10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                    

Commission File No. 001-38535

Aptinyx Inc.

(Exact name of registrant as specified in its charter)

Delaware	47-4626057
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

909 Davis Street, Suite 600

Evanston, IL 60201

(847) 871-0377

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	APTX	The Nasdaq Global Select Market

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  ☒    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  ☒    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 filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes  ☐    No  ☒

As of August 2, 2022 the registrant had 67,715,718 shares of common stock, $0.01 par value per share, outstanding.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION	5
Item 1.	Condensed Financial Statements (unaudited)	5
	Balance Sheets	5
	Statements of Operations	6
	Statements of Cash Flows	7
	Statements of Stockholders’ Equity	8
	Notes to Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27
PART II.	OTHER INFORMATION	28
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	29
Item 6.	Exhibits	30
Signatures		31

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks, uncertainties, and other factors that may cause actual results, levels of activity, performance, or achievements to be materially different from the information expressed or implied by these forward-looking statements. All statements, other than statements of historical facts, contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management and expected market growth are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

These forward-looking statements include, among other things, statements about:

● the timing, progress, and results of preclinical studies and clinical trials for NYX-2925, NYX-783, NYX-458, and any future product candidates we may develop, including statements regarding the timing of initiation, commencement, and completion of studies or trials and related preparatory work, and costs associated therewith, the period during which the results of the studies will become available, our research and development programs, and our ability to demonstrate safety and efficacy of our product candidates to the satisfaction of applicable regulatory authorities;

● the impacts of the current COVID-19 pandemic on our continuing operations, clinical development plans, including the timing of initiation, recommencement and completion of studies or trials, financial forecasts and expectations, and other matters related to our business and operations;

● the existence or absence of side effects or other properties relating to our product candidates that could delay or prevent their regulatory approval, limit their commercial potential, or result in significant negative consequences following any potential marketing approval;

● the potential for our identified research priorities to advance our technologies;

● our ability to establish or maintain future collaborations or strategic relationships or obtain additional funding in connection with these relationships;

● our ability to obtain and maintain regulatory approval of our product candidates, NYX-2925, NYX-783, NYX-458, and any other future product candidates, and any statements regarding the label of an approved product candidate, including any restrictions, limitations, and/or warnings therein;

● our intellectual property position, including the scope of protection we are able to establish and maintain for intellectual property rights covering NYX-2925, NYX-783, NYX-458, and any additional product candidates we may develop, and any statements as to whether we do or do not infringe, misappropriate, or otherwise violate any third-party intellectual property rights;

● our ability and the potential to successfully manufacture our product candidates for clinical studies and for commercial use, if approved;

● our ability to commercialize our products in light of the intellectual property rights of others;

● our ability to obtain funding for our operations, including funding necessary to complete further development and commercialization of our product candidates;

● our plans to research, develop, and commercialize our product candidates;

● our ability to retain and attract collaborators with research, development, regulatory, and commercialization expertise;

● the size and growth potential of the markets for our product candidates and our ability to serve those markets;

● the rate and degree of market acceptance and clinical utility of NYX-2925, NYX-783, NYX-458, and any future product candidates we may develop, if approved;

● the pricing and reimbursement of NYX-2925, NYX-783, NYX-458, and any future product candidates we may develop, if approved;

● regulatory developments in the United States and foreign countries;

● our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately;

● the success of competing therapies that are or may become available;

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● our ability to retain the continued service of our key professionals and to identify, hire, and retain additional qualified professionals;

● the accuracy of our estimates regarding expenses, future revenue, capital requirements, and needs for additional financing;

● our financial performance;

● our expectations related to the use of our cash reserves;

● the impact of laws and regulations, including, without limitation, recently enacted tax reform legislation;

● our expectations regarding the time during which we will be an “emerging growth company” under the Jumpstart Our Business Startups Act;

● our use of proceeds from our debt financing and our initial and follow-on public offerings; and

● other risks and uncertainties, including those listed under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021, or Annual Report.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Quarterly Report on Form 10-Q and our Annual Report filed with the Securities and Exchange Commission, or the SEC, on March 23, 2022, particularly in the “Risk Factors” section, that could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, collaborations, joint ventures or investments that we may make or into which we may enter.

You should read this Quarterly Report on Form 10-Q and the documents that we reference herein and have filed or incorporated by reference as exhibits hereto completely and with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

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PART I—FINANCIAL INFORMATION

Item 1. Condensed Financial Statements.

Aptinyx Inc.

Condensed Balance Sheets

(unaudited)

(in thousands, except per share data)

	June 30,		December 31,
	2022		2021
Assets
Current assets:
Cash and cash equivalents	$	85,269	$	106,124
Restricted cash		105		197
Prepaid expenses and other current assets		6,766		8,422
Total current assets		92,140		114,743
Other assets		92		—
Property and equipment, net		74		185
Total assets	$	92,306	$	114,928
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	2,106	$	622
Accrued expenses and other current liabilities		3,576		5,064
Total current liabilities		5,682		5,686
Term loan, non-current		24,498		14,155
Other long-term liabilities		27		331
Total liabilities	$	30,207	$	20,172
Commitments and contingencies (see Note 12)
Stockholders’ equity:
Preferred stock, $0.01 par value, 10,000 shares authorized and no shares issued and outstanding as of June 30, 2022 and December 31, 2021		—		—
Common stock, $0.01 par value, 150,000 shares authorized as of June 30, 2022 and December 31, 2021, 67,716 issued and outstanding as of June 30, 2022 and December 31, 2021		677		677
Additional paid-in capital		386,803		381,966
Accumulated deficit		(325,381)		(287,887)
Total stockholders’ equity	$	62,099	$	94,756
Total liabilities and stockholders’ equity	$	92,306	$	114,928

See accompanying notes to these unaudited condensed financial statements.

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Aptinyx Inc.

Condensed Statements of Operations

(unaudited)

(in thousands, except per share data)

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenues:
Collaboration revenue	$	—	$	—	$	—	$	1,000
Operating expenses:
Research and development		11,909		14,796		25,511		25,110
General and administrative		5,196		5,070		10,973		10,046
Total operating expenses		17,105		19,866		36,484		35,156
Loss from operations		(17,105)		(19,866)		(36,484)		(34,156)
Other (income) expense, net		(195)		(47)		(224)		(111)
Interest expense		757		—		1,234		—
Net loss and comprehensive loss	$	(17,667)	$	(19,819)	$	(37,494)	$	(34,045)
Net loss per share attributable to common stockholders, basic and diluted	$	(0.26)	$	(0.29)	$	(0.55)	$	(0.51)
Weighted-average number of common shares outstanding, basic and diluted		67,716		67,381		67,716		66,716

See accompanying notes to these unaudited condensed financial statements.

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Aptinyx Inc.

Condensed Statements of Cash Flows

(unaudited)

(in thousands)

	Six Months Ended
	June 30,
	2022		2021
Cash flows from operating activities:
Net loss	$	(37,494)	$	(34,045)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		87		450
Change in fair value of derivative liability associated with contingently issuable warrants		(109)		—
Non-cash interest expense related to term loan		350		—
Stock-based compensation expense		4,631		5,133
Changes in operating assets and liabilities:
Prepaid expenses and other assets		1,887		3,692
Accounts receivable		—		257
Accounts payable		1,406		(775)
Accrued expenses and other liabilities		(1,440)		(467)
Net cash used in operating activities		(30,682)		(25,755)
Cash flows from investing activities:
Proceeds from sale of property and equipment		—		121
Net cash provided by investing activities		—		121
Cash flows from financing activities:
Proceeds from stock options exercised		—		133
Repurchase of shares for tax withholdings		—		(912)
Proceeds from issuance of term loan, net of issuance costs paid to lender		10,000		—
Payment of debt issuance costs		(20)		—
Proceeds from at the market offering, net of sales commission		—		14,615
Payment of offering costs		(153)		(4)
Net cash provided by financing activities		9,827		13,832
Net (decrease) in cash, cash equivalents and restricted cash		(20,855)		(11,802)
Cash, cash equivalents and restricted cash, at beginning of period		106,321		141,299
Cash, cash equivalents and restricted cash, at end of period	$	85,466	$	129,497
Supplemental disclosure of cash flow information:
Cash paid for interest	$	798	$	—
Supplemental disclosure of non-cash investing and financing activities:
Deferred offering costs not yet paid	$	78	$	—
Issuance of warrants in connection with term loan financing		206		—

See accompanying notes to these unaudited condensed financial statements.

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Aptinyx Inc.

Condensed Statements of Stockholders’ Equity

(unaudited)

(in thousands)

				Additional				Total
	Common stock			paid-in		Accumulated		stockholders’
	Shares	Amount		capital		deficit		equity
Balance at March 31, 2022	67,716	$	677	$	384,522	$	(307,714)	$	77,485
Stock‑based compensation	—		—		2,281		—		2,281
Net loss	—		—		—		(17,667)		(17,667)
Balance at June 30, 2022	67,716	$	677	$	386,803	$	(325,381)	$	62,099
Balance at March 31, 2021	66,930	$	669	$	375,499	$	(227,227)	$	148,941
Issuance of common stock upon vesting of restricted stock	1,084		11		(11)		—		—
Repurchase of shares for tax withholdings	(345)		(3)		(902)		—		(905)
Stock-based compensation	—		—		2,478		—		2,478
Issuance of common stock upon exercise of stock options	47		—		61		—		61
Net loss	—		—		—		(19,819)		(19,819)
Balance at June 30, 2021	67,716	$	677	$	377,125	$	(247,046)	$	130,756
				Additional				Total
	Common stock			paid-in		Accumulated		stockholders’
	Shares	Amount		capital		deficit		equity
Balance at December 31, 2021	67,716	$	677	$	381,966	$	(287,887)	$	94,756
Stock‑based compensation	—		—		4,631		—		4,631
Issuance of warrants in connection with term loan financing	—		—		206		—		206
Net loss	—		—		—		(37,494)		(37,494)
Balance at June 30, 2022	67,716	$	677	$	386,803	$	(325,381)	$	62,099
Balance at December 31, 2020	63,257	$	633	$	358,277	$	(213,001)	$	145,909
Issuance of common stock upon vesting of restricted stock	1,089		11		(11)		—		—
Repurchase of shares for tax withholdings	(347)		(3)		(909)		—		(912)
Issuance of common stock upon at the market offering, net of sales commissions and other offering costs of $529	3,630		36		14,502		—		14,538
Stock‑based compensation	—		—		5,133		—		5,133
Issuance of common stock upon exercise of stock options	87		—		133		—		133
Net loss	—		—		—		(34,045)		(34,045)
Balance at June 30, 2021	67,716	$	677	$	377,125	$	(247,046)	$	130,756

See accompanying notes to the unaudited condensed financial statements.

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Aptinyx Inc.

Notes to Condensed Financial Statements

(unaudited)

1.           Organization

Description of business

Aptinyx Inc. (the “Company” or “Aptinyx”) was incorporated in Delaware on June 24, 2015, and maintains its headquarters in Evanston, Illinois.

Aptinyx is a clinical-stage biopharmaceutical company focused on the discovery, development, and commercialization of novel, proprietary, synthetic small molecules for the treatment of brain and nervous system disorders. Aptinyx has a platform for discovering proprietary compounds that work through a novel mechanism: modulation of N-methyl-D-aspartate receptors (“NMDAr”), which are vital to normal and effective brain and nervous system functions. This mechanism has applicability across numerous nervous system disorders.

Liquidity and capital resources

On July 1, 2019, the Company entered into a Sales Agreement (the “2019 Sales Agreement”) with Cowen and Company, LLC (“Cowen”) pursuant to which the Company may offer and sell shares of its common stock with an aggregate offering price of up to $50.0 million under an “at the market” offering program (the “2019 ATM Offering”). The 2019 Sales Agreement provides that Cowen will be entitled to a sales commission equal to 3.0% of the gross sales price per share of all shares sold under the 2019 ATM Offering. To date, the Company has sold an aggregate of 5,120,940 shares under the 2019 ATM Offering at a weighted-average price of $3.99 per share for net proceeds of $20.4 million after deducting sales commission and other offering expenses, including 3,629,458 shares for net proceeds of $14.5 million during the six months ended June 30, 2021.

On September 15, 2021, the Company entered into a Loan and Security agreement (the “Loan Agreement”) with K2 HealthVentures LLC (“Lender”). The Loan Agreement provides up to $50.0 million principal in term loans, $15.0 million of which was funded at the time the Company entered into the agreement and $10.0 million of which was funded on March 14, 2022. See Note 7 for additional details regarding the Loan Agreement.

On September 16, 2021, the Company entered into a Sales Agreement (the “2021 Sales Agreement”) with Cowen pursuant to which the Company may offer and sell shares of its common stock with an aggregate offering price of up to $50.0 million under an “at the market” offering program (the “2021 ATM Offering”) and which supersedes the 2019 Sales Agreement and 2019 ATM Offering. The 2021 Sales Agreement provides that Cowen will be entitled to a sales commission equal to 3.0% of the gross sales price per share of all shares sold under the 2021 ATM Offering. As of the date of these financial statements, no shares of common stock have been issued and sold pursuant to the 2021 Sales Agreement.

On March 24, 2022, the Company entered into an amendment to the 2021 Sales Agreement (the “2022 Sales Agreement”) pursuant to which the Company may offer and sell shares of its common stock with an aggregate offering price of up to $75.0 million under an “at the market” offering program (the “2022 ATM Offering”) and which supersedes the 2021 Sales Agreement and 2021 ATM Offering. The 2022 Sales Agreement provides that Cowen will be entitled to a sales commission equal to 3.0% of the gross sales price per share of all shares sold under the 2022 ATM Offering. As of the date of these financial statements, no shares of common stock have been issued and sold pursuant to the 2022 Sales Agreement.

As of June 30, 2022, the Company had cash and cash equivalents of $85.3 million, which the Company believes will be sufficient to funds its planned operations for a period of at least twelve months from the date of issuance of these condensed financial statements.

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2.Summary of significant accounting policies

Basis of presentation

The condensed financial statements of the Company included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted from this report, as is permitted by such rules and regulations. The accompanying condensed financial statements reflect all adjustments consisting of normal, recurring adjustments that are necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. Interim results are not necessarily indicative of results for a full year. Accordingly, these condensed financial statements should be read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “Annual Report”) filed with the SEC on March 23, 2022.

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”), or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial statements upon adoption. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company, and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.

Use of estimates

The condensed financial statements are prepared in conformity with GAAP. This process requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Risk and uncertainties

The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, uncertainty of: the impact of COVID-19 on future clinical study results, the scope, timing, rate of progress, and expense of the Company’s ongoing as well as any additional preclinical studies, clinical studies, and other research and development activities, clinical study enrollment rate or design, the manufacturing of the Company’s product candidates, significant and changing government regulation, and the timing and receipt of any regulatory approvals.

Significant accounting policies

The Company’s significant accounting policies are described herein and in Note 3, “Summary of significant accounting policies,” in the Annual Report. There have been no material changes to the significant accounting policies during the six months ended June 30, 2022.

Recently issued accounting pronouncement

In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”), as amended, which requires a lessee to recognize assets and liabilities on the balance sheet for operating leases and changes many key definitions, including the definition of a lease. The new standard includes a short-term lease exception for leases with a term of 12 months or less, as part of which a lessee can make an accounting policy election not to recognize lease assets and lease liabilities. Lessees will continue to differentiate between finance leases (previously referred to as capital leases) and operating leases using classification criteria that are substantially similar to the previous guidance. The new standard became effective for the Company for annual reporting periods beginning after December 15, 2021, and interim periods within

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fiscal years beginning after December 15, 2022, and early adoption is permitted. The Company anticipates that the adoption of this standard will have an impact on its balance sheet due to the recognition of right-of-use assets and lease liabilities; however, the Company is currently evaluating the impact that the adoption of ASU 2016-02 may have on its condensed financial statements.

3.           Supplemental financial information

Cash, cash equivalents and restricted cash

Cash and cash equivalents consist of cash and, if applicable, highly liquid investments with an original maturity of three months or less when purchased. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheets that sum to the total of the same such amounts shown in the condensed statements of cash flows (in thousands).

	As of		As of
	June 30,		December 31,
	2022		2021
Cash and cash equivalents	$	85,269	$	106,124
Short-term and long-term restricted cash		197		197
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows	$	85,466	$	106,321

Prepaid expenses and other current assets

Prepaid expenses and other current assets consist of the following (in thousands):

	As of		As of
	June 30,		December 31,
	2022		2021
Prepaid clinical	$	3,515	$	4,693
Prepaid insurance		50		1,122
Prepaid manufacturing costs		2,844		2,241
Other prepaid expenses and current assets		357		366
Total prepaid expenses and other current assets	$	6,766	$	8,422

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consist of the following (in thousands):

	As of		As of
	June 30,		December 31,
	2022		2021
Employee-related expenses	$	1,344	$	2,567
Development costs and sponsored research		1,027		1,347
Clinical trials		592		810
Other		613		340
Total accrued expenses and other current liabilities	$	3,576	$	5,064

4.           Research collaboration agreement with Allergan

On July 24, 2015, the Company entered into a Research Collaboration Agreement (“RCA”) with Naurex Inc., a subsidiary of Allergan plc (“Allergan”), which became a wholly owned subsidiary of AbbVie Inc. in May 2020. The RCA was focused on the research and discovery of small molecules that modulate NMDArs. Under the terms of the agreement, the RCA terminated upon the earlier of (i) 180 days after a predetermined anniversary of the effective date of the RCA and (ii) the date on which Allergan exercised the last of three options to acquire molecules from a pool of

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eligible compounds, in both cases (clauses (i) and (ii)) subject to potential extension if and as required for the Company to transfer to Allergan information and technology related to compounds that were licensed by Allergan. The jointly funded research activities and option exercise period under the RCA, including the associated payments by Allergan to the Company, came to their contractual conclusions in accordance with the agreement in August 2020 and February 2021, respectively. Under the terms of the agreement, Allergan was to pay the Company $1.0 million for each option exercised by Allergan. On February 23, 2021, Allergan exercised its option to acquire exclusive rights to develop and commercialize AGN-281705 within a predefined set of indications. For the six months ended June 30, 2021, the Company recognized the $1.0 million non-refundable milestone payment within collaboration revenue in the statements of operations as there were no remaining performance obligations associated with the optioned compound.

5.           Fair value measurements

ASC 820, Fair Value Measurement (“ASC 820”), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tier fair value hierarchy that distinguishes between the following:

● Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;

● Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and

● Level 3 inputs are unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The carrying values reported in the Company’s balance sheets for cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued expenses are reasonable estimates of their fair values due to the short-term nature of these items.

Assets and liabilities measured at fair value on a recurring basis as of June 30, 2022, are as follows (in thousands):

	June 30,
	2022		Level 1		Level 2		Level 3
Assets
Money market funds, included in cash and cash equivalents	$	76,973	$	76,973	$	—	$	—
Money market funds, included in restricted cash		197		197		—		—
Total Assets	$	77,170	$	77,170	$	—	$	—
Liabilities
Derivative liability, included in other long-term liabilities	$	16	$	—	$	—	$	16
Total Liabilities	$	16	$	—	$	—	$	16

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Assets measured at fair value on a recurring basis as of December 31, 2021, are as follows (in thousands):

	December 31,
	2021		Level 1		Level 2		Level 3
Assets
Money market funds, included in cash and cash equivalents	$	103,859	$	103,859	$	—	$	—
Money market funds, included in restricted cash		197		197		—		—
Total Assets	$	104,056	$	104,056	$	—	$	—
Liabilities
Derivative liability, included in other long-term liabilities	$	331	$	—	$	—	$	331
Total Liabilities	$	331	$	—	$	—	$	331

6.           Property and equipment, net

Property and equipment are as follows (in thousands):

	As of		As of
	June 30,		December 31,
	2022		2021
Office equipment and furniture		152		152
Laboratory equipment		401		401
Leasehold improvements		979		979
Less accumulated depreciation		(1,458)		(1,347)
Property and equipment, net	$	74	$	185

Depreciation expense was less than $0.1 million for each of the three months ended June 30, 2022 and 2021, respectively, and $0.1 million and $0.5 million for the six months ended June 30, 2022 and 2021, respectively. The Company disposed of certain laboratory equipment during the six months ended June 30, 2021, that were fully depreciated at the time of disposal.

7.           Debt

On September 15, 2021, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with K2 HealthVentures LLC (the “Lender”). The Lender has agreed to make available to the Company term loans in an aggregate principal amount of up to $50.0 million under the Loan Agreement. The Company plans to use the proceeds of the term loans to support clinical development as well as for working capital and general corporate purposes. The Loan Agreement provides a term loan commitment of $50.0 million in four potential tranches: (i) a $15.0 million term loan facility funded on September 15, 2021 (the “First Tranche Term Loan”); (ii) a $10.0 million term loan facility (the “Second Tranche Term Loan”) funded on March 14, 2022; (iii) a $10.0 million term loan facility (the “Third Tranche Term Loan”) available at the Company’s option between July 1, 2022, and December 1, 2022, subject to the draw of the Second Tranche Term Loan and positive Phase 2 clinical data from NYX-2925 or NYX-458 and progression of another clinical asset; and (iv) a $15.0 million term loan facility (the “Fourth Tranche Term Loan”) available through July 1, 2023, at the Company’s option but subject to review of financial and clinical plans and Lender’s Investment Committee approval. All four of these term loans have a maturity date of September 1, 2025.

Borrowings under all four term loan facilities bear interest at a floating per annum rate equal to the greater of (i) 7.95% and (ii) the Prime Rate plus 4.70%. The Company is permitted to make interest-only payments on the First Tranche Term Loan for the first 24 months following the funding date. The interest-only period can be extended by an additional 12 months, subject to the funding of the Second Tranche Term Loan and the funding of the Third Tranche Term Loan. The term of the combined facility will be 48 months, with repayment in monthly installments commencing at the end of the resulting interest-only period as outlined above through the end of the 48-month term.

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The Company is obligated to pay a final fee equal to 6.45% of the aggregate amount of the term loans funded (“Exit Fee”), to occur upon the earliest of (i) the maturity date, (ii) the acceleration of the term loans, and (iii) the prepayment of the term loans. The Company has the option to prepay all, but not less than all, of the outstanding principal balance of the term loans under the Loan Agreement. If the Company prepays all of the term loans prior to the maturity date, it will pay the Lender a prepayment penalty fee based on a percentage of the outstanding principal balance, equal to 3% if the payment occurs on or before 24 months after the initial funding date, 2% if the prepayment occurs more than 24 months after, but on or before 36 months after the initial funding date, or 1% if the prepayment occurs more than 36 months after the initial funding date. The Company also is obligated to pay the Lender an origination fee of 0.8% of all term loans funded at the time of funding.

The Lender may, at its option, elect to convert any portion of no more than $4 million of the then outstanding term loan amount and all accrued and unpaid interest thereon into shares of the Company’s common stock at a conversion price of the lesser of $4.25 per share and the price per share of the common stock in the Company’s next equity offering in which the Company receives at least $20.0 million of gross proceeds. The Company determined that the embedded conversion option is not required to be separated from the term loan. The embedded conversion option meets the derivative accounting scope exception since the embedded conversion option is indexed to the Company’s own common stock and qualifies for classification within stockholders’ equity.

The Company’s obligations under the Loan Agreement are secured by a first priority security interest in substantially all of its assets. The Loan Agreement contains customary representations and warranties, and also includes customary events of default, including payment default, breach of covenants, change of control, and material adverse effects. The Loan Agreement restricts certain activities, such as disposing of the Company’s business or certain assets, incurring additional debt or liens or making payments on other debt, making certain investments and declaring dividends, acquiring or merging with another entity, engaging in transactions with affiliates or encumbering intellectual property, among others. There are no financial covenants associated with the Loan Agreement. The Company was in compliance with all non-financial covenants under the Loan Agreement as of June 30, 2022.

Upon the occurrence of an event of default, a default interest rate of an additional 5% per annum may be applied to the outstanding loan balances, and the Lender may declare all outstanding obligations immediately due and payable and exercise all of its rights and remedies as set forth in the Loan Agreement and under applicable law.

The Company recorded interest expense related to the Loan Agreement of $0.8 million for the three months ended June 30, 2022, and $1.2 million for the six months ended June 30, 2022.

Future principal debt payments of the term loans funded as of June 30, 2022, are as follows (in thousands):

2023	$	2,867
2024		12,167
2025		9,966
2026		—
Total principal payments		25,000
Exit Fee		1,613
Total principal payments and Exit Fee		26,613
Less: Unamortized debt discount related to warrants		(420)
Less: Unamortized debt discount related to Exit Fee		(1,335)
Less: Unamortized debt issuance costs		(360)
Term loan, non-current	$	24,498

8.           Stock incentive plans

On June 5, 2018, the Company’s stockholders approved the 2018 Stock Option and Incentive Plan (the “2018 Plan”), which became effective on June 20, 2018.

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Stock-based compensation expense

Non-cash stock-based compensation expense recognized in the accompanying condensed statements of operations relating to stock options, restricted stock awards, and restricted stock units for the three and six months ended June 30, 2022 and 2021, was as follows (in thousands):

	Three months ended				Six months ended
	June 30,				June 30,
	2022		2021		2022		2021
Research and development	$	444	$	676	$	819	$	1,413
General and administrative		1,837		1,802		3,812		3,720
Total stock‑based compensation expense	$	2,281	$	2,478	$	4,631	$	5,133

Stock options

The table below summarizes activity related to stock options (in thousands, except per share amounts):

				Weighted‑
		Weighted‑		average
		average		remaining	Aggregate
		exercise		contractual	intrinsic
Options	Shares	price		term	value
Outstanding, December 31, 2021	10,713	$	5.36	8.07	$	718
Granted	2,286		2.98
Exercised	—		—
Forfeited and canceled	(383)		3.97
Outstanding, June 30, 2022	12,616	$	4.97	7.82	$	19
Vested and expected to vest at June 30, 2022	12,616	$	4.97	7.82	$	19
Exercisable at June 30, 2022	6,282	$	6.64	6.61	$	2

During the six months ended June 30, 2022 and 2021, the Company granted 2.3 million and 3.1 million stock options, respectively, and these options had a weighted-average grant-date fair value of $2.28 and $2.73 per share, respectively. The weighted-average grant-date fair value of options was determined using the Black-Scholes option-pricing model. The assumptions used in the Black-Scholes option-pricing model for options granted during the six months ended June 30, 2022, were similar to those as described in the Annual Report, except for the manner in which the expected volatility was determined. The expected volatility for the Company’s options granted during the six months ended June 30, 2022, is based on a weighted-average of the historical volatility of share values of publicly traded companies within the biotechnology industry, which includes the historical volatility of the Company’s stock since the Company’s initial public offering. As of June 30, 2022, there was $14.6 million of total unrecognized stock-based compensation expense related to non-vested stock options, which is expected to be recognized over a weighted-average period of 2.7 years. The options have a ten-year life and generally vest over a period of four years, subject to continuous employment.

Restricted stock units

In June 2020, the Company issued an aggregate of 205,200 restricted stock units to employees. The restricted stock units issued in 2020 vested ten months from the date of grant. Such shares were not accounted for as outstanding until they vested. Non-cash restricted stock unit award expense recognized in the accompanying condensed statements of operations was $0.0 million and $0.2 million for the three months ended in June 30, 2022 and 2021, respectively, and $0.0 million and $0.8 million for the six months ended June 30, 2022 and 2021, respectively. There were no unvested restricted stock units as of June 30, 2022.

9.         Warrants and derivative liability

Warrants

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On September 15, 2021, the Company entered into the Loan Agreement with the Lender pursuant to which the Lender may provide the Company with term loans in an aggregate principal amount of up to $50.0 million.

On September 15, 2021, in connection with the funding of the First Tranche Term Loan, the Company issued a warrant exercisable for 147,600 shares of the Company’s common stock at an exercise price of $2.29 per share. The warrant is immediately exercisable for 147,600 shares and expires on September 15, 2031.

On March 14, 2022, in connection with the funding of the Second Tranche Term Loan, the Company issued a warrant exercisable for 98,399 shares of the Company’s common stock at an exercise price of $2.29 per share. The warrant is immediately exercisable for 98,399 shares and expires on September 15, 2031.

No warrants had been exercised as of June 30, 2022. Any shares of the Company’s common stock issued upon exercise of the warrants are permitted to be settled in unregistered shares. The warrants are classified as equity as they meet all of the conditions under GAAP for equity classification. The Company has calculated the fair value of the warrants for initial measurement and date of funding of the Second Tranche Term Loan, and reassesses whether equity classification for the warrants is appropriate upon any changes to the warrants or capital structure, at each balance sheet date.

The Company determined that the fair value of the warrants issued in connection with the First Tranche Term Loan and Second Tranche Term Loan was $0.3 million and $0.2 million, respectively. The specific assumptions used to determine the fair value of the warrants were as follows:

	First Tranche		Second Tranche
	Term Loan		Term Loan
Expected volatility	95	%	93	%
Expected dividends	None		None
Expected term	5.00 Years		5.00 Years
Risk-free rate	0.81	%	2.10	%

Derivative Liability

The Additional Warrants’ (as defined below) derivative liability will be remeasured each reporting period until settled or extinguished with subsequent changes in fair value recorded through other income (expense), net in the condensed statements of operations. The fair value of the Additional Warrants derivative liability was determined using a Black-Scholes option pricing model based on the same input assumptions above, with an additional assessment required for the probability that the Additional Tranche Term Loans will be funded which would trigger the issuance of the Additional Warrants.

The Company is conditionally obligated to issue a fixed number of additional warrants (“Additional Warrants”) in the amount of 344,398 shares upon the funding of the Second, Third and Fourth Tranche Term Loans with the same exercise price and contractual term. The contingent obligation to issue the Additional Warrants did not meet the derivative scope exception or equity classification criteria and were accounted for as a derivative liability. The contingently issuable Additional Warrants derivative liability had an initial fair value of $0.3 million and was recorded as additional debt discount and as a separate derivative liability within other long-term liabilities in the condensed balance sheet.

As a result of the funding of the Second Tranche Term Loan, the Company issued a warrant exercisable for 98,399 shares of the Company’s common stock at $2.29 per share. Upon issuing the warrants, the Company reclassified the related portion of its Additional Warrants derivative liability into equity. The remaining Additional Warrant Liability that remains outstanding was remeasured as of period end. The Company recorded a $0.1 million loss on change in fair value through other (income) expense, net in the condensed statement of operations.

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The following table provides a reconciliation of the beginning and ending balances for the Company’s Additional Warrants derivative liability recognized in connection with the term loan measured at fair value using significant unobservable inputs (Level 3):

	Additional
	Warrants
Balance at December 31, 2021	$	331
Fair value of Additional Warrant Derivative Liability issued during the period		—
Change in fair value		(109)
Derecognition		(206)
Balance at June 30, 2022	$	16

The specific assumptions used to determine the fair value of the warrants as of June 30, 2022, and December 31, 2021 were as follows:

	June 30,		December 31,
	2022		2021
Expected volatility	97	%	95	%
Expected dividends	None		None
Expected term	5.00 Years		5.00 Years
Risk-free rate	3.01	%	1.26	%

10.         Net loss per share

Basic and diluted net loss per share attributable to common stockholders was calculated as follows for the three and six months ended June 30, 2022 and 2021 (in thousands, except per share data):

	Three months ended				Six months ended
	June 30,				June 30,
	2022		2021		2022		2021
Numerator:
Net loss attributable to common stockholders	$	(17,667)	$	(19,819)	$	(37,494)	$	(34,045)
Denominator:
Weighted-average common shares outstanding—basic and diluted		67,716		67,381		67,716		66,716
Net loss per share attributable to common stockholders—basic and diluted	$	(0.26)	$	(0.29)	$	(0.55)	$	(0.51)

The following common stock equivalents outstanding as of June 30, 2022 and 2021, were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been anti-dilutive (in thousands):

	As of
	June 30,
	2022	2021
Stock options issued and outstanding	12,616	9,488
Warrants	246	—
Total	12,862	9,488

11.          Income taxes

Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided if based upon the weight of available evidence, it is more likely than not that some or

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all of the deferred tax assets will not be realized. The Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets, including its net operating losses. Based on its history of operating losses, the Company believes that it is more likely than not that the benefit of its deferred tax assets will not be realized. Accordingly, the Company has provided a full valuation allowance for deferred tax assets as of June 30, 2022, and December 31, 2021.

12.         Commitments and contingencies

Contingencies

From time to time, the Company may be subject to occasional lawsuits, investigations, and claims arising out of the normal conduct of business. The Company has no significant pending or threatened litigation as of June 30, 2022.

Indemnifications

In the normal course of business, the Company enters into contracts that contain a variety of indemnifications with its employees, licensors, suppliers and service providers. Further, the Company indemnifies its directors and officers who are, or were, serving at the Company’s request in such capacities. The Company’s maximum exposure under these arrangements is unknown as of June 30, 2022. The Company does not anticipate recognizing any significant losses relating to these arrangements.

Leases

The Company enters into various non-cancelable, operating lease agreements for its facilities and equipment in order to conduct its operations. The Company expenses rent on a straight-line basis over the life of the lease and has recorded deferred rent on the Company’s balance sheets within both accrued expenses and other current liabilities and other long-term liabilities.

Total rent expense, inclusive of lease incentives, under all the operating lease agreements amounted to $0.2 million for each of the three months ended June 30, 2022 and 2021, and $0.4 million for each of the six months ended June 30, 2022 and 2021.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with our condensed financial statements and accompanying footnotes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited financial statements and related footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2021, or Annual Report, filed with the Securities and Exchange Commission, or the SEC, on March 23, 2022.

Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. See “Special Note Regarding Forward-Looking Statements.” Because of many factors, including those factors set forth in the “Risk Factors” section of our Annual Report, and in section Part II, Item 1A of this Quarterly Report on Form 10-Q, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

Overview

We are a clinical-stage biopharmaceutical company focused on the discovery, development, and commercialization of novel, proprietary, synthetic small molecules for the treatment of nervous system disorders. We focus our efforts on targeting and modulating N-methyl-D-aspartate receptors, or NMDArs, which are vital to normal and effective function of the brain and nervous system. We believe leveraging the therapeutic advantages of the differentiated modulatory

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mechanism of our compounds will drive a paradigm shift in the treatment of disorders of the brain and nervous system. We are advancing a pipeline of distinct product candidates derived from our NMDAr modulator discovery platform, or the discovery platform. The following table summarizes the current status of our development programs as of the date of this quarterly report.

NYX-2925 is in clinical development for the treatment of centralized pain. On April 7, 2022, we announced that NYX-2925 did not achieve statistically significant separation from placebo on the primary endpoint in a Phase 2b study evaluating its effects in patients with painful diabetic peripheral neuropathy, or DPN, and that the study results do not currently point to a path forward in development for painful DPN. We are currently evaluating NYX-2925 in a Phase 2b study evaluating the efficacy and safety in 305 patients with fibromyalgia.

NYX-783 is in Phase 2b clinical development for the treatment of post-traumatic stress disorder, or PTSD. We are currently enrolling a Phase 2b study evaluating the efficacy and safety of a 50 mg dose of NYX-783 in approximately 300 patients with PTSD. On April 19, 2022, we announced a temporary pause of the initiation of a second Phase 2b study evaluating a 150 mg dose of NYX-783 in patients with PTSD. The 150 mg study had not enrolled any patients at the time of the announcement and the study initiation was paused to conserve capital and extend operational runway.

NYX-458 is in clinical development for the treatment of cognitive impairment associated with neurodegenerative conditions. We are currently enrolling a Phase 2 exploratory study evaluating the safety and potential cognitive benefits of NYX-458 in approximately 100 patients with cognitive impairment associated with Parkinson’s disease or dementia with Lewy bodies.

The COVID-19 pandemic has and could further adversely impact our clinical and/or preclinical studies, as well as our business operations. We continue to evaluate the impact of the COVID-19 pandemic on patients and our employees, as well as our operations and the operations of our business partners and healthcare communities. In response to the COVID-19 pandemic, we have implemented policies to mitigate the risk of exposure to COVID-19 by our personnel, including a work-from-home policy applicable to the majority of our personnel and a phased approach to bringing personnel back to our locations over time. However, the ultimate impact of the COVID-19 pandemic on our business operations is highly uncertain and subject to change and will depend on future developments which are difficult to predict.

Since our inception in June 2015, we have never generated revenue from the sale of our products and have incurred significant net losses. Our nominal revenues have been primarily derived from a research collaboration agreement with Allergan plc, or Allergan, a development services agreement with Allergan, and research and development grants from the U.S. government. While these revenues offset a small portion of the costs associated with our early-stage research and discovery efforts, we do not rely on these revenues to fund our operations. In connection with the contractual

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conclusion of our research collaboration with Allergan in February 2021, we do not expect to receive further revenues from this collaboration.

From our inception through June 30, 2022, we have raised an aggregate of $135.0 million of gross proceeds from sales of our convertible preferred stock, $117.8 million of gross proceeds from our initial public offering, or IPO, $104.4 million of gross proceeds from our follow-on public offerings and our “at the market” offering program, or the ATM Offering, and $25.0 million of gross proceeds from our Loan Agreement. See “Liquidity and capital resources.” Our net losses were $74.9 million and $50.1 million for the years ended December 31, 2021 and 2020, respectively, and $37.5 million and $34.0 million for the six months ended June 30, 2022 and 2021, respectively. As of June 30, 2022, we had an accumulated deficit of $325.4 million. Our net losses may fluctuate significantly from quarter to quarter and year to year. We expect to continue to incur significant expenses and operating losses for the foreseeable future. We anticipate that our expenses will continue to increase in connection with our ongoing activities.

We believe that our available funds will be sufficient to fund our operations for at least the next twelve months. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. We do not expect to generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for a product candidate, which we expect will take a number of years and the outcome of which is uncertain, or enter into collaborative agreements with third parties, the timing of which is largely beyond our control and may never occur. To fund our current and future operating plans, we will need additional capital, which we may obtain through one or more equity offerings, debt financings, or other third-party funding, including potential strategic alliances and licensing or collaboration arrangements. We may, however, be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all, including as a result of COVID-19. Our failure to raise capital or enter into such other arrangements as and when needed would have a negative impact on our financial condition and our ability to develop our current product candidates, or any additional product candidates, if developed. The amount and timing of our future funding requirements will depend on many factors, including the impacts of COVID-19, our ability to timely and successfully enroll subjects in our clinical studies, and the pace and results of our preclinical and clinical development efforts. We cannot assure you that we will ever be profitable or generate positive cash flow from operating activities.

Financial operations overview

Revenues

We have not generated any revenue from product sales. We are unable to predict when, if ever, material net cash inflows will commence from sales of our products, if approved. Our revenue to date has been primarily derived from a research collaboration agreement with Allergan (now a subsidiary of AbbVie), under which the jointly funded research activities and option exercise period, including the associated payments by Allergan, came to their contractual conclusion in August 2020 and February 2021, respectively; a development services agreement with Allergan, which was put in place to continue certain development activities for a pre-determined period of time following Allergan's acquisition of Naurex Inc.; and research and development grants from the U.S. government that have no repayment or royalty obligations and none of which are currently outstanding.

Operating expenses

Research and development expenses

Research and development activities account for a significant portion of our operating expenses. We expense research and development costs as incurred. Research and development expenses consist of costs incurred in connection with the development of our product candidates, including:

● fees paid to consultants, sponsored researchers, contract manufacturing organizations, or CMOs, and contract research organizations, or CROs, including in connection with our preclinical and clinical studies, and other related clinical study fees, such as for investigator grants, patient screening, laboratory work, clinical study database management, and statistical compilation and analysis;

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● costs related to acquiring and maintaining preclinical and clinical study materials and facilities;

● costs related to compliance with regulatory requirements; and

● costs related to salaries, bonuses, and other compensation, including stock-based compensation, for employees in research and development functions.

At this time, we cannot reasonably estimate or know the nature, timing, and costs of the efforts that will be necessary to complete the development of our product candidates. This is due to the numerous risks and uncertainties associated with developing such product candidates, including the uncertainty related to:

● the impacts of COVID-19;

● future clinical study results;

● the scope, rate of progress, and expense of our ongoing as well as any additional preclinical studies, clinical studies and other research and development activities;

● clinical study enrollment rate or design;

● the manufacturing of our product candidates;

● our ability to obtain and maintain intellectual property protection for our product candidates;

● our ability to obtain funding for our operations, including funding necessary to complete further development and commercialization of our product candidates;

● significant and changing government regulation;

● establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers, developing and timely delivery of commercial-grade drug formulations that can be used in our clinical trials and for commercial launch;

● the timing and receipt of regulatory approvals, if any; and

● the risks disclosed in the section entitled “Risk Factors” of our Annual Report.

A change in the outcome of any of these variables with respect to the development of any of our product candidates could significantly change the costs, timing, and viability associated with the development of that product candidate.

We expect our research and development expenses to increase over the next several years as we continue to implement our business strategy, which includes advancing our product candidates into and through clinical development, expanding our research and development efforts, seeking regulatory approvals for any product candidates for which we successfully complete clinical studies, accessing and developing additional product candidates, and hiring additional personnel to support our research and development efforts. In addition, product candidates in later stages of clinical development generally incur higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical studies. As such, we expect our research and development expenses to increase as our product candidates advance into later stages of clinical development.

General and administrative expenses

General and administrative expenses consist primarily of salaries and related costs, including stock-based compensation. General and administrative expenses also include rent as well as professional fees for legal, consulting, accounting, and audit services.

In the future, we expect that our general and administrative expenses will increase as we continue to support our research and development and the potential commercialization of our product candidates, if approved.

Other (income) expense, net, and interest expense

Other (income) expense, net and interest expense consists primarily of the interest income earned on our cash and cash equivalents and interest expense on our Loan Agreement, and includes changes in fair value of the derivative liability associated with our obligation to issue additional warrants in connection with subsequent draws under our Loan Agreement.

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Results of operations

Comparison of the three months ended June 30, 2022 and 2021

The following table summarizes our results of operations for the three months ended June 30, 2022 and 2021 (in thousands):

	Three months
	ended June 30,				Increase
	2022		2021		(Decrease)
Operating expenses:
Research and development		11,909		14,796		(2,887)
General and administrative		5,196		5,070		126
Total operating expenses		17,105		19,866		(2,761)
Loss from operations		(17,105)		(19,866)		(2,761)
Other (income) expense, net		(195)		(47)		(148)
Interest expense		757		—		757
Net loss and comprehensive loss	$	(17,667)	$	(19,819)	$	(2,152)

Research and development expenses

The following table summarizes our research and development expenses incurred during the three months ended June 30, 2022 and 2021 (in thousands):

	Three months
	ended June 30,				Increase
	2022		2021		(Decrease)
NYX-2925	$	2,357	$	10,248	$	(7,891)
NYX-783		4,154		391		3,763
NYX-458		1,924		1,152		772
Preclinical research and discovery programs		1,148		450		698
Personnel and related costs		2,326		2,555		(229)
Total research and development expenses	$	11,909	$	14,796	$	(2,887)

Research and development expenses were $11.9 million for the three months ended June 30, 2022, compared to $14.8 million for the three months ended June 30, 2021. The net decrease of approximately $2.9 million was primarily due to the following:

● a decrease of approximately $7.9 million related to the completion of enrollment in our Phase 2b clinical studies of NYX-2925 in patients with painful DPN and in patients with fibromyalgia in October 2021 and February 2022, respectively; offset in part by

● an increase of approximately $0.7 million related to enrollment in our Phase 2 exploratory study of NYX-458 in patients with cognitive impairment associated with Parkinson’s disease and dementia with Lewy bodies, which had been temporarily suspended from March 2020 to April 2021 due to challenges associated with the COVID-19 pandemic; and

● an increase of approximately $3.8 million in clinical, regulatory, and drug product costs related to the initiation of Phase 2b development of NYX-783 in patients with PTSD.

General and administrative expense

General and administrative expenses were $5.1 million for each of the three months ended June 30, 2022, and June 30, 2021, respectively.

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Other (income) expense, net

We recorded $0.2 million of other income for the three months ended June 30, 2022, compared to less than $0.1 million of other income for the three months ended June 30, 2021. This was primarily driven by a change in fair value of the derivative liability.

Interest expense

Interest expense was $0.8 million for the three months ended June 30, 2022, due to interest expense associated with our Loan Agreement. We did not incur interest expense in the three months ended June 30, 2021.

Comparison of the six months ended June 30, 2022 and 2021

The following table summarizes our results of operations for the six months ended June 30, 2022 and 2021 (in thousands):

	Six months
	ended June 30,				Increase
	2022		2021		(Decrease)
Collaboration revenue		—		1,000		(1,000)
Operating expenses:
Research and development		25,511		25,110		401
General and administrative		10,973		10,046		927
Total operating expenses		36,484		35,156		1,328
Loss from operations		(36,484)		(34,156)		2,328
Other (income) expense, net		(224)		(111)		(113)
Interest expense		1,234		—		1,234
Net loss and comprehensive loss	$	(37,494)	$	(34,045)	$	3,449

Collaboration revenue

Collaboration revenue was $0.0 million and $1.0 million for the six months ended June 30, 2022 and 2021, respectively, and was attributable to the research collaboration with Allergan. The payments by Allergan associated with the jointly funded research activities and option exercise period under the research collaboration came to their contractual conclusion in August 2020 and February 2021, respectively.

Research and development expenses

The following table summarizes our research and development expenses incurred during the six months ended June 30, 2022 and 2021 (in thousands):

	Six months
	ended June 30,				Increase
	2022		2021		(Decrease)
NYX-2925	$	6,886	$	16,027	$	(9,141)
NYX-783		8,705		1,168		7,537
NYX-458		3,384		1,688		1,696
Preclinical research and discovery programs		2,008		1,343		665
Personnel and related costs		4,528		4,884		(356)
Total research and development expenses	$	25,511	$	25,110	$	401

23

Research and development expenses were $25.5 million for the six months ended June 30, 2022, compared to $25.1 million for the six months ended June 30, 2021. The increase of approximately $0.4 million was primarily due to the following:

● a decrease of approximately $9.1 million related to the completion of enrollment in our Phase 2b clinical studies of NYX-2925 in patients with painful DPN and in patients with fibromyalgia in October 2021 and February 2022, respectively; offset by

● an increase of approximately $1.7 million related to enrollment in our Phase 2 exploratory study of NYX-458 in patients with cognitive impairment associated with Parkinson’s disease and dementia with Lewy bodies, which had been temporarily suspended from March 2020 to April 2021 due to challenges associated with the COVID-19 pandemic; and

● an increase of approximately $7.5 million in clinical, regulatory, and drug product costs related to the initiation of Phase 2b development of NYX-783 in patients with PTSD.

General and administrative expenses

General and administrative expenses were $10.9 million for the six months ended June 30, 2022, compared to $10.0 million for the six months ended June 30, 2021.

Other (income) expense, net

We recorded $0.2 million of other income for the six months ended June 30, 2022, compared to $0.1 million of other income for the six months ended June 30, 2021. This was primarily driven by a change in fair value of the derivative liability.

Interest expense

Interest expense was $1.2 million for the six months ended June 30, 2022, due to interest expense associated with our Loan Agreement. We did not incur interest expense in the six months ended June 30, 2021.

Liquidity and capital resources

From our inception through June 30, 2022, we have incurred significant operating losses and have funded our operations to date through proceeds from collaborations, grants, sales of convertible preferred stock, IPO and follow-on public offerings, our ATM Offerings, and our debt financing. We have generated limited revenue to date from a research collaboration agreement with Allergan, a development services agreement with Allergan, and research and development grants from the U.S. government. The jointly funded research activities and option exercise period under the research collaboration agreement with Allergan, as well as associated payments by Allergan to us, came to their contractual conclusion in August 2020 and February 2021, respectively.

On March 24, 2022, we entered into an amendment to the 2021 Sales Agreement (the “2022 Sales Agreement”) with Cowen pursuant to which the Company may offer and sell shares of its common stock with an aggregate offering price of up to $75.0 million under an “at the market” offering program (the “2022 ATM Offering”) and which supersedes the 2021 Sales Agreement and 2021 ATM Offering. The 2022 Sales Agreement provides that Cowen will be entitled to a sales commission equal to 3.0% of the gross sales price per share of all shares sold under the 2022 ATM Offering. To date, no shares of common stock have been issued and sold pursuant to the 2022 Sales Agreement.

On September 15, 2021, we entered into a loan and security agreement with K2 HealthVentures LLC, or Loan Agreement. The Loan Agreement provides up to $50.0 million principal in term loans, $15.0 million of which was funded at the time we entered into the agreement and $10.0 million of which was funded on March 14, 2022. Interest on the outstanding loan balance will accrue at a variable rate equal to the greater of (i) 7.95% and (ii) the prime rate as published in the Wall Street Journal plus 4.70%. We are required to make monthly interest-only payments through September 2023. If we draw the third tranche, the interest-only period will be extended through October 2024.

24

Subsequent to the interest-only period, we are required to make equal monthly principal payments plus any accrued interest until the loans mature in September 2025. Upon final payment or prepayment of the loans, we are required to pay a final payment equal to 6.45% of the loans borrowed. We have the option to prepay the loans in whole, subject to a prepayment fee of 3% if the payment occurs on or before 24 months after the initial funding date, 2% if the prepayment occurs more than 24 months after, but on or before 36 months after the initial funding date, or 1% if the prepayment occurs more than 36 months after the initial funding date. We are obligated to pay a loan origination fee of 0.8% of each term loan that is funded under the Loan Agreement. The Loan Agreement also restricts certain activities, such as disposing of our business or certain assets, incurring additional debt or liens or making payments on other debt, making certain investments and declaring dividends, acquiring or merging with another entity, engaging in transactions with affiliates or encumbering intellectual property, among others.

As of June 30, 2022, we had cash and cash equivalents of $85.3 million. We invest our cash equivalents in liquid money market accounts.

Funding requirements

Our primary uses of capital are, and we expect will continue to be, research and development activities, compensation and related expenses, product manufacturing, laboratory and related supplies, legal, and other regulatory expenses, patent prosecution filing and maintenance costs for our licensed intellectual property, and general overhead costs. We expect to continue incurring significant expenses and operating losses for the foreseeable future. In addition, since the closing of our IPO, we have incurred, and expect to continue to incur, costs associated with operating as a public company. We anticipate that our expenses will increase in connection with our ongoing activities as we:

● seek to address and recover from impacts of the COVID-19 pandemic, including delays to our product development timelines;

● advance the clinical development of our lead product candidates;

● continue to improve the manufacturing process for our product candidates and manufacture clinical supplies as our development progresses;

● continue the research and development of our preclinical product candidates;

● seek to identify and develop additional product candidates;

● maintain, expand, and protect our intellectual property portfolio; and

● improve our operational, financial, and management systems to support our clinical development and other operations.

Outlook

Based on our research and development plans and our timing expectations related to the progress of our programs, we expect that our cash and cash equivalents as of June 30, 2022 will be sufficient to fund our operations for at least the next 12 months. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.

We do not expect to generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for a product candidate, which we expect will take a number of years and the outcome of which is uncertain, or enter into collaborative agreements with third parties, the timing of which is largely beyond our control and may never occur. We will continue to require additional capital to develop our product candidates and fund operations for the foreseeable future, which we may obtain through one or more equity offerings, debt financings, or other third-party funding, including potential strategic alliances and licensing or collaboration arrangements. We may, however, be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all, including as a result of the COVID-19 pandemic. Our failure to raise capital or enter into such other arrangements as and when needed would have a negative impact on our financial condition and our ability to develop our current product candidates, or any additional product candidates, if developed. The amount and timing of our future funding requirements will depend on many factors, including the effects of the COVID-19 pandemic, our ability to timely and successfully enroll subjects in our clinical studies and the pace and results of our preclinical and clinical development efforts. We cannot assure you that we will ever be profitable or generate positive cash flow from operating activities.

25

Cash flows

The following table summarizes our sources and uses of cash for each of the three months ended June 30, 2022 and 2021 (in thousands):

	Six months ended
	June 30,
	2022		2021
Net cash provided by (used in):
Operating activities	$	(30,682)	$	(25,755)
Investing activities		—		121
Financing activities		9,827		13,832
Net (decrease) increase in cash, cash equivalents and restricted cash	$	(20,855)	$	(11,802)

Operating activities

For the six months ended June 30, 2022, compared to the same period in 2021, the $4.9 million increase in net cash used in operating activities was primarily due to a $3.4 million increase in our net loss year over year, driven mostly by lower collaboration revenue, higher research and development expenses, and offset by a decrease in the use of cash of $0.9 million due to changes in working capital largely driven by the timing of cash paid to support our clinical research programs and a $0.6 million decrease in non-cash expenses related primarily to stock-based compensation.

Investing activities

For the six months ended June 30, 2022, compared to the same period in 2021, the $0.1 million decrease in net cash provided by investing activities was primarily due to proceeds from disposal of laboratory equipment in 2021.

Financing activities

For the six months ended June 30, 2022, compared to the same period in 2021, the $4.0 million decrease in net cash provided by financing activities was primarily due to $14.6 million of net proceeds received from our at the market offering in the 2021 period compared to $9.8 million of net proceeds received from our loan and security agreement in the 2022 period.

Critical accounting policies and significant judgments and estimates

This discussion and analysis of our financial condition and results of operations is based on our financial statements, which we have prepared in accordance with United States generally accepted accounting principles. The preparation of our financial statements and related disclosures requires us to make estimates, assumptions and judgments that affect the reported amount of assets, liabilities, revenue, costs and expenses, and related disclosures. Our critical accounting policies are described in the notes of our condensed financial statements included herein and our critical accounting estimates are discussed under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations— Critical Accounting Policies and Significant Judgments and Estimates” in our Annual Report. There were no material changes to our critical accounting policies or critical accounting estimates through June 30, 2022, from those discussed in our Annual Report.

Recent accounting pronouncements

See Note 2 to our condensed financial statements included elsewhere in this Quarterly Report on Form 10-Q.

JOBS Act accounting election

Under Section 107(b) of the Jumpstart Our Business Startups Act of 2012, as amended, or the JOBS Act, an “emerging growth company” can delay the adoption of new or revised accounting standards until such time as those standards

26

would apply to private companies. We intend to rely on this exemption. There are other exemptions and reduced reporting requirements provided by the JOBS Act that we are currently evaluating. For example, as an “emerging growth company,” we are exempt from Sections 14A(a) and (b) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which would otherwise require us to (1) submit certain executive compensation matters to shareholder advisory votes, such as “say-on-pay,” “say-on-frequency,” and “golden parachutes;” and (2) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of our chief executive officer’s compensation to our median employee compensation. We also intend to rely on an exemption from the rule requiring us to provide an auditor’s attestation report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002. We will continue to remain an “emerging growth company” until the earliest of the following: (1) December 31, 2023; (2) the last day of the fiscal year in which our total annual gross revenue is equal to or more than $1.07 billion; (3) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (4) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Information requested by this Item 3. Quantitative and Qualitative Disclosures about Market Risk is not applicable as we are electing scaled disclosure requirements available to smaller reporting companies with respect to this Item.

Item 4. Controls and Procedures.

The Company has established disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to management, including the principal executive officer (our Chief Executive Officer) and principal financial officer (our Chief Financial Officer), to allow timely decisions regarding required disclosure. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of disclosure controls and procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our disclosure controls and procedures have been designed to provide reasonable assurance of achieving their objectives. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective at the reasonable assurance level as of June 30, 2022.

Changes in internal control over financial reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the six months ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

As of June 30, 2022, we have not experienced any material impact to our internal control over financial reporting due to the COVID-19 pandemic. We are continually monitoring and assessing the COVID-19 pandemic on our internal controls to minimize the impact on their design and operating effectiveness.

27

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may be involved in lawsuits, claims, investigations and proceedings, consisting of intellectual property, commercial, employment and other matters which arise in the ordinary course of business. While the outcome of any such proceedings cannot be predicted with certainty, as of June 30, 2022, we were not party to any legal proceedings that we would expect to have a material adverse impact on our financial position, results of operations, or cash flow.

Item 1A. Risk Factors.

The discussion of our business and operations in this report should be read together with the risk factors contained below, in Item 1A of our Annual Report, and in our other filings with the SEC, which describe various risks and uncertainties to which we are or may become subject. These risks and uncertainties have the potential to affect our business, financial condition, results of operations, cash flows, strategies, or prospects in a material and adverse manner. Except as noted below, there are no material changes from the risk factors as previously disclosed in our Annual Report.

We may fail to continue to meet the listing standards of Nasdaq and, as a result, our common stock may be delisted, which could have a material adverse effect on the liquidity of our common stock.

Our common stock currently trades on The Nasdaq Global Select Market. The Nasdaq Stock Market LLC has requirements that a company must meet in order to remain listed on Nasdaq. In particular, Nasdaq rules require us to maintain a minimum closing bid price of $1.00 per share of our common stock. If the closing bid price of our common stock were to remain below $1.00 per share for 30 consecutive trading days, or we do not meet other listing requirements, we would fail to be in compliance with Nasdaq’s listing standards. The Nasdaq Stock Market LLC initiated the delisting process by issuing a deficiency letter on June 9, 2022, notifying us that the bid price for our common stock had closed below the $1.00 per share minimum for 30 consecutive trading days, and providing us a period of 180 calendar days to regain compliance with the minimum bid price requirement. In order to regain compliance, shares of our common stock would need to maintain a minimum closing bid price of at least $1.00 per share for a minimum of 10 consecutive trading days. In addition, we may be unable to meet other applicable Nasdaq listing requirements, including maintaining minimum levels of stockholders’ equity or market values of our common stock, in which case our common stock could be delisted. If our common stock were to be delisted, the liquidity of our common stock would be adversely affected, and the market price of our common stock could decrease.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Unregistered Sales of Equity Securities

Not applicable.

Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

28

Item 5. Other Information.

None.

29

Item 6. Exhibits.

EXHIBIT INDEX

Exhibit Number	Description
3.1	Amended and Restated Certificate of Incorporation of the Registrant, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-38535 filed with the SEC on June 25, 2018).
3.2	Amended and Restated Bylaws of the Registrant, incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K  (File No. 001-38535 filed with the SEC on June 25, 2018).
31.1*	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended
31.2*	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended
32.1*	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

*     Filed herewith.

+    The certifications furnished in Exhibit 32.1 hereto are deemed to be furnished with this Quarterly Report on Form 10-Q and will not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the Registrant specifically incorporates it by reference.

30

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	APTINYX INC.
Date: August 4, 2022	By:	/s/ Andrew Kidd
		Andrew Kidd
		Chief Executive Officer (Principal executive officer)
Date: August 4, 2022	By:	/s/ Ashish Khanna
		Ashish Khanna
		Chief Financial Officer and Chief Business Officer (Principal financial and accounting officer)

31

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULE 13a-14(a) / 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Andrew Kidd, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2022 of Aptinyx 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 registrant’s 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 registrant’s 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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s 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 registrant’s 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 registrant’s internal control over financial reporting.

Date:	August 4, 2022	By:	/s/ Andrew Kidd
			Andrew Kidd
			Chief Executive Officer (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO RULE 13a-14(a) / 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Ashish Khanna, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2022 of Aptinyx 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 registrant’s 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 registrant’s 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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s 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 registrant’s 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 registrant’s internal control over financial reporting.

Date:	August 4, 2022	By:	/s/ Ashish Khanna
			Ashish Khanna
			Chief Financial Officer and Chief Business Officer (Principal Financial and Accounting Officer)

EX-32.1

EXHIBIT 32.1*

CERTIFICATIONS OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Aptinyx Inc. (the “Company”) for the quarter ended June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certify, pursuant to 18 U.S.C. Section 1350, that, to the best of their knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ Andrew Kidd
	Andrew Kidd
	Chief Executive Officer
	(Principal Executive Officer)
Dated: August 4, 2022
	/s/ Ashish Khanna
	Ashish Khanna
	Chief Financial Officer and Chief Business Officer
	(Principal Financial and Accounting Officer)
Dated: August 4, 2022

* This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2022	Aug. 02, 2022
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2022
Document Transition Report	false
Entity File Number	001-38535
Entity Registrant Name	Aptinyx Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	47-4626057
Entity Address, Address Line One	909 Davis Street
Entity Address, Address Line Two	Suite 600
Entity Address, City or Town	Evanston
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60201
City Area Code	847
Local Phone Number	871-0377
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	APTX
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		67,715,718
Entity Central Index Key	0001674365
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2

XML

Condensed Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 85,269	$ 106,124
Restricted cash	105	197
Prepaid expenses and other current assets	6,766	8,422
Total current assets	92,140	114,743
Other assets	92
Property and equipment, net	74	185
Total assets	92,306	114,928
Current liabilities:
Accounts payable	2,106	622
Accrued expenses and other current liabilities	3,576	5,064
Total current liabilities	5,682	5,686
Term loan, non-current	24,498	14,155
Other long-term liabilities	27	331
Total liabilities	30,207	20,172
Commitments and contingencies (see Note 12)
Stockholders' equity:
Preferred stock, $0.01 par value, 10,000 shares authorized and no shares issued and outstanding as of June 30, 2022 and December 31, 2021
Common stock, $0.01 par value, 150,000 shares authorized as of June 30, 2022 and December 31, 2021, 67,716 issued and outstanding as of June 30, 2022 and December 31, 2021	677	677
Additional paid-in capital	386,803	381,966
Accumulated deficit	(325,381)	(287,887)
Total stockholders' equity	62,099	94,756
Total liabilities and stockholders' equity	$ 92,306	$ 114,928

XML

Condensed Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Jun. 30, 2022	Dec. 31, 2021
Condensed Balance Sheets
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000	10,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	150,000	150,000
Common stock, shares issued	67,716	67,716
Common stock, shares outstanding	67,716	67,716

XML

Condensed Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Revenues:
Collaboration revenue				$ 1,000
Type of Revenue [Extensible List]	aptx:CollaborationRevenueMember	aptx:CollaborationRevenueMember	aptx:CollaborationRevenueMember	aptx:CollaborationRevenueMember
Operating expenses:
Research and development	$ 11,909	$ 14,796	$ 25,511	$ 25,110
General and administrative	5,196	5,070	10,973	10,046
Total operating expenses	17,105	19,866	36,484	35,156
Loss from operations	(17,105)	(19,866)	(36,484)	(34,156)
Other (income) expense, net	(195)	(47)	(224)	(111)
Interest expense	757		1,234
Net loss and comprehensive loss	$ (17,667)	$ (19,819)	$ (37,494)	$ (34,045)
Net loss per share attributable to common stockholders, basic (in dollars per share)	$ (0.26)	$ (0.29)	$ (0.55)	$ (0.51)
Net loss per share attributable to common stockholders, diluted (in dollars per share)	$ (0.26)	$ (0.29)	$ (0.55)	$ (0.51)
Weighted-average number of common shares outstanding, basic (in shares)	67,716	67,381	67,716	66,716
Weighted-average number of common shares outstanding, diluted (in shares)	67,716	67,381	67,716	66,716

XML

Condensed Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Cash flows from operating activities:
Net loss	$ (37,494)	$ (34,045)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense	87	450
Change in fair value of derivative liability associated with contingently issuable warrants	(109)
Non-cash interest expense related to term loan	350
Stock-based compensation expense	4,631	5,133
Changes in operating assets and liabilities:
Prepaid expenses and other assets	1,887	3,692
Accounts receivable		257
Accounts payable	1,406	(775)
Accrued expenses and other liabilities	(1,440)	(467)
Net cash used in operating activities	(30,682)	(25,755)
Cash flows from investing activities:
Proceeds from sale of property and equipment		121
Net cash provided by investing activities		121
Cash flows from financing activities:
Proceeds from stock options exercised		133
Repurchase of shares for tax withholdings		(912)
Proceeds from issuance of term loan, net of issuance costs paid to lender	10,000
Payment of debt issuance costs	(20)
Proceeds from at the market offering, net of sales commission		14,615
Payment of offering costs	(153)	(4)
Net cash provided by financing activities	9,827	13,832
Net (decrease) in cash, cash equivalents and restricted cash	(20,855)	(11,802)
Cash, cash equivalents and restricted cash, at beginning of period	106,321	141,299
Cash, cash equivalents and restricted cash, at end of period	85,466	$ 129,497
Supplemental disclosure of cash flow information:
Cash paid for interest	798
Supplemental disclosure of non-cash investing and financing activities:
Deferred offering costs not yet paid	78
Issuance of warrants in connection with term loan financing	$ 206

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Condensed Statements of Stockholders' Equity - USD ($) $ in Thousands	ATM Offering Common stock	ATM Offering Additional paid-in capital	ATM Offering	Common stock	Additional paid-in capital	Accumulated deficit	Total
Stockholders' (deficit) equity beginning balance at Dec. 31, 2020				$ 633	$ 358,277	$ (213,001)	$ 145,909
Stockholders' (deficit) equity shares beginning balance at Dec. 31, 2020				63,257,000
Stockholders' (Deficit) Equity Rollforward
Issuance of common stock upon vesting of restricted stock				$ 11	(11)
Issuance of common stock upon vesting of restricted stock (in shares)				1,089,000
Repurchase of shares for tax withholdings				$ (3)	(909)		(912)
Repurchase of shares for tax withholdings (in shares)				(347,000)
Stock-based compensation					5,133		5,133
Issuance of common stock	$ 36	$ 14,502	$ 14,538
Issuance of common stock (in shares)	3,630,000		3,629,458
Issuance of common stock upon exercise of stock options					133		133
Issuance of common stock upon exercise of stock options (in shares)				87,000
Net loss						(34,045)	(34,045)
Stockholders' (deficit) equity ending balance at Jun. 30, 2021				$ 677	377,125	(247,046)	130,756
Stockholders' (deficit) equity shares ending balance at Jun. 30, 2021				67,716,000
Stockholders' (deficit) equity beginning balance at Mar. 31, 2021				$ 669	375,499	(227,227)	148,941
Stockholders' (deficit) equity shares beginning balance at Mar. 31, 2021				66,930,000
Stockholders' (Deficit) Equity Rollforward
Issuance of common stock upon vesting of restricted stock				$ 11	(11)
Issuance of common stock upon vesting of restricted stock (in shares)				1,084,000
Repurchase of shares for tax withholdings				$ (3)	(902)		(905)
Repurchase of shares for tax withholdings (in shares)				(345,000)
Stock-based compensation					2,478		2,478
Issuance of common stock upon exercise of stock options					61		61
Issuance of common stock upon exercise of stock options (in shares)				47,000
Net loss						(19,819)	(19,819)
Stockholders' (deficit) equity ending balance at Jun. 30, 2021				$ 677	377,125	(247,046)	130,756
Stockholders' (deficit) equity shares ending balance at Jun. 30, 2021				67,716,000
Stockholders' (deficit) equity beginning balance at Dec. 31, 2021				$ 677	381,966	(287,887)	$ 94,756
Stockholders' (deficit) equity shares beginning balance at Dec. 31, 2021				67,716,000			67,716,000
Stockholders' (Deficit) Equity Rollforward
Stock-based compensation					4,631		$ 4,631
Issuance of warrants in connection with term loan financing					206		206
Net loss						(37,494)	(37,494)
Stockholders' (deficit) equity ending balance at Jun. 30, 2022				$ 677	386,803	(325,381)	$ 62,099
Stockholders' (deficit) equity shares ending balance at Jun. 30, 2022				67,716,000			67,716,000
Stockholders' (deficit) equity beginning balance at Mar. 31, 2022				$ 677	384,522	(307,714)	$ 77,485
Stockholders' (deficit) equity shares beginning balance at Mar. 31, 2022				67,716,000
Stockholders' (Deficit) Equity Rollforward
Stock-based compensation					2,281		2,281
Net loss						(17,667)	(17,667)
Stockholders' (deficit) equity ending balance at Jun. 30, 2022				$ 677	$ 386,803	$ (325,381)	$ 62,099
Stockholders' (deficit) equity shares ending balance at Jun. 30, 2022				67,716,000			67,716,000

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Condensed Statements of Stockholders' Equity (Parenthetical) $ in Thousands	6 Months Ended
	Jun. 30, 2021 USD ($)
Sales commissions and other offering costs	$ 4
ATM Offering
Sales commissions and other offering costs	$ 529

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Organization

6 Months Ended

Jun. 30, 2022

Organization

Organization

1.           Organization

Description of business

Aptinyx Inc. (the “Company” or “Aptinyx”) was incorporated in Delaware on June 24, 2015, and maintains its headquarters in Evanston, Illinois.

Aptinyx is a clinical-stage biopharmaceutical company focused on the discovery, development, and commercialization of novel, proprietary, synthetic small molecules for the treatment of brain and nervous system disorders. Aptinyx has a platform for discovering proprietary compounds that work through a novel mechanism: modulation of N-methyl-D-aspartate receptors (“NMDAr”), which are vital to normal and effective brain and nervous system functions. This mechanism has applicability across numerous nervous system disorders.

Liquidity and capital resources

On July 1, 2019, the Company entered into a Sales Agreement (the “2019 Sales Agreement”) with Cowen and Company, LLC (“Cowen”) pursuant to which the Company may offer and sell shares of its common stock with an aggregate offering price of up to $50.0 million under an “at the market” offering program (the “2019 ATM Offering”). The 2019 Sales Agreement provides that Cowen will be entitled to a sales commission equal to 3.0% of the gross sales price per share of all shares sold under the 2019 ATM Offering. To date, the Company has sold an aggregate of 5,120,940 shares under the 2019 ATM Offering at a weighted-average price of $3.99 per share for net proceeds of $20.4 million after deducting sales commission and other offering expenses, including 3,629,458 shares for net proceeds of $14.5 million during the six months ended June 30, 2021.

On September 15, 2021, the Company entered into a Loan and Security agreement (the “Loan Agreement”) with K2 HealthVentures LLC (“Lender”). The Loan Agreement provides up to $50.0 million principal in term loans, $15.0 million of which was funded at the time the Company entered into the agreement and $10.0 million of which was funded on March 14, 2022. See Note 7 for additional details regarding the Loan Agreement.

On September 16, 2021, the Company entered into a Sales Agreement (the “2021 Sales Agreement”) with Cowen pursuant to which the Company may offer and sell shares of its common stock with an aggregate offering price of up to $50.0 million under an “at the market” offering program (the “2021 ATM Offering”) and which supersedes the 2019 Sales Agreement and 2019 ATM Offering. The 2021 Sales Agreement provides that Cowen will be entitled to a sales commission equal to 3.0% of the gross sales price per share of all shares sold under the 2021 ATM Offering. As of the date of these financial statements, no shares of common stock have been issued and sold pursuant to the 2021 Sales Agreement.

On March 24, 2022, the Company entered into an amendment to the 2021 Sales Agreement (the “2022 Sales Agreement”) pursuant to which the Company may offer and sell shares of its common stock with an aggregate offering price of up to $75.0 million under an “at the market” offering program (the “2022 ATM Offering”) and which supersedes the 2021 Sales Agreement and 2021 ATM Offering. The 2022 Sales Agreement provides that Cowen will be entitled to a sales commission equal to 3.0% of the gross sales price per share of all shares sold under the 2022 ATM Offering. As of the date of these financial statements, no shares of common stock have been issued and sold pursuant to the 2022 Sales Agreement.

As of June 30, 2022, the Company had cash and cash equivalents of $85.3 million, which the Company believes will be sufficient to funds its planned operations for a period of at least twelve months from the date of issuance of these condensed financial statements.

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Summary of significant accounting policies

6 Months Ended

Jun. 30, 2022

Summary of significant accounting policies

Summary of significant accounting policies

2.Summary of significant accounting policies

Basis of presentation

The condensed financial statements of the Company included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted from this report, as is permitted by such rules and regulations. The accompanying condensed financial statements reflect all adjustments consisting of normal, recurring adjustments that are necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. Interim results are not necessarily indicative of results for a full year. Accordingly, these condensed financial statements should be read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “Annual Report”) filed with the SEC on March 23, 2022.

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”), or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial statements upon adoption. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company, and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.

Use of estimates

The condensed financial statements are prepared in conformity with GAAP. This process requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Risk and uncertainties

The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, uncertainty of: the impact of COVID-19 on future clinical study results, the scope, timing, rate of progress, and expense of the Company’s ongoing as well as any additional preclinical studies, clinical studies, and other research and development activities, clinical study enrollment rate or design, the manufacturing of the Company’s product candidates, significant and changing government regulation, and the timing and receipt of any regulatory approvals.

Significant accounting policies

The Company’s significant accounting policies are described herein and in Note 3, “Summary of significant accounting policies,” in the Annual Report. There have been no material changes to the significant accounting policies during the six months ended June 30, 2022.

Recently issued accounting pronouncement

In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”), as amended, which requires a lessee to recognize assets and liabilities on the balance sheet for operating leases and changes many key definitions, including the definition of a lease. The new standard includes a short-term lease exception for leases with a term of 12 months or less, as part of which a lessee can make an accounting policy election not to recognize lease assets and lease liabilities. Lessees will continue to differentiate between finance leases (previously referred to as capital leases) and operating leases using classification criteria that are substantially similar to the previous guidance. The new standard became effective for the Company for annual reporting periods beginning after December 15, 2021, and interim periods within

fiscal years beginning after December 15, 2022, and early adoption is permitted. The Company anticipates that the adoption of this standard will have an impact on its balance sheet due to the recognition of right-of-use assets and lease liabilities; however, the Company is currently evaluating the impact that the adoption of ASU 2016-02 may have on its condensed financial statements.

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Supplemental financial information

6 Months Ended

Jun. 30, 2022

Supplemental financial information

Supplemental financial information

3.           Supplemental financial information

Cash, cash equivalents and restricted cash

Cash and cash equivalents consist of cash and, if applicable, highly liquid investments with an original maturity of three months or less when purchased. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheets that sum to the total of the same such amounts shown in the condensed statements of cash flows (in thousands).

	As of		As of
	June 30,		December 31,
	2022		2021
Cash and cash equivalents	$	85,269	$	106,124
Short-term and long-term restricted cash		197		197
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows	$	85,466	$	106,321

Prepaid expenses and other current assets

Prepaid expenses and other current assets consist of the following (in thousands):

	As of		As of
	June 30,		December 31,
	2022		2021
Prepaid clinical	$	3,515	$	4,693
Prepaid insurance		50		1,122
Prepaid manufacturing costs		2,844		2,241
Other prepaid expenses and current assets		357		366
Total prepaid expenses and other current assets	$	6,766	$	8,422

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consist of the following (in thousands):

	As of		As of
	June 30,		December 31,
	2022		2021
Employee-related expenses	$	1,344	$	2,567
Development costs and sponsored research		1,027		1,347
Clinical trials		592		810
Other		613		340
Total accrued expenses and other current liabilities	$	3,576	$	5,064

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Research collaboration agreement with Allergan

6 Months Ended

Jun. 30, 2022

Research collaboration agreement with Allergan

Research collaboration agreement with Allergan

4.           Research collaboration agreement with Allergan

On July 24, 2015, the Company entered into a Research Collaboration Agreement (“RCA”) with Naurex Inc., a subsidiary of Allergan plc (“Allergan”), which became a wholly owned subsidiary of AbbVie Inc. in May 2020. The RCA was focused on the research and discovery of small molecules that modulate NMDArs. Under the terms of the agreement, the RCA terminated upon the earlier of (i) 180 days after a predetermined anniversary of the effective date of the RCA and (ii) the date on which Allergan exercised the last of three options to acquire molecules from a pool of

eligible compounds, in both cases (clauses (i) and (ii)) subject to potential extension if and as required for the Company to transfer to Allergan information and technology related to compounds that were licensed by Allergan. The jointly funded research activities and option exercise period under the RCA, including the associated payments by Allergan to the Company, came to their contractual conclusions in accordance with the agreement in August 2020 and February 2021, respectively. Under the terms of the agreement, Allergan was to pay the Company $1.0 million for each option exercised by Allergan. On February 23, 2021, Allergan exercised its option to acquire exclusive rights to develop and commercialize AGN-281705 within a predefined set of indications. For the six months ended June 30, 2021, the Company recognized the $1.0 million non-refundable milestone payment within collaboration revenue in the statements of operations as there were no remaining performance obligations associated with the optioned compound.

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Fair value measurements

6 Months Ended

Jun. 30, 2022

Fair value measurements

Fair value measurements

5.           Fair value measurements

ASC 820, Fair Value Measurement (“ASC 820”), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tier fair value hierarchy that distinguishes between the following:

● Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;

● Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and

● Level 3 inputs are unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The carrying values reported in the Company’s balance sheets for cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued expenses are reasonable estimates of their fair values due to the short-term nature of these items.

Assets and liabilities measured at fair value on a recurring basis as of June 30, 2022, are as follows (in thousands):

	June 30,
	2022		Level 1		Level 2		Level 3
Assets
Money market funds, included in cash and cash equivalents	$	76,973	$	76,973	$	—	$	—
Money market funds, included in restricted cash		197		197		—		—
Total Assets	$	77,170	$	77,170	$	—	$	—
Liabilities
Derivative liability, included in other long-term liabilities	$	16	$	—	$	—	$	16
Total Liabilities	$	16	$	—	$	—	$	16

Assets measured at fair value on a recurring basis as of December 31, 2021, are as follows (in thousands):

	December 31,
	2021		Level 1		Level 2		Level 3
Assets
Money market funds, included in cash and cash equivalents	$	103,859	$	103,859	$	—	$	—
Money market funds, included in restricted cash		197		197		—		—
Total Assets	$	104,056	$	104,056	$	—	$	—
Liabilities
Derivative liability, included in other long-term liabilities	$	331	$	—	$	—	$	331
Total Liabilities	$	331	$	—	$	—	$	331

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Property and equipment, net

6 Months Ended

Jun. 30, 2022

Property and equipment, net

Property and equipment, net

6.           Property and equipment, net

Property and equipment are as follows (in thousands):

	As of		As of
	June 30,		December 31,
	2022		2021
Office equipment and furniture		152		152
Laboratory equipment		401		401
Leasehold improvements		979		979
Less accumulated depreciation		(1,458)		(1,347)
Property and equipment, net	$	74	$	185

Depreciation expense was less than $0.1 million for each of the three months ended June 30, 2022 and 2021, respectively, and $0.1 million and $0.5 million for the six months ended June 30, 2022 and 2021, respectively. The Company disposed of certain laboratory equipment during the six months ended June 30, 2021, that were fully depreciated at the time of disposal.

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Debt

6 Months Ended

Jun. 30, 2022

Debt

Debt

7.           Debt

On September 15, 2021, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with K2 HealthVentures LLC (the “Lender”). The Lender has agreed to make available to the Company term loans in an aggregate principal amount of up to $50.0 million under the Loan Agreement. The Company plans to use the proceeds of the term loans to support clinical development as well as for working capital and general corporate purposes. The Loan Agreement provides a term loan commitment of $50.0 million in four potential tranches: (i) a $15.0 million term loan facility funded on September 15, 2021 (the “First Tranche Term Loan”); (ii) a $10.0 million term loan facility (the “Second Tranche Term Loan”) funded on March 14, 2022; (iii) a $10.0 million term loan facility (the “Third Tranche Term Loan”) available at the Company’s option between July 1, 2022, and December 1, 2022, subject to the draw of the Second Tranche Term Loan and positive Phase 2 clinical data from NYX-2925 or NYX-458 and progression of another clinical asset; and (iv) a $15.0 million term loan facility (the “Fourth Tranche Term Loan”) available through July 1, 2023, at the Company’s option but subject to review of financial and clinical plans and Lender’s Investment Committee approval. All four of these term loans have a maturity date of September 1, 2025.

Borrowings under all four term loan facilities bear interest at a floating per annum rate equal to the greater of (i) 7.95% and (ii) the Prime Rate plus 4.70%. The Company is permitted to make interest-only payments on the First Tranche Term Loan for the first 24 months following the funding date. The interest-only period can be extended by an additional 12 months, subject to the funding of the Second Tranche Term Loan and the funding of the Third Tranche Term Loan. The term of the combined facility will be 48 months, with repayment in monthly installments commencing at the end of the resulting interest-only period as outlined above through the end of the 48-month term.

The Company is obligated to pay a final fee equal to 6.45% of the aggregate amount of the term loans funded (“Exit Fee”), to occur upon the earliest of (i) the maturity date, (ii) the acceleration of the term loans, and (iii) the prepayment of the term loans. The Company has the option to prepay all, but not less than all, of the outstanding principal balance of the term loans under the Loan Agreement. If the Company prepays all of the term loans prior to the maturity date, it will pay the Lender a prepayment penalty fee based on a percentage of the outstanding principal balance, equal to 3% if the payment occurs on or before 24 months after the initial funding date, 2% if the prepayment occurs more than 24 months after, but on or before 36 months after the initial funding date, or 1% if the prepayment occurs more than 36 months after the initial funding date. The Company also is obligated to pay the Lender an origination fee of 0.8% of all term loans funded at the time of funding.

The Lender may, at its option, elect to convert any portion of no more than $4 million of the then outstanding term loan amount and all accrued and unpaid interest thereon into shares of the Company’s common stock at a conversion price of the lesser of $4.25 per share and the price per share of the common stock in the Company’s next equity offering in which the Company receives at least $20.0 million of gross proceeds. The Company determined that the embedded conversion option is not required to be separated from the term loan. The embedded conversion option meets the derivative accounting scope exception since the embedded conversion option is indexed to the Company’s own common stock and qualifies for classification within stockholders’ equity.

The Company’s obligations under the Loan Agreement are secured by a first priority security interest in substantially all of its assets. The Loan Agreement contains customary representations and warranties, and also includes customary events of default, including payment default, breach of covenants, change of control, and material adverse effects. The Loan Agreement restricts certain activities, such as disposing of the Company’s business or certain assets, incurring additional debt or liens or making payments on other debt, making certain investments and declaring dividends, acquiring or merging with another entity, engaging in transactions with affiliates or encumbering intellectual property, among others. There are no financial covenants associated with the Loan Agreement. The Company was in compliance with all non-financial covenants under the Loan Agreement as of June 30, 2022.

Upon the occurrence of an event of default, a default interest rate of an additional 5% per annum may be applied to the outstanding loan balances, and the Lender may declare all outstanding obligations immediately due and payable and exercise all of its rights and remedies as set forth in the Loan Agreement and under applicable law.

The Company recorded interest expense related to the Loan Agreement of $0.8 million for the three months ended June 30, 2022, and $1.2 million for the six months ended June 30, 2022.

Future principal debt payments of the term loans funded as of June 30, 2022, are as follows (in thousands):

2023	$	2,867
2024		12,167
2025		9,966
2026		—
Total principal payments		25,000
Exit Fee		1,613
Total principal payments and Exit Fee		26,613
Less: Unamortized debt discount related to warrants		(420)
Less: Unamortized debt discount related to Exit Fee		(1,335)
Less: Unamortized debt issuance costs		(360)
Term loan, non-current	$	24,498

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Stock incentive plans

6 Months Ended

Jun. 30, 2022

Stock incentive plans

Stock incentive plans

8.           Stock incentive plans

On June 5, 2018, the Company’s stockholders approved the 2018 Stock Option and Incentive Plan (the “2018 Plan”), which became effective on June 20, 2018.

Stock-based compensation expense

Non-cash stock-based compensation expense recognized in the accompanying condensed statements of operations relating to stock options, restricted stock awards, and restricted stock units for the three and six months ended June 30, 2022 and 2021, was as follows (in thousands):

	Three months ended				Six months ended
	June 30,				June 30,
	2022		2021		2022		2021
Research and development	$	444	$	676	$	819	$	1,413
General and administrative		1,837		1,802		3,812		3,720
Total stock‑based compensation expense	$	2,281	$	2,478	$	4,631	$	5,133

Stock options

The table below summarizes activity related to stock options (in thousands, except per share amounts):

				Weighted‑
		Weighted‑		average
		average		remaining	Aggregate
		exercise		contractual	intrinsic
Options	Shares	price		term	value
Outstanding, December 31, 2021	10,713	$	5.36	8.07	$	718
Granted	2,286		2.98
Exercised	—		—
Forfeited and canceled	(383)		3.97
Outstanding, June 30, 2022	12,616	$	4.97	7.82	$	19
Vested and expected to vest at June 30, 2022	12,616	$	4.97	7.82	$	19
Exercisable at June 30, 2022	6,282	$	6.64	6.61	$	2

During the six months ended June 30, 2022 and 2021, the Company granted 2.3 million and 3.1 million stock options, respectively, and these options had a weighted-average grant-date fair value of $2.28 and $2.73 per share, respectively. The weighted-average grant-date fair value of options was determined using the Black-Scholes option-pricing model. The assumptions used in the Black-Scholes option-pricing model for options granted during the six months ended June 30, 2022, were similar to those as described in the Annual Report, except for the manner in which the expected volatility was determined. The expected volatility for the Company’s options granted during the six months ended June 30, 2022, is based on a weighted-average of the historical volatility of share values of publicly traded companies within the biotechnology industry, which includes the historical volatility of the Company’s stock since the Company’s initial public offering. As of June 30, 2022, there was $14.6 million of total unrecognized stock-based compensation expense related to non-vested stock options, which is expected to be recognized over a weighted-average period of 2.7 years. The options have a ten-year life and generally vest over a period of four years, subject to continuous employment.

Restricted stock units

In June 2020, the Company issued an aggregate of 205,200 restricted stock units to employees. The restricted stock units issued in 2020 vested ten months from the date of grant. Such shares were not accounted for as outstanding until they vested. Non-cash restricted stock unit award expense recognized in the accompanying condensed statements of operations was $0.0 million and $0.2 million for the three months ended in June 30, 2022 and 2021, respectively, and $0.0 million and $0.8 million for the six months ended June 30, 2022 and 2021, respectively. There were no unvested restricted stock units as of June 30, 2022.

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Warrants and derivative liability

6 Months Ended

Jun. 30, 2022

Warrants and derivative liability

Warrants and derivative liability

9.         Warrants and derivative liability

Warrants

On September 15, 2021, the Company entered into the Loan Agreement with the Lender pursuant to which the Lender may provide the Company with term loans in an aggregate principal amount of up to $50.0 million.

On September 15, 2021, in connection with the funding of the First Tranche Term Loan, the Company issued a warrant exercisable for 147,600 shares of the Company’s common stock at an exercise price of $2.29 per share. The warrant is immediately exercisable for 147,600 shares and expires on September 15, 2031.

On March 14, 2022, in connection with the funding of the Second Tranche Term Loan, the Company issued a warrant exercisable for 98,399 shares of the Company’s common stock at an exercise price of $2.29 per share. The warrant is immediately exercisable for 98,399 shares and expires on September 15, 2031.

No warrants had been exercised as of June 30, 2022. Any shares of the Company’s common stock issued upon exercise of the warrants are permitted to be settled in unregistered shares. The warrants are classified as equity as they meet all of the conditions under GAAP for equity classification. The Company has calculated the fair value of the warrants for initial measurement and date of funding of the Second Tranche Term Loan, and reassesses whether equity classification for the warrants is appropriate upon any changes to the warrants or capital structure, at each balance sheet date.

The Company determined that the fair value of the warrants issued in connection with the First Tranche Term Loan and Second Tranche Term Loan was $0.3 million and $0.2 million, respectively. The specific assumptions used to determine the fair value of the warrants were as follows:

	First Tranche		Second Tranche
	Term Loan		Term Loan
Expected volatility	95	%	93	%
Expected dividends	None		None
Expected term	5.00 Years		5.00 Years
Risk-free rate	0.81	%	2.10	%

Derivative Liability

The Additional Warrants’ (as defined below) derivative liability will be remeasured each reporting period until settled or extinguished with subsequent changes in fair value recorded through other income (expense), net in the condensed statements of operations. The fair value of the Additional Warrants derivative liability was determined using a Black-Scholes option pricing model based on the same input assumptions above, with an additional assessment required for the probability that the Additional Tranche Term Loans will be funded which would trigger the issuance of the Additional Warrants.

The Company is conditionally obligated to issue a fixed number of additional warrants (“Additional Warrants”) in the amount of 344,398 shares upon the funding of the Second, Third and Fourth Tranche Term Loans with the same exercise price and contractual term. The contingent obligation to issue the Additional Warrants did not meet the derivative scope exception or equity classification criteria and were accounted for as a derivative liability. The contingently issuable Additional Warrants derivative liability had an initial fair value of $0.3 million and was recorded as additional debt discount and as a separate derivative liability within other long-term liabilities in the condensed balance sheet.

As a result of the funding of the Second Tranche Term Loan, the Company issued a warrant exercisable for 98,399 shares of the Company’s common stock at $2.29 per share. Upon issuing the warrants, the Company reclassified the related portion of its Additional Warrants derivative liability into equity. The remaining Additional Warrant Liability that remains outstanding was remeasured as of period end. The Company recorded a $0.1 million loss on change in fair value through other (income) expense, net in the condensed statement of operations.

The following table provides a reconciliation of the beginning and ending balances for the Company’s Additional Warrants derivative liability recognized in connection with the term loan measured at fair value using significant unobservable inputs (Level 3):

	Additional
	Warrants
Balance at December 31, 2021	$	331
Fair value of Additional Warrant Derivative Liability issued during the period		—
Change in fair value		(109)
Derecognition		(206)
Balance at June 30, 2022	$	16

The specific assumptions used to determine the fair value of the warrants as of June 30, 2022, and December 31, 2021 were as follows:

	June 30,		December 31,
	2022		2021
Expected volatility	97	%	95	%
Expected dividends	None		None
Expected term	5.00 Years		5.00 Years
Risk-free rate	3.01	%	1.26	%

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Net loss per share

6 Months Ended

Jun. 30, 2022

Net loss per share

Net loss per share

10.         Net loss per share

Basic and diluted net loss per share attributable to common stockholders was calculated as follows for the three and six months ended June 30, 2022 and 2021 (in thousands, except per share data):

	Three months ended				Six months ended
	June 30,				June 30,
	2022		2021		2022		2021
Numerator:
Net loss attributable to common stockholders	$	(17,667)	$	(19,819)	$	(37,494)	$	(34,045)
Denominator:
Weighted-average common shares outstanding—basic and diluted		67,716		67,381		67,716		66,716
Net loss per share attributable to common stockholders—basic and diluted	$	(0.26)	$	(0.29)	$	(0.55)	$	(0.51)

The following common stock equivalents outstanding as of June 30, 2022 and 2021, were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been anti-dilutive (in thousands):

	As of
	June 30,
	2022	2021
Stock options issued and outstanding	12,616	9,488
Warrants	246	—
Total	12,862	9,488

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Income taxes

6 Months Ended

Jun. 30, 2022

Income taxes

Income taxes

11.          Income taxes

Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided if based upon the weight of available evidence, it is more likely than not that some or

all of the deferred tax assets will not be realized. The Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets, including its net operating losses. Based on its history of operating losses, the Company believes that it is more likely than not that the benefit of its deferred tax assets will not be realized. Accordingly, the Company has provided a full valuation allowance for deferred tax assets as of June 30, 2022, and December 31, 2021.

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Commitments and contingencies

6 Months Ended

Jun. 30, 2022

Commitments and contingencies

Commitments and contingencies

12.         Commitments and contingencies

Contingencies

From time to time, the Company may be subject to occasional lawsuits, investigations, and claims arising out of the normal conduct of business. The Company has no significant pending or threatened litigation as of June 30, 2022.

Indemnifications

In the normal course of business, the Company enters into contracts that contain a variety of indemnifications with its employees, licensors, suppliers and service providers. Further, the Company indemnifies its directors and officers who are, or were, serving at the Company’s request in such capacities. The Company’s maximum exposure under these arrangements is unknown as of June 30, 2022. The Company does not anticipate recognizing any significant losses relating to these arrangements.

Leases

The Company enters into various non-cancelable, operating lease agreements for its facilities and equipment in order to conduct its operations. The Company expenses rent on a straight-line basis over the life of the lease and has recorded deferred rent on the Company’s balance sheets within both accrued expenses and other current liabilities and other long-term liabilities.

Total rent expense, inclusive of lease incentives, under all the operating lease agreements amounted to $0.2 million for each of the three months ended June 30, 2022 and 2021, and $0.4 million for each of the six months ended June 30, 2022 and 2021.

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Summary of significant accounting policies (Policies)

6 Months Ended

Jun. 30, 2022

Summary of significant accounting policies

Basis of presentation

Basis of presentation

The condensed financial statements of the Company included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted from this report, as is permitted by such rules and regulations. The accompanying condensed financial statements reflect all adjustments consisting of normal, recurring adjustments that are necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. Interim results are not necessarily indicative of results for a full year. Accordingly, these condensed financial statements should be read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “Annual Report”) filed with the SEC on March 23, 2022.

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”), or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial statements upon adoption. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company, and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.

Use of estimates

Use of estimates

The condensed financial statements are prepared in conformity with GAAP. This process requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Risk and uncertainties

Risk and uncertainties

The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, uncertainty of: the impact of COVID-19 on future clinical study results, the scope, timing, rate of progress, and expense of the Company’s ongoing as well as any additional preclinical studies, clinical studies, and other research and development activities, clinical study enrollment rate or design, the manufacturing of the Company’s product candidates, significant and changing government regulation, and the timing and receipt of any regulatory approvals.

Recently issued accounting pronouncement

Recently issued accounting pronouncement

In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”), as amended, which requires a lessee to recognize assets and liabilities on the balance sheet for operating leases and changes many key definitions, including the definition of a lease. The new standard includes a short-term lease exception for leases with a term of 12 months or less, as part of which a lessee can make an accounting policy election not to recognize lease assets and lease liabilities. Lessees will continue to differentiate between finance leases (previously referred to as capital leases) and operating leases using classification criteria that are substantially similar to the previous guidance. The new standard became effective for the Company for annual reporting periods beginning after December 15, 2021, and interim periods within

fiscal years beginning after December 15, 2022, and early adoption is permitted. The Company anticipates that the adoption of this standard will have an impact on its balance sheet due to the recognition of right-of-use assets and lease liabilities; however, the Company is currently evaluating the impact that the adoption of ASU 2016-02 may have on its condensed financial statements.

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Supplemental financial information (Tables)

6 Months Ended

Jun. 30, 2022

Supplemental financial information

Schedule of cash, cash equivalents and restricted cash

. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheets that sum to the total of the same such amounts shown in the condensed statements of cash flows (in thousands).

	As of		As of
	June 30,		December 31,
	2022		2021
Cash and cash equivalents	$	85,269	$	106,124
Short-term and long-term restricted cash		197		197
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows	$	85,466	$	106,321

Schedule of prepaid expenses and other current assets

Prepaid expenses and other current assets consist of the following (in thousands):

	As of		As of
	June 30,		December 31,
	2022		2021
Prepaid clinical	$	3,515	$	4,693
Prepaid insurance		50		1,122
Prepaid manufacturing costs		2,844		2,241
Other prepaid expenses and current assets		357		366
Total prepaid expenses and other current assets	$	6,766	$	8,422

Schedule of accrued expenses and other current liabilities

Accrued expenses and other current liabilities consist of the following (in thousands):

	As of		As of
	June 30,		December 31,
	2022		2021
Employee-related expenses	$	1,344	$	2,567
Development costs and sponsored research		1,027		1,347
Clinical trials		592		810
Other		613		340
Total accrued expenses and other current liabilities	$	3,576	$	5,064

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Fair value measurements (Tables)

6 Months Ended

Jun. 30, 2022

Fair value measurements

Schedule of assets and liabilities measured at fair value

Assets and liabilities measured at fair value on a recurring basis as of June 30, 2022, are as follows (in thousands):

	June 30,
	2022		Level 1		Level 2		Level 3
Assets
Money market funds, included in cash and cash equivalents	$	76,973	$	76,973	$	—	$	—
Money market funds, included in restricted cash		197		197		—		—
Total Assets	$	77,170	$	77,170	$	—	$	—
Liabilities
Derivative liability, included in other long-term liabilities	$	16	$	—	$	—	$	16
Total Liabilities	$	16	$	—	$	—	$	16

Assets measured at fair value on a recurring basis as of December 31, 2021, are as follows (in thousands):

	December 31,
	2021		Level 1		Level 2		Level 3
Assets
Money market funds, included in cash and cash equivalents	$	103,859	$	103,859	$	—	$	—
Money market funds, included in restricted cash		197		197		—		—
Total Assets	$	104,056	$	104,056	$	—	$	—
Liabilities
Derivative liability, included in other long-term liabilities	$	331	$	—	$	—	$	331
Total Liabilities	$	331	$	—	$	—	$	331

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Property and equipment, net (Tables)

6 Months Ended

Jun. 30, 2022

Property and equipment, net

Schedule of property and equipment, net

Property and equipment are as follows (in thousands):

	As of		As of
	June 30,		December 31,
	2022		2021
Office equipment and furniture		152		152
Laboratory equipment		401		401
Leasehold improvements		979		979
Less accumulated depreciation		(1,458)		(1,347)
Property and equipment, net	$	74	$	185

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Debt (Tables)

6 Months Ended

Jun. 30, 2022

Debt

Schedule of maturities of long-term debt

Future principal debt payments of the term loans funded as of June 30, 2022, are as follows (in thousands):

2023	$	2,867
2024		12,167
2025		9,966
2026		—
Total principal payments		25,000
Exit Fee		1,613
Total principal payments and Exit Fee		26,613
Less: Unamortized debt discount related to warrants		(420)
Less: Unamortized debt discount related to Exit Fee		(1,335)
Less: Unamortized debt issuance costs		(360)
Term loan, non-current	$	24,498

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Stock incentive plans (Tables)

6 Months Ended

Jun. 30, 2022

Stock incentive plans

Allocation of stock-based compensation expenses

Non-cash stock-based compensation expense recognized in the accompanying condensed statements of operations relating to stock options, restricted stock awards, and restricted stock units for the three and six months ended June 30, 2022 and 2021, was as follows (in thousands):

	Three months ended				Six months ended
	June 30,				June 30,
	2022		2021		2022		2021
Research and development	$	444	$	676	$	819	$	1,413
General and administrative		1,837		1,802		3,812		3,720
Total stock‑based compensation expense	$	2,281	$	2,478	$	4,631	$	5,133

Summary of stock option activity

The table below summarizes activity related to stock options (in thousands, except per share amounts):

				Weighted‑
		Weighted‑		average
		average		remaining	Aggregate
		exercise		contractual	intrinsic
Options	Shares	price		term	value
Outstanding, December 31, 2021	10,713	$	5.36	8.07	$	718
Granted	2,286		2.98
Exercised	—		—
Forfeited and canceled	(383)		3.97
Outstanding, June 30, 2022	12,616	$	4.97	7.82	$	19
Vested and expected to vest at June 30, 2022	12,616	$	4.97	7.82	$	19
Exercisable at June 30, 2022	6,282	$	6.64	6.61	$	2

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Warrants and derivative liability (Tables)

6 Months Ended

Jun. 30, 2022

Class of Warrant or Right [Line Items]

Schedule of fair value of the warrants or rights

	June 30,		December 31,
	2022		2021
Expected volatility	97	%	95	%
Expected dividends	None		None
Expected term	5.00 Years		5.00 Years
Risk-free rate	3.01	%	1.26	%

Schedule of reconciliation of liabilities with significant unobservable inputs

	Additional
	Warrants
Balance at December 31, 2021	$	331
Fair value of Additional Warrant Derivative Liability issued during the period		—
Change in fair value		(109)
Derecognition		(206)
Balance at June 30, 2022	$	16

Loan agreement

Class of Warrant or Right [Line Items]

Schedule of fair value of the warrants or rights

	First Tranche		Second Tranche
	Term Loan		Term Loan
Expected volatility	95	%	93	%
Expected dividends	None		None
Expected term	5.00 Years		5.00 Years
Risk-free rate	0.81	%	2.10	%

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Net loss per share (Tables)

6 Months Ended

Jun. 30, 2022

Net loss per share

Schedule of basic and diluted net loss per share attributable to common stockholders calculation

Basic and diluted net loss per share attributable to common stockholders was calculated as follows for the three and six months ended June 30, 2022 and 2021 (in thousands, except per share data):

	Three months ended				Six months ended
	June 30,				June 30,
	2022		2021		2022		2021
Numerator:
Net loss attributable to common stockholders	$	(17,667)	$	(19,819)	$	(37,494)	$	(34,045)
Denominator:
Weighted-average common shares outstanding—basic and diluted		67,716		67,381		67,716		66,716
Net loss per share attributable to common stockholders—basic and diluted	$	(0.26)	$	(0.29)	$	(0.55)	$	(0.51)

Schedule of anti-dilutive securities excluded from computation of diluted net loss per share

The following common stock equivalents outstanding as of June 30, 2022 and 2021, were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been anti-dilutive (in thousands):

	As of
	June 30,
	2022	2021
Stock options issued and outstanding	12,616	9,488
Warrants	246	—
Total	12,862	9,488

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Organization (Details) - USD ($) $ / shares in Units, $ in Thousands						6 Months Ended		36 Months Ended
	Mar. 24, 2022	Mar. 14, 2022	Sep. 16, 2021	Sep. 15, 2021	Jul. 01, 2019	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Dec. 31, 2021
Organization
Proceeds from public offering, net of underwriters' discounts							$ 14,615
Cash and cash equivalents						$ 85,269		$ 85,269	$ 106,124
Expected period of sufficient funds for planned operations						12 months
Proceeds from issuance of term loan						$ 10,000
ATM Offering
Organization
Number of common stock shares newly issued							3,629,458	5,120,940
Public offering price of the shares sold						$ 3.99		$ 3.99
Proceeds from public offering, net of underwriters' discounts							$ 14,500	$ 20,400
Threshold shares agreed to be sold					$ 50,000
Sales commission percentage					3.00%
2021 ATM Offering
Organization
Number of common stock shares newly issued						0
Threshold shares agreed to be sold			$ 50,000
Sales commission percentage			3.00%
2022 ATM Offering
Organization
Number of common stock shares newly issued						0
Threshold shares agreed to be sold	$ 75,000
Sales commission percentage	3.00%
Loan agreement
Organization
Maximum borrowing capacity				$ 50,000
First Tranche Term Loan
Organization
Proceeds from issuance of term loan				15,000
Principal amount				$ 15,000
Second Tranche Term Loan
Organization
Proceeds from issuance of term loan		$ 10,000
Principal amount		$ 10,000

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Supplemental financial information - Cash, cash equivalents and restricted cash (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021	Jun. 30, 2021	Dec. 31, 2020
Supplemental financial information
Cash and cash equivalents	$ 85,269	$ 106,124
Short-term and long-term restricted cash	197	197
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows	$ 85,466	$ 106,321	$ 129,497	$ 141,299

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Supplemental financial information - Prepaid expenses and other current assets (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Supplemental financial information
Prepaid clinical	$ 3,515	$ 4,693
Prepaid insurance	50	1,122
Prepaid manufacturing costs	2,844	2,241
Other prepaid expenses and current assets	357	366
Total prepaid expenses and other current assets	$ 6,766	$ 8,422

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Supplemental financial information - Accrued expenses and other current liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Supplemental financial information
Employee-related expenses	$ 1,344	$ 2,567
Development costs and sponsored research	1,027	1,347
Clinical trials	592	810
Other	613	340
Total accrued expenses and other current liabilities	$ 3,576	$ 5,064

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Research collaboration agreement with Allergan (Details) - RCA $ in Millions		6 Months Ended
	Jul. 24, 2015 USD ($) Option	Jun. 30, 2021 USD ($)
Research collaboration agreement with Allergan
Agreement term	180 days
Number of options to acquire molecules | Option	3
Payment of option exercise fee	$ 1.0
Milestone payment		$ 1.0

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Fair value measurements (Details) - Recurring - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Fair value measurements
Total Assets	$ 77,170	$ 104,056
Derivative liability, included in other long-term liabilities	16	331
Total Liabilities	16	331
Money market funds, included in cash and cash equivalents
Fair value measurements
Money market funds	76,973	103,859
Money market funds, included in restricted cash
Fair value measurements
Money market funds	197	197
Level 1
Fair value measurements
Total Assets	77,170	104,056
Level 1 | Money market funds, included in cash and cash equivalents
Fair value measurements
Money market funds	76,973	103,859
Level 1 | Money market funds, included in restricted cash
Fair value measurements
Money market funds	197	197
Level 3
Fair value measurements
Derivative liability, included in other long-term liabilities	16	331
Total Liabilities	$ 16	$ 331

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Property and equipment, net (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Property and equipment
Less accumulated depreciation	$ (1,458)		$ (1,458)		$ (1,347)
Property and equipment, net	74		74		185
Depreciation			100	$ 500
Maximum
Property and equipment
Depreciation	100	$ 100
Office equipment and furniture
Property and equipment
Property and equipment, gross	152		152		152
Laboratory equipment
Property and equipment
Property and equipment, gross	401		401		401
Leasehold improvements
Property and equipment
Property and equipment, gross	$ 979		$ 979		$ 979

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Debt (Details) $ / shares in Units, $ in Thousands			3 Months Ended	6 Months Ended
	Mar. 14, 2022 USD ($)	Sep. 15, 2021 USD ($) tranche $ / shares	Jun. 30, 2022 USD ($)	Jun. 30, 2022 USD ($)
Debt Instrument [Line Items]
Proceeds from issuance of term loan				$ 10,000
Interest expense			$ 757	1,234
Loan agreement
Debt Instrument [Line Items]
Maximum borrowing capacity		$ 50,000
Number of tranches | tranche		4
Interest rate		7.95%
Term of debt		48 months
Final fee percentage		6.45%
Origination fee		0.80%
Conversion price | $ / shares		$ 4.25
Equity offering proceeds threshold to set debt conversion price		$ 20,000
Additional default interest rate		5.00%
Interest expense			$ 800	$ 1,200
Loan agreement | Minimum
Debt Instrument [Line Items]
Threshold amount for conversion		$ 4,000
Loan agreement | Prepayment occurs on or before 24 months after initial funding
Debt Instrument [Line Items]
Prepayment penalty percentage		3.00%
Threshold period in which prepayment occurs		24 months
Loan agreement | Prepayment occurs more than 24 months and on or before 36 months after initial funding
Debt Instrument [Line Items]
Prepayment penalty percentage		2.00%
Loan agreement | Prepayment occurs more than 24 months and on or before 36 months after initial funding | Minimum
Debt Instrument [Line Items]
Threshold period in which prepayment occurs		24 months
Loan agreement | Prepayment occurs more than 24 months and on or before 36 months after initial funding | Maximum
Debt Instrument [Line Items]
Threshold period in which prepayment occurs		36 months
Loan agreement | Prepayment occurs more than 36 months after initial funding
Debt Instrument [Line Items]
Prepayment penalty percentage		1.00%
Threshold period in which prepayment occurs		36 months
Loan agreement | Prime
Debt Instrument [Line Items]
Spread (as a percent)		4.70%
First Tranche Term Loan
Debt Instrument [Line Items]
Proceeds from issuance of term loan		$ 15,000
Principal amount		$ 15,000
Period for which interest only payment is permitted		24 months
Additional period for which interest only payment can be extended		12 months
Second Tranche Term Loan
Debt Instrument [Line Items]
Proceeds from issuance of term loan	$ 10,000
Principal amount	$ 10,000
Third Tranche Term Loan Facility
Debt Instrument [Line Items]
Principal amount		$ 10,000
Third Tranche Term Loan For 15 Million [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity		$ 15,000

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Debt - Future Principal Debt Payments on The Loan Payable (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Long-term Debt, Rolling Maturity [Abstract]
2023	$ 2,867
2024	12,167
2025	9,966
Total principal payments	25,000
Exit Fee	1,613
Total principal payments and Exit Fee	26,613
Less: Unamortized debt discount related to warrants	(420)
Less: Unamortized debt discount related to Exit Fee	(1,335)
Less: Unamortized debt issuance costs	(360)
Term loan, non-current	$ 24,498	$ 14,155

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Stock incentive plans - Stock-based compensation expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 2,281	$ 2,478	$ 4,631	$ 5,133
Research and development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	444	676	819	1,413
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 1,837	$ 1,802	$ 3,812	$ 3,720

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Stock incentive plans - Activity related to stock options (Details) - Stock options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Shares
Outstanding, at the beginning of the period	10,713
Granted	2,286	3,100
Forfeited and canceled	(383)
Outstanding, at the end of the period	12,616		10,713
Vested and expected to vest	12,616
Exercisable	6,282
Weighted-average exercise price
Outstanding, at the beginning of the period	$ 5.36
Granted	2.98
Forfeited and canceled	3.97
Outstanding, at the end of the period	4.97		$ 5.36
Vested and expected to vest	4.97
Exercisable at the end of the period	$ 6.64
Weighted-average remaining contractual term
Weighted-average remaining contractual term	7 years 9 months 25 days		8 years 25 days
Vested and expected to vest	7 years 9 months 25 days
Exercisable	6 years 7 months 9 days
Aggregate intrinsic value
Outstanding, at the beginning of the period	$ 718
Outstanding, at the end of the period	19		$ 718
Vested and expected to vest	19
Exercisable	$ 2
Weighted-average grant date fair value per share	$ 2.28	$ 2.73
Unrecognized stock-based compensation related to non-vested stock options	$ 14,600
Expenses recognized over a weighted-average period (in years)	2 years 8 months 12 days
Term of award	10 years
Vesting period	4 years

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Stock incentive plans - Restricted stock units (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Shares
Non-cash restricted stock unit award expense recognized		$ 2,281	$ 2,478	$ 4,631	$ 5,133
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	10 months
Shares
Unvested restricted stock outstanding		0		0
Issued (in shares)	205,200
Non-cash restricted stock unit award expense recognized		$ 0	$ 200	$ 0	$ 800

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Warrants and derivative liability (Details)			6 Months Ended
	Jun. 30, 2022 USD ($) shares	Sep. 15, 2021 USD ($) item $ / shares shares	Jun. 30, 2022 USD ($)	Mar. 14, 2022 USD ($) $ / shares shares	Dec. 31, 2021 USD ($)
Class of Warrant or Right [Line Items]
Warrants exercised | shares	0
Expected volatility
Class of Warrant or Right [Line Items]
Warrants and rights outstanding, measurement input	97		97		95
Expected dividends
Class of Warrant or Right [Line Items]
Warrants and rights outstanding, measurement input	0		0		0
Expected term
Class of Warrant or Right [Line Items]
Warrants and rights outstanding, measurement input	5.00		5.00		5.00
Risk-free rate
Class of Warrant or Right [Line Items]
Warrants and rights outstanding, measurement input	3.01		3.01		1.26
Loan agreement
Class of Warrant or Right [Line Items]
Maximum borrowing capacity		$ 50,000,000.0
First Tranche Term Loan
Class of Warrant or Right [Line Items]
Issued warrant exercisable | shares		147,600
Exercise price | $ / shares		$ 2.29
Derivative liability, included in other long-term liabilities		$ 300,000
First Tranche Term Loan | Expected volatility
Class of Warrant or Right [Line Items]
Warrants and rights outstanding, measurement input		95
First Tranche Term Loan | Expected dividends
Class of Warrant or Right [Line Items]
Warrants and rights outstanding, measurement input		0
First Tranche Term Loan | Expected term
Class of Warrant or Right [Line Items]
Warrants and rights outstanding, measurement input		5.00
First Tranche Term Loan | Risk-free rate
Class of Warrant or Right [Line Items]
Warrants and rights outstanding, measurement input		0.81
Second Tranche Term Loan
Class of Warrant or Right [Line Items]
Issued warrant exercisable | shares				98,399
Exercise price | $ / shares				$ 2.29
Change in fair value of warrants			$ 100,000
Derivative liability, included in other long-term liabilities				$ 200,000
Second Tranche Term Loan | Expected volatility
Class of Warrant or Right [Line Items]
Warrants and rights outstanding, measurement input				93
Second Tranche Term Loan | Expected dividends
Class of Warrant or Right [Line Items]
Warrants and rights outstanding, measurement input				0
Second Tranche Term Loan | Expected term
Class of Warrant or Right [Line Items]
Warrants and rights outstanding, measurement input				5.00
Second Tranche Term Loan | Risk-free rate
Class of Warrant or Right [Line Items]
Warrants and rights outstanding, measurement input				2.10
Additional Warrants
Class of Warrant or Right [Line Items]
Warrants obligated to be issued upon the funding of the second, third and fourth tranche term loans | item		344,398
Derivative liability, included in other long-term liabilities	$ 300,000		$ 300,000

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Warrants and derivative liability - Reconciliation of company's additional warrants (Details) - Additional Warrants $ in Thousands	6 Months Ended
	Jun. 30, 2022 USD ($)
Reconciliation of company's additional warrants derivative liability
Balance at beginning of period	$ 331
Change in fair value	(109)
Derecognition	(206)
Balance at end of period	$ 16

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Net loss per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Numerator:
Net loss attributable to common stockholders	$ (17,667)	$ (19,819)	$ (37,494)	$ (34,045)
Denominator:
Weighted-average number of common shares outstanding, basic (in shares)	67,716	67,381	67,716	66,716
Weighted-average number of common shares outstanding, diluted (in shares)	67,716	67,381	67,716	66,716
Net loss per share attributable to common stockholders, basic (in dollars per share)	$ (0.26)	$ (0.29)	$ (0.55)	$ (0.51)
Net loss per share attributable to common stockholders, diluted (in dollars per share)	$ (0.26)	$ (0.29)	$ (0.55)	$ (0.51)

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Net loss per share - Anti-dilutive securities (Details) - shares shares in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Common stock equivalents outstanding excluded from the computation of diluted net loss per share attributable to common stockholders
Outstanding anti-dilutive securities excluded from computation of diluted net loss per share	12,862	9,488
Stock options
Common stock equivalents outstanding excluded from the computation of diluted net loss per share attributable to common stockholders
Outstanding anti-dilutive securities excluded from computation of diluted net loss per share	12,616	9,488
Warrants
Common stock equivalents outstanding excluded from the computation of diluted net loss per share attributable to common stockholders
Outstanding anti-dilutive securities excluded from computation of diluted net loss per share	246

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Commitments and contingencies (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Commitments and contingencies
Rent expense inclusive of lease incentives	$ 0.2	$ 0.2	$ 0.4	$ 0.4