QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
The Nasdaq Global Market LLC ( |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||||||||||
☒ | Smaller reporting company | |||||||||||||
Emerging growth company |
Pages | |||||
F-2 | |||||
F-3 | |||||
F-4 | |||||
F-5 | |||||
F-6 |
September 30, 2021 | December 31, 2020 | ||||||||||
(unaudited) | |||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Other receivables | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net of accumulated depreciation | |||||||||||
Operating lease right-of-use asset | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and stockholders’ equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable and other accrued liabilities | $ | $ | |||||||||
Accrued payroll and benefits | |||||||||||
Total current liabilities | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 9) | |||||||||||
Stockholders’ equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
License fees | $ | $ | $ | $ | |||||||||||||||||||
Collaboration revenue | |||||||||||||||||||||||
Total revenues (Note 9) | |||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Cost of license fees and collaboration revenue | |||||||||||||||||||||||
Research and development | |||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
(Loss) income from operations before other income (expense) and income taxes | ( | ( | ( | ||||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest income, net | |||||||||||||||||||||||
Other income (expense), net | ( | ||||||||||||||||||||||
Change in fair value of equity warrant rights (Note 9) | ( | ( | |||||||||||||||||||||
Total other (expense) income | ( | ( | |||||||||||||||||||||
Benefit (provision) for income taxes | ( | ( | ( | ||||||||||||||||||||
Net (loss) income and comprehensive (loss) income | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
Net (loss) income per share | |||||||||||||||||||||||
Basic | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
Diluted | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
Weighted-average shares outstanding | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted |
Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2020 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Recognition of stock-based compensation expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Exercise of vested stock options | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Shares issued as consideration for in-license rights (Note 8(b)) | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2021 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Recognition of stock-based compensation expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Lapse of repurchase rights related to common stock issued pursuant to stock option exercises prior to vesting | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Exercise of vested stock options | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2021 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Recognition of stock-based compensation expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Lapse of repurchase rights related to common stock issued pursuant to stock option exercises prior to vesting | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Exercise of vested stock options | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Balance as of September 30, 2021 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders’ Deficit | |||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2019 | $ | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Recognition of stock-based compensation expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Lapse of repurchase rights related to common stock issued pursuant to stock option exercises prior to vesting | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Balance as of March 31, 2020 | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Recognition of stock-based compensation expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Exercise of vested stock options | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Balance as of June 30, 2020 | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Recognition of stock-based compensation expense | — | $ | — | — | $ | — | $ | $ | — | $ | |||||||||||||||||||||||||||||||
Exercise of vested stock options | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Shares issued as consideration for in-license rights | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Issuance of Series C Preferred Stock in September 2020 at $ | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Balance as of September 30, 2020 | $ | $ | $ | $ | ( | $ | ( |
Nine Months Ended September 30, | |||||||||||
2021 | 2020 | ||||||||||
Cash Flows From Operating Activities: | |||||||||||
Net income (loss) | $ | $ | ( | ||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Stock-based compensation (Note 5) | |||||||||||
Non-cash lease expense | |||||||||||
Loss on disposal of property and equipment | |||||||||||
Loss on lease termination | |||||||||||
Change in fair value of derivative assets | |||||||||||
Unrealized gain from transactions denominated in a foreign currency | ( | ||||||||||
Issuance of common stock pursuant to in-license agreement (Note 8(b)) | |||||||||||
Changes in operating assets and liabilities: | |||||||||||
Other receivables | ( | ||||||||||
Prepaid expenses and other current assets | ( | ( | |||||||||
Other non-current assets | ( | ( | |||||||||
Accounts payable and other accrued liabilities | |||||||||||
Accrued payroll and benefits | |||||||||||
Other long-term liabilities | |||||||||||
Net cash provided by (used in) operating activities | ( | ||||||||||
Cash Flows From Investing Activities: | |||||||||||
Purchases of property and equipment | ( | ( | |||||||||
Cash used in investing activities | ( | ( | |||||||||
Cash Flows From Financing Activities: | |||||||||||
Proceeds from issuance of preferred stock, net of issuance costs | |||||||||||
Issuance costs for initial public offering | ( | ||||||||||
Proceeds from exercise of vested stock options | |||||||||||
Proceeds from stock option exercises prior to vesting | |||||||||||
Net cash provided by financing activities | |||||||||||
Net increase in cash, cash equivalents and restricted cash | |||||||||||
Cash, cash equivalents, and restricted cash — beginning of year | |||||||||||
Cash, cash equivalents, and restricted cash — end of period | $ | $ | |||||||||
Reconciliation of cash, cash equivalents and restricted cash | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Cash, cash equivalents and restricted cash | $ | $ | |||||||||
Supplemental Disclosures Noncash Investing and Financing Activities: | |||||||||||
Operating lease right-of-use asset obtained in exchange for operating lease liability | $ | $ | |||||||||
Expense of right-of-use asset upon lease termination | $ | ( | $ | ||||||||
Stock issued to licensor pursuant to execution of out-license agreement | $ | $ | |||||||||
Series C Preferred Stock issuance costs in accounts payable and other accrued liabilities | $ | $ | |||||||||
Deferred offering costs included in accounts payable and accrued liabilities | $ | $ |
September 30, 2021 | December 31, 2020 | ||||||||||
Furniture and fixtures | $ | $ | |||||||||
Office equipment | |||||||||||
Laboratory equipment | |||||||||||
Leasehold improvements | |||||||||||
Property and equipment, at cost | |||||||||||
(Less): Accumulated depreciation and amortization | |||||||||||
Property and equipment, net of accumulated depreciation and amortization | $ | $ |
September 30, 2021 | December 31, 2020 | ||||||||||
Deposits | $ | $ | |||||||||
Equity warrant rights* (Note 7) | |||||||||||
Other long term assets | |||||||||||
Other assets | $ | $ |
September 30, 2021 | December 31, 2020 | ||||||||||
Trade accounts payable and other | $ | $ | |||||||||
Operating lease liability, current portion | |||||||||||
Accrued clinical studies | |||||||||||
Contract liability | |||||||||||
Income taxes payable | |||||||||||
Employee stock option pre-vesting exercise liability, current portion | |||||||||||
Accounts payable and other accrued liabilities | $ | $ |
September 30, 2021 | December 31, 2020 | ||||||||||
Operating lease liability, non-current portion | $ | $ | |||||||||
Derivative liability | |||||||||||
Employee stock option pre-vesting exercise liability, non-current portion | |||||||||||
Other long-term liabilities | $ | $ |
September 30, 2021 | December 31, 2020 | ||||||||||
Stock options issued and outstanding | |||||||||||
Common stock awards reserved for future grant | |||||||||||
Restricted stock units outstanding | |||||||||||
Total shares of common stock reserved |
Three months ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Research and development | $ | $ | $ | $ | |||||||||||||||||||
General and administrative | |||||||||||||||||||||||
Total stock-based compensation | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Basic EPS | |||||||||||||||||||||||
Net (loss) income | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
Less: undistributed income allocated to participating securities | |||||||||||||||||||||||
Net (loss) income available to common shareholders | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
Basic weighted average shares outstanding | |||||||||||||||||||||||
Net (loss) income per share attributable to common stockholders—basic | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
Diluted EPS | |||||||||||||||||||||||
Net (loss) income | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
Less: undistributed income reallocated to participating securities | |||||||||||||||||||||||
Net (loss) income available to common shareholders | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
Basic weighted average shares outstanding | |||||||||||||||||||||||
Effect of dilutive securities: | |||||||||||||||||||||||
Common stock options | |||||||||||||||||||||||
Diluted weighted average shares outstanding | |||||||||||||||||||||||
Net (loss) income per share attributable to common stockholders—diluted | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
September 30, 2021 Fair Value Measurements | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Money market funds | $ | $ | $ | $ | |||||||||||||||||||
Equity warrant rights | |||||||||||||||||||||||
Total assets measured at fair value | $ | $ | $ | $ | |||||||||||||||||||
December 31, 2020 Fair Value Measurements | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Money market funds | $ | $ | |||||||||||||||||||||
Total assets measured at fair value | $ | $ |
Equity Warrant Rights, presented on the Condensed Consolidated Balance Sheets | |||||
Fair value as of December 31, 2020 | $ | ||||
Initial fair value estimate of equity warrant rights upon issuance | |||||
Fair value as of March 31, 2021 | $ | ||||
Revaluation of equity warrant rights upon achievement of first development milestone, included in "total revenues" within the Condensed Statement of Operations for the three months ended June 30, 2021 | |||||
Revaluation of equity warrant rights included in "other (expense) income, net" within the Condensed Statement of Operations for the three months ended June 30, 2021 | ( | ||||
Fair value as of June 30, 2021 | $ | ||||
Revaluation of equity warrant rights included in "total revenues" within the Condensed Statement of Operations for the three months ended September 30, 2021 | |||||
Revaluation of equity warrant rights included in "other (expense) income, net" within the Condensed Statement of Operations for the three months ended September 30, 2021 | ( | ||||
Fair value as of September 30, 2021 | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Operating lease cost | $ | $ | $ | $ | |||||||||||||||||||
Variable lease cost | |||||||||||||||||||||||
Short-term lease cost | |||||||||||||||||||||||
Total lease cost | $ | $ | $ | $ |
Operating Leases - future payments | September 30, 2021 | ||||
2021 (remaining three months) | $ | ||||
2022 | |||||
2023 | |||||
2024 | |||||
2025 | |||||
Total future lease payments, undiscounted | $ | ||||
(Less): Imputed interest | ( | ||||
Present value of operating lease payments | $ |
Three Months Ended September 30, | Change | ||||||||||||||||
2021 | 2020 | ||||||||||||||||
(in thousands) | |||||||||||||||||
Revenues: | |||||||||||||||||
License fees and collaboration revenue | $ | 1,240 | $ | — | $ | 1,240 | |||||||||||
Total revenues | 1,240 | — | 1,240 | ||||||||||||||
Operating expenses: | |||||||||||||||||
Cost of license fees and collaboration revenue | 65 | — | 65 | ||||||||||||||
Research and development | 10,209 | 7,991 | 2,218 | ||||||||||||||
General and administrative | 6,671 | 2,150 | 4,521 | ||||||||||||||
Total operating expenses | 16,945 | 10,141 | 6,804 | ||||||||||||||
(Loss) income from operations before other (expense) income and income taxes | (15,705) | (10,141) | (5,564) | ||||||||||||||
Other (expense) income: | |||||||||||||||||
Interest income, net | 8 | 4 | 4 | ||||||||||||||
Other income, net | 5 | — | 5 | ||||||||||||||
Change in fair value of equity warrant rights | (346) | — | (346) | ||||||||||||||
Total other (expense) income, net | (333) | 4 | (337) | ||||||||||||||
Benefit (provision) for income taxes | 341 | (1) | 342 | ||||||||||||||
Net loss | $ | (15,697) | $ | (10,138) | $ | (5,559) |
Nine Months Ended September 30, | Change | ||||||||||||||||
2021 | 2020 | ||||||||||||||||
(in thousands) | |||||||||||||||||
Revenues: | |||||||||||||||||
License fees and collaboration revenue | $ | 56,689 | $ | — | $ | 56,689 | |||||||||||
Total revenues | 56,689 | — | 56,689 | ||||||||||||||
Operating expenses: | |||||||||||||||||
Cost of license fees and collaboration revenue | 2,099 | — | 2,099 | ||||||||||||||
Research and development | 33,674 | 11,239 | 22,435 | ||||||||||||||
General and administrative | 18,625 | 4,282 | 14,343 | ||||||||||||||
Total operating expenses | 54,398 | 15,521 | 38,877 | ||||||||||||||
Income (loss) from operations before other (expense) income and income taxes | 2,291 | (15,521) | 17,812 | ||||||||||||||
Other (expense) income: | |||||||||||||||||
Interest income, net | 24 | 178 | (154) | ||||||||||||||
Other expense, net | (68) | — | (68) | ||||||||||||||
Change in fair value of equity warrant rights | (1,222) | — | (1,222) | ||||||||||||||
Total other (expense) income, net | (1,266) | 178 | (1,444) | ||||||||||||||
Benefit for income taxes | (1) | (1) | — | ||||||||||||||
Net income (loss) | $ | 1,024 | $ | (15,344) | $ | 16,368 |
Nine Months Ended September 30, | |||||||||||
2021 | 2020 | ||||||||||
(in thousands) | |||||||||||
Net cash provided by (used in) : | |||||||||||
Operating activities | $ | 15,869 | $ | (11,125) | |||||||
Investing activities | (312) | (506) | |||||||||
Financing activities | 95 | 40,008 | |||||||||
Net increase in cash, cash equivalents and restricted cash | $ | 15,652 | $ | 28,377 |
Exhibit Number | Description | Form | File Number | Incorporated by Reference Exhibit | Date | Filed Herewith | |||||||||||||||||
3.1 | 8-K | 001-39614 | 3.1 | 10/20/2020 | |||||||||||||||||||
3.2 | 8-K | 001-39614 | 3.2 | 10/20/2020 | |||||||||||||||||||
31.1 | X | ||||||||||||||||||||||
31.2 | X | ||||||||||||||||||||||
32.1* | X | ||||||||||||||||||||||
32.2* | X | ||||||||||||||||||||||
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. | X | |||||||||||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document. | X | |||||||||||||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | X | |||||||||||||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | X | |||||||||||||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | X | |||||||||||||||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | X | |||||||||||||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | X |
* | The certifications attached as Exhibit 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Tarsus Pharmaceuticals, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing. |
Date: | November 10, 2021 | ||||
TARSUS PHARMACEUTICALS, INC. | ||
/s/ Bobak Azamian, M.D., Ph.D. | ||
Bobak Azamian, M.D., Ph.D. | ||
President and Chief Executive Officer | ||
(Principal Executive Director) |
Date: | November 10, 2021 | ||||
/s/ Leonard M. Greenstein | ||
Leonard M. Greenstein | ||
Chief Financial Officer | ||
(Principal Financial Officer and Principal Accounting Officer) |
Date: November 10, 2021 | By: | /s/ Bobak Azamian, M.D., Ph.D. | ||||||||||||||||||||||||
Bobak Azamian, M.D., Ph.D. President and Chief Executive Officer (Principal Executive Officer) |
Date: November 10, 2021 | By: | /s/ Leo M. Greenstein | ||||||||||||||||||||||||
Leo M. Greenstein Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
Date: November 10, 2021 | By: | /s/ Bobak Azamian, M.D., Ph.D. | |||||||||||||||||||||
Bobak Azamian, M.D., Ph.D. | |||||||||||||||||||||||
President and Chief Executive Officer | |||||||||||||||||||||||
(Principal Executive Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
Date: November 10, 2021 | By: | /s/ Leo M. Greenstein | |||||||||||||||||||||
Leo M. Greenstein | |||||||||||||||||||||||
Chief Financial Officer | |||||||||||||||||||||||
(Principal Financial Officer and Principal Accounting Officer) |
Condensed Balance Sheets (Parenthetical) - $ / shares |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (usd per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized (shares) | 10,000,000 | 10,000,000 |
Preferred stock, issued (shares) | 0 | 0 |
Preferred stock, outstanding (shares) | 0 | 0 |
Common stock, par value (usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized (shares) | 200,000,000 | 200,000,000 |
Common stock, issued (shares) | 20,714,228 | 20,502,576 |
Common stock, outstanding (shares) | 20,671,079 | 20,323,301 |
Common stock, subject to repurchase (shares) | 43,149 | 179,375 |
Condensed Statements of Preferred Stock and Stockholders' Equity (Deficit) (Parenthetical) $ in Thousands |
1 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2020
USD ($)
$ / shares
|
Sep. 30, 2020
USD ($)
$ / shares
|
|
Stock issued, issuance costs | $ 330 | |
Series C Preferred Stock | ||
Original issue price (usd per share) | $ / shares | $ 14.0003 | $ 14.0003 |
Stock issued, issuance costs | $ 243 |
Description of Business and Presentation of Financial Statements |
9 Months Ended |
---|---|
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Presentation of Financial Statements | DESCRIPTION OF BUSINESS AND PRESENTATION OF FINANCIAL STATEMENTS (a) Description of Business Tarsus Pharmaceuticals, Inc. (“Tarsus” or the “Company”) is a biopharmaceutical company that applies proven science to new technology for patients, starting with eye care. (b) Reverse Stock Split and Initial Public Offering On October 8, 2020, the Tarsus Board of Directors approved a 1-for-7.4276 reverse stock split and a certificate of amendment was filed to amend the Company's certificate of incorporation to effect this reverse split. The par value was not adjusted as a result of the reverse stock split. All share and per share information included in the accompanying financial statements give retroactive effect to this reverse stock split for all periods presented. On October 20, 2020, the Company completed its initial public offering ("IPO") through an underwritten sale of 6,325,000 shares of its common stock at a price of $16.00 per share, inclusive of an additional 825,000 shares of its common stock sold upon the full exercise of the underwriters’ purchase option. The aggregate net proceeds by the Company from the offering totaled $91.7 million, after deducting underwriting discounts and commissions and other offering expenses. Concurrent with the closing of the Company's IPO, all then-outstanding shares of its convertible preferred stock (see Note 4) were automatically converted into an aggregate of 11,107,018 issued shares of common stock. (c) Liquidity The Company currently has no product sales, and has accumulated losses and negative cash flows from operations since inception (other than consideration received from an out-licensing agreement, as discussed in Note 9), resulting in an accumulated deficit of $31.8 million as of September 30, 2021 and $32.8 million as of December 31, 2020. The Company’s cash and cash equivalents were $183.8 million and $168.1 million as of September 30, 2021 and December 31, 2020, respectively. The Company has funded its inception-to-date operations primarily through equity capital raises and proceeds from its out-license agreement. The Company believes that its existing capital resources will be sufficient to meet projected operating requirements beyond at least 12 months from the filing date of this Form 10-Q. Accordingly, the accompanying financial statements in this Form 10-Q have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The 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. The Company’s operations currently consist of its corporate organization build-out, intellectual property licensing activities, and preclinical and clinical study progression. The Company faces the clinical, business, and liquidity risks that are typically associated with biotechnology companies; it must complete expensive research and development activities, achieve research and development outcomes that are inherently uncertain, recruit and retain skilled personnel (including executive management), and expand and defend its intellectual property rights. Management expects the Company to continue to incur losses in the foreseeable future as a result of research and development activities and other operating expenses. The Company will be required to raise additional capital to fund its future operations. However, no assurance can be given as to whether financing will be available on terms acceptable to the Company, if at all. If the Company raises additional funds by issuing equity securities, its stockholders may experience dilution. Any future debt financing into which the Company enters may impose additional covenants that restrict operations, including limitations on its ability to incur liens or additional debt, pay dividends, repurchase common stock, make certain investments, or engage in certain merger, consolidation or asset sale transactions. Any debt financing or additional equity raise may contain terms that are not favorable to the Company or its stockholders. The Company’s potential inability to raise capital when needed could have a negative impact on its financial condition and ability to pursue planned business strategies. If the Company is unable to raise additional funds as required, it may need to delay, reduce, or terminate some or all its development programs and clinical trials. The Company may also be required to sell or license its rights to product candidates in certain territories or indications that it would otherwise prefer to develop and commercialize on its own. If the Company is required to enter into collaborations and other arrangements to address its liquidity needs, it may have to give up certain rights that limit its ability to develop and commercialize product candidates or may have other terms that are not favorable to the Company or its stockholders, which could materially and adversely affect its business and financial prospects. These factors may adversely impact the Company's ability to achieve its business objectives and would likely have an adverse effect on its future business prospects, or even its ability to remain a going concern. (d) Operating Segment To date, the Company has operated and managed its business and financial information on an aggregate basis for the purposes of evaluating financial performance and the allocation of capital and personnel resources. Accordingly, the Company’s management determined that it has one reportable operating segment. This single segment is focused exclusively on developing pharmaceutical products for eventual commercialization. (e) Emerging Growth Company Status The Company is an "emerging growth company," as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has irrevocably elected to not take this exemption. As a result, it will adopt new or revised accounting standards on the relevant effective dates on which adoption of such standards is required for other public companies that are not emerging growth companies.
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Summary of Significant Accounting Policies and Use of Estimates |
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Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies and Use of Estimates | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES (i) Basis of Presentation The Company’s condensed financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and pursuant to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Accordingly, the accompanying condensed financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. The interim condensed balance sheet as of September 30, 2021, the interim condensed statements of operations and comprehensive (loss) income, and stockholders’ equity for the three and nine months ended September 30, 2021 and 2020, and the interim condensed cash flows for the nine months ended September 30, 2021 and 2020 are unaudited. These unaudited interim financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, which consist of only normal and recurring adjustments for the fair presentation of its financial information. The financial data and other information disclosed in these notes related to the three and nine-month periods are also unaudited. The condensed balance sheet as of December 31, 2020 has been derived from the audited financial statements at that date but does not include all information and footnotes required by GAAP for annual financial statements. The condensed interim operating results for three and nine months ended September 30, 2021 are not necessarily indicative of results to be expected for the year ending December 31, 2021 or any other interim or annual period. The accompanying interim unaudited condensed financial statements should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2020 in the Company’s Annual Report on Form 10-K (“Annual Report”) for the fiscal year ended December 31, 2020, as filed with the SEC on March 31, 2021. The preparation of financial statements in conformity with GAAP and with the rules and regulations of the SEC requires management to make informed estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. These amounts may materially differ from the amounts ultimately realized and reported due to the inherent uncertainty of any estimate or assumption. On an on-going basis, management evaluates its most critical estimates and assumptions, including those related to the (i) fair value of equity-based awards and periodic recognition of stock-based compensation, (ii) the realization of income tax assets and estimates of tax liabilities, and (iii) expense accruals related to research and development activities, including clinical trials. The accounting policies and estimates that most significantly impact the presented amounts within the accompanying condensed financial statements are further described below: (ii) Cash and Cash Equivalents Cash and cash equivalents consist of bank deposits and highly liquid investments, including money market fund accounts, with original maturities of three months or less from the purchase date. (iii) Restricted Cash Restricted cash represents cash held as collateral for the Company’s corporate credit card program. Any cash that is legally or contractually restricted from immediate use is classified as restricted cash. (iv) Concentration of Credit Risk and Other Risks and Uncertainties Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents in deposits at financial institutions that exceed federally insured limits. In March 2020, the World Health Organization declared a pandemic related to the global novel coronavirus disease 2019 (“COVID-19”) outbreak. To date, the Company’s operations have not been significantly impacted by the COVID-19 pandemic, though the Company continues to monitor the potential impact COVID-19 may have on its ongoing and planned clinical trials. However, the Company cannot at this time predict the specific extent, duration, or full impact that the COVID-19 outbreak may have on these activities or its financial condition. The Company’s results of operations involve numerous risks and uncertainties. Factors that could adversely impact the Company’s operating results and business objectives include, but are not limited to, (1) uncertainty of results of clinical trials, (2) uncertainty of regulatory approval of the Company’s potential product candidates, including TP-03 for ophthalmic conditions, TP-04 for treatment of rosacea, and TP-05 for prophylaxis of Lyme and community malaria reduction, (3) uncertainty of market acceptance of its product candidates, (4) competition from substitute products and other companies, (5) securing and protecting proprietary technology and strategic relationships, and (6) dependence on key individuals and sole source suppliers. The Company’s product candidates require approvals from the U.S. Food and Drug Administration (“FDA”) and comparable foreign regulatory agencies prior to commercial sales in their respective jurisdictions. There can be no assurance that any product candidates will receive these necessary approvals. If the Company is denied approval, approval is delayed, or is unable to maintain approval for any product candidate, it could have a materially adverse impact on the Company's business. (v) Property and Equipment Property and equipment is stated at historical cost and is depreciated on a straight-line basis over an estimated useful life that corresponds with its designated asset category. Leasehold improvements are amortized on a straight-line basis over the shorter of the remaining lease term or the estimated useful lives of related improvements. The Company evaluates the recoverability of “long-lived assets” (which includes property and equipment) whenever events or changes in circumstances in the business indicate that the asset’s carrying amount may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amounts to the sum of the future undiscounted cash flows the assets are expected to generate over the remaining useful lives of the assets. If a long-lived asset fails a recoverability test, the Company measures the amount by which the carrying value of the asset exceeds its fair value. Other than the right-of-use ("ROU") asset impairment discussed in Note 8, there were no events or changes in business circumstances during the three and nine months ended September 30, 2021 or year ended December 31, 2020 that indicated the carrying amounts of any long-lived assets were not fully recoverable. (vi) Revenue Recognition for Out-License Arrangements Overview The Company currently has one out-license arrangement that allows the licensee to market the Company’s TP-03 product (representing "functional intellectual property") in certain territories for a certain field of use and for a stated term - see Note 9. The accounting and reporting of revenue for out-license arrangements requires significant judgment for: (a) identification of the number of performance obligations within the contract, (b) the contract’s transaction price for allocation (including variable consideration), (c) the stand-alone selling price for each identified performance obligation, and (d) the timing and amount of revenue recognition in each period. The Company's out-license arrangement, as described in Note 9, was analyzed under GAAP to determine whether the promised goods or services (which include the license, and know-how, data, and information necessary or reasonably useful for the research, development, manufacture, or commercialization of any license product, and governance committee services) are distinct or must be accounted for as part of a combined performance obligation. In making these assessments, the Company considers factors such as the stage of development of the underlying intellectual property and the capabilities of the customer to develop the intellectual property on their own, and/or whether the required expertise is readily available. If the license is considered to not be distinct, the license is combined with other promised goods or services as a combined performance obligation for revenue recognition. The Company's out-license arrangement is in exchange for the following forms of consideration: (i) upfront cash payments, (ii) equity-based consideration, (iii) sales royalties, (iv) sales threshold milestones, (v) development milestone fees, and (vi) regulatory milestone fees. Revenue is recognized in proportion to the allocated transaction price when (or as) the respective performance obligation is satisfied. The Company evaluates the progress related to each milestone at each reporting period and, if necessary, also adjusts the probability of achievement and related revenue recognition. The measure of progress, and thereby periods over which revenue is recognized, is subject to estimates by management and may change over the course of the agreement. Contractual Terms for Receipt of Payments The contractual terms that establish the Company’s right to collect specified amounts from its customers and that require contemporaneous evaluation and documentation under GAAP for the corresponding timing and amount of revenue recognition, as follows: (1) Upfront License Fees: The Company determines whether non-refundable license consideration is recognized at the time of contract execution (i.e., when the license is transferred to the customer and customer is able to use and benefit from the license) or over the actual (or implied) contractual period of the out-license. The Company also evaluates whether it has any other requirements to provide substantive services that are inseparable from the performance obligation of the license transfer to determine whether any combined performance obligation is satisfied over time or at a point in time. (2) Development Milestones: The Company utilizes the “most likely amount” method to estimate the amount of consideration to which it will be entitled for achievement of development milestones. For those payments based on development milestones (e.g., patient dosing in a clinical study or the achievement of statistically significant clinical results), the Company assesses the probability that the milestone will be achieved, including its ability to control the timing or likelihood of achievement, and any associated revenue constraint. At each reporting period, the Company re-evaluates this associated revenue recognition constraint. Any resulting adjustments are recorded to revenue on a cumulative catch-up basis, thus reflected in the financial statements in the period of adjustment. (3) Regulatory Milestones: The Company utilizes the “most likely amount” method to estimate the consideration to which it will be entitled and recognizes revenue in the period regulatory approval occurs (the performance obligation is satisfied). Amounts constrained as variable consideration are included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company evaluates whether the milestones are considered probable of being reached and not otherwise constrained. Accordingly, due to the inherent uncertainty of achieving regulatory approval, associated milestones are constrained for revenue recognition until achievement. (4) Royalties: Under the "sales-or-usage-based royalty exception" the Company recognizes revenue based on the contractual percentage of the licensee’s sales to its customers at the later of (i) the occurrence of the related sales or (ii) the date upon which the performance obligation to which some or all of the royalty has been allocated has been satisfied or partially satisfied. To date, the Company has not recognized any royalty revenue from its out-licensing arrangements. (5) Sales Threshold Milestones: Similar to royalties, applying the "sales-or-usage-based royalty exception", the Company recognizes revenue from sales threshold milestones at the later of (i) the period the licensee achieves the one-time annual product sales levels in their territories for which the Company is contractually entitled to a specified lump-sum receipt, or (ii) the date upon which the performance obligation to which some or all of the milestone has been allocated has been satisfied or partially satisfied. To date, the Company has not recognized any sales threshold milestone revenue from out-licensing arrangements. (vii) Research and Development Costs Research and development costs are expensed as incurred or as certain upfront or milestone payments become contractually due to licensors upon the achievement of clinical or regulatory events. These expenses also include internal costs directly attributable to in-development programs, including cost of certain salaries, payroll taxes, employee benefits, and stock-based compensation expense, as well as laboratory and clinical supplies, pre-clinical and clinical trial related expenses, and the cost of services provided by outside contractors. The Company recognizes expense for pre-clinical studies and clinical trial activities performed by these third parties. This is typically based upon estimates of the proportion of work completed over the term of the individual study or trial, as well as patient enrollment and dosing events in accordance with agreements established with clinical research organizations ("CROs") and clinical trial or pre-clinical study sites. The Company has entered, and may continue to enter into, license agreements to access and utilize intellectual property for drug development. In each case, the Company evaluates if the assets acquired in a transaction represent the acquisition of an asset or a business, as defined under applicable GAAP. The Company’s executed in-license agreements (see Note 8(b)) were evaluated and determined to represent asset acquisitions. Because these assets have not yet received regulatory approval and have no alternative future uses, the purchase price for each was immediately recognized as research and development expense. In addition, any future milestone payments (whether in the form of cash or stock) made before product regulatory approval (that do not meet the definition of a derivative) will also be immediately recognized as research and development expense when paid or becomes payable, provided there is no alternative future use of the rights in other research and development projects. (viii) Stock-Based Compensation The Company recognizes stock-based compensation expense for equity awards granted to employees, consultants, and members of its Board of Directors. The Black-Scholes pricing model is used to estimate the fair value of stock option awards as of the date of grant. The fair value of restricted stock units is representative of the closing share price preceding the date of grant. For stock-based awards that vest subject to the satisfaction of a service requirement, the related expense is recognized on a straight-line basis over each award’s actual or implied vesting period. For stock-based awards that vest subject to a performance condition, the Company recognizes related expense on an accelerated attribution method, if and when it concludes that it is highly probable that the performance condition will be achieved. As applicable, the Company reverses previously recognized expense in the same period of the forfeiture of unvested awards. The measurement of the fair value of stock-based awards and recognition of stock-based compensation expense requires assumptions to be estimated by management that involve inherent uncertainties and the application of management’s judgment, including (a) the fair value of the Company’s common stock on the date of the option grant, (b) the expected term of the stock option until its exercise by the recipient, (c) stock price volatility over the expected term, (d) the prevailing risk-free interest rate over the expected term, and (e) expected dividend payments over the expected term. Management estimates the expected term of awarded stock options utilizing the “simplified method” for awards as the Company does not yet have sufficient exercise history since its November 2016 formation. Further, prior to the IPO, the Company was privately-held and therefore lacked company-specific historical and implied volatility information of its stock. Accordingly, management estimated this expected volatility based on a designated peer-group of publicly-traded companies for a look-back period, as of the date of grant, that corresponded with the expected term of the awarded stock option. The Company estimates the risk-free interest rate based upon the U.S. Department of the Treasury yield curve in effect at award grant for time periods that correspond with the expected term of the awarded stock option. The Company’s expected dividend yield is zero because it has never paid cash dividends and does not expect to for the foreseeable future. Prior to the IPO, given the absence of a public trading market, the Company’s Board of Directors, with input from management, considered numerous objective and subjective factors to determine the fair value of its common stock. The factors included: (i) third-party valuations of the Company’s common stock; (ii) the Company’s stage of development; (iii) the status of research and development efforts; (iv) the rights, preferences and privileges of the Company’s preferred stock relative to common stock; (v) the Company’s operating results and financial condition, including the Company’s levels of available capital resources; (vi) equity market conditions affecting comparable public companies; (vii) general U.S. market conditions; and (viii) the lack of current marketability of the Company’s common stock. Subsequent to the IPO, the fair value of the Company’s common stock is based on the closing quoted market price of its common stock as reported by the Nasdaq Global Select Market on the date of grant. All stock-based compensation expense is reported in the Statements of Operations and Comprehensive (Loss) Income within "research and development" expense or "general and administrative" expense, based upon the assigned department of the award recipient. (ix) Income Taxes Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recorded based on the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the financial statements, as well as operating losses and tax credit carryforwards using enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period of enactment. Realization of deferred tax assets is dependent upon future earnings, the timing and amount of which are uncertain due to the Company’s historical operating performance and recorded cumulative net losses in prior fiscal periods. A valuation allowance is recorded to reduce deferred tax assets, because based upon a weighting of positive and negative factors, it is more likely than not that these deferred tax assets will not be realized. If and when the Company were to determine that deferred tax assets are realizable, an adjustment to the corresponding valuation allowance would increase the net income in the period that such determination was made. In the event that the Company is assessed interest and/or penalties from taxing authorities that have not been previously accrued, such amounts would be included as a component of “income tax expense” within the Statements of Operations and Comprehensive (Loss) Income in the period the notice was received. To date there have been no interest or penalties charged. In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). ASU 2019-12 removes certain exceptions for performing intraperiod tax allocations, recognizing deferred taxes for investments, and calculating income taxes in interim periods. The guidance also simplifies the accounting for franchise taxes, transactions that result in a step-up in the tax basis of goodwill, and the effect of enacted changes in tax laws or rates in interim periods. The Company adopted ASU 2019-12 in the first quarter of 2021, which had no material impact to its financial statements. (x) Net (Loss) Income per Share Attributable to Common Stockholders Basic net (loss) income per share attributable to common stockholders is calculated by dividing the net (loss) income by the weighted-average number of shares of common stock outstanding for the period, without the consideration for potential dilutive shares of common stock. Diluted net (loss) income per share is computed by dividing the net (loss) income by the weighted-average number of common stock equivalents outstanding for the period determined using the treasury-stock method and if-converted method, as applicable. The Company’s participating securities include unvested common stock awards issued upon early exercise of certain stock options, as early exercised unvested common stock awards have a non-forfeitable right to dividends. The Company’s participating securities do not have a contractual obligation to share in the Company’s losses, so in periods of net losses, the "two-class method" of calculating basic and diluted earnings per share is not required. In periods of net income, basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. Also, net income is attributed to both common stockholders and participating security holders, and therefore, net income is allocated to shares of common stock and participating securities, as if all of the earnings for the period had been distributed. Diluted earnings per share under the two-class method is calculated using the more dilutive of the treasury stock or the two-class method. For the nine months ended September 30, 2021, the "two-class method" was utilized to calculate diluted net income per share as it was more dilutive than the "treasury stock method". Due to a net loss for the three months ended September 30, 2021, and the three and nine months ended September 30, 2020, all otherwise potentially dilutive securities are antidilutive, and accordingly, the reported basic net loss per share equals the reported diluted net loss per share in these periods. (xi) Fair Value Measurements Assets and liabilities recorded at fair value on a recurring basis in the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows: •Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that are publicly accessible at the measurement date. •Level 2: Observable prices that are based on inputs not quoted on active markets, but that are corroborated by market data. These inputs may include quoted prices for similar assets or liabilities or quoted market prices in markets that are not active to the general public. •Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The carrying amounts for financial instruments consisting of cash and cash equivalents, accounts payable and accrued liabilities approximate fair value due to their short maturities. Derivative instruments (see Note 7) are carried at fair value based on unobservable market inputs. (xii) Comprehensive (Loss) Income Comprehensive (loss) income represents all changes in stockholders’ equity (deficit), except those resulting from distributions to stockholders. For all periods presented, comprehensive (loss) income was the same as reported net (loss) income. (xiii) Recently Issued or Effective Accounting Standards Recently issued or effective accounting pronouncements that impact, or may have an impact, on the Company’s financial statements have been discussed within the footnote to which each relates. Other recent accounting pronouncements not disclosed in these Condensed Financial Statements have been determined by the Company’s management to have no impact, or an immaterial impact, on its current and expected future financial position, results of operations, or cash flows.
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Account Detail | BALANCE SHEET ACCOUNT DETAIL The composition of selected captions within the accompanying Condensed Balance Sheets are summarized below: (a) Property and Equipment, net of Accumulated Depreciation “Property and equipment, net of accumulated depreciation” consists of the following:
Depreciation expense (included within “total operating expenses” in the accompanying Statements of Operations and Comprehensive (Loss) Income) for the three months ended September 30, 2021 and 2020 was $0.1 million and $24 thousand, respectively, and for the nine months ended September 30, 2021 and 2020 was $0.3 million and $0.1 million, respectively. (b) Other Assets "Other assets" consists of the following:
*In January 2020, the FASB issued Accounting Standards Update No. 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force), which clarifies the interaction of the accounting for equity securities, investments accounted for under the equity method, and certain forward contracts and purchased options. This update is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years. The Company is in the process of determining the impact the adoption will have on its financial statements, beginning as of and for the three months ending March 31, 2022. (c) Accounts Payable and Other Accrued Liabilities “Accounts payable and other accrued liabilities” consists of the following:
(d) Other Long-Term Liabilities “Other long-term liabilities” consists of the following:
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | STOCKHOLDERS’ EQUITY Authorized Stock Under the October 2020 Amended and Restated Certificate of Incorporation, the Company is authorized to issue two classes of stock: common and preferred. The total number of shares authorized for issuance is 200.0 million shares of common stock and 10.0 million shares of preferred stock. Common Stock Overview and Reserve for Future Issuance Common stockholders have one vote for each share of common stock held and are entitled to receive any dividends declared by the Company’s Board of Directors when legally available for distribution, then-subject to the dividend rights of the holders of preferred stock. For the three and nine months ended September 30, 2021 and for the year ended December 31, 2020, no dividends were declared. As of September 30, 2021 and December 31, 2020, the Company had 20.7 million and 20.5 million shares of common stock issued, respectively. At September 30, 2021 and December 31, 2020, the Company had 20.7 million, and 20.3 million shares of common stock outstanding, respectively. The following shares of common stock were reserved for issuance:
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Stock-Based Compensation |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | STOCK-BASED COMPENSATION 2020 and 2016 Equity Incentive Plans The Company's Board of Directors and stockholders adopted and approved the Company's 2020 Equity Incentive Plan (the “2020 Plan”) on October 8, 2020. The 2020 Plan replaced the Company's 2016 Equity Incentive Plan that was earlier adopted in December 2016 (the “2016 Plan”). However, awards outstanding under the 2016 Plan will continue to be governed by its original terms. The number of shares of the Company's common stock that were initially available for issuance under the 2020 Plan equaled the initial sum of 9,000,000 shares plus 2,432,980 shares that were then available for issuance under the 2016 Plan. The 2020 Plan provides for the following types of awards: incentive and non-statutory stock options, stock appreciation rights, restricted shares, and restricted stock units. The number of shares of common stock reserved for issuance under the 2020 Plan are increased automatically on the first business day of each fiscal year, commencing in 2021 and ending in 2030, by a number equal to the lesser of: (i) 4% of the shares of common stock outstanding on the last day of the prior fiscal year; or (ii) the number of shares determined by the Company's Board of Directors. In general, to the extent that any awards under the 2020 Plan are forfeited, terminate, expire or lapse without the issuance of shares, or if the Company reacquires the shares subject to awards granted under the 2020 Plan, those shares will again become available for issuance under the 2020 Plan, as will shares applied to pay the exercise or purchase price of an award or to satisfy tax withholding obligations related to any award. Stock-based awards are governed by agreements between the Company and the recipients. Incentive stock options and nonqualified stock options may be granted under the 2020 Plan (and previously the 2016 Plan) at an exercise price of not less than 100% of the fair market value of common stock on the respective date of grant. The grant date is the date the terms of the award are formally approved by the Company’s Board of Directors or its designee. Through September 30, 2021, all awards issued under the 2020 Plan and 2016 Plan were in the form of stock options and restricted stock units. These stock award agreements have service and/or performance conditions for vesting, unless immediately vested on the date of grant. Stock awards granted typically have to four-year service conditions for full vesting. Any performance conditions for vesting are explicitly stated in each award agreement and are associated with clinical, business development, or operational milestones. Stock options must be exercised, if at all, no later than 10 years from the date of grant. Upon termination of employment, vested stock options may be exercised within 12 months after the date of termination upon death, six months after the date of termination upon disability, and three months after the date of termination for all other separations. Employee Stock Purchase Plan Under the terms of the Company's 2020 Employee Stock Purchase Plan (the “ESPP”), eligible employees can purchase common stock through scheduled payroll deductions. The purchase price is equal to the closing price of the Company's common stock on the first or last day of the offering period (whichever is less), minus a 15% discount. To determine the value of ESPP expense to be recognized during each offering period, the Black-Scholes option-pricing model is used, in combination with the discounted employee price. A participant may purchase a maximum of 3,000 shares of common stock during a six-month offering period, not to exceed $25,000 at full market value on the offering date during each ESPP year. As of September 30, 2021, a total of 2.5 million shares of common stock are authorized and remain available for issuance under the ESPP. Beginning on January 1, 2021, and each January 1st thereafter, the number of common stock available for issuance under the ESPP shall automatically increase by an amount equal to the lessor of (i) one percent of the total number of shares of common stock outstanding on the last day of the year, (ii) 2.5 million shares, or (iii) a number determined by our board of directors. Stock-Based Compensation Summary Stock-based compensation expense (inclusive of ESPP) is recorded in the accompanying Condensed Statements of Operations and Comprehensive (Loss) Income based on the designated department of the award recipient. Stock-based compensation expense for the three and nine months ended September 30, 2021 and 2020 was as follows:
Pre-Vesting Exercise Feature of Certain Stock Options The 2016 Plan permitted certain option holders to exercise awarded options prior to vesting. Upon this early exercise, the options became subject to a restricted stock agreement and remain subject to the same vesting provisions in the corresponding stock option award. These unvested options are subject to repurchase by the Company upon employee termination at the same price exercised. These unvested shares of common stock are reported as issued (but not outstanding) on the accompanying Condensed Balance Sheets while subject to repurchase by the Company. These shares are also excluded from the basic net (loss) income per share until the repurchase right lapses upon vesting, but are included in the diluted net income per share for the nine months ended September 30, 2021. The Company initially records a liability for these early exercises that is subsequently reclassified into stockholders’ equity on a pro rata basis as vesting occurs. As of September 30, 2021 and December 31, 2020, the Company recorded the unvested portion of the exercise proceeds of $0.1 million and $0.4 million, respectively, as a liability from pre-vesting exercises in the accompanying Condensed Balance Sheets.
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Net (Loss) Income Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net (Loss) Income Per Share | NET (LOSS) INCOME PER SHARE The Company permits certain option holders to exercise awarded options prior to vesting (see Note 5) and upon early exercise, become subject to a restricted stock agreement and remain subject to the same vesting provisions in the corresponding stock option award. These pre-vested option exercises are considered to be "participating securities" as restricted stock due to non-forfeitable right to dividends (i.e., even prior to vesting). The following table sets forth the computation of basic and diluted net (loss) income per share attributable to common stockholders:
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | FAIR VALUE MEASUREMENTS The table below summarizes certain financial instruments measured at fair value that are included within the accompanying balance sheets, and their designation among the three fair value measurement categories (see Note 2(xiii)):
Money Market Funds Money market fund holdings are included in "cash and cash equivalents" on the accompanying Balance Sheets and are classified within Level 1 of the fair value hierarchy because of their readily-available market prices in active markets that are publicly accessible at the measurement date. These money market funds are invested in U.S. Treasury, bills, notes, and other obligations issued or guaranteed as to principal and interest by the U.S. Government or its agencies. Equity Warrant Rights In March 2021, contemporaneous with the China Out-License transaction (see Note 9), the Company and LianBio Ophthalmology Limited (“LianBio”), executed a warrant agreement for the Company to purchase a stated number of equity securities of LianBio, a then privately-held pharmaceutical company focused on China, at fair value (on a per share basis at the time of issuance). The warrants will vest upon the achievement of certain clinical and regulatory events. These warrants are classified as Level 3 in the fair value measurement hierarchy. The most significant assumptions used in the option pricing valuation model to determine the fair value as of September 30, 2021, include: the estimated fair value of LianBio common stock (that since had its IPO on November 1, 2021), LianBio stock volatility (based on the historical volatility of similar companies), and the probability of achievement of discrete clinical and regulatory milestones for the vesting of each of the three warrants. As of September 30, 2021, one of these three milestones was met for vesting of the respective warrant. These warrants allow for "noncash settlement" and therefore met the criteria to be recognized as a "derivative asset" on the accompanying Condensed Balance Sheets and are presented within "other assets" as of September 30, 2021 (see Note 3(b)). These warrants will be remeasured with a corresponding amount reported in "other (expense) income, net" on the Statement of Operations and Comprehensive (Loss) Income at each reporting date, until exercised or expired. The following table sets forth a summary of the changes in fair value of the equity warrant rights presented in "other assets" on the accompanying Condensed Balance Sheets. The measurement of the equity warrant rights represents a Level 3 financial instrument:
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Commitment & Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitment & Contingencies | COMMITMENTS & CONTINGENCIES (a) Facility Leases Overview In the ordinary course of business, the Company enters lease agreements with unaffiliated parties for facilities and office equipment. As of September 30, 2021 and December 31, 2020, the Company had three active leases in Irvine, California for adjacent office and laboratory suites. In January 2021, the Company entered into a six-month lease for an additional administrative office suite that was not then capitalized due to its under 12-month term. On July 30, 2021, the Company executed an amendment to extend the term of this lease and a new office suite, both expiring January 31, 2024. This amendment was accounted for as a "lease modification" and resulted in the recognition of an "operating lease right-of-use asset" valued at $0.7 million as of the execution date. The Company's two other capitalized facility leases commenced on June 1, 2020 and also expire on January 31, 2024. One includes a renewal option that was not reasonably certain to be exercised at the time of lease commencement for purposes of accounting and reporting. The Company's facility leases are capitalized and reported within "operating lease right-of-use asset" and the corresponding lease liability within "accounts payable and other accrued liabilities" and "other long-term liabilities" on the accompanying Condensed Balance Sheets; each amounted to a total of $1.3 million as of September 30, 2021. These operating leases have annual rent that is payable monthly and carry fixed annual increases. Also, under these arrangements, real estate taxes, certain operating expenses, and common area maintenance are paid by the Company. Since these costs are variable in nature, they are excluded from the measurement of the reported right-of-use asset and liability and are expensed as incurred. In December 2020, the Company recorded a $15 thousand impairment of its "operating lease right-of-use lease asset" in connection with its decision to early terminate one of the leases, which was completed in January 2021. During the year ended December 31, 2020 and for the three and nine months ended September 30, 2021, the Company had no sublease arrangements with it as lessor. Components of Lease Expense The liability associated with each lease is amortized over the respective lease term using the “effective interest rate method.” The Company’s right-of-use asset is amortized over the lease term on a straight-line basis to lease expense, as reported on an allocated basis within “research and development” and “general and administrative” expenses on the accompanying Condensed Statements of Operations and Comprehensive (Loss) Income. The components of lease cost were as follows:
Weighted-Average Remaining Lease Term and Applied Discount Rate As of September 30, 2021 and December 31, 2020, the Company's active facility leases had a weighted average remaining lease term of 2 years, 4 months and 2 years, 10 months, respectively. The weighted average estimated incremental borrowing rate of 10% was utilized to present value future minimum lease payments since an implicit interest rate was not readily determinable. Future Contractual Lease Payments The below table summarizes the (i) minimum lease payments over the next five years and thereafter, (ii) lease arrangement imputed interest, and (iii) present value of future lease payments:
(b) In-License Agreements for Lotilaner Agreement for Skin and Eye Disease or Conditions in Humans In January 2019, the Company entered into an in-license agreement with Elanco Tiergesundheit AG (“Elanco”) for exclusive worldwide rights to certain intellectual property for the development and commercialization of lotilaner in the treatment or cure of any eye or skin disease or condition in humans (the "January 2019 Agreement"). The Company has sole financial responsibility for related development, regulatory, and commercialization activities. The Company made a $1.0 million upfront payment at execution of the January 2019 Agreement. In September 2020, the Company made a required $1.0 million clinical milestone payment associated with the first of two U.S. pivotal trials for the treatment of Demodex blepharitis. The Company paid an additional $2.0 million for its second pivotal trial milestone in April 2021, which was recorded within "research and development" expense in the accompanying Statements of Operations and Comprehensive (Loss) Income for the nine months ended September 30, 2021. The Company may make further cash payments to Elanco under this January 2019 Agreement upon the achievement of certain clinical milestones in the treatment of human skin diseases using lotilaner for an aggregate maximum of $3.0 million and various commercial and sales threshold milestones for an aggregate maximum of $79.0 million. In addition, the Company will be obligated to pay tiered contractual royalties to Elanco in the mid to high single digits of its net sales. If the Company receives certain types of payments from its sublicensees, it will also be obligated to pay Elanco a variable percentage in the low to mid double-digits of such proceeds, except for territories in which the Company achieved applicable regulatory approval prior to sublicense execution. As part of the China Out-License discussed in Note 9, the Company made a required contractual payment in the amount of $2.5 million to Elanco as part of the receipt of $25 million of initial proceeds from LianBio during the second quarter of 2021. Agreement for All Other Diseases or Conditions in Humans In September 2020, the Company executed an expanded in-license agreement with Elanco, granting the Company a worldwide license to certain intellectual property for the development and commercialization of lotilaner for the treatment, palliation, prevention, or cure of "all other" diseases and conditions in humans (i.e., beyond that of the eye or skin), the “September 2020 Agreement.” The Company issued Elanco 222,460 shares of its common stock at the execution of the September 2020 Agreement. The value of these shares was $3.1 million ($14.0003 per share, approximating the issuance price of the Company's Series C preferred stock in September 2020). The Company is required to make further cash payments to Elanco under the September 2020 Agreement upon the achievement of various clinical milestones for an aggregate maximum of $4.5 million and various commercial and sales threshold milestones for an aggregate maximum of $77.0 million. In addition, the Company will be obligated to pay contractual royalties to Elanco in the single digits of its net sales. If the Company receives certain types of payments from its sublicensees, it will also be obligated to pay Elanco a variable percentage in the low to mid double-digits of such proceeds, except for territories in which the Company achieved applicable regulatory approval prior to sublicense execution. In March 2021, the Company entered into an out-license agreement with LianBio (see Note 9), which obligated it to grant Elanco an additional fixed 187,500 shares of the Company's common stock that were otherwise required to be granted no later than the 18-month anniversary of the September 2020 Agreement for the Company's continued license exclusivity. These additional shares were valued at $5.5 million based on the Company's stock closing price of $29.30 per share (on the date the issuance became contractually required) and is reported within "research and development" expense within the accompanying Condensed Statements of Operations and Comprehensive (Loss) Income for the nine months ended September 30, 2021. (c) Employment Agreements The Company has entered into employment agreements with seven of its named executive officers. These agreements provide for the payment of certain benefits upon separation of employment under specified circumstances, such as termination without cause, or termination in connection with a change in control event. (d) Litigation Contingencies From time to time, the Company may be subject to various litigation and related matters arising in the ordinary course of business. The Company is currently not aware of any such matters where there is at least a reasonable probability that a material loss, if any, has been or will be incurred for financial statement recognition. (e) Indemnities and Guarantees The Company has certain indemnity commitments, under which it may be required to make payments to its officers and directors in relation to certain transactions to the maximum extent permitted under applicable laws. The duration of these indemnities varies, and in certain cases, is indefinite and does not provide for any limitation of maximum payments. The Company has not been obligated to make any such payments to date and no liabilities have been recorded for this contingency in the accompanying Condensed Balance Sheets.
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Out-License Agreement |
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Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Out-License Agreement | OUT-LICENSE AGREEMENT Out-License of TP-03 Commercial Rights in Greater China in March 2021 On March 26, 2021, the Company entered into an out-license agreement with LianBio for its exclusive development and commercialization rights of TP-03 (lotilaner ophthalmic solution, 0.25%) in the People’s Republic of China, Hong Kong, Macau, and Taiwan (the “China Territory”) for the treatment of Demodex blepharitis and Meibomian Gland Disease (the “China Out-License”). LianBio is contractually responsible for all clinical development and commercialization activities and costs within the China Territory. The Company received payments from LianBio totaling $25.0 million in April and May 2021 as initial consideration, and a total of $30.0 million in June and August 2021 for the achievement of two clinical development milestones. The Company is also eligible to receive other payments and consideration from LianBio upon achievement of certain additional milestones, including: (i) TP-03 clinical development and regulatory milestones of up to $45.0 million, (ii) TP-03 sales-based milestones for the China Territory of up to $100.0 million, (iii) tiered mid-to-high-teen royalties for China Territory TP-03 sales, and (iv) LianBio equity securities, subject to three TP-03 clinical/regulatory achievements for complete vesting, of which one tranche vested in June 2021. The Company recognized "license fees" and "collaboration revenue" for the three months ended September 30, 2021 of $0.7 million and $0.5 million, respectively, in the accompanying Condensed Statements of Operations and Comprehensive (Loss) Income, in accordance with the revenue recognition accounting policy described in Note 2(vi). These amounts represent separately valued "performance obligations" in the China Out-License. For the nine months ended September 30, 2021, the Company recognized $53.1 million and $3.6 million, respectively, for "license fees" and "collaboration revenue". These revenue amounts were each recognized upon (i) the transfer of TP-03 license rights in the China Territory to LianBio and (ii) the actual or partial completion of clinical activities and related data for the Company's pivotal trials of TP-03 in the treatment of Demodex blepharitis (each representing separately valued "performance obligations" in the China Out-License). As part of this revenue recognition model, the Company was required to value the LianBio equity warrants, applying a discounted cash flow model with highly subjective inputs for this then privately-held, pre-revenue company. The Company also considered the probability of achievement of requisite vesting events for these warrants. Subsequent adjustments to the estimated initial fair value of these warrants are reported within "total revenues" and "other (expense) income, net" on the accompanying Condensed Statements of Operations for the three and nine months ended September 30, 2021 (Note 7). In future periods, the Company may recognize additional revenue from contractual receipts due from LianBio as (1) performance obligations are satisfied related to the completion of the TP-03 pivotal trial and as associated clinical data and reports are delivered, (2) regulatory approval events are achieved, and (3) LianBio has sales of TP-03 in the China Territory.
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Summary of Significant Accounting Policies and Use of Estimates (Policies) |
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Accounting Policies [Abstract] | |
Operating Segment | To date, the Company has operated and managed its business and financial information on an aggregate basis for the purposes of evaluating financial performance and the allocation of capital and personnel resources. Accordingly, the Company’s management determined that it has one reportable operating segment. This single segment is focused exclusively on developing pharmaceutical products for eventual commercialization. |
Basis of Presentation | Basis of Presentation The Company’s condensed financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and pursuant to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Accordingly, the accompanying condensed financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. The interim condensed balance sheet as of September 30, 2021, the interim condensed statements of operations and comprehensive (loss) income, and stockholders’ equity for the three and nine months ended September 30, 2021 and 2020, and the interim condensed cash flows for the nine months ended September 30, 2021 and 2020 are unaudited. These unaudited interim financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, which consist of only normal and recurring adjustments for the fair presentation of its financial information. The financial data and other information disclosed in these notes related to the three and nine-month periods are also unaudited. The condensed balance sheet as of December 31, 2020 has been derived from the audited financial statements at that date but does not include all information and footnotes required by GAAP for annual financial statements. The condensed interim operating results for three and nine months ended September 30, 2021 are not necessarily indicative of results to be expected for the year ending December 31, 2021 or any other interim or annual period. The accompanying interim unaudited condensed financial statements should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2020 in the Company’s Annual Report on Form 10-K (“Annual Report”) for the fiscal year ended December 31, 2020, as filed with the SEC on March 31, 2021. The preparation of financial statements in conformity with GAAP and with the rules and regulations of the SEC requires management to make informed estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. These amounts may materially differ from the amounts ultimately realized and reported due to the inherent uncertainty of any estimate or assumption. On an on-going basis, management evaluates its most critical estimates and assumptions, including those related to the (i) fair value of equity-based awards and periodic recognition of stock-based compensation, (ii) the realization of income tax assets and estimates of tax liabilities, and (iii) expense accruals related to research and development activities, including clinical trials. The accounting policies and estimates that most significantly impact the presented amounts within the accompanying condensed financial statements are further described below:
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Cash and Cash Equivalents | Cash and Cash EquivalentsCash and cash equivalents consist of bank deposits and highly liquid investments, including money market fund accounts, with original maturities of three months or less from the purchase date. |
Restricted Cash | Restricted CashRestricted cash represents cash held as collateral for the Company’s corporate credit card program. Any cash that is legally or contractually restricted from immediate use is classified as restricted cash. |
Concentration of Credit Risk and Other Risks and Uncertainties | Concentration of Credit Risk and Other Risks and Uncertainties Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents in deposits at financial institutions that exceed federally insured limits. In March 2020, the World Health Organization declared a pandemic related to the global novel coronavirus disease 2019 (“COVID-19”) outbreak. To date, the Company’s operations have not been significantly impacted by the COVID-19 pandemic, though the Company continues to monitor the potential impact COVID-19 may have on its ongoing and planned clinical trials. However, the Company cannot at this time predict the specific extent, duration, or full impact that the COVID-19 outbreak may have on these activities or its financial condition. The Company’s results of operations involve numerous risks and uncertainties. Factors that could adversely impact the Company’s operating results and business objectives include, but are not limited to, (1) uncertainty of results of clinical trials, (2) uncertainty of regulatory approval of the Company’s potential product candidates, including TP-03 for ophthalmic conditions, TP-04 for treatment of rosacea, and TP-05 for prophylaxis of Lyme and community malaria reduction, (3) uncertainty of market acceptance of its product candidates, (4) competition from substitute products and other companies, (5) securing and protecting proprietary technology and strategic relationships, and (6) dependence on key individuals and sole source suppliers. The Company’s product candidates require approvals from the U.S. Food and Drug Administration (“FDA”) and comparable foreign regulatory agencies prior to commercial sales in their respective jurisdictions. There can be no assurance that any product candidates will receive these necessary approvals. If the Company is denied approval, approval is delayed, or is unable to maintain approval for any product candidate, it could have a materially adverse impact on the Company's business.
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Property and Equipment | Property and EquipmentProperty and equipment is stated at historical cost and is depreciated on a straight-line basis over an estimated useful life that corresponds with its designated asset category. Leasehold improvements are amortized on a straight-line basis over the shorter of the remaining lease term or the estimated useful lives of related improvements. The Company evaluates the recoverability of “long-lived assets” (which includes property and equipment) whenever events or changes in circumstances in the business indicate that the asset’s carrying amount may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amounts to the sum of the future undiscounted cash flows the assets are expected to generate over the remaining useful lives of the assets. If a long-lived asset fails a recoverability test, the Company measures the amount by which the carrying value of the asset exceeds its fair value. |
Revenue | Revenue Recognition for Out-License Arrangements Overview The Company currently has one out-license arrangement that allows the licensee to market the Company’s TP-03 product (representing "functional intellectual property") in certain territories for a certain field of use and for a stated term - see Note 9. The accounting and reporting of revenue for out-license arrangements requires significant judgment for: (a) identification of the number of performance obligations within the contract, (b) the contract’s transaction price for allocation (including variable consideration), (c) the stand-alone selling price for each identified performance obligation, and (d) the timing and amount of revenue recognition in each period. The Company's out-license arrangement, as described in Note 9, was analyzed under GAAP to determine whether the promised goods or services (which include the license, and know-how, data, and information necessary or reasonably useful for the research, development, manufacture, or commercialization of any license product, and governance committee services) are distinct or must be accounted for as part of a combined performance obligation. In making these assessments, the Company considers factors such as the stage of development of the underlying intellectual property and the capabilities of the customer to develop the intellectual property on their own, and/or whether the required expertise is readily available. If the license is considered to not be distinct, the license is combined with other promised goods or services as a combined performance obligation for revenue recognition. The Company's out-license arrangement is in exchange for the following forms of consideration: (i) upfront cash payments, (ii) equity-based consideration, (iii) sales royalties, (iv) sales threshold milestones, (v) development milestone fees, and (vi) regulatory milestone fees. Revenue is recognized in proportion to the allocated transaction price when (or as) the respective performance obligation is satisfied. The Company evaluates the progress related to each milestone at each reporting period and, if necessary, also adjusts the probability of achievement and related revenue recognition. The measure of progress, and thereby periods over which revenue is recognized, is subject to estimates by management and may change over the course of the agreement. Contractual Terms for Receipt of Payments The contractual terms that establish the Company’s right to collect specified amounts from its customers and that require contemporaneous evaluation and documentation under GAAP for the corresponding timing and amount of revenue recognition, as follows: (1) Upfront License Fees: The Company determines whether non-refundable license consideration is recognized at the time of contract execution (i.e., when the license is transferred to the customer and customer is able to use and benefit from the license) or over the actual (or implied) contractual period of the out-license. The Company also evaluates whether it has any other requirements to provide substantive services that are inseparable from the performance obligation of the license transfer to determine whether any combined performance obligation is satisfied over time or at a point in time. (2) Development Milestones: The Company utilizes the “most likely amount” method to estimate the amount of consideration to which it will be entitled for achievement of development milestones. For those payments based on development milestones (e.g., patient dosing in a clinical study or the achievement of statistically significant clinical results), the Company assesses the probability that the milestone will be achieved, including its ability to control the timing or likelihood of achievement, and any associated revenue constraint. At each reporting period, the Company re-evaluates this associated revenue recognition constraint. Any resulting adjustments are recorded to revenue on a cumulative catch-up basis, thus reflected in the financial statements in the period of adjustment. (3) Regulatory Milestones: The Company utilizes the “most likely amount” method to estimate the consideration to which it will be entitled and recognizes revenue in the period regulatory approval occurs (the performance obligation is satisfied). Amounts constrained as variable consideration are included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company evaluates whether the milestones are considered probable of being reached and not otherwise constrained. Accordingly, due to the inherent uncertainty of achieving regulatory approval, associated milestones are constrained for revenue recognition until achievement. (4) Royalties: Under the "sales-or-usage-based royalty exception" the Company recognizes revenue based on the contractual percentage of the licensee’s sales to its customers at the later of (i) the occurrence of the related sales or (ii) the date upon which the performance obligation to which some or all of the royalty has been allocated has been satisfied or partially satisfied. To date, the Company has not recognized any royalty revenue from its out-licensing arrangements.(5) Sales Threshold Milestones: Similar to royalties, applying the "sales-or-usage-based royalty exception", the Company recognizes revenue from sales threshold milestones at the later of (i) the period the licensee achieves the one-time annual product sales levels in their territories for which the Company is contractually entitled to a specified lump-sum receipt, or (ii) the date upon which the performance obligation to which some or all of the milestone has been allocated has been satisfied or partially satisfied. To date, the Company has not recognized any sales threshold milestone revenue from out-licensing arrangements.
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Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred or as certain upfront or milestone payments become contractually due to licensors upon the achievement of clinical or regulatory events. These expenses also include internal costs directly attributable to in-development programs, including cost of certain salaries, payroll taxes, employee benefits, and stock-based compensation expense, as well as laboratory and clinical supplies, pre-clinical and clinical trial related expenses, and the cost of services provided by outside contractors. The Company recognizes expense for pre-clinical studies and clinical trial activities performed by these third parties. This is typically based upon estimates of the proportion of work completed over the term of the individual study or trial, as well as patient enrollment and dosing events in accordance with agreements established with clinical research organizations ("CROs") and clinical trial or pre-clinical study sites. The Company has entered, and may continue to enter into, license agreements to access and utilize intellectual property for drug development. In each case, the Company evaluates if the assets acquired in a transaction represent the acquisition of an asset or a business, as defined under applicable GAAP. The Company’s executed in-license agreements (see Note 8(b)) were evaluated and determined to represent asset acquisitions. Because these assets have not yet received regulatory approval and have no alternative future uses, the purchase price for each was immediately recognized as research and development expense. In addition, any future milestone payments (whether in the form of cash or stock) made before product regulatory approval (that do not meet the definition of a derivative) will also be immediately recognized as research and development expense when paid or becomes payable, provided there is no alternative future use of the rights in other research and development projects.
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Stock-Based Compensation | Stock-Based Compensation The Company recognizes stock-based compensation expense for equity awards granted to employees, consultants, and members of its Board of Directors. The Black-Scholes pricing model is used to estimate the fair value of stock option awards as of the date of grant. The fair value of restricted stock units is representative of the closing share price preceding the date of grant. For stock-based awards that vest subject to the satisfaction of a service requirement, the related expense is recognized on a straight-line basis over each award’s actual or implied vesting period. For stock-based awards that vest subject to a performance condition, the Company recognizes related expense on an accelerated attribution method, if and when it concludes that it is highly probable that the performance condition will be achieved. As applicable, the Company reverses previously recognized expense in the same period of the forfeiture of unvested awards. The measurement of the fair value of stock-based awards and recognition of stock-based compensation expense requires assumptions to be estimated by management that involve inherent uncertainties and the application of management’s judgment, including (a) the fair value of the Company’s common stock on the date of the option grant, (b) the expected term of the stock option until its exercise by the recipient, (c) stock price volatility over the expected term, (d) the prevailing risk-free interest rate over the expected term, and (e) expected dividend payments over the expected term. Management estimates the expected term of awarded stock options utilizing the “simplified method” for awards as the Company does not yet have sufficient exercise history since its November 2016 formation. Further, prior to the IPO, the Company was privately-held and therefore lacked company-specific historical and implied volatility information of its stock. Accordingly, management estimated this expected volatility based on a designated peer-group of publicly-traded companies for a look-back period, as of the date of grant, that corresponded with the expected term of the awarded stock option. The Company estimates the risk-free interest rate based upon the U.S. Department of the Treasury yield curve in effect at award grant for time periods that correspond with the expected term of the awarded stock option. The Company’s expected dividend yield is zero because it has never paid cash dividends and does not expect to for the foreseeable future. Prior to the IPO, given the absence of a public trading market, the Company’s Board of Directors, with input from management, considered numerous objective and subjective factors to determine the fair value of its common stock. The factors included: (i) third-party valuations of the Company’s common stock; (ii) the Company’s stage of development; (iii) the status of research and development efforts; (iv) the rights, preferences and privileges of the Company’s preferred stock relative to common stock; (v) the Company’s operating results and financial condition, including the Company’s levels of available capital resources; (vi) equity market conditions affecting comparable public companies; (vii) general U.S. market conditions; and (viii) the lack of current marketability of the Company’s common stock. Subsequent to the IPO, the fair value of the Company’s common stock is based on the closing quoted market price of its common stock as reported by the Nasdaq Global Select Market on the date of grant. All stock-based compensation expense is reported in the Statements of Operations and Comprehensive (Loss) Income within "research and development" expense or "general and administrative" expense, based upon the assigned department of the award recipient.
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Income Taxes | Income Taxes Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recorded based on the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the financial statements, as well as operating losses and tax credit carryforwards using enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period of enactment. Realization of deferred tax assets is dependent upon future earnings, the timing and amount of which are uncertain due to the Company’s historical operating performance and recorded cumulative net losses in prior fiscal periods. A valuation allowance is recorded to reduce deferred tax assets, because based upon a weighting of positive and negative factors, it is more likely than not that these deferred tax assets will not be realized. If and when the Company were to determine that deferred tax assets are realizable, an adjustment to the corresponding valuation allowance would increase the net income in the period that such determination was made. In the event that the Company is assessed interest and/or penalties from taxing authorities that have not been previously accrued, such amounts would be included as a component of “income tax expense” within the Statements of Operations and Comprehensive (Loss) Income in the period the notice was received. To date there have been no interest or penalties charged. In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). ASU 2019-12 removes certain exceptions for performing intraperiod tax allocations, recognizing deferred taxes for investments, and calculating income taxes in interim periods. The guidance also simplifies the accounting for franchise taxes, transactions that result in a step-up in the tax basis of goodwill, and the effect of enacted changes in tax laws or rates in interim periods. The Company adopted ASU 2019-12 in the first quarter of 2021, which had no material impact to its financial statements.
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Net (Loss) Income per Share Attributable to Common Stockholders | Net (Loss) Income per Share Attributable to Common Stockholders Basic net (loss) income per share attributable to common stockholders is calculated by dividing the net (loss) income by the weighted-average number of shares of common stock outstanding for the period, without the consideration for potential dilutive shares of common stock. Diluted net (loss) income per share is computed by dividing the net (loss) income by the weighted-average number of common stock equivalents outstanding for the period determined using the treasury-stock method and if-converted method, as applicable. The Company’s participating securities include unvested common stock awards issued upon early exercise of certain stock options, as early exercised unvested common stock awards have a non-forfeitable right to dividends. The Company’s participating securities do not have a contractual obligation to share in the Company’s losses, so in periods of net losses, the "two-class method" of calculating basic and diluted earnings per share is not required. In periods of net income, basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. Also, net income is attributed to both common stockholders and participating security holders, and therefore, net income is allocated to shares of common stock and participating securities, as if all of the earnings for the period had been distributed. Diluted earnings per share under the two-class method is calculated using the more dilutive of the treasury stock or the two-class method. For the nine months ended September 30, 2021, the "two-class method" was utilized to calculate diluted net income per share as it was more dilutive than the "treasury stock method". Due to a net loss for the three months ended September 30, 2021, and the three and nine months ended September 30, 2020, all otherwise potentially dilutive securities are antidilutive, and accordingly, the reported basic net loss per share equals the reported diluted net loss per share in these periods.
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Fair Value Measurements | Fair Value Measurements Assets and liabilities recorded at fair value on a recurring basis in the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows: •Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that are publicly accessible at the measurement date. •Level 2: Observable prices that are based on inputs not quoted on active markets, but that are corroborated by market data. These inputs may include quoted prices for similar assets or liabilities or quoted market prices in markets that are not active to the general public. •Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The carrying amounts for financial instruments consisting of cash and cash equivalents, accounts payable and accrued liabilities approximate fair value due to their short maturities. Derivative instruments (see Note 7) are carried at fair value based on unobservable market inputs.
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Comprehensive (Loss) Income | Comprehensive (Loss) Income Comprehensive (loss) income represents all changes in stockholders’ equity (deficit), except those resulting from distributions to stockholders. For all periods presented, comprehensive (loss) income was the same as reported net (loss) income. |
Recently Issued or Effective Accounting Standards | Recently Issued or Effective Accounting StandardsRecently issued or effective accounting pronouncements that impact, or may have an impact, on the Company’s financial statements have been discussed within the footnote to which each relates. Other recent accounting pronouncements not disclosed in these Condensed Financial Statements have been determined by the Company’s management to have no impact, or an immaterial impact, on its current and expected future financial position, results of operations, or cash flows. |
Balance Sheet Account Detail (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and equipment, net of accumulated depreciation | “Property and equipment, net of accumulated depreciation” consists of the following:
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Other assets | "Other assets" consists of the following:
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Accounts payable and accrued liabilities | “Accounts payable and other accrued liabilities” consists of the following:
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Other long-term liabilities | “Other long-term liabilities” consists of the following:
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Stockholders' Equity (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock details | The following shares of common stock were reserved for issuance:
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Stock-Based Compensation (Tables) |
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Stock-based compensation | Stock-based compensation expense for the three and nine months ended September 30, 2021 and 2020 was as follows:
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Net (Loss) Income Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net (loss) income per share, basis and diluted | The following table sets forth the computation of basic and diluted net (loss) income per share attributable to common stockholders:
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial instruments measured at fair value | The table below summarizes certain financial instruments measured at fair value that are included within the accompanying balance sheets, and their designation among the three fair value measurement categories (see Note 2(xiii)):
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Changes in fair value of derivative liability | The following table sets forth a summary of the changes in fair value of the equity warrant rights presented in "other assets" on the accompanying Condensed Balance Sheets. The measurement of the equity warrant rights represents a Level 3 financial instrument:
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Commitment & Contingencies (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of lease cost | The components of lease cost were as follows:
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Future contractual lease payments | The below table summarizes the (i) minimum lease payments over the next five years and thereafter, (ii) lease arrangement imputed interest, and (iii) present value of future lease payments:
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Description of Business and Presentation of Financial Statements (Details) $ / shares in Units, $ in Thousands |
9 Months Ended | ||||
---|---|---|---|---|---|
Oct. 20, 2020
USD ($)
$ / shares
shares
|
Oct. 08, 2020 |
Sep. 30, 2021
USD ($)
segment
|
Dec. 31, 2020
USD ($)
|
Sep. 30, 2020
USD ($)
|
|
Subsequent Event [Line Items] | |||||
Reverse stock split, conversion ratio | 0.1346 | ||||
Accumulated deficit | $ | $ 31,821 | $ 32,845 | |||
Cash and cash equivalents | $ | $ 183,801 | $ 168,129 | $ 86,329 | ||
Number of reportable segments | segment | 1 | ||||
Number of operating segments | segment | 1 | ||||
IPO | |||||
Subsequent Event [Line Items] | |||||
Stock issued (shares) | shares | 6,325,000 | ||||
Price per share (usd per share) | $ / shares | $ 16.00 | ||||
Stock issued, net proceeds | $ | $ 91,700 | ||||
Common stock issued upon conversion of preferred stock (shares) | shares | 11,107,018 | ||||
Underwriters' option | |||||
Subsequent Event [Line Items] | |||||
Stock issued (shares) | shares | 825,000 |
Balance Sheet Account Detail - Property and Equipment, Net of Accumulated Depreciation (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
Dec. 31, 2020 |
|
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, at cost | $ 869 | $ 869 | $ 682 | ||
(Less): Accumulated depreciation and amortization | 350 | 350 | 134 | ||
Property and equipment, net of accumulated depreciation and amortization | 519 | 519 | 548 | ||
Depreciation | 100 | $ 24 | 300 | $ 100 | |
Furniture and fixtures | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, at cost | 450 | 450 | 294 | ||
Office equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, at cost | 67 | 67 | 74 | ||
Laboratory equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, at cost | 167 | 167 | 173 | ||
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, at cost | $ 185 | $ 185 | $ 141 |
Balance Sheet Account Detail - Other Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Deposits | $ 72 | $ 33 |
Equity warrant rights | 1,501 | 0 |
Other long term assets | 42 | 48 |
Other assets | $ 1,615 | $ 81 |
Balance Sheet Account Detail - Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Trade accounts payable and other | $ 2,010 | $ 2,237 |
Operating lease liability, current portion | 538 | 282 |
Accrued clinical studies | 4,450 | 1,524 |
Contract liability | 1,034 | 0 |
Income taxes payable | 0 | 0 |
Employee stock option pre-vesting exercise liability, current portion | 87 | 304 |
Accounts payable and other accrued liabilities | $ 8,119 | $ 4,347 |
Balance Sheet Account Detail - Other Long-Term Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Operating lease liability, non-current portion | $ 755 | $ 549 |
Derivative liability | 150 | 0 |
Employee stock option pre-vesting exercise liability, non-current portion | 0 | 56 |
Other long-term liabilities | $ 905 | $ 605 |
Stockholders' Equity - Additional Information (Details) |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2021
vote
$ / shares
shares
|
Dec. 31, 2020
$ / shares
shares
|
|
Class of Stock [Line Items] | ||
Common stock, authorized (shares) | 200,000,000 | 200,000,000 |
Preferred stock, authorized (shares) | 10,000,000 | |
Common stock voting rights, number of votes | vote | 1 | |
Common stock dividends declared (usd per share) | $ / shares | $ 0 | $ 0 |
Common stock, issued (shares) | 20,714,228 | 20,502,576 |
Common stock, outstanding (shares) | 20,671,079 | 20,323,301 |
Stockholders' Equity - Shares Reserved for Issuance (Details) - shares |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Equity [Abstract] | ||
Stock options issued and outstanding (shares) | 2,663,356 | 1,836,739 |
Stock options reserved for future grant (shares) | 9,376,475 | 9,414,091 |
Restricted stock units outstanding | 4,257 | 0 |
Total shares of common stock reserved (shares) | 12,044,088 | 11,250,830 |
Stock-Based Compensation - Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation | $ 2,119 | $ 223 | $ 6,276 | $ 401 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation | 544 | 102 | 1,315 | 118 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation | $ 1,575 | $ 121 | $ 4,961 | $ 283 |
Net (Loss) Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Basic EPS | ||||||||
Net (loss) income | $ (15,697) | $ 6,345 | $ 10,376 | $ (10,138) | $ (3,250) | $ (1,957) | $ 1,024 | $ (15,344) |
Less: undistributed income allocated to participating securities | 0 | 0 | 7 | 0 | ||||
Net (loss) income available to common shareholders | $ (15,697) | $ (10,138) | $ 1,017 | $ (15,344) | ||||
Basic weighted average shares outstanding (shares) | 20,641,285 | 2,729,685 | 20,511,973 | 2,677,315 | ||||
Net (loss) income per share attributable to common stockholders - basic (usd per share) | $ (0.76) | $ (3.71) | $ 0.05 | $ (5.73) | ||||
Diluted EPS | ||||||||
Net (loss) income | $ (15,697) | $ 6,345 | $ 10,376 | $ (10,138) | $ (3,250) | $ (1,957) | $ 1,024 | $ (15,344) |
Less: undistributed income reallocated to participating securities | 0 | 0 | 7 | 0 | ||||
Net (loss) income available to common shareholders | $ (15,697) | $ (10,138) | $ 1,017 | $ (15,344) | ||||
Basic weighted average shares outstanding (shares) | 20,641,285 | 2,729,685 | 20,511,973 | 2,677,315 | ||||
Effect of dilutive securities: | ||||||||
Common stock options (shares) | 0 | 0 | 1,520,514 | 0 | ||||
Diluted weighted average shares outstanding (shares) | 20,641,285 | 2,729,685 | 22,032,487 | 2,677,315 | ||||
Net (loss) income per share attributable to common stockholders - diluted (usd per share) | $ (0.76) | $ (3.71) | $ 0.05 | $ (5.73) |
Net (Loss) Income Per Share - Antidilutive Securities (Details) - shares shares in Thousands |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Unexercised stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of net income (loss) per share | 1,800 | 900 | 1,800 |
Preferred stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of net income (loss) per share | 8,500 | 8,300 | |
Early-exercised and unvested stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of net income (loss) per share | 179 | 179 |
Fair Value Measurements - Financial Instruments Measured at Fair Value (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Assets: | ||
Equity warrant rights | $ 1,501 | |
Total assets measured at fair value | 185,302 | $ 168,129 |
Money market funds | ||
Assets: | ||
Money market funds | 183,801 | 168,129 |
Level 1 | ||
Assets: | ||
Equity warrant rights | 0 | |
Total assets measured at fair value | 183,801 | 168,129 |
Level 1 | Money market funds | ||
Assets: | ||
Money market funds | 183,801 | 168,129 |
Level 2 | ||
Assets: | ||
Equity warrant rights | 0 | |
Total assets measured at fair value | 0 | 0 |
Level 2 | Money market funds | ||
Assets: | ||
Money market funds | 0 | 0 |
Level 3 | ||
Assets: | ||
Equity warrant rights | 1,501 | |
Total assets measured at fair value | 1,501 | 0 |
Level 3 | Money market funds | ||
Assets: | ||
Money market funds | $ 0 | $ 0 |
Fair Value Measurements - Changes in Fair Value of Derivative Liability (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Fair value, beginning of period | $ 1,076 | $ 1,233 | $ 0 |
Initial fair value estimate of equity warrant rights upon issuance | 1,233 | ||
Fair value, end of period | 1,501 | 1,076 | $ 1,233 |
Total revenues | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Revaluation of equity warrant rights | 771 | 719 | |
Other income (expense), net | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Revaluation of equity warrant rights | $ (346) | $ (876) |
Commitment & Contingencies - Lease Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating lease cost | $ 118 | $ 79 | $ 238 | $ 133 |
Variable lease cost | 33 | 38 | 104 | 38 |
Short-term lease cost | 21 | 0 | 116 | 0 |
Total lease cost | $ 172 | $ 117 | $ 458 | $ 171 |
Commitment & Contingencies - Employment Arrangements (Details) |
Sep. 30, 2021
arrangement
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
Number of employment arrangements with executive officers | 7 |