10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2023

OR

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

For the transition period from ______________ to ______________

Commission File Number: 001-39575

ONCORUS, INC.

(Exact name of registrant as specified in its charter)

Delaware	47-3779757
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
4 Corporate Drive Andover, Massachusetts	01810
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (857) 320-6400

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 per share	ONCR	The Nasdaq Stock Market LLC

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, 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 May 19, 2023, the registrant had 26,094,847 shares of common stock, $0.0001 par value per share, outstanding.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION	2
Item 1.	Financial Statements (Unaudited)	2
	Condensed Consolidated Balance Sheets	2
	Condensed Consolidated Statements of Operations and Comprehensive Loss	3
	Condensed Consolidated Statements of Stockholders’ Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	26
PART II.	OTHER INFORMATION	27
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
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	28
Signatures		30

i

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations or financial condition, business strategy and plans, and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “hope,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:

•the initiation, timing, progress and expected results of our preclinical studies and clinical trials for product candidates from our self-amplifying RNA platform, including our planned Phase 1 clinical trial of ONCR-021;

•the potential therapeutic benefit of our therapies and their ability to improve upon existing immuno-oncology and RNA-based therapies;

•the ability of our self-amplifying RNA platform to avoid the challenges associated with neutralizing antibodies;

•our manufacturing capabilities and plans to manufacture our product candidates in-house, our good manufacturing practices, or GMP, compliant manufacturing facility and related operational timelines;

•the timing of certain regulatory milestones, including the submission of investigational new drug applications, or INDs, for ONCR-021 and ONCR-788, and our ability to receive the required regulatory approvals and clearances to successfully market and sell our products in the United States and certain other countries;

•our ability to fund our working capital requirements;

•our financial performance and our ability to effectively manage our anticipated growth; and

•the sufficiency of our existing funding and our ability to obtain additional funding for our operations including our ability to continue as a going concern.

These forward-looking statements are based on our management’s current expectations, estimates, forecasts and projections about our business and the industry in which we operate, and management’s beliefs and assumptions and are not guarantees of future performance or development. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described under the section titled “Risk Factors” under Part II, Item 1A, below and under "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2022, and under similar captions in our periodic reports filed with the SEC from time to time. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this report. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance, or events and circumstances reflected in the forward-looking statements will be achieved or occur. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q to conform these statements to new information, actual results or changes in our expectations, except as required by law.

1

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

ONCORUS, INC.

Condensed Consolidated Balance Sheets

(in thousands, except for par value data)

(unaudited)

	MARCH 31, 2023			DECEMBER 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	21,217		$	25,709
Investments		23,765			36,487
Prepaid expenses and other current assets		1,688			2,422
Total current assets		46,670			64,618
Property and equipment, net		34,852			44,360
Right-of-use asset		24,214			32,560
Restricted cash		3,437			3,437
Other assets		580			611
Total assets	$	109,753		$	145,586
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	2,760		$	5,694
Accrued expenses and other current liabilities		6,623			10,948
Lease liability - current portion		1,187			1,129
Term loan, net of debt discount		20,538			19,436
Total current liabilities		31,108			37,207
Lease liability - net of current portion		47,524			47,854
Total liabilities		78,632			85,061
Stockholders’ equity:
Preferred stock, $0.0001 par value; authorized — 10,000 shares at March 31, 2023 and December 31, 2022; issued and outstanding — no shares at March 31, 2023 and December 31, 2022		—			—
Common stock, $0.0001 par value; authorized — 100,000 shares at March 31, 2023 and December 31, 2022; issued and outstanding — 26,095 shares at March 31, 2023 and December 31, 2022		3			3
Additional paid-in capital		334,050			332,583
Accumulated other comprehensive loss		(24	)		(52	)
Accumulated deficit		(302,908	)		(272,009	)
Total stockholders’ equity		31,121			60,525
Total liabilities and stockholders’ equity	$	109,753		$	145,586

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

2

ONCORUS, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except per share data)

(unaudited)

	THREE MONTHS ENDED MARCH 31,
	2023			2022
Operating expenses:
Research and development	$	10,630		$	12,469
General and administrative		4,499			5,349
Total operating expenses		15,129			17,818
Impairment loss		(14,575	)		—
Loss from operations		(29,704	)		(17,818	)
Other (expense) income:
Other expense		—			(38	)
Interest (expense) income		(1,195	)		76
Total other (expense) income, net		(1,195	)		38
Net loss	$	(30,899	)	$	(17,780	)
Comprehensive loss:
Net unrealized loss on investments		(28	)		(26	)
Comprehensive loss	$	(30,927	)	$	(17,806	)
Net loss per share—basic and diluted	$	(1.18	)	$	(0.69	)
Weighted-average number of common shares outstanding—basic and diluted		26,095			25,865

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

3

ONCORUS, INC.

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except share amounts)

(unaudited)

	COMMON STOCK
	SHARES		AMOUNT		ADDITIONAL PAID-IN CAPITAL		ACCUMULATED OTHER COMPRENSIVE LOSS			ACCUMULATED DEFICIT			TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)
Balance at December 31, 2021		25,848,229	$	3	$	324,620	$	(14	)	$	(194,587	)	$	130,022
Stock-based compensation expense		—		—		1,980		—			—			1,980
Exercise of options to purchase common stock		34,967		—		62		—			—			62
Other comprehensive loss		—		—		—		(26	)		—			(26	)
Net loss		—		—		—		—			(17,780	)		(17,780	)
Balance at March 31, 2022		25,883,196	$	3	$	326,662	$	(40	)	$	(212,367	)	$	114,258
Balance at December 31, 2022		26,094,847	$	3	$	332,583	$	(52	)	$	(272,009	)	$	60,525
Stock-based compensation expense		—		—		1,467		—			—			1,467
Other comprehensive loss		—		—		—		28			—			28
Net loss		—		—		—		—			(30,899	)		(30,899	)
Balance at March 31, 2023		26,094,847	$	3	$	334,050	$	(24	)	$	(302,908	)	$	31,121

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

4

ONCORUS, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	THREE MONTHS ENDED MARCH 31,
	2023			2022
Operating activities:
Net loss	$	(30,899	)	$	(17,780	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,099			583
Stock-based compensation		1,467			1,980
Interest expense related to term loan		1,335			—
Amortization of premium/discount on investments		(278	)		51
Long-lived asset impairment		14,575			—
Non-cash interest income		(232	)		(59	)
Changes in:
Prepaid expenses and other assets		714			975
Operating lease right-of-use asset		223			523
Tenant improvement allowance reimbursements		2,952			4,511
Accounts payable		(3,214	)		(11,940	)
Accrued expenses and other current liabilities		(4,918	)		(1,807	)
Operating lease liability		(271	)		(474	)
Net cash used in operating activities		(17,447	)		(23,437	)
Investing activities
Purchase of property and equipment		(73	)		(1,868	)
Proceeds from sales and maturities of investments		13,028			—
Net cash provided by (used in) in investing activities		12,955			(1,868	)
Financing activities
Proceeds from exercise of options to purchase common stock		—			62
Net cash provided by financing activities		—			62
Decrease in cash and cash equivalents		(4,492	)		(25,243	)
Cash, cash equivalents and restricted cash at beginning of period		29,146			104,189
Cash, cash equivalents and restricted cash at end of period	$	24,654		$	78,946
Supplemental disclosure of non-cash investing and financing activities
Purchase of property and equipment in accrued expenses and accounts payable	$	872		$	4,965

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

5

ONCORUS, INC.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

(in thousands, except share and per share amounts, unless otherwise noted)

1. Nature of the Business and Liquidity

Oncorus, Inc. (the "Company") is a preclinical-stage biopharmaceutical company focused on the intravenous administration of self-amplifying RNA to transform outcomes for cancer patients. The Company believes that its product candidates have the potential to bring significant benefit to patients who are currently underserved by approved immuno-oncology therapies, including other viral immunotherapies and immune checkpoint inhibitors. The Company's approach involves encapsulating genomes of RNA viruses known to kill cancer cells within a lipid nanoparticle, creating a selectively self-amplifying vRNA immunotherapy to be administered intravenously.

The Company’s operations to date have focused on organization and staffing, business planning, raising capital, acquiring and developing the Company’s technology, establishing the Company’s intellectual property portfolio, identifying potential product candidates and undertaking preclinical studies, commencing a clinical trial and manufacturing scale-up activities. The Company does not have any product candidates approved for sale and has not generated any revenue from product sales. The Company’s product candidates are subject to long development cycles and the Company may be unsuccessful in its efforts to develop, obtain regulatory approval for or market its product candidates.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, possible failure of preclinical studies or clinical trials, the need to obtain marketing approval for its product candidates, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, the need to successfully commercialize and gain market acceptance of any of the Company’s products that are approved and the ability to secure additional capital to fund its operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure, and extensive compliance-related capabilities. Even if the Company’s drug development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

Liquidity

In accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these unaudited condensed consolidated financial statements are issued.

The Company has incurred recurring losses since its inception, including a net loss of $30.9 million for the three months ended March 31, 2023, which included a non-cash charge of $14.6 million related to the impairment of the Company's long-lived assets. In addition, as of March 31, 2023, the Company had an accumulated deficit of $302.9 million. The Company expects to continue to generate operating losses for the foreseeable future.

The Company expects that its cash, cash equivalents and investments as of March 31, 2023, following the repayment in full of its debt in May 2023, will enable it to fund its operating expenses and capital expenditure requirements into the third quarter of 2023, which raises substantial doubt about the Company's ability to continue as a going concern without additional funding. The Company expects to finance its operations through potential public or private equity financings, debt financings, collaboration agreements, strategic transactions and other capital sources or combinations thereof. The future viability of the Company is dependent on its ability to raise additional capital to finance its operations. The Company’s inability to raise capital as and when needed would have a negative impact on its financial condition and ability to pursue its business strategies and operating plan. There can be no assurance that the Company's current operating plan will be achieved or that additional funding will be available on terms acceptable to the Company, or at all.

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

6

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and as amended by the FASB’s ASUs.

In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements include all normal and recurring adjustments (which consist primarily of accruals and estimates that impact the financial statements) which are considered necessary to present fairly the Company’s financial position as of March 31, 2023, its results of operations for the three months ended March 31, 2023 and 2022, its changes in stockholders’ equity for the three months ended March 31, 2023 and 2022 and its cash flows for the three months ended March 31 2023 and 2022.

The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2022, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K (the "Annual Report") filed with the Securities and Exchange Commission (the “SEC”) on March 24, 2023. The condensed consolidated balance sheet data as of December 31, 2022 presented for comparative purposes was derived from the Company’s audited consolidated financial statements but does not include all disclosures required by GAAP. The results for the three months ended March 31, 2023, are not necessarily indicative of the operating results to be expected for the full year or for any other subsequent interim period.

The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2022, included in its Annual Report. Any changes to the Company’s significant accounting policies are further discussed below.

COVID-19 Pandemic

In response to the COVID-19 pandemic, the Company implemented a work-from-home policy allowing employees who can work from home to do so. The Company has transitioned back to in-office work for the majority of its employees. Work in our office and manufacturing spaces has been organized to reduce risk of COVID-19 transmission. Business travel was previously suspended but is now becoming more frequent, and online and teleconference technology continues to be used regularly. The Company continues to monitor guidance from the CDC and other relevant health regulatory authorities and may adjust its plans and protocols to the extent there are changes in such guidance. As of the date of issuance of these unaudited interim condensed consolidated financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, assumptions and judgments or revise the carrying value of its assets or liabilities. Actual results could differ from those estimates, and any such differences may be material to the Company’s unaudited interim condensed consolidated financial statements.

Going Concern

At each reporting period, the Company evaluates whether there are conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. The Company is required to make certain additional disclosures if it concludes substantial doubt exists and it is not alleviated by the Company’s plans or when its plans alleviate substantial doubt about the Company’s ability to continue as a going concern. See Note 1 (Liquidity).

Principles of Consolidation

The accompanying unaudited interim condensed consolidated financial statements of the Company include the accounts of its wholly owned subsidiary, Oncorus Securities Corporation. All intercompany transactions have been eliminated in consolidation. The Company has one operating segment.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. On an ongoing basis, the Company’s management evaluates its estimates, which include, but are not limited to, the estimated fair value of the Company’s common stock and share-based awards utilized for stock-based compensation purposes, accrued expenses, and amounts of expenses during the reported period. The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions.

7

Deferred Offering Costs

The Company capitalizes certain legal, professional, accounting and other third-party fees that are directly associated with in-process equity issuances or debt financings as deferred offering costs until such equity issuances or debt financings are consummated. After consummation, these costs are recorded as a reduction in the capitalized amount associated with the equity issuance or debt financing.

Debt Related Costs

The carrying value of the Company’s Term Loan (see Note 8) is recorded net of issuance costs and discount relating to the issuance of warrants and fees paid to the lender. Debt-related costs are amortized over the term of the debt using the effective interest method and recognized as interest expense.

Warrants

In accordance with ASC Topic 470-20-25, when the Company issues debt with warrants, the Company treats the warrants as a debt discount, recorded as a contra-liability against the debt, and amortizes the balance over the life of the underlying debt as amortization of debt discount expense in the statements of operations. The offset to the contra-liability is recorded as additional paid-in capital in the Company’s consolidated balance sheet if the warrants are not treated as a derivative or as liability warrants. The Company determines the fair value of the warrants at issuance using the Black-Scholes option pricing model.

Concentration of Credit Risk and of Significant Suppliers

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents and short-term investments. The Company has all of its cash at one financial institution that management believes to be of high credit quality, in amounts that exceed federally insured limits. The Company invests its excess cash, in line with its investment policy, primarily in money market funds and high credit quality debt instruments.

The Company is dependent upon a third-party contract manufacturer and third-party contract research organizations for the performance of portions of its testing for pre-clinical and clinical studies. The Company believes that its relationships with these organizations are satisfactory, and that alternative suppliers of these services are available in the event of the loss of one or more of these suppliers.

Restricted Cash

The Company maintains a balance in a segregated bank account in connection with a letter of credit for the benefit of the landlord in connection with its operating lease for its Andover, Massachusetts facility. As of March 31, 2023, restricted cash consisted of $3.4 million held for the benefit of the landlord. This amount has been classified as part of non-current assets on the Company's unaudited interim condensed consolidated balance sheets.

The Company includes its restricted cash balance in the cash, cash equivalents and restricted cash reconciliation of operating, investing, and financing activities in the unaudited interim condensed consolidated statements of cash flows. The following table provides a reconciliation of cash, cash equivalents and restricted cash in the unaudited interim condensed consolidated balance sheets that sum to the total of the same such amounts shown in the unaudited interim condensed consolidated statements of cash flows:

	MARCH 31,
	2023		2022
	(in thousands)
Cash and cash equivalents	$	21,217	$	75,509
Restricted cash		3,437		3,437
Total cash, cash equivalents and restricted cash shown in the unaudited interim consolidated statements of cash flows	$	24,654	$	78,946

Investments

Short-term investments consist of commercial paper, corporate bonds and U.S. treasury securities with original maturities greater than three months. The Company may sell investments at any time for use in current operations even if the investments have not yet reached maturity. As a result, the Company classifies its investments, including securities with maturities beyond twelve months, as current assets. As of March 31, 2023, all investments are classified as available-for-sale securities ("AFS"), which are recorded at fair value. Unrealized holding gains and losses on available-for-sale securities are reported as a net amount in accumulated other comprehensive income or loss in stockholders’ equity until realized. Purchase premiums and discounts are amortized to other income over the terms of the related securities.

ASU 2016-13 (Topic 326) made targeted changes to ASC 320 Debt Securities ("ASC 320") to eliminate the concept of “other than temporary” from the impairment loss estimation model for AFS securities. A summary of the changes made by the Company as a result of adoption of ASU 2016-13 is as follows:

8

•The use of an allowance approach, rather than a permanent write-down of a security’s cost basis upon determination of an impairment loss;

•The amount of the allowance is limited to the amount at which the security’s fair value is less than its amortized cost basis;

•The Company may not consider the length of time a security’s fair value has been less than amortized cost; and

•The Company may not consider recoveries in fair value after the balance sheet date when assessing whether a credit loss exists.

The Company’s AFS securities are carried at fair value. For AFS securities in an unrealized loss position, management will first evaluate whether there is intent to sell a security, or if it is more likely than not that the Company will be required to sell a security prior to anticipated recovery of its amortized cost basis. If either of these criteria are met, the Company will record a write-down of the security’s amortized cost basis to fair value through income. For those AFS securities which do not meet the intent or requirement to sell criteria, management will evaluate whether the decline in fair value is a result of credit related matters or other factors. In performing this assessment, management considers the creditworthiness of the issuer including whether the security is guaranteed by the U.S. federal government or other government agency, the extent to which fair value is less than amortized cost, and changes in credit rating during the period, among other factors. If this assessment indicates the existence of credit losses, an allowance for credit losses will be established, as determined by a discounted cash flow analysis. To the extent the estimated cash flows do not support the amortized cost, the deficiency is considered to be due to credit loss and is recognized in earnings.

Changes in the allowance for credit losses are recorded as a provision for (or reversal of) credit loss expense. Losses are charged against the allowance when the security is determined to be uncollectible, or when either of the aforementioned criteria surrounding intent or requirement to sell have been met. On January 1, 2022, the date on which the Company adopted ASU 2016-13, no allowance for credit losses was recorded for AFS securities. Gains and losses on sales of securities are recognized at the time of sale on the specific-identification basis.

Prior to the adoption of ASU 2016-13, management evaluated impaired securities for other-than-temporary impairment (“OTTI”) at least on a quarterly basis, and more frequently when economic or market concerns warranted such evaluation. Consideration was given to the length of time and the extent to which the fair value was less than cost, current market conditions, the financial condition and near-term prospects of the issuer, performance of collateral underlying the securities, the ratings of the individual securities, the interest rate environment, the Company’s intent to sell the security or whether it was more likely than not that the Company would be required to sell the debt security before its anticipated recovery, as well as other qualitative factors.

If a decline in fair value below the amortized cost basis of an investment was judged to be other than temporary, the investment was written down to fair value. The portion of the impairment related to credit losses was included in net income, and the portion of the impairment related to other factors was included in other comprehensive income. Refer to Note 3, “Cash Equivalents and Investments” for additional information regarding the measurement of impairment losses on AFS securities.

Fair Value Measurements

Certain assets and liabilities of the Company are carried at fair value under GAAP. 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—Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2—Valuations based on quoted prices for similar assets or liabilities in markets that are not active or for which all significant inputs are observable, either directly or indirectly, such as quoted market prices, interest rates, and yield curves.

Level 3—Valuations that require inputs that reflect the Company’s own assumptions that are both significant to the fair value measurement and unobservable.

To the extent a valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair values requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized as Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The Company believes that the carrying amounts of prepaid expenses, other current assets, accounts payable, and accrued expenses approximate their fair value due to the short-term nature of those instruments.

9

Operating Leases

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on specific facts and circumstances, the existence of an identified asset(s), if any, and the Company’s control over the use of the identified asset(s), if applicable. The lease liability is measured at the present value of future lease payments, discounted using the discount rate as of the lease commencement date. Future lease payments may include payments that depend on an index or a rate (such as the consumer price index or other market index). The Company initially measures payments based on an index or rate by using the applicable rate at lease commencement and subsequent changes in such rates are recognized as variable lease costs. Variable payments that do not depend on a rate or index are not included in the lease liability and are recognized as they are incurred. The Company’s contracts typically do not have variable payments based on index or rate. The Company’s contracts that include a lease component generally include additional services that are transferred to the lessee (e.g., common-area maintenance services), which are non-lease components. Contracts typically also include other costs and fees that do not provide a separate service to the lessee, such as costs paid by the lessee to reimburse the lessor for administrative costs or payment for the lessor’s costs for property taxes, insurance related to the leased asset, and other lessor costs. The Company elected the practical expedient to account for the lease and its associated non-lease components as a single lease component for its real estate leases, including the office, lab, and its manufacturing space.

When readily determinable, the discount rate used to calculate the lease liability is the rate implicit in the lease. As the Company's leases typically do not provide an implicit rate, the Company uses its incremental borrowing rate based on the lease term and economic environment at the lease commencement date. The lease term used to calculate the lease liability includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. With limited exceptions, the nature of the Company's facility leases is such that there are no economic or other conditions that would indicate that it is reasonably certain at lease commencement that the Company will exercise options to extend the term.

The Company recognizes a corresponding right-of-use (“ROU”) asset, initially measured as the amount of lease liability, adjusted for any initial lease costs or lease payments made before or at the commencement of the lease, and reduced by any lease incentives. In certain instances when there is unpredictability of payout of leasehold improvement reimbursements, the ROU asset and lease liability will be adjusted on a prospective basis as construction related to leasehold improvements is performed over the life of the lease.

The Company’s leases consist of only operating leases. Operating leases are recognized on the balance sheet as ROU assets, lease liabilities current and lease liabilities non-current. Fixed rents are included in the calculation of the lease balances while certain variable costs paid for certain operating and pass-through costs are excluded. Lease expense is recognized over the expected lease term on a straight-line basis. For leases with a term of one year or less, or short-term leases, the Company has elected to not recognize the lease liability for these arrangements and the lease payments are recognized in the consolidated statements of operations and comprehensive loss.

Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13 (Topic 326), Financial Instruments — Credit Losses — Measurement of Credit Losses on Financial Instruments, which is codified in Topic 326. The ASU changes how entities will measure credit losses on Held-to-Maturity (HTM) and Available-for-Sale debt securities. After the adoption of ASU 2016-13 (Topic 326), additional disclosures are required for HTM debt securities. The standard became effective for the Company as of January 1, 2023. The Company adopted ASU 2016-13 (Topic 326) in the first quarter of 2023. The adoption of this pronouncement did not have a material impact on the Company's consolidated financial statements.

There have been no other recently issued accounting pronouncements other than those described in the Company’s audited financial statements as of and for the year ended December 31, 2022, and the notes thereto, which are included in the Annual Report.

3. Cash Equivalents and Investments

The following tables summarize the amortized cost and fair value of the Company's cash equivalents and investments (in thousands):

10

	MARCH 31, 2023
	AMORTIZED COST BASIS		GROSS UNREALIZED GAINS		GROSS UNREALIZED LOSSES			ALLOWANCE FOR CREDIT LOSSES		ESTIMATED FAIR VALUE
Cash Equivalents
Money market funds	$	9,014	$	—	$	—		$	—	$	9,014
Total Cash Equivalents	$	9,014	$	—	$	—		$	—	$	9,014
Investments
Commercial paper	$	16,308	$	—	$	—		$	—	$	16,308
Corporate bonds		1,509		—		(9	)		—		1,500
U.S. treasury securities		5,972		—		(15	)		—		5,957
Total Investments	$	23,789	$	—	$	(24	)	$		$	23,765

	DECEMBER 31, 2022
	AMORTIZED COST BASIS		GROSS UNREALIZED GAINS		GROSS UNREALIZED LOSSES			ALLOWANCE FOR CREDIT LOSSES		ESTIMATED FAIR VALUE
Cash Equivalents
Money market funds	$	19,881	$	—	$	—		$	—	$	19,881
Total Cash Equivalents	$	19,881	$	—	$	—		$	—	$	19,881
Investments
Commercial paper	$	25,094	$	—	$	—		$	—	$	25,094
U.S. treasury securities		8,417		—		(39	)		—		8,378
Corporate bonds		3,028		—		(13	)		—		3,015
Total Investments	$	36,539	$	—	$	(52	)	$	—	$	36,487

The Company did not record a provision for credit losses on any AFS securities for either the three months ended March 31, 2023 or March 31, 2022. No securities held by the Company were delinquent on contractual payments as of March 31, 2023 and December 31, 2022, nor were any securities placed on non-accrual status for the three and twelve month periods then ended, respectively. Interest on investments is recognized as interest income in the consolidated statements of operations and comprehensive loss. All investments held as of March 31, 2023 were classified as AFS securities and had contractual maturities of less than one year.

The following table summarizes gross realized gains and losses from sales of AFS securities for the periods indicated:

	THREE MONTHS ENDED MARCH 31,
	2023		2022
Gross realized gains from sales of AFS securities	$	44	$	—
Gross realized losses from sales of AFS securities		—		—
Losses from sales of AFS securities, net	$	44	$	—

Information pertaining to AFS securities with gross unrealized gains (losses) as of March 31, 2023 and December 31, 2022, for which the Company did not recognize a provision for credit losses under the current expected credit loss methodology, aggregated by investment category and length of time that individual securities had been in a continuous loss position, is as follows:

			MARCH 31, 2023 - LESS THAN 12 MONTHS
	# OF HOLDINGS		GROSS UNREALIZED GAINS		FAIR VALUE
Commercial paper		11	$	—	$	16,308
U.S. treasury securities		4		24		5,957
Corporate bonds		1		4		1,500
		16	$	28	$	23,765

11

			DECEMBER 31, 2022 - LESS THAN 12 MONTHS
	# OF HOLDINGS		GROSS UNREALIZED GAINS			FAIR VALUE
Commercial paper		17	$	—		$	25,094
U.S. treasury securities		5		(39	)		8,378
Corporate bonds		2		(13	)		3,015
		24	$	(52	)	$	36,487

The Company does not intend to sell these investments and has determined based upon available evidence that it is more likely than not that the Company will not be required to sell each security before the expected recovery of its amortized cost basis. As a result, the Company did not recognize an ACL on these investments as of March 31, 2023 or December 31, 2022. The causes of the impairments listed in the tables above by category are as follows as of March 31, 2023 and December 31, 2022:

1.Corporate bonds – The securities with unrealized losses in this portfolio have contractual terms that generally do not permit the issuer to settle the security at a price less than the current par value of the investment. The decline in market value of these securities is attributable to changes in interest rates and not credit quality.

2.U.S. treasury securities – The securities with unrealized losses in this portfolio have contractual terms that generally do not permit the issuer to settle the security at a price less than the current par value of the investment. The decline in market value of these securities is attributable to changes in interest rates and not credit quality. Additionally, these securities are implicitly guaranteed by the U.S. government or one of its agencies.

4. Fair Value Measurements

The following table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis (in thousands):

	FAIR VALUE MEASUREMENTS AS OF MARCH 31, 2023
	LEVEL 1		LEVEL 2		LEVEL 3		TOTAL
Assets:
Money market funds	$	9,014	$	—	$	—	$	9,014
U.S. treasury securities		5,957		—		—		5,957
Commercial paper		—		16,308		—		16,308
Corporate bonds		—		1,500		—		1,500
Total Assets	$	14,971	$	17,808	$	—	$	32,779

	FAIR VALUE MEASUREMENTS AS OF DECEMBER 31, 2022
	LEVEL 1		LEVEL 2		LEVEL 3		TOTAL
Assets:
Money market funds	$	19,881	$	—	$	—	$	19,881
U.S. treasury securities		8,378		—		—		8,378
Commercial paper		—		25,094		—		25,094
Corporate bonds		—		3,015		—		3,015
Total Assets	$	28,259	$	28,109	$	—	$	56,368

The Company classifies its money market funds and U.S. treasury securities as Level 1 assets since it measures fair value using quoted prices in active markets for identical assets. The Level 2 assets include commercial paper and corporate bonds and are valued based on quoted prices for similar assets in active markets and inputs other than quoted prices that are derived from observable market data. The Company did not hold any Level 3 assets during the periods presented.

The Company evaluates transfers between levels at the end of each reporting period. There were no transfers between Level 1 and Level 2 assets during the periods presented.

5. Leases

The Company has an operating lease for approximately 33,518 square feet (the “Pod 4 Portion”), approximately 54,666 square feet (the “Pod 5 Portion”), and approximately 17,150 square feet ("Pod 3 Portion") of a manufacturing facility located in Andover, Massachusetts that also serves as its corporate headquarters. This lease expires in December 2036 and the Company has two options to extend the term of the lease for a period of ten years each. As of March 31, 2023, the Company had not exercised its options to extend the lease term for either lease and did not consider it reasonably certain that these options would be exercised. The Company agreed to

12

provide the landlord with a $3.4 million letter of credit as support for its obligations under the Andover facility lease. The lease provides a lease incentive in the form of reimbursable leasehold improvements of $14.9 million. Due to the unpredictability of the payout of leasehold improvement reimbursements, the right-of-use asset will be adjusted on a prospective basis to reflect any payments relating to the lease incentive as construction related to these improvements is performed over the life of the lease. As of March 31, 2023, the Company had capitalized $38.1 million of leasehold improvement costs, of which $14.4 million was reimbursed through the lease incentive. The lease payments include fixed base rent payments and variable rents for certain shared facility operating and other costs.

The Company was also party to an operating lease in Cambridge, Massachusetts, which served as its corporate headquarters until September 2022. On September 13, 2022, the Company executed an amendment to its Cambridge lease which accelerated the lease termination date to November 15, 2022, from the previous date of January, 2024. In connection with this amendment, the Company remeasured the remaining lease liability and right-of-use-asset and recognized a gain of $0.5 million, which was included as a reduction of operating expenses in the consolidated statements of operations and comprehensive loss during the three months ended December 31, 2022.

During the three months ended March 31, 2023, the Company recognized total rent expense related to the leases described above of $1.2 million, compared to $1.6 million in the same period of 2022. The amount of variable rent expense and rent for short-term leases for the three months ended March 31, 2023 and 2022 was $0.6 million and $0.9 million, respectively.

Other supplemental information related to leases is as follows:

	AS OF AND FOR THREE MONTHS ENDED MARCH 31,
	2023			2022
Weighted average remaining lease term	14 years			13.5 years
Weighted average discount rate		7.7	%		8.1	%
Cash paid for amounts included in the measurement of lease liabilities (in thousands)	$	1,210		$	1,505

Maturities of operating lease liabilities are as follows as of March 31, 2023 (in thousands):

Year	Amount
2023	$	3,640
2024		4,995
2025		5,145
2026		5,299
2027		5,458
Thereafter		57,114
Total lease payments		81,651
Less imputed interest		(32,940	)
Total lease liabilities	$	48,711
Current portion		1,187
Long-term portion		47,524

6. Impairment of Long-lived Assets

The Company’s long-lived assets consist of property and equipment and an operating lease, right-of-use asset associated with its manufacturing facility in Andover, Massachusetts. Long-lived assets that are classified as held for use are tested for recoverability whenever events or changes in circumstances indicate that the Company's carrying value of the assets may not be fully recoverable. The Company identified circumstances that indicated that its long-lived assets may not be recoverable as of March 31, 2023. Specifically, these circumstances included changes in the market price of the asset group, continued losses and a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. As a result, the Company performed a recoverability test by comparing the future cash flows attributable to the asset group to the carrying value of the long-lived assets. Based on this evaluation, the Company determined that the long-lived assets were no longer recoverable and recorded an impairment charge of $14.6 million by comparing the carrying amount to the estimated fair value.

13

Under ASC 820, Fair Value Measurement, a fair value measurement of a nonfinancial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. Therefore, fair value is a market-based measurement and not an entity-specific measurement. It is determined based on assumptions that market participants would use in pricing the asset or liability. The exit price objective of a fair value measurement applies regardless of the reporting entity’s intent and/or ability to sell the asset or transfer the liability at the measurement date. The fair value estimate of the Company’s property and equipment used a combination of methods, including the cost and market approaches. The fair value of the right of use asset and leasehold improvements were estimated using the discounted cash flow method of the income approach. Cash flows were estimated using a market rent for comparable laboratory and manufacturing facilities discounted at a market discount rate over the remaining term of the Company's lease. The Company continues to classify its long-lived assets as held for use. If circumstances change as a result of the Company's decision to prioritize preservation of capital or if the assets are not transferred in an orderly transaction between market participants, the value obtained could be different than the Company’s estimates and such differences could be material.

7. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

	MARCH 31,  2023		DECEMBER 31, 2022
Accrued research and development costs	$	2,242	$	2,661
Accrued leasehold improvement costs		1,446		4,079
Accrued compensation		1,291		2,612
Accrued professional fees		846		752
Accrued interest expense		208		198
Miscellaneous accrued expenses		591		646
Total accrued expenses and other current liabilities	$	6,623	$	10,948

8. Term Loan, Net of Debt Discount

On April 1, 2022, the Company entered into a loan and security agreement (the "Loan Agreement") with K2 HealthVentures LLC ("K2HV"), and together with any other lender from time to time party thereto, the “Lenders”), K2HV as administrative agent for the Lenders, and Ankura Trust Company, LLC, as collateral agent for the Lenders. The Loan Agreement provided for term loan commitments of up to $45.0 million in four potential tranches, of which $20.0 million was funded on April 1, 2022. The timing and availability of the other tranche term loan commitments was subject to various conditions.

The facility carried a 48-month term with interest only payments for 24 months. Subsequent to the interest-only period, the Company was required to make equal monthly payments of principal plus interest until the loans were scheduled mature on April 1, 2026. The term loans bore a variable interest rate equal to the greater of 7.75% and (ii) the sum of (A) the prime rate last quoted in The Wall Street Journal (or a comparable replacement rate if The Wall Street Journal ceases to quote such rate) and (B) 4.25%. The variable interest rate at March 31, 2023 was 12.25%. Upon final payment or prepayment of the loans, the Company was required to pay a final payment equal to 5.45% of the loans borrowed (the "Final Fee"), which is being accrued to interest expense over the term of the loan. The Company had an option to prepay the loans in whole, subject to a prepayment fee of 3% prior to the first anniversary of April 1, 2022, 2% after the first anniversary but prior the second anniversary of the funding date, and 1% thereafter if prior to the maturity date. As described in Note 13, subsequent to March 31, 2023, the Company repaid in full the $20.0 million owed, together with $1.6 million in accrued interest and fees, and terminated the Loan Agreement.

The Lenders could have elected at any time prior to the full repayment of the term loans to convert any portion of the principal amount of the term loans then outstanding, up to an aggregate of $5.0 million in principal amount, into shares of the Company's common stock at a conversion price of $2.2689, subject to customary beneficial ownership limitations.

The Loan Agreement contained customary representations and warranties, events of default and affirmative and negative covenants, including covenants that limited or restricted the Company’s ability to, among other things, dispose of assets, make changes to the Company’s business, management, ownership or business locations, merge or consolidate, incur additional indebtedness, pay dividends or other distributions or repurchase equity, make investments, and enter into certain transactions with affiliates, in each case subject to certain exceptions. As security for its obligations under the Loan Agreement, the Company granted the Lenders a first priority security interest on substantially all of the Company’s assets (other than intellectual property), subject to certain exceptions.

In connection with entering into the Loan Agreement, the Company also issued to K2HV a warrant to purchase a number of shares of Common Stock equal to the quotient of 2.95% of the aggregate funded term loan amount divided by $1.5126, the exercise price, up to

14

a maximum of 877,627 shares (the "Warrant"). The Warrant expires on April 1, 2032. The Warrant has been classified within equity since it (i) is indexed to the Company’s own equity and (ii) meets the equity classification conditions. As of March 31, 2023, the Warrant was exercisable for 390,056 shares of common stock. The Company allocated the proceeds between the term loan and the Warrant on a relative fair value basis, resulting in a discount on the term loan. The Warrant provides the Lenders with certain piggyback registration rights with respect to the shares of common stock issuable upon exercise of the Warrant.

The Company incurred fees and issuance costs associated with the Loan Agreement of $0.5 million. The Company recorded contractual interest expense related to the Loan Agreement of $0.6 million and additional interest expense related to the amortization of the debt discount and issuance costs and accretion of the Final Fee of $1.1 million in the three months ended March 31, 2023. The effective interest rate at March 31, 2023, which includes the non-cash interest components noted above, was 34.0%.

Future principal debt payments on the Loan Agreement as of March 31, 2023 are as follows (in thousands):

	MARCH 31, 2023
2023	$	20,000
2024		—
2025		—
2026		—
2027		—
Total principal payments		20,000
Final Fee		1,090
Total principal payments and Final Fee		21,090
Less: Unamortized debt discount and debt issuance costs		(277	)
Less: Unaccreted Final Fee		(275	)
Term loan, current	$	20,538

9. Common Stock

The Company’s amended and restated certificate of incorporation provides for 100,000,000 shares designated as common stock with a par value of $0.0001 per share as part of its authorized capital.

Each share of the Company's common stock is entitled to one vote. The holders of shares of common stock are entitled to receive dividends, if and when declared by the Board of Directors.

Restricted Stock

The Company issued restricted stock to its founders and certain of its officers. In general, the shares of restricted stock vested over a four-year period, with 25% of the shares vesting after one year, followed by monthly vesting over the remaining three years. As of March 31, 2023, all restricted stock awards were fully vested.

Common Stock Warrants

The Company issued warrants to purchase common stock in connection with a preferred stock financing in March 2016. These common stock warrants allow for the holders to purchase 71,544 shares of common stock at $1.21 per share. As of March 31, 2023, 2022, all of the common stock warrants were fully exercisable. The common stock warrants expire in 2031. As described in Note 8, on April 1, 2022, the Company issued a warrant to K2HV to purchase 390,056 shares of common stock. This warrant expires in 2032.

Reserved Shares

The Company has reserved the following shares of common stock for the conversion or exercise of the following securities:

	MARCH 31, 2023		DECEMBER 31, 2022
Exercise of common stock warrants		949,171		949,171
Exercise of options to purchase common stock		4,558,988		4,391,207
Shares available for issuance under equity incentive plans		2,512,467		2,680,248
Shares available for issuance under term loan conversion		2,203,711		2,203,711
Total		8,020,626		10,224,337

15

10. Equity Incentive Plans

The Company adopted the 2016 Equity Incentive Plan, as amended (the “2016 Plan”) on March 31, 2016. The 2016 Plan provided for the granting of stock options, restricted stock awards, restricted stock units, stock appreciation rights and other stock awards to employees, directors and non-employees. All option awards were granted with an exercise price equal to or greater than the market price of the Company’s stock at the date of grant. Option awards generally vest over three to four years. Certain option awards provide for accelerated vesting if there is a change in control as defined in the 2016 Plan. The provisions of the 2016 Plan allow for early exercises for options that have not yet vested. Early exercises have historically been for a de minimis number of shares.

On September 23, 2020, the Company adopted the 2020 Equity Incentive Plan (the “2020 Plan”), which became effective on October 1, 2020 and serves as the successor to the 2016 Plan. The 2020 Plan authorizes the award of stock options, restricted stock awards, stock appreciation rights, restricted stock units, cash awards, performance awards and stock bonus awards. The number of shares reserved for issuance under the 2020 Plan increases automatically on January 1 of each fiscal year, through and including January 1, 2030, by the number of shares equal to 5% of the aggregate number of outstanding shares of common stock as of the immediately preceding December 31, or a lesser number of shares as may be determined by the board of directors (or an authorized committee thereof). On January 1, 2023, the number of shares reserved for issuance under the 2020 Plan increased by 1,298,656 shares of common stock.

At March 31, 2023, there were 2,512,467 shares of common stock available for issuance under the 2020 Plan.

On September 23, 2020, the Company adopted the 2020 Employee Stock Purchase Plan (the "ESPP"), which became effective on October 1, 2020. The Company initially reserved 280,000 shares of common stock for sale under the ESPP. The aggregate number of shares reserved for sale under the ESPP increases automatically on January 1st of each fiscal year through and including January 1, 2030, by the number of shares equal to the lesser of (a) 1% of the total number of shares of common stock outstanding on the last day of the fiscal year prior to the date of such automatic increase and (b) 560,000 shares, provided that prior to the date of any such increase, the board of directors may determine a lesser number of shares for such increase. On January 1, 2023, the the number of shares reserved for issuance under the ESPP increased by 259,731 shares of common stock. The ESPP provides for six-month offering periods commencing on January 1 and ending on June 30 and commencing on July 1 and ending on December 31 of each calendar year. The Company began its first offering period on January 1, 2022, and issued 89,112 shares of common stock on June 30, 2022 at the end of the first offering period. The Company commenced its second offering period on July 1, 2022, and issued 122,228 shares of common stock on December 31, 2022 at the end of the second offering period. The Company commenced an offering period on January 1, 2023 that is scheduled to end on June 30, 2023.

Total stock-based compensation was classified as follows on the unaudited interim condensed consolidated statements of operations (in thousands):

	THREE MONTHS ENDED MARCH 31,
	2023		2022
General and administrative	$	901	$	1,262
Research and development		566		718
Total stock-based compensation	$	1,467	$	1,980

In December 2020, the Company granted an employee an option to purchase 113,000 shares of the Company’s common stock with an exercise price per share equal to the fair value of the Company’s common stock on the date of grant. This grant is included in the outstanding options in the summary table below. The option grant includes three separate tranches (each tranche representing one-third of the total grant) that will each vest four years from the date of grant. This option grant and its tranches are subject to accelerated vesting in the event that the Company achieves certain defined milestones related to the Company’s manufacturing efforts. The Company recognized stock-based compensation expense of $0.2 million related to this grant in the three months ended March 31, 2023.

16

A summary of option activity for the three months ended March 31, 2023 is presented below:

	SHARES			WEIGHTED AVERAGE EXERCISE PRICE		WEIGHTED- AVERAGE REMAINING CONTRACTUAL TERM (YEARS)		AGGREGATE INTRINSIC VALUE (IN THOUSANDS)
Outstanding at December 31, 2022		4,391,207		$	7.57
Granted		347,609		$	0.39
Exercised		—			—
Canceled, expired or forfeited		(179,828	)	$	6.53
Outstanding at March 31, 2023		4,558,988		$	7.07		7.85	$	—
Vested and expected to vest at March 31, 2023		4,558,988		$	7.07		7.80	$	—
Exercisable at March 31, 2023		2,225,663		$	7.55		6.88	$	—

The weighted average grant date fair value per share of options granted to employees, directors and non-employee consultants during the three months ended March 31, 2023 and 2022 was $0.39 and $1.54, respectively. There were no options exercised during the three months ended March 31, 2023. The total intrinsic value of options exercised was $0.0 million for the three months ended March 31, 2023. Total unrecognized stock-based compensation expense related to options was $9.2 million at March 31, 2023, and is expected to be recognized over a weighted-average period of 2.4 years.

11. Commitments and Contingencies

The Company is not currently party to any material legal proceedings. At each reporting date, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company expenses costs related to such legal proceedings as incurred.

12. Net Loss Per Share

The following securities that could potentially dilute basic net loss per share in the future were not included in the computation of diluted net loss per share for the periods presented, because to do so would have been antidilutive:

	THREE MONTHS ENDED MARCH 31,
	2023		2022
Outstanding stock options		4,558,988		4,584,601
Shares expected to be purchased under employee stock purchase plan		156,898		62,243
Common stock warrants		461,600		71,544
Total		5,177,486		4,718,388

13. Subsequent Events

The Company has evaluated subsequent events from the balance sheet date through the date on which these financial statements were issued and identified the following:

Termination of Loan Agreement

On May 12, 2023, the Company repaid in full all of its outstanding obligations and other fees under the Loan Agreement (see Note 8), including $20.0 million of principal and $1.6 million of accrued interest and related fees and expenses, and the Loan Agreement was terminated.

17

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion of our financial condition and results of operations in conjunction with our unaudited interim condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q. In addition to historical financial information, this discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties, such as statements of our plans, objectives, expectations, intentions and belief. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the section titled "Risk Factors" under Part II, Item 1A, below and under "Part I, Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission, or the SEC, on March 24, 2023.

These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.

Introduction

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, is provided in addition to the accompanying unaudited interim condensed consolidated financial statements and notes to assist readers in understanding our results of operations, financial condition, and cash flows. Our MD&A is organized as follows:

Overview - A discussion of our business and overall analysis of financial and other highlights in order to provide context for the remainder of MD&A.

Results of Operations - An analysis of our financial results comparing the three months ended March 31, 2023 to the three months ended March 31, 2022.

Liquidity and Capital Resources - An analysis of changes in our unaudited interim condensed consolidated balance sheets and cash flows, and discussion of our financial condition and potential sources of liquidity.

Critical Accounting Policies and Significant Judgments and Estimates - A discussion of critical accounting policies and those that require us to make subjective estimates and judgments.

Overview

We are a preclinical-stage biopharmaceutical company focused on the intravenous administration of self-amplifying RNA to transform outcomes for cancer patients. We believe that our product candidates have the potential to bring significant benefit to patients who are currently underserved by approved immuno-oncology therapies, including other viral immunotherapies and immune checkpoint inhibitors.

Our Self-Amplifying RNA Platform

Our self-amplifying RNA immunotherapy platform improves upon key characteristics of this therapeutic class to enhance systemic activity. Our approach involves encapsulating genomes of RNA viruses known to kill cancer cells within a lipid nanoparticle, or LNP, creating a selectively self-amplifying vRNA immunotherapy to be administered intravenously, or IV. We believe this approach has the potential to avoid the rapid immune clearance caused by neutralizing antibodies otherwise observed to date with IV-administered oncolytic viruses, which is thought to have limited the effectiveness of RNA viruses in the clinic. Once inside the tumor, the viral RNA genome is first amplified via transcription and then instructs tumor cells to synthesize proteins via translation that then self assemble into infectious virions, which thereafter causes an immunogenic tumor cell lysis before daughter virions infect nearby tumor cells.

Our two product candidates from our self-amplifying RNA platform are ONCR-021 and ONCR-788. ONCR-021, our lead product candidate, is an IV administered viral RNA encoding an optimized genome of Coxsackievirus 21A, or CVA21, encapsulated within an LNP. Subject to receipt of additional financing, we plan to submit an investigational new drug application, or IND, to the U.S. Food and Drug Administration, or FDA, in mid-2023 to evaluate ONCR-021 in multiple indications, including non-small cell lung cancer, renal cell carcinoma, melanoma, and anaplastic thyroid cancer, both as monotherapy and in combination with immune checkpoint inhibitors and other cancer treatments. We are also developing ONCR-788, which encodes for a modified version of the Seneca Valley Virus, or SVV. Both CVA21 and SVV have extensive clinical experience and favorable safety profiles when administered IV. Following the IND submission for ONCR-021 and pending the receipt of additional financing, which is not certain at this time, we may submit an IND for ONCR-788 to enable its development in small cell lung cancer, neuroendocrine prostate and other neuroendocrine cancers, both as a single agent and in combination with immune checkpoint inhibitors and other cancer treatments.

18

Alongside our self-amplifying RNA platform, we are also developing a proprietary LNP platform intended to efficiently deliver nucleic acids after both intramuscular and IV administration.

Our HSV Platform

Our product candidate ONCR-177 is an intratumorally, or iTu, administered viral immunotherapy based on our oncolytic HSV-1 platform, which leverages the Herpes Simplex Virus type 1, or HSV-1, a virus which has been clinically proven to effectively treat certain cancers. In November 2022, we announced our decision to discontinue our Phase 1 clinical trial of ONCR-177. We plan to present the results of the Phase 1 clinical trial in conjunction with a medical conference in 2023. Further development product candidates from our HSV platform, including ONCR-719, an armed HSV-1 engineered for viral entry via the EGFR receptor for the treatment of glioblastoma multiforme, or GBM, is dependent on our ability to obtain additional financing or enter into a partnership, collaboration, strategic alliance or licensing arrangement with a third party.

Manufacturing

We plan to manufacture our product candidates at our manufacturing facility in Andover, Massachusetts. The facility is approximately 105,000 square feet, of which 41,000 square feet are specifically dedicated to processes that are compliant with good manufacturing practices, or GMP. We began process development activities at the facility in 2021 and, as of November 2022, construction was complete and the facility is currently fully operational. We have completed initial engineering batches of ONCR-021 at the facility, with additional engineering batches planned for the first half of 2023.

Recent Developments

On April 1, 2022, we entered into a Loan and Security Agreement with K2 HealthVentures LLC, or K2HV, as lender and administrative agent, and Ankura Trust Company, LLC, as collateral agent, or the Loan Agreement, which enabled us to borrow up to an aggregate of $45.0 million upon the achievement of certain time-based and regulatory milestones. We borrowed $20.0 million under the Loan Agreement concurrent with its execution.

On May 12, 2023, we repaid in full all of our outstanding obligations and other fees under the Loan Agreement, including $20.0 million of principal and $1.6 million of accrued interest and related fees and expenses, and the Loan Agreement was terminated.

Financial

Since inception in 2015, our operations have focused on organizing and staffing our company, business planning, raising capital, acquiring and developing our technology, establishing our intellectual property portfolio, identifying potential product candidates and undertaking preclinical studies, commencing a clinical trial, and manufacturing scale-up activities. We do not have any products approved for sale and have not generated any revenue from product sales. We will not generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for our product candidates. In addition, if we obtain regulatory approval for our product candidates and do not enter into a third-party commercialization partnership, we expect to incur significant expenses related to developing our commercialization capability to support product sales, marketing, manufacturing and distribution activities.

We have funded our operations primarily through the sale of redeemable convertible preferred stock and from our initial public offering, or IPO, of our common stock in 2020 and a follow-on public offering of common stock in 2021. From inception through March 31, 2023, we raised an aggregate of $306.3 million in gross proceeds from sales of our equity securities.

At-the-Market Program

In November 2021, we entered into an Open Market Sale AgreementSM, or the Sales Agreement, with Jefferies LLC, or Jefferies, relating to the sale of shares of our common stock. In accordance with the terms of the Sales Agreement, we may offer and sell shares of our common stock having an aggregate offering price of up to $50,000,000 from time to time through Jefferies, acting as agent, in a series of one or more at-the-market equity offerings. Jefferies is not required to sell any specific amount but acts as our agent using commercially reasonable efforts consistent with its normal trading and sales practices. Shares sold pursuant to the Sales Agreement will be sold pursuant to a shelf registration statement on Form S-3 which was declared effective by the SEC on November 12, 2021. Our common stock will be sold at prevailing market prices at the time of the sale, and as a result, prices may vary. As of March 31, 2023, we have not sold any shares under the Sales Agreement.

Since inception, we have incurred significant operating losses. Our net losses were $30.9 million (including a non-cash charge of $14.6 million related to the impairment of our long-lived assets) and $17.8 million for the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023 we had an accumulated deficit of $302.9 million. We expect to continue to incur significant and increasing expenses and operating losses for the foreseeable future.

19

We will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of public or private equity offerings and debt financings or other sources, such as potential collaboration agreements, strategic alliances and licensing arrangements. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on acceptable terms, or at all. Our failure to raise capital or enter into such agreements as and when needed could have a material adverse effect on our business, results of operations and financial condition.

As of March 31, 2023, we had aggregate cash and cash equivalents and investments of $45.0 million. We believe that our existing cash and cash equivalents and investments, following the full prepayment of our debt in May 2023, will enable us to fund our operating expenses and capital expenditure requirements into the third quarter of 2023.

Components of Operating Results

Research and Development Expenses

Research and development expenses consist primarily of costs incurred for our research and development activities, including our product candidate discovery efforts, preclinical and clinical studies under our research programs, which include:

•employee-related expenses, including salaries, bonuses, benefits and stock-based compensation expense for our research and development personnel;

•costs of funding research performed by third parties that conduct research and development and preclinical and clinical activities on our behalf;

•costs of manufacturing drug product and drug supply related to our current or future product candidates;

•costs of conducting preclinical studies and clinical trials of our product candidates;

•consulting and professional fees related to research and development activities, including stock-based compensation to non-employees;

•costs of maintaining our laboratory, including purchasing laboratory supplies and non-capital equipment used in our preclinical studies;

•costs related to compliance with clinical regulatory requirements;

•facility costs and other allocated expenses, which include expenses for rent and maintenance of facilities, insurance, depreciation and other supplies; and

•fees for maintaining licenses and other amounts due under our third-party licensing agreements.

Research and development costs are expensed as they are incurred. Costs for certain activities are recognized based on an evaluation of the progress to completion of specific tasks using data such as information provided to us by our vendors and analyzing the progress of our preclinical and clinical studies or other services performed. Significant judgment and estimates are made in determining the accrued expense balances at the end of any reporting period.

We track external research and development costs on a program-by-program basis beginning, with respect to each program, upon our internal nomination of a candidate in that program for further preclinical and clinical development. For example, ONCR-021 and ONCR-788 were both nominated as candidates in May 2021, at which time we began tracking their external research and development costs. External costs include fees paid to consultants, contractors and vendors, including contract manufacturing organizations, or CMOs, and clinical research organizations, or CROs, in connection with our preclinical, clinical and manufacturing activities and license milestone payments related to candidate development. We do not allocate employee costs, costs associated with our discovery efforts, costs incurred for laboratory supplies, and facilities, including depreciation, or other indirect costs, to specific product development programs because these costs are deployed across multiple product development programs and, as such, are not separately classified.

The successful development of our product candidates is highly uncertain. We cannot reasonably estimate or know the nature, timing, and estimated costs of the efforts that will be necessary to complete development of our current or future product candidates. We are also unable to predict when, if ever, material net cash inflows will commence from the sale of our product candidates, if they are approved. This is due to the numerous risks and uncertainties associated with developing product candidates, including the uncertainty of:

•the scope, rate of progress, and expenses of our ongoing research activities as well as any preclinical studies and clinical trials and other research and development activities;

•establishing an appropriate safety profile;

20

•successful enrollment in and completion of clinical trials;

•whether our product candidates show safety and efficacy in our clinical trials;

•receipt of marketing approvals from applicable regulatory authorities;

•establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers;

•obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our product candidates;

•commercializing product candidates, if and when approved, whether alone or in collaboration with others; and

•continued acceptable safety profile of the products following any regulatory approval.

A change in the outcome of any of these variables with respect to the development of our current and future product candidates would significantly change the costs and timing associated with the development of those product candidates.

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect research and development costs to increase significantly for the foreseeable future as we commence clinical trials and continue the development of our current and future product candidates. However, we do not believe that it is possible at this time to accurately project expenses through commercialization. There are numerous factors associated with the successful commercialization of any of our product candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development. Additionally, future commercial and regulatory factors beyond our control will impact our clinical development programs and plans.

General and Administrative Expenses

General and administrative expenses include salaries, bonuses and other compensation-related costs, including stock-based compensation, for personnel in executive, finance and accounting, business development, operations and administrative roles. Other significant costs include professional service and consulting fees including legal fees relating to intellectual property and corporate matters, audit and tax fees, recruiting costs, costs for consultants who we utilize to supplement our personnel and insurance costs. General and administrative expenses also include travel costs, facility and office-related costs that are not included in research and development expenses, as well as depreciation and amortization.

We anticipate that our general and administrative expenses will increase in the future as our business expands to support expected growth in research and development activities, including our future clinical programs. These increases will likely include increased costs related to the hiring of additional personnel and fees to outside service providers, among other expenses. We also anticipate increased expenses associated with being a public company, including costs for audit, legal, regulatory and tax-related services related to compliance with the rules and regulations of the SEC and Nasdaq listing standards, director and officer insurance premiums, and investor relations costs. In addition, if we obtain regulatory approval for any of our product candidates and do not enter into a third-party commercialization collaboration, we expect to incur significant expenses related to building a sales and marketing team to support product sales, marketing and distribution activities.

Impairment of long-lived assets

As of March 31, 2023, we identified circumstances that indicated that the value of our long-lived assets may not be recoverable at the carrying values reflected on our balance sheet as of such date. These circumstances included changes in the market price of the asset group, our continued losses and a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. As a result, we performed a recoverability evaluation by comparing the future cash flows attributable to the asset group to the carrying value of the long-lived assets. Based on this evaluation, we determined that the long-lived assets were no longer recoverable and recorded an impairment charge of $14.6 million based on the difference between the carrying amount and the estimated fair value of the assets. The fair value was estimated using a combination of methods, including consideration of replacement costs, liquidation values, and market rates that market participants would consider the highest and best use of the asset.

Other (Expense) Income

Other (expense) income consists primarily of interest expense associated with our Loan Agreement with K2HV and interest income earned on our investments and cash equivalents.

Results of Operations

The following table summarizes our results of operations for the periods indicated.

21

	THREE MONTHS ENDED MARCH 31,						CHANGE
	2023			2022			$			%
	(in thousands, except percentages)
Operating expenses:
Research and development	$	10,630		$	12,469		$	(1,839	)		-15	%
General and administrative		4,499			5,349			(850	)		-16	%
Total operating expenses		15,129			17,818			(2,689	)		-15	%
Impairment loss		(14,575	)		—			(14,575	)		—
Loss from operations		(29,704	)		(17,818	)		(11,886	)		-67	%
Total other (expense) income, net		(1,195	)		38			(1,233	)		-3244	%
Net loss	$	(30,899	)	$	(17,780	)	$	(13,119	)		-74	%

Three Months Ended March 31, 2023, Compared to the Three Months Ended March 31, 2022

Research and Development Expenses

The table below summarizes our research and development expenses by product candidate or development program and unallocated research and development expenses for each of the periods presented:

	THREE MONTHS ENDED MARCH 31,
	2023		2022		CHANGE
	(in thousands)
Direct external expenses by program
ONCR-177	$	620	$	3,127	$	(2,507	)
ONCR-021		1,232		925		307
ONCR-788		—		46		(46	)
Platform development, early stage research and unallocated    expenses:
Employee compensation and related		3,721		4,600		(879	)
External research, development and consulting		1,950		284		1,666
Laboratory supplies		69		958		(889	)
Facility-related		1,802		1,793		9
Other expenses		1,236		736		500
Total research and development	$	10,630	$	12,469	$	(1,839	)

Research and development expenses decreased from $12.5 million for the three months ended March 31, 2022 to $10.6 million for the three months ended March 31, 2023. The decrease of $1.9 million, or 15%, was primarily the result of:

•a $2.5 million decrease in direct external expenses for ONCR-177 due to this program winding down in the fourth quarter of 2022 and the first quarter of 2023;

•a $0.3 million increase in direct external expenses for ONCR-021, attributable to additional pharmacology, toxicology and translational medicine costs associated with pre-clinical development work to support our planned IND filing in mid-2023;

•a $0.9 million decrease in employee compensation costs, primarily due to employee turnover and decreased fulltime headcount in 2023 as compared to 2022;

•a $1.7 million increase in external research, development and consulting costs as we engaged third parties to perform additional functions due to employee turnover and decreased fulltime headcount;

•a $0.9 million decrease in laboratory supply costs due to lower consumption of supplies as a result of the discontinuation of the ONCR-177 program in the later part of 2022; and

•a $0.5 million increase in other expenses, primarily driven by the increase in depreciation of leasehold improvements placed into service at the Andover facility during 2022.

General and Administrative Expenses

22

	THREE MONTHS ENDED MARCH 31,
	2023		2022		CHANGE
	(in thousands)
Employee compensation and related	$	2,171	$	2,535	$	(364	)
Professional service and consultant fees		1,405		1,922		(517	)
Facility-related		472		301		171
Other expenses		451		591		(140	)
Total general and administrative expenses	$	4,499	$	5,349	$	(850	)

General and administrative expenses decreased from $5.3 million for the three months ended March 31, 2022, to $4.5 million for the three months ended March 31, 2023. The decrease of $0.8 million, or -15%, was primarily the result of:

•a $0.4 million decrease in employee compensation and related expenses, primarily due to employee turnover and decreased fulltime headcount in 2022 and the first quarter of 2023 as compared to the first quarter of 2022;

•a $0.5 million decrease in professional service and consultant fees primarily related to decreased consultant costs to support our personnel and decreased recruiting costs since our hiring has moderated during 2022 and the first quarter of 2023;

•a $0.2 million increase in facility-related costs primarily due to expansion of our Andover facility in 2022; and

•a $0.1 million decrease in other expenses primarily related to decreased support costs from consolidating our operations into one facility in 2022.

Other (Expense) Income

Other (expense) income for the three months ended March 31, 2023, decreased by $1.2 million compared to the three months ended March 31, 2022. This decrease was primarily driven by the acceleration of the amortization of both the discount and the deferred financing costs and the accrual of the debt exit fee upon the prepayment of our term loan on May 12, 2023. See further discussion of this payoff in Liquidity and Capital Resources and in Note 8 to the Consolidated Financial Statements.

Liquidity and Capital Resources

Cash Flows

	THREE MONTHS ENDED MARCH 31,
	2023			2022
	(in thousands)
Net cash (used in) provided by:
Operating activities	$	(17,447	)	$	(23,437	)
Investing activities		12,955			(1,868	)
Financing activities		—			62
Net decrease in cash and cash equivalents	$	(4,492	)	$	(25,243	)

Operating Activities

Net cash used in operating activities for the three months ended March 31, 2023 was $17.5 million and primarily related to our net loss for the period of $30.9 million, partially offset by non-cash charges consisting primarily of an impairment loss of $14.6 million, depreciation and amortization of $1.1 million, stock-based compensation expense of $1.5 million, $(0.6) million of amortization of premiums/discounts and interest income on our investments, and non-cash interest expense related to our Term Loan of $1.3 million. Our net cash used in operating activities also included a net use of cash of $(4.5) million related to changes in operating assets and liabilities as follows:

•a source of cash of $2.9 million from the reimbursement of certain Andover construction costs through our tenant improvement allowance;

•a net source of cash of $0.7 million due to a decrease in prepaid expenses and other current assets primarily due to services being performed on amounts already paid to vendors; and

•a net use of cash of $8.1 million from decreases in accounts payable and accrued expenses primarily due to the timing of Andover construction invoices.

Investing Activities

23

Net cash used in investing activities for the three months ended March 31, 2023, was $13.0 million, which primarily consisted of net proceeds from the sales and maturities of short-term investments of $13.0 million.

Funding Requirements

We will need to obtain substantial additional funding to support our continuing operations. If we are unable to raise capital when needed or on acceptable terms, we would be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts.

We believe that our existing cash and cash equivalents and investments, following the repayment in full of our debt in May 2023, will enable us to fund our operating expenses and capital expenditure requirements into the third quarter of 2023. We have based this estimate on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect. Our future capital requirements will depend on a number of factors, including:

•the costs of conducting preclinical studies and clinical trials;

•the costs of manufacturing;

•the scope, progress, results and costs of discovery, preclinical development, laboratory testing, and clinical trials for product candidates we may develop, if any;

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

•our ability to establish and maintain collaborations on favorable terms, if at all;

•the achievement of milestones or occurrence of other developments that trigger payments under any license or collaboration agreements we might have at such time;

•the costs associated with the expansion of operations at our Andover facility;

•the costs and timing of future commercialization activities, including product sales, marketing, manufacturing and distribution, for any of our product candidates for which we receive marketing approval;

•the amount of revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval; and

•the costs of preparing, filing and prosecuting patent applications, obtaining, maintaining and enforcing our intellectual property rights, and defending intellectual property-related claims.

Our cash and cash equivalents and investments as of March 31, 2023, will not be sufficient to complete development of our product candidates. Accordingly, we will be required to obtain further funding to achieve our business objectives.

Sources of Liquidity

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of public or private equity offerings and debt financings or other sources, such as potential collaboration agreements, strategic alliances and licensing arrangements. We may also raise additional capital from sales of common stock under our Sales Agreement. To the extent that we raise additional capital through the sale of equity or convertible debt securities, ownership interests of stockholders may be diluted, and the terms of these securities may include liquidation or other preferences that could adversely affect the rights of our common stockholders. Debt financing, if available, may involve agreements that include restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, that could adversely impact our ability to conduct our business.

If we raise funds through potential collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds when needed, we may be required 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.

Critical Accounting Policies and Significant Judgments and Estimates

Our unaudited interim condensed consolidated financial statements and accompanying notes have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these unaudited interim condensed consolidated financial statements requires us to make judgments and estimates that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the unaudited interim condensed consolidated financial statements and the reported amounts of expenses during the reported periods. We base our estimates on historical experience, known trends and events, and various other factors that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. On an ongoing basis, we evaluate our judgments and estimates in light of changes in circumstances, facts,

24

and experience. The effects of material revisions in estimates, if any, will be reflected in the consolidated financial statements prospectively from the date of change in estimates.

There have been no significant changes to our critical accounting policies or other significant judgments and estimates from those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 24, 2023.

Contractual Obligations

As of March 31, 2023, there have been no material changes to our contractual obligations and commitments, consisting of operating lease obligations, from those described in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 24, 2023.

Emerging Growth Company and Smaller Reporting Company Status

We are an ‘‘emerging growth company,’’ or EGC, under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. Section 107 of the JOBS Act provides that an EGC can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Thus, an EGC can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of the delayed adoption of new or revised accounting standards and, therefore, we will be subject to the same requirements to adopt new or revised accounting standards as private entities.

As an EGC, we may also take advantage of certain exemptions and reduced reporting requirements under the JOBS Act. Subject to certain conditions, as an EGC:

•we may present only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations in our annual reports on Form 10-K filed with the SEC;

•we will avail ourselves of the exemption from providing an auditor’s attestation report on our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;

•we will avail ourselves of the exemption from complying with any requirement that may be adopted by the Public Company Accounting Oversight Board, or PCAOB, regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis;

•we may provide reduced disclosure about our executive compensation arrangements in our proxy statements filed with the SEC; and

•we will not require nonbinding advisory votes on executive compensation or stockholder approval of any golden parachute payments.

We will remain an EGC until the earliest of (i) December 31, 2025, (ii) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more, (iii) the date on which we have issued more than $1 billion in non-convertible debt during the previous rolling three-year period, or (iv) the date on which we are deemed to be a large accelerated filer under the Securities Exchange Act of 1934, as amended, or the Exchange Act.

We are also a ‘‘smaller reporting company,’’ meaning that the market value of our stock held by non-affiliates is less than $700 million and our annual revenue was less than $100 million during our most recently completed fiscal year. We may continue to be a smaller reporting company for so long as (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue is less than $100 million during our most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million.

If we are a smaller reporting company at the time we cease to be an EGC, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to EGCs, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

Recent Accounting Pronouncements

Refer to Note 2 in the accompanying notes to our unaudited interim condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q for a discussion of recent accounting pronouncements.

25

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risk related to changes in interest rates. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because of our variable rate debt and our cash equivalents, in the form of a money market fund, are primarily invested in U.S. treasury obligations.

Because of the short-term nature of the investments in our portfolio, an immediate one percentage point change in market interest rates would not have a material impact on the fair market value of our investment portfolio.

Following the repayment in full of our indebtedness in May 2023, we are no longer exposed to interest rate risk with respect to our debt obligations.

We are not currently exposed to significant market risk related to changes in foreign currency exchange rates; however, we have contracted with, and may continue to contract with, foreign vendors that are located in Europe. Our operations may be subject to fluctuations in foreign currency exchange rates in the future.

Inflation generally affects us by increasing our cost of labor and certain supply chain costs. We do not believe that inflation had a material effect on our business, financial condition or results of operations during the three months ended March 31, 2023.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2023, the end of the period covered by this Quarterly Report on Form 10-Q. Based on the evaluation of our disclosure controls and procedures as of March 31, 2023, our principal executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving the desired control objectives. Our management recognizes that any control system, no matter how well designed and operated, is based upon certain judgments and assumptions and cannot provide absolute assurance that its objectives will be met. Similarly, an evaluation of controls cannot provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected.

26

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. We are not currently a party to any material legal proceedings, and we are not aware of any pending or threatened legal proceeding against us that we believe could have an adverse effect on our business, operating results or financial condition.

Item 1A. Risk Factors.

Our business is subject to risks and events that, if they occur, could adversely affect our financial condition and results of operations and the trading price of our securities. Except as provided below, our risk factors as of the date of this Quarterly Report on Form 10-Q have not changed materially from those described in “Part I, Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 24, 2023.

We have recently suffered an impairment loss on our long-lived assets, and in the future we could suffer additional losses if our assets are sold for less than their carrying values.

Following our continued operating losses and a sustained decline in our market capitalization, we concluded that changes in business circumstances indicated that the carrying amount of our long-lived assets, consisting of our property and equipment and right of use asset, may not be fully recoverable. As a result, we performed a recoverability test to compare our forecast of the undiscounted cash flows expected to result from the use and eventual disposition of our long-lived assets to their carrying values on our balance sheet. Following this analysis, we recognized a non-cash impairment loss of $14.6 million for the three months ended March 31, 2023. We are evaluating opportunities to finance our continued operations and the further development of our programs, including, but not limited to, the potential sale or lease of our facilities, property and equipment; however, we can provide no assurances that we will successfully achieve our financing goals, that we will be able do so in accordance with our expected timeline or that we will be able to recover the carrying value of our facilities, property and equipment in a potential transaction. The process of pursuing a plan to sell or lease our facilities may be time-consuming and disruptive to our business operations, and if we are unable to effectively manage the process, our businesses, financial condition, and results of operations could be adversely affected and may result in additional non-cash impairment charges. Any potential transactions, and the related valuations, would be dependent upon various external factors beyond our control, including, among others, market conditions, industry trends, interest of third parties, and the availability of financing to potential buyers on commercially reasonable terms. Such impairments or losses could materially affect our reported net earnings, business, financial condition, results of operations, cash flows or stock price.

If we cannot comply with Nasdaq’s continued listing standards, our common stock could be delisted, which would harm our business and could have an adverse impact on the liquidity and trading price of our common stock and our ability to raise additional capital.

Our common stock is currently listed on The Nasdaq Capital Market and, prior to May 3, 2023, was previously listed on The Nasdaq Global Market. To maintain the listing of our common stock on The Nasdaq Global Market, we were required to satisfy minimum financial and other continued listing requirements and standards, including those related to the price of our common stock. On November 1, 2022, we received a written notice from the Listing Qualifications Department of The Nasdaq Stock Market, or Nasdaq, notifying us that, based on the closing bid price of our common stock being below $1.00 per share for 30 consecutive business days, we no longer complied with Nasdaq’s minimum bid price requirement in Listing Rule 5450(a)(1) for continued listing on The Nasdaq Global Market.

Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), we were provided an initial compliance period of 180 calendar days from receipt of the Notice, or until May 1, 2023, to regain compliance with the minimum bid price requirement. To regain compliance, the bid price for our common stock would need to close at $1.00 per share or more for a minimum of 10 consecutive business days during this 180-day grace period, among other requirements.

On April 26, 2023, we submitted to the Listing Qualifications Department of Nasdaq an application to transfer the listing of our common stock from The Nasdaq Global Market to The Nasdaq Capital Market. On May 2, 2023, we received a notice, or the Extension Notice, from the Listing Qualifications Department informing us that Nasdaq granted us an additional 180 calendar days, or until October 30, 2023 to regain compliance with the minimum closing bid price requirement for continued listing on The Nasdaq Capital Market under Nasdaq Marketplace Rule 5550(a)(2). In connection with the Extension Notice, the listing of our common stock was transferred from the Nasdaq Global Market to the Nasdaq Capital Market, effective as of May 3, 2023. The Extension Notice has no other immediate effect on the listing of our common stock. If at any time before October 30, 2023, the closing bid price of our common stock is at least $1.00 per share for a minimum of 10 consecutive business days, Nasdaq will provide written confirmation

27

that we have achieved compliance with Nasdaq Marketplace Rule 5550(a)(2). If compliance cannot be demonstrated to Nasdaq’s satisfaction by October 30, 2023, Nasdaq will provide written notification that our common stock will be delisted.

We intend to continue actively monitoring the bid price for our common stock between now and October 30, 2023 and will consider available options to resolve the deficiency and regain compliance Nasdaq's marketplace rules. These options include, subject to approval by our Board of Directors and stockholders, effecting a reverse stock split, if necessary. However, there can be no assurance that a reverse stock split, or any other alternatives we may consider to regain compliance with the minimum bid price requirement, would be approved or would result in a sustained higher stock price that would allow us to meet the Nasdaq stock price listing requirements.

There is no assurance that we will regain compliance with Nasdaq's marketplace rules or that our common stock will not be delisted from Nasdaq. If our common stock were to be delisted from Nasdaq and is not eligible for quotation or listing on another market or exchange, trading of our common stock could be conducted only in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board. In such event, it could become more difficult to dispose of, or obtain accurate price quotations for, our common stock, and there would likely also be a reduction in our coverage by securities analysts and the news media, which could cause the price of our common stock to decline further. Also, it may be difficult for us to raise additional capital if we are not listed on a major exchange.

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

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibit Number	Description
3.1	Amended and Restated Certificate of Incorporation of the Registrant (incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-39575), filed with the SEC on October 6, 2020).
3.2	Amended and Restated Bylaws of the Registrant (incorporated herein by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K (File No. 001-39575), filed with the SEC on October 6, 2020).
31.1*	Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1^	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2^	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document)
101.SCH*	Inline XBRL Taxonomy Extension Schema Document
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document

28

101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*	Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed herewith.

^ This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing by the registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

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.

	ONCORUS, INC.
Date: May 22, 2023	By:	/s/ Theodore (Ted) Ashburn
		Theodore (Ted) Ashburn, M.D., Ph.D.
		President, Chief Executive Officer and Director
		(Principal Executive Officer)

	ONCORUS, INC.
Date: May 22, 2023	By:	/s/ Alexander Nolte
		Alexander Nolte
		Interim Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

30

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

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

I, Theodore (Ted) Ashburn, M.D., Ph.D., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Oncorus, 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(s) 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

(c) 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(s) 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: May 22, 2023	By:	/s/ Theodore (Ted) Ashburn, M.D., Ph.D.
		Theodore (Ted) Ashburn, M.D., Ph.D.
		President, Chief Executive Officer and Director
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

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

I, Alexander Nolte, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Oncorus, 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(s) 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

(c) 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(s) 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: May 22, 2023	By:	/s/ Alexander Nolte
		Alexander Nolte
		Interim Chief Financial 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 Oncorus, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

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

Date: May 22, 2023	By:	/s/ Theodore (Ted) Ashburn, M.D., Ph.D.
		Theodore (Ted) Ashburn, M.D., Ph.D.
		President, Chief Executive Officer and Director
		(Principal Executive Officer)

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 Oncorus, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

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

Date: May 22, 2023	By:	/s/ Alexander Nolte
		Alexander Nolte
		Interim Chief Financial Officer
		(Principal Financial Officer)

XML

Cover Page - shares	3 Months Ended
	Mar. 31, 2023	May 20, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Entity Registrant Name	ONCORUS, INC.
Current Fiscal Year End Date	--12-31
Entity Central Index Key	0001671818
Entity Current Reporting Status	Yes
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Filer Category	Non-accelerated Filer
Entity File Number	001-39575
Entity Address, Address Line One	4 Corporate Drive
Entity Address, City or Town	Andover
Entity Address, State or Province	MA
Entity Tax Identification Number	47-3779757
Entity Address, Postal Zip Code	01810
Entity Incorporation, State or Country Code	DE
City Area Code	(857)
Local Phone Number	320-6400
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes
Entity Common Stock, Shares Outstanding		26,094,847
Security Exchange Name	NASDAQ
Trading Symbol	ONCR
Title of 12(b) Security	Common Stock, $0.0001 par value per share

XML

Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 21,217	$ 25,709
Investments	23,765	36,487
Prepaid expenses and other current assets	1,688	2,422
Total current assets	46,670	64,618
Property and equipment, net	34,852	44,360
Right-of-use asset	24,214	32,560
Restricted cash	3,437	3,437
Other assets	580	611
Total assets	109,753	145,586
Current liabilities:
Accounts payable	2,760	5,694
Accrued expenses and other current liabilities	6,623	10,948
Lease liability - current portion	1,187	1,129
Term loan, net of debt discount	20,538	19,436
Total current liabilities	31,108	37,207
Lease liability - net of current portion	47,524	47,854
Total liabilities	78,632	85,061
Stockholders’ equity:
Preferred stock, $0.0001 par value; authorized - 10,000 shares at March 31, 2023 and December 31, 2022; issued and outstanding - no shares at March 31, 2023 and December 31, 2022	0	0
Common stock, $0.0001 par value; authorized - 100,000 shares at March 31, 2023 and December 31, 2022; issued and outstanding - 26,095 shares at March 31, 2023 and December 31, 2022	3	3
Additional paid-in capital	334,050	332,583
Accumulated other comprehensive loss	(24)	(52)
Accumulated deficit	(302,908)	(272,009)
Total stockholders’ equity	31,121	60,525
Total liabilities and stockholders’ equity	$ 109,753	$ 145,586

XML

Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares	Mar. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001
Common Stock, Shares Authorized	100,000,000	100,000,000
Common Stock, Shares Issued	26,095,000	26,095,000
Common Stock, Shares Outstanding	26,095,000	26,095,000

XML

Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Operating expenses:
Research and development	$ 10,630	$ 12,469
General and administrative	4,499	5,349
Total operating expenses	15,129	17,818
Impairment loss	(14,575)	0
Loss from operations	(29,704)	(17,818)
Other (expense) income:
Other expense	0	(38)
Interest (expense) income	(1,195)	76
Total other (expense) income, net	(1,195)	38
Net loss	(30,899)	(17,780)
Net unrealized loss on investments	(28)	(26)
Comprehensive loss	$ (30,927)	$ (17,806)
Net loss per share - basic	$ (1.18)	$ (0.69)
Net loss per share - diluted	$ (1.18)	$ (0.69)
Weighted-average number of common shares outstanding - basic	26,095	25,865
Weighted-average number of common shares outstanding - diluted	26,095	25,865

XML

Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Other Comprehensive Loss [Member]	Accumulated Deficit [Member]
Balance at Dec. 31, 2021	$ 130,022	$ 3	$ 324,620	$ (14)	$ (194,587)
Balance (in shares) at Dec. 31, 2021		25,848,229
Stock-based compensation expense	1,980		1,980
Exercise of stock options to purchase common stock	62		62
Exercise of stock options to purchase common stock (shares)		34,967
Other comprehensive loss	(26)			(26)
Net loss	(17,780)				(17,780)
Balance at Mar. 31, 2022	114,258	$ 3	326,662	(40)	(212,367)
Balance (in shares) at Mar. 31, 2022		25,883,196
Balance at Dec. 31, 2022	60,525	$ 3	332,583	(52)	(272,009)
Balance (in shares) at Dec. 31, 2022		26,094,847
Stock-based compensation expense	$ 1,467		1,467
Exercise of stock options to purchase common stock (shares)	0
Other comprehensive loss	$ 28			28
Net loss	(30,899)				(30,899)
Balance at Mar. 31, 2023	$ 31,121	$ 3	$ 334,050	$ (24)	$ (302,908)
Balance (in shares) at Mar. 31, 2023		26,094,847

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Operating activities:
Net loss	$ (30,899)	$ (17,780)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,099	583
Stock-based compensation	1,467	1,980
Interest expense related to term loan	1,335	0
Amortization of premium/discount on investments	(278)	51
Impairment loss	14,575	0
Non-cash interest income	(232)	(59)
Changes in:
Prepaid expenses and other assets	714	975
Operating lease right-of-use asset	223	523
Tenant Improvement Allowance Reimbursements	2,952	4,511
Accounts payable	(3,214)	(11,940)
Accrued expenses and other current liabilities	(4,918)	(1,807)
Operating lease liability	(271)	(474)
Net cash used in operating activities	(17,447)	(23,437)
Investing activities
Purchase of property and equipment	(73)	(1,868)
Proceeds from sales and maturities of investments	13,028	0
Net cash provided by (used in) in investing activities	12,955	(1,868)
Financing activities
Proceeds from exercise of stock options to purchase of common stock	0	62
Net cash provided by financing activities	0	62
Decrease in cash and cash equivalents	(4,492)	(25,243)
Cash, cash equivalents and restricted cash at beginning of period	29,146	104,189
Cash, cash equivalents and restricted cash at end of period	24,654	78,946
Supplemental disclosure of non-cash investing and financing activities
Purchase of property and equipment in accrued expenses and accounts payable	$ 872	$ 4,965

XML

Nature of the Business and Liquidity

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Nature of the Business and Liquidity

1. Nature of the Business and Liquidity

Oncorus, Inc. (the "Company") is a preclinical-stage biopharmaceutical company focused on the intravenous administration of self-amplifying RNA to transform outcomes for cancer patients. The Company believes that its product candidates have the potential to bring significant benefit to patients who are currently underserved by approved immuno-oncology therapies, including other viral immunotherapies and immune checkpoint inhibitors. The Company's approach involves encapsulating genomes of RNA viruses known to kill cancer cells within a lipid nanoparticle, creating a selectively self-amplifying vRNA immunotherapy to be administered intravenously.

The Company’s operations to date have focused on organization and staffing, business planning, raising capital, acquiring and developing the Company’s technology, establishing the Company’s intellectual property portfolio, identifying potential product candidates and undertaking preclinical studies, commencing a clinical trial and manufacturing scale-up activities. The Company does not have any product candidates approved for sale and has not generated any revenue from product sales. The Company’s product candidates are subject to long development cycles and the Company may be unsuccessful in its efforts to develop, obtain regulatory approval for or market its product candidates.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, possible failure of preclinical studies or clinical trials, the need to obtain marketing approval for its product candidates, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, the need to successfully commercialize and gain market acceptance of any of the Company’s products that are approved and the ability to secure additional capital to fund its operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure, and extensive compliance-related capabilities. Even if the Company’s drug development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

Liquidity

In accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these unaudited condensed consolidated financial statements are issued.

The Company has incurred recurring losses since its inception, including a net loss of $30.9 million for the three months ended March 31, 2023, which included a non-cash charge of $14.6 million related to the impairment of the Company's long-lived assets. In addition, as of March 31, 2023, the Company had an accumulated deficit of $302.9 million. The Company expects to continue to generate operating losses for the foreseeable future.

The Company expects that its cash, cash equivalents and investments as of March 31, 2023, following the repayment in full of its debt in May 2023, will enable it to fund its operating expenses and capital expenditure requirements into the third quarter of 2023, which raises substantial doubt about the Company's ability to continue as a going concern without additional funding. The Company expects to finance its operations through potential public or private equity financings, debt financings, collaboration agreements, strategic transactions and other capital sources or combinations thereof. The future viability of the Company is dependent on its ability to raise additional capital to finance its operations. The Company’s inability to raise capital as and when needed would have a negative impact on its financial condition and ability to pursue its business strategies and operating plan. There can be no assurance that the Company's current operating plan will be achieved or that additional funding will be available on terms acceptable to the Company, or at all.

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

XML

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and as amended by the FASB’s ASUs.

In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements include all normal and recurring adjustments (which consist primarily of accruals and estimates that impact the financial statements) which are considered necessary to present fairly the Company’s financial position as of March 31, 2023, its results of operations for the three months ended March 31, 2023 and 2022, its changes in stockholders’ equity for the three months ended March 31, 2023 and 2022 and its cash flows for the three months ended March 31 2023 and 2022.

The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2022, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K (the "Annual Report") filed with the Securities and Exchange Commission (the “SEC”) on March 24, 2023. The condensed consolidated balance sheet data as of December 31, 2022 presented for comparative purposes was derived from the Company’s audited consolidated financial statements but does not include all disclosures required by GAAP. The results for the three months ended March 31, 2023, are not necessarily indicative of the operating results to be expected for the full year or for any other subsequent interim period.

The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2022, included in its Annual Report. Any changes to the Company’s significant accounting policies are further discussed below.

COVID-19 Pandemic

In response to the COVID-19 pandemic, the Company implemented a work-from-home policy allowing employees who can work from home to do so. The Company has transitioned back to in-office work for the majority of its employees. Work in our office and manufacturing spaces has been organized to reduce risk of COVID-19 transmission. Business travel was previously suspended but is now becoming more frequent, and online and teleconference technology continues to be used regularly. The Company continues to monitor guidance from the CDC and other relevant health regulatory authorities and may adjust its plans and protocols to the extent there are changes in such guidance. As of the date of issuance of these unaudited interim condensed consolidated financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, assumptions and judgments or revise the carrying value of its assets or liabilities. Actual results could differ from those estimates, and any such differences may be material to the Company’s unaudited interim condensed consolidated financial statements.

Going Concern

At each reporting period, the Company evaluates whether there are conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. The Company is required to make certain additional disclosures if it concludes substantial doubt exists and it is not alleviated by the Company’s plans or when its plans alleviate substantial doubt about the Company’s ability to continue as a going concern. See Note 1 (Liquidity).

Principles of Consolidation

The accompanying unaudited interim condensed consolidated financial statements of the Company include the accounts of its wholly owned subsidiary, Oncorus Securities Corporation. All intercompany transactions have been eliminated in consolidation. The Company has one operating segment.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. On an ongoing basis, the Company’s management evaluates its estimates, which include, but are not limited to, the estimated fair value of the Company’s common stock and share-based awards utilized for stock-based compensation purposes, accrued expenses, and amounts of expenses during the reported period. The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions.

Deferred Offering Costs

The Company capitalizes certain legal, professional, accounting and other third-party fees that are directly associated with in-process equity issuances or debt financings as deferred offering costs until such equity issuances or debt financings are consummated. After consummation, these costs are recorded as a reduction in the capitalized amount associated with the equity issuance or debt financing.

Debt Related Costs

The carrying value of the Company’s Term Loan (see Note 8) is recorded net of issuance costs and discount relating to the issuance of warrants and fees paid to the lender. Debt-related costs are amortized over the term of the debt using the effective interest method and recognized as interest expense.

Warrants

In accordance with ASC Topic 470-20-25, when the Company issues debt with warrants, the Company treats the warrants as a debt discount, recorded as a contra-liability against the debt, and amortizes the balance over the life of the underlying debt as amortization of debt discount expense in the statements of operations. The offset to the contra-liability is recorded as additional paid-in capital in the Company’s consolidated balance sheet if the warrants are not treated as a derivative or as liability warrants. The Company determines the fair value of the warrants at issuance using the Black-Scholes option pricing model.

Concentration of Credit Risk and of Significant Suppliers

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents and short-term investments. The Company has all of its cash at one financial institution that management believes to be of high credit quality, in amounts that exceed federally insured limits. The Company invests its excess cash, in line with its investment policy, primarily in money market funds and high credit quality debt instruments.

The Company is dependent upon a third-party contract manufacturer and third-party contract research organizations for the performance of portions of its testing for pre-clinical and clinical studies. The Company believes that its relationships with these organizations are satisfactory, and that alternative suppliers of these services are available in the event of the loss of one or more of these suppliers.

Restricted Cash

The Company maintains a balance in a segregated bank account in connection with a letter of credit for the benefit of the landlord in connection with its operating lease for its Andover, Massachusetts facility. As of March 31, 2023, restricted cash consisted of $3.4 million held for the benefit of the landlord. This amount has been classified as part of non-current assets on the Company's unaudited interim condensed consolidated balance sheets.

The Company includes its restricted cash balance in the cash, cash equivalents and restricted cash reconciliation of operating, investing, and financing activities in the unaudited interim condensed consolidated statements of cash flows. The following table provides a reconciliation of cash, cash equivalents and restricted cash in the unaudited interim condensed consolidated balance sheets that sum to the total of the same such amounts shown in the unaudited interim condensed consolidated statements of cash flows:

	MARCH 31,
	2023		2022
	(in thousands)
Cash and cash equivalents	$	21,217	$	75,509
Restricted cash		3,437		3,437
Total cash, cash equivalents and restricted cash shown in the unaudited interim consolidated statements of cash flows	$	24,654	$	78,946

Investments

Short-term investments consist of commercial paper, corporate bonds and U.S. treasury securities with original maturities greater than three months. The Company may sell investments at any time for use in current operations even if the investments have not yet reached maturity. As a result, the Company classifies its investments, including securities with maturities beyond twelve months, as current assets. As of March 31, 2023, all investments are classified as available-for-sale securities ("AFS"), which are recorded at fair value. Unrealized holding gains and losses on available-for-sale securities are reported as a net amount in accumulated other comprehensive income or loss in stockholders’ equity until realized. Purchase premiums and discounts are amortized to other income over the terms of the related securities.

ASU 2016-13 (Topic 326) made targeted changes to ASC 320 Debt Securities ("ASC 320") to eliminate the concept of “other than temporary” from the impairment loss estimation model for AFS securities. A summary of the changes made by the Company as a result of adoption of ASU 2016-13 is as follows:

•The use of an allowance approach, rather than a permanent write-down of a security’s cost basis upon determination of an impairment loss;

•The amount of the allowance is limited to the amount at which the security’s fair value is less than its amortized cost basis;

•The Company may not consider the length of time a security’s fair value has been less than amortized cost; and

•The Company may not consider recoveries in fair value after the balance sheet date when assessing whether a credit loss exists.

The Company’s AFS securities are carried at fair value. For AFS securities in an unrealized loss position, management will first evaluate whether there is intent to sell a security, or if it is more likely than not that the Company will be required to sell a security prior to anticipated recovery of its amortized cost basis. If either of these criteria are met, the Company will record a write-down of the security’s amortized cost basis to fair value through income. For those AFS securities which do not meet the intent or requirement to sell criteria, management will evaluate whether the decline in fair value is a result of credit related matters or other factors. In performing this assessment, management considers the creditworthiness of the issuer including whether the security is guaranteed by the U.S. federal government or other government agency, the extent to which fair value is less than amortized cost, and changes in credit rating during the period, among other factors. If this assessment indicates the existence of credit losses, an allowance for credit losses will be established, as determined by a discounted cash flow analysis. To the extent the estimated cash flows do not support the amortized cost, the deficiency is considered to be due to credit loss and is recognized in earnings.

Changes in the allowance for credit losses are recorded as a provision for (or reversal of) credit loss expense. Losses are charged against the allowance when the security is determined to be uncollectible, or when either of the aforementioned criteria surrounding intent or requirement to sell have been met. On January 1, 2022, the date on which the Company adopted ASU 2016-13, no allowance for credit losses was recorded for AFS securities. Gains and losses on sales of securities are recognized at the time of sale on the specific-identification basis.

Prior to the adoption of ASU 2016-13, management evaluated impaired securities for other-than-temporary impairment (“OTTI”) at least on a quarterly basis, and more frequently when economic or market concerns warranted such evaluation. Consideration was given to the length of time and the extent to which the fair value was less than cost, current market conditions, the financial condition and near-term prospects of the issuer, performance of collateral underlying the securities, the ratings of the individual securities, the interest rate environment, the Company’s intent to sell the security or whether it was more likely than not that the Company would be required to sell the debt security before its anticipated recovery, as well as other qualitative factors.

If a decline in fair value below the amortized cost basis of an investment was judged to be other than temporary, the investment was written down to fair value. The portion of the impairment related to credit losses was included in net income, and the portion of the impairment related to other factors was included in other comprehensive income. Refer to Note 3, “Cash Equivalents and Investments” for additional information regarding the measurement of impairment losses on AFS securities.

Fair Value Measurements

Certain assets and liabilities of the Company are carried at fair value under GAAP. 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—Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2—Valuations based on quoted prices for similar assets or liabilities in markets that are not active or for which all significant inputs are observable, either directly or indirectly, such as quoted market prices, interest rates, and yield curves.

Level 3—Valuations that require inputs that reflect the Company’s own assumptions that are both significant to the fair value measurement and unobservable.

To the extent a valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair values requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized as Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The Company believes that the carrying amounts of prepaid expenses, other current assets, accounts payable, and accrued expenses approximate their fair value due to the short-term nature of those instruments.

Operating Leases

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on specific facts and circumstances, the existence of an identified asset(s), if any, and the Company’s control over the use of the identified asset(s), if applicable. The lease liability is measured at the present value of future lease payments, discounted using the discount rate as of the lease commencement date. Future lease payments may include payments that depend on an index or a rate (such as the consumer price index or other market index). The Company initially measures payments based on an index or rate by using the applicable rate at lease commencement and subsequent changes in such rates are recognized as variable lease costs. Variable payments that do not depend on a rate or index are not included in the lease liability and are recognized as they are incurred. The Company’s contracts typically do not have variable payments based on index or rate. The Company’s contracts that include a lease component generally include additional services that are transferred to the lessee (e.g., common-area maintenance services), which are non-lease components. Contracts typically also include other costs and fees that do not provide a separate service to the lessee, such as costs paid by the lessee to reimburse the lessor for administrative costs or payment for the lessor’s costs for property taxes, insurance related to the leased asset, and other lessor costs. The Company elected the practical expedient to account for the lease and its associated non-lease components as a single lease component for its real estate leases, including the office, lab, and its manufacturing space.

When readily determinable, the discount rate used to calculate the lease liability is the rate implicit in the lease. As the Company's leases typically do not provide an implicit rate, the Company uses its incremental borrowing rate based on the lease term and economic environment at the lease commencement date. The lease term used to calculate the lease liability includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. With limited exceptions, the nature of the Company's facility leases is such that there are no economic or other conditions that would indicate that it is reasonably certain at lease commencement that the Company will exercise options to extend the term.

The Company recognizes a corresponding right-of-use (“ROU”) asset, initially measured as the amount of lease liability, adjusted for any initial lease costs or lease payments made before or at the commencement of the lease, and reduced by any lease incentives. In certain instances when there is unpredictability of payout of leasehold improvement reimbursements, the ROU asset and lease liability will be adjusted on a prospective basis as construction related to leasehold improvements is performed over the life of the lease.

The Company’s leases consist of only operating leases. Operating leases are recognized on the balance sheet as ROU assets, lease liabilities current and lease liabilities non-current. Fixed rents are included in the calculation of the lease balances while certain variable costs paid for certain operating and pass-through costs are excluded. Lease expense is recognized over the expected lease term on a straight-line basis. For leases with a term of one year or less, or short-term leases, the Company has elected to not recognize the lease liability for these arrangements and the lease payments are recognized in the consolidated statements of operations and comprehensive loss.

Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13 (Topic 326), Financial Instruments — Credit Losses — Measurement of Credit Losses on Financial Instruments, which is codified in Topic 326. The ASU changes how entities will measure credit losses on Held-to-Maturity (HTM) and Available-for-Sale debt securities. After the adoption of ASU 2016-13 (Topic 326), additional disclosures are required for HTM debt securities. The standard became effective for the Company as of January 1, 2023. The Company adopted ASU 2016-13 (Topic 326) in the first quarter of 2023. The adoption of this pronouncement did not have a material impact on the Company's consolidated financial statements.

There have been no other recently issued accounting pronouncements other than those described in the Company’s audited financial statements as of and for the year ended December 31, 2022, and the notes thereto, which are included in the Annual Report.

XML

Cash Equivalents and Investments

3 Months Ended

Mar. 31, 2023

Cash and Cash Equivalents [Abstract]

Cash Equivalents and Investments

3. Cash Equivalents and Investments

The following tables summarize the amortized cost and fair value of the Company's cash equivalents and investments (in thousands):

	MARCH 31, 2023
	AMORTIZED COST BASIS		GROSS UNREALIZED GAINS		GROSS UNREALIZED LOSSES			ALLOWANCE FOR CREDIT LOSSES		ESTIMATED FAIR VALUE
Cash Equivalents
Money market funds	$	9,014	$	—	$	—		$	—	$	9,014
Total Cash Equivalents	$	9,014	$	—	$	—		$	—	$	9,014
Investments
Commercial paper	$	16,308	$	—	$	—		$	—	$	16,308
Corporate bonds		1,509		—		(9	)		—		1,500
U.S. treasury securities		5,972		—		(15	)		—		5,957
Total Investments	$	23,789	$	—	$	(24	)	$		$	23,765

	DECEMBER 31, 2022
	AMORTIZED COST BASIS		GROSS UNREALIZED GAINS		GROSS UNREALIZED LOSSES			ALLOWANCE FOR CREDIT LOSSES		ESTIMATED FAIR VALUE
Cash Equivalents
Money market funds	$	19,881	$	—	$	—		$	—	$	19,881
Total Cash Equivalents	$	19,881	$	—	$	—		$	—	$	19,881
Investments
Commercial paper	$	25,094	$	—	$	—		$	—	$	25,094
U.S. treasury securities		8,417		—		(39	)		—		8,378
Corporate bonds		3,028		—		(13	)		—		3,015
Total Investments	$	36,539	$	—	$	(52	)	$	—	$	36,487

The Company did not record a provision for credit losses on any AFS securities for either the three months ended March 31, 2023 or March 31, 2022. No securities held by the Company were delinquent on contractual payments as of March 31, 2023 and December 31, 2022, nor were any securities placed on non-accrual status for the three and twelve month periods then ended, respectively. Interest on investments is recognized as interest income in the consolidated statements of operations and comprehensive loss. All investments held as of March 31, 2023 were classified as AFS securities and had contractual maturities of less than one year.

The following table summarizes gross realized gains and losses from sales of AFS securities for the periods indicated:

	THREE MONTHS ENDED MARCH 31,
	2023		2022
Gross realized gains from sales of AFS securities	$	44	$	—
Gross realized losses from sales of AFS securities		—		—
Losses from sales of AFS securities, net	$	44	$	—

Information pertaining to AFS securities with gross unrealized gains (losses) as of March 31, 2023 and December 31, 2022, for which the Company did not recognize a provision for credit losses under the current expected credit loss methodology, aggregated by investment category and length of time that individual securities had been in a continuous loss position, is as follows:

			MARCH 31, 2023 - LESS THAN 12 MONTHS
	# OF HOLDINGS		GROSS UNREALIZED GAINS		FAIR VALUE
Commercial paper		11	$	—	$	16,308
U.S. treasury securities		4		24		5,957
Corporate bonds		1		4		1,500
		16	$	28	$	23,765

			DECEMBER 31, 2022 - LESS THAN 12 MONTHS
	# OF HOLDINGS		GROSS UNREALIZED GAINS			FAIR VALUE
Commercial paper		17	$	—		$	25,094
U.S. treasury securities		5		(39	)		8,378
Corporate bonds		2		(13	)		3,015
		24	$	(52	)	$	36,487

The Company does not intend to sell these investments and has determined based upon available evidence that it is more likely than not that the Company will not be required to sell each security before the expected recovery of its amortized cost basis. As a result, the Company did not recognize an ACL on these investments as of March 31, 2023 or December 31, 2022. The causes of the impairments listed in the tables above by category are as follows as of March 31, 2023 and December 31, 2022:

1.Corporate bonds – The securities with unrealized losses in this portfolio have contractual terms that generally do not permit the issuer to settle the security at a price less than the current par value of the investment. The decline in market value of these securities is attributable to changes in interest rates and not credit quality.

2.U.S. treasury securities – The securities with unrealized losses in this portfolio have contractual terms that generally do not permit the issuer to settle the security at a price less than the current par value of the investment. The decline in market value of these securities is attributable to changes in interest rates and not credit quality. Additionally, these securities are implicitly guaranteed by the U.S. government or one of its agencies.

XML

Fair Value Measurements

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

4. Fair Value Measurements

The following table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis (in thousands):

	FAIR VALUE MEASUREMENTS AS OF MARCH 31, 2023
	LEVEL 1		LEVEL 2		LEVEL 3		TOTAL
Assets:
Money market funds	$	9,014	$	—	$	—	$	9,014
U.S. treasury securities		5,957		—		—		5,957
Commercial paper		—		16,308		—		16,308
Corporate bonds		—		1,500		—		1,500
Total Assets	$	14,971	$	17,808	$	—	$	32,779

	FAIR VALUE MEASUREMENTS AS OF DECEMBER 31, 2022
	LEVEL 1		LEVEL 2		LEVEL 3		TOTAL
Assets:
Money market funds	$	19,881	$	—	$	—	$	19,881
U.S. treasury securities		8,378		—		—		8,378
Commercial paper		—		25,094		—		25,094
Corporate bonds		—		3,015		—		3,015
Total Assets	$	28,259	$	28,109	$	—	$	56,368

The Company classifies its money market funds and U.S. treasury securities as Level 1 assets since it measures fair value using quoted prices in active markets for identical assets. The Level 2 assets include commercial paper and corporate bonds and are valued based on quoted prices for similar assets in active markets and inputs other than quoted prices that are derived from observable market data. The Company did not hold any Level 3 assets during the periods presented.

The Company evaluates transfers between levels at the end of each reporting period. There were no transfers between Level 1 and Level 2 assets during the periods presented.

XML

Leases

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Leases

5. Leases

The Company has an operating lease for approximately 33,518 square feet (the “Pod 4 Portion”), approximately 54,666 square feet (the “Pod 5 Portion”), and approximately 17,150 square feet ("Pod 3 Portion") of a manufacturing facility located in Andover, Massachusetts that also serves as its corporate headquarters. This lease expires in December 2036 and the Company has two options to extend the term of the lease for a period of ten years each. As of March 31, 2023, the Company had not exercised its options to extend the lease term for either lease and did not consider it reasonably certain that these options would be exercised. The Company agreed to

provide the landlord with a $3.4 million letter of credit as support for its obligations under the Andover facility lease. The lease provides a lease incentive in the form of reimbursable leasehold improvements of $14.9 million. Due to the unpredictability of the payout of leasehold improvement reimbursements, the right-of-use asset will be adjusted on a prospective basis to reflect any payments relating to the lease incentive as construction related to these improvements is performed over the life of the lease. As of March 31, 2023, the Company had capitalized $38.1 million of leasehold improvement costs, of which $14.4 million was reimbursed through the lease incentive. The lease payments include fixed base rent payments and variable rents for certain shared facility operating and other costs.

The Company was also party to an operating lease in Cambridge, Massachusetts, which served as its corporate headquarters until September 2022. On September 13, 2022, the Company executed an amendment to its Cambridge lease which accelerated the lease termination date to November 15, 2022, from the previous date of January, 2024. In connection with this amendment, the Company remeasured the remaining lease liability and right-of-use-asset and recognized a gain of $0.5 million, which was included as a reduction of operating expenses in the consolidated statements of operations and comprehensive loss during the three months ended December 31, 2022.

During the three months ended March 31, 2023, the Company recognized total rent expense related to the leases described above of $1.2 million, compared to $1.6 million in the same period of 2022. The amount of variable rent expense and rent for short-term leases for the three months ended March 31, 2023 and 2022 was $0.6 million and $0.9 million, respectively.

Other supplemental information related to leases is as follows:

	AS OF AND FOR THREE MONTHS ENDED MARCH 31,
	2023			2022
Weighted average remaining lease term	14 years			13.5 years
Weighted average discount rate		7.7	%		8.1	%
Cash paid for amounts included in the measurement of lease liabilities (in thousands)	$	1,210		$	1,505

Maturities of operating lease liabilities are as follows as of March 31, 2023 (in thousands):

Year	Amount
2023	$	3,640
2024		4,995
2025		5,145
2026		5,299
2027		5,458
Thereafter		57,114
Total lease payments		81,651
Less imputed interest		(32,940	)
Total lease liabilities	$	48,711
Current portion		1,187
Long-term portion		47,524

XML

Impairment of Long-lived Assets

3 Months Ended

Mar. 31, 2023

Restructuring and Related Activities [Abstract]

Impairment of Long-lived Assets

6. Impairment of Long-lived Assets

The Company’s long-lived assets consist of property and equipment and an operating lease, right-of-use asset associated with its manufacturing facility in Andover, Massachusetts. Long-lived assets that are classified as held for use are tested for recoverability whenever events or changes in circumstances indicate that the Company's carrying value of the assets may not be fully recoverable. The Company identified circumstances that indicated that its long-lived assets may not be recoverable as of March 31, 2023. Specifically, these circumstances included changes in the market price of the asset group, continued losses and a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. As a result, the Company performed a recoverability test by comparing the future cash flows attributable to the asset group to the carrying value of the long-lived assets. Based on this evaluation, the Company determined that the long-lived assets were no longer recoverable and recorded an impairment charge of $14.6 million by comparing the carrying amount to the estimated fair value.

Under ASC 820, Fair Value Measurement, a fair value measurement of a nonfinancial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. Therefore, fair value is a market-based measurement and not an entity-specific measurement. It is determined based on assumptions that market participants would use in pricing the asset or liability. The exit price objective of a fair value measurement applies regardless of the reporting entity’s intent and/or ability to sell the asset or transfer the liability at the measurement date. The fair value estimate of the Company’s property and equipment used a combination of methods, including the cost and market approaches. The fair value of the right of use asset and leasehold improvements were estimated using the discounted cash flow method of the income approach. Cash flows were estimated using a market rent for comparable laboratory and manufacturing facilities discounted at a market discount rate over the remaining term of the Company's lease. The Company continues to classify its long-lived assets as held for use. If circumstances change as a result of the Company's decision to prioritize preservation of capital or if the assets are not transferred in an orderly transaction between market participants, the value obtained could be different than the Company’s estimates and such differences could be material.

XML

Accrued Expenses and Other Liabilities

3 Months Ended

Mar. 31, 2023

Payables and Accruals [Abstract]

Accrued Expenses and Other Liabilities

7. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

	MARCH 31,  2023		DECEMBER 31, 2022
Accrued research and development costs	$	2,242	$	2,661
Accrued leasehold improvement costs		1,446		4,079
Accrued compensation		1,291		2,612
Accrued professional fees		846		752
Accrued interest expense		208		198
Miscellaneous accrued expenses		591		646
Total accrued expenses and other current liabilities	$	6,623	$	10,948

XML

Term Loan, Net of Debt Discount

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Term Loan, Net of Debt Discount

8. Term Loan, Net of Debt Discount

On April 1, 2022, the Company entered into a loan and security agreement (the "Loan Agreement") with K2 HealthVentures LLC ("K2HV"), and together with any other lender from time to time party thereto, the “Lenders”), K2HV as administrative agent for the Lenders, and Ankura Trust Company, LLC, as collateral agent for the Lenders. The Loan Agreement provided for term loan commitments of up to $45.0 million in four potential tranches, of which $20.0 million was funded on April 1, 2022. The timing and availability of the other tranche term loan commitments was subject to various conditions.

The facility carried a 48-month term with interest only payments for 24 months. Subsequent to the interest-only period, the Company was required to make equal monthly payments of principal plus interest until the loans were scheduled mature on April 1, 2026. The term loans bore a variable interest rate equal to the greater of 7.75% and (ii) the sum of (A) the prime rate last quoted in The Wall Street Journal (or a comparable replacement rate if The Wall Street Journal ceases to quote such rate) and (B) 4.25%. The variable interest rate at March 31, 2023 was 12.25%. Upon final payment or prepayment of the loans, the Company was required to pay a final payment equal to 5.45% of the loans borrowed (the "Final Fee"), which is being accrued to interest expense over the term of the loan. The Company had an option to prepay the loans in whole, subject to a prepayment fee of 3% prior to the first anniversary of April 1, 2022, 2% after the first anniversary but prior the second anniversary of the funding date, and 1% thereafter if prior to the maturity date. As described in Note 13, subsequent to March 31, 2023, the Company repaid in full the $20.0 million owed, together with $1.6 million in accrued interest and fees, and terminated the Loan Agreement.

The Lenders could have elected at any time prior to the full repayment of the term loans to convert any portion of the principal amount of the term loans then outstanding, up to an aggregate of $5.0 million in principal amount, into shares of the Company's common stock at a conversion price of $2.2689, subject to customary beneficial ownership limitations.

The Loan Agreement contained customary representations and warranties, events of default and affirmative and negative covenants, including covenants that limited or restricted the Company’s ability to, among other things, dispose of assets, make changes to the Company’s business, management, ownership or business locations, merge or consolidate, incur additional indebtedness, pay dividends or other distributions or repurchase equity, make investments, and enter into certain transactions with affiliates, in each case subject to certain exceptions. As security for its obligations under the Loan Agreement, the Company granted the Lenders a first priority security interest on substantially all of the Company’s assets (other than intellectual property), subject to certain exceptions.

In connection with entering into the Loan Agreement, the Company also issued to K2HV a warrant to purchase a number of shares of Common Stock equal to the quotient of 2.95% of the aggregate funded term loan amount divided by $1.5126, the exercise price, up to

a maximum of 877,627 shares (the "Warrant"). The Warrant expires on April 1, 2032. The Warrant has been classified within equity since it (i) is indexed to the Company’s own equity and (ii) meets the equity classification conditions. As of March 31, 2023, the Warrant was exercisable for 390,056 shares of common stock. The Company allocated the proceeds between the term loan and the Warrant on a relative fair value basis, resulting in a discount on the term loan. The Warrant provides the Lenders with certain piggyback registration rights with respect to the shares of common stock issuable upon exercise of the Warrant.

The Company incurred fees and issuance costs associated with the Loan Agreement of $0.5 million. The Company recorded contractual interest expense related to the Loan Agreement of $0.6 million and additional interest expense related to the amortization of the debt discount and issuance costs and accretion of the Final Fee of $1.1 million in the three months ended March 31, 2023. The effective interest rate at March 31, 2023, which includes the non-cash interest components noted above, was 34.0%.

Future principal debt payments on the Loan Agreement as of March 31, 2023 are as follows (in thousands):

	MARCH 31, 2023
2023	$	20,000
2024		—
2025		—
2026		—
2027		—
Total principal payments		20,000
Final Fee		1,090
Total principal payments and Final Fee		21,090
Less: Unamortized debt discount and debt issuance costs		(277	)
Less: Unaccreted Final Fee		(275	)
Term loan, current	$	20,538

XML

Common Stock

3 Months Ended

Mar. 31, 2023

Statement of Stockholders' Equity [Abstract]

Common Stock

9. Common Stock

The Company’s amended and restated certificate of incorporation provides for 100,000,000 shares designated as common stock with a par value of $0.0001 per share as part of its authorized capital.

Each share of the Company's common stock is entitled to one vote. The holders of shares of common stock are entitled to receive dividends, if and when declared by the Board of Directors.

Restricted Stock

The Company issued restricted stock to its founders and certain of its officers. In general, the shares of restricted stock vested over a four-year period, with 25% of the shares vesting after one year, followed by monthly vesting over the remaining three years. As of March 31, 2023, all restricted stock awards were fully vested.

Common Stock Warrants

The Company issued warrants to purchase common stock in connection with a preferred stock financing in March 2016. These common stock warrants allow for the holders to purchase 71,544 shares of common stock at $1.21 per share. As of March 31, 2023, 2022, all of the common stock warrants were fully exercisable. The common stock warrants expire in 2031. As described in Note 8, on April 1, 2022, the Company issued a warrant to K2HV to purchase 390,056 shares of common stock. This warrant expires in 2032.

Reserved Shares

The Company has reserved the following shares of common stock for the conversion or exercise of the following securities:

	MARCH 31, 2023		DECEMBER 31, 2022
Exercise of common stock warrants		949,171		949,171
Exercise of options to purchase common stock		4,558,988		4,391,207
Shares available for issuance under equity incentive plans		2,512,467		2,680,248
Shares available for issuance under term loan conversion		2,203,711		2,203,711
Total		8,020,626		10,224,337

XML

Equity Incentive Plan

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Equity Incentive Plans

10. Equity Incentive Plans

The Company adopted the 2016 Equity Incentive Plan, as amended (the “2016 Plan”) on March 31, 2016. The 2016 Plan provided for the granting of stock options, restricted stock awards, restricted stock units, stock appreciation rights and other stock awards to employees, directors and non-employees. All option awards were granted with an exercise price equal to or greater than the market price of the Company’s stock at the date of grant. Option awards generally vest over three to four years. Certain option awards provide for accelerated vesting if there is a change in control as defined in the 2016 Plan. The provisions of the 2016 Plan allow for early exercises for options that have not yet vested. Early exercises have historically been for a de minimis number of shares.

On September 23, 2020, the Company adopted the 2020 Equity Incentive Plan (the “2020 Plan”), which became effective on October 1, 2020 and serves as the successor to the 2016 Plan. The 2020 Plan authorizes the award of stock options, restricted stock awards, stock appreciation rights, restricted stock units, cash awards, performance awards and stock bonus awards. The number of shares reserved for issuance under the 2020 Plan increases automatically on January 1 of each fiscal year, through and including January 1, 2030, by the number of shares equal to 5% of the aggregate number of outstanding shares of common stock as of the immediately preceding December 31, or a lesser number of shares as may be determined by the board of directors (or an authorized committee thereof). On January 1, 2023, the number of shares reserved for issuance under the 2020 Plan increased by 1,298,656 shares of common stock.

At March 31, 2023, there were 2,512,467 shares of common stock available for issuance under the 2020 Plan.

On September 23, 2020, the Company adopted the 2020 Employee Stock Purchase Plan (the "ESPP"), which became effective on October 1, 2020. The Company initially reserved 280,000 shares of common stock for sale under the ESPP. The aggregate number of shares reserved for sale under the ESPP increases automatically on January 1st of each fiscal year through and including January 1, 2030, by the number of shares equal to the lesser of (a) 1% of the total number of shares of common stock outstanding on the last day of the fiscal year prior to the date of such automatic increase and (b) 560,000 shares, provided that prior to the date of any such increase, the board of directors may determine a lesser number of shares for such increase. On January 1, 2023, the the number of shares reserved for issuance under the ESPP increased by 259,731 shares of common stock. The ESPP provides for six-month offering periods commencing on January 1 and ending on June 30 and commencing on July 1 and ending on December 31 of each calendar year. The Company began its first offering period on January 1, 2022, and issued 89,112 shares of common stock on June 30, 2022 at the end of the first offering period. The Company commenced its second offering period on July 1, 2022, and issued 122,228 shares of common stock on December 31, 2022 at the end of the second offering period. The Company commenced an offering period on January 1, 2023 that is scheduled to end on June 30, 2023.

Total stock-based compensation was classified as follows on the unaudited interim condensed consolidated statements of operations (in thousands):

	THREE MONTHS ENDED MARCH 31,
	2023		2022
General and administrative	$	901	$	1,262
Research and development		566		718
Total stock-based compensation	$	1,467	$	1,980

In December 2020, the Company granted an employee an option to purchase 113,000 shares of the Company’s common stock with an exercise price per share equal to the fair value of the Company’s common stock on the date of grant. This grant is included in the outstanding options in the summary table below. The option grant includes three separate tranches (each tranche representing one-third of the total grant) that will each vest four years from the date of grant. This option grant and its tranches are subject to accelerated vesting in the event that the Company achieves certain defined milestones related to the Company’s manufacturing efforts. The Company recognized stock-based compensation expense of $0.2 million related to this grant in the three months ended March 31, 2023.

A summary of option activity for the three months ended March 31, 2023 is presented below:

	SHARES			WEIGHTED AVERAGE EXERCISE PRICE		WEIGHTED- AVERAGE REMAINING CONTRACTUAL TERM (YEARS)		AGGREGATE INTRINSIC VALUE (IN THOUSANDS)
Outstanding at December 31, 2022		4,391,207		$	7.57
Granted		347,609		$	0.39
Exercised		—			—
Canceled, expired or forfeited		(179,828	)	$	6.53
Outstanding at March 31, 2023		4,558,988		$	7.07		7.85	$	—
Vested and expected to vest at March 31, 2023		4,558,988		$	7.07		7.80	$	—
Exercisable at March 31, 2023		2,225,663		$	7.55		6.88	$	—

The weighted average grant date fair value per share of options granted to employees, directors and non-employee consultants during the three months ended March 31, 2023 and 2022 was $0.39 and $1.54, respectively. There were no options exercised during the three months ended March 31, 2023. The total intrinsic value of options exercised was $0.0 million for the three months ended March 31, 2023. Total unrecognized stock-based compensation expense related to options was $9.2 million at March 31, 2023, and is expected to be recognized over a weighted-average period of 2.4 years.

XML

Commitments and Contingencies

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

11. Commitments and Contingencies

The Company is not currently party to any material legal proceedings. At each reporting date, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company expenses costs related to such legal proceedings as incurred.

XML

Net Loss Per Share

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Net Loss Per Share

12. Net Loss Per Share

The following securities that could potentially dilute basic net loss per share in the future were not included in the computation of diluted net loss per share for the periods presented, because to do so would have been antidilutive:

	THREE MONTHS ENDED MARCH 31,
	2023		2022
Outstanding stock options		4,558,988		4,584,601
Shares expected to be purchased under employee stock purchase plan		156,898		62,243
Common stock warrants		461,600		71,544
Total		5,177,486		4,718,388

XML

Subsequent Events

3 Months Ended

Mar. 31, 2023

Subsequent Events [Abstract]

Subsequent Events

13. Subsequent Events

The Company has evaluated subsequent events from the balance sheet date through the date on which these financial statements were issued and identified the following:

Termination of Loan Agreement

On May 12, 2023, the Company repaid in full all of its outstanding obligations and other fees under the Loan Agreement (see Note 8), including $20.0 million of principal and $1.6 million of accrued interest and related fees and expenses, and the Loan Agreement was terminated.

XML

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and as amended by the FASB’s ASUs.

In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements include all normal and recurring adjustments (which consist primarily of accruals and estimates that impact the financial statements) which are considered necessary to present fairly the Company’s financial position as of March 31, 2023, its results of operations for the three months ended March 31, 2023 and 2022, its changes in stockholders’ equity for the three months ended March 31, 2023 and 2022 and its cash flows for the three months ended March 31 2023 and 2022.

The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2022, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K (the "Annual Report") filed with the Securities and Exchange Commission (the “SEC”) on March 24, 2023. The condensed consolidated balance sheet data as of December 31, 2022 presented for comparative purposes was derived from the Company’s audited consolidated financial statements but does not include all disclosures required by GAAP. The results for the three months ended March 31, 2023, are not necessarily indicative of the operating results to be expected for the full year or for any other subsequent interim period.

The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2022, included in its Annual Report. Any changes to the Company’s significant accounting policies are further discussed below.

COVID-19 Pandemic

COVID-19 Pandemic

In response to the COVID-19 pandemic, the Company implemented a work-from-home policy allowing employees who can work from home to do so. The Company has transitioned back to in-office work for the majority of its employees. Work in our office and manufacturing spaces has been organized to reduce risk of COVID-19 transmission. Business travel was previously suspended but is now becoming more frequent, and online and teleconference technology continues to be used regularly. The Company continues to monitor guidance from the CDC and other relevant health regulatory authorities and may adjust its plans and protocols to the extent there are changes in such guidance. As of the date of issuance of these unaudited interim condensed consolidated financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, assumptions and judgments or revise the carrying value of its assets or liabilities. Actual results could differ from those estimates, and any such differences may be material to the Company’s unaudited interim condensed consolidated financial statements.

Going Concern

Going Concern

At each reporting period, the Company evaluates whether there are conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. The Company is required to make certain additional disclosures if it concludes substantial doubt exists and it is not alleviated by the Company’s plans or when its plans alleviate substantial doubt about the Company’s ability to continue as a going concern. See Note 1 (Liquidity).

Principles of Consolidation

Principles of Consolidation

The accompanying unaudited interim condensed consolidated financial statements of the Company include the accounts of its wholly owned subsidiary, Oncorus Securities Corporation. All intercompany transactions have been eliminated in consolidation. The Company has one operating segment.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. On an ongoing basis, the Company’s management evaluates its estimates, which include, but are not limited to, the estimated fair value of the Company’s common stock and share-based awards utilized for stock-based compensation purposes, accrued expenses, and amounts of expenses during the reported period. The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions.

Deferred Offering Costs

Deferred Offering Costs

The Company capitalizes certain legal, professional, accounting and other third-party fees that are directly associated with in-process equity issuances or debt financings as deferred offering costs until such equity issuances or debt financings are consummated. After consummation, these costs are recorded as a reduction in the capitalized amount associated with the equity issuance or debt financing.

Debt Related Costs

Debt Related Costs

The carrying value of the Company’s Term Loan (see Note 8) is recorded net of issuance costs and discount relating to the issuance of warrants and fees paid to the lender. Debt-related costs are amortized over the term of the debt using the effective interest method and recognized as interest expense.

Warrants

Warrants

In accordance with ASC Topic 470-20-25, when the Company issues debt with warrants, the Company treats the warrants as a debt discount, recorded as a contra-liability against the debt, and amortizes the balance over the life of the underlying debt as amortization of debt discount expense in the statements of operations. The offset to the contra-liability is recorded as additional paid-in capital in the Company’s consolidated balance sheet if the warrants are not treated as a derivative or as liability warrants. The Company determines the fair value of the warrants at issuance using the Black-Scholes option pricing model.

Concentration of Credit Risk and of Significant Suppliers

Concentration of Credit Risk and of Significant Suppliers

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents and short-term investments. The Company has all of its cash at one financial institution that management believes to be of high credit quality, in amounts that exceed federally insured limits. The Company invests its excess cash, in line with its investment policy, primarily in money market funds and high credit quality debt instruments.

The Company is dependent upon a third-party contract manufacturer and third-party contract research organizations for the performance of portions of its testing for pre-clinical and clinical studies. The Company believes that its relationships with these organizations are satisfactory, and that alternative suppliers of these services are available in the event of the loss of one or more of these suppliers.

Restricted Cash

Restricted Cash

The Company maintains a balance in a segregated bank account in connection with a letter of credit for the benefit of the landlord in connection with its operating lease for its Andover, Massachusetts facility. As of March 31, 2023, restricted cash consisted of $3.4 million held for the benefit of the landlord. This amount has been classified as part of non-current assets on the Company's unaudited interim condensed consolidated balance sheets.

The Company includes its restricted cash balance in the cash, cash equivalents and restricted cash reconciliation of operating, investing, and financing activities in the unaudited interim condensed consolidated statements of cash flows. The following table provides a reconciliation of cash, cash equivalents and restricted cash in the unaudited interim condensed consolidated balance sheets that sum to the total of the same such amounts shown in the unaudited interim condensed consolidated statements of cash flows:

	MARCH 31,
	2023		2022
	(in thousands)
Cash and cash equivalents	$	21,217	$	75,509
Restricted cash		3,437		3,437
Total cash, cash equivalents and restricted cash shown in the unaudited interim consolidated statements of cash flows	$	24,654	$	78,946

Investments

Investments

Short-term investments consist of commercial paper, corporate bonds and U.S. treasury securities with original maturities greater than three months. The Company may sell investments at any time for use in current operations even if the investments have not yet reached maturity. As a result, the Company classifies its investments, including securities with maturities beyond twelve months, as current assets. As of March 31, 2023, all investments are classified as available-for-sale securities ("AFS"), which are recorded at fair value. Unrealized holding gains and losses on available-for-sale securities are reported as a net amount in accumulated other comprehensive income or loss in stockholders’ equity until realized. Purchase premiums and discounts are amortized to other income over the terms of the related securities.

ASU 2016-13 (Topic 326) made targeted changes to ASC 320 Debt Securities ("ASC 320") to eliminate the concept of “other than temporary” from the impairment loss estimation model for AFS securities. A summary of the changes made by the Company as a result of adoption of ASU 2016-13 is as follows:

•The use of an allowance approach, rather than a permanent write-down of a security’s cost basis upon determination of an impairment loss;

•The amount of the allowance is limited to the amount at which the security’s fair value is less than its amortized cost basis;

•The Company may not consider the length of time a security’s fair value has been less than amortized cost; and

•The Company may not consider recoveries in fair value after the balance sheet date when assessing whether a credit loss exists.

The Company’s AFS securities are carried at fair value. For AFS securities in an unrealized loss position, management will first evaluate whether there is intent to sell a security, or if it is more likely than not that the Company will be required to sell a security prior to anticipated recovery of its amortized cost basis. If either of these criteria are met, the Company will record a write-down of the security’s amortized cost basis to fair value through income. For those AFS securities which do not meet the intent or requirement to sell criteria, management will evaluate whether the decline in fair value is a result of credit related matters or other factors. In performing this assessment, management considers the creditworthiness of the issuer including whether the security is guaranteed by the U.S. federal government or other government agency, the extent to which fair value is less than amortized cost, and changes in credit rating during the period, among other factors. If this assessment indicates the existence of credit losses, an allowance for credit losses will be established, as determined by a discounted cash flow analysis. To the extent the estimated cash flows do not support the amortized cost, the deficiency is considered to be due to credit loss and is recognized in earnings.

Changes in the allowance for credit losses are recorded as a provision for (or reversal of) credit loss expense. Losses are charged against the allowance when the security is determined to be uncollectible, or when either of the aforementioned criteria surrounding intent or requirement to sell have been met. On January 1, 2022, the date on which the Company adopted ASU 2016-13, no allowance for credit losses was recorded for AFS securities. Gains and losses on sales of securities are recognized at the time of sale on the specific-identification basis.

Prior to the adoption of ASU 2016-13, management evaluated impaired securities for other-than-temporary impairment (“OTTI”) at least on a quarterly basis, and more frequently when economic or market concerns warranted such evaluation. Consideration was given to the length of time and the extent to which the fair value was less than cost, current market conditions, the financial condition and near-term prospects of the issuer, performance of collateral underlying the securities, the ratings of the individual securities, the interest rate environment, the Company’s intent to sell the security or whether it was more likely than not that the Company would be required to sell the debt security before its anticipated recovery, as well as other qualitative factors.

If a decline in fair value below the amortized cost basis of an investment was judged to be other than temporary, the investment was written down to fair value. The portion of the impairment related to credit losses was included in net income, and the portion of the impairment related to other factors was included in other comprehensive income. Refer to Note 3, “Cash Equivalents and Investments” for additional information regarding the measurement of impairment losses on AFS securities.

Fair Value Measurements

Fair Value Measurements

Certain assets and liabilities of the Company are carried at fair value under GAAP. 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—Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2—Valuations based on quoted prices for similar assets or liabilities in markets that are not active or for which all significant inputs are observable, either directly or indirectly, such as quoted market prices, interest rates, and yield curves.

Level 3—Valuations that require inputs that reflect the Company’s own assumptions that are both significant to the fair value measurement and unobservable.

To the extent a valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair values requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized as Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The Company believes that the carrying amounts of prepaid expenses, other current assets, accounts payable, and accrued expenses approximate their fair value due to the short-term nature of those instruments.

Operating Leases

Operating Leases

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on specific facts and circumstances, the existence of an identified asset(s), if any, and the Company’s control over the use of the identified asset(s), if applicable. The lease liability is measured at the present value of future lease payments, discounted using the discount rate as of the lease commencement date. Future lease payments may include payments that depend on an index or a rate (such as the consumer price index or other market index). The Company initially measures payments based on an index or rate by using the applicable rate at lease commencement and subsequent changes in such rates are recognized as variable lease costs. Variable payments that do not depend on a rate or index are not included in the lease liability and are recognized as they are incurred. The Company’s contracts typically do not have variable payments based on index or rate. The Company’s contracts that include a lease component generally include additional services that are transferred to the lessee (e.g., common-area maintenance services), which are non-lease components. Contracts typically also include other costs and fees that do not provide a separate service to the lessee, such as costs paid by the lessee to reimburse the lessor for administrative costs or payment for the lessor’s costs for property taxes, insurance related to the leased asset, and other lessor costs. The Company elected the practical expedient to account for the lease and its associated non-lease components as a single lease component for its real estate leases, including the office, lab, and its manufacturing space.

When readily determinable, the discount rate used to calculate the lease liability is the rate implicit in the lease. As the Company's leases typically do not provide an implicit rate, the Company uses its incremental borrowing rate based on the lease term and economic environment at the lease commencement date. The lease term used to calculate the lease liability includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. With limited exceptions, the nature of the Company's facility leases is such that there are no economic or other conditions that would indicate that it is reasonably certain at lease commencement that the Company will exercise options to extend the term.

The Company recognizes a corresponding right-of-use (“ROU”) asset, initially measured as the amount of lease liability, adjusted for any initial lease costs or lease payments made before or at the commencement of the lease, and reduced by any lease incentives. In certain instances when there is unpredictability of payout of leasehold improvement reimbursements, the ROU asset and lease liability will be adjusted on a prospective basis as construction related to leasehold improvements is performed over the life of the lease.

The Company’s leases consist of only operating leases. Operating leases are recognized on the balance sheet as ROU assets, lease liabilities current and lease liabilities non-current. Fixed rents are included in the calculation of the lease balances while certain variable costs paid for certain operating and pass-through costs are excluded. Lease expense is recognized over the expected lease term on a straight-line basis. For leases with a term of one year or less, or short-term leases, the Company has elected to not recognize the lease liability for these arrangements and the lease payments are recognized in the consolidated statements of operations and comprehensive loss.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13 (Topic 326), Financial Instruments — Credit Losses — Measurement of Credit Losses on Financial Instruments, which is codified in Topic 326. The ASU changes how entities will measure credit losses on Held-to-Maturity (HTM) and Available-for-Sale debt securities. After the adoption of ASU 2016-13 (Topic 326), additional disclosures are required for HTM debt securities. The standard became effective for the Company as of January 1, 2023. The Company adopted ASU 2016-13 (Topic 326) in the first quarter of 2023. The adoption of this pronouncement did not have a material impact on the Company's consolidated financial statements.

There have been no other recently issued accounting pronouncements other than those described in the Company’s audited financial statements as of and for the year ended December 31, 2022, and the notes thereto, which are included in the Annual Report.

XML

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2023

Summary Of Significant Accounting Policies [Abstract]

Summary of Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash in the unaudited interim condensed consolidated balance sheets that sum to the total of the same such amounts shown in the unaudited interim condensed consolidated statements of cash flows:

	MARCH 31,
	2023		2022
	(in thousands)
Cash and cash equivalents	$	21,217	$	75,509
Restricted cash		3,437		3,437
Total cash, cash equivalents and restricted cash shown in the unaudited interim consolidated statements of cash flows	$	24,654	$	78,946

XML

Cash Equivalents and Investments (Tables)

3 Months Ended

Mar. 31, 2023

Cash and Cash Equivalents [Abstract]

Summary of amortized cost and fair value of our cash equivalents and investments

The following tables summarize the amortized cost and fair value of the Company's cash equivalents and investments (in thousands):

	MARCH 31, 2023
	AMORTIZED COST BASIS		GROSS UNREALIZED GAINS		GROSS UNREALIZED LOSSES			ALLOWANCE FOR CREDIT LOSSES		ESTIMATED FAIR VALUE
Cash Equivalents
Money market funds	$	9,014	$	—	$	—		$	—	$	9,014
Total Cash Equivalents	$	9,014	$	—	$	—		$	—	$	9,014
Investments
Commercial paper	$	16,308	$	—	$	—		$	—	$	16,308
Corporate bonds		1,509		—		(9	)		—		1,500
U.S. treasury securities		5,972		—		(15	)		—		5,957
Total Investments	$	23,789	$	—	$	(24	)	$		$	23,765

	DECEMBER 31, 2022
	AMORTIZED COST BASIS		GROSS UNREALIZED GAINS		GROSS UNREALIZED LOSSES			ALLOWANCE FOR CREDIT LOSSES		ESTIMATED FAIR VALUE
Cash Equivalents
Money market funds	$	19,881	$	—	$	—		$	—	$	19,881
Total Cash Equivalents	$	19,881	$	—	$	—		$	—	$	19,881
Investments
Commercial paper	$	25,094	$	—	$	—		$	—	$	25,094
U.S. treasury securities		8,417		—		(39	)		—		8,378
Corporate bonds		3,028		—		(13	)		—		3,015
Total Investments	$	36,539	$	—	$	(52	)	$	—	$	36,487

Schedule of Realized Gain (Loss)

The following table summarizes gross realized gains and losses from sales of AFS securities for the periods indicated:

	THREE MONTHS ENDED MARCH 31,
	2023		2022
Gross realized gains from sales of AFS securities	$	44	$	—
Gross realized losses from sales of AFS securities		—		—
Losses from sales of AFS securities, net	$	44	$	—

Summary of Government-Sponsored Residential Mortgage-Backed Securities with Gross Unrealized Gains (Losses)

Information pertaining to AFS securities with gross unrealized gains (losses) as of March 31, 2023 and December 31, 2022, for which the Company did not recognize a provision for credit losses under the current expected credit loss methodology, aggregated by investment category and length of time that individual securities had been in a continuous loss position, is as follows:

			MARCH 31, 2023 - LESS THAN 12 MONTHS
	# OF HOLDINGS		GROSS UNREALIZED GAINS		FAIR VALUE
Commercial paper		11	$	—	$	16,308
U.S. treasury securities		4		24		5,957
Corporate bonds		1		4		1,500
		16	$	28	$	23,765

			DECEMBER 31, 2022 - LESS THAN 12 MONTHS
	# OF HOLDINGS		GROSS UNREALIZED GAINS			FAIR VALUE
Commercial paper		17	$	—		$	25,094
U.S. treasury securities		5		(39	)		8,378
Corporate bonds		2		(13	)		3,015
		24	$	(52	)	$	36,487

XML

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Summary of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis (in thousands):

	FAIR VALUE MEASUREMENTS AS OF MARCH 31, 2023
	LEVEL 1		LEVEL 2		LEVEL 3		TOTAL
Assets:
Money market funds	$	9,014	$	—	$	—	$	9,014
U.S. treasury securities		5,957		—		—		5,957
Commercial paper		—		16,308		—		16,308
Corporate bonds		—		1,500		—		1,500
Total Assets	$	14,971	$	17,808	$	—	$	32,779

	FAIR VALUE MEASUREMENTS AS OF DECEMBER 31, 2022
	LEVEL 1		LEVEL 2		LEVEL 3		TOTAL
Assets:
Money market funds	$	19,881	$	—	$	—	$	19,881
U.S. treasury securities		8,378		—		—		8,378
Commercial paper		—		25,094		—		25,094
Corporate bonds		—		3,015		—		3,015
Total Assets	$	28,259	$	28,109	$	—	$	56,368

XML

Leases (Tables)

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Schedule of Other Supplemental Information Related to Leases

Other supplemental information related to leases is as follows:

	AS OF AND FOR THREE MONTHS ENDED MARCH 31,
	2023			2022
Weighted average remaining lease term	14 years			13.5 years
Weighted average discount rate		7.7	%		8.1	%
Cash paid for amounts included in the measurement of lease liabilities (in thousands)	$	1,210		$	1,505

Summary of Maturities of Operating Lease Liabilities

Maturities of operating lease liabilities are as follows as of March 31, 2023 (in thousands):

Year	Amount
2023	$	3,640
2024		4,995
2025		5,145
2026		5,299
2027		5,458
Thereafter		57,114
Total lease payments		81,651
Less imputed interest		(32,940	)
Total lease liabilities	$	48,711
Current portion		1,187
Long-term portion		47,524

XML

Accrued Expenses and Other Liabilities (Tables)

3 Months Ended

Mar. 31, 2023

Payables and Accruals [Abstract]

Summary of Accrued Expenses and Other Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

	MARCH 31,  2023		DECEMBER 31, 2022
Accrued research and development costs	$	2,242	$	2,661
Accrued leasehold improvement costs		1,446		4,079
Accrued compensation		1,291		2,612
Accrued professional fees		846		752
Accrued interest expense		208		198
Miscellaneous accrued expenses		591		646
Total accrued expenses and other current liabilities	$	6,623	$	10,948

XML

Term Loan, Net of Debt Discount (Tables)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Schedule of Future Principal Debt Payments on the Loan Agreement

Future principal debt payments on the Loan Agreement as of March 31, 2023 are as follows (in thousands):

	MARCH 31, 2023
2023	$	20,000
2024		—
2025		—
2026		—
2027		—
Total principal payments		20,000
Final Fee		1,090
Total principal payments and Final Fee		21,090
Less: Unamortized debt discount and debt issuance costs		(277	)
Less: Unaccreted Final Fee		(275	)
Term loan, current	$	20,538

XML

Common Stock (Tables)

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Summary of Reserved Shares of Common Stock

The Company has reserved the following shares of common stock for the conversion or exercise of the following securities:

	MARCH 31, 2023		DECEMBER 31, 2022
Exercise of common stock warrants		949,171		949,171
Exercise of options to purchase common stock		4,558,988		4,391,207
Shares available for issuance under equity incentive plans		2,512,467		2,680,248
Shares available for issuance under term loan conversion		2,203,711		2,203,711
Total		8,020,626		10,224,337

XML

Equity Incentive Plan (Tables)

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Summary of Total Stock-based Compensation Including Both Stock Option Awards and Restricted Stock

Total stock-based compensation was classified as follows on the unaudited interim condensed consolidated statements of operations (in thousands):

	THREE MONTHS ENDED MARCH 31,
	2023		2022
General and administrative	$	901	$	1,262
Research and development		566		718
Total stock-based compensation	$	1,467	$	1,980

Summary of Option Activity

A summary of option activity for the three months ended March 31, 2023 is presented below:

	SHARES			WEIGHTED AVERAGE EXERCISE PRICE		WEIGHTED- AVERAGE REMAINING CONTRACTUAL TERM (YEARS)		AGGREGATE INTRINSIC VALUE (IN THOUSANDS)
Outstanding at December 31, 2022		4,391,207		$	7.57
Granted		347,609		$	0.39
Exercised		—			—
Canceled, expired or forfeited		(179,828	)	$	6.53
Outstanding at March 31, 2023		4,558,988		$	7.07		7.85	$	—
Vested and expected to vest at March 31, 2023		4,558,988		$	7.07		7.80	$	—
Exercisable at March 31, 2023		2,225,663		$	7.55		6.88	$	—

XML

Net Loss Per Share (Tables)

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Summary of Antidilutive Securities Excluded from Computation of Earnings Per Share

The following securities that could potentially dilute basic net loss per share in the future were not included in the computation of diluted net loss per share for the periods presented, because to do so would have been antidilutive:

	THREE MONTHS ENDED MARCH 31,
	2023		2022
Outstanding stock options		4,558,988		4,584,601
Shares expected to be purchased under employee stock purchase plan		156,898		62,243
Common stock warrants		461,600		71,544
Total		5,177,486		4,718,388

XML

Nature of the Business and Liquidity - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Accounting Policies [Line Items]
Net loss	$ (30,899)	$ (17,780)
Impairment loss	14,575	$ 0
Accumulated deficit	$ (302,908)		$ (272,009)

XML

Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($) Segment	Mar. 31, 2022 USD ($)
Accounting Policies [Abstract]
Number of operating segments | Segment	1
Restricted cash | $	$ 3,437	$ 3,437

XML

Summary of Significant Accounting Policies - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Detail) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Accounting Policies [Abstract]
Cash and cash equivalents	$ 21,217	$ 25,709	$ 75,509
Restricted cash	3,437		3,437
Cash, cash equivalents and restricted cash at end of period	$ 24,654	$ 29,146	$ 78,946	$ 104,189

XML

Cash Equivalents and Investments - Summary of amortized cost and fair value of our cash equivalents and investments (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Cash and Cash Equivalents [Line Items]
Amortized Cost	$ 23,789	$ 36,539
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(24)	(52)
Allowance For Credit Losses		0
Estimated Fair Value	23,765	36,487
Money Market Funds [Member]
Cash and Cash Equivalents [Line Items]
Amortized Cost, Cash Equivalents	9,014	19,881
Gross Unrealized Gains, Cash Equivalents	0	0
Allowance For Credit Losses, cash equivalents	0	0
Gross Unrealized Losses, Cash Equivalents	0	0
Estimated Fair Value, Cash Equivalents	9,014	19,881
Commercial Paper [Member]
Cash and Cash Equivalents [Line Items]
Amortized Cost	16,308	25,094
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Allowance For Credit Losses	0	0
Estimated Fair Value	16,308	25,094
US Treasury Securities [Member]
Cash and Cash Equivalents [Line Items]
Amortized Cost	5,972	8,417
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(15)	(39)
Allowance For Credit Losses	0	0
Estimated Fair Value	5,957	8,378
Corporate Bonds [Member]
Cash and Cash Equivalents [Line Items]
Amortized Cost	1,509	3,028
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(9)	(13)
Allowance For Credit Losses	0	0
Estimated Fair Value	1,500	3,015
Cash Equivalents [Member]
Cash and Cash Equivalents [Line Items]
Amortized Cost, Cash Equivalents	9,014	19,881
Gross Unrealized Gains, Cash Equivalents	0	0
Gross Unrealized Losses, Cash Equivalents	0	0
Allowance For Credit Losses, cash equivalents	0	0
Estimated Fair Value, Cash Equivalents	$ 9,014	$ 19,881

XML

Cash Equivalents and Investments - Schedule of Realized Gain (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Fair Value, Net Asset (Liability) [Abstract]
Gross realized gains from sales of AFS securities	$ 44	$ 0
Gross realized losses from sales of AFS securities	0	0
Losses from sales of AFS securities, net	$ 44	$ 0

XML

Cash Equivalents and Investments - Summary of Government-Sponsored Residential Mortgage-Backed Securities with Gross Unrealized Gains (Losses) (Details) $ in Thousands	Mar. 31, 2023 USD ($) Holding	Dec. 31, 2022 USD ($) Holding
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Number of holdings | Holding	16	24
Gross unrealized gain less than 12 months	$ 28	$ (52)
Fair value less than 12 Months	$ 23,765	$ 36,487
Corporate Bonds [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Number of holdings | Holding	1	2
Gross unrealized gain less than 12 months	$ 4	$ (13)
Fair value less than 12 Months	$ 1,500	$ 3,015
Commercial Paper [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Number of holdings | Holding	11	17
Gross unrealized gain less than 12 months	$ 0	$ 0
Fair value less than 12 Months	$ 16,308	$ 25,094
US Treasury Securities [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Number of holdings | Holding	4	5
Gross unrealized gain less than 12 months	$ 24	$ (39)
Fair value less than 12 Months	$ 5,957	$ 8,378

XML

Fair Value Measurements - Summary of Financial Assets and Liabilities Measured at Fair Value On a Recurring Basis (Detail) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets	$ 32,779	$ 56,368
Money Market Funds [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets	9,014	19,881
US Treasury Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets	5,957	8,378
Commercial Paper [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets	16,308	25,094
Corporate Bonds [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets	1,500	3,015
Level 1 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets	14,971	28,259
Level 1 [Member] | Money Market Funds [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets	9,014	19,881
Level 1 [Member] | US Treasury Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets	5,957	8,378
Level 1 [Member] | Commercial Paper [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets	0	0
Level 1 [Member] | Corporate Bonds [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets	0	0
Level 2 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets	17,808	28,109
Level 2 [Member] | Commercial Paper [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets	16,308	25,094
Level 2 [Member] | Corporate Bonds [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets	$ 1,500	$ 3,015

XML

Leases - Additional Information (Detail) $ in Millions		3 Months Ended
	Sep. 13, 2022 USD ($)	Mar. 31, 2023 USD ($) ft²	Mar. 31, 2022 USD ($)
Lessee Lease Description [Line Items]
Leasehold improvement costs capitalized		$ 38.1
Leasehold improvement costs reimbursed		14.4
Lease incentive related to leasehold improvements		14.9
Letter of Credit [Member]
Lessee Lease Description [Line Items]
Pledged letter of credit		3.4
Lab Space [Member]
Lessee Lease Description [Line Items]
Rent expense for lease		1.2	$ 1.6
Short Term Lease Expense [Member]
Lessee Lease Description [Line Items]
Rent expense for lease		$ 0.6	$ 0.9
POD 3 [Member]
Lessee Lease Description [Line Items]
Lease space | ft²		17,150
POD 4 [Member]
Lessee Lease Description [Line Items]
Lease space | ft²		33,518
POD 5 [Member]
Lessee Lease Description [Line Items]
Lease space | ft²		54,666
CambridgeMassachusetts [Member]
Lessee Lease Description [Line Items]
Operating lease liability right of use asset gain recognized	$ 0.5
Andover, Massachusetts [Member]
Lessee Lease Description [Line Items]
Lessee, operating lease, option to extend		the Company has two options to extend the term of the lease for a period of ten years each

XML

Leases - Summary of Other Supplemental Information Related to Leases (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Leases [Abstract]
Weighted average remaining lease term	14 years	13 years 6 months
Weighted average discount rate	7.70%	8.10%
Cash paid for amounts included in the measurement of lease liabilities (in thousands)	$ 1,210	$ 1,505

XML

Leases - Summary of Maturities of Operating Lease Liabilities (Detail) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Lessee, Operating Lease, Liability, to be Paid [Abstract]
2023	$ 3,640
2024	4,995
2025	5,145
2026	5,299
2027	5,458
Thereafter	57,114
Total lease payments	81,651
Less imputed interest	(32,940)
Total lease liabilities	48,711
Lease liability - current portion	1,187	$ 1,129
Lease liability - net of current portion	$ 47,524	$ 47,854

XML

Impairment of Long-lived Assets - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Restructuring and Related Activities [Abstract]
Impairment loss	$ 14,575	$ 0

XML

Accrued Expenses and Other Liabilities - Summary of Accrued Expenses and Other Liabilities (Detail) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Accrued research and development costs	$ 2,242	$ 2,661
Accrued leasehold improvement costs	1,446	4,079
Accrued compensation	1,291	2,612
Accrued professional fees	846	752
Accrued interest expense	208	198
Miscellaneous accrued expenses	591	646
Total accrued expenses and other liabilities	$ 6,623	$ 10,948

XML

Term Loan, Net of Debt Discount - Additional Information (Details) - USD ($)			3 Months Ended
	May 12, 2023	Apr. 01, 2022	Mar. 31, 2023
Debt Instrument [Line Items]
Warrant exercisable for common stock		390,056
Term Loan [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity		$ 45,000,000.0
Principal in Term Loans		$ 5,000,000.0
Term Loan Variable Interest Rate		4.25%	12.25%
Final Fee		5.45%
Debt instrument interest rate, terms		The term loans bore a variable interest rate equal to the greater of 7.75% and (ii) the sum of (A) the prime rate last quoted in The Wall Street Journal (or a comparable replacement rate if The Wall Street Journal ceases to quote such rate) and (B) 4.25%. The variable interest rate at March 31, 2023 was 12.25%. Upon final payment or prepayment of the loans, the Company was required to pay a final payment equal to 5.45% of the loans borrowed (the "Final Fee"), which is being accrued to interest expense over the term of the loan. The Company had an option to prepay the loans in whole, subject to a prepayment fee of 3% prior to the first anniversary of April 1, 2022, 2% after the first anniversary but prior the second anniversary of the funding date, and 1% thereafter if prior to the maturity date. As described in Note 13, subsequent to March 31, 2023, the Company repaid in full the $20.0 million owed, together with $1.6 million in accrued interest and fees, and terminated the Loan Agreement.
Common Stock Conversion Price		$ 2,268.9000
Warrant to purchase a number of shares		2.95%
Warrants or rights, exercise price		$ 1.5126
Warrants to purchase a maximum number of shares		877,627
Warrant Expiry Date		Apr. 01, 2032
Warrant exercisable for common stock			390,056
Issuance cost			$ 500,000
Interest rate			34.00%
Interest expense			$ 600,000
Interest expense, debt amortization			$ 1,100,000
Term Loan [Member] | Maximum [Member]
Debt Instrument [Line Items]
Term Loan Variable Interest Rate		7.75%
Term Loan [Member] | Subsequent Event [Member]
Debt Instrument [Line Items]
Debt instrument rapayment of principal amount	$ 20,000,000.0
Repayment of accrued interest and related fees	$ 1,600,000
Tranche One [Member] | Term Loan [Member]
Debt Instrument [Line Items]
Principal amount		$ 20,000,000.0
Prior to First Anniversary [Member] | Term Loan [Member]
Debt Instrument [Line Items]
Prepayment fee		3.00%
Prior to Second Anniversary [Member] | Term Loan [Member]
Debt Instrument [Line Items]
Prepayment fee		2.00%
Prior to Maturity [Member] | Term Loan [Member]
Debt Instrument [Line Items]
Prepayment fee		1.00%

XML

Term Loan, Net of Debt Discount - Schedule of Future Principal Debt Payments on the Loan Agreement (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Long-Term Debt, Rolling Maturity [Abstract]
2023	$ 20,000
2024	0
2025	0
2026	0
2027	0
Total principal payments	20,000
Final Fee	1,090
Total principal payments and Final Fee	21,090
Less: Unamortized debt discount and debt issuance costs	(277)
Less: Unaccreted Final Fee	(275)
Term loan, current	$ 20,538

XML

Common Stock - Additional Information (Detail) - $ / shares	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022	Apr. 01, 2022
Common stock, voting rights	Each share of the Company's common stock is entitled to one vote
Common Stock, Shares Authorized	100,000,000	100,000,000
Common stock, par or stated value per share	$ 0.0001	$ 0.0001
Warrants or rights, number of shares called	949,171	949,171
Warrant exercisable for common stock			390,056
Common Stock Warrants [Member]
Warrants or rights, number of shares called	71,544
Warrants or rights, exercise price	$ 1.21
Restricted Stock [Member] | Founders [Member]
Share based payment award, award vesting period	4 years
Share-based payment award, award vesting percentage	25.00%

XML

Common Stock - Summary of Reserved Shares of Common Stock (Detail) - shares	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022	Sep. 23, 2020
Exercise of common stock warrants	949,171	949,171
Exercise of options to purchase common stock	4,558,988	4,391,207
Total	8,020,626	10,224,337
Employee Stock Purchase Plan [Member]
Shares available for issuance under equity incentive plans	2,512,467	2,680,248
Shares available for issuance under term loan conversion	2,203,711,000	2,203,711,000
Total			280,000
Exercise of options to purchase common stock [Member]
Exercise of options to purchase common stock	4,558,988	4,391,207

XML

Equity Incentive Plan - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands			1 Months Ended	3 Months Ended			12 Months Ended
	Jan. 01, 2023	Sep. 23, 2020	Dec. 31, 2020	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share based payments shares increase decrease	259,731
Shares available for purchase under employee stock purchase plan				8,020,626			10,224,337
Share based payment awards options granted				347,609
Share based compensation expenses				$ 1,467		$ 1,980
Share-based payment arrangement, expense				$ 1,467		$ 1,980
Unrecognized compensation expense related to stock options weighted average period				2 years 4 months 24 days
Common Stock [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Issuance of common stock under employee stock purchase plans, Shares					89,112		122,228
2016 Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Weighted average grant date fair value of options granted				$ 0.39		$ 1.54
Aggregate intrinsic value, options exercised				$ 0
Unrecognized compensation expense related to stock options				$ 9,200
2016 Plan [Member] | Restricted Stock [Member] | Minimum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period				3 years
2016 Plan [Member] | Restricted Stock [Member] | Maximum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period				4 years
2016 Plan [Member] | Performance Share [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share based payment awards options granted			113,000
Share based payment award, requisite service period				4 years
Share based compensation expenses				$ 200
Share-based payment arrangement, expense				$ 200
2020 Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares available for issuance under equity incentive plans				2,512,467
Share based payments shares increase decrease	1,298,656
2020 Plan [Member] | Restricted Stock [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share based payment award description				The number of shares reserved for issuance under the 2020 Plan increases automatically on January 1 of each fiscal year, through and including January 1, 2030, by the number of shares equal to 5% of the aggregate number of outstanding shares of common stock as of the immediately preceding December 31, or a lesser number of shares as may be determined by the board of directors (or an authorized committee thereof).
Share based payments shares increase/decrease				5.00%
Employee Stock Purchase Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share based payment award description				The aggregate number of shares reserved for sale under the ESPP increases automatically on January 1st of each fiscal year through and including January 1, 2030, by the number of shares equal to the lesser of (a) 1% of the total number of shares of common stock outstanding on the last day of the fiscal year prior to the date of such automatic increase and (b) 560,000 shares, provided that prior to the date of any such increase, the board of directors may determine a lesser number of shares for such increase.
Shares available for issuance under equity incentive plans				2,512,467			2,680,248
Share based payments shares increase decrease		560,000
Shares available for purchase under employee stock purchase plan		280,000

XML

Equity Incentive Plan - Summary of Total Stock-based Compensation Including Both Stock Option Awards and Restricted Stock (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Share based compensation expenses	$ 1,467	$ 1,980
General and Administrative [Member]
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Share based compensation expenses	901	1,262
Research and Development [Member]
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Share based compensation expenses	$ 566	$ 718

XML

Equity Incentive Plan - Summary of Option Activity (Detail) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($) $ / shares shares
Share-Based Payment Arrangement [Abstract]
Shares, Outstanding | shares	4,391,207
Shares, Granted | shares	347,609
Shares, Exercised | shares	0
Shares, Canceled, expired or forfeited | shares	(179,828)
Shares, Outstanding | shares	4,558,988
Shares, Vested and expected to vest | shares	4,558,988
Shares, Exercisable | shares	2,225,663
Weighted average exercise price, Outstanding | $ / shares	$ 7.57
Weighted average exercise price, Granted | $ / shares	0.39
Weighted average exercise price, Exercised | $ / shares	0
Weighted average exercise price, Canceled, expired or forfeited | $ / shares	6.53
Weighted average exercise price, Outstanding | $ / shares	7.07
Weighted average exercise price, Vested and expected to vest | $ / shares	7.07
Weighted average exercise price, Exercisable | $ / shares	$ 7.55
Weighted- Average remaining contractual term (years), Outstanding	7 years 10 months 6 days
Weighted- Average remaining contractual term (years), Vested and expected to vest	7 years 9 months 18 days
Weighted- Average remaining contractual term (years), Exercisable	6 years 10 months 17 days
Aggregate intrinsic value, Outstanding | $	$ 0
Aggregate intrinsic value, Vested and expected to vest | $	0
Aggregate intrinsic value, Exercisable | $	$ 0

XML

Net Loss Per Share - Summary of Antidilutive Securities Excluded from Computation of Earnings Per Share (Detail) - shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive Securities dilute basic net loss per share	5,177,486	4,718,388
Employee Stock Purchase Plan [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive Securities dilute basic net loss per share	156,898	62,243
Outstanding Stock Options [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive Securities dilute basic net loss per share	4,558,988	4,584,601
Common stock warrants [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive Securities dilute basic net loss per share	461,600	71,544

XML

Subsequent Events - Additional Information (Detail) - Subsequent Event [Member] - Termination of Loan Agreement [Member] $ in Millions	May 12, 2023 USD ($)
Subsequent Event [Line Items]
Debt instrument rapayment of principal amount	$ 20.0
Repayment of accrued interest and related fees and expenses	$ 1.6