarah Boyce, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Avidity Biosciences, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2022	/s/ Sarah Boyce
	Sarah Boyce
	President, Chief Executive Officer and Director
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael F. MacLean, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Avidity Biosciences, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2022	/s/ Michael F. MacLean
	Michael F. MacLean
	Chief Financial and Chief Business Officer
	(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Avidity Biosciences, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Sarah Boyce, President, Chief Executive Officer and Director of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 9, 2022	/s/ Sarah Boyce
	Sarah Boyce
	President, Chief Executive Officer and Director (Principal Executive Officer)

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Avidity Biosciences, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael F. MacLean, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 9, 2022	/s/ Michael F. MacLean
	Michael F. MacLean
	Chief Financial and Chief Business Officer (Principal Financial Officer)

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2022	Jul. 25, 2022
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2022
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Registrant Name	Avidity Biosciences, Inc.
Entity Central Index Key	0001599901
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		52,127,032
Entity File Number	001-39321
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	46-1336960
Entity Address, Address Line One	10578 Science Center Drive
Entity Address, Address Line Two	Suite 125
Entity Address, City or Town	San Diego
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92121
City Area Code	858
Local Phone Number	401-7900
Title of 12(b) Security	Common Stock, $0.0001 par value
Trading Symbol	RNA
Security Exchange Name	NASDAQ
Document Quarterly Report	true
Document Transition Report	false

XML

Condensed Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 125,106	$ 320,448
Marketable securities	273,112	85,095
Prepaid and other assets	6,033	5,598
Total current assets	404,251	411,141
Property and equipment, net	6,137	4,805
Restricted cash	251	251
Right-of-use asset	9,747	10,784
Other assets	415	599
Total assets	420,801	427,580
Current liabilities:
Accounts payable and accrued liabilities	20,552	14,085
Accrued compensation	4,687	8,940
Lease liabilities, current portion	3,068	1,769
Deferred revenue, current portion	5,380	4,864
Total current liabilities	33,687	29,658
Lease liabilities, net of current portion	8,753	9,960
Deferred revenue, net of current portion	4,010	6,532
Total liabilities	46,450	46,150
Commitments and contingencies (Note 7)	0	0
Stockholders’ equity:
Common stock, $0.0001 par value; authorized shares – 400,000; issued and outstanding shares – 52,081 and 47,754 at June 30, 2022 and December 31, 2021, respectively	5	5
Additional paid-in capital	641,806	566,161
Accumulated other comprehensive loss	(2,986)	(187)
Accumulated deficit	(264,474)	(184,549)
Total stockholders’ equity	374,351	381,430
Total liabilities and stockholders’ equity	$ 420,801	$ 427,580

XML

Condensed Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2022	Dec. 31, 2021
Statement Of Financial Position [Abstract]
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	400,000,000	400,000,000
Common stock, shares issued	52,081,000	47,754,000
Common stock, shares outstanding	52,081,000	47,754,000

XML

Condensed Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Income Statement [Abstract]
Collaboration revenue	$ 2,178	$ 2,607	$ 3,973	$ 5,311
Revenue from Contract with Customer, Product and Service [Extensible Enumeration]	us-gaap:LicenseAndServiceMember	us-gaap:LicenseAndServiceMember	us-gaap:LicenseAndServiceMember	us-gaap:LicenseAndServiceMember
Operating expenses:
Research and development	$ 39,789	$ 22,706	$ 67,477	$ 43,383
General and administrative	8,688	6,268	17,255	12,152
Total operating expenses	48,477	28,974	84,732	55,535
Loss from operations	(46,299)	(26,367)	(80,759)	(50,224)
Other income (expense):
Interest income	611	16	861	32
Other expense	(2)	(2)	(27)	(5)
Total other income	609	14	834	27
Net loss	(45,690)	(26,353)	(79,925)	(50,197)
Other comprehensive income (loss):
Net unrealized (losses) gains on marketable securities	(960)	3	(2,799)	5
Comprehensive loss	$ (46,650)	$ (26,350)	$ (82,724)	$ (50,192)
Net loss per share, basic	$ (0.92)	$ (0.70)	$ (1.63)	$ (1.34)
Net loss per share, diluted	$ (0.92)	$ (0.70)	$ (1.63)	$ (1.34)
Weighted-average shares outstanding, basic	49,927	37,583	49,091	37,552
Weighted-average shares outstanding, diluted	49,927	37,583	49,091	37,552

XML

Condensed Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Total	Public Offering	Common Stock	Common Stock Public Offering	Additional Paid-in Capital	Additional Paid-in Capital Public Offering	Accumulated Other Comprehensive Loss	Accumulated Deficit
Balance at Dec. 31, 2020	$ 306,223		$ 4		$ 372,764		$ (5)	$ (66,540)
Balance, Shares at Dec. 31, 2020			37,569
Issuance of common stock upon exercise of stock options	24				24
Issuance of common stock upon exercise of stock options, Shares			31
Vesting of early exercise options	10				10
Stock-based compensation	3,701				3,701
Net loss	(23,844)							(23,844)
Other comprehensive gain (loss)	2						2
Balance at Mar. 31, 2021	286,116		$ 4		376,499		(3)	(90,384)
Balance, Shares at Mar. 31, 2021			37,600
Balance at Dec. 31, 2020	306,223		$ 4		372,764		(5)	(66,540)
Balance, Shares at Dec. 31, 2020			37,569
Net loss	(50,197)
Balance at Jun. 30, 2021	264,480		$ 4		381,213			(116,737)
Balance, Shares at Jun. 30, 2021			37,665
Balance at Mar. 31, 2021	286,116		$ 4		376,499		(3)	(90,384)
Balance, Shares at Mar. 31, 2021			37,600
Issuance of common stock upon exercise of stock options	98				98
Issuance of common stock upon exercise of stock options, Shares			51
Issuance of common stock under employee stock purchase plan	318				318
Issuance of common stock under employee stock purchase plan, Shares			14
Vesting of early exercise options	9				9
Stock-based compensation	4,289				4,289
Net loss	(26,353)							(26,353)
Other comprehensive gain (loss)	3						3
Balance at Jun. 30, 2021	264,480		$ 4		381,213			(116,737)
Balance, Shares at Jun. 30, 2021			37,665
Balance at Dec. 31, 2021	381,430		$ 5		566,161		(187)	(184,549)
Balance, Shares at Dec. 31, 2021			47,754
Issuance of common stock upon exercise of stock options	10				10
Issuance of common stock upon exercise of stock options, Shares			7
Vesting of early exercise options	1				1
Issuance of common stock in public offerings, net of issuance costs		$ 24,103				$ 24,103
Issuance of common stock in public offerings, net of issuance costs, Shares				1,520
Stock-based compensation	6,238				6,238
Net loss	(34,235)							(34,235)
Other comprehensive gain (loss)	(1,839)						(1,839)
Balance at Mar. 31, 2022	375,708		$ 5		596,513		(2,026)	(218,784)
Balance, Shares at Mar. 31, 2022			49,281
Balance at Dec. 31, 2021	$ 381,430		$ 5		566,161		(187)	(184,549)
Balance, Shares at Dec. 31, 2021			47,754
Issuance of common stock upon exercise of stock options, Shares	12
Net loss	$ (79,925)
Balance at Jun. 30, 2022	374,351		$ 5		641,806		(2,986)	(264,474)
Balance, Shares at Jun. 30, 2022			52,081
Balance at Mar. 31, 2022	375,708		$ 5		596,513		(2,026)	(218,784)
Balance, Shares at Mar. 31, 2022			49,281
Issuance of common stock upon exercise of stock options	4				4
Issuance of common stock upon exercise of stock options, Shares			5
Issuance of common stock under employee stock purchase plan	499				499
Issuance of common stock under employee stock purchase plan, Shares			49
Vesting of early exercise options	1				1
Issuance of common stock in public offerings, net of issuance costs		$ 38,281				$ 38,281
Issuance of common stock in public offerings, net of issuance costs, Shares				2,746
Stock-based compensation	6,508				6,508
Net loss	(45,690)							(45,690)
Other comprehensive gain (loss)	(960)						(960)
Balance at Jun. 30, 2022	$ 374,351		$ 5		$ 641,806		$ (2,986)	$ (264,474)
Balance, Shares at Jun. 30, 2022			52,081

XML

Condensed Statements of Stockholders' Equity (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2022	Mar. 31, 2022
Public Offering | Common Stock
Stock issuance costs	$ 1,184	$ 745

XML

Condensed Statements of Cash Flows (unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Cash flows from operating activities
Net loss	$ (79,925)	$ (50,197)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	636	255
Stock-based compensation expense	12,746	7,990
Amortization of premiums and discounts on marketable securities, net	223	69
Gain on disposal of property and equipment	0	(16)
Changes in operating assets and liabilities:
Prepaid and other assets	(251)	(4,394)
Accounts payable and accrued liabilities	6,582	579
Accrued compensation	(4,253)	151
Operating lease right-of-use assets and liabilities, net	1,128	299
Deferred revenue	(2,006)	(2,552)
Net cash used in operating activities	(65,120)	(47,816)
Cash flows from investing activities
Maturities of marketable securities	21,525	3,580
Purchases of marketable securities	(212,564)	0
Purchases of property and equipment	(2,080)	(1,233)
Net cash (used in) provided by investing activities	(193,119)	2,347
Cash flows from financing activities
Proceeds from issuance of common stock in public offerings, gross	64,313	0
Payment of issuance costs related to public offerings	(1,929)	0
Proceeds from issuance of common stock under employee stock purchase plan	499	318
Proceeds from exercise of stock options	14	122
Payment of deferred financing costs	0	(10)
Net cash provided by financing activities	62,897	430
Net decrease in cash, cash equivalents and restricted cash	(195,342)	(45,039)
Cash, cash equivalents and restricted cash at beginning of period	320,699	321,713
Cash, cash equivalents and restricted cash at end of period	125,357	276,674
Supplemental schedule of noncash investing and financing activities:
Costs incurred, but not paid, in connection with deferred financing costs included in accounts payable and accrued liabilities	0	90
Costs incurred, but not paid, in connection with purchases of property and equipment included in accounts payable and accrued liabilities	$ 0	$ 94

XML

Description of Business and Basis of Presentation

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Description of Business and Basis of Presentation

1. Description of Business and Basis of Presentation

Description of Business

Avidity Biosciences, Inc. (the Company or Avidity) is a biopharmaceutical company committed to delivering a new class of RNA therapeutics called Antibody Oligonucleotide Conjugates (AOCs). The Company’s proprietary AOC platform is designed to combine the specificity of monoclonal antibodies with the precision of RNA therapeutics to target the root cause of diseases previously untreatable with such therapeutics.

Liquidity

On June 16, 2020, the Company completed its initial public offering (IPO) in which it sold 16,560,000 shares of common stock at an offering price of $18.00 per share. Proceeds from the IPO, net of underwriting discounts, commissions and offering costs, were $274.1 million. On August 6, 2021, the Company completed a public offering of 9,200,000 shares of its common stock at a public offering price of $18.00 per share. The net proceeds from the offering were $155.1 million, after deducting underwriting discounts, commissions and offering costs. On July 2, 2021, the Company entered into a sales agreement (the Sales Agreement) with Cowen and Company, LLC (the Sales Agent), under which the Company may, from time to time, sell shares of its common stock having an aggregate offering price of up to $150.0 million through the Sales Agent. Through June 30, 2022, the Company has sold 5,046,860 shares of its common stock pursuant to the Sales Agreement and received net proceeds of $82.0 million, after deducting offering-related transaction costs and commissions. See Note 8 (Stockholders Equity) for more information on the Company’s equity offerings.

To date, the Company has devoted substantially all of its resources to organizing and staffing the Company, business planning, raising capital, developing its proprietary AOC platform, identifying potential product candidates, establishing its intellectual property portfolio, conducting research, preclinical and clinical studies, and providing other general and administrative support for these operations. In addition, the Company has a limited operating history, has incurred operating losses since inception and expects that it will continue to incur net losses into the foreseeable future as it continues the development of its product candidates and development programs. As of June 30, 2022, the Company had an accumulated deficit of $264.5 million and cash, cash equivalents and marketable securities of $398.2 million.

The Company believes that existing cash, cash equivalents and marketable securities will be sufficient to fund the Company’s operations for at least 12 months from the date of the filing of this Form 10-Q. The Company plans to finance its future cash needs through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. If the Company is not able to secure adequate additional funding, it may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, and/or delay or reduce the scope of its planned development programs. Any of these actions could materially harm the Company’s business, results of operations and future prospects.

Basis of Presentation

The accompanying unaudited interim condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) and the rules and regulations of the Securities and Exchange Commission (SEC) related to a quarterly report on Form 10-Q. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations. The unaudited interim condensed financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results for the periods presented. All such adjustments are of a normal and recurring nature. The operating results presented in these unaudited interim condensed financial statements are not necessarily indicative of the results that may be expected for any future periods. These unaudited interim condensed financial statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended December 31, 2021 included in the Company’s annual report on Form 10-K filed with the SEC on March 1, 2022.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Use of Estimates

The Company’s condensed financial statements are prepared in accordance with GAAP, which requires the Company to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in the condensed financial statements and

accompanying notes. The most significant estimates in the Company’s condensed financial statements relate to revenue recognition, stock-based compensation, and accrued research and development costs. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with original maturities of three months or less from the date of purchase to be cash equivalents. Cash and cash equivalents include cash in readily available checking and money market accounts. Restricted cash represents cash held as collateral for the letter of credit required under the Company’s facility lease and is reported as a long-term asset in the accompanying condensed balance sheets.

Marketable Securities

The Company’s marketable securities primarily consist of U.S. Government and corporate debt securities. The Company classifies its marketable securities as available-for-sale and records such assets at estimated fair value in the condensed balance sheets, with unrealized gains and losses, if any, reported as a component of other comprehensive income (loss) within the condensed statements of operations and comprehensive loss and as a separate component of stockholders’ equity. The Company classifies marketable securities with remaining maturities greater than one year as current assets because such marketable securities are available to fund the Company’s current operations. Realized gains and losses are calculated on the specific identification method and recorded as interest income. There were no realized gains and losses during any of the periods presented.

At each balance sheet date, the Company assesses available-for-sale securities in an unrealized loss position to determine whether the unrealized loss is other-than-temporary. When the Company determines that a decline in the fair value below its cost basis is other-than-temporary, the Company recognizes an impairment loss in the period in which the other-than-temporary decline occurred. There have been no other-than-temporary impairments recognized during any of the periods presented.

See Note 4 (Marketable Securities) for further information.

Concentration of Credit Risk

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 has not experienced any losses in such accounts and believes it is not exposed to significant risk on its cash balances due to the financial position of the depository institutions in which those deposits are held. Additionally, the Company has established guidelines regarding approved investments, credit quality, diversification, liquidity and maturities of investments, which are designed to maintain safety and liquidity.

Fair Value of Financial Instruments

Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

• Level 1—Quoted prices in active markets for identical assets or liabilities.

• Level 2—Observable inputs, such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

• Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

None of the Company’s non-financial assets are recorded at fair value on a non-recurring basis. The carrying amounts reflected in the Company’s condensed balance sheets for prepaid and other assets and accounts payable and accrued liabilities approximate their fair values due to their short-term nature. The Company recognizes transfers between levels of the fair value hierarchy on the date of the event or change in circumstances that caused the transfer. No transfers between levels have occurred during the periods presented.

See Note 3 (Fair Value Measurements) for information on assets measured at fair value.

Property and Equipment, net

Property and equipment, including leasehold improvements, are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are recorded using the straight-line method over the estimated useful lives of the related assets, which ranges from three to five years. Leasehold improvements are amortized on a straight-line basis over the shorter of the estimated useful lives of the assets or the remaining lease term. Repairs and maintenance charges that do not increase the useful life of the assets are charged to operating expenses as incurred.

Impairment of Long-Lived Assets

Long-lived assets consist of property and equipment. An impairment loss is recorded if and when events and circumstances indicate that assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets. The Company has not recognized any impairment losses in any of the periods presented in these condensed financial statements.

Segment Information

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by management in making decisions regarding resource allocation and assessing performance. The Company manages its operations as a single operating segment in the United States for the purposes of assessing performance and making operating decisions.

Revenue Recognition

To date, all the Company’s revenue has been derived from collaboration and research agreements. The terms of these arrangements include the following types of payments to the Company: non-refundable, upfront license fees; development, regulatory and commercial milestone payments; payments for research and development services provided by the Company or for manufacturing supply services the Company provides through its contract manufacturers; and royalties on net sales of licensed products.  

The Company performs the following steps in determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of these agreements: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when, or as, the Company satisfies each performance obligation.

The Company receives payments from its collaborators based on billing schedules established in each contract. Upfront and other payments may require deferral of revenue recognition to a future period until the Company performs its obligations under its research and collaboration arrangements. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional.

See Note 5 (Collaboration, License and Research Agreements) for further information.

Research and Development Costs

Research and development costs are expensed as incurred and include salaries, benefits and stock-based compensation associated with research and development personnel, third-party research and development expenses, license fees, laboratory supplies, facilities, overhead costs, and consultants. Nonrefundable advance payments for goods and services that will be used in future research and development activities are capitalized and recorded as expense in the period that the Company receives the goods or when services are performed.

Upfront and milestone payments to acquire contractual rights to licensed technology are expensed when incurred if there is uncertainty in the Company receiving future economic benefit from the acquired contractual rights.

Patent Costs

Costs related to filing and pursuing patent applications are recorded as general and administrative expense and expensed as incurred since recoverability of such expenditures is uncertain.

Income Taxes

The Company accounts for income taxes in accordance with Accounting Standards Codification (ASC) 740, Income Taxes, which provides for deferred taxes using the asset and liability method. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit would more likely than not be realized assuming examination by the taxing authority. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances.

The Company is subject to taxation in the United States and various state jurisdictions. As of December 31, 2021, the Company’s tax years since conversion to a corporation in 2019 are subject to examination by taxing authorities.

Stock-Based Compensation

Stock-based compensation expense for employee and non-employee stock option grants is recorded at the estimated fair value of the award as of the grant date and is recognized as expense on a straight-line basis over the requisite service period (usually the vesting period) of the stock-based award, and forfeitures are recognized as incurred. Stock-based compensation expense for employee stock purchases under the Company’s Employee Stock Purchase Plan (the ESPP) is recorded at the estimated fair value of the purchase as of the plan enrollment date and is recognized as expense on a straight-line basis over the applicable six-month ESPP offering period. The estimation of fair value for stock-based compensation requires management to make estimates and judgments about, among other things, the estimated life of options and volatility of the Company’s common stock. The judgments directly affect the amount of compensation expense that will be recognized.

Comprehensive Loss

Comprehensive loss is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources, including unrealized gains and losses on marketable securities. Comprehensive gains (losses) have been reflected in the statements of operations and comprehensive loss for all periods presented.

Net Loss Per Share

Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding for the period, adjusted for the weighted-average number of common shares outstanding that are subject to repurchase or forfeiture. The Company has excluded 11,449 and 38,118 weighted-average shares subject to repurchase or forfeiture from the weighted-average number of common shares outstanding for the three months ended June 30, 2022 and 2021, respectively, and 12,705 and 48,080 weighted-average shares subject to repurchase or forfeiture from the weighted-average number of common shares outstanding for the six months ended June 30, 2022 and 2021, respectively. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and dilutive common stock equivalents outstanding for the period determined using the treasury-stock and if-converted methods. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding as inclusion of the potentially dilutive securities would be anti-dilutive.

Potentially dilutive securities not included in the calculation of diluted net loss per share, because to do so would be anti-dilutive, are as follows (in common stock equivalent shares; in thousands):

	June 30,
	2022		2021
Common stock options issued and outstanding		8,636		5,766
Common stock subject to repurchase or forfeiture		10		30
ESPP shares pending issuance		4		2
Total		8,650		5,798

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

Accounting Standards Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Statements (Topic 326), which intends to improve financial reporting by requiring earlier recognition of credit losses on certain financial assets, such as available-for-sale debt securities. Subsequent to the issuance of ASU 2016-13, the FASB issued several additional Accounting Standard Updates (ASUs) to clarify implementation guidance, provide narrow-scope improvements and provide additional disclosure guidance. In November 2019, the FASB issued an amendment making this ASU effective for fiscal years beginning after December 15, 2022 for smaller reporting companies. The Company was a smaller reporting company at the determination date, and therefore the new standard will be effective for the Company on January 1, 2023. The Company is currently evaluating the potential impact that the adoption of ASU 2016-13 may have on its financial statements and related disclosures.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

3. Fair Value Measurements

The Company determines the fair value of its marketable securities based on one or more valuations from its investment accounting and reporting service provider. The investment service provider values the securities using a hierarchical security pricing model that relies primarily on valuations provided by an industry-recognized valuation service. Such valuations may be based on trade prices in active markets for identical assets (Level 1 inputs) or valuation models using inputs that are observable either directly or indirectly (Level 2 inputs), such as quoted prices for similar assets, yield curves, volatility factors, credit spreads, default rates, loss severity, current market and contractual prices for the underlying instruments or debt, and broker and dealer quotes, as well as other relevant economic measures.

The following tables summarize the Company’s marketable securities measured at fair value (in thousands):

			Fair Value Measurements Using
As of June 30, 2022	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Marketable securities:
U.S. Treasury securities	$	247,249	$	247,249	$	—	$	—
U.S. Government agency securities		4,928		—		4,928		—
Negotiable certificates of deposit		3,798		—		3,798		—
Corporate debt securities		17,137		—		17,137		—
Total	$	273,112	$	247,249	$	25,863	$	—

			Fair Value Measurements Using
As of December 31, 2021	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Marketable securities:
U.S. Treasury securities	$	65,372	$	65,372	$	—	$	—
Negotiable certificates of deposit		3,873		—		3,873		—
Corporate debt securities		15,850		—		15,850		—
Total	$	85,095	$	65,372	$	19,723	$	—

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Marketable Securities

6 Months Ended

Jun. 30, 2022

Investments Debt And Equity Securities [Abstract]

Marketable Securities

4. Marketable Securities

The Company’s marketable securities, which consist of highly liquid marketable debt securities, are classified as available-for-sale and are stated at fair value. The following tables summarize the Company’s marketable securities (in thousands):

As of June 30, 2022	Maturity (in years)	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
U.S. Treasury securities	1 or less	$	197,630	$	—	$	(1,395	)	$	196,235
U.S. Government agency securities	1 or less		5,000		—		(72	)		4,928
Negotiable certificates of deposit	1 or less		2,647		—		(34	)		2,613
Corporate debt securities	1 or less		12,839		—		(211	)		12,628
U.S. Treasury securities	1 - 2		52,114		—		(1,100	)		51,014
Negotiable certificates of deposit	1 - 2		1,224		—		(39	)		1,185
Corporate debt securities	1 - 2		4,644		—		(135	)		4,509
Total		$	276,098	$	—	$	(2,986	)	$	273,112

As of December 31, 2021	Maturity (in years)	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
U.S. Treasury securities	1 or less	$	2,492	$	—	$	(1	)	$	2,491
Negotiable certificates of deposit	1 or less		1,190		—		(1	)		1,189
U.S. Treasury securities	1 - 2		63,034		—		(153	)		62,881
Negotiable certificates of deposit	1 - 2		2,687		—		(3	)		2,684
Corporate debt securities	1 - 2		15,879		—		(29	)		15,850
Total		$	85,282	$	—	$	(187	)	$	85,095

The unrealized losses on the Company’s marketable securities of $3.0 million as of June 30, 2022 were caused by interest rate increases which resulted in the decrease in market value of these securities. Because the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those marketable securities to be other-than-temporarily impaired at June 30, 2022. None of the Company’s marketable securities have been in a continuous unrealized loss position for 12 months or greater as of June 30, 2022.

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Collaboration, License and Research Agreements

6 Months Ended

Jun. 30, 2022

Collaboration License And Research Agreements [Abstract]

Collaboration, License and Research Agreements

5. Collaboration, License and Research Agreements

Research Collaboration and License Agreement with Eli Lilly and Company

In April 2019, the Company entered into a Research Collaboration and License Agreement (the Lilly Agreement) with Eli Lilly and Company (Lilly) for the discovery, development and commercialization of AOC products directed against certain targets in immunology and other select indications on a worldwide basis. Under the Lilly Agreement, the Company granted Lilly an exclusive, worldwide, royalty-bearing license, with the right to sublicense (subject to certain conditions), under the Company’s technology to research, develop, manufacture and sell products containing AOCs that are directed to up to six mRNA targets. The Company retains the right to use its technology to perform its obligations under the Lilly Agreement and for all purposes not granted to Lilly. The Company agreed that it will not, itself or with a third party, research, develop, manufacture or commercialize or otherwise exploit any compound or product directed against targets subject to the Lilly Agreement.

In consideration of the rights granted to Lilly under the Lilly Agreement, the Company received a one-time upfront fee of $20.0 million and is eligible to receive up to $60.0 million in development milestone payments, up to $140.0 million in regulatory milestone payments and up to $205.0 million in commercialization milestone payments per target. In addition, Lilly is obligated to reimburse the Company for research expenses, as defined in and incurred under the Lilly Agreement. Lilly is obligated to pay the Company a tiered royalty ranging from the mid-single to low-double digits on worldwide annual net sales of licensed products, subject to specified and capped reductions for the market entry of biosimilar products, loss of patent coverage of licensed products and for payments owed to third parties for additional rights necessary to commercialize licensed products in the territory. Lilly’s royalty obligations and the Lilly Agreement will expire on a licensed product-by-licensed product and country-by-country basis on the later of ten years from the date of the first commercial sale or when there is no longer a valid patent claim covering such licensed product in such country.

The Company has identified multiple promises to deliver goods and services, which include at inception of the agreement: (i) a license to technology and patents, information and know-how; and (ii) collaboration, including research services, technical and regulatory support provided by the Company. At inception and through June 30, 2022, the Company has identified one performance obligation for all the deliverables under the Lilly Agreement since the delivered elements are either not capable of being distinct or are not distinct within the context of the contract. Accordingly, the Company will recognize revenue for the fixed or determinable collaboration in an amount proportional to the collaboration expenses incurred and the total estimated collaboration expenses over the five-year period over which it expects to deliver its performance obligations. The Company periodically reviews and updates the estimated collaboration expenses, when appropriate, which adjusts the percentage of revenue that is recognized for the period. In connection with the Lilly Agreement, the Company recognized revenue of $2.1 million and $2.5 million for the three months ended June 30, 2022 and 2021, respectively, and $3.8 million and $5.1 million for the six months ended June 30, 2022 and 2021, respectively, and had deferred revenue of $9.2 million and $11.1 million as of June 30, 2022 and December 31, 2021, respectively. Collaboration receivables related to the Lilly Agreement were $1.1 million and $0.9 million as of June 30, 2022 and December 31, 2021, respectively, which are included in prepaid and other assets on the condensed balance sheets.

A reconciliation of the closing balance of deferred revenue related to the Lilly Agreement is as follows (in thousands):

Balance at December 31, 2021	$	11,108
Revenue recognized		(1,875	)
Balance at June 30, 2022	$	9,233

Research Agreement with MyoKardia, Inc.

In December 2020, the Company entered into a research collaboration (the MyoKardia Agreement) with MyoKardia, Inc. (MyoKardia), a wholly-owned subsidiary of Bristol Myers Squibb, to demonstrate the potential utility of AOCs in cardiac tissue by leveraging MyoKardia’s genetic cardiomyopathy platform including, among other aspects, its novel target discovery engine and proprietary cardiac disease models. In connection with the MyoKardia Agreement, the Company recognized revenue of $40.5 thousand and $0.1 million for the three months ended June 30, 2022 and 2021, respectively, and $0.1 million and $0.2 million for the six months ended June 30, 2022 and 2021, respectively.

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Property and Equipment, Net

6 Months Ended

Jun. 30, 2022

Property Plant And Equipment [Abstract]

Property and Equipment, Net

6. Property and Equipment, net

Property and equipment consist of the following (in thousands):

	June 30, 2022			December 31, 2021
Laboratory equipment	$	5,566		$	4,775
Computers and software		116			116
Office furniture and equipment		2,575			1,398
Leasehold improvements		249			249
Property and equipment, gross		8,506			6,538
Less accumulated depreciation		(2,369	)		(1,733	)
Total property and equipment, net	$	6,137		$	4,805

Depreciation expense related to property and equipment was $0.3 million and $0.1 million for the three months ended June 30, 2022 and 2021, respectively, and $0.6 million and $0.3 million for the six months ended June 30, 2022 and 2021, respectively.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2022

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

7. Commitments and Contingencies

Lease Agreements

The Company determines if an arrangement is a finance lease, operating lease or short-term lease at inception, or as applicable, and accounts for the arrangement under the relevant accounting literature. During the periods presented, the Company was party to various non-cancellable office and laboratory space operating leases and short-term leases. Currently, the Company is only party to a non-cancellable office and laboratory space operating lease. Under the relevant guidance, the Company recognizes operating lease right-of-use (ROU) assets and liabilities based on the present value of the future minimum lease payments over the lease term at the commencement date, using the Company’s assumed incremental borrowing rate, and amortizes the ROU assets and liabilities over the lease term. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Short-term leases are not subject to recognition of an ROU asset or liability or straight-line lease expense requirements.

As of June 30, 2022, future minimum payments for the Company’s operating lease liabilities are as follows (in thousands):

Year ending December 31,
2022 (remaining)	$	1,519
2023		3,113
2024		3,207
2025		3,303
2026		3,111
Total lease payments		14,253
Less imputed interest		(2,432	)
Total operating lease liabilities		11,821
Less lease liabilities, current portion		(3,068	)
Lease liabilities, net of current portion	$	8,753

Supplemental cash flow information related to cash paid for amounts included in the measurement of operating lease liabilities was as follows (in thousands):

	Six Months Ended June 30,
	2022		2021
Cash paid included in operating cash flows	$	251	$	—

Rent expense was as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Operating leases	$	690	$	149	$	1,379	$	299
Short-term leases		—		72		—		81
Total rent expense	$	690	$	221	$	1,379	$	380

Litigation

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. There are no matters currently outstanding for which any liabilities have been accrued.

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Stockholders' Equity

6 Months Ended

Jun. 30, 2022

Equity [Abstract]

Stockholders' Equity

8. Stockholders’ Equity

Amended and Restated Certificate of Incorporation

On June 16, 2020, the Company’s certificate of incorporation was amended and restated to authorize 400,000,000 shares of common stock and 40,000,000 shares of undesignated preferred stock, each with a par value of $0.0001 per share. There was no preferred stock issued for any of the periods presented in the condensed financial statements.

Common Stock

On June 16, 2020, the Company completed its IPO in which it sold 16,560,000 shares of common stock at an offering price of $18.00 per share. Proceeds from the IPO, net of underwriting discounts, commissions and offering costs, were $274.1 million.

On July 2, 2021, the Company entered into the Sales Agreement with the Sales Agent, under which the Company may, from time to time, sell shares of its common stock having an aggregate offering price of up to $150.0 million through the Sales Agent. Sales of the Company’s common stock made pursuant to the Sales Agreement are made under the Company’s shelf registration statement on Form S-3, which became automatically effective upon filing on July 2, 2021 (the Shelf Registration Statement). In addition, the Sales Agreement may be terminated by the Company or the Sales Agent at any time upon ten days’ notice to the other party, or by the Sales Agent, with respect to itself, at any time in certain circumstances, including the occurrence of a material adverse change. During the six months ended June 30, 2022, the Company sold 4,266,311 shares of its common stock pursuant to the Sales Agreement and received net proceeds of $62.4 million, after deducting offering-related transaction costs and commissions. Through June 30, 2022, the Company has sold 5,046,860 shares of its common stock pursuant to the Sales Agreement and received net proceeds of $82.0 million, after deducting offering-related transaction costs and commissions. See Note 10 (Subsequent Events) for information on additional shares sold after June 30, 2022.

On August 6, 2021, the Company completed a public offering of 9,200,000 shares of its common stock at a public offering price of $18.00 per share. The net proceeds from the offering were $155.1 million, after deducting underwriting discounts, commissions and offering costs. The shares sold in the offering were registered pursuant to the Company’s Shelf Registration Statement.

Equity Incentive Plans

In January 2013, the Company adopted the 2013 Equity Incentive Plan (the 2013 Plan). The 2013 Plan provided for the issuance of incentive units to employees and nonemployees of the Company and non‑statutory unit options, restricted unit awards, unit appreciation rights, and unit bonuses to directors, employees and consultants of the Company. Under the 2013 Plan, 2,127,013 units were initially reserved for issuance. Upon the conversion of the Company to a C corporation, the 2013 Plan continued on the same terms and conditions. In 2019, the number of shares reserved under the 2013 Plan was increased to 4,771,615 shares.

In June 2020, the Company’s board of directors adopted, and the Company’s stockholders approved, the 2020 Incentive Award Plan (the 2020 Plan), which became effective in connection with the IPO. Pursuant to the 2020 Plan, the Company ceased granting awards under the 2013 Plan. Under the 2020 Plan, the Company may grant stock options, restricted stock, dividend equivalents, restricted stock units, stock appreciation rights, and other stock or cash-based awards to individuals who are then employees, officers, non-employee directors or consultants of the Company. A total of 3,900,000 shares of common stock were initially reserved for issuance under the 2020 Plan. In addition, the number of shares of

common stock available for issuance under the 2020 Plan will be increased annually on the first day of each fiscal year during the term of the 2020 Plan, beginning with the 2021 fiscal year, by an amount equal to the lesser of (a) 5% of the shares of common stock outstanding on the final day of the immediately preceding calendar year or (b) such smaller number of shares as determined by the Company’s board of directors. At June 30, 2022, 2,092,732 shares remain available for issuance under the 2020 Plan.

Stock Options

Options granted from the 2013 Plan and 2020 Plan are exercisable at various dates and will expire no more than ten years from their date of grant. Options generally vest over a four-year period. Prior to the IPO, the exercise price of options was determined by the Company’s board of directors. Following the IPO, the Company grants options with an exercise price equal to the fair market value of the Company’s stock on the date of the option grant.

Stock option activity for employee and nonemployee awards and related information is as follows (in thousands, except per share data):

	Number of Options			Weighted- Average Exercise Price Per Share
Outstanding at December 31, 2021		5,778		$	14.49
Granted		3,028			14.95
Exercised		(12	)		1.19
Forfeited/expired		(158	)		22.02
Outstanding at June 30, 2022		8,636		$	14.53

The weighted-average grant date fair value of options granted during the six months ended June 30, 2022 and 2021 were $10.71 and $17.08 per share, respectively.

Employee Stock Purchase Plan

In June 2020, the Company adopted the ESPP, which permits participants to contribute up to 15% of their eligible compensation during defined rolling six-month periods to purchase the Company’s common stock. The purchase price of the shares will be 85% of the lower of the fair market value of the Company’s common stock on the first day of trading of the offering period or on the applicable purchase date. The Company issued 48,760 and 14,235 shares of common stock under the ESPP during the six months ended June 30, 2022 and 2021, respectively. The Company had an outstanding liability of $40.2 thousand at June 30, 2022, which is included in accounts payable and accrued liabilities on the condensed balance sheet, for employee contributions to the ESPP for shares pending issuance at the end of the offering period. As of June 30, 2022, 589,803 shares of common stock were available for issuance under the ESPP.

Stock-Based Compensation Expense

The assumptions used in the Black-Scholes model to determine the fair value of stock option grants and shares purchasable under the ESPP were as follows:

	Six Months Ended June 30,
Stock Option Grants	2022	2021
Risk-free interest rate	1.5%-3.4%	0.5% - 1.2%
Expected volatility	85%	87%-88%
Expected term (in years)	5.5-6.1	5.5 - 6.1
Expected dividend yield	—%	—%

	Six Months Ended June 30,
ESPP	2022	2021
Risk-free interest rate	2.2%	0.1%
Expected volatility	79%	75%
Expected term (in years)	0.5	0.5
Expected dividend yield	—%	—%

The allocation of stock-based compensation expense was as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Research and development expense	$	3,531	$	2,487	$	6,797	$	4,497
General and administrative expense		2,977		1,802		5,949		3,493
Total stock-based compensation expense	$	6,508	$	4,289	$	12,746	$	7,990

As of June 30, 2022, the unrecognized compensation cost related to outstanding time-based options was $65.8 million, which is expected to be recognized over a weighted-average period of 2.8 years. As of June 30, 2022, the unrecognized compensation cost related to stock purchase rights under the ESPP was $0.2 million, which is expected to be recognized over a weighted-average period of 0.5 years.

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COVID-19

6 Months Ended

Jun. 30, 2022

Extraordinary And Unusual Items [Abstract]

COVID-19

9. COVID-19

The COVID-19 outbreak in the United States has caused significant business disruption. The extent of the impact of COVID-19 on the Company’s operational and financial performance will depend on certain developments, including the continued spread of COVID-19 and the measures taken by the governmental authorities, and its impact on the Company’s preclinical studies and clinical trials, employees and vendors, all of which are uncertain and cannot be predicted, particularly as the Company advances its product candidates into and through clinical development. In December 2021, the Company transitioned to a hybrid model with its employees generally working both remotely and onsite, and the Company anticipates it will continue to use this model going forward. To date, the Company has not experienced material disruptions in its business operations. However, a prolonged outbreak could have a material adverse impact on the financial results and business operations of the Company, including the timing and ability of the Company to complete certain clinical trials and other efforts required to advance the development of its product candidates and raise additional capital.

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Subsequent Events

6 Months Ended

Jun. 30, 2022

Subsequent Events [Abstract]

Subsequent Events

10.    Subsequent Events

From July 1, 2022 through August 9, 2022, the Company sold 1,042,300 shares of its common stock pursuant to the Sales Agreement and received net proceeds of $18.7 million, after deducting offering-related transaction costs and commissions.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited interim condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) and the rules and regulations of the Securities and Exchange Commission (SEC) related to a quarterly report on Form 10-Q. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations. The unaudited interim condensed financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results for the periods presented. All such adjustments are of a normal and recurring nature. The operating results presented in these unaudited interim condensed financial statements are not necessarily indicative of the results that may be expected for any future periods. These unaudited interim condensed financial statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended December 31, 2021 included in the Company’s annual report on Form 10-K filed with the SEC on March 1, 2022.

Use of Estimates

Use of Estimates

The Company’s condensed financial statements are prepared in accordance with GAAP, which requires the Company to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in the condensed financial statements and

accompanying notes. The most significant estimates in the Company’s condensed financial statements relate to revenue recognition, stock-based compensation, and accrued research and development costs. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions.

Cash, Cash Equivalents and Restricted Cash

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with original maturities of three months or less from the date of purchase to be cash equivalents. Cash and cash equivalents include cash in readily available checking and money market accounts. Restricted cash represents cash held as collateral for the letter of credit required under the Company’s facility lease and is reported as a long-term asset in the accompanying condensed balance sheets.

Marketable Securities

Marketable Securities

The Company’s marketable securities primarily consist of U.S. Government and corporate debt securities. The Company classifies its marketable securities as available-for-sale and records such assets at estimated fair value in the condensed balance sheets, with unrealized gains and losses, if any, reported as a component of other comprehensive income (loss) within the condensed statements of operations and comprehensive loss and as a separate component of stockholders’ equity. The Company classifies marketable securities with remaining maturities greater than one year as current assets because such marketable securities are available to fund the Company’s current operations. Realized gains and losses are calculated on the specific identification method and recorded as interest income. There were no realized gains and losses during any of the periods presented.

At each balance sheet date, the Company assesses available-for-sale securities in an unrealized loss position to determine whether the unrealized loss is other-than-temporary. When the Company determines that a decline in the fair value below its cost basis is other-than-temporary, the Company recognizes an impairment loss in the period in which the other-than-temporary decline occurred. There have been no other-than-temporary impairments recognized during any of the periods presented.

See Note 4 (Marketable Securities) for further information.

Concentration of Credit Risk

Concentration of Credit Risk

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 has not experienced any losses in such accounts and believes it is not exposed to significant risk on its cash balances due to the financial position of the depository institutions in which those deposits are held. Additionally, the Company has established guidelines regarding approved investments, credit quality, diversification, liquidity and maturities of investments, which are designed to maintain safety and liquidity.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

• Level 1—Quoted prices in active markets for identical assets or liabilities.

• Level 2—Observable inputs, such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

• Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

None of the Company’s non-financial assets are recorded at fair value on a non-recurring basis. The carrying amounts reflected in the Company’s condensed balance sheets for prepaid and other assets and accounts payable and accrued liabilities approximate their fair values due to their short-term nature. The Company recognizes transfers between levels of the fair value hierarchy on the date of the event or change in circumstances that caused the transfer. No transfers between levels have occurred during the periods presented.

See Note 3 (Fair Value Measurements) for information on assets measured at fair value.

Property and Equipment, Net

Property and Equipment, net

Property and equipment, including leasehold improvements, are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are recorded using the straight-line method over the estimated useful lives of the related assets, which ranges from three to five years. Leasehold improvements are amortized on a straight-line basis over the shorter of the estimated useful lives of the assets or the remaining lease term. Repairs and maintenance charges that do not increase the useful life of the assets are charged to operating expenses as incurred.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

Long-lived assets consist of property and equipment. An impairment loss is recorded if and when events and circumstances indicate that assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets. The Company has not recognized any impairment losses in any of the periods presented in these condensed financial statements.

Segment Information

Segment Information

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by management in making decisions regarding resource allocation and assessing performance. The Company manages its operations as a single operating segment in the United States for the purposes of assessing performance and making operating decisions.

Revenue Recognition

Revenue Recognition

To date, all the Company’s revenue has been derived from collaboration and research agreements. The terms of these arrangements include the following types of payments to the Company: non-refundable, upfront license fees; development, regulatory and commercial milestone payments; payments for research and development services provided by the Company or for manufacturing supply services the Company provides through its contract manufacturers; and royalties on net sales of licensed products.  

The Company performs the following steps in determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of these agreements: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when, or as, the Company satisfies each performance obligation.

The Company receives payments from its collaborators based on billing schedules established in each contract. Upfront and other payments may require deferral of revenue recognition to a future period until the Company performs its obligations under its research and collaboration arrangements. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional.

See Note 5 (Collaboration, License and Research Agreements) for further information.

Research and Development Costs

Research and Development Costs

Research and development costs are expensed as incurred and include salaries, benefits and stock-based compensation associated with research and development personnel, third-party research and development expenses, license fees, laboratory supplies, facilities, overhead costs, and consultants. Nonrefundable advance payments for goods and services that will be used in future research and development activities are capitalized and recorded as expense in the period that the Company receives the goods or when services are performed.

Upfront and milestone payments to acquire contractual rights to licensed technology are expensed when incurred if there is uncertainty in the Company receiving future economic benefit from the acquired contractual rights.

Patent Costs

Patent Costs

Costs related to filing and pursuing patent applications are recorded as general and administrative expense and expensed as incurred since recoverability of such expenditures is uncertain.

Income Taxes

Income Taxes

The Company accounts for income taxes in accordance with Accounting Standards Codification (ASC) 740, Income Taxes, which provides for deferred taxes using the asset and liability method. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit would more likely than not be realized assuming examination by the taxing authority. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances.

The Company is subject to taxation in the United States and various state jurisdictions. As of December 31, 2021, the Company’s tax years since conversion to a corporation in 2019 are subject to examination by taxing authorities.

Stock-Based Compensation

Stock-Based Compensation

Stock-based compensation expense for employee and non-employee stock option grants is recorded at the estimated fair value of the award as of the grant date and is recognized as expense on a straight-line basis over the requisite service period (usually the vesting period) of the stock-based award, and forfeitures are recognized as incurred. Stock-based compensation expense for employee stock purchases under the Company’s Employee Stock Purchase Plan (the ESPP) is recorded at the estimated fair value of the purchase as of the plan enrollment date and is recognized as expense on a straight-line basis over the applicable six-month ESPP offering period. The estimation of fair value for stock-based compensation requires management to make estimates and judgments about, among other things, the estimated life of options and volatility of the Company’s common stock. The judgments directly affect the amount of compensation expense that will be recognized.

Comprehensive Loss

Comprehensive Loss

Comprehensive loss is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources, including unrealized gains and losses on marketable securities. Comprehensive gains (losses) have been reflected in the statements of operations and comprehensive loss for all periods presented.

Net Loss Per Share

Net Loss Per Share

Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding for the period, adjusted for the weighted-average number of common shares outstanding that are subject to repurchase or forfeiture. The Company has excluded 11,449 and 38,118 weighted-average shares subject to repurchase or forfeiture from the weighted-average number of common shares outstanding for the three months ended June 30, 2022 and 2021, respectively, and 12,705 and 48,080 weighted-average shares subject to repurchase or forfeiture from the weighted-average number of common shares outstanding for the six months ended June 30, 2022 and 2021, respectively. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and dilutive common stock equivalents outstanding for the period determined using the treasury-stock and if-converted methods. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding as inclusion of the potentially dilutive securities would be anti-dilutive.

Potentially dilutive securities not included in the calculation of diluted net loss per share, because to do so would be anti-dilutive, are as follows (in common stock equivalent shares; in thousands):

	June 30,
	2022		2021
Common stock options issued and outstanding		8,636		5,766
Common stock subject to repurchase or forfeiture		10		30
ESPP shares pending issuance		4		2
Total		8,650		5,798

Recently Issued Accounting Pronouncements and Accounting Standards Not Yet Adopted

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

Accounting Standards Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Statements (Topic 326), which intends to improve financial reporting by requiring earlier recognition of credit losses on certain financial assets, such as available-for-sale debt securities. Subsequent to the issuance of ASU 2016-13, the FASB issued several additional Accounting Standard Updates (ASUs) to clarify implementation guidance, provide narrow-scope improvements and provide additional disclosure guidance. In November 2019, the FASB issued an amendment making this ASU effective for fiscal years beginning after December 15, 2022 for smaller reporting companies. The Company was a smaller reporting company at the determination date, and therefore the new standard will be effective for the Company on January 1, 2023. The Company is currently evaluating the potential impact that the adoption of ASU 2016-13 may have on its financial statements and related disclosures.

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Schedule of Potentially Dilutive Securities not Included in Calculation of Diluted Net Loss Per Share

Potentially dilutive securities not included in the calculation of diluted net loss per share, because to do so would be anti-dilutive, are as follows (in common stock equivalent shares; in thousands):

	June 30,
	2022		2021
Common stock options issued and outstanding		8,636		5,766
Common stock subject to repurchase or forfeiture		10		30
ESPP shares pending issuance		4		2
Total		8,650		5,798

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Summary of Cash Equivalents and Marketable Securities Measured at Fair Value

The following tables summarize the Company’s marketable securities measured at fair value (in thousands):

			Fair Value Measurements Using
As of June 30, 2022	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Marketable securities:
U.S. Treasury securities	$	247,249	$	247,249	$	—	$	—
U.S. Government agency securities		4,928		—		4,928		—
Negotiable certificates of deposit		3,798		—		3,798		—
Corporate debt securities		17,137		—		17,137		—
Total	$	273,112	$	247,249	$	25,863	$	—

			Fair Value Measurements Using
As of December 31, 2021	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Marketable securities:
U.S. Treasury securities	$	65,372	$	65,372	$	—	$	—
Negotiable certificates of deposit		3,873		—		3,873		—
Corporate debt securities		15,850		—		15,850		—
Total	$	85,095	$	65,372	$	19,723	$	—

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Marketable Securities (Tables)

6 Months Ended

Jun. 30, 2022

Investments Debt And Equity Securities [Abstract]

Summary of Marketable Securities

The Company’s marketable securities, which consist of highly liquid marketable debt securities, are classified as available-for-sale and are stated at fair value. The following tables summarize the Company’s marketable securities (in thousands):

As of June 30, 2022	Maturity (in years)	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
U.S. Treasury securities	1 or less	$	197,630	$	—	$	(1,395	)	$	196,235
U.S. Government agency securities	1 or less		5,000		—		(72	)		4,928
Negotiable certificates of deposit	1 or less		2,647		—		(34	)		2,613
Corporate debt securities	1 or less		12,839		—		(211	)		12,628
U.S. Treasury securities	1 - 2		52,114		—		(1,100	)		51,014
Negotiable certificates of deposit	1 - 2		1,224		—		(39	)		1,185
Corporate debt securities	1 - 2		4,644		—		(135	)		4,509
Total		$	276,098	$	—	$	(2,986	)	$	273,112

As of December 31, 2021	Maturity (in years)	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
U.S. Treasury securities	1 or less	$	2,492	$	—	$	(1	)	$	2,491
Negotiable certificates of deposit	1 or less		1,190		—		(1	)		1,189
U.S. Treasury securities	1 - 2		63,034		—		(153	)		62,881
Negotiable certificates of deposit	1 - 2		2,687		—		(3	)		2,684
Corporate debt securities	1 - 2		15,879		—		(29	)		15,850
Total		$	85,282	$	—	$	(187	)	$	85,095

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Collaboration, License and Research Agreements (Tables)

6 Months Ended

Jun. 30, 2022

Collaboration License And Research Agreements [Abstract]

Summary of Reconciliation of Deferred Revenue Related to Lilly Agreement

A reconciliation of the closing balance of deferred revenue related to the Lilly Agreement is as follows (in thousands):

Balance at December 31, 2021	$	11,108
Revenue recognized		(1,875	)
Balance at June 30, 2022	$	9,233

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Property and Equipment, Net (Tables)

6 Months Ended

Jun. 30, 2022

Property Plant And Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment consist of the following (in thousands):

	June 30, 2022			December 31, 2021
Laboratory equipment	$	5,566		$	4,775
Computers and software		116			116
Office furniture and equipment		2,575			1,398
Leasehold improvements		249			249
Property and equipment, gross		8,506			6,538
Less accumulated depreciation		(2,369	)		(1,733	)
Total property and equipment, net	$	6,137		$	4,805

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Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2022

Commitments And Contingencies Disclosure [Abstract]

Schedule of Future Minimum Payments for Operating Lease Liabilities

As of June 30, 2022, future minimum payments for the Company’s operating lease liabilities are as follows (in thousands):

Year ending December 31,
2022 (remaining)	$	1,519
2023		3,113
2024		3,207
2025		3,303
2026		3,111
Total lease payments		14,253
Less imputed interest		(2,432	)
Total operating lease liabilities		11,821
Less lease liabilities, current portion		(3,068	)
Lease liabilities, net of current portion	$	8,753

Supplemental Cash Flow Information Related to Cash Paid for Amounts Included in Measurement of Operating Lease Liabilities

Supplemental cash flow information related to cash paid for amounts included in the measurement of operating lease liabilities was as follows (in thousands):

	Six Months Ended June 30,
	2022		2021
Cash paid included in operating cash flows	$	251	$	—

Schedule of Rent Expense

Rent expense was as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Operating leases	$	690	$	149	$	1,379	$	299
Short-term leases		—		72		—		81
Total rent expense	$	690	$	221	$	1,379	$	380

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Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2022

Equity [Abstract]

Summary of Stock Option Activity

Stock option activity for employee and nonemployee awards and related information is as follows (in thousands, except per share data):

	Number of Options			Weighted- Average Exercise Price Per Share
Outstanding at December 31, 2021		5,778		$	14.49
Granted		3,028			14.95
Exercised		(12	)		1.19
Forfeited/expired		(158	)		22.02
Outstanding at June 30, 2022		8,636		$	14.53

Schedule of Assumptions Used in Black-Scholes Model Pricing Model to to Determine Fair Value of Stock Option and Shares Purchasable Under ESPP

The assumptions used in the Black-Scholes model to determine the fair value of stock option grants and shares purchasable under the ESPP were as follows:

	Six Months Ended June 30,
Stock Option Grants	2022	2021
Risk-free interest rate	1.5%-3.4%	0.5% - 1.2%
Expected volatility	85%	87%-88%
Expected term (in years)	5.5-6.1	5.5 - 6.1
Expected dividend yield	—%	—%

	Six Months Ended June 30,
ESPP	2022	2021
Risk-free interest rate	2.2%	0.1%
Expected volatility	79%	75%
Expected term (in years)	0.5	0.5
Expected dividend yield	—%	—%

Schedule of Allocated Stock-based Compensation Expense

The allocation of stock-based compensation expense was as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Research and development expense	$	3,531	$	2,487	$	6,797	$	4,497
General and administrative expense		2,977		1,802		5,949		3,493
Total stock-based compensation expense	$	6,508	$	4,289	$	12,746	$	7,990

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Description of Business and Basis of Presentation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands				6 Months Ended	12 Months Ended
	Aug. 06, 2021	Jul. 02, 2021	Jun. 16, 2020	Jun. 30, 2022	Jun. 30, 2022	Dec. 31, 2021
Description Of Business And Basis Of Presentation [Line Items]
Sale of stock number of shares issued in transaction				4,266,311	5,046,860
Sale of common stock maximum aggregate offering price		$ 150,000
Net proceeds from Issuance of common stock after deducting offering-related transaction costs and commissions				$ 62,400	$ 82,000
Accumulated deficit				264,474	264,474	$ 184,549
Cash, cash equivalents and marketable securities				$ 398,200	$ 398,200
Public Offering
Description Of Business And Basis Of Presentation [Line Items]
Sale of stock number of shares issued in transaction			16,560,000		5,046,860
Sale of stock, price per share			$ 18.00
Proceeds from the IPO, net of underwriting discounts, commissions and offering costs			$ 274,100
Sale of common stock maximum aggregate offering price		$ 150,000
Net proceeds from Issuance of common stock after deducting offering-related transaction costs and commissions					$ 82,000
Common Stock | Follow-on Public Offering
Description Of Business And Basis Of Presentation [Line Items]
Sale of stock number of shares issued in transaction	9,200,000
Sale of stock, price per share	$ 18.00
Proceeds from the IPO, net of underwriting discounts, commissions and offering costs	$ 155,100

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Summary of Significant Accounting Policies - Additional Information (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2022 USD ($) shares	Jun. 30, 2021 shares	Jun. 30, 2022 USD ($) Segment shares	Jun. 30, 2021 shares
Summary Of Significant Accounting Policies [Line Items]
Realized gains and losses on marketable securities			$ 0
Other-than-temporary impairments on marketable securities			0
Transfers of assets measured on recurring basis out of Level 1 into Level 2	$ 0		0
Transfers of assets measured on recurring basis out of Level 2 into Level 1	0		0
Transfers of liabilities measured on recurring basis out of Level 1 into Level 2	0		0
Transfers of liabilities measured on recurring basis out of Level 2 into Level 1	$ 0		0
Transfers of financial instrument classified as liability into level 3			0
Transfers of financial instrument classified as liability out of level 3			0
Transfers of financial instrument classified as asset into level 3			0
Transfers of financial instrument classified as asset out of level 3			$ 0
Number of operating segment | Segment			1
Weighted-average shares/units subject to repurchase or forfeiture | shares	11,449	38,118	12,705	48,080
Minimum
Summary Of Significant Accounting Policies [Line Items]
Estimated useful lives of assets			3 years
Maximum
Summary Of Significant Accounting Policies [Line Items]
Estimated useful lives of assets			5 years

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Summary of Significant Accounting Policies - Schedule of Potentially Dilutive Securities not Included in Calculation of Diluted Net Loss Per Share (Details) - shares shares in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total	8,650	5,798
Common Stock Options Issued and Outstanding
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total	8,636	5,766
Common Stock Subject to Repurchase or Forfeiture
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total	10	30
ESPP Shares Pending Issuance
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total	4	2

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Fair Value Measurements - Summary of Cash Equivalents and Marketable Securities Measured at Fair Value (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities	$ 273,112	$ 85,095
Recurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities	273,112	85,095
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities	247,249	65,372
Recurring | Significant Other Observable Inputs (Level 2)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities	25,863	19,723
Recurring | Significant Unobservable Inputs (Level 3)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities	0	0
Recurring | US Treasury Securities
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities	247,249	65,372
Recurring | US Treasury Securities | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities	247,249	65,372
Recurring | US Treasury Securities | Significant Other Observable Inputs (Level 2)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities	0	0
Recurring | US Treasury Securities | Significant Unobservable Inputs (Level 3)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities	0	0
Recurring | Corporate debt securities
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities	17,137	15,850
Recurring | Corporate debt securities | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities	0	0
Recurring | Corporate debt securities | Significant Other Observable Inputs (Level 2)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities	17,137	15,850
Recurring | Corporate debt securities | Significant Unobservable Inputs (Level 3)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities	0	0
Recurring | U.S. Government Agency Securities
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities	4,928
Recurring | U.S. Government Agency Securities | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities	0
Recurring | U.S. Government Agency Securities | Significant Other Observable Inputs (Level 2)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities	4,928
Recurring | U.S. Government Agency Securities | Significant Unobservable Inputs (Level 3)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities	0
Recurring | Certificates of Deposit
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities	3,798	3,873
Recurring | Certificates of Deposit | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities	0	0
Recurring | Certificates of Deposit | Significant Other Observable Inputs (Level 2)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities	3,798	3,873
Recurring | Certificates of Deposit | Significant Unobservable Inputs (Level 3)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities	$ 0	$ 0

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Marketable Securities - Summary of Marketable Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	$ 276,098	$ 85,282
Unrealized Gains	0	0
Unrealized Losses	(2,986)	(187)
Estimated Fair Value	273,112	85,095
U.S. Treasury Securities with 1 Year or Less Maturity
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	197,630	2,492
Unrealized Gains	0	0
Unrealized Losses	(1,395)	(1)
Estimated Fair Value	196,235	2,491
Corporate Debt Securities with 1 to 2 Years Maturity
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	4,644	15,879
Unrealized Gains	0	0
Unrealized Losses	(135)	(29)
Estimated Fair Value	4,509	15,850
U.S. Government Agency Securities with 1 Year or Less Maturity
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	5,000
Unrealized Gains	0
Unrealized Losses	(72)
Estimated Fair Value	4,928
Negotiable Certificates of Deposit with 1 Year or Less Maturity
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	2,647	1,190
Unrealized Gains	0	0
Unrealized Losses	(34)	(1)
Estimated Fair Value	2,613	1,189
U.S. Treasury Securities with 1 to 2 Years Maturity
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	52,114	63,034
Unrealized Gains	0	0
Unrealized Losses	(1,100)	(153)
Estimated Fair Value	51,014	62,881
Corporate Debt Securities with 1 Year or Less Maturity
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	12,839
Unrealized Gains	0
Unrealized Losses	(211)
Estimated Fair Value	12,628
Negotiable Certificates of Deposit with 1 to 2 Years Maturity
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	1,224	2,687
Unrealized Gains	0	0
Unrealized Losses	(39)	(3)
Estimated Fair Value	$ 1,185	$ 2,684

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Marketable Securities - Additional Information (Details) - USD ($)	Jun. 30, 2022	Dec. 31, 2021
Investments Debt And Equity Securities [Abstract]
Unrealized losses on marketable securities	$ 2,986,000	$ 187,000
Unrealized losses position for 12 month or greater	$ 0

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Collaboration, License and Research Agreements - Additional Information (Details)	1 Months Ended	3 Months Ended		6 Months Ended
	Apr. 30, 2019 USD ($) Product	Jun. 30, 2022 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2022 USD ($) Obligation	Jun. 30, 2021 USD ($)	Dec. 31, 2021 USD ($)
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Revenue recognized		$ 2,178,000	$ 2,607,000	$ 3,973,000	$ 5,311,000
Research Collaboration and License Agreement with Eli Lilly
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Upfront fees received	$ 20,000,000.0
License agreement expiry period	10 years
Number of performance obligation | Obligation				1
Period for expects performance obligation				5 years
Revenue recognized		2,100,000	2,500,000	$ 3,800,000	5,100,000
Deferred revenue		9,233,000		9,233,000		$ 11,108,000
Research Collaboration and License Agreement with Eli Lilly | Prepaid and Other Assets
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Collaboration receivables		1,100,000		1,100,000		$ 900,000
Research Collaboration and License Agreement with Eli Lilly | Maximum
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Rights to antibody oligonucleotide conjugates for messengers RNA targets. | Product	6
Development milestone payment eligible to receive per target	$ 60,000,000.0
Regulatory milestone payment eligible to receive per target	140,000,000.0
Commercialization milestone payment eligible to receive	$ 205,000,000.0
Research Collaboration with MyoKardia, Inc.
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Revenue recognized		$ 40,500	$ 100,000	$ 100,000	$ 200,000

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Collaboration, License and Research Agreements - Reconciliation of Deferred Revenue Related to Lilly Agreement (Details) - Research Collaboration and License Agreement with Eli Lilly $ in Thousands	6 Months Ended
	Jun. 30, 2022 USD ($)
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Balance	$ 11,108
Revenue recognized	(1,875)
Balance	$ 9,233

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Property and Equipment, Net - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 8,506	$ 6,538
Less accumulated depreciation	(2,369)	(1,733)
Total property and equipment, net	6,137	4,805
Laboratory Equipment
Property Plant And Equipment [Line Items]
Property and equipment, gross	5,566	4,775
Computers and Software
Property Plant And Equipment [Line Items]
Property and equipment, gross	116	116
Office Furniture and Equipment
Property Plant And Equipment [Line Items]
Property and equipment, gross	2,575	1,398
Leasehold Improvements
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 249	$ 249

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Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Property Plant And Equipment [Abstract]
Depreciation expenses related to property and equipment	$ 300	$ 100	$ 636	$ 255

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Commitments and Contingencies - Additional Information (Details)	6 Months Ended
	Jun. 30, 2022 USD ($)
Commitments And Contingencies Disclosure [Abstract]
Operating lease, description	During the periods presented, the Company was party to various non-cancellable office and laboratory space operating leases and short-term leases. Currently, the Company is only party to a non-cancellable office and laboratory space operating lease. Under the relevant guidance, the Company recognizes operating lease right-of-use (ROU) assets and liabilities based on the present value of the future minimum lease payments over the lease term at the commencement date, using the Company’s assumed incremental borrowing rate, and amortizes the ROU assets and liabilities over the lease term. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Short-term leases are not subject to recognition of an ROU asset or liability or straight-line lease expense requirements.
Loss contingencies accrued	$ 0

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Commitments and Contingencies - Schedule of Future Minimum Payments For Operating Lease Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Commitments And Contingencies Disclosure [Abstract]
2022 (remaining)	$ 1,519
2023	3,113
2024	3,207
2025	3,303
2026	3,111
Total lease payments	14,253
Less imputed interest	(2,432)
Total operating lease liabilities	11,821
Less lease liabilities, current portion	(3,068)	$ (1,769)
Lease liabilities, net of current portion	$ 8,753	$ 9,960

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Commitments and Contingencies - Supplemental Cash Flow Information Related to Cash Paid for Amounts Included in Measurement of Operating Lease Liabilities (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Commitments And Contingencies Disclosure [Abstract]
Cash paid included in operating cash flows	$ 251	$ 0

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Commitments and Contingencies - Schedule of Rent Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Commitments And Contingencies Disclosure [Abstract]
Operating leases	$ 690	$ 149	$ 1,379	$ 299
Short-term leases	0	72	0	81
Total rent expense	$ 690	$ 221	$ 1,379	$ 380

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Stockholders' Equity - Additional Information (Details) - USD ($)				1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	Aug. 06, 2021	Jul. 02, 2021	Jun. 16, 2020	Jun. 30, 2020	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Dec. 31, 2021	Dec. 31, 2019	Jan. 31, 2013
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock shares authorized			400,000,000		400,000,000		400,000,000		400,000,000	400,000,000
Preferred stock undesignated shares authorized			40,000,000
Common stock par value per share			$ 0.0001		$ 0.0001		$ 0.0001		$ 0.0001	$ 0.0001
Preferred stock par value per share			$ 0.0001
Preferred stock issued					0		0		0	0
Sale of stock number of shares issued in transaction							4,266,311		5,046,860
Sale of common stock maximum aggregate offering price		$ 150,000,000.0
Termination notice period for sales agreement		10 days
Net proceeds from Issuance of common stock after deducting offering-related transaction costs and commissions							$ 62,400,000		$ 82,000,000.0
Weighted-average grant date fair value of options granted							$ 10.71	$ 17.08
Time-based Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation cost					$ 65,800,000		$ 65,800,000		$ 65,800,000
Weighted-average period of unrecognized compensation cost							2 years 9 months 18 days
Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting period							4 years
2013 Equity Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Units initially reserved for issuance												2,127,013
Increased to number of shares reserved under plan											4,771,615
2013 Equity Incentive Plan | Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expiration period							10 years
2020 Incentive Award Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares of common stock initially reserved for issuance				3,900,000
Percentage of shares of common stock outstanding on final day of immediately preceding calendar year				5.00%
Number of remaining shares available for issuance					2,092,732		2,092,732		2,092,732
2020 Incentive Award Plan | Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expiration period							10 years
Employee Stock Purchase Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Participant maximum contribution as percentage of eligible compensation				15.00%
Percentage of purchase price of shares of lower of fair market value				85.00%
Shares of common stock available for issuance					589,803		589,803		589,803
Shares issued under ESPP							48,760	14,235
Unrecognized compensation cost					$ 200,000		$ 200,000		$ 200,000
Weighted-average period of unrecognized compensation cost							6 months
Employee Stock Purchase Plan | Accounts Payable and Accrued Liabilities
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Outstanding liability					$ 40,200		$ 40,200		$ 40,200
Common Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares issued under ESPP					49,000	14,000
Public Offering
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Sale of stock number of shares issued in transaction			16,560,000						5,046,860
Sale of stock, price per share			$ 18.00
Proceeds from the IPO, net of underwriting discounts, commissions and offering costs			$ 274,100,000
Sale of common stock maximum aggregate offering price		$ 150,000,000.0
Net proceeds from Issuance of common stock after deducting offering-related transaction costs and commissions									$ 82,000,000.0
Follow-on Public Offering | Common Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Sale of stock number of shares issued in transaction	9,200,000
Sale of stock, price per share	$ 18.00
Proceeds from the IPO, net of underwriting discounts, commissions and offering costs	$ 155,100,000
Proceeds from the follow-on public offering, net of underwriting discounts, commissions and offering costs	$ 155,100,000

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Stockholders' Equity - Summary of Stock Option Activity (Details) shares in Thousands	6 Months Ended
	Jun. 30, 2022 $ / shares shares
Number of Options
Outstanding at December 31, 2021 | shares	5,778
Granted | shares	3,028
Exercised | shares	(12)
Forfeited/expired | shares	(158)
Outstanding at June 30, 2022 | shares	8,636
Weighted-Average Exercise Price
Outstanding at December 31, 2021 | $ / shares	$ 14.49
Granted | $ / shares	14.95
Exercised | $ / shares	1.19
Forfeited/expired | $ / shares	22.02
Outstanding at June 30, 2022 | $ / shares	$ 14.53

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Stockholders' Equity - Schedule of Assumptions Used in Black-Scholes Model Pricing Model to to Determine Fair Value of Stock Option and Shares Purchasable Under ESPP (Details)	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Risk-free interest rate, Minimum	1.50%	0.50%
Risk-free interest rate, Maximum	3.40%	1.20%
Expected volatility	85.00%
Expected dividend yield	0.00%	0.00%
Employee Stock Purchase Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Risk-free interest rate	2.20%	0.10%
Expected volatility	79.00%	75.00%
Expected term (in years)	6 months	6 months
Expected dividend yield	0.00%	0.00%
Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected volatility		87.00%
Expected term (in years)	5 years 6 months	5 years 6 months
Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected volatility		88.00%
Expected term (in years)	6 years 1 month 6 days	6 years 1 month 6 days

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Stockholders' Equity - Schedule of Allocated Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 6,508	$ 4,289	$ 12,746	$ 7,990
Research and Development Expense
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	3,531	2,487	6,797	4,497
General and Administrative Expense
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 2,977	$ 1,802	$ 5,949	$ 3,493

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Subsequent Events - Additional Information (Details) - USD ($) $ in Millions	1 Months Ended	6 Months Ended	12 Months Ended
	Aug. 09, 2022	Jun. 30, 2022	Jun. 30, 2022
Subsequent Event [Line Items]
Sale of stock number of shares issued in transaction		4,266,311	5,046,860
Net proceeds from Issuance of common stock after deducting offering-related transaction costs and commissions		$ 62.4	$ 82.0
Subsequent Event
Subsequent Event [Line Items]
Sale of stock number of shares issued in transaction	1,042,300
Net proceeds from Issuance of common stock after deducting offering-related transaction costs and commissions	$ 18.7