Related Party Transactions

12 Months Ended

Dec. 31, 2022

14. Related Party Transactions

In February 2021, the Company completed a follow-on public offering in which the Company sold 9,783,660 shares of common stock at a price of $3.50 per share, which included 1,212,231 shares issued pursuant to the underwriters’ exercise of their option to purchase additional shares of common stock. The aggregate net proceeds received by the Company from the offering were approximately $32.0 million, net of underwriting discounts and commissions and offering expenses.

The following aggregate number of shares of common stock were sold to the Company’s owners of more than 10% of our common stock, directors, or executive officers during the February 2021 underwritten public offering:


	Number of		Aggregate
		Shares of	Purchase
	Common Stock		Price
Owners of More Than 10% of Our Common Stock
OrbiMed Advisors LLC (1)		1,285,714	$	4,499,999
Board of Directors
Richard A. Miller, M.D.		100,000		350,000

(1)	Peter Thompson, M.D., a member of our Board of Directors since November 2014, is a Member of OrbiMed Advisors, LLC.

As more fully described in Note 5, the Company holds a 49.7% ownership in Angel Pharmaceuticals and, in connection with intellectual property licensing agreements between the Company and Angel Pharmaceuticals, the Company provides operational support and clinical drug supplies to Angel Pharmaceuticals. Third-party and internal personnel costs incurred by the Company are billed to Angel Pharmaceuticals in the period incurred and recorded as an offset to expenses. During the years ended December 31, 2022 and 2021, the Company billed Angel for approximately $0.1 million and $0.2 million in internal personnel costs, respectively, and $1.3 million and $1.6 million in third-party costs, respectively. Of the third-party costs billed to Angel in the years ending December 31, 2022 and 2021, approximately $0.5 million and $0.6 million, respectively, were associated with clinical drug supply manufactured and expensed in prior years. The remaining $0.8 million and $1.0 million in third-party costs were primarily associated with

clinical drug supply passthrough costs incurred during the years ended December 31, 2022 and 2021, respectively, and did not have an impact on the Company’s consolidated statements of operations.

In addition to the provision of clinical supplies to Angel Pharmaceuticals, Angel Pharmaceuticals may provide clinical supplies to the Company on an as needed basis. These supplies are recorded as research and development expense. During the year ended December 31, 2022, Angel Pharmaceuticals billed the Company for approximately $0.2 million in third-party costs associated with clinical drug supply provided to the Company.

In August 2021, the Company entered into an agreement to sublease 7,585 square feet of its office and laboratory space in Burlingame, California to Angel Pharmaceuticals. Pursuant to the sublease, rent is due monthly and is subject to scheduled annual increases and Angel Pharmaceuticals is responsible for certain operating expenses and taxes throughout the life of the sublease. The sublease will expire in February 2023 and Angel Pharmaceuticals has no option to extend the sublease term. Sublease income is recognized on a straight-line basis as other income in our consolidated statements of operations. For the years ended December 31, 2022 and 2021, the Company recognized $0.6 million and $0.2 million of sublease income, respectively.

In July 2021, Linda S. Grais, M.D., J.D., a member of the Company’s Board of Directors, was appointed as a non-executive member of the Board of Directors of ICON plc (“ICON”), effective upon completion of ICON’s acquisition of PRA Health Sciences, Inc. ICON is a clinical research organization and provides services to support the Company’s clinical trials. During the years ended December 31, 2022 and 2021, the Company recorded approximately $429,000 and $246,000, respectively, in clinical trial expenses under its agreements with ICON.