Subsequent Events

12 Months Ended

Dec. 31, 2020

Subsequent Events [Abstract]

Subsequent Events

SUBSEQUENT EVENTS

Securities Purchase Agreement

On March 18, 2021, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with several institutional and accredited investors (the “Investors”) pursuant to which the Company agreed to issue and sell to the Investors in a private placement (the “Private Placement”) an aggregate of 6,271,836 shares of common stock and, to certain Investors, in lieu of common stock, pre-funded warrants (the “Pre-Funded Warrants”) to purchase an aggregate of 50,000 shares of common stock at a price of $8.70 per share of common stock (or $8.69 per Pre-Funded Warrant). The price per Pre-Funded Warrant represents the price of $8.70 per share sold in the Private Placement, minus the $0.01 per share exercise price of each such Pre-Funded Warrant. The Pre-Funded Warrants are exercisable, subject to certain beneficial ownership restrictions, at any time after their original issuance and will not expire. The Private Placement is expected to close on or about March 23, 2021 and the Company expects to receive gross proceeds of approximately $55.0 million, before deducting offering expenses payable by the Company.

Option Agreement and Co-Development Agreement

Also on March 18, 2021, the Company entered into an Option Agreement (the “Option Agreement”) with Abingworth Bioventures 8 LP (“Abingworth Bioventures 8”), which is one of the Investors party to the Securities Purchase Agreement. Pursuant to the Option Agreement, if the Company and a syndicate, of which Abingworth Bioventures 8 is a part, do not execute a definitive co-development agreement (as defined in the Option Agreement and described below) by May 15, 2021, Abingworth Bioventures 8 may, at its option, require the Company to repurchase the common shares Abingworth Bioventures 8 purchased in the Private Placement at the original purchase price of $8.70 per share. This option must be exercised, if at all, by June 15, 2021.

The Company and Abingworth LLP (“Abingworth”), an affiliate of Abingworth Bioventures 8, are parties to a non-binding letter of intent pursuant to which the Company and Abingworth have expressed an intention to negotiate a co-development agreement (the “Co-Development Agreement”) that is expected to provide the Company with up to $65.0 million in funding from a syndicate of investors including Abingworth, in addition to the $2.0 million of common stock purchased by Abingworth Bioventures 8 in the Private Placement and an additional purchase of up to $5.5 million of the Company’s common stock on the same terms and conditions, including the purchase price per common share, as the Private Placement. The Company expects that, pursuant to the Co-Development Agreement, the Company will grant to Abingworth a security interest in substantially all of its assets and property, excluding its intellectual property, that will contain such other terms, conditions and covenants as are customary in similar financings. The granting of any security interest, or the sale or transfer of any rights, in the Company’s intellectual property would be subject to a negative covenant in favor of Abingworth. Contingent upon and commencing 120 days following regulatory approval of mavorixafor as a treatment for WHIM Syndrome in the United States or the European Union, the Company would be required to make annual repayments of amounts funded by the syndicate, with the total amount of repayments contingent upon the total amount of funding accepted by the Company under the Co-Development Agreement, if executed. The Co-Development Agreement has not been finalized and is still subject to material items of due diligence, term negotiation, and approval by the Company’s board of directors. There is no assurance that the Co-Development Agreement will be executed and the Company may not receive the $65.0 million in financing, in which case the Company may be required to repurchase the $2.0 million of common shares purchased by Abingworth Bioventures 8 in the Private Placement.

Registration Rights Agreement

Also on March 18, 2021, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) with the Investors, pursuant to which the Company agreed to register for resale the common stock and the issuance of the shares of

common stock underlying the Pre-Funded Warrants held by the Investors by no later than June 30, 2021 (the “Filing Deadline”). The Company has agreed to use commercially reasonable efforts to cause such registration statement to become effective as soon as practicable and to keep such registration statement effective until the date common shares and the shares of common stock underlying the Pre-Funded Warrants covered by such registration statement have been sold or may be resold pursuant to Rule 144 without restriction. The Company is subject to liquidated damages payable to the Investors should the Company fail to comply with the terms of the Registration Rights Agreement.

Class B Warrant Price Adjustment

As a result of the Private Placement, the exercise price of the Company’s Class B warrants, which are currently exercisable, will be adjusted from $15.00 to $8.70 per Class B warrant effective on the closing of the securities purchase agreement, which is expected to be March 23, 2021. No Class B warrant has been exercised to date.