10-Q 1 asmb-20230930.htm 10-Q 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

 

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

 

For the quarterly period ended September 30, 2023

 

OR

 

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

 

For the transition period from ___________to___________.

 

Commission file number: 001-35005

 

ASSEMBLY BIOSCIENCES, INC.

(Exact name of Registrant as specified in its charter)

 

Delaware

20-8729264

(State or other jurisdiction of

(I.R.S. Employer Identification No.)

incorporation or organization)

 

 

331 Oyster Point Blvd., Fourth Floor

South San Francisco, California

94080

(Address of principal executive offices)

(zip code)

 

(833) 509-4583

(Registrant’s telephone number, including area code)

 

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

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001

ASMB

The Nasdaq Global Select Market

 

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

 

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

 

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

 

Large Accelerated Filer

 

Accelerated Filer

Non-accelerated Filer

 

Smaller Reporting Company

Emerging growth company

 

 

 

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

 

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

 

As of November 3, 2023, there were 65,709,112 shares of the registrant’s common stock outstanding.

 

 

 


 

Index

 

 

 

Page

Number

 

 

 

PART I:

FINANCIAL INFORMATION

2

 

 

 

Item 1.

Financial Statements

2

 

 

 

 

Condensed Consolidated Balance Sheets at September 30, 2023 (unaudited) and December 31, 2022

2

 

 

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2023 and 2022 (unaudited)

3

 

 

 

 

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2023 and 2022 (unaudited)

4

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022 (unaudited)

6

 

 

 

 

Notes to the Condensed Consolidated Financial Statements (unaudited)

7

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

14

 

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

24

 

 

 

Item 4.

Controls and Procedures

24

 

 

 

PART II:

OTHER INFORMATION

25

 

 

 

Item 1.

Legal Proceedings

25

 

 

 

Item 1A.

Risk Factors

25

 

 

 

Item 2.

Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

40

 

 

 

Item 3.

Defaults Upon Senior Securities

40

 

 

 

Item 4.

Mine Safety Disclosures

40

 

 

 

Item 5.

Other Information

40

 

 

 

Item 6.

Exhibits

41

 

 

SIGNATURES

42

 

 


 

References to Assembly Biosciences, Inc.

Throughout this Quarterly Report on Form 10-Q, the “Company,” “Assembly,” “we,” “us,” and “our,” except where the context requires otherwise, refer to Assembly Biosciences, Inc. and its consolidated subsidiaries, and “board of directors” refers to the board of directors of Assembly Biosciences, Inc.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” that are subject to certain risks and uncertainties, including, without limitation, those set forth in Part I, Item 1A of our Annual Report on Form 10-K filed with the U.S. Securities and Exchanges Commission (SEC) on March 22, 2023 (2022 Annual Report) and Part II, Item 1A of this Quarterly Report on Form 10-Q under the heading “Risk Factors,” that could cause actual results to materially differ. Such risks and uncertainties include, among other things:

our ability to realize the potential benefits of our collaboration with Gilead Sciences, Inc. (Gilead), including all financial aspects of the collaboration and equity investments;
our ability to initiate and complete clinical studies involving our therapeutic product candidates, including studies contemplated by our collaboration with Gilead, in the currently anticipated timeframes or at all;
the occurrence of any event, change or other circumstance that could give rise to the termination of our collaboration with Gilead;
safety and efficacy data from clinical or nonclinical studies may not warrant further development of our product candidates;
clinical and nonclinical data presented at conferences may not differentiate our product candidates from other companies’ candidates; and
results of nonclinical studies may not be representative of disease behavior in a clinical setting and may not be predictive of the outcomes of clinical studies.

You are urged to consider statements that include the words may, will, would, could, should, might, believes, hopes, estimates, projects, potential, expects, plans, anticipates, intends, continues, forecast, designed, goal or the negative of those words or other comparable words to be uncertain and forward-looking. In particular, forward-looking statements include, but are not limited to, statements regarding the timing of commencement of future clinical studies involving our therapeutic product candidates; and our ability to successfully complete, and receive favorable results in, clinical studies for our product candidates. We intend such forward-looking statements to be covered by the safe harbor provisions contained in Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Except as required by law, we assume no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

1


 

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

ASSEMBLY BIOSCIENCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands except for share amounts and par value)

 

 

 

September 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

 

 

(Unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

26,656

 

 

$

52,418

 

Marketable securities

 

 

19,554

 

 

 

39,192

 

Accounts receivable from collaboration

 

 

 

 

 

944

 

Prepaid expenses and other current assets

 

 

3,462

 

 

 

4,413

 

Total current assets

 

 

49,672

 

 

 

96,967

 

 

 

 

 

 

 

Property and equipment, net

 

 

561

 

 

 

743

 

Operating lease right-of-use (ROU) assets

 

 

844

 

 

 

3,195

 

Other assets

 

 

552

 

 

 

889

 

Total assets

 

$

51,629

 

 

$

101,794

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

758

 

 

$

2,493

 

Accrued research and development expenses

 

 

1,619

 

 

 

3,122

 

Other accrued expenses

 

 

3,886

 

 

 

7,317

 

Operating lease liabilities - short-term

 

 

869

 

 

 

3,364

 

Total current liabilities

 

 

7,132

 

 

 

16,296

 

 

 

 

 

 

 

Deferred revenue

 

 

2,733

 

 

 

2,733

 

Operating lease liabilities - long-term

 

 

50

 

 

 

101

 

Total liabilities

 

 

9,915

 

 

 

19,130

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued or outstanding

 

 

 

 

 

 

Common stock, $0.001 par value; 150,000,000 shares authorized as of September 30, 2023 and December 31, 2022; 52,614,194 and 48,894,973 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

 

 

53

 

 

 

49

 

Additional paid-in capital

 

 

816,722

 

 

 

807,938

 

Accumulated other comprehensive loss

 

 

(275

)

 

 

(803

)

Accumulated deficit

 

 

(774,786

)

 

 

(724,520

)

Total stockholders' equity

 

 

41,714

 

 

 

82,664

 

Total liabilities and stockholders' equity

 

$

51,629

 

 

$

101,794

 

 

See Accompanying Notes to Condensed Consolidated Financial Statements

2


 

ASSEMBLY BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands except for share and per share amounts)

(Unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

10,824

 

 

$

18,130

 

 

$

37,894

 

 

$

53,127

 

General and administrative

 

 

4,224

 

 

 

5,271

 

 

 

14,201

 

 

 

18,009

 

Total operating expenses

 

 

15,048

 

 

 

23,401

 

 

 

52,095

 

 

 

71,136

 

Loss from operations

 

 

(15,048

)

 

 

(23,401

)

 

 

(52,095

)

 

 

(71,136

)

 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other income, net

 

 

628

 

 

 

256

 

 

 

1,829

 

 

 

439

 

Total other income

 

 

628

 

 

 

256

 

 

 

1,829

 

 

 

439

 

Net loss

 

$

(14,420

)

 

$

(23,145

)

 

$

(50,266

)

 

$

(70,697

)

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on marketable securities

 

 

50

 

 

 

(1

)

 

 

528

 

 

 

(580

)

Comprehensive loss

 

$

(14,370

)

 

$

(23,146

)

 

$

(49,738

)

 

$

(71,277

)

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share, basic and diluted

 

$

(0.27

)

 

$

(0.48

)

 

$

(0.97

)

 

$

(1.46

)

Weighted average common shares outstanding, basic and diluted

 

 

52,565,333

 

 

 

48,448,399

 

 

 

51,951,123

 

 

 

48,289,501

 

 

See Accompanying Notes to Condensed Consolidated Financial Statements

3


 

ASSEMBLY BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands except for share amounts)

(Unaudited)

 

 

 

For the Three Month Period

 

 

 

Common Stock

 

 

Additional

 

 

Accumulated
Other

 

 

 

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

Paid-in
Capital

 

 

Comprehensive
Loss

 

 

Accumulated
Deficit

 

 

Stockholders'
Equity

 

Balance as of June 30, 2023

 

 

52,450,731

 

 

$

52

 

 

$

815,588

 

 

$

(325

)

 

$

(760,366

)

 

$

54,949

 

Issuance of common stock for settlement of restricted stock units (RSUs)

 

 

163,463

 

 

 

1

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

Unrealized gain on marketable debt securities

 

 

 

 

 

 

 

 

 

 

 

50

 

 

 

 

 

 

50

 

Stock-based compensation

 

 

 

 

 

 

 

 

1,135

 

 

 

 

 

 

 

 

 

1,135

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(14,420

)

 

 

(14,420

)

Balance as of September 30, 2023

 

 

52,614,194

 

 

$

53

 

 

$

816,722

 

 

$

(275

)

 

$

(774,786

)

 

$

41,714

 

 

 

 

Common Stock

 

 

Additional

 

 

Accumulated
Other

 

 

 

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

Paid-in
Capital

 

 

Comprehensive
Loss

 

 

Accumulated
Deficit

 

 

Stockholders'
Equity

 

Balance as of June 30, 2022

 

 

48,362,736

 

 

$

48

 

 

$

803,910

 

 

$

(998

)

 

$

(678,980

)

 

$

123,980

 

Issuance of common stock for settlement of RSUs

 

 

118,458

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on marketable debt securities

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

(1

)

Stock-based compensation

 

 

 

 

 

 

 

 

1,570

 

 

 

 

 

 

 

 

 

1,570

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(23,145

)

 

 

(23,145

)

Balance as of September 30, 2022

 

 

48,481,194

 

 

$

48

 

 

$

805,480

 

 

$

(999

)

 

$

(702,125

)

 

$

102,404

 

 

 

4


 

 

 

For the Nine Month Period

 

 

 

Common Stock

 

 

Additional

 

 

Accumulated
Other

 

 

 

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

Paid-in
Capital

 

 

Comprehensive
Loss

 

 

Accumulated
Deficit

 

 

Stockholders'
Equity

 

Balance as of December 31, 2022

 

 

48,894,973

 

 

$

49

 

 

$

807,938

 

 

$

(803

)

 

$

(724,520

)

 

$

82,664

 

Issuance of common stock under at-the-market (ATM) equity offering program, net of issuance costs

 

 

3,134,045

 

 

 

3

 

 

 

4,543

 

 

 

 

 

 

 

 

 

4,546

 

Issuance of common stock under Employee Stock Purchase Plan (ESPP)

 

 

90,407

 

 

 

 

 

 

80

 

 

 

 

 

 

 

 

 

80

 

Issuance of common stock for settlement of RSUs

 

 

494,769

 

 

 

1

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

Unrealized gain on marketable debt securities

 

 

 

 

 

 

 

 

 

 

 

528

 

 

 

 

 

 

528

 

Stock-based compensation

 

 

 

 

 

 

 

 

4,162

 

 

 

 

 

 

 

 

 

4,162

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(50,266

)

 

 

(50,266

)

Balance as of September 30, 2023

 

 

52,614,194

 

 

$

53

 

 

$

816,722

 

 

$

(275

)

 

$

(774,786

)

 

$

41,714

 

 

 

 

Common Stock

 

 

Additional

 

 

Accumulated
Other

 

 

 

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

Paid-in
Capital

 

 

Comprehensive
Loss

 

 

Accumulated
Deficit

 

 

Stockholders'
Equity

 

Balance as of December 31, 2021

 

 

48,120,437

 

 

$

48

 

 

$

800,728

 

 

$

(419

)

 

$

(631,428

)

 

$

168,929

 

Issuance of common stock under ESPP

 

 

134,888

 

 

 

 

 

 

177

 

 

 

 

 

 

 

 

 

177

 

Issuance of common stock for settlement of RSUs

 

 

225,869

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on marketable debt securities

 

 

 

 

 

 

 

 

 

 

 

(580

)

 

 

 

 

 

(580

)

Stock-based compensation

 

 

 

 

 

 

 

 

4,575

 

 

 

 

 

 

 

 

 

4,575

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(70,697

)

 

 

(70,697

)

Balance as of September 30, 2022

 

 

48,481,194

 

 

$

48

 

 

$

805,480

 

 

$

(999

)

 

$

(702,125

)

 

$

102,404

 

 

See Accompanying Notes to Condensed Consolidated Financial Statements

5


 

ASSEMBLY BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Nine Months Ended September 30,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities

 

 

 

 

 

 

Net loss

 

$

(50,266

)

 

$

(70,697

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

366

 

 

 

374

 

Stock-based compensation

 

 

4,160

 

 

 

4,580

 

Net (accretion) amortization of investments in marketable debt securities

 

 

(534

)

 

 

234

 

Non-cash rent expense

 

 

2,525

 

 

 

2,644

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable from collaboration

 

 

944

 

 

 

(910

)

Prepaid expenses and other current assets

 

 

951

 

 

 

2,060

 

Other assets

 

 

337

 

 

 

90

 

Accounts payable

 

 

(1,735

)

 

 

(717

)

Accrued research and development expenses

 

 

(1,503

)

 

 

1,062

 

Other accrued expenses

 

 

(3,429

)

 

 

(1,182

)

Operating lease liabilities

 

 

(2,720

)

 

 

(2,747

)

Net cash used in operating activities

 

 

(50,904

)

 

 

(65,209

)

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

Proceeds from maturities of marketable securities

 

 

46,315

 

 

 

66,000

 

Purchases of property and equipment

 

 

(184

)

 

 

(102

)

Purchases of marketable securities

 

 

(25,615

)

 

 

(18,820

)

Proceeds from sale of marketable securities

 

 

 

 

 

27,000

 

Net cash provided by investing activities

 

 

20,516

 

 

 

74,078

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

Proceeds from the issuance of common stock under ATM equity offering program, net of issuance costs

 

 

4,546

 

 

 

 

Proceeds from the issuance of common stock under ESPP

 

 

80

 

 

 

177

 

Net cash provided by financing activities

 

 

4,626

 

 

 

177

 

 

 

 

 

 

 

Net (decrease) increase in cash and cash equivalents

 

 

(25,762

)

 

 

9,046

 

Cash and cash equivalents at the beginning of the period

 

 

52,418

 

 

 

45,627

 

Cash and cash equivalents at the end of the period

 

$

26,656

 

 

$

54,673

 

Supplemental non-cash investing and financing activities

 

 

 

 

 

 

Operating lease liabilities arising from obtaining ROU assets

 

$

 

 

$

171

 

 

See Accompanying Notes to Condensed Consolidated Financial Statements

6


 

ASSEMBLY BIOSCIENCES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 - Nature of Business

Overview

Assembly Biosciences, Inc. (together with its subsidiaries, Assembly or the Company), incorporated in Delaware in October 2005, is a biotechnology company developing innovative antiviral therapeutics with the potential to improve the lives of patients worldwide by targeting serious viral diseases, including high-recurrence genital herpes, transplant-related herpesviruses, chronic hepatitis delta virus (HDV) infection and chronic hepatitis B virus (HBV) infection. The Company operates in one segment and is headquartered in South San Francisco, California.

Liquidity

The Company has not derived any revenue from product sales to date and currently has no approved products. Once a product has been developed, it will need to be approved for sale by the U.S. Food and Drug Administration (FDA) or an applicable foreign regulatory agency. Since inception, the Company’s operations have been financed through the sale of equity securities, the proceeds from the exercise of warrants and stock options, the issuance of debt, and upfront payments related to collaboration agreements. The Company has incurred losses from operations since inception and expects to continue to incur substantial losses for the next several years as it continues its product development efforts. In October 2023, the Company received $100.0 million upon entering into the Option, License and Collaboration Agreement (the Gilead Collaboration Agreement) and the Common Stock Purchase Agreement and an Investor Rights Agreement (collectively, the Gilead Equity Agreements) with Gilead Sciences, Inc. (Gilead). Management believes the Company currently has sufficient funds to meet its operating requirements for at least the next twelve months following the date these unaudited condensed consolidated financial statements are issued.

Note 2 - Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and pursuant to the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the SEC. In management’s opinion, the unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements and include normal recurring adjustments necessary for the fair presentation of the Company’s financial position and its results of operations and comprehensive loss and its cash flows for the periods presented. These statements do not include all disclosures required by U.S. GAAP and should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes for the fiscal year ended December 31, 2022, which are contained in the 2022 Annual Report. The results for the three and nine months ended September 30, 2023 are not necessarily indicative of results to be expected for the entire year ending December 31, 2023 or future operating periods.

Use of Estimates

The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Significant estimates inherent in the preparation of the accompanying unaudited condensed consolidated financial statements include estimates of costs incurred but not yet invoiced for research and development accruals.

The Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is reasonably possible these external factors could have an effect on the Company’s estimates and could cause actual results to differ materially from those estimates and assumptions.

7


 

Other Risks and Uncertainties

The Company relies on contract research organizations (CROs), including one located in Ukraine that temporarily shut down operations due to Russia’s invasion. Though this CRO has resumed operations and the Company continues to utilize this CRO, the Company has reallocated certain work to other global CROs in case the CRO shuts down operations again.

U.S. and global financial markets have experienced volatility and disruption due to other macroeconomic and geopolitical events such as rising inflation, rising interest rates to combat inflation, the risk of a recession, the war between Russia and Ukraine, the Israel-Hamas war, as well as the ongoing impact of the COVID-19 pandemic. The Company cannot predict at this time to what extent, if at all, it and its employees, CROs, vendors and/or collaborators could potentially be negatively impacted by these events.

Net Loss per Share

Basic net loss per share of common stock excludes dilution and is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share of common stock reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity unless inclusion of such shares would be anti-dilutive.

A reconciliation of the numerators and the denominators of the basic and diluted net loss per common share computations is as follows (in thousands, except for share and per share amounts):

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(14,420

)

 

$

(23,145

)

 

$

(50,266

)

 

$

(70,697

)

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - basic and diluted

 

 

52,565,333

 

 

 

48,448,399

 

 

 

51,951,123

 

 

 

48,289,501

 

Net loss per share - basic and diluted

 

$

(0.27

)

 

$

(0.48

)

 

$

(0.97

)

 

$

(1.46

)

Securities excluded from the computation of diluted net loss per share because including them would have been antidilutive are as follows:

 

 

September 30,

 

 

 

2023

 

 

2022

 

Options to purchase common stock

 

 

9,945,471

 

 

 

9,441,215

 

Common stock subject to purchase under ESPP

 

 

80,543

 

 

 

102,772

 

Unvested RSUs

 

 

1,088,889

 

 

 

1,837,049

 

Total

 

 

11,114,903

 

 

 

11,381,036

 

Recently Adopted Accounting Standards

In June 2016, the Financial Accounting Standards Board (the FASB) issued Accounting Standards Update (ASU) No. 2016-13, Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which requires expected credit losses relating to financial assets measured on an amortized cost basis and available-for-sale debt securities be recorded through an allowance for credit losses. ASU 2016-13 limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and requires the reversal of previously recognized credit losses if fair value increases. The FASB issued additional amendments to the new guidance related to transition and clarification and deferred the effective date of this standard for all entities except SEC filers that are not smaller reporting companies to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted ASU 2016-13 effective January 1, 2023 on a modified retrospective basis. The Company elected to exclude accrued interest receivable from the amortized cost basis of its available-for-sale debt securities and to not measure an allowance for credit losses for accrued interest receivable. The adoption of ASU 2016-13 did not have a material impact on the Company’s consolidated financial statements.

8


 

Note 3 – Fair Value Measurements and Investments in Marketable Securities

The carrying amounts of cash equivalents and marketable securities approximate their fair value based upon quoted market prices. Certain of the Company’s financial instruments are not measured at fair value on a recurring basis, but are recorded at amounts that approximate their fair value due to their liquid or short-term nature, such as cash, accounts receivable, accounts payable and accrued expenses.

The Company uses the following three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs to value its financial instruments:

Level 1: Observable inputs such as unadjusted quoted prices in active markets for identical instruments.

Level 2: Quoted prices for similar instruments that are directly or indirectly observable in the marketplace.

Level 3: Significant unobservable inputs that are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.

Investments in marketable securities consisted of the following (in thousands):

 

 

September 30, 2023

 

 

 

Amortized
Cost

 

 

Gross
Unrealized
Gain

 

 

Gross
Unrealized
Loss

 

 

Fair Value

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

Money market fund

 

$

23,058