For the quarterly period ended June 30, 2021
For the transition period from _______ to _______
Commission File Number: 001-37798
Selecta Biosciences, Inc.
(Exact name of registrant as specified in its charter)
(State or other jurisdiction
of incorporation or organization)
(I.R.S. Employer Identification No.)
65 Grove Street, Watertown, MA
(Address of principal executive offices)
(Zip Code)

(617) 923-1400
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.0001 par value per shareSELBThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerýSmaller reporting companyý
Emerging growth companyý
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ý
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No ý
As of August 6, 2021, the registrant had 115,079,292 shares of common stock, par value $0.0001 per share, outstanding.

Item 2.
Item 3.
Item 4.
Item 1. 
Item 1A. 
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.


This Quarterly Report on Form 10-Q, or the Quarterly Report, contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future results of operations and financial position, business strategy, prospective products, product approvals, research and development costs, timing and likelihood of success, the plans and objectives of management for future operations and future results of anticipated products, the impact of the COVID-19 pandemic on our business and operations and our future financial results, and the period over which we estimate our existing cash and cash equivalents will be sufficient to fund our future operating expenses and capital expenditure requirements are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential”, or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of important factors that could cause actual results to differ materially from those in the forward-looking statements, including the factors described under the sections in this Quarterly Report titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as the following:
our status as a development-stage company and our expectation to incur losses in the future;
our future capital needs and our need to raise additional funds;
our ability to build a pipeline of product candidates and develop and commercialize such pipeline;
our unproven approach to therapeutic intervention;
our ability to enroll patients in clinical trials, timely and successfully complete those trials and receive necessary regulatory approvals;
our ability to access manufacturing facilities and to receive or manufacture sufficient quantities of our product candidates;
our ability to maintain our existing or future collaborations or licenses;
the continuing impact of the COVID-19 pandemic on our operations, the continuity of our business, including our preclinical studies and clinical trials, and general economic conditions;
our ability to protect and enforce our intellectual property rights;
federal, state, and foreign regulatory requirements, including FDA regulation of our product candidates;
our ability to obtain and retain key executives and attract and retain qualified personnel;
developments relating to our competitors and our industry, including the impact of government regulation; and
our ability to successfully manage our growth.
Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties.
You should read this Quarterly Report and the documents that we reference in this Quarterly Report completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

Item 1. Financial Statements

Selecta Biosciences, Inc. and Subsidiaries
Consolidated Balance Sheets
(Amounts in thousands, except share data and par value)
 June 30,December 31,
Current assets:  
Cash and cash equivalents$125,749 $138,685 
Marketable securities24,389  
Accounts receivable8,464 7,224 
Prepaid expenses and other current assets8,210 5,434 
Total current assets166,812 151,343 
Non-current assets:
Property and equipment, net1,778 1,395 
Right-of-use asset, net10,399 10,948 
Long-term restricted cash1,379 1,379 
Other assets154 370 
Total assets$180,522 $165,435 
Liabilities and stockholders’ (deficit) equity   
Current liabilities:  
Accounts payable$154 $443 
Accrued expenses8,861 8,146 
Loan payable2,291  
Lease liability977 908 
Deferred revenue75,013 72,050 
Total current liabilities87,296 81,547 
Non-current liabilities:
Loan payable, net of current portion22,931 24,793 
Lease liability9,143 9,647 
Deferred revenue24,739 38,746 
Warrant liabilities40,635 28,708 
Total liabilities184,744 183,441 
Commitments and contingencies (Note 17)
Stockholders’ (deficit) equity:  
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding at June 30, 2021 and December 31, 2020
Common stock, $0.0001 par value; 200,000,000 shares authorized; 115,079,292 and 108,071,249 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively
12 11 
Additional paid-in capital424,984 391,175 
Accumulated deficit(424,661)(404,629)
Accumulated other comprehensive loss(4,557)(4,563)
Total stockholders’ (deficit) equity (4,222)(18,006)
Total liabilities and stockholders’ (deficit) equity $180,522 $165,435 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

Selecta Biosciences, Inc. and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income (Loss)
(Amounts in thousands, except share and per share data)

 Three Months Ended June 30,Six Months Ended June 30,
Grant and collaboration revenue$19,663 $ $30,713 $ 
Operating expenses:
Research and development14,463 10,730 27,467 25,454 
General and administrative4,748 5,637 9,952 9,735 
Total operating expenses19,211 16,367 37,419 35,189 
Operating income (loss)452 (16,367)(6,706)(35,189)
Investment income12 13 24 253 
Foreign currency transaction, net(14)(42)(7)40 
Interest expense(711)(205)(1,422)(478)
Change in fair value of warrant liabilities4,820 (7,539)(11,927)(8,385)
Other income, net6 59 6 58 
Net income (loss)4,565 (24,081)(20,032)(43,701)
Other comprehensive income (loss):
Foreign currency translation adjustment12 31 6 (29)
Unrealized gains on marketable securities1    
Total comprehensive income (loss)$4,578 $(24,050)$(20,026)$(43,730)
Net income (loss) per share:
Basic$0.04 $(0.25)$(0.18)$(0.46)
Diluted$0.00 $(0.25)$(0.18)$(0.46)
Weighted average common shares outstanding:
Basic113,524,110 96,785,915 112,140,815 95,754,714 
Diluted121,177,998 96,785,915 112,140,815 95,754,714 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

Selecta Biosciences, Inc. and Subsidiaries
Consolidated Statements of Changes in Stockholders’ (Deficit) Equity
(Amounts in thousands, except share data)
   Additional otherStockholders’
 Common stockpaid-inAccumulatedcomprehensive(Deficit)
Balance at December 31, 2020108,071,249 $11 $391,175 $(404,629)$(4,563)$(18,006)
Issuance of common stock under Employee Stock Purchase Plan34,696 — 72 — — 72 
Issuance of common stock upon exercise of options153,278 — 244 — — 244 
Issuance of vested restricted stock units10,937 — — — —  
Issuance of common stock through at-the-market offering, net4,706,844 — 20,943 — — 20,943 
Stock-based compensation expense— — 1,780 — — 1,780 
Currency translation adjustment— — — — (6)(6)
Unrealized (losses) on marketable securities— — — — (1)(1)
Net loss— — — (24,597)— (24,597)
Balance at March 31, 2021112,977,004 $11 $414,214 $(429,226)$(4,570)$(19,571)
Issuance of common stock upon exercise of options242,278 — 425 — — 425 
Issuance of vested restricted stock units10,938 — — — —  
Issuance of common stock through at-the-market offering, net1,849,072 1 8,562 — — 8,563 
Stock-based compensation expense— — 1,783 — — 1,783 
Currency translation adjustment— — — — 12 12 
Unrealized gain on marketable securities— — — — 1 1 
Net income— — — 4,565 — 4,565 
Balance at June 30, 2021
115,079,292 $12 $424,984 $(424,661)$(4,557)$(4,222)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

Selecta Biosciences, Inc. and Subsidiaries
Consolidated Statements of Changes in Stockholders’ (Deficit) Equity
(Amounts in thousands, except share data)
   Additional otherStockholders’
 Common stockpaid-inAccumulatedcomprehensive(Deficit)
Balance at December 31, 201986,325,547 $9 $348,664 $(335,753)$(4,523)$8,397 
Issuance of common stock under Employee Stock Purchase Plan78,583 — 114 — — 114 
Issuance of common stock upon exercise of options5,128 — 3 — — 3 
Issuance of vested restricted stock units10,937 — — — —  
Issuance of common stock through at-the-market offering, net598,977 — 1,141 — — 1,141 
Other financing fees— — (147)— — (147)
Stock-based compensation expense— — 1,409 — — 1,409 
Currency translation adjustment— — — — (60)(60)
Net loss— — — (19,620)— (19,620)
Balance at March 31, 202087,019,172 $9 $351,184 $(355,373)$(4,583)$(8,763)
Issuance of common stock upon exercise of options37,500 — 98 — — 98 
Issuance of vested restricted stock units10,938 — — — —  
Issuance of common stock through at-the-market offering, net470,509 — 967 — — 967 
Issuance of common stock upon exercise of pre-funded warrants8,342,128 1 — — — 1 
Issuance of common stock upon exercise of common warrants4,967,563 — 17,214 — — 17,214 
Stock-based compensation expense— — 1,481 — — 1,481 
Currency translation adjustment— — — — 31 31 
Net loss— — — (24,081)— (24,081)
Balance at June 30, 2020100,847,810 $10 $370,944 $(379,454)$(4,552)$(13,052)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

Selecta Biosciences, Inc. and Subsidiaries 
Consolidated Statements of Cash Flows
(Amounts in thousands)
 Six Months Ended June 30,
Cash flows from operating activities
Net loss$(20,032)$(43,701)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization512 356 
Amortization of premiums and discounts on marketable securities28  
Non-cash lease expense549 602 
Loss on disposal of property and equipment
Stock-based compensation expense3,563 2,890 
Non-cash interest expense594 173 
Warrant liabilities revaluation11,927 8,385 
Changes in operating assets and liabilities:
Accounts receivable(1,241)5,000 
Prepaid expenses, deposits and other assets(2,811)451 
Accounts payable(289)735 
Deferred revenue(11,046)2,000 
Accrued expenses and other liabilities70 (362)
                    Net cash used in operating activities(18,176)(23,506)
Cash flows from investing activities
Purchases of marketable securities(24,417) 
Purchases of property and equipment(643)(334)
Proceeds from the sale of property and equipment 45 
                    Net cash used in investing activities(25,060)(289)
Cash flows from financing activities
Repayments of principal on outstanding debt (4,200)
Net proceeds from issuance of common stock- at-the-market offering29,547 2,137 
Issuance costs paid for December 2019 financing (4,381)
Other financing fees (147)
Proceeds from exercise of pre-funded and common warrants 49 
Proceeds from exercise of stock options672 101 
Proceeds from issuance of common stock under Employee Stock Purchase Plan72 114 
                    Net cash provided by (used in) financing activities30,291 (6,327)
Effect of exchange rate changes on cash9 (42)
Net change in cash, cash equivalents, and restricted cash(12,936)(30,164)
Cash, cash equivalents, and restricted cash at beginning of period140,064 91,551 
Cash, cash equivalents, and restricted cash at end of period$127,128 $61,387 
Supplement cash flow information
Cash paid for interest$998 $387 
Noncash investing and financing activities
Cashless warrant exercise$ $17,089 
Reclassification of warrant liability to equity upon exercise of warrants$ $77 
Purchase of property and equipment not yet paid$2 $111 
Equity offering costs in accrued liabilities$44 $29 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

Selecta Biosciences, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)

1. Nature of the Business and Basis of Presentation
Selecta Biosciences, Inc., or the Company, was incorporated in Delaware on December 10, 2007, and is based in Watertown, Massachusetts. The Company is a clinical-stage biopharmaceutical company leveraging its ImmTOR™ immune tolerance platform with the goals of amplifying the efficacy of biologics, including enabling the re-dosing of life-saving gene therapies, and restoring self-tolerance in autoimmune diseases. The Company’s ImmTOR platform encapsulates rapamycin, also known as sirolimus, an immunomodulator, in biodegradable nanoparticles and is designed to induce antigen-specific immune tolerance. The Company believes ImmTOR has the potential to enhance the efficacy without compromising the safety of biologic therapies, improve product candidates under development, and enable novel therapeutic modalities. Since inception, the Company has devoted its efforts principally to research and development of its technology and product candidates, recruiting management and technical staff, acquiring operating assets, and raising capital.
The Company is subject to risks common to companies in the biotechnology industry including, but not limited to, new technological innovations, protection of proprietary technology, dependence on key personnel, compliance with government regulations and the need to obtain additional financing. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel infrastructure and extensive compliance-reporting capabilities.
The Company’s product candidates are in development. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained, or maintained, that any products developed will obtain necessary government regulatory approval or that any approved products will be commercially viable. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate significant revenue from product sales. The Company operates in an environment of rapid change in technology and substantial competition from pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees and consultants.
Unaudited Interim Financial Information
The accompanying unaudited consolidated financial statements for the three and six months ended June 30, 2021 and 2020 have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission, or the SEC, for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP, have been condensed or omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K that was filed with the SEC on March 12, 2021. The unaudited interim financial statements have been prepared on the same basis as the audited consolidated financial statements. In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all adjustments that are necessary for a fair statement of the Company’s financial position as of June 30, 2021, consolidated results of operations for the three and six months ended June 30, 2021, and cash flows for the six months ended June 30, 2021. Such adjustments are of a normal and recurring nature. The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2021.
Liquidity and Management’s Plan
The future success of the Company is dependent on its ability to develop its product candidates and ultimately upon its ability to attain profitable operations. The Company is subject to a number of risks similar to other early-stage life science companies, including, but not limited to, successful development of its product candidates, raising additional capital with favorable terms, protection of proprietary technology and market acceptance of any approved future products. The successful development of product candidates requires substantial working capital which may not be available to the Company on favorable terms or at all.
To date, the Company has financed its operations primarily through the initial public offering of its common stock, private placements of its common stock, issuances of common and preferred stock, debt, research grants and research collaborations. The Company currently has no source of product revenue, and it does not expect to generate product revenue for the foreseeable future. To date, all of the Company’s revenue has been collaboration and grant revenue. The Company has devoted substantially all of its financial resources and efforts to developing its ImmTOR platform, identifying potential product candidates and conducting preclinical studies and its clinical trials. The Company is in the early stages of development of its product candidates, and it has not completed development of any ImmTOR-enabled therapies.

As of June 30, 2021, the Company’s cash, cash equivalents, restricted cash and marketable securities were $151.5 million, of which $1.4 million was restricted cash related to lease commitments and $0.3 million was held by its Russian subsidiary designated solely for use in its operations. The Company believes the cash, cash equivalents, restricted cash and marketable securities as of June 30, 2021 will enable it to fund its operating expenses and capital expenditure requirements for at least twelve months from the issuance of these financial statements. As of June 30, 2021, the Company had an accumulated deficit of $424.7 million. The Company anticipates operating losses to continue for the foreseeable future due to, among other things, costs related to research, development of its product candidates, conducting preclinical studies and clinical trials, and its administrative organization. The Company will require substantial additional financing to fund its operations and to continue to execute its strategy, and the Company will pursue a range of options to secure additional capital.
At this time, any impact of COVID-19 on the Company’s business, revenues, results of operations and financial condition will largely depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the duration of the pandemic, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions, supply chain disruptions, the ultimate impact on financial markets and the global economy, and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.
Guarantees and Indemnifications
As permitted under Delaware law, the Company indemnifies its officers, directors, consultants and employees for certain events or occurrences that happen by reason of the relationship with, or position held at, the Company. Through June 30, 2021, the Company had not experienced any losses related to these indemnification obligations, and no claims were outstanding. The Company does not expect significant claims related to these indemnification obligations and, consequently, concluded that the fair value of these obligations is negligible, and no related reserves were established.

2. Summary of Significant Accounting Policies
There have been no material changes to the Company’s significant accounting policies during the three months ended June 30, 2021, as compared to the significant accounting policies disclosed in Note 2 – Summary of Significant Accounting Policies included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.
Recent Accounting Pronouncements
Recently Adopted
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes. ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The Company adopted the new standard effective January 1, 2021, and there was no impact on its consolidated financial statements.
In October 2020, the FASB issued ASU 2020-10, Codification Improvements, which updates various codification topics by clarifying or improving disclosure requirements to align with the SEC’s regulations. The Company adopted the new standard effective January 1, 2021, and there was no impact on its consolidated financial statements.
Not Yet Adopted
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). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. This new standard will be effective for us for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than the fiscal year beginning after December 15, 2020. The Company is assessing the impact this standard will have on its consolidated financial statements and disclosures.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. Subsequently, in November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses. ASU 2016-13 requires entities to measure all expected credit losses for most financial assets held at the reporting date based on an expected loss model which includes historical experience, current conditions, and reasonable and supportable forecasts. ASU 2016-13 also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses. This new standard will be effective for us for fiscal years beginning after December 15, 2021. The Company is assessing the impact this standard will have on its consolidated financial statements and disclosures.


3. Marketable Securities
The following table summarizes the marketable securities held as of June 30, 2021 (in thousands):
Unrealized gainsUnrealized lossesFair
June 30, 2021
Corporate bonds$2,007 $ $ $2,007 
Commercial paper22,382   22,382 
Total$24,389 $ $ $24,389 
All marketable securities held at June 30, 2021 had maturities of less than 12 months when purchased and are classified as short-term marketable securities on the accompanying consolidated balance sheet. During the six months ended June 30, 2021, there were no marketable securities adjusted for other than temporary declines in fair value.
As of December 31, 2020, the Company held no marketable securities.

4. Net Income (Loss) Per Share
The Company has reported a net income for the three months ended June 30, 2021. The 2019 warrants have been included in the calculation of diluted net income per share for the three months ended June 30, 2021 as the warrants are both liability-classified and in-the-money. The Company used the treasury stock method to determine the number of dilutive shares. The following table sets forth the computation of basic and diluted net income per share (in thousands, except share and per-share data) for the three months ended June 30, 2021:
 Three Months Ended June 30,
     Net income (loss)$4,565 
     Less: Change in fair value of 2019 warrants(4,820)
     Adjusted net loss$(255)
     Weighted-average common shares used in per share calculations - basic113,524,110 
     Dilutive effect of employee equity incentive plans and outstanding warrants7,653,888 
     Weighted-average common shares used in per share calculations - diluted121,177,998 
Net income (loss) per share:

For the three months ended June 30, 2020 and the six months ended June 30, 2021 and 2020, all potentially dilutive securities are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive and therefore basic and diluted net loss per share were the same for all periods presented.
The following table represents the potential dilutive common shares excluded from the computation of the diluted net income (loss) per share for all periods presented, as the effect would have been anti-dilutive:
 Three Months Ended June 30,Six Months Ended June 30,
Options, RSUs and ESPP shares10,574,133 7,671,099 10,574,133 7,671,099 
Warrants to purchase common stock292,469 14,841,100 12,378,016 14,841,100 
Total10,866,602 22,512,199 22,952,149 22,512,199 


5. Fair Value Measurements
The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2021 and December 31, 2020 (in thousands):
June 30, 2021
Total(Level 1)(Level 2)(Level 3)
     Money market funds (included in cash equivalents)$56,160 $56,160 $ $ 
Marketable securities:
     Corporate bonds2,007  2,007  
     Commercial paper22,382  22,382  
Total assets$80,549 $56,160 $24,389 $ 
     Warrant liabilities$40,635 $ $ $40,635 
Total liabilities$40,635 $ $ $40,635 
December 31, 2020
Total(Level 1)(Level 2)(Level 3)
     Money market funds (included in cash equivalents)$80,576 $80,576 $ $ 
Total assets$80,576 $80,576 $ $ 
     Warrant liabilities$28,708 $ $ $28,708 
Total liabilities$28,708 $ $ $28,708 

There were no transfers within the fair value hierarchy during the six months ended June 30, 2021 or the year ended December 31, 2020.

Cash, Cash Equivalents, and Restricted Cash
As of June 30, 2021 and December 31, 2020, the money market funds were classified as cash and cash equivalents on the accompanying consolidated balance sheets as they mature within 90 days from the date of purchase.
As of June 30, 2021, the Company had restricted cash balances relating to a secured letter of credit in connection with its lease for the Company’s headquarters (see Note 8 included elsewhere in this Quarterly Report). The Company’s consolidated statement of cash flows includes the following as of June 30, 2021 and 2020 (in thousands):
June 30,
Cash and cash equivalents$125,749 $59,730 
Short-term restricted cash 278 
Long-term restricted cash1,379 1,379 
Total cash, cash equivalents, and restricted cash$127,128 $61,387 

Marketable Securities
As of June 30, 2021, marketable securities classified as Level 2 within the valuation hierarchy consist of corporate bonds and commercial paper. Marketable securities represent holdings of available-for-sale marketable debt securities in accordance with the Company’s investment policy. The Company estimates the fair values of these marketable securities by taking into consideration valuations that include market pricing based on real-time trade data for the same or similar securities, and other observable inputs. The amortized cost of available-for-sale debt securities is adjusted for amortization of premiums and accretion of discounts to the earliest call date for premiums or to maturity for discounts.
Loans Payable
At June 30, 2021, given the recent issuance of the Term A Loan under the 2020 Term Loan, the Company believes the carrying value approximates the fair value of the loan.

Common Warrants
In December 2019, the Company issued common warrants in connection with a private placement of common shares. Pursuant to the terms of the common warrants, the Company could be required to settle the common warrants in cash in the event of certain acquisitions of the Company and, as a result, the common warrants are required to be measured at fair value and reported as a liability on the balance sheet. The Company recorded the fair value of the common warrants upon issuance using the Black-Scholes valuation model and is required to revalue the common warrants at each reporting date with any changes in fair value recorded in the statement of operations and comprehensive income (loss). The valuation of the common warrants is considered Level 3 of the fair value hierarchy due to the need to use assumptions in the valuation that are both significant to the fair value measurement and unobservable. The significant unobservable inputs used in the fair value measurement of the warrant liabilities were the volatility rate and the estimated term of the warrants. Generally, increases (decreases) in the fair value of the underlying stock and estimated term would result in a directionally similar impact to the fair value measurement. The change in the fair value of the Level 3 warrant liability is reflected in the statement of operations and comprehensive income (loss) for the three and six months ended June 30, 2021 and 2020.
The estimated fair value of warrants is determined using Level 3 inputs inherent in the Black-Scholes simulation valuation.
Estimated fair value of the underlying stock. The Company estimates the fair value of the common stock based on the closing stock price at the end of each reporting period.
Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury at the valuation date commensurate with the expected remaining life assumption.
Dividend rate. The dividend rate is based on the historical rate, which the Company anticipates will remain at zero.
Expected life. The expected life of the warrants is assumed to be equivalent to their remaining contractual term which expires on December 23, 2024.
Volatility. The Company estimates stock price volatility based on the Company’s historical volatility and the historical volatility of peer companies for a period of time commensurate with the expected remaining life of the warrants.
A summary of the Black-Scholes pricing model assumptions used to record the fair value of the warrant liability is as follows:
June 30,
Risk-free interest rate0.46 %
Dividend yield 
Expected life (in years)3.48
Expected volatility97.48 %
Changes in Level 3 Liabilities Measured at Fair Value on a Recurring Basis
The following table reflects a roll-forward of fair value for the Company’s Level 3 warrant liabilities (see Note 10), for the six months ended June 30, 2021 (in thousands):
Warrant liabilities
Fair value as of December 31, 2020
     Change in fair value11,927 
Fair value as of June 30, 2021


6. Property and Equipment
Property and equipment consists of the following (in thousands):
 June 30,December 31,
Laboratory equipment$5,003 $4,427 
Computer equipment and software710 532 
Leasehold improvements41 38 
Furniture and fixtures327 327 
Office equipment163 163 
Construction in process44 163 
Total property and equipment6,288 5,650 
Less accumulated depreciation(4,510)(4,255)
Property and equipment, net$1,778 $1,395 

Depreciation expense was $0.2 million and $0.3 million for the three and six months ended June 30, 2021, respectively. Depreciation expense was $0.2 million and $0.4 million for the three and six months ended June 30, 2020, respectively.

7. Accrued Expenses
Accrued expenses consist of the following (in thousands):
 June 30,December 31,
Payroll and employee related expenses$2,205 $3,049 
Collaboration and licensing1,350 1,350 
Accrued patent fees495 534 
Accrued external research and development costs3,634 2,029 
Accrued professional and consulting services661 798 
Accrued interest165 170 
Other351 216 
Accrued expenses$8,861 $8,146 

8. Leases
65 Grove Street Lease
In July 2019, the Company entered into a lease for 25,078 square feet of laboratory and office space located at 65 Grove Street, Watertown, Massachusetts, or the Headquarters Lease. As part of the Headquarters Lease, the Company incurred $0.8 million in non-reimbursable construction costs. The lease began in March 2020, when the Company took control of the office space, and the lease term is 8 years. The discount rate of 8.9% was determined based on the Company’s incremental borrowing rate adjusted for the lease term, including any reasonably certain renewal periods. In connection with the Headquarters Lease, the Company secured a letter of credit from Silicon Valley Bank, or SVB, for $1.4 million, recognized as long-term restricted cash, as of June 30, 2021 and December 31, 2020, respectively, which automatically renews each year.
Moscow, Russia Lease
The Company has a month-to-month facility agreement for its Moscow, Russia office. Rent expense is recognized as incurred.

As of June 30, 2021 and December 31, 2020, the components of the operating leases were as follows (in thousands):
June 30,December 31,
   Right-of-use asset, net$10,399 $10,948 
   Current operating lease liabilities$977 $908 
   Non-current operating lease liabilities9,143 9,647 
Total operating lease liabilities$10,120 $10,555 

For the three and six months ended June 30, 2021 and 2020 the components of lease costs were as follows (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
Operating lease cost$454 $613 $898 $1,085 
Variable lease cost182 174 470 373 
Short-term lease cost2 3 5 5 
Total lease cost$638 $790 $1,373 $1,463 

The maturity of the Company’s operating lease liabilities as of June 30, 2021 were as follows (in thousands):
June 30,
2021 (remainder)$914 
     Total future minimum lease payments13,666 
Less imputed interest3,546 
     Total operating lease liabilities$10,120 

The supplemental disclosure for the statement of cash flows related to operating leases were as follows (in thousands):
June 30,
Cash paid for amounts included in the measurement of lease liabilities:$898 $825 

Other than the initial recording of the right-of-use asset and lease liability for the Headquarters Lease, which is non-cash, the changes in the Company’s right-of-use asset and lease liability for the six months ended June 30, 2021 and 2020 are reflected in the non-cash lease expense and accrued expenses and other liabilities, respectively, in the consolidated statements of cash flows.
The following summarizes additional information related to operating leases:
June 30,
Weighted-average remaining lease term6.9 years7.9 years
Weighted-average discount rate8.9 %8.9 %

9. Debt
2020 Term Loan
On August 31, 2020, the Company entered into a term loan of up to $35.0 million, or the 2020 Term Loan, consisting of term loans in an aggregate amount of $25.0 million, or the Term A Loan, and term loans in an aggregate amount of

$10.0 million, or the Term B Loan, governed by a loan and security agreement, or the Loan Agreement, between the Company and Oxford Finance LLC, or Oxford, as Collateral Agent and a Lender, and SVB, as a Lender. The Term A Loan was funded in full on August 31, 2020, or the Funding Date.
The Term B Loan will be available, subject to Collateral Agent’s discretion and customary terms and conditions, during the period commencing on the date the Company has delivered to the Collateral Agent and the Lenders evidence: (i) the Company or one of the Company’s collaboration partners has enrolled its first patient for a Phase 1 clinical trial evaluating the treatment of methylmalonic acidemia, or MMA, and (ii) the Company has enrolled the first patient in each of two Phase 3 pivotal trials evaluating SEL-212, or the Second Draw Period Milestone, and ending on the earliest of (i) the date which is 30 days following the date the Second Draw Period Milestone is achieved, (ii) September 30, 2021 and (iii) the occurrence of an event of default, other than an event of default that has been waived in writing by Collateral Agent and the Lenders in their sole discretion, with such period referred to as the Second Draw Period.
The 2020 Term Loan will mature on August 1, 2025. Each advance under the Term Loan accrues interest at a floating per annum rate equal to the greater of (a) 7.90%, and (b) the lesser of (x) the sum of (i) the prime rate reported in The Wall Street Journal on the last business day of the month that immediately precedes the month in which the interest will accrue, and (ii) 4.65% and (y) 10.00%. The Term Loan provides for interest-only payments on a monthly basis until April 1, 2022; provided however, if the Company has delivered to the Collateral Agent and the Lenders prior to September 30, 2021 evidence that Borrower has achieved the Second Draw Period Milestone, the Term Loan provides for interest-only payments on a monthly basis until October 1, 2022. Thereafter, amortization payments will be payable monthly in equal installments of principal and interest to fully amortize the outstanding principal over the remaining term of the loan, subject to recalculation upon a change in the prime rate. The Company may prepay the Term Loan in full but not in part provided that the Company (i) provides ten days’ prior written notice to Collateral Agent, (ii) pays on the date of such prepayment (A) all outstanding principal plus accrued and unpaid interest, and (B) a prepayment fee of between 3.0% and 1.0% of the aggregate original principal amount advanced by the lender depending on the timing of the prepayment. Amounts outstanding during an event of default are payable upon SVB’s demand and shall accrue interest at an additional rate of 5.0% per annum of the past due amount outstanding. At the end of the loan term (whether at maturity, by prepayment in full or otherwise), the Company shall make a final payment to the lender in the amount of 9.0% of the aggregate original principal amount advanced by the lender. The final payment fee totaling $2.3 million is recorded as a loan discount.
The Term Loan is secured by a lien on substantially all of the assets of the Company, other than intellectual property, provided that such lien on substantially all assets includes any rights to payments and proceeds from the sale, licensing or disposition of intellectual property. The Company has also granted the Collateral Agent a negative pledge with respect to its intellectual property.
The Loan Agreement contains customary covenants and representations, including but not limited to financial reporting obligations and limitations on dividends, indebtedness, collateral, investments, distributions, transfers, mergers or acquisitions, taxes, corporate changes, deposit accounts, and subsidiaries. The Loan Agreement also contains other customary provisions, such as expense reimbursement, non-disclosure obligations as well as indemnification rights for the benefit of the Collateral Agent.
The events of default under the Loan Agreement include, but are not limited to, the Company’s failure to make any payments of principal or interest under the Loan Agreement or other transaction documents, the Company’s breach or default in the performance of any covenant under the Loan Agreement or other transaction documents, the occurrence of a material adverse change, the Company making a false or misleading representation or warranty in any material respect under the Loan Agreement, the Company’s insolvency or bankruptcy, any attachment or judgment on the Company’s assets of at least $0.5 million, or the occurrence of any default under any agreement or obligation of the Company involving indebtedness in excess of $0.5 million. If an event of default occurs, the Collateral Agent is entitled to take enforcement action, including acceleration of amounts due under the Loan Agreement.
The Company incurred $0.4 million in debt issuance costs in connection with the closing of the 2020 Term Loan. Debt issuance costs are presented in the consolidated balance sheet as a direct deduction from the associated liability and amortized to interest expense over the term of the related debt.
The Company assessed all terms and features of the 2020 Term Loan to identify any potential embedded features that would require bifurcation. As part of this analysis, the Company assessed the economic characteristics and risks of the 2020 Term Loan, including any put, call, and contingent features. The Company determined that the interest rate collar and prepayment call option did not require bifurcation; whereas the contingent put option and default (contingent) interest rate feature met bifurcation criteria resulting in immaterial amounts.
On August 31, 2020, in connection with the 2020 Term A Loan, the Company issued warrants to the Lenders to purchase an aggregate of 196,850 shares of its common stock at an exercise price equal to $2.54 per share. In accordance with ASC

815-40, these warrants are classified as permanent equity in the accompanying consolidated balance sheets and will expire ten years from the date of issuance. The initial grant date fair value of the warrants was $0.4 million as determined by the Black-Scholes valuation model and recorded to stockholders' equity, with the SVB portion allocated to the reacquisition price of the 2017 Term Loan and the Oxford fair value portion as a loan discount to the Term A Loan.
Additionally, on August 31, 2020, pursuant to the terms of a Warrant Side Letter agreement among the Company and the Lenders, the Company agreed to issue to the Lenders, on the date the Company draws the Term B Loan and in accordance with each party’s respective pro rata share with respect to the Term B Loan, one or more warrants to purchase an aggregate number of shares of its common stock that is equal to $200,000 divided by the average closing price of the Company’s common stock on The Nasdaq Stock Market LLC for the ten consecutive trading days ending the day before such issuance, rounded down to the nearest whole number of shares, and having an exercise price equal to the Term B Warrant Price.
On the Funding Date, the Company entered into a payoff letter with SVB, pursuant to which the Company utilized $13.7 million of the 2020 Term Loan to pay off all outstanding obligations under the previous term loan, consisting of the principal payment, final prepayment and accrued interest. During the three months ended September 30, 2020, the Company recognized a loss on extinguishment of debt in the amount of $0.5 million determined as the difference between the reacquisition price and carrying value at August 31, 2020.
As of June 30, 2021 and December 31, 2020, the outstanding principal balance under the 2020 Term Loan was $25.0 million.
Future minimum principal and interest payments on the 2020 Term Loan as of June 30, 2021 are as follows (in thousands):
2021 (remainder)$1,004 
Total minimum debt payments32,259 
Less: Amount representing interest(5,010)
Less: Debt discount and deferred charges(2,027)
Less: Current portion of loan payable(2,291)
Loan payable, net of current portion$22,931 

10. Equity
Equity Financings
August 2020 Shelf Registration Statement
On August 6, 2020, the Company filed an updated universal shelf registration statement on Form S-3 (Reg. No. 333-241692) with the SEC to sell an aggregate amount of up to $200.0 million of certain of its securities. The shelf registration statement was declared effective by the SEC on August 14, 2020.
“At-the-Market” Offerings
In August 2017, the Company entered into a sales agreement, or the 2017 Sales Agreement, with Jefferies LLC, as sales agent, to sell shares of its common stock with an aggregate value of up to $50.0 million in an “at the market offering.” On August 6, 2020, concurrent with the filing of the updated shelf registration statement, the Company entered into a sales agreement, or the 2020 Sales Agreement with Jefferies LLC, as sales agent, pursuant to which the Company may, from time to time, issue and sell common stock with an aggregate value of up to $50.0 million in an “at the market offering.” The 2017 Sales Agreement terminated pursuant to its terms in August 2020.
Sales of common stock, if any, pursuant to the 2020 Sales Agreement, may be made in sales deemed to be an “at the market offering” as defined in Rule 415(a) of the Securities Act, including sales made directly through the Nasdaq Stock Market or on any other existing trading market for the Company’s common stock. The Company intends to use the proceeds from the offering for working capital and other general corporate purposes. The Company may suspend or terminate the 2020 Sales Agreement at any time.
During the six months ended June 30, 2021, the Company sold 6,555,916 shares of its common stock pursuant to the 2020 Sales Agreement at an average price of approximately $