0001558370-23-008503 | 10-Q | XBRL Viewer | Corvus Pharmaceuticals INC

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CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 9,654	$ 13,159
Marketable securities	24,813	29,144
Accounts receivable - related party	429	588
Prepaid and other current assets	655	773
Total current assets	35,551	43,664
Property and equipment, net	330	353
Operating lease right-of-use asset	1,953	2,217
Investment in Angel Pharmaceuticals	20,234	21,877
Other assets	129	129
Total assets	58,197	68,240
Current liabilities:
Accounts payable	1,407	1,976
Operating lease liability	1,263	1,228
Accrued and other liabilities	5,620	7,548
Total current liabilities	8,290	10,752
Operating lease liability	1,040	1,373
Total liabilities	9,330	12,125
Commitments and contingencies (Note 13)
Stockholders' equity:
Preferred stock: $0.0001 par value; 10,000,000 shares authorized at March 31, 2023 and December 31, 2022; 0 shares issued and outstanding at March 31, 2022 and December 31, 2022
Common stock: $0.0001 par value; 290,000,000 shares authorized at March 31, 2023 and December 31, 2022; 46,568,511 and 46,553,511 shares issued and outstanding at March 31, 2023 and December 31, 2022	5	5
Additional paid-in capital	364,857	364,361
Accumulated other comprehensive (loss) income	(434)	(563)
Accumulated deficit	(315,561)	(307,688)
Total stockholders' equity	48,867	56,115
Total liabilities and stockholders' equity	$ 58,197	$ 68,240

Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2023

Stock-Based Compensation

Schedule of expenses relating to employee and non-employee stock-based awards

The Company’s results of operations include expenses relating to employee and non-employee stock-based awards as follows (in thousands):


	Three Months Ended
	March 31,
	2023		2022
Research and development	$	192	$	302
General and administrative		300		437
Total	$	492	$	739

Equity Method Investment (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
Equity Method Investment (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Schedule of Equity Method Investments [Line Items]
Loss from equity method investment	$ 1,731	$ 1,041
Net loss	$ (7,873)	(8,297)
Angel Pharmaceuticals
Schedule of Equity Method Investments [Line Items]
Ownership interest (as percent)	49.70%		49.70%
Equity reserved (as percent)	7.00%		7.00%
Loss from equity method investment	$ 1,700		$ (1,000)
Net loss	(2,032)	(1,325)
Share of loss from investments accounted for using the equity method	$ (1,731)	$ (1,041)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Stock Option Plans - Stock Option Activity (Details) - $ / shares	1 Months Ended		3 Months Ended
	Mar. 31, 2016	Feb. 28, 2014	Mar. 31, 2023
Stock Option Plans
Shares available for future option grants			5,138,454
Shares Available for Grant
Beginning balance			4,017,011
Ending balance			5,138,454
Number of Options
Beginning balance			7,006,250
Ending balance			7,731,807
2014 Plan
Stock Option Plans
Vesting period		4 years
Maximum exercise term		10 years
Exercise price of common stock of its fair value (as a percent)		100.00%
Shares available for future option grants	0
Maximum number of options that may be re-issued under the 2016 plan	1,136,229
Shares Available for Grant
Ending balance	0
2016 Plan
Stock Option Plans
Vesting period	4 years
Maximum exercise term	10 years
Exercise price of common stock of its fair value (as a percent)	100.00%
Shares available for future option grants			5,138,454
Shares Available for Grant
Beginning balance			4,017,011
Additional shares authorized			1,862,000
Granted			(860,000)
Forfeited			119,443
Ending balance			5,138,454
Number of Options
Beginning balance			7,006,250
Granted			860,000
Exercised			(15,000)
Forfeited			(119,443)
Ending balance			7,731,807
Weighted-Average Exercise Price
Beginning balance (in dollars per share)			$ 5.25
Granted (in dollars per share)			0.90
Exercised (in dollars per share)			0.28
Forfeited (in dollars per share)			6.75
Ending balance (in dollars per share)			$ 4.75

Common Stock (Details)		1 Months Ended		3 Months Ended
Common Stock (Details)	Mar. 28, 2023 USD ($)	Nov. 30, 2021 USD ($)	Mar. 31, 2020 USD ($)	Mar. 31, 2023 USD ($) Vote shares	Dec. 31, 2022 shares
Common Stock
Common stock, shares authorized for issuance				290,000,000	290,000,000
Preferred stock, shares authorized for issuance				10,000,000	10,000,000
Number of votes per share of common stock \| Vote				1
Dividends on common stock \| $				$ 0
Shares of common stock reserved for issuance, on an as-converted basis
Shares available for future option grants				5,138,454	4,017,011
Outstanding options				7,731,807	7,006,250
Shares reserved for employee stock purchase plan				400,000	400,000
Total				13,270,261	11,423,261
At-the-market offering \| Jefferies LLC \| 2020 Sales Agreement
Common Stock
Common stock shares sold				6,920,339
Common stock gross proceeds \| $				$ 31,100,000
At-the-market offering \| Jefferies LLC \| 2020 Sales Agreement \| Maximum
Common Stock
Potential gross proceeds \| $			$ 50,000,000
At-the-market offering \| Jefferies LLC \| 2021 sales agreement \| Maximum
Common Stock
Potential gross proceeds \| $		$ 40,000,000
At-the-market offering \| Jefferies LLC \| 2023 Sales Agreement
Common Stock
Stock issuance costs, as a percent of gross proceeds	3.00%
Common stock shares sold				0
At-the-market offering \| Jefferies LLC \| 2023 Sales Agreement \| Maximum
Common Stock
Potential gross proceeds \| $	$ 90,000,000

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2023	May 08, 2023
Document And Entity Information
Document Quarterly Report	true
Document Transition Report	false
Document Type	10-Q
Document Period End Date	Mar. 31, 2023
Entity Registrant Name	Corvus Pharmaceuticals, Inc.
Entity Tax Identification Number	46-4670809
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity File Number	001-37719
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	863 Mitten Road, Suite 102
Entity Address, City or Town	Burlingame
Entity Address, Postal Zip Code	94010
Entity Address, State or Province	CA
City Area Code	650
Local Phone Number	900-4520
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Title of 12(b) Security	Common Stock
Security Exchange Name	NASDAQ
Trading Symbol	CRVS
Entity Common Stock, Shares Outstanding		46,568,511
Entity Central Index Key	0001626971
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Amendment Flag	false

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Operating expenses:
Research and development	$ 4,594,000	$ 5,100,000
General and administrative	1,980,000	2,313,000
Total operating expenses	6,574,000	7,413,000
Loss from operations	(6,574,000)	(7,413,000)
Interest income and other expense, net	376,000	11,000
Sublease income - related party	56,000	146,000
Loss from equity method investment	(1,731,000)	(1,041,000)
Net loss	$ (7,873,000)	$ (8,297,000)
Net loss per share, basic	$ (0.17)	$ (0.18)
Net loss per share, diluted	$ (0.17)	$ (0.18)
Shares used to compute net loss per share, basic	46,556,178	46,553,511
Shares used to compute net loss per share, diluted	46,556,178	46,553,511
Other comprehensive loss:
Unrealized gain (loss) on marketable securities	$ 41,000	$ (28,000)
Cumulative foreign currency translation adjustment	88,000	146,000
Comprehensive loss	$ (7,744,000)	$ (8,179,000)

Facility Lease (Tables)

3 Months Ended

Mar. 31, 2023

Facility Lease

Schedule of Operating Lease Costs


		Three Months Ended
	Statements of operations and	March 31,
	comprehensive loss location	2023		2022
Costs of operating lease
Operating lease costs	Research and development, General and administrative	$	306	$	306
Costs of non-lease components (previously common area maintenance)	Research and development, General and administrative		111		108
Total operating lease cost		$	417	$	414
Other Information
Operating cash flows used for operating lease		$	459	$	433
Remaining lease term			1.8 years		2.8 years
Discount rate			8.0%		8.0%

Schedule of Minimum rental commitments


Year Ended December 31 (in thousands)
2023*	$	1,043
2024		1,434
Total lease payments		2,477
Less: imputed interest		(174)
Total	$	2,303

* Remainder of the year

As of December 31, 2022, minimum rental commitments under this lease were as follows (in thousands):


Year Ended December 31 (in thousands)
2023	$	1,391
2024		1,434
Total lease payments		2,825
Less: imputed interest		(224)
Total	$	2,601

Related Party Transactions (Details)		1 Months Ended			3 Months Ended		12 Months Ended
Related Party Transactions (Details)	Apr. 26, 2016 $ / shares shares	Aug. 31, 2021 ft²	Feb. 28, 2021 USD ($) $ / shares shares	Mar. 31, 2018 USD ($) $ / shares shares	Mar. 31, 2023 USD ($)	Mar. 31, 2022 USD ($)	Dec. 31, 2022 USD ($)
Owners of More Than 5% of Our Common Stock or Board of Directors
Area of property subleased \| ft²		7,585
Sublease income - related party					$ 56,000	$ 146,000	$ 146,000
Angel Pharmaceuticals
Owners of More Than 5% of Our Common Stock or Board of Directors
Area of property subleased \| ft²		7,585
Sublease income - related party					56,000		$ 146,000
ICON plc
Owners of More Than 5% of Our Common Stock or Board of Directors
Clinical trial expense					$ 118,000	69,000
Follow-on Public Offering
Public Offerings
Issuance of common stock \| shares			9,783,660	8,117,647
Share offering price \| $ / shares			$ 3.50	$ 8.50
Proceeds from sale of stock			$ 32,000,000.0	$ 64,900,000
Over-Allotment Option
Public Offerings
Issuance of common stock \| shares	502,618		1,212,231	1,058,823
Share offering price \| $ / shares	$ 15.00
Angel Pharmaceuticals
Related Party Transactions
Ownership interest (as percent)					49.70%		49.70%
Angel Pharmaceuticals \| Angel Pharmaceuticals
Related Party Transactions
Ownership interest (as percent)							49.70%
Owners of More Than 5% of Our Common Stock or Board of Directors
Internal personnel costs					$ 0.0	50,000
Related party research service costs					100,000
Third-party costs					$ 48,000	$ 101,000

Balance Sheet Components - Prepaid and Other Current Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Prepaid and Other Current Assets
Interest receivable	$ 38	$ 45
Prepaid research and development manufacturing expenses	221	192
Prepaid facility expenses	196	182
Prepaid insurance	69	252
Other	131	102
Total of prepaid and other current assets	$ 655	$ 773

Stock Option Plans

3 Months Ended

Mar. 31, 2023

Stock Option Plans

Stock Option Plans

9. Stock Option Plans

In February 2014, the Company adopted the 2014 Equity Incentive Plan (the “2014 Plan”), which was subsequently amended in November 2014, July 2015 and September 2015, under which it granted incentive stock options (“ISOs”) or non-qualified stock options (“NSOs”). Terms of stock agreements, including vesting requirements, are determined by the board of directors or a committee authorized by the board of directors, subject to the provisions of the 2014 Plan. In general, awards granted by the Company vest over four years and have a maximum exercise term of 10 years. The 2014 Plan provides that grants must be at an exercise price of 100% of fair market value of the Company’s common stock as determined by the board of directors on the date of the grant.

In connection with the consummation of the IPO in March 2016, the 2016 Equity Incentive Award Plan (the “2016 Plan”), became effective. Under the 2016 Plan, incentive stock options, non-statutory stock options, stock purchase rights and other stock-based awards may be granted. Terms of stock agreements, including vesting requirements, are determined by the board of directors or a committee authorized by the board of directors, subject to the provisions of the 2016 Plan. In general, awards granted by the Company vest over four years and have a maximum exercise term of 10 years. The 2016 Plan provides that grants must be at an exercise price of 100% of fair market value of the Company’s common stock as determined by the board of directors on the date of the grant. In conjunction with adopting the 2016 Plan, the 2014 Plan was terminated and no further awards will be granted under the 2014 Plan. Options outstanding under the 2014 Plan as of the effective date of the 2016 Plan that are forfeited or lapse unexercised may be re-issued under the 2016 Plan, up to a maximum of 1,136,229 shares.

Activity under the Company’s stock option plans is set forth below:


		Options Outstanding
			Weighted ‑
	Shares		Average
	Available	Number of	Exercise
	for Grant	Options	Price
Balance at December 31, 2022	4,017,011	7,006,250	$	5.25
Additional shares authorized	1,862,000	—		—
Options granted	(860,000)	860,000		0.90
Options exercised	—	(15,000)		0.28
Options forfeited	119,443	(119,443)		6.75
Balance at March 31, 2023	5,138,454	7,731,807	$	4.75

Equity Method Investment (Tables)

3 Months Ended

Mar. 31, 2023

Equity Method Investment

Schedule of financial information of Angel Pharmaceuticals Co.


		As of		As of
Balance Sheet Data	March 31, 2023		December 31, 2022

	(in thousands)
Current assets	$	24,463	$	29,062
Non-current assets		1,572		1,652
Current liabilities		3,625		6,293
Non-current liabilities		903		985
Stockholders' equity		21,507		23,436


	Three Months Ended
	March 31,
Statement of Operations Data	2023		2022

		(in thousands)
Revenue	$	—	$	—
Gross Profit		—		—
Net loss		(2,032)		(1,325)
Share of loss from investments accounted for using the equity method		(1,731)		(1,041)

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Measurements

Schedule of fair value of assets measured at fair value on a recurring basis, by level of fair value hierarchy

The following tables present information as of March 31, 2023 and December 31, 2022 about the Company’s assets that are measured at fair value on a recurring basis and indicate the level of the fair value hierarchy the Company utilized to determine such fair values (in thousands):


	March 31, 2023
	Fair Value Measured Using						Total
	(Level 1)		(Level 2)		(Level 3)		Balance
Assets
Cash equivalents	$	9,407	$	—	$	—	$	9,407
Marketable securities		14,698		10,115		—		24,813
	$	24,105	$	10,115	$	—	$	34,220


	December 31, 2022
	Fair Value Measured Using						Total
	(Level 1)		(Level 2)		(Level 3)		Balance
Assets
Cash equivalents	$	11,942	$	—	$	—	$	11,942
Marketable securities		22,001		7,143		—		29,144
	$	33,943	$	7,143	$	—	$	41,086

Schedule of fair value of available for sale marketable securities

As of March 31, 2023 and December 31, 2022, the fair value of available for sale marketable securities by type of security were as follows (in thousands):


	March 31, 2023
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
U.S. Treasury securities	$	14,697	$	4	$	(3)	$	14,698
U.S. Government agency securities		10,126		2		(13)		10,115
	$	24,823	$	6	$	(16)	$	24,813


	December 31, 2022
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
U.S. Treasury securities	$	22,020	$	4	$	(23)	$	22,001
U.S. Government agency securities		7,175		—		(32)		7,143
	$	29,195	$	4	$	(55)	$	29,144

Balance Sheet Components - Accrued and Other Liabilities (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Accrued and Other Liabilities
Accrued clinical trial expense	$ 2,893,000	$ 2,934,000
Accrued manufacturing expense	1,482,000	3,254,000
Personnel related	658,000	1,113,000
Accrued legal and accounting	208,000	89,000
Other	379,000	158,000
Total of accrued and other liabilities	5,620,000	7,548,000
Depreciation expense	$ 57,000	$ 87,000

Income Taxes

3 Months Ended

Mar. 31, 2023

Income Taxes

Income Taxes

11. Income Taxes

During the three months ended March 31, 2023 and 2022, the Company recorded no income tax benefits for the net operating losses (NOLs) incurred due to the uncertainty of realizing a benefit from those items. The Company continues to maintain a full valuation allowance against its net deferred tax assets.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
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-Subparagraph (b)
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Stock-Based Compensation

3 Months Ended

Mar. 31, 2023

Stock-Based Compensation

Stock-Based Compensation

10. Stock-Based Compensation

The Company’s results of operations include expenses relating to employee and non-employee stock-based awards as follows (in thousands):


	Three Months Ended
	March 31,
	2023		2022
Research and development	$	192	$	302
General and administrative		300		437
Total	$	492	$	739

Organization

3 Months Ended

Mar. 31, 2023

Organization

Organization

1. Organization

Corvus Pharmaceuticals, Inc. (“Corvus” or the “Company”) was incorporated in Delaware on January 27, 2014 and commenced operations in November 2014. Corvus is a clinical-stage biopharmaceutical company. The Company’s operations are located in Burlingame, California.

Presentation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Corvus Biopharmaceuticals, Ltd. and Corvus Hong Kong Limited. All intercompany accounts and transactions have been eliminated from the consolidated financial statements.

Initial Public Offering

On March 22, 2016, the Company’s registration statement on Form S-1 (File No. 333-208850) relating to its initial public offering (“IPO”) of its common stock was declared effective by the Securities and Exchange Commission (“SEC”) and the shares of its common stock began trading on the Nasdaq Global Market on March 23, 2016. The public offering price of the shares sold in the IPO was $15.00 per share. The IPO closed on March 29, 2016, pursuant to which the Company sold 4,700,000 shares of its common stock. On April 26, 2016, the Company sold an additional 502,618 shares of its common stock to the underwriters upon partial exercise of their over-allotment option, at the initial offering price of $15.00 per share. The Company received aggregate net proceeds of approximately $70.6 million, after underwriting discounts, commissions and offering expenses. Immediately prior to the consummation of the IPO, all outstanding shares of convertible preferred stock were converted into common stock.

Follow-on Public Offerings

In March 2018, the Company completed a follow-on public offering in which the Company sold 8,117,647 shares of common stock at a price of $8.50 per share, which included 1,058,823 shares issued pursuant to the underwriters’ exercise of their option to purchase additional shares of common stock. The aggregate net proceeds received by the Company from the offering were approximately $64.9 million, net of underwriting discounts and commissions and offering expenses payable by the Company.

In February 2021, the Company completed a follow-on public offering in which the Company sold 9,783,660 shares of common stock at a price of $3.50 per share, which included 1,212,231 shares issued pursuant to the underwriters’ exercise of their option to purchase additional shares of common stock. The aggregate net proceeds received by the Company from the offering were approximately $32.0 million, net of underwriting discounts and commissions and offering expenses.

Liquidity

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, protection of proprietary technology, dependence on key personnel, contract manufacturer and contract research organizations, compliance with government regulations and the need to obtain additional financing to fund operations. Since commencing operations in 2014, the majority of the Company’s efforts have been focused on the research and development of CPI-818, ciforadenant and mupadolimab (formerly CPI-006). The Company believes that it will continue to expend substantial resources for the foreseeable future as it continues clinical development of, seek regulatory approval for and, if approved, prepare for the commercialization of CPI-818, ciforadenant and mupadolimab, as well as product candidates under the Company’s other development programs. These expenditures will include costs associated with research and development, conducting preclinical studies and clinical trials, obtaining regulatory

approvals, manufacturing and supply, sales and marketing and general operations. In addition, other unanticipated costs may arise. Because the outcome of any clinical trial and/or regulatory approval process is highly uncertain, the Company may not be able to accurately estimate the actual amounts necessary to successfully complete the development, regulatory approval process and commercialization of CPI-818, ciforadenant and mupadolimab or any other product candidates. The Company does not expect its existing capital resources to be sufficient to enable it to fund the completion of its clinical trials and remaining development program of CPI-818, ciforadenant and mupadolimab through commercialization. In addition, its operating plan may change as a result of many factors, including those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed on March 28, 2023 and this Quarterly Report on Form 10-Q.

The Company has incurred significant losses and negative cash flows from operations in all periods since inception and had an accumulated deficit of $315.6 million as of March 31, 2023. The Company has historically financed its operations primarily through the sale of common stock and redeemable convertible preferred stock. While the Company has been able to raise multiple rounds of financing, there can be no assurance that in the event the Company requires additional financing, such financing will be available on terms which are favorable or at all. Failure to generate sufficient cash flows from operations, raise additional capital or reduce certain discretionary spending would have a material adverse effect on the Company’s ability to achieve its intended business objectives.

As of March 31, 2023, the Company had cash, cash equivalents and short-term marketable securities of $34.5 million. Management believes that the Company’s current cash, cash equivalents and short-term marketable securities will be sufficient to fund its planned operations for at least 12 months from the date of the issuance of these financial statements.

As of March 28, 2023, at the time of the filing of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, and during the sixty-day period preceding this date, its calculated public float was below $75.0 million. As a result, it has been and will be subject to baby shelf rules for any offerings conducted on its shelf registration statement, including any sales under its ATM with Jefferies LLC (“Jefferies”). Such rules limit the amount the Company can raise until such time that its public float is above $75.0 million.

Organization - Public Offerings (Details) - USD ($) $ / shares in Units, $ in Thousands			1 Months Ended		3 Months Ended
	Apr. 26, 2016	Mar. 29, 2016	Feb. 28, 2021	Mar. 31, 2018	Mar. 31, 2023	Dec. 31, 2022
Public Offerings
Accumulated deficit					$ 315,561	$ 307,688
Cash, cash equivalents and short-term marketable securities					$ 34,500
Common stock, par value (in dollars per share)					$ 0.0001	$ 0.0001
Shelf Registration Statement
Public Offerings
Securities offering period					60 days
Minimum \| Shelf Registration Statement
Public Offerings
Public Float					$ 75,000
Follow-on Public Offering
Public Offerings
Share offering price			$ 3.50	$ 8.50
Proceeds from sale of stock			$ 32,000	$ 64,900
Issuance of common stock			9,783,660	8,117,647
Over-Allotment Option
Public Offerings
Share offering price	$ 15.00
Issuance of common stock	502,618		1,212,231	1,058,823
IPO
Public Offerings
Share offering price		$ 15.00
Net proceeds from IPO	$ 70,600
Issuance of common stock		4,700,000

Net Loss per Share - Anti-Dilutive Securities (Details) - shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Outstanding options
Excluded from the calculation of diluted net loss per share, due to anti-dilutive effect
Anti dilutive securities were excluded from the calculation of diluted net loss per share	7,731,807	5,773,988

Fair Value Measurements - Available For Sale (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Fair value of available for sale marketable securities
Amortized Cost	$ 24,823	$ 29,195
Gross Unrealized Gains	6	4
Gross Unrealized Losses	(16)	(55)
Fair Value	24,813	29,144
U.S. Treasury securities
Fair value of available for sale marketable securities
Amortized Cost	14,697	22,020
Gross Unrealized Gains	4	4
Gross Unrealized Losses	(3)	(23)
Fair Value	14,698	22,001
U.S. Government agency securities
Fair value of available for sale marketable securities
Amortized Cost	10,126	7,175
Gross Unrealized Gains	2
Gross Unrealized Losses	(13)	(32)
Fair Value	$ 10,115	$ 7,143

Fair Value Measurements

3 Months Ended

Mar. 31, 2023

Fair Value Measurements

Fair Value Measurements

4. Fair Value Measurements

Financial assets and liabilities are measured and recorded at fair value. The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. The fair value hierarchy prioritizes valuation inputs based on the observable nature of those inputs. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality. The hierarchy defines three levels of valuation inputs:

●

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

●

Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

●

Level 3—Unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability

There have been no transfers of assets and liabilities between levels of hierarchy.

The Company’s Level 2 investments are valued using third-party pricing sources. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar investments, issuer credit spreads, benchmark investments, prepayment/default projections based on historical data and other observable inputs.


	March 31, 2023
	Fair Value Measured Using						Total
	(Level 1)		(Level 2)		(Level 3)		Balance
Assets
Cash equivalents	$	9,407	$	—	$	—	$	9,407
Marketable securities		14,698		10,115		—		24,813
	$	24,105	$	10,115	$	—	$	34,220


	December 31, 2022
	Fair Value Measured Using						Total
	(Level 1)		(Level 2)		(Level 3)		Balance
Assets
Cash equivalents	$	11,942	$	—	$	—	$	11,942
Marketable securities		22,001		7,143		—		29,144
	$	33,943	$	7,143	$	—	$	41,086

As of March 31, 2023 marketable securities had a maximum remaining maturity of nine months.

As of March 31, 2023 and December 31, 2022, the fair value of available for sale marketable securities by type of security were as follows (in thousands):


	March 31, 2023
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
U.S. Treasury securities	$	14,697	$	4	$	(3)	$	14,698
U.S. Government agency securities		10,126		2		(13)		10,115
	$	24,823	$	6	$	(16)	$	24,813


	December 31, 2022
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
U.S. Treasury securities	$	22,020	$	4	$	(23)	$	22,001
U.S. Government agency securities		7,175		—		(32)		7,143
	$	29,195	$	4	$	(55)	$	29,144

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Facility Lease - Additional information (Details)	1 Months Ended	3 Months Ended		12 Months Ended
Facility Lease - Additional information (Details)	Aug. 31, 2021 ft²	Mar. 31, 2023 USD ($)	Mar. 31, 2022 USD ($)	Dec. 31, 2022 USD ($)
Facility Lease
Area of property subleased \| ft²	7,585
Sublease income - related party \| $		$ 56,000	$ 146,000	$ 146,000

Facility Lease - Lessee information (Details) $ in Thousands	1 Months Ended	3 Months Ended		46 Months Ended
	Sep. 30, 2021 USD ($) ft²	Mar. 31, 2023 USD ($)	Mar. 31, 2022 USD ($)	Oct. 31, 2018 USD ($)	Dec. 31, 2022 USD ($)	Feb. 01, 2015 ft²
Lease
Area of leased facility \| ft²	27,280					8,138
Lease term						1 year
Landlord Provided Free Rent And Lease Incentives				$ 1,900
Lease extension period	2 years
Increase in operating lease right-of-use asset	$ 2,400	$ 264	$ 238
Increase in the operating lease liability	$ 2,400	298	$ 254
Operating lease right-of-use asset		$ 1,953			$ 2,217

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock.	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit	Total
Balance at Dec. 31, 2021	$ 5	$ 361,669	$ 1,869	$ (266,381)	$ 97,162
Balance (in shares) at Dec. 31, 2021	46,553,511
Stock-based compensation expense		739			739
Unrealized gain (loss) on marketable securities			(28)		(28)
Foreign currency translation adjustment			146		146
Net loss				(8,297)	(8,297)
Balance at Mar. 31, 2022	$ 5	362,408	1,987	(274,678)	89,722
Balance (in shares) at Mar. 31, 2022	46,553,511
Balance at Dec. 31, 2022	$ 5	364,361	(563)	(307,688)	56,115
Balance (in shares) at Dec. 31, 2022	46,553,511
Common stock issued on exercise of stock options		4			4
Common stock issued on exercise of stock options (in shares)	15,000
Stock-based compensation expense		492			492
Unrealized gain (loss) on marketable securities			41		41
Foreign currency translation adjustment			88		88
Net loss				(7,873)	(7,873)
Balance at Mar. 31, 2023	$ 5	$ 364,857	$ (434)	$ (315,561)	$ 48,867
Balance (in shares) at Mar. 31, 2023	46,568,511

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
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+ Details

Summary of Significant Accounting Policies (Policies)	3 Months Ended
Summary of Significant Accounting Policies (Policies)	Mar. 31, 2023
Summary of Significant Accounting Policies
Basis of Presentation	Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company’s functional and reporting currency is the U.S. dollar, except for its investment in its equity method investee which is the Chinese renminbi (RMB). The accompanying condensed consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and discharge of liabilities in the normal course of business.
Unaudited Interim Financial Information	Unaudited Interim Financial Information The accompanying interim condensed consolidated financial statements and related disclosures are unaudited, have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the results of operations for the periods presented. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. The condensed consolidated results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the full year or for any other future year or interim period. The accompanying condensed consolidated financial statements should be read in conjunction with the audited financial statements and the related notes for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 28, 2023.
Use of Estimates	Use of Estimates The preparation of the Company’s condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from such estimates.
Concentrations of Credit Risk and Other Risks and Uncertainties	Concentrations of Credit Risk and Other Risks and Uncertainties Substantially all of the Company’s cash and cash equivalents are deposited in accounts with two financial institutions that management believes are of high credit quality. Such deposits may, at times, exceed federally insured limits. The Company maintains its cash with an accredited financial institution and accordingly, such funds are subject to minimal credit risk. The Company’s marketable securities consist of investments in U.S. Treasury securities and U.S. government agency securities, which can be subject to certain credit risks. However, the Company mitigates the risks by investing in high-grade instruments, limiting its exposure to any one issuer, and monitoring the ongoing creditworthiness of the financial institutions and issuers. The Company has not experienced any losses on its deposits of cash, cash equivalents or marketable securities. The Company is subject to a number of risks similar to other early stage biopharmaceutical companies, including, but not limited to, the need to obtain adequate additional funding, possible failure of preclinical testing or clinical trials, its reliance on third parties to conduct its clinical trials, the need to obtain marketing approval for its product candidates, competitors developing new technological innovations, the need to successfully commercialize and gain market acceptance of the Company’s product candidates, its right to develop and commercialize its product candidates pursuant to the terms and conditions of the licenses granted to the Company, and protection of proprietary technology. If the Company does not successfully commercialize or partner any of its product candidates, it will be unable to generate product revenue or achieve profitability.
Segments	Segments Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment, that of the development of and commercialization of precisely targeted oncology therapies.
Significant Accounting Policies	Significant Accounting Policies The Company’s significant accounting policies are described in Note 2 to its consolidated financial statements for the year ended December 31, 2022, included in its Annual Report on Form 10-K. There have been no material changes to the Company’s significant accounting policies during the three months ended March 31, 2023.
Investments in Equity Securities	Investments in Equity Securities The Company uses the equity method of accounting for its equity investment if the investment provides the ability to exercise significant influence, but not control, over operating and financial policies of the investee. The Company’s proportionate share of the net income (loss) resulting from the equity method investment is reported under the line item captioned “loss from equity method investment” in the Consolidated Statements of Operations and Comprehensive Loss and the carrying value of the equity method investments is reported under the line captioned “Investment in Angel” in the Consolidated Balance Sheets. The Company’s equity method investments are reported at cost and adjusted each period for the Company’s share of the investee’s income or loss and the foreign currency translation adjustment as applicable. For equity method investees with a functional currency different than the Company’s reporting currency, the Company follows the guidance under ASC 830-10-15-5, pursuant to which, the foreign currency financial statements of a foreign investee accounted for by the equity method should be translated to the reporting entity's reporting currency. The Company evaluates equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable. Factors considered by the Company when reviewing an equity method investment for impairment include the length of time (duration) and the extent (severity) to which the fair value of the equity method investment has been less than cost, the investee’s financial condition and near-term prospects and the intent and ability to hold the investment for a period of time sufficient to allow for anticipated recovery. An impairment that is other-than-temporary is recognized in the period identified.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12 simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 is effective in 2021 and interim periods within that year and permits for an early adoption. The Company adopted ASU 2019-12 effective January 1, 2021. The adoption of the guidance did not have a material impact on its financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. The standard amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. For available-for-sale debt securities, entities will be required to recognize an allowance for credit losses rather than a reduction in carrying value of the asset. Entities will no longer be permitted to consider the length of time that fair value has been less than amortized cost when evaluating when credit losses should be recognized. This new guidance is effective in the first quarter of 2023 for calendar-year SEC filers that are smaller reporting companies as of the one-time determination date. The Company has adopted the new guidance as of January 1, 2023, and it did not have a material impact on its financial statements and related disclosures.

Balance Sheet Components

3 Months Ended

Mar. 31, 2023

Balance Sheet Components

Balance Sheet Components

7. Balance Sheet Components (in thousands)


	March 31,		December 31,
	2023		2022
Prepaid and Other Current Assets
Interest receivable	$	38	$	45
Prepaid research and development manufacturing expenses		221		192
Prepaid facility expenses		196		182
Prepaid insurance		69		252
Other		131		102
	$	655	$	773
Property and Equipment
Laboratory equipment	$	2,678	$	2,673
Computer equipment and purchased software		171		142
Leasehold improvements		2,084		2,084
		4,933		4,899
Less: accumulated depreciation and amortization		(4,603)		(4,546)
	$	330	$	353
Accrued and Other Liabilities
Accrued clinical trial expense	$	2,893	$	2,934
Accrued manufacturing expense		1,482		3,254
Personnel related		658		1,113
Accrued legal and accounting		208		89
Other		379		158
	$	5,620	$	7,548

During the three months ended March 31, 2023 and 2022, the Company recorded approximately $57,000 and $87,000 in depreciation expense, respectively.

Balance Sheet Components (Tables)

3 Months Ended

Mar. 31, 2023

Balance Sheet Components

Schedule of balance sheet components


	March 31,		December 31,
	2023		2022
Prepaid and Other Current Assets
Interest receivable	$	38	$	45
Prepaid research and development manufacturing expenses		221		192
Prepaid facility expenses		196		182
Prepaid insurance		69		252
Other		131		102
	$	655	$	773
Property and Equipment
Laboratory equipment	$	2,678	$	2,673
Computer equipment and purchased software		171		142
Leasehold improvements		2,084		2,084
		4,933		4,899
Less: accumulated depreciation and amortization		(4,603)		(4,546)
	$	330	$	353
Accrued and Other Liabilities
Accrued clinical trial expense	$	2,893	$	2,934
Accrued manufacturing expense		1,482		3,254
Personnel related		658		1,113
Accrued legal and accounting		208		89
Other		379		158
	$	5,620	$	7,548

Facility Lease - Lease cost (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Operating lease cost
Operating lease costs	$ 306	$ 306
Costs of non-lease components (previously common area maintenance)	111	108
Total operating lease cost	417	414
Other Information
Operating cash flows used for operating lease	$ 459	$ 433
Remaining lease term	1 year 9 months 18 days	2 years 9 months 18 days
Discount rate	8.00%	8.00%

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Cash flows from operating activities
Net loss	$ (7,873)	$ (8,297)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	57	87
Accretion related to marketable securities	(264)	55
Stock-based compensation	492	739
Loss from equity method investment	1,731	1,041
Changes in operating assets and liabilities:
Accounts receivable - related party	159	134
Prepaid and other current assets	118	304
Operating lease right-of-use asset	264	238
Accounts payable	(569)	624
Accrued and other liabilities	(1,928)	(1,095)
Operating lease liability	(298)	(254)
Net cash used in operating activities	(8,111)	(6,424)
Cash flows from investing activities
Purchases of marketable securities	(13,089)	(26,384)
Maturities of marketable securities	17,725	810
Purchases of property and equipment	(34)
Net cash provided by (used in) investing activities	4,602	(25,574)
Cash flows from financing activities
Proceeds from exercise of common stock options	4
Net cash provided by financing activities	4
Net increase (decrease) in cash and cash equivalents	(3,505)	(31,998)
Cash and cash equivalents at beginning of the period	13,159	63,458	$ 63,458
Cash and cash equivalents at end of the period	$ 9,654	$ 31,460	$ 13,159

Facility Lease - Minimum rental commitments (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Quarter Ended March 31, 2023
Minimum rental commitments 2023
2023	$ 1,043
2024	1,434
Total lease payments	2,477
Less: imputed interest	(174)
Total	2,303
Minimum rental commitments 2022
2023	1,043
2024	1,434
Total lease payments	2,477
Less: imputed interest	(174)
Total	$ 2,303
Year Ended December 31, 2022
Minimum rental commitments 2023
2023		$ 1,391
2024		1,434
Total lease payments		2,825
Less: imputed interest		(224)
Total		2,601
Minimum rental commitments 2022
2023		1,391
2024		1,434
Total lease payments		2,825
Less: imputed interest		(224)
Total		$ 2,601

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2023

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company’s functional and reporting currency is the U.S. dollar, except for its investment in its equity method investee which is the Chinese renminbi (RMB). The accompanying condensed consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and discharge of liabilities in the normal course of business.

Unaudited Interim Financial Information

The accompanying interim condensed consolidated financial statements and related disclosures are unaudited, have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the results of operations for the periods presented.

The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. The condensed consolidated results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the full year or for any other future year or interim period. The accompanying condensed consolidated financial statements should be read in conjunction with the audited financial statements and the related notes for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 28, 2023.

Use of Estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from such estimates.

Investments in Equity Securities

The Company uses the equity method of accounting for its equity investment if the investment provides the ability to exercise significant influence, but not control, over operating and financial policies of the investee.

The Company’s proportionate share of the net income (loss) resulting from the equity method investment is reported under the line item captioned “loss from equity method investment” in the Consolidated Statements of Operations and Comprehensive Loss and the carrying value of the equity method investments is reported under the line captioned “Investment in Angel” in the Consolidated Balance Sheets. The Company’s equity method investments are reported at cost and adjusted each period for the Company’s share of the investee’s income or loss and the foreign currency translation adjustment as applicable.

For equity method investees with a functional currency different than the Company’s reporting currency, the Company follows the guidance under ASC 830-10-15-5, pursuant to which, the foreign currency financial statements of a foreign investee accounted for by the equity method should be translated to the reporting entity's reporting currency.

The Company evaluates equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable. Factors considered by the Company when reviewing an equity method investment for impairment include the length of time (duration) and the extent (severity) to which the fair value of the equity method investment has been less than cost, the investee’s financial condition and near-term prospects and the intent and ability to hold the investment for a period of time sufficient to allow for anticipated recovery. An impairment that is other-than-temporary is recognized in the period identified.

Concentrations of Credit Risk and Other Risks and Uncertainties

Substantially all of the Company’s cash and cash equivalents are deposited in accounts with two financial institutions that management believes are of high credit quality. Such deposits may, at times, exceed federally insured limits. The Company maintains its cash with an accredited financial institution and accordingly, such funds are subject to minimal credit risk. The Company’s marketable securities consist of investments in U.S. Treasury securities and U.S. government agency securities, which can be subject to certain credit risks. However, the Company mitigates the risks by investing in high-grade instruments, limiting its exposure to any one issuer, and monitoring the ongoing creditworthiness of the financial institutions and issuers. The Company has not experienced any losses on its deposits of cash, cash equivalents or marketable securities.

The Company is subject to a number of risks similar to other early stage biopharmaceutical companies, including, but not limited to, the need to obtain adequate additional funding, possible failure of preclinical testing or clinical trials, its reliance on third parties to conduct its clinical trials, the need to obtain marketing approval for its product candidates, competitors developing new technological innovations, the need to successfully commercialize and gain market acceptance of the Company’s product candidates, its right to develop and commercialize its product candidates pursuant to the terms and conditions of the licenses granted to the Company, and protection of proprietary technology. If the Company does not successfully commercialize or partner any of its product candidates, it will be unable to generate product revenue or achieve profitability.

Segments

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource

allocation and assessing performance. The Company views its operations and manages its business in one operating segment, that of the development of and commercialization of precisely targeted oncology therapies.

Significant Accounting Policies

The Company’s significant accounting policies are described in Note 2 to its consolidated financial statements for the year ended December 31, 2022, included in its Annual Report on Form 10-K. There have been no material changes to the Company’s significant accounting policies during the three months ended March 31, 2023.

Recent Accounting Pronouncements

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12 simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 is effective in 2021 and interim periods within that year and permits for an early adoption. The Company adopted ASU 2019-12 effective January 1, 2021. The adoption of the guidance did not have a material impact on its financial statements and related disclosures.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. The standard amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. For available-for-sale debt securities, entities will be required to recognize an allowance for credit losses rather than a reduction in carrying value of the asset. Entities will no longer be permitted to consider the length of time that fair value has been less than amortized cost when evaluating when credit losses should be recognized. This new guidance is effective in the first quarter of 2023 for calendar-year SEC filers that are smaller reporting companies as of the one-time determination date. The Company has adopted the new guidance as of January 1, 2023, and it did not have a material impact on its financial statements and related disclosures.

Common Stock

3 Months Ended

Mar. 31, 2023

Common Stock

Common Stock

8. Common Stock

As of March 31, 2023, the amended and restated certificate of incorporation authorizes the Company to issue 290 million shares of common stock and 10 million shares of preferred stock.

Each share of common stock is entitled to one vote. Common stockholders are entitled to dividends if and when declared by the board of directors. As of March 31, 2023, no dividends on common stock had been declared.

In March 2020, the Company entered into an open market sale agreement (the “2020 Sales Agreement”) with Jefferies LLC (“Jefferies”) to sell shares of the Company’s common stock, from time-to-time, with aggregate gross sales proceeds of up to $50,000,000, through an at-the-market equity offering program under which Jefferies will act as its sales agent. In November 2021, the Company entered into another Sale Agreement (“2021 Sales Agreement”) with Jefferies to sell shares of its common stock from time-to-time, with aggregate gross sales proceeds of up to $40,000,000.

On March 28, 2023, the Company terminated both the 2020 Sales Agreement and the 2021 Sales Agreement and concurrently entered into a new open market sale agreement (the “2023 Sales Agreement”) with Jefferies to sell shares of the Company’s common stock, from time-to-time, with aggregate gross sales proceeds of up to $90,000,000, through an at-the-market equity offering program under which Jefferies will act as its sales agent. The issuance and sale of shares of common stock by the Company pursuant to the 2023 Sales Agreement are deemed an “at-the-market” offering under the Securities Act of 1933, as amended. Jefferies is entitled to compensation for its services equal to 3.0% of the gross proceeds of any shares of common stock sold through Jefferies under the 2023 Sales Agreement.

During the three months ended March 31, 2023, the Company did not sell any shares of common stock under its at-the-market offering program. As of March 31, 2023, the Company had sold 6,920,339 shares of common stock for gross proceeds of $31.1 million under the 2020 Sales Agreement.

The Company has reserved shares of common stock for issuance as follows:


	March 31,	December 31,
	2023	2022
Shares available for future option grants	5,138,454	4,017,011
Outstanding options	7,731,807	7,006,250
Shares reserved for employee stock purchase plan	400,000	400,000
Total	13,270,261	11,423,261

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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+ Details

Facility Lease

3 Months Ended

Mar. 31, 2023

Facility Lease

Facility lease

12. Facility Lease

In January 2015, the Company signed an initial operating lease, effective February 1, 2015 for 8,138 square feet of office and laboratory space with a one year term. Between January 2015 and September 2021, the Company entered into a series of lease amendments to increase the amount of leased space to 27,280 square feet and extend the expiration of the lease to February 2025. The lease agreement includes annual rent escalations. Under the lease and subsequent amendments, the landlord provided approximately $1.9 million in free rent and lease incentives. The Company records rent expense on a straight-line basis over the effective term of the lease, including any free rent periods and incentives. As the interest rate implicit in lease arrangements is typically not readily available, in calculating the present value of the lease payments, the Company has utilized its incremental borrowing rate, which was determined based on the prevailing market rates for collateralized debt with maturity dates commensurate with the term of its lease. The Company’s facility lease is a net lease, as the non-lease components (i.e. common area maintenance) are paid separately from rent based on actual costs incurred. Therefore, the non-lease components were not included in the right-of-use asset and liability and are reflected as an expense in the period incurred.

In September 2021, the Company entered into a lease amendment to extend the expiration of its operating lease by two years from February 2023 to February 2025. As a result of this lease extension, the Company recorded a $2.4 million increase in the operating lease right-of-use asset and a corresponding increase in the operating lease liability.

As of March 31, 2023 and December 31, 2022, the right-of-use asset under operating lease was $2.0 million and $2.2 million, respectively. The elements of lease expense for the three months ended March 31, 2023 and 2022 were as follows (in thousands):


		Three Months Ended
	Statements of operations and	March 31,
	comprehensive loss location	2023		2022
Costs of operating lease
Operating lease costs	Research and development, General and administrative	$	306	$	306
Costs of non-lease components (previously common area maintenance)	Research and development, General and administrative		111		108
Total operating lease cost		$	417	$	414
Other Information
Operating cash flows used for operating lease		$	459	$	433
Remaining lease term			1.8 years		2.8 years
Discount rate			8.0%		8.0%

As of March 31, 2023, minimum rental commitments under this lease were as follows (in thousands):


Year Ended December 31 (in thousands)
2023*	$	1,043
2024		1,434
Total lease payments		2,477
Less: imputed interest		(174)
Total	$	2,303

* Remainder of the year

As of December 31, 2022, minimum rental commitments under this lease were as follows (in thousands):


Year Ended December 31 (in thousands)
2023	$	1,391
2024		1,434
Total lease payments		2,825
Less: imputed interest		(224)
Total	$	2,601

In August 2021, the Company entered into an agreement to sublease 7,585 square feet of its office and laboratory space in Burlingame, California to Angel Pharmaceuticals. Pursuant to the sublease, rent is due monthly and is subject to scheduled annual increases and Angel Pharmaceuticals is responsible for certain operating expenses and taxes throughout the life of the sublease. The sublease will expire in February 2023 and Angel Pharmaceuticals has no option to extend the sublease term. Sublease income is recognized on a straight-line basis as other income in our consolidated statements of operations. For the three months ended March 31, 2023 and 2022, the Company recognized approximately $56,000 and $146,000 of sublease income, respectively.

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2023	Dec. 31, 2022
CONDENSED CONSOLIDATED BALANCE SHEETS
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	290,000,000	290,000,000
Common stock, shares issued	46,568,511	46,553,511
Common stock, shares outstanding	46,568,511	46,553,511

Net Loss per Share - Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Numerator:
Net loss - basic and diluted	$ (7,873)	$ (8,297)
Denominator:
Weighted average common shares outstanding used to compute basic net loss per share	46,556,178	46,553,511
Weighted average common shares outstanding used to compute diluted net loss per share	46,556,178	46,553,511
Net loss per share, basic	$ (0.17)	$ (0.18)
Net loss per share, diluted	$ (0.17)	$ (0.18)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Balance Sheet Components - Property and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Property and Equipment
Property and equipment, gross	$ 4,933	$ 4,899
Less: accumulated depreciation and amortization	(4,603)	(4,546)
Property and equipment, net	330	353
Laboratory equipment
Property and Equipment
Property and equipment, gross	2,678	2,673
Computer equipment and purchased software
Property and Equipment
Property and equipment, gross	171	142
Leasehold improvements
Property and Equipment
Property and equipment, gross	$ 2,084	$ 2,084

Stock-Based Compensation - Expense Allocation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Stock-based compensation
Stock-based compensation expense	$ 492	$ 739
Research and development
Stock-based compensation
Stock-based compensation expense	192	302
General and administrative
Stock-based compensation
Stock-based compensation expense	$ 300	$ 437

Common Stock (Tables)

3 Months Ended

Mar. 31, 2023

Common Stock

Schedule of shares of common stock reserved for issuance

The Company has reserved shares of common stock for issuance as follows:


	March 31,	December 31,
	2023	2022
Shares available for future option grants	5,138,454	4,017,011
Outstanding options	7,731,807	7,006,250
Shares reserved for employee stock purchase plan	400,000	400,000
Total	13,270,261	11,423,261

Commitments and Contingencies

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies

Commitments and Contingencies

13. Commitments and Contingencies

In August 2015, the Company entered into an agreement for a line of credit of $0.1 million for the purpose of issuing its landlord a letter of credit of $0.1 million as a security deposit under its facility lease. The Company pledged money market funds and marketable securities as collateral for the line of credit. For further discussion of the Company’s facility lease agreement, see Note 12.

Pursuant to the Company’s license agreements with each of Vernalis, Scripps and Monash, it has obligations to make future milestone and royalty payments to these parties, respectively. However, because these amounts are contingent, they have not been included on the Company’s balance sheet. For further discussion of the Vernalis, Scripps and Monash licensing agreements, see Note 6.

Indemnifications

In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless and defend an indemnified party for losses suffered or incurred by the indemnified party. Some of the provisions will limit losses to those arising from third-party actions. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. The Company has never incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. The Company has also entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by Delaware corporate law. There have been no claims to date and the Company has a directors and officers insurance policy that may enable it to recover a portion of any amounts paid for future claims.

Legal Proceedings

The Company is not a party to any material legal proceedings.

Equity Method Investment

3 Months Ended

Mar. 31, 2023

Equity Method Investment

Equity Method Investment

5. Equity Method Investment

As of March 31, 2023 and December 31, 2022, the Company’s ownership interest in Angel was approximately 49.7%, excluding 7% of Angel’s equity reserved for issuance under the Angel ESOP. The Company recognized its share of losses in Angel for the total amount of $1.7 million and $1.0 million as loss from equity method investment on the consolidated statement of operations for the three months ended March 31, 2023 and 2022, respectively.

Summary Financial Information

Summary financial information for Angel Pharmaceuticals is as follows:


		As of		As of
Balance Sheet Data	March 31, 2023		December 31, 2022

	(in thousands)
Current assets	$	24,463	$	29,062
Non-current assets		1,572		1,652
Current liabilities		3,625		6,293
Non-current liabilities		903		985
Stockholders' equity		21,507		23,436


	Three Months Ended
	March 31,
Statement of Operations Data	2023		2022

		(in thousands)
Revenue	$	—	$	—
Gross Profit		—		—
Net loss		(2,032)		(1,325)
Share of loss from investments accounted for using the equity method		(1,731)		(1,041)

Net Loss per Share (Tables)

3 Months Ended

Mar. 31, 2023

Net Loss per Share

Schedule of net loss per share, basic and diluted

The following table shows the calculation of net loss per share (in thousands, except share and per share data):


	Three Months Ended
	March 31,
	2023		2022
Numerator:
Net loss - basic and diluted	$	(7,873)	$	(8,297)
Denominator:
Weighted average common shares outstanding used to compute basic and diluted net loss per share		46,556,178		46,553,511
Net loss per share, basic and diluted	$	(0.17)	$	(0.18)

Schedule of antidilutive securities excluded from calculation of diluted net loss per share

The amounts in the table below were excluded from the calculation of diluted net loss per share, due to their anti-dilutive effect:


	Three Months Ended
	March 31,
	2023	2022
Outstanding options	7,731,807	5,773,988

Summary of Significant Accounting Policies (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($) item segment	Dec. 31, 2022 USD ($)
Summary of Significant Accounting Policies
Accumulated deficit	$ (315,561)	$ (307,688)
Cash, cash equivalents and marketable securities	34,500
Accumulated other comprehensive income	$ (434)	$ (563)
Concentrations of Credit Risk and Other Risks and Uncertainties
Number of financial institutions used for cash and cash equivalent deposits \| item	2
Segments
Number of operating segments \| segment	1

- Definition

Accumulated change in equity from transactions and other events and circumstances from non-owner sources, net of tax effect, at period end. Excludes Net Income (Loss), and accumulated changes in equity from transactions resulting from investments by owners and distributions to owners. Includes foreign currency translation items, certain pension adjustments, unrealized gains and losses on certain investments in debt and equity securities, other than temporary impairment (OTTI) losses related to factors other than credit losses on available-for-sale and held-to-maturity debt securities that an entity does not intend to sell and it is not more likely than not that the entity will be required to sell before recovery of the amortized cost basis, as well as changes in the fair value of derivatives related to the effective portion of a designated cash flow hedge.

+ References + Details

Fair Value Measurements - Recurring (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Assets
Maximum remaining maturity of marketable securities	9 months
Recurring
Assets
Cash equivalents	$ 9,407	$ 11,942
Marketable securities	24,813	29,144
Total Assets	34,220	41,086
Recurring \| Level 1
Assets
Cash equivalents	9,407	11,942
Marketable securities	14,698	22,001
Total Assets	24,105	33,943
Recurring \| Level 2
Assets
Marketable securities	10,115	7,143
Total Assets	$ 10,115	$ 7,143

Commitments and Contingencies - Line of Credit (Details) $ in Millions	Aug. 31, 2015 USD ($)
Line of credit
Security deposit	$ 0.1
Secured debt
Line of credit
Line of credit	$ 0.1

Equity Method Investment - Summary Financial Information (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Schedule of Equity Method Investments [Line Items]
Current assets	$ 35,551	$ 43,664
Current liabilities	8,290	10,752
Stockholders' equity	48,867	56,115	$ 89,722	$ 97,162
Angel Pharmaceuticals
Schedule of Equity Method Investments [Line Items]
Current assets	24,463	29,062
Non-current assets	1,572	1,652
Current liabilities	3,625	6,293
Non-current liabilities	903	985
Stockholders' equity	$ 21,507	$ 23,436

- Definition

Sum of the carrying amounts as of the balance sheet date of all assets that are expected to be realized in cash, sold, or consumed within one year (or the normal operating cycle, if longer). Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events.

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Amount of obligation due after one year or beyond the normal operating cycle, if longer.

+ References

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License and Collaboration Agreements

3 Months Ended

Mar. 31, 2023

License and Collaboration Agreements

License and Collaboration Agreements

6. License and Collaboration Agreements

Scripps Licensing Agreement

In December 2014, the Company entered into a license agreement with The Scripps Research Institute (“Scripps”), pursuant to which it was granted a non-exclusive, world-wide license for all fields of use under Scripps’ rights in certain know-how and technology related to a mouse hybridoma clone expressing an anti-human CD73 antibody, and to progeny, mutants or unmodified derivatives of such hybridoma and any antibodies expressed by such hybridoma, from which we developed mupadolimab. Scripps also granted the Company the right to grant sublicenses in conjunction with other proprietary rights the Company holds, or to others collaborating with or performing services for the Company. Under this license agreement, Scripps has agreed not to grant any additional commercial licenses with respect to such materials, other than march-in rights granted to the U.S. government.

Upon execution of the agreement, the Company made a one-time cash payment to Scripps of $10,000 and is also obligated to pay a minimum annual fee to Scripps of $25,000. The first minimum annual fee payment is due on each anniversary of the effective date of the agreement and will be due on each subsequent anniversary of the effective date for the term of the agreement. The Company is also required to make performance-based cash payments upon successful completion of clinical and sales milestones. The aggregate potential milestone payments are $2.6 million. The Company is also required to pay royalties on net sales of licensed products (including mupadolimab) sold by it, its affiliates and its sublicensees at a rate in the low-single digits. In addition, should the Company sublicense the rights licensed under the agreement, it has agreed to pay a percentage of sublicense revenue received at specified rates that start at double digit percentages and decrease to single digit percentages based on the elapsed time from the effective date of the agreement and the time of entry into such sublicense. To date, no milestone payments have been made.

The Company’s license agreement with Scripps will terminate upon expiration of its obligation to pay royalties to Scripps under the license agreement. The Company’s license agreement with Scripps is terminable by the consent of the parties, at will by the Company upon providing 90 days written notice to Scripps, or by Scripps for certain material breaches, or if the Company undergoes a bankruptcy event. In addition, Scripps may terminate the license on a product-by-product basis, or the entire agreement, if the Company fails to meet specified diligence obligations related to the development and commercialization of licensed products. Scripps may also terminate the agreement after the third anniversary of the effective date of the agreement if it reasonably believes, based on reports the Company provides to Scripps, that the Company has not used commercially reasonable efforts as required under the agreement, subject to a specified notice and cure period.

Vernalis Licensing Agreement

In February 2015, the Company entered into a license agreement with Vernalis (R&D) Limited (“Vernalis”), which was subsequently amended as of November 5, 2015, and, pursuant to which the Company was granted an exclusive, worldwide license under certain patent rights and know-how, including a limited right to grant sublicenses, for all fields of use to develop, manufacture and commercialize products containing certain adenosine receptor antagonists, including ciforadenant. Pursuant to this agreement, the Company made a one-time cash payment to Vernalis in the amount of $1.0 million, which was recorded as research and development expense as technological feasibility of the asset had not been established and there was no alternative future use. The Company is also required to make cash milestone payments to Vernalis upon the successful completion of clinical and regulatory milestones for licensed products depending on the indications for which such licensed products are developed and upon achievement of certain sales milestones. In February 2017, the Company made a milestone payment of $3.0 million to Vernalis following the expansion of a cohort of patients with renal cell cancer treated with single agent ciforadenant in the Company’s Phase 1/1b clinical trial. During the three months ended March 31, 2023, no clinical or regulatory milestones were completed or paid to Vernalis and the aggregate potential milestone payments were approximately $220 million for all indications as of March 31, 2023. The Company has also agreed to pay Vernalis tiered incremental royalties based on the annual net sales of licensed products containing ciforadenant on a product by product and country by country basis, subject to certain offsets and reductions. The tiered royalty rates for products containing ciforadenant range from the mid single digits up to the low double digits on a country by country net sales basis. The royalties on other licensed products that do not include ciforadenant also increase with the amount of net sales on a product-by-product and country by country basis

and range from the low single digits up to the mid single digits on a country by country net sales basis. The Company is also obligated to pay to Vernalis certain sales milestones as indicated above when worldwide net sales reach specified levels over an agreed upon time period.

The Company has also agreed to pay Vernalis tiered incremental royalties based on the annual net sales of licensed products containing ciforadenant on a product-by-product and country-by-country basis, subject to certain offsets and reductions. The tiered royalty rates for products containing ciforadenant range from the mid-single digits up to the low-double digits on a country-by-country net sales basis. The royalties on other licensed products that do not include ciforadenant also increase with the amount of net sales on a product-by-product and country-by-country basis and range from the low-single digits up to the mid-single digits on a country-by-country net sales basis. The Company is also obligated to pay to Vernalis certain sales milestones as indicated above when worldwide net sales reach specified levels over an agreed upon time period.

The agreement will expire on a product-by-product and country-by-country basis upon the expiration of the Company’s payment obligations to Vernalis in respect of a particular product and country. Both parties have the right to terminate the agreement for an uncured material breach by the other party. The Company may also terminate the agreement at its convenience by providing 90 days written notice, provided that the Company has not received notice of its own default under the agreement at the time the Company exercises such termination right. Vernalis may also terminate the agreement if the Company challenges a licensed patent or undergoes a bankruptcy event.

Monash License Agreement

In April 2017, the Company entered into a license agreement with Monash University (Monash), pursuant to which the Company was granted an exclusive, sublicensable worldwide license under certain know-how, patent rights and other intellectual property rights controlled by Monash to research, develop, and commercialize certain antibodies directed to CXCR2 for the treatment of human diseases.

Upon execution of the agreement, the Company made a one time cash payment to Monash of $275,000 and reimbursed Monash for certain patent prosecution costs incurred prior to execution of the agreement. The Company recorded these payments as research and development expenses for the year ended December 31, 2017. The Company is also obligated to pay an annual license maintenance fee to Monash of $25,000 until a certain development milestone is met with respect to the licensed product, after which no further maintenance fee will be due. The Company is also required to make development and sales milestone payments to Monash with respect to the licensed products. During the three months ended March 31, 2023, no development or sales milestones were completed or paid to Monash and the aggregate potential milestones were $45.1 million as of March 31, 2023. The Company is also required to pay to Monash tiered royalties on net sales of licensed products sold by it, its affiliates and its sublicensees at a rate ranging in the low single digits. In addition, should the Company sublicense its rights under the agreement, the Company has agreed to pay a percentage of sublicense revenue received at specified rates that are currently at low double digit percentages and decrease to single digit percentages based on the achievement of development milestones.

The term of the Company’s agreement with Monash continues until the expiration of its obligation to pay royalties to Monash thereunder. The license agreement is terminable at will by the Company upon providing 30 days written notice to Monash, or by either party for material breaches by the other party. In addition, Monash may terminate the entire agreement or convert the license to a non-exclusive license if the Company has materially breached its obligation to use commercially reasonable efforts to develop and commercialize a licensed product, subject to a specified notice and cure mechanism.

License and Collaboration Agreements (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Apr. 30, 2017	Feb. 28, 2017	Dec. 31, 2015	Nov. 05, 2015
Monash License
License and Collaboration Agreements
Period of written notice to terminate	30 days
Licensing Agreement \| Scripps Research Institute
License and Collaboration Agreements
Minimum annual fee				$ 25,000
Aggregate potential milestone payments	$ 2,600,000
Period of written notice to terminate	90 days
Licensing Agreement \| Scripps Research Institute \| Research and development
License and Collaboration Agreements
One-time cash payment				$ 10,000
Licensing Agreement \| Vernalis (R&D) Limited
License and Collaboration Agreements
Milestone payments made	$ 0		$ 3,000,000.0
Period of written notice to terminate	90 days
Licensing Agreement \| Vernalis (R&D) Limited \| Maximum
License and Collaboration Agreements
Aggregate potential milestone payments	$ 220,000,000
Licensing Agreement \| Vernalis (R&D) Limited \| Research and development
License and Collaboration Agreements
One-time cash payment					$ 1,000,000.0
Licensing Agreement \| Monash License
License and Collaboration Agreements
Minimum annual fee		$ 25,000
Milestone payments made	0
Licensing Agreement \| Monash License \| Maximum
License and Collaboration Agreements
Aggregate potential milestone payments	$ 45,100,000
Licensing Agreement \| Monash License \| Research and development
License and Collaboration Agreements
One-time cash payment		$ 275,000

Net Loss per Share

3 Months Ended

Mar. 31, 2023

Net Loss per Share

Net Loss per Share

3. Net Loss per Share

The following table shows the calculation of net loss per share (in thousands, except share and per share data):


	Three Months Ended
	March 31,
	2023		2022
Numerator:
Net loss - basic and diluted	$	(7,873)	$	(8,297)
Denominator:
Weighted average common shares outstanding used to compute basic and diluted net loss per share		46,556,178		46,553,511
Net loss per share, basic and diluted	$	(0.17)	$	(0.18)

The amounts in the table below were excluded from the calculation of diluted net loss per share, due to their anti-dilutive effect:


	Three Months Ended
	March 31,
	2023	2022
Outstanding options	7,731,807	5,773,988

Stock Option Plans (Tables)

3 Months Ended

Mar. 31, 2023

Stock Option Plans

Schedule of stock option activity

Activity under the Company’s stock option plans is set forth below:


		Options Outstanding
			Weighted ‑
	Shares		Average
	Available	Number of	Exercise
	for Grant	Options	Price
Balance at December 31, 2022	4,017,011	7,006,250	$	5.25
Additional shares authorized	1,862,000	—		—
Options granted	(860,000)	860,000		0.90
Options exercised	—	(15,000)		0.28
Options forfeited	119,443	(119,443)		6.75
Balance at March 31, 2023	5,138,454	7,731,807	$	4.75

Income Taxes - Components of loss before income tax and Income tax benefits (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Taxes
Income tax benefits	$ 0	$ 0

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Related Party Transactions

3 Months Ended

Mar. 31, 2023

Related Party Transactions

Related Party Transactions

14. Related Party Transactions

As more fully described in Note 5 to the Company’s consolidated financial statements for the year ended December 31, 2022, included in the Annual Report on Form 10-K, the Company holds a 49.7% ownership in Angel Pharmaceuticals and, in connection with intellectual property licensing agreements between the Company and Angel Pharmaceuticals, the Company provides operational support and clinical drug supplies to Angel Pharmaceuticals. Third-party and internal personnel costs incurred by the Company are billed to Angel Pharmaceuticals in the period incurred and recorded as an offset to expenses. During the three months ended March 31, 2023 and 2022, the Company billed Angel for $0.0 million and approximately $50,000, respectively, in internal personnel costs and approximately $48,000 and $101,000, respectively, in third-party party costs.

In addition to the provision of clinical supplies to Angel Pharmaceuticals, Angel Pharmaceuticals may provide clinical supplies or research services to the Company on an as needed basis. These costs are recorded as research and development expense. During the three months ended March 31, 2023, Angel Pharmaceuticals billed the Company for approximately $0.1 million in research services.

In July 2021, Linda S. Grais, M.D., J.D., a member of the Company’s Board of Directors, was appointed as a non-executive member of the Board of Directors of ICON plc (“ICON”), effective upon completion of ICON’s acquisition of PRA Health Sciences, Inc. ICON is a clinical research organization and provides services to support the Company’s clinical trials. During the three months ended March 31, 2023 and 2022, the Company recorded approximately $118,000 and $69,000, respectively, in clinical trial expenses under its agreements with ICON.