UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the transition period from |
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to |
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Commission File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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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.
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).
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 |
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Accelerated filer |
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Smaller reporting company |
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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 5, 2024, the registrant had
Table of Contents
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
19 |
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Item 3. Quantitative and Qualitative Disclosures About Market Risk |
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
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78 |
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In this Quarterly Report on Form 10-Q, unless otherwise stated or as the context otherwise requires, references to “Vera,” “the Company,” “we,” “us,” “our” and similar references refer to Vera Therapeutics, Inc.
This Quarterly Report on Form 10-Q also contains registered marks, trademarks and trade names of other companies. All other trademarks, registered marks and trade names appearing in this report are the property of their respective holders. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, these other companies.
1
SUMMARY OF RISKS ASSOCIATED WITH OUR BUSINESS
An investment in shares of our Class A common stock involves a high degree of risk. Below is a list of some of the material risks associated with our business. This summary does not address all of the risks that we face. Additional discussion of the risks listed in this summary, as well as other risks that we face, are set forth under Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q:
2
3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
VERA THERAPEUTICS, INC.
Condensed Balance Sheets
(in thousands, except share amounts)
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September 30, |
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December 31, |
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2024 |
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2023 |
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(unaudited) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Marketable securities |
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Prepaid expenses and other assets, current |
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Total current assets |
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Property and equipment, net |
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Operating lease right-of-use assets |
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Prepaid expenses and other assets, noncurrent |
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Total assets |
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$ |
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$ |
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Liabilities and stockholders’ equity |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Operating lease liabilities |
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Accrued expenses and other liabilities, current |
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Total current liabilities |
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Long-term debt |
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Operating lease liabilities, noncurrent |
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Accrued expenses and other liabilities, noncurrent |
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Total liabilities |
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Stockholders’ equity |
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Preferred stock, $ |
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Class A common stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive income |
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Accumulated deficit |
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( |
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( |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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The accompanying notes are an integral part of these unaudited condensed financial statements.
4
VERA THERAPEUTICS, INC.
Condensed Statements of Operations and Comprehensive Loss
(unaudited)
(in thousands, except share and per share amounts)
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Three Months Ended |
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Nine Months Ended |
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2024 |
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2023 |
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2024 |
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2023 |
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Operating expenses: |
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Research and development |
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$ |
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$ |
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$ |
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General and administrative |
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Total operating expenses |
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Loss from operations |
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( |
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( |
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( |
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( |
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Other income (expense): |
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Interest income |
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Interest expense |
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( |
) |
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( |
) |
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( |
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( |
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Other income, net |
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Total other income |
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Net loss |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
Other comprehensive income: |
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Change in unrealized gains and losses on marketable securities |
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Comprehensive loss |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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$ |
( |
) |
Net loss per share attributable to common stockholders, basic and diluted |
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$ |
( |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted |
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The accompanying notes are an integral part of these unaudited condensed financial statements.
5
VERA THERAPEUTICS, INC.
Condensed Statements of Stockholders’ Equity
(unaudited)
(in thousands, except share amounts)
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Class A Common Stock |
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Additional |
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Accumulated Other |
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Accumulated |
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Total |
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Shares |
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Amount |
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Capital |
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Comprehensive Income (Loss) |
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Deficit |
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Equity |
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Balances as of December 31, 2023 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
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Issuance of common stock from underwritten follow-on offering, net of offering costs |
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— |
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— |
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Issuance of common stock pursuant to exercise of options |
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— |
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— |
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Issuance of common stock upon vesting of restricted stock units |
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— |
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— |
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— |
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— |
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— |
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Issuance of common stock pursuant to employee stock purchase plan |
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— |
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— |
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— |
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Proceeds from short swing settlement |
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— |
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— |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Unrealized gain (loss) on marketable securities |
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— |
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— |
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— |
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( |
) |
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— |
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( |
) |
Net loss |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
Balances as of March 31, 2024 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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Issuance of common stock pursuant to exercise of options |
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— |
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— |
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Issuance of common stock upon vesting of restricted stock units |
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— |
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— |
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— |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Unrealized gain (loss) on marketable securities |
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— |
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— |
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— |
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( |
) |
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— |
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( |
) |
Net loss |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
Balances as of June 30, 2024 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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||||
Issuance of common stock pursuant to exercise of options |
|
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— |
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— |
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— |
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Issuance of common stock upon vesting of restricted stock units |
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— |
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— |
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— |
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— |
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— |
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Issuance of common stock pursuant to employee stock purchase plan |
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— |
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— |
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— |
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Repurchase of common stock |
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( |
) |
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— |
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( |
) |
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— |
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— |
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( |
) |
Stock-based compensation |
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— |
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— |
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— |
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— |
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Unrealized gain (loss) on marketable securities |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
Balances as of September 30, 2024 |
|
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
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6
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Class A Common Stock |
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Additional |
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Accumulated Other |
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Accumulated |
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Total |
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Shares |
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Amount |
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Capital |
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Comprehensive Income (Loss) |
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Deficit |
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Equity |
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||||||
Balances as of December 31, 2022 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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Issuance of common stock from underwritten follow-on offering, net of offering costs |
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— |
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— |
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Issuance of common stock pursuant to exercise of options |
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— |
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— |
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— |
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Issuance of common stock pursuant to employee stock purchase plan |
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— |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Unrealized gain (loss) on marketable securities |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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|
( |
) |
|
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( |
) |
Balances as of March 31, 2023 |
|
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$ |
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$ |
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$ |
( |
) |
|
$ |
( |
) |
|
$ |
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||||
Issuance of common stock pursuant to exercise of options |
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— |
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— |
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— |
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Issuance of common stock upon vesting of restricted stock units |
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— |
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— |
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— |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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||
Unrealized gain (loss) on marketable securities |
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— |
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— |
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— |
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( |
) |
|
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— |
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( |
) |
Net loss |
|
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— |
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— |
|
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— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balances as of June 30, 2023 |
|
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|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
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||||
Issuance of common stock pursuant to exercise of options |
|
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— |
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— |
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— |
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Issuance of common stock upon vesting of restricted stock units |
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— |
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— |
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— |
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— |
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— |
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Issuance of common stock pursuant to employee stock purchase plan |
|
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— |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Unrealized gain (loss) on marketable securities |
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— |
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— |
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— |
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— |
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||
Net loss |
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— |
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$ |
— |
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$ |
— |
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|
$ |
— |
|
|
$ |
( |
) |
|
$ |
( |
) |
Balances as of September 30, 2023 |
|
|
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|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
The accompanying notes are an integral part of these unaudited condensed financial statements.
7
VERA THERAPEUTICS, INC.
Condensed Statements of Cash Flows
(unaudited)
(in thousands)
|
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Nine Months Ended |
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2024 |
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2023 |
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Cash flows from operating activities |
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Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation and amortization |
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Accretion of discount and amortization of premium on purchase of debt securities |
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( |
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( |
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Accretion of loan exit fee and amortization of loan costs |
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Reduction in the carrying amount of operating lease right-of-use assets |
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Stock-based compensation |
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Changes in operating assets and liabilities: |
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Prepaid expense and other current assets |
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( |
) |
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Other assets |
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( |
) |
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Accounts payable |
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( |
) |
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Accrued and other liabilities |
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( |
) |
|
Operating lease liabilities |
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( |
) |
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( |
) |
Net cash used in operating activities |
|
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( |
) |
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( |
) |
Cash flows from investing activities |
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||
Purchase of property and equipment |
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( |
) |
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Purchase of marketable securities |
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( |
) |
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( |
) |
Proceeds from maturities of marketable securities |
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Proceeds from sale of marketable securities |
|
|
|
|
|
|
||
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from financing activities |
|
|
|
|
|
|
||
Proceeds from exercise of stock options and employee stock purchase plan |
|
|
|
|
|
|
||
Proceeds from short swing settlement |
|
|
|
|
|
|
||
Repurchase of common stock |
|
|
( |
) |
|
|
|
|
Proceeds from issuance of common stock in follow-on offering |
|
|
|
|
|
|
||
Payment of costs and underwriting discounts and commissions related to follow-on offering |
|
|
( |
) |
|
|
( |
) |
Net cash provided by financing activities |
|
|
|
|
|
|
||
Net decrease in cash and cash equivalents |
|
|
( |
) |
|
|
( |
) |
Cash and cash equivalents, beginning of period |
|
|
|
|
|
|
||
Cash and cash equivalents, end of period |
|
$ |
|
|
$ |
|
||
Supplemental disclosure of cash flow information |
|
|
|
|
|
|
||
Cash paid for interest expense |
|
$ |
|
|
$ |
|
||
Cash paid for operating leases |
|
$ |
|
|
$ |
|
||
Addition to right-of-use assets obtained from operating lease liabilities |
|
$ |
|
|
$ |
|
The accompanying notes are an integral part of these unaudited condensed financial statements.
8
VERA THERAPEUTICS, INC.
Notes to Unaudited Condensed Financial Statements
1. ORGANIZATION AND DESCRIPTION OF THE BUSINESS
Description of Business
Vera Therapeutics, Inc. (the Company) is a clinical stage biotechnology company focused on developing and commercializing treatments for patients with serious immunological diseases. The Company was incorporated in May 2016 in Delaware. The Company’s headquarters and operations are located in Brisbane, California. The Company operates in one segment.
Liquidity
Since inception, the Company devoted substantially all of its resources to its research and development efforts, pre-clinical studies and clinical trials, establishing and maintaining its intellectual property portfolio, hiring personnel, raising capital, and providing general and administrative support for these operations. The Company has incurred recurring net operating losses and has not generated positive cash flow from operations since its inception and had an accumulated deficit of $
Management believes that the Company’s cash, cash equivalents and marketable securities as of September 30, 2024 will be sufficient to fund its operating expenses and capital expenditure requirements for at least 12 months subsequent to the issuance date of these financial statements. The Company intends to raise additional capital through public or private equity offerings or debt financing or other capital sources, which may include strategic collaborations or other arrangements with third parties in order to achieve its long-term business objectives. If the Company fails to obtain necessary capital when needed on acceptable terms, or at all, it could force the Company to delay, limit, reduce or terminate its product development programs, commercialization efforts or other operations.
2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
Unaudited Condensed Financial Statements
In the opinion of management, the unaudited condensed financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the periods presented. Interim results are not necessarily indicative of results for a full year or any other period. The information included in this Form 10-Q should be read in conjunction with the audited financial statements and related notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 27, 2024.
Emerging Growth Company Status
The Company is an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (JOBS Act). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with certain new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (1) is no longer an emerging growth company or (2) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.
Use of Estimates
The preparation of the Company’s financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of expenses during the reporting period. Management estimates that affect the reported
9
Concentrations of Credit Risk and Other Risks and Uncertainties
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents and marketable securities. The Company maintains bank deposits in a federally insured financial institution and these deposits may exceed federally insured limits. The Company is exposed to credit risk in the event of default by the financial institution holding its cash, cash equivalents, and marketable securities to the extent recorded in the balance sheet. The Company has not experienced any losses to date related to these concentrations.
The Company’s future results of operations involve a number of other risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, uncertainty of results of clinical trials and reaching milestones, uncertainty of regulatory approval of the Company’s current and potential future product candidates, uncertainty of market acceptance of the Company’s product candidates, competition from substitute products and larger companies, securing and protecting proprietary technology, strategic relationships and dependence on key individuals or sole-source suppliers. The Company relies on one supply chain for each of its product candidates. If any of the single source suppliers in any of the supply chains fails to satisfy the Company’s requirements on a timely basis, it could suffer delays in its clinical development programs and activities, which could adversely affect operating results.
Significant Accounting Policies
There have been no material changes to the Company’s significant accounting policies from the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Recently Adopted Accounting Pronouncements
In June 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. This standard update clarifies the guidance in Topic 210, related to measuring the fair value of an equity security subject to contractual sale restrictions that prohibit the sale of an equity security and introduces new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. The guidance is effective for annual periods beginning after December 15, 2023, with early adoption permitted. The Company adopted this standard on January 1, 2024, and it did not have a material impact on the Company’s condensed financial statements or related disclosures.
Recently Issued Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This update improves reportable segment disclosure requirements and requires enhanced disclosures related to significant segment expenses regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. Amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. This ASU will result in the required additional disclosures being included in the Company’s financial statements upon adoption.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption
10
is also permitted for annual financial statements that have not yet been issued or made available for issuance. This ASU will result in the required additional disclosures being included in the Company’s financial statements upon adoption.
3. OTHER FINANCIAL STATEMENT INFORMATION
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consist of the following (in thousands):
|
|
September 30, |
|
|
December 31, |
|
||
Prepaid clinical trial costs |
|
$ |
|
|
$ |
|
||
Interest income receivable |
|
|
|
|
|
|
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Prepaid insurance |
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|
|
|
|
|
||
Prepaid medical affairs expenses |
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Prepaid commercial planning |
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Prepaid professional services fees |
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Prepaid drug manufacturing costs |
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||
Prepaid software license fees |
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Prepaid rent |
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|
|
|
||
Other |
|
|
|
|
|
|
||
Total prepaid expenses and other current assets |
|
$ |
|
|
$ |
|
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the following (in thousands):
|
|
September 30, |
|
|
December 31, |
|
||
Accrued clinical trial and drug manufacturing expenses |
|
$ |
|
|
$ |
|
||
Accrued payroll |
|
|
|
|
|
|
||
Related party payable |
|
|
|
|
|
|
||
Other accrued expenses |
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|
|
|
|
|
||
Other current liabilities |
|
|
|
|
|
|
||
Total accrued expenses and other current liabilities |
|
$ |
|
|
$ |
|
11
4. CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES
The Company’s cash equivalents and available-for-sale investment securities are classified within the fair value hierarchy as defined by authoritative guidance. Level 1 securities consist of highly liquid money market funds for which the carrying amount approximates the fair value of identical assets as quoted in the active markets. Level 2 securities, consisting of U.S. Treasuries, U.S. agency securities and corporate debt securities, are measured based on other observable inputs, including broker or dealer quotations or other valuations using observable market data. The Company’s debt securities are accounted for as available-for-sale securities.
Unrealized gains and losses are reported as a component of other comprehensive income (loss). Fair value of the debt securities was $
The following table presents the Company’s financial assets measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):
|
|
September 30, 2024 |
|
|||||||||||||||||
|
|
Fair Value Hierarchy Level |
Amortized Cost |
|
Unrealized Gains |
|
Unrealized Losses |
|
Estimated Fair Value |
|
Cash and Cash Equivalents |
|
Marketable Securities |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Money market funds |
|
Level 1 |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||
U.S. Government bonds |
|
Level 2 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
U.S. Government agency securities |
|
Level 2 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Corporate debt securities |
|
Level 2 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total cash equivalents and marketable securities |
|
|
|
|
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|
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|
|
|
|
|
||||||
Cash |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total |
|
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||
|
|
|
|
|
|
|
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||||||
|
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||||||
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||||||
|
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|
|
|
||||||
|
|
December 31, 2023 |
|
|||||||||||||||||
|
|
Fair Value Hierarchy Level |
Amortized Cost |
|
Unrealized Gains |
|
Unrealized Losses |
|
Estimated Fair Value |
|
Cash and Cash Equivalents |
|
Marketable Securities |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Money market funds |
|
Level 1 |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||
U.S. Government bonds |
|
Level 2 |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||||
U.S. Government agency securities |
|
Level 2 |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||||
Corporate debt securities |