QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
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(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading symbol(s) |
Name of each exchange on which registered | ||
Large accelerated filer |
☐ |
Accelerated filer |
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Non-acc elerated filer |
☒ |
Smaller reporting company |
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Emerging growth company |
☐ |
Page |
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PART I |
3 |
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Item 1. |
3 |
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3 |
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4 |
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5 |
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6 |
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7 |
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Item 2. |
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Item 3. |
21 |
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Item 4. |
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PART II |
22 |
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Item 1. |
22 |
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Item 1A. |
22 |
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Item 6. |
45 |
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46 |
Item 1. |
Financial Statements |
March 31, 2022 |
December 31, 2021 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ | $ | ||||||
Marketable securities |
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Prepaid research and development expenses |
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Other prepaid expenses and current assets |
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Total current assets |
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Property and equipment, net |
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Non-current marketable securities |
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Operating lease right-of-use |
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Other assets |
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Total assets |
$ | $ | ||||||
Liabilities and stockholders’ equity |
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Current liabilities: |
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Accounts payable |
$ | $ | ||||||
Accrued research and development expenses |
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Other accrued liabilities |
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Total current liabilities |
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Development financing liability |
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Long-term portion of operating lease liability |
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Total liabilities |
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Commitments and contingencies |
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Stockholders’ equity: |
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Preferred stock, $ |
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Common stock, $ outstanding as of March 31, 2022 and December 31, 2021, respectively |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
( |
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Accumulated deficit |
( |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
$ | $ | ||||||
Three Months Ended |
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March 31, |
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2022 |
2021 |
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Operating expenses: |
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Research and development |
$ | $ | ||||||
General and administrative |
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Total operating expenses |
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Loss from operations |
( |
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Other income (expense), net: |
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Interest income |
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Interest expense |
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Total other income (expense), net |
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Net loss |
$ | ( |
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Other comprehensive loss: |
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Unrealized loss on marketable securities |
( |
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Total other comprehensive loss |
( |
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Comprehensive loss |
$ | ( |
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Basic and diluted net loss per common share |
$ | ( |
) | $ | ( |
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Weighted average common shares outstanding used to calculate basic and diluted net loss per common share |
Three Months Ended |
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March 31, |
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2022 |
2021 |
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Operating activities |
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Net loss |
$ | ( |
) | $ | ( |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation and amortization |
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Stock-based compensation expense |
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Accretion of development financing liability |
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Net accretion and amortization of investments in marketable securities |
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Changes in assets and liabilities: |
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Other prepaid expenses and current assets |
( |
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Other assets |
( |
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Accounts payable |
( |
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Accrued research and development expenses |
( |
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Other accrued liabilities |
( |
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Net cash used in operating activities |
( |
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Investing activities |
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Purchases of property and equipment |
( |
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Purchases of marketable securities |
( |
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Proceeds from maturities of marketable securities |
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Net cash (used in) provided by investing activities |
( |
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Financing activities |
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Proceeds from development financing |
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Issuance costs paid for issuance of common stock |
( |
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Net cash provided by financing activities |
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Net (decrease) increase in cash and cash equivalents |
( |
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Cash and cash equivalents at beginning of period |
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Cash and cash equivalents at end of period |
$ | $ | ||||||
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Supplemental disclosure |
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Cash paid for amounts included in the measurement of lease liabilities |
$ | $ |
Accumulated |
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Additional |
Other |
Total |
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Common Stock |
Paid-in |
Comprehensive |
Accumulated |
Stockholders’ |
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Shares |
Amount |
Capital |
Income (Loss) |
Deficit |
Equity |
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Balances as of December 31, 2021 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
Issuance costs related to issuance of common stock and pre-funded warrants |
— | — | — | |||||||||||||||||||||
Stock-based compensation expense |
— | — | — | — | ||||||||||||||||||||
Net loss |
— | — | — | — | ( |
) | ( |
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Net unrealized loss on marketable securities |
— | — | — | ( |
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Balances as of March 31, 2022 |
$ | $ | $ | ( |
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Accumulated |
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Additional |
Other |
Total |
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Common Stock |
Paid-in |
Comprehensive |
Accumulated |
Stockholders’ |
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Shares |
Amount |
Capital |
Income (Loss) |
Deficit |
Equity |
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Balances as of December 31, 2020 |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
Stock-based compensation expense |
— | — | — | — | ||||||||||||||||||||
Net loss |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||
Net unrealized loss on marketable securities |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
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Balances as of March 31, 2021 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
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As of March 31, 2022 |
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Level 1 |
Level 2 |
Level 3 |
Total |
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Assets: |
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Cash equivalents: |
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Money market funds |
$ | $ | — | $ | — | $ | ||||||||||
Total cash equivalents |
— | — | ||||||||||||||
Marketable securities: |
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U.S. and foreign commercial paper |
— | — | ||||||||||||||
U.S. and foreign corporate debt securities |
— | — | ||||||||||||||
Supranational debt securities |
— | — | ||||||||||||||
U.S. treasury securities |
— | — | ||||||||||||||
Total marketable securities |
— | — | ||||||||||||||
Total assets measured at fair value |
$ | $ | $ | — | $ | |||||||||||
As of December 31, 2021 |
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Level 1 |
Level 2 |
Level 3 |
Total |
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Cash equivalents: |
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Money market funds |
$ | $ | — | $ | — | $ | ||||||||||
Total cash equivalents |
— | — | ||||||||||||||
Marketable securities: |
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U.S. and foreign commercial paper |
— | — | ||||||||||||||
U.S. and foreign corporate debt securities |
— | — | ||||||||||||||
Asset-backed securities |
— | — | ||||||||||||||
U.S. treasury securities |
— | — | ||||||||||||||
Total marketable securities |
— | — | ||||||||||||||
Total assets measured at fair value |
$ | $ | $ | — | $ | |||||||||||
Due less than 1 year |
$ | |||
Due between 1 and 2 years |
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Total fair value |
$ | |||
March 31, 2022 |
December 31, 2021 |
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Accrued compensation |
$ | $ | ||||||
Accrued professional fees and other |
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Current portion of operating lease liability |
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Total other accrued liabilities |
$ | $ | ||||||
Three Months Ended March 31, |
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2022 |
2021 |
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Numerator: |
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Net loss |
$ |
( |
) |
$ |
( |
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Denominator: |
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Weighted average number of: |
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Common stock shares outstanding |
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Pre-funded warrants outstanding |
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Total |
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Net loss per share |
$ |
( |
) |
$ |
( |
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Three Months Ended March 31, |
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2022 |
2021 |
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Common stock options |
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Incentive awards |
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Total |
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Three Months Ended March 31, |
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2022 |
2021 |
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Research and development |
$ | $ | ||||||
General and administrative |
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Total stock-based compensation expense |
$ | $ | ||||||
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | Clinical trial and drug manufacturing operations—In collaboration with our clinical research organization partners, we sponsor clinical trials that take place at investigator sites in the U.S. and internationally. We also partner with contract manufacturing organizations to develop, manufacture, and distribute our product candidate drug supplies. To date, these collective research and development personnel and vendors have adapted to COVID-19 related travel restrictions and reduced access to work facilities through the use of remote working technologies and other measures as they continue to progress toward completion of our clinical trials. However, as we continue to enroll clinical trials and look to complete the clinical development of seladelpar and initiate other programs, our research and development employees and contractors who support our clinical activities may not be able to sufficiently access their applicable work facilities as a result of continued facility closure orders and the possibility that governmental authorities might further modify such restrictions. Furthermore, although we and our contractors continue to plan for and develop pandemic-related risk mitigation strategies, it is uncertain whether these plans will continue to be sufficient to fully offset the potential impact COVID-19, including the emergence of new COVID-19 variants, travel restrictions and/or facility access restrictions (or other unanticipated impediments) may have on our ability to execute our development activities in a timely and cost-effective manner. |
• | Drug regulator interactions—The FDA and comparable foreign regulatory agencies may experience operational interruptions or delays, which could impact timelines for regulatory meetings, submissions, trial initiations, and regulatory approvals. For example, COVID-19 related regulatory submission issues have created an impediment to clinical site activation in the U.K. |
• | Financial reporting and compliance—To date, there has been no adverse impact on our ability to maintain our established financial reporting functions and internal controls over financial reporting. However, our ability to prepare our financial results timely and accurately is partially dependent upon the availability of third-party information systems and other cloud-based services. |
• | Remote workforce operations—To date, our workforce has adapted to remotely working to maintain operations. Our operations are currently in a hybrid model with most employees working from our office for a portion of the week and working remotely for the rest of the week. Our continued use of partially-remote operations, however, could increase our cyber-security risk, create data accessibility concerns, and make us more susceptible to communication disruptions, any of which could adversely impact our business operations, or delay necessary interactions with regulators, contract manufacturers, contract research organizations, clinical trial sites, and other important agencies and contractors, which may result in increased costs to us. |
Three Months Ended March 31, |
Change Q1 |
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2022 |
2021 |
2022 vs. 2021 |
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($ in thousands) |
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Operating expenses: |
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Research and development |
$ | 18,415 | $ | 12,382 | $ | 6,033 | ||||||
General and administrative |
6,087 | 5,236 | 851 | |||||||||
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Total operating expenses |
24,502 | 17,618 | 6,884 | |||||||||
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Loss from operations |
(24,502 | ) | (17,618 | ) | (6,884 | ) | ||||||
Other income (expense), net: |
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Interest income |
98 | 67 | 31 | |||||||||
Interest expense |
(3,365 | ) | — | (3,365 | ) | |||||||
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Total other income (expense), net |
(3,267 | ) | 67 | (3,334 | ) | |||||||
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Net loss |
$ | (27,769 | ) | $ | (17,551 | ) | $ | (10,218) | ||||
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Three Months Ended March 31, |
Change Q1 |
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2022 |
2021 |
2022 vs. 2021 |
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Project costs: |
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Seladelpar PBC clinical studies |
$ | 9,273 | $ | 5,903 | $ | 3,370 | ||||||
Seladelpar drug manufacturing & development |
2,256 | 754 | 1,502 | |||||||||
Seladelpar and non-seladelpar other studies |
100 | 1,095 | (995 | ) | ||||||||
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Total project costs |
11,629 | 7,752 | 3,877 | |||||||||
Internal research and development costs |
6,786 | 4,630 | 2,156 | |||||||||
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Total research and development |
$ | 18,415 | $ | 12,382 | $ | 6,033 | ||||||
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• | expenses incurred under agreements with contract research organizations, investigative sites and consultants that conduct our clinical trials and a substantial portion of our preclinical activities; |
• | the cost of acquiring and manufacturing clinical trial and other materials; and |
• | other costs associated with development activities, including additional studies. |
Three Months Ended March 31, |
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2022 |
2021 |
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Net cash used in operating activities |
$ | (25,362 | ) | $ | (20,561 | ) | ||
Net cash (used in) provided by investing activities |
(50,990 | ) | 35,694 | |||||
Net cash provided by financing activities |
24,541 | — | ||||||
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Net (decrease) increase in cash and cash equivalents |
$ | (51,811 | ) | $ | 15,133 | |||
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Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
Item 4. |
Controls and Procedures |
Item 1. |
Legal Proceedings |
• | Our business may be adversely affected by the effects of the COVID-19 pandemic, particularly the emergence of COVID-19 variants such as the Delta and Omicron variants, including those impacting our ability to enroll and conduct critical clinical trials such as RESPONSE, as well as impacts to our other development efforts, administrative personnel and third-party service providers. |
• | We have incurred significant net losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future. We may need to raise additional equity and/or debt capital to fund our continued operations, including clinical trials and other product development. In the event we do not successfully raise sufficient funds to finance our product development activities, we will curtail our product development activities commensurate with the magnitude of the shortfall or our product development activities may cease altogether. |
• | Failure to remain in compliance with our obligations under the development financing agreement with Abingworth could lead to reduced funding under the agreement and/or the acceleration of potentially significant payments to Abingworth. |
• | Our ability to generate future revenues from product sales is uncertain and depends upon our ability to successfully develop, obtain regulatory approval for, and commercialize product candidates, including most importantly, seladelpar. |
• | Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates. |
• | Drug development and obtaining and maintaining regulatory approval for drug products is costly, time-consuming, and highly uncertain. |
• | Serious complications or side effects in connection with the use or development of our product candidates could lead to delay or discontinuation of development of our product candidates. |
• | Our manufacturing partners and other service providers, including CROs managing our clinical trials, may fail to perform adequately in their efforts to support the development, manufacture, and commercialization of our drug candidates and future products. |
• | We have never successfully commercialized a product. If any of our product candidates receive marketing approval, they may nonetheless be unable to gain sufficient market acceptance by physicians, patients, health care payors and others in the medical community. |
• | If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell our product candidates, we may be unable to generate any revenue. |
• | The commercial success of our products is subject to significant competition from products or product candidates that may be superior to, or more cost effective than, our products or product candidates. |
• | We may not be able to protect the confidentiality of our trade secrets, and our patents or other means of defending our intellectual property may be insufficient to protect our proprietary rights. |
• | Patents or proprietary rights of others may restrict our development, manufacturing, and/or commercialization efforts and subject us to litigation and other proceedings that could find us liable for damages. |
• | Our business is dependent on our key personnel and will be harmed if we cannot recruit and retain leaders in our development, administrative, and commercial organizations. |
• | Significant disruptions of information technology systems or breaches of data security could adversely affect our business. |
• | Changes in and failures to comply with United States and foreign privacy and data protection laws, regulations and standards may adversely affect our business, operations and consolidated financial performance. |
• | Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall. |
• | We are currently managing clinical trials in geographies that are affected by the COVID-19 pandemic, in particular in areas that have been impacted by the emergence of COVID-19 variants such as the Delta and Omicron variants. While we have not experienced material impacts to our clinical activities through March 31, 2022, we are observing impacts due to COVID-19, including reluctance of subjects to enroll in clinical studies due to the ongoing pandemic, travel restrictions impacting trial enrollment, personnel shortages at clinical sites impacting trial enrollment and operations and facility restrictions impacting trial enrollment. We believe that the COVID-19 pandemic, including the emergence of COVID-19 variants, will have a continuing impact on various aspects of our clinical activities in the future. For example, pandemic-related reluctance or restrictions, including curtailment of activities, could reduce the rate of patient enrollment in our RESPONSE clinical trial and other clinical studies, and impair the ability to efficiently treat patients at investigator sites. Additionally, our employees, representatives from our clinical research organization partners, and study investigators may be unable to efficiently collaborate or unwilling to conduct investigator site activities in-person at the sites (as per standard practice) and may be required to delay, or alter, their approach to complete this work due to shortages of personnel or diversion of resources at clinical sites or continued government-imposed limitations on activities. Further, our employees and representatives from our contract manufacturing organizations may experience unanticipated challenges sourcing raw materials or producing and distributing sufficient quantities of clinical drug supplies for use in our clinical trials. |
• | We have moved to a hybrid model of operations, with most employees working from our office for a portion of the week and working remotely for the rest of the week. The safety, health and well-being of our workforce is of primary concern and we may need to enact further precautionary measures to help minimize the risk of our employees being exposed to the coronavirus. |
• | Our continuing reliance on personnel working from home may negatively impact productivity, or disrupt, delay, or otherwise adversely impact our business. In addition, this could increase our cyber-security and data privacy risks, create data accessibility concerns, and make us more susceptible to communication disruptions, any of which could adversely impact our business operations, or delay necessary interactions with regulators, contract manufacturers, contract research organizations, clinical trial sites, and other important agencies and contractors, which could result in increased costs to us. |
• | In some jurisdictions, contractors involved in conducting our research and development activities may not be able to access their applicable work facilities for an extended period of time as a result of facility closure orders and the possibility that governmental authorities further modify such access restrictions. |
• | The United States Food and Drug Administration (FDA), comparable foreign regulatory agencies, and ethics boards may experience operational interruptions or delays, which could impact timelines for regulatory meetings, submissions, trial initiations, and regulatory approvals. |
• | the rate of progress and cost of our clinical studies; |
• | the need for additional or expanded clinical studies; |
• | the rate of progress and cost of our Chemistry, Manufacturing and Control development, registration, validation and commercial programs; |
• | the timing, economic and other terms of any licensing, collaboration or other similar arrangement into which we may enter; |
• | the costs and timing of seeking and obtaining FDA and other regulatory approvals; |
• | the extent of our other development activities; |
• | the costs of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights; and |
• | the effect of competing products and market developments. |
• | successful enrollment and completion of clinical trials, including, in the case of RESPONSE, enrollment of sufficient subjects willing to receive a liver biopsy; |
• | receipt of marketing approvals from the FDA and regulatory authorities outside the United States for the product candidate; |
• | establishing commercial manufacturing capabilities by making arrangements with third-party manufacturers; |
• | launching commercial sales of the product, whether alone or in collaboration with others; |
• | acceptance of the product by patients, the medical community and third-party payors; |
• | effectively competing with other therapies; |
• | a continued acceptable safety profile of the product following marketing approval; and |
• | obtaining, maintaining, enforcing and defending intellectual property rights and claims. |
• | regulators or institutional review boards may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; |
• | the clinical study protocol may require one or more amendments delaying study completion; |
• | clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs; |
• | the number of subjects required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be insufficient or slower than we anticipate, we may have to compete with other clinical trials to enroll eligible subjects, or subjects may drop out of these clinical trials at a higher rate than we anticipate; |
• | the number of patients in our RESPONSE clinical trial that choose to have biopsies may be insufficient to satisfy regulatory requirements; |
• | clinical investigators or study subjects may fail to comply with clinical study protocols; |
• | trial conduct and data analysis errors may occur, including, but not limited to, data entry and/or labeling errors; |
• | our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; |
• | we might have to suspend or terminate clinical trials of our product candidates for various reasons, including a finding that the subjects are being exposed to unacceptable health risks; |
• | geo-political turmoil between Russia and Ukraine and/or continuing military actions in Ukraine may cause us to have to suspend or terminate clinical trials of seladelpar in those countries; |
• | regulators or institutional review boards may require that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements; |
• | the cost of clinical trials of our product candidates may be greater than we anticipate; |
• | the supply or quality of our clinical trial materials or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; and |
• | our product candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators to suspend or terminate the trials. |
• | reluctance of patients to enroll in our clinical trials due to the COVID-19 pandemic; |
• | personnel shortages at clinical sites due to the COVID-19 pandemic that impact the enrollment timeline or operations at clinical trial sites participating in our clinical trials; |
• | competition for eligible patients from competing clinical trials; |
• | delays in obtaining regulatory approval to commence a trial; |
• | delays in reaching agreement with the FDA or other regulatory authorities on final trial design; |
• | imposition of a clinical hold following a reported safety event; |
• | an inspection of our clinical trial operations or trial sites by the FDA or other regulatory authorities; |
• | delays in reaching agreement on acceptable terms with prospective contract research organizations (CROs) and clinical trial sites; |
• | delays in obtaining required institutional review board (IRB) approval at each site; |
• | delays in recruiting suitable patients to participate in a trial; |
• | delays in having subjects complete participation in a trial or return for post-treatment follow-up; |
• | delays caused by the need to enroll additional subjects willing to have biopsies in the RESPONSE trial; |
• | delays caused by subjects dropping out of a trial due to side effects or otherwise; |
• | changes to treatment guidelines or the introduction of a new standard of care; |
• | delays caused by clinical sites dropping out of a trial; |
• | time required to add new clinical sites; |
• | delays by our contract manufacturers to produce and deliver sufficient supply of clinical trial materials; and |
• | delays in importing clinical trial materials into foreign countries where our clinical trials are being conducted. |
• | regulatory authorities may withdraw their approval of the product or impose restrictions on its distribution in a form of a risk evaluation and mitigation strategy (REMS) plan; |
• | regulatory authorities may require the addition of labeling statements, such as black box or other warnings or contraindications that could diminish the usage of the product or otherwise limit the commercial success of the affected product; |
• | we may be required to change the way the product is administered or to conduct additional clinical studies; |
• | we may choose to discontinue sale of the product; |
• | we could be sued and held liable for harm caused to patients; or |
• | our reputation may suffer. |
• | we may be unable to demonstrate to the satisfaction of regulatory authorities that a product candidate is safe and effective for any indication; |
• | regulatory authorities may not find the data from nonclinical studies and clinical studies sufficient or may differ in the interpretation of the data; |
• | regulatory authorities may require additional nonclinical or clinical studies; |
• | regulatory authorities might not approve our third party manufacturers’ processes or facilities for clinical or commercial product; |
• | regulatory authorities may change their approval policies or adopt new regulations; |
• | regulatory authorities may disagree with the design or implementation of our clinical studies; |
• | regulatory authorities may not accept clinical data from studies that are conducted in countries where the standard of care is potentially different from the jurisdiction of that regulatory authority; |
• | the results of clinical studies may not meet the level of statistical significance required by regulatory authorities for approval; |
• | we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; and |
• | the data collection from clinical studies of our product candidates may not be sufficient to support the submission of a new drug application (NDA), marketing authorization or other equivalent submission, or to obtain regulatory approval in the United States or elsewhere. |
• | issue an untitled or warning letter asserting violation of the law; |
• | seek an injunction or impose civil or criminal penalties up to and including imprisonment or monetary fines; |
• | suspend or withdraw regulatory approval; |
• | suspend any ongoing clinical trials; |
• | refuse to approve a pending NDA or supplements to an NDA; or |
• | request recall and/or seize product. |
• | the inability to meet our product specifications, including product formulation, and quality requirements consistently; |
• | a delay or inability to procure or expand sufficient manufacturing capacity; |
• | manufacturing and product quality issues, including those related to scale-up of manufacturing; |
• | costs and validation of new equipment and facilities required for scale-up; |
• | a failure to comply with cGMP and similar quality standards; |
• | the inability to negotiate manufacturing agreements with third parties under commercially reasonable terms; |
• | termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging to us; |
• | the reliance on a limited number of sources, and in some cases, single sources for key materials, such that if we are unable to secure a sufficient supply of these key materials, we will be unable to manufacture and sell our products in a timely fashion, in sufficient quantities or under acceptable terms; |
• | the lack of qualified backup suppliers for those materials that are currently purchased from a sole or single source supplier; |
• | operations of our third-party manufacturers or suppliers could be disrupted by conditions unrelated to our business or operations, including the bankruptcy of the manufacturer or supplier; |
• | disruption of the distribution of chemical supplies between the U.K. and E.U. due to Brexit; |
• | carrier disruptions or increased costs that are beyond our control; and |
• | the failure to deliver our products under specified storage conditions and in a timely manner. |
• | demonstration of clinical safety and efficacy in our clinical trials; |
• | the risk/benefit profile of our products; |
• | the relative convenience, ease of administration and acceptance by physicians, patients and health care payors; |
• | the prevalence and severity of any side effects; |
• | the safety of products seen in a broader patient group, including its use outside the approved indications; |
• | limitations or warnings contained in the FDA and other regulatory authorities approved label for the relevant product; |
• | acceptance of the product by physicians, other health care providers and patients as a safe and effective treatment; |
• | the potential and perceived advantages of products over alternative treatments; |
• | the timing of market introduction of competitive products; |
• | pricing and cost-effectiveness; |
• | the effectiveness of our or any future collaborators’ sales and marketing strategies; |
• | our ability to obtain formulary approval; |
• | our ability to obtain and maintain sufficient third-party coverage or reimbursement, which may vary from country to country; and |
• | the effectiveness of our or any future collaborators’ sales, marketing and distribution efforts. |
• | different regulatory requirements for drug approvals in foreign countries; |
• | reduced protection for intellectual property rights; |
• | unexpected changes in tariffs, trade barriers and regulatory requirements; |
• | differing payor reimbursement regimes, governmental payors or patient self-pay systems and price controls; |
• | economic weakness, including inflation, or political instability in particular foreign economies and markets; |
• | compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; |
• | foreign taxes, including withholding of payroll taxes; |
• | foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country; |
• | workforce uncertainty in countries where labor unrest is more common than in the United States; |
• | production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and |
• | business interruptions resulting from geopolitical actions, including war and terrorism, pandemics, or natural disasters including earthquakes, typhoons, volcanic eruptions, floods and fires. |
• | research and development resources, including personnel and technology; |
• | regulatory experience; |
• | experience in pharmaceutical development and commercialization; |
• | ability to negotiate competitive pricing and reimbursement with third-party payors; |
• | experience and expertise in the exploitation of intellectual property rights; and |
• | capital resources. |
• | decreased demand for our products; |
• | impairment to our business reputation; |
• | withdrawal of clinical study participants; |
• | distraction of management’s attention from our primary business; |
• | substantial monetary awards to patients or other claimants; |
• | the inability to commercialize our products; and |
• | loss of revenues. |
• | delays in enrolling and/or completing the RESPONSE clinical trial or our other clinical trials; |
• | adverse or inconclusive results in our clinical trials; |
• | adverse or inconclusive results or delays in preclinical testing; |
• | inability to obtain additional funding; |
• | any delay in filing an Investigational New Drug (IND) application or NDA for any of our future product candidates and any adverse development or perceived adverse development with respect to the FDA’s review of an IND or NDA; |
• | failure to enter into new collaborations; |
• | failure by us or our licensors to prosecute, maintain or enforce our intellectual property rights; |
• | failure to successfully develop and commercialize our future product candidates; |
• | changes in laws or regulations applicable to future products; |
• | changes in the structure of health care payment systems; |
• | inability to obtain adequate product supply for our product candidates or the inability to do so at acceptable prices; |
• | adverse regulatory decisions; |
• | introduction of new products, services or technologies by our competitors; |
• | failure to meet or exceed financial projections we may provide to the public; |
• | failure to meet or exceed the estimates and projections of the investment community; |
• | the perception of the pharmaceutical industry by the public, legislatures, regulators and the investment community; |
• | announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors; |
• | announcements of significant or potential equity or debt sales by us; |
• | announcements of clinical trial plans or results by us or our competitors; |
• | disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; |
• | additions or departures of key scientific or management personnel; |
• | significant lawsuits, including patent or stockholder litigation; |
• | changes in the market valuations of similar companies; |
• | sales of our common stock by us or our stockholders in the future; and |
• | trading volume of our common stock. |
Item 6. |
Exhibits |
CYMABAY THERAPEUTICS, INC. | ||
By: | /s/ Sujal Shah | |
Sujal Shah | ||
President and Chief Executive Officer | ||
(Principal Executive Officer) | ||
Date: | May 12, 2022 | |
By: | /s/ Daniel Menold | |
Daniel Menold | ||
Vice President, Finance | ||
(Principal Financial and Accounting Officer) | ||
Date: | May 12, 2022 |
Exhibit 31.1
CERTIFICATIONS
I, Sujal Shah, certify that:
1. | I have reviewed this Form 10-Q of CymaBay Therapeutics, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date May 12, 2022
/s/ Sujal Shah |
Sujal Shah President and Chief Executive Officer (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATIONS
I, Daniel Menold, certify that:
1. | I have reviewed this Form 10-Q of CymaBay Therapeutics, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles |
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; an |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: May 12, 2022
/s/ Daniel Menold |
Daniel Menold Vice President, Finance (Principal Financial and Accounting Officer) |
Exhibit 32.1
CERTIFICATION
Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the Exchange Act), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), each of Sujal Shah, President and Chief Executive Officer, and Daniel Menold, Vice President, Finance of CymaBay Therapeutics, Inc. (the Company), hereby certifies that, to the best of his knowledge:
1. | The Companys Quarterly Report on Form 10-Q for the period ended March 31, 2022, to which this Certification is attached as Exhibit 32.1 (the Periodic Report), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act, and |
2. | The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
In Witness Whereof, the undersigned has set his hand hereto as of May 12, 2022.
/s/ Sujal Shah |
Sujal Shah President and Chief Executive Officer (Principal Executive Officer) |
/s/ Daniel Menold |
Daniel Menold Vice President, Finance (Principal Financial and Accounting Officer) |
This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of CymaBay Therapeutics, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 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 | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 84,677,939 | 84,677,939 |
Common stock, shares outstanding | 84,677,939 | 84,677,939 |
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Operating expenses: | ||
Research and development | $ 18,415 | $ 12,382 |
General and administrative | 6,087 | 5,236 |
Total operating expenses | 24,502 | 17,618 |
Loss from operations | (24,502) | (17,618) |
Other income (expense), net: | ||
Interest income | 98 | 67 |
Interest expense | (3,365) | |
Total other income (expense), net | (3,267) | 67 |
Net loss | (27,769) | (17,551) |
Other comprehensive loss: | ||
Unrealized loss on marketable securities | (206) | (14) |
Total other comprehensive loss | (206) | (14) |
Comprehensive loss | $ (27,975) | $ (17,565) |
Basic and diluted net loss per common share | $ (0.32) | $ (0.25) |
Weighted average common shares outstanding used to calculate basic and diluted net loss per common share | 87,802,939 | 68,946,092 |
Organization and Description of Business |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | 1. Organization and Description of Business CymaBay Therapeutics, Inc. (the Company or CymaBay) is a clinical-stage biopharmaceutical company focused on developing and providing access to innovative therapies for patients with liver and other chronic diseases with high unmet medical need. The Company’s key clinical development candidate is seladelpar. Seladelpar has been under development primarily for the treatment of primary biliary cholangitis (PBC), a rare liver disease. The Company was incorporated in Delaware in October 1988 as Transtech Corporation. The Company’s headquarters and operations are located in Newark, California and it operates i Liquidity The Company has incurred net operating losses and negative cash flows from operations since its inception. During the three months ended March 31, 2022, the Company incurred a net loss of $27.8 million and used $25.4 million of cash in operations. At March 31, 2022, the Company had an accumulated deficit of $794.6 million. Historically, the Company has incurred substantial research and development expenses in the course of studying its product candidates in clinical trials. To date, none of the Company’s product candidates have been approved for marketing and sale, and the Company has not recorded any revenue from product sales. Generally, the Company’s ability to achieve profitability is dependent on its ability to successfully develop, acquire or in-license additional product candidates, conduct clinical trials for those product candidates, obtain regulatory approvals, and support commercialization activities for those product candidates. Any products developed will require approval of the U.S. Food and Drug Administration (FDA) or a foreign regulatory authority prior to commercial sale. The regulatory approval process is expensive, time-consuming, and uncertain, and any denial or delay of approval could have a material adverse effect on the Company. Even if approved, the Company’s products may not achieve market acceptance and will face competition from both generic and branded pharmaceutical products. As of March 31, 2022, the Company had cash, cash equivalents and marketable securities totaling $193.4
million, which the Company believes is sufficient to fund its current operating plan for at least twelve months from the issuance date of its financial statements. The Company has historically obtained, and expects to obtain in the future, additional financing to fund its business strategy through: future equity offerings; debt financing; one or more possible licenses, collaborations or other similar arrangements with respect to development and/or commercialization rights of the Company’s product candidates; or a combination of the above. It is unclear if or when any such transactions will occur, on satisfactory terms or at all. The Company’s failure to raise capital as and when needed could have a negative impact on its financial condition and its ability to pursue its business strategies. If adequate funds are not available to the Company, it could have a material adverse effect on the Company’s business, results of operations, and financial condition. Market volatility resulting from the global novel coronavirus disease (COVID-19) pandemic, geopolitical or other factors could also adversely impact the Company’s ability to access capital when and as needed. Failure to raise sufficient capital when needed could require the Company to significantly delay, scale back or discontinue one or more of its product development programs or commercialization efforts, or other aspects of its business plans, and the Company’s operating results and financial condition would be adversely affected. |
Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation and Use of Estimates The accompanying interim condensed consolidated financial statements are unaudited and are comprised of the accounts of CymaBay and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company has no unconsolidated subsidiaries or investments accounted for under the equity method. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP), which requires management to make informed estimates and assumptions that impact the amounts and disclosures reported in the condensed consolidated financial statements and accompanying notes, and the requirements of the United States Securities and Exchange Commission (SEC) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. In management’s opinion, the unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited 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 financial statements and accompanying notes for the fiscal year ended December 31, 2021, which is contained in the Company’s Annual Report on Form 10-K as filed with the SEC on March 17, 2022. The results for the three months ended March 31, 2022 are not necessarily indicative of results to be expected for the entire year ending December 31, 2022 or future operating periods. The condensed consolidated financial statements have been prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions that affect the amounts and disclosures reported in the condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates. Actual results could differ materially from those estimates and assumptions. These estimates form the basis for making judgments about the carrying values of assets and liabilities when these values are not readily apparent from other sources. Estimates are assessed each reporting period and updated to reflect current information and any changes in estimates will generally be reflected in the period first identified. Fair Value of Financial Instruments The Company’s financial instruments during the periods reported consist of cash, cash equivalents, marketable securities, accounts payable, certain accrued liabilities, and the development financing liability. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Assets and liabilities that are measured at fair value are reported using a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs and is as follows: Level 1—Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2—Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or indirectly. Level 3—Inputs that are significant to the fair value measurement and are unobservable (i.e. supported by little market activity), which requires the reporting entity to develop its own valuation techniques and assumptions. The carrying amounts of cash, accounts payable, and certain accrued liabilities approximate their related fair values due to the short-term nature of these instruments. Cash is classified as level 1 and accounts payable and accrued liabilities as level 2 under the fair value hierarchy. The following tables present the Company’s financial assets that are measured at fair value on a recurring basis using the above input categories (in thousands):
The Company estimates the fair value of its money market funds, corporate debt, asset-backed securities, commercial paper, U.S. treasury securities, and supranational debt securities by taking into consideration valuations obtained from third-party pricing services. 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 securities, issuer credit spreads, benchmark securities, prepayment/default projections based on historical data, and other observable inputs. The fair value of the Company’s development financing liability is consistent with its carrying value of $78.7 million, which is recorded at amortized cost. The development financing liability is classified as level 3 under the fair value hierarchy as its valuation is based on a discounted cash flow model that uses unobservable inputs such as the estimated timing of regulatory approval and attainment of certain sales milestones. Cash, Cash Equivalents, and Marketable Securities The Company considers all highly liquid investments with an original maturity of 90 days or less at the time of purchase to be cash equivalents. Cash and cash equivalents consist of deposits with commercial banks in checking, interest-bearing, and money market funds. The Company invests excess cash in marketable securities with high credit ratings. These securities consist primarily of corporate debt, commercial paper, asset-backed securities, U.S. treasury securities, and supranational debt securities and are classified as “available-for-sale.” Realized gains and losses from the sale of marketable securities, if any, are calculated using the specific-identification method. Realized gains and losses and declines in value judged to be other-than-temporary are included in interest income or expense in the condensed consolidated statements of operations and comprehensive loss. Unrealized holding gains and losses are reported in accumulated other comprehensive loss in the condensed consolidated balance sheets. To date, the Company has not recorded any impairment charges on its marketable securities related to other-than-temporary declines in market value. In determining whether a decline in market value is other-than-temporary, various factors are considered, including the cause, duration of time and severity of the impairment, any adverse changes in the investees’ financial condition, and the Company’s intent and ability to hold the security for a period of time sufficient to allow for an anticipated recovery in market value. Unrealized gains and losses of the Company’s available-for-sale The following table shows the fair value of the Company’s marketable securities, by contractual maturity, as of March 31, 2022 (in thousands):
Concentration of Risk Cash, cash equivalents, and marketable securities consist of financial instruments that potentially subject the Company to a concentration of credit risk to the extent of the fair value recorded on the balance sheet. The Company invests cash that is not required for immediate operating needs primarily in highly liquid instruments that bear minimal risk. The Company has established guidelines relating to the quality, diversification, and maturities of securities to enable the Company to manage its credit risk. The Company is exposed to credit risk in the event of a default by the financial institutions holding its cash, cash equivalents and investments and issuers of investments to the extent recorded on the condensed consolidated balance sheets. Certain materials and key components that the Company utilizes in its operations are obtained through single suppliers. Since the suppliers of key components and materials must be named in a new drug application NDA filed with the FDA for a product, significant delays can occur if the qualification of a new supplier is required. If delivery of material from the Company’s suppliers were interrupted for any reason, the Company may be unable to supply any of its product candidates for clinical trials. Other Risks and Uncertainties In March 2020, the World Health Organization declared the global novel coronavirus disease (COVID-19) outbreak a pandemic. To date, the Company’s operations have not been significantly impacted by the COVID-19 outbreak. However, the Company continues to monitor potential risks and uncertainties associated with operating its business during the pandemic. These risks include, but are not limited to, ongoing government advisories and restrictions on travel and workplace access, workforce shortages, and global supply chain delays, all of which could potentially impact the Company’s ability to conduct its critical drug development and regulatory compliance activities. The Company cannot predict the specific extent, duration, or full impact that the COVID-19 outbreak will have on its consolidated financial condition and operations. The impact of the COVID-19 coronavirus outbreak on the financial performance of the Company will depend on future developments, including the duration and spread of the outbreak and related governmental advisories and restrictions. These developments and the impact of COVID-19 on the financial markets and the overall economy are highly uncertain. If the financial markets and/or the overall economy are impacted for an extended period, the Company’s results may be adversely affected. Research and Development Expenses Research and development expenses consist of costs incurred in identifying, developing, and testing product candidates. These expenses consist primarily of costs for research and development personnel, including related stock-based compensation; contract research organizations (CRO) and other third parties that assist in managing, monitoring, and analyzing clinical trials; investigator and site fees; laboratory services; consultants; contract manufacturing services; non-clinical studies, including materials; and allocated expenses, such as depreciation of assets, and facilities and information technology that support research and development activities. Research and development costs are expensed as incurred, including expenses that may or may not be reimbursed under research and development funding arrangements. Payments made prior to the receipt of goods or services to be used in research and development are recorded as prepaid assets until the goods are received or services are rendered. Such payments are evaluated for current or long-term classification based on when they will be realized. Additionally, if expectations change such that the Company does not expect goods to be delivered or services to be rendered, such prepayments are charged to expense. The Company records expenses related to clinical studies and manufacturing development activities based on its estimates of the services received and efforts expended pursuant to contracts with multiple CROs and manufacturing vendors that conduct and manage these activities on its behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract, and may result in uneven payment flows. There may be instances in which payments made to the Company’s vendors will exceed the level of services provided and result in a prepayment. Payments under some of these contracts depend on factors such as the successful enrollment of subjects and the completion of clinical trial milestones. In amortizing or accruing service fees, the Company estimates the time period over which services will be performed, enrollment of subjects, number of sites activated and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the Company’s estimate, the Company will adjust the accrued or prepaid expense balance accordingly. To date, there have been no material differences from the Company’s estimates to the amounts actually incurred. Development Financing Agreement The Company accounts for the Financing Agreement (see Note 4) as a debt instrument. Accordingly, the Company has recorded payments received under the Financing Agreement as part of a development financing liability in the Company’s consolidated balance sheet. The liability is recorded at amortized cost and accreted to the contractual success fee amounts based on the estimated timing of regulatory approval and attainment of certain sales milestones using an imputed interest rate. Certain transaction fees incurred specifically to complete the Financing Agreement were capitalized and recorded as a reduction to the carrying amount of the development financing liability and are being amortized to interest expense using the effective interest rate method. There are several factors that could affect the estimated timing of regulatory approval and attainment of sales milestones, some of which are not entirely within the Company’s control. Therefore, the Company periodically reassesses the estimated timing of regulatory approval and attainment of sales milestones, and the expected contractual success fee payments due therefrom. If the timing and/or amount of such expected payments is materially different than original estimates, the Company will prospectively adjust the accretion of the development financing liability and the imputed interest rate. The Company identified certain contingent repayment features in the Financing Agreement that are required to be bifurcated from the debt host instrument as embedded derivative liabilities; however, the Company determined the fair value of these features, both individually and in the aggregate, was immaterial at inception and as of March 31, 2022. The fair value of these features will be assessed at each reporting date and will be marked to market, if material. To determine the amount to record for the embedded derivative liabilities, the Company must assess the probability of occurrence of various potential future events that could affect the timing and/or amount of future cash flows related to the Financing Agreement. Stock-Based Compensation Stock-based compensation is measured at fair value on the grant date of the award. Compensation cost is recognized as expense on a straight-line basis over the vesting period for options with service conditions, and forfeitures are accounted for as they occur. The Company uses the Black-Scholes option pricing model to determine the fair value of stock option awards. The determination of fair value for stock-based awards using an option-pricing model requires management to make certain assumptions regarding subjective input variables such as expected term, dividends, volatility and risk-free rate. If actual results are not consistent with the Company’s assumptions and judgments used in making these estimates, the Company may be required to increase or decrease compensation expense, which could be material to the Company’s results of operations. Recently Issued Accounting Pronouncements ASU 2020-06 In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own EquityASU 2016-13 In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments available-for-sale No. 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815) and Leases (Topic 842), which deferred the adoption deadline for smaller reporting companies to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, and entities are required to use a modified retrospective approach, with certain exceptions. The Company is currently assessing this standard and does not anticipate a material impact to its condensed consolidated financial statements and related disclosures. |
Other Accrued Liabilities |
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Other Accrued Liabilities Current Disclosure | 3. Other Accrued Liabilities Other accrued liabilities consist of (in thousands):
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Development Financing Agreement |
3 Months Ended |
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Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Development Financing Agreement | 4. Development Financing Agreement On July 30, 2021 (the Effective Date), the Company entered into a Development Financing Agreement (the Financing Agreement) with Abingworth to provide funding to the Company to support its development of seladelpar for the treatment of primary biliary cholangitis (PBC). The Financing Agreement provides the Company up to $100.0 million in funding, of which $25.0 million was provided in August 2021, $25.0 million was provided in November 2021, and $25.0 million was provided in January 2022. The Company has an option to receive an additional $25 million (the Optional Funding) within approximately two months of enrollment completion of the Company’s Phase 3 RESPONSE clinical trial. The Optional Funding is subject to certain customary funding conditions. The use of proceeds from the funding is limited to PBC “Development Program” costs incurred or paid as defined in the Financing Agreement. In return, the Company will pay to Abingworth: (1) contingent upon the first to occur of regulatory approval of seladelpar for the treatment of PBC in the U.S., U.K., Germany, Spain, Italy or France (Regulatory Approval), fixed success payments equal to 2.0x of the funding provided, consisting of $10 million payable in 90 days after the Regulatory Approval and thereafter, payments due on the first six anniversaries of the Regulatory Approval in the amounts of $15.0 million, $22.5 million, $22.5 million, $25.0 million, $27.5 million and $27.5 million, respectively (or if the Optional Funding is provided, 133% of such payments) and (2) variable success payments equal to 1.1x of the funding provided, consisting of sales milestone payments of (x) $17.5 million and $27.5 million, respectively (or if the Optional Funding is provided, 133% of such payments) upon first reaching certain cumulative U.S. product sales thresholds, and (y) $37.5 million (or if the Optional Funding is provided, 133% of such payment) upon first reaching a specified U.S. product sales run rate. Promptly following receipt of Regulatory Approval, the Company is required to execute a note agreement and deliver a promissory note to Abingworth within two business days to convert the fixed and variable success payments into a note payable. At the time that Abingworth receives, collectively, an aggregate of 3.1x of the funding provided (approximately $232.5 million (or $310.0 million if the Optional Funding is provided)), the Company’s payment obligations under the Financing Agreement will be fully satisfied. The Company has the option to satisfy its payment obligations to Abingworth upon Regulatory Approval, or a change of control of the Company, by paying an amount equal to the remaining payments payable to Abingworth subject to a mid-single-digit discount rate. Upon a change of control of the Company, an acceleration payment of 1.35x of the funding provided is payable, net of payments already made to Abingworth and creditable against future payments to Abingworth. Pursuant to the Financing Agreement, the Company granted Abingworth a security interest in all its assets (other than intellectual property not related to seladelpar), provided that the Company is permitted to incur certain indebtedness. The security interest will terminate when the Company has paid Abingworth 2.0x of the funding provided or upon certain terminations of the Financing Agreement. The Financing Agreement provides for negative, affirmative and additional covenants, which the Company must comply with for the duration of the Financing Agreement term. As of March 31, 2022, the Company was in compliance with all covenants stipulated in the Financing Agreement. In certain instances, upon the termination of the Financing Agreement, the Company will be obligated to pay Abingworth a multiple of the amounts paid to the Company under the Financing Agreement, including specifically: (i) 310% of such amounts in the event that Abingworth terminates the Financing Agreement due to (x) a Fundamental Breach, as defined in the Financing Agreement, (y) the bankruptcy of the Company, or (z) a safety concern resulting from gross negligence on the part of the Company or due to a safety concern that was material on the Effective Date and the material data showing such safety concern was not publicly known, disclosed to Abingworth, or in the diligence room made available to Abingworth, (ii) 200% of such amounts in the event the Financing Agreement is terminated due to (x) Material Breach, as defined in the Financing Agreement, by the Company or (y) the security interests of Abingworth being invalidated or terminated other than as set forth in the Financing Agreement, and (iii) 100% of such amounts in the event of certain irresolvable disagreements within the executive review committee overseeing the Company’s development of seladelpar. In addition, if, following certain terminations, the Company continues to develop seladelpar for the treatment of PBC and obtains regulatory approval, it will make the payments to Abingworth as if the Financing Agreement had not been terminated, less any payments made upon termination. The Company shall not be obligated to make any payments to Abingworth under certain instances of technical or regulatory failure of the PBC development program as defined in the Financing Agreement. As part of the arrangement, an executive review committee was established between the Company and Abingworth to discuss the Company’s development of seladelpar. The Company evaluated the Financing Agreement and determined it to be a research and development funding arrangement with the characteristics of a debt instrument as the transfer of financial risk to Abingworth was not considered substantive and genuine. Accordingly, the Company has recorded payments received under the Financing Agreement as part of a development financing liability in its condensed consolidated balance sheets. The Company accounts for the overall development financing liability at amortized cost based on the estimated timing of regulatory approval and attainment of certain sales milestones and the contractual success fee payments expected to be due therefrom, as discounted using an imputed interest rate. The development financing liability will be accreted as interest expense to its expected future repayment amount over the expected life of the agreement using the effective interest rate method. Certain legal and financial advisory fees incurred specifically to complete the Financing Agreement were capitalized and recorded as a reduction to the carrying amount of the development financing liability and will also be amortized to interest expense using the effective interest method. There are several factors that could affect the estimated timing of regulatory approval and attainment of sales milestones, some of which are not entirely within the Company’s control. Therefore, the Company periodically reassesses the estimated timing of regulatory approval and attainment of sales milestones, and the expected contractual success fee payments due therefrom. If the timing and/or amount of such expected payments is materially different than original estimates, the Company will prospectively adjust the accretion of the development financing liability and the imputed interest rate. The Company identified certain contingent repayment features in the agreement that are required to be bifurcated from the debt host instrument as embedded derivative liabilities; however, the fair value of these features was immaterial at the Effective Date and as of March 31, 2022. The fair value of the embedded derivative liabilities will be assessed at subsequent reporting dates if material. As of March 31, 2022, the development financing liability was classified as a long-term liability as the Company expects the related repayments to take place between 2024 and 2030 for purposes of the model used to calculate its carrying value. The imputed interest rate on the unamortized portion of the development financing liability was approximately 19% as of March 31, 2022.
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Stockholders' Equity |
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Mar. 31, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | 5. Stockholders’ Equity Preferred and Common Stock Authorized The Company is authorized to issue 10,000,000 shares of preferred stock and 200,000,000 shares of common stock as of March 31, 2022 and December 31, 2021. Sale of Common Stock and Prefunded Warrants Pursuant to the Company’s public equity offering completed in November 2021, the Company issued pre-funded warrants to purchase 3,125,000 shares of common stock at a price of $3.9999 per share. These pre-funded warrants have an exercise price of $0.0001 per share, were fully exercisable upon issuance, and have no expiration date. A holder will not be entitled to exercise any portion of any pre-funded warrant if the holder’s ownership of the Company’s common stock would exceed 4.99% to 14.99% following such exercise. The Company determined that the pre-funded warrants should be equity classified because they are freestanding financial instruments, are immediately exercisable, do not embody an obligation for the Company to repurchase its shares, permit the holders to receive a fixed number of shares of common stock upon exercise, are indexed to the Company’s common stock and meet the equity classification criteria. In addition, such pre-funded warrants do not provide any guarantee of value or return. Accordingly, the proceeds from the issuance of the warrants were recorded as additional paid-in capital on the Company’s condensed consolidated balance sheet as of March 31, 2022. None of the pre-funded warrants were exercised since they were issued in November 2021, and therefore remain outstanding as of March 31, 2022. At-the-Market In July 2020, the Company filed a $200.0 million registration statement on Form
S-3 with the SEC and entered into an at-the-market |
Net Loss Per Common Share |
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Net Loss Per Common Share | 6. Net Loss Per Common Share Basic net loss per share of common stock is based on the weighted-average number of shares of common stock equivalents outstanding during the period. 3,125,000 pre-funded warrants to purchase common stock were included in the weighted-average common stock share equivalents outstanding for the three months ended March 31, 2022. In all periods presented, the Company’s outstanding stock options were excluded from the calculation of net loss per share because their effect would be antidilutive. The following table sets forth the computation of basic and diluted net loss per share (in thousands, except share and per share amounts):
The following table shows the total outstanding securities considered anti-dilutive and therefore excluded from the computation of net loss per share (in thousands):
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Stock Plans and Stock-Based Compensation |
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Stock Plans and Stock-Based Compensation | 7. Stock Plans and Stock-Based Compensation Stock Plans As of March 31, 2022, there were 2,433,522 shares available for future grants under the Company’s 2013 Equity Incentive Plan and no shares available for grant under the Company’s 2020 New Hire Plan. On January 1, 2022, in accordance with the annual share increase provision in the 2013 Plan, the Company added 4,233,896 shares to the 2013 Plan share reserve. During the three months ended March 31, 2022, the Company granted 3,479,668 stock options, which primarily related to its option grants issued to employees and directors. Stock-Based Compensation Expense Stock-based compensation expense is included in the condensed consolidated statements of operations and comprehensive loss and is as follows (in thousands):
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Commitments and Contingencies |
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Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. Commitments and Contingencies Genfit Litigation On January 15, 2021, Genfit S.A. (Genfit) filed a complaint against the Company in the U.S. District Court for the Northern District of California, alleging misappropriation of trade secrets and related causes of action based on the Company’s receipt of a Genfit protocol synopsis for Genfit’s Phase 3 clinical trial of its drug candidate elafibranor in patients with primary biliary cholangitis. An Amended Complaint was filed on April 16, 2021 with substantially the same allegations. Genfit seeks damages in an unspecified amount as well as injunctive relief. On March 12, 2021, the Court granted a Temporary Restraining Order (later converted to a Preliminary Injunction), prohibiting the Company from accessing or disseminating the protocol synopsis, using any Genfit trade secrets contained therein or destroying any evidence related thereto. The Company filed a Motion to Dismiss the Amended Complaint that was granted on September 9, 2021, with leave to amend. Genfit filed a Second Amended Complaint on October 15, 2021 with substantially the same allegations and claims for relief as in the original complaint. The Company filed a Motion to Dismiss most of the Second Amended Complaint that was granted on January 21, 2022, without further leave to amend. What remains in the complaint is an alleged misappropriation of the protocol synopsis as a whole. The Company filed its Answer to what remained of the Second Amended Complaint on February 4, 2022. The Company intends to defend itself vigorously. While the outcome of any litigation is inherently uncertain, based on currently available information, management does not currently believe a loss associated with this matter is probable, nor is any amount reasonably estimable, and accordingly no amounts have been recorded or disclosed.
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Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation and Use of Estimates | Basis of Presentation and Use of Estimates The accompanying interim condensed consolidated financial statements are unaudited and are comprised of the accounts of CymaBay and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company has no unconsolidated subsidiaries or investments accounted for under the equity method. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP), which requires management to make informed estimates and assumptions that impact the amounts and disclosures reported in the condensed consolidated financial statements and accompanying notes, and the requirements of the United States Securities and Exchange Commission (SEC) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. In management’s opinion, the unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited 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 financial statements and accompanying notes for the fiscal year ended December 31, 2021, which is contained in the Company’s Annual Report on Form 10-K as filed with the SEC on March 17, 2022. The results for the three months ended March 31, 2022 are not necessarily indicative of results to be expected for the entire year ending December 31, 2022 or future operating periods. The condensed consolidated financial statements have been prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions that affect the amounts and disclosures reported in the condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates. Actual results could differ materially from those estimates and assumptions. These estimates form the basis for making judgments about the carrying values of assets and liabilities when these values are not readily apparent from other sources. Estimates are assessed each reporting period and updated to reflect current information and any changes in estimates will generally be reflected in the period first identified. |
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Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments during the periods reported consist of cash, cash equivalents, marketable securities, accounts payable, certain accrued liabilities, and the development financing liability. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Assets and liabilities that are measured at fair value are reported using a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs and is as follows: Level 1—Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2—Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or indirectly. Level 3—Inputs that are significant to the fair value measurement and are unobservable (i.e. supported by little market activity), which requires the reporting entity to develop its own valuation techniques and assumptions. The carrying amounts of cash, accounts payable, and certain accrued liabilities approximate their related fair values due to the short-term nature of these instruments. Cash is classified as level 1 and accounts payable and accrued liabilities as level 2 under the fair value hierarchy. The following tables present the Company’s financial assets that are measured at fair value on a recurring basis using the above input categories (in thousands):
The Company estimates the fair value of its money market funds, corporate debt, asset-backed securities, commercial paper, U.S. treasury securities, and supranational debt securities by taking into consideration valuations obtained from third-party pricing services. 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 securities, issuer credit spreads, benchmark securities, prepayment/default projections based on historical data, and other observable inputs. The fair value of the Company’s development financing liability is consistent with its carrying value of $78.7 million, which is recorded at amortized cost. The development financing liability is classified as level 3 under the fair value hierarchy as its valuation is based on a discounted cash flow model that uses unobservable inputs such as the estimated timing of regulatory approval and attainment of certain sales milestones.
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Cash, Cash Equivalents, and Marketable Securities | Cash, Cash Equivalents, and Marketable Securities The Company considers all highly liquid investments with an original maturity of 90 days or less at the time of purchase to be cash equivalents. Cash and cash equivalents consist of deposits with commercial banks in checking, interest-bearing, and money market funds. The Company invests excess cash in marketable securities with high credit ratings. These securities consist primarily of corporate debt, commercial paper, asset-backed securities, U.S. treasury securities, and supranational debt securities and are classified as “available-for-sale.” Realized gains and losses from the sale of marketable securities, if any, are calculated using the specific-identification method. Realized gains and losses and declines in value judged to be other-than-temporary are included in interest income or expense in the condensed consolidated statements of operations and comprehensive loss. Unrealized holding gains and losses are reported in accumulated other comprehensive loss in the condensed consolidated balance sheets. To date, the Company has not recorded any impairment charges on its marketable securities related to other-than-temporary declines in market value. In determining whether a decline in market value is other-than-temporary, various factors are considered, including the cause, duration of time and severity of the impairment, any adverse changes in the investees’ financial condition, and the Company’s intent and ability to hold the security for a period of time sufficient to allow for an anticipated recovery in market value. Unrealized gains and losses of the Company’s available-for-sale The following table shows the fair value of the Company’s marketable securities, by contractual maturity, as of March 31, 2022 (in thousands):
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Concentration of Risk | Concentration of Risk Cash, cash equivalents, and marketable securities consist of financial instruments that potentially subject the Company to a concentration of credit risk to the extent of the fair value recorded on the balance sheet. The Company invests cash that is not required for immediate operating needs primarily in highly liquid instruments that bear minimal risk. The Company has established guidelines relating to the quality, diversification, and maturities of securities to enable the Company to manage its credit risk. The Company is exposed to credit risk in the event of a default by the financial institutions holding its cash, cash equivalents and investments and issuers of investments to the extent recorded on the condensed consolidated balance sheets. Certain materials and key components that the Company utilizes in its operations are obtained through single suppliers. Since the suppliers of key components and materials must be named in a new drug application NDA filed with the FDA for a product, significant delays can occur if the qualification of a new supplier is required. If delivery of material from the Company’s suppliers were interrupted for any reason, the Company may be unable to supply any of its product candidates for clinical trials. |
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Other Risks and Uncertainties | Other Risks and Uncertainties In March 2020, the World Health Organization declared the global novel coronavirus disease
(COVID-19) outbreak a pandemic. To date, the Company’s operations have not been significantly impacted by the COVID-19 outbreak. However, the Company continues to monitor potential risks and uncertainties associated with operating its business during the pandemic. These risks include, but are not limited to, ongoing government advisories and restrictions on travel and workplace access, workforce shortages, and global supply chain delays, all of which could potentially impact the Company’s ability to conduct its critical drug development and regulatory compliance activities. The Company cannot predict the specific extent, duration, or full impact that the COVID-19 outbreak will have on its consolidated financial condition and operations. The impact of the COVID-19 coronavirus outbreak on the financial performance of the Company will depend on future developments, including the duration and spread of the outbreak and related governmental advisories and restrictions. These developments and the impact of COVID-19 on the financial markets and the overall economy are highly uncertain. If the financial markets and/or the overall economy are impacted for an extended period, the Company’s results may be adversely affected. |
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Research and Development Expenses | Research and Development Expenses Research and development expenses consist of costs incurred in identifying, developing, and testing product candidates. These expenses consist primarily of costs for research and development personnel, including related stock-based compensation; contract research organizations (CRO) and other third parties that assist in managing, monitoring, and analyzing clinical trials; investigator and site fees; laboratory services; consultants; contract manufacturing services; non-clinical studies, including materials; and allocated expenses, such as depreciation of assets, and facilities and information technology that support research and development activities. Research and development costs are expensed as incurred, including expenses that may or may not be reimbursed under research and development funding arrangements. Payments made prior to the receipt of goods or services to be used in research and development are recorded as prepaid assets until the goods are received or services are rendered. Such payments are evaluated for current or long-term classification based on when they will be realized. Additionally, if expectations change such that the Company does not expect goods to be delivered or services to be rendered, such prepayments are charged to expense. The Company records expenses related to clinical studies and manufacturing development activities based on its estimates of the services received and efforts expended pursuant to contracts with multiple CROs and manufacturing vendors that conduct and manage these activities on its behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract, and may result in uneven payment flows. There may be instances in which payments made to the Company’s vendors will exceed the level of services provided and result in a prepayment. Payments under some of these contracts depend on factors such as the successful enrollment of subjects and the completion of clinical trial milestones. In amortizing or accruing service fees, the Company estimates the time period over which services will be performed, enrollment of subjects, number of sites activated and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the Company’s estimate, the Company will adjust the accrued or prepaid expense balance accordingly. To date, there have been no material differences from the Company’s estimates to the amounts actually incurred.
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Development Financing Agreement | Development Financing Agreement The Company accounts for the Financing Agreement (see Note 4) as a debt instrument. Accordingly, the Company has recorded payments received under the Financing Agreement as part of a development financing liability in the Company’s consolidated balance sheet. The liability is recorded at amortized cost and accreted to the contractual success fee amounts based on the estimated timing of regulatory approval and attainment of certain sales milestones using an imputed interest rate. Certain transaction fees incurred specifically to complete the Financing Agreement were capitalized and recorded as a reduction to the carrying amount of the development financing liability and are being amortized to interest expense using the effective interest rate method. There are several factors that could affect the estimated timing of regulatory approval and attainment of sales milestones, some of which are not entirely within the Company’s control. Therefore, the Company periodically reassesses the estimated timing of regulatory approval and attainment of sales milestones, and the expected contractual success fee payments due therefrom. If the timing and/or amount of such expected payments is materially different than original estimates, the Company will prospectively adjust the accretion of the development financing liability and the imputed interest rate. The Company identified certain contingent repayment features in the Financing Agreement that are required to be bifurcated from the debt host instrument as embedded derivative liabilities; however, the Company determined the fair value of these features, both individually and in the aggregate, was immaterial at inception and as of March 31, 2022. The fair value of these features will be assessed at each reporting date and will be marked to market, if material. To determine the amount to record for the embedded derivative liabilities, the Company must assess the probability of occurrence of various potential future events that could affect the timing and/or amount of future cash flows related to the Financing Agreement. |
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Stock-Based Compensation | Stock-Based Compensation Stock-based compensation is measured at fair value on the grant date of the award. Compensation cost is recognized as expense on a straight-line basis over the vesting period for options with service conditions, and forfeitures are accounted for as they occur. The Company uses the Black-Scholes option pricing model to determine the fair value of stock option awards. The determination of fair value for stock-based awards using an option-pricing model requires management to make certain assumptions regarding subjective input variables such as expected term, dividends, volatility and risk-free rate. If actual results are not consistent with the Company’s assumptions and judgments used in making these estimates, the Company may be required to increase or decrease compensation expense, which could be material to the Company’s results of operations. |
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Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements ASU 2020-06 In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own EquityASU 2016-13 In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments available-for-sale No. 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815) and Leases (Topic 842), which deferred the adoption deadline for smaller reporting companies to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, and entities are required to use a modified retrospective approach, with certain exceptions. The Company is currently assessing this standard and does not anticipate a material impact to its condensed consolidated financial statements and related disclosures. |
Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value Assets Measured on Recurring Basis | The following tables present the Company’s financial assets that are measured at fair value on a recurring basis using the above input categories (in thousands):
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Marketable Securities | The following table shows the fair value of the Company’s marketable securities, by contractual maturity, as of March 31, 2022 (in thousands):
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Other Accrued Liabilities (Tables) |
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Other Accrued Liabilities Current [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Other Accrued Liabilities | Other accrued liabilities consist of (in thousands):
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Net Loss Per Common Share (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Net Loss per Share | The following table sets forth the computation of basic and diluted net loss per share (in thousands, except share and per share amounts):
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Anti-Dilutive Securities Excluded from the Computation of Diluted Net Loss per Share | The following table shows the total outstanding securities considered anti-dilutive and therefore excluded from the computation of net loss per share (in thousands):
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Stock Plans and Stock-Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock-Based Compensation Expense | Stock-based compensation expense is included in the condensed consolidated statements of operations and comprehensive loss and is as follows (in thousands):
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Organization and Description of Business - Additional Information (Detail) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2022
USD ($)
segment
|
Mar. 31, 2021
USD ($)
|
Dec. 31, 2021
USD ($)
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|
Class of Stock [Line Items] | |||
Number of operating segments | segment | 1 | ||
Net loss | $ (27,769) | $ (17,551) | |
Cash flows from operating activities | (25,362) | $ (20,561) | $ (25,400) |
Accumulated deficit | (794,625) | $ (766,856) | |
Cash and cash equivalents and marketable securities | $ 193,400 |
Summary of Significant Accounting Policies - Additional Information (Detail) |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
Product Information [Line Items] | |
Cash and cash equivalents, maturity description | 90 days or less |
Maximum [Member] | |
Product Information [Line Items] | |
Short-term contractual maturities | 1 year |
Minimum [Member] | |
Product Information [Line Items] | |
Short-term contractual maturities | 1 year |
Summary of Significant Accounting Policies - fair value of the Company's marketable securities (Details) - Marketable securities [Member] $ in Thousands |
Mar. 31, 2022
USD ($)
|
---|---|
Marketable Securities [Line Items] | |
Due less than 1 year | $ 114,564 |
Due between 1 and 2 years | 4,885 |
Total fair value | $ 119,449 |
Other Accrued Liabilities - Summary of Other Accrued Liabilities (Detail) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Other Accrued Liabilities Current [Abstract] | ||
Accrued compensation | $ 2,081 | $ 3,986 |
Accrued professional fees and other | 1,510 | 1,333 |
Operating lease liability | 590 | 567 |
Total other accrued liabilities | $ 4,181 | $ 5,886 |
Stockholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions |
Mar. 31, 2022 |
Dec. 31, 2021 |
Nov. 30, 2021 |
Jul. 31, 2020 |
---|---|---|---|---|
Class of Stock [Line Items] | ||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | ||
Common stock, shares authorized | 200,000,000 | 200,000,000 | ||
Prefunded warrants [Member] | ||||
Class of Stock [Line Items] | ||||
Number of common stock into which the class of warrant or right may be converted | 3,125,000 | |||
Sale of Stock, Price Per Share | $ 3.9999 | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.0001 | |||
Prefunded warrants [Member] | Maximum [Member] | ||||
Class of Stock [Line Items] | ||||
Percentage Ownership By Shareholders Percentage | 14.99% | |||
Prefunded warrants [Member] | Minimum [Member] | ||||
Class of Stock [Line Items] | ||||
Percentage Ownership By Shareholders Percentage | 4.99% | |||
ATM Offering [Member] | ||||
Class of Stock [Line Items] | ||||
Common Stock, Value, Registered For Issuance | $ 200.0 | |||
Common stock value subscribed | $ 75.0 |
Net Loss Per Common Share - Computation of Basic and Diluted Net Loss per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Numerator: | ||
Net loss | $ (27,769) | $ (17,551) |
Denominator: | ||
Weighted average number of common stock shares outstanding | 84,677,939 | 68,946,092 |
Weighted average number of pre-funded warrants outstanding | 3,125,000 | 0 |
Total | 87,802,939 | 68,946,092 |
Net loss per share | $ (0.32) | $ (0.25) |
Net Loss Per Common Share - Anti-Dilutive Securities Excluded from the Computation of Diluted Net Loss per Share (Detail) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from the computation of diluted loss per share | 14,281 | 10,153 |
Common Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from the computation of diluted loss per share | 14,180 | 10,052 |
Incentive Awards [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from the computation of diluted loss per share | 101 | 101 |
Net Loss Per Common Share - Additional Information (Detail) |
3 Months Ended |
---|---|
Mar. 31, 2022
shares
| |
Common Stock [Member] | |
Incremental Common Shares Attributable to Dilutive Effect of Equity Unit Purchase Agreements | 3,125,000 |
Stock Plans and Stock-Based Compensation - Additional Information (Detail) - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Jan. 01, 2022 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options granted | 3,479,668 | |
2013 Equity Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share reserved for issue | 2,433,522 | 4,233,896 |
Twenty Twenty New Hire Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares available for grant | 0 |
Stock Plans and Stock-Based Compensation - Summary of Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | $ 2,414 | $ 2,505 |
Research and Development [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 1,098 | 1,077 |
General and Administrative [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | $ 1,316 | $ 1,428 |
Commitments and Contingencies - Additional Information (Detail) |
3 Months Ended | ||
---|---|---|---|
Mar. 12, 2021 |
Jan. 15, 2021 |
Mar. 31, 2022 |
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Loss Contingencies [Line Items] | |||
Loss Contingency, Lawsuit Filing Date | January 15, 2021 | ||
Loss Contingency, Name of Plaintiff | Genfit S.A. | ||
Loss Contingency, Allegations | alleging misappropriation of trade secrets and related causes of action based on the Company’s receipt of a Genfit protocol synopsis for Genfit’s Phase 3 clinical trial of its drug candidate elafibranor in patients with primary biliary cholangitis. | ||
Loss Contingency, Actions Taken by Defendant | The Company intends to defend itself vigorously. While the outcome of any litigation is inherently uncertain, based on currently available information, management does not currently believe a loss associated with this matter is probable, nor is any amount reasonably estimable | ||
Loss Contingency, Actions Taken by Court, Arbitrator or Mediator | On March 12, 2021, the Court granted a Temporary Restraining Order (later converted to a Preliminary Injunction), prohibiting the Company from accessing or disseminating the protocol synopsis, using any Genfit trade secrets contained therein or destroying any evidence related thereto. | ||
Pending Litigation [Member] | |||
Loss Contingencies [Line Items] | |||
Loss Contingency, Lawsuit Filing Date | April 16, 2021 |
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