QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
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(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☒ | Smaller reporting company | ||||
Emerging growth company |
Page |
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PART I – FINANCIAL INFORMATION |
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26 |
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PART II – OTHER INFORMATION |
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76 |
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77 |
• | We are a clinical stage company with a limited operating history, have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future. We have no products approved for commercial sale and have not generated any revenue from product sales. |
• | We will require additional capital to fund our operations and if we fail to obtain necessary financing, we will not be able to complete the development and commercialization of our product candidates. Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates. |
• | Although we have initiated clinical trials for certain of our product candidates, we have not yet demonstrated an ability to successfully complete clinical trials of our product candidates, obtain marketing approvals, manufacture a commercial-scale medicine, or arrange for a third party to do so on our behalf; or conduct sales and marketing activities necessary for successful commercialization of our product candidates. |
• | If we are unable to obtain regulatory approval for our product candidates and successfully commercialize them, or if we experience significant delays in doing so, our business will be materially harmed. |
• | Our ongoing and planned clinical trials or those of our collaborators may reveal significant adverse events not seen in our preclinical and clinical studies and may result in a safety profile that could inhibit regulatory approval or market acceptance of any of our product candidates. |
• | Stem cell transplant is a high-risk procedure with curative potential that may result in complications or adverse events for patients in our clinical trials or for patients that use any of our product candidates, if approved. |
• | If we are not able to identify a safe and effective dose for any of our antibody-drug conjugates, or ADCs, we may need to delay, abandon or limit our development of any potential product candidates. |
• | Clinical development involves a lengthy and expensive process, with an uncertain outcome. We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of any product candidates. If we encounter delays or difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected. |
• | The results of earlier studies and interim data from our ongoing studies may not be predictive of future clinical trial results, and we may fail to establish an adequate safety or efficacy profile to conduct advanced clinical trials or obtain regulatory approval for our product candidates. |
• | We have no experience as a company in obtaining regulatory approval for a drug or biologic. Even if we complete the necessary clinical trials, we cannot predict when, or if, we will obtain regulatory approval to commercialize a product candidate we may develop, and any such approval may be for a narrower indication than we seek. |
• | Because we are developing product candidates for the treatment of diseases in which there is little clinical experience using new technologies, there is increased risk that the FDA, the EMA, or other regulatory authorities may not consider the endpoints of our clinical trials to provide clinically meaningful results, and these results may be difficult to analyze. |
• | We rely on third parties to conduct our preclinical and clinical trials and will rely on them to perform other tasks for us. If these third parties do not successfully carry out their contractual duties, meet expected deadlines or comply with regulatory requirements, we may not be able to obtain regulatory approval for or commercialize our product candidates and our business could be substantially harmed. |
• | We currently rely, and expect to continue to rely, on third parties to manufacture our clinical product supplies, and we intend to rely on third parties to produce and process our product candidates, if approved. This reliance increases the risk that we may not have sufficient quantities of our product candidates or may not be able to produce such quantities at an acceptable cost or quality level, which could delay, prevent or impair our development or commercialization efforts. |
• | Any contamination in our or our third parties’ manufacturing process, shortages of raw materials or reagents or failure of any of our key suppliers to deliver necessary components of our product candidates could result in delays in our clinical development or marketing schedules. |
• | We may never obtain FDA approval for any of our product candidates in the U.S., and even if we do, we may never obtain approval for or commercialize any of our product candidates in any other jurisdiction, which would limit our ability to realize their full market potential. |
• | Even if our product candidates are approved by government regulators, the commercial success of any of our product candidates will depend upon the degree of market acceptance by physicians, patients, third-party payors and others in the medical community. Coverage and reimbursement may be limited or unavailable in certain market segments for our product candidates, if approved, which could make it difficult for us to sell any product candidates or therapies profitably. |
• | We currently have no marketing and sales organization and have no experience in marketing products. If we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell our product candidates, we may not be able to generate product revenue. |
• | We face substantial competition, including from companies with greater financial, technical, research, manufacturing, marketing, distribution and other resources than us, which may result in others discovering, developing or commercializing products before or more successfully than we do. |
• | We are highly dependent on intellectual property licensed from third parties and termination of any of these licenses could result in the loss of significant rights, which would harm our business. |
• | It is difficult and costly to protect our intellectual property and our proprietary technologies, and we may not be able to ensure their protection. If we are unable to obtain and maintain sufficient intellectual property protection for our product candidates, or our technologies, we may not be able to compete effectively in our markets and our business may be adversely affected. |
• | The commercial success of any of our product candidates will depend upon the degree of market acceptance by physicians, patients, third-party payors and others in the medical community. |
• | We currently depend, and may in the future continue to depend, on collaborations with third parties for the research, development, and commercialization of certain of the product candidates we may develop. If any such collaborations are not successful, we may not be able to capitalize on the market potential of those product candidates and our business may be adversely affected. |
• | If we are not able to establish collaborations on commercially reasonable terms, we may have to alter our development and commercialization plans. |
• | The coronavirus, or COVID-19, pandemic or any future pandemic, epidemic or outbreak of any other highly infectious disease could have a material adverse effect on our business, financial condition and results of operations. |
• | If we lose key management personnel, or if we fail to recruit additional highly skilled personnel, our ability to identify and develop new or next generation product candidates will be impaired, which could result in loss of market opportunities or market share and could make us less competitive. |
• | The trading price of our common stock has been, and will likely continue to be, highly volatile. As a result of this volatility, investors may not be able to sell common stock at or above the purchase price and may lose some or all of their investment. |
ITEM 1. |
FINANCIAL STATEMENTS. |
March 31, 2022 |
December 31, 2021 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ | $ | ||||||
Marketable securities |
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Prepaid expenses and other current assets |
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Total current assets |
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Restricted cash |
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Operating lease, right-of-use |
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Property and equipment, net |
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Total assets |
$ | $ | ||||||
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Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Accounts payable |
$ | $ | ||||||
Accrued expenses and other current liabilities |
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Operating lease liability, current portion |
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Total current liabilities |
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Operating lease liability, net of current portion |
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Deferred rent |
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Total liabilities |
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Commitments and contingencies (Note 7) |
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Stockholders’ Equity: |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
( |
) | ( |
) | ||||
Accumulated deficit |
( |
) | ( |
) | ||||
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
$ | $ | ||||||
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Three Months Ended March 31, |
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2022 |
2021 |
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Operating expenses: |
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Research and development |
$ | $ | ||||||
General and administrative |
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Total operating expenses |
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Loss from operations |
( |
) | ( |
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Interest and other income, net |
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Net loss |
$ | ( |
) | $ | ( |
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Net loss per share, basic and diluted |
$ | ( |
) | $ | ( |
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Weighted average common shares outstanding, basic and diluted |
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Comprehensive loss: |
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Net loss |
$ | ( |
) | $ | ( |
) | ||
Other comprehensive loss: |
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Unrealized gains (losses) on marketable securities |
( |
) | ||||||
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Total other comprehensive income (loss) |
( |
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Total comprehensive loss |
$ | ( |
) | $ | ( |
) | ||
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Accumulated |
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Common Stock |
Additional Paid-in |
Other Comprehensive |
Accumulated |
Total Stockholders’ |
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Shares |
Amount |
Capital |
Income (Loss) |
Deficit |
Equity |
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Three Months Ended March 31, 2022 |
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Balances at December 31, 2021 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
Stock-based compensation expense |
— | — | — | — | ||||||||||||||||||||
Unrealized losses on marketable securities |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
Net loss |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||
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Balances at March 31, 2022 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
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Three Months Ended March 31, 2021 |
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Balances at December 31, 2020 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
Vesting of restricted stock |
— | — | — | — | — | |||||||||||||||||||
Issuance of common stock upon exercise of stock options |
— | — | — | |||||||||||||||||||||
Stock-based compensation expense |
— | — | — | — | ||||||||||||||||||||
Unrealized gains on marketable securities |
— | — | — | — | ||||||||||||||||||||
Net loss |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||
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Balances at March 31, 2021 |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
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Three months ended March 31, |
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2022 |
2021 |
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Cash flows from operating activities: |
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Net loss |
$ | ( |
) | $ | ( |
) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
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Stock-based compensation expense |
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Depreciation and amortization expense |
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Loss on disposal of property and equipment |
— | |||||||
Amortization of right-of-use-asset |
— |
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Net amortization of premiums on marketable securities |
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Changes in operating assets and liabilities: |
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Prepaid expenses and other current assets |
( |
) | ||||||
Accounts payable |
( |
) | ||||||
Accrued expenses and other current liabilities |
( |
) | ( |
) | ||||
Operating lease liabilities |
( |
) | — | |||||
Deferred rent |
— | |||||||
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Net cash used in operating activities |
( |
) | ( |
) | ||||
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Cash flows from investing activities: |
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Purchases of property and equipment |
( |
) | ( |
) | ||||
Purchases of marketable securities |
( |
) | — | |||||
Maturities of marketable securities |
— | |||||||
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Net cash provided by (used in) investing activities |
( |
) | ||||||
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Cash flows from financing activities: |
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Proceeds from exercise of common stock options |
— | |||||||
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Net cash provided by financing activities |
— | |||||||
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Net decrease in cash, cash equivalents and restricted cash |
( |
) | ( |
) | ||||
Cash, cash equivalents and restricted cash at beginning of period |
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Cash, cash equivalents and restricted cash at end of period |
$ | $ | ||||||
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• | Level 1—Quoted prices in active markets for identical assets or liabilities. |
• | Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. |
• | Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. |
As of March 31, |
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2022 |
2021 |
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Stock options to purchase common stock |
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Unvested restricted common stock and units |
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Shares of common stock issuable under Employee Stock Purchase Plan |
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Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
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U.S. treasury notes (due within one year) |
$ | $ | $ | ( |
) | $ | ||||||||||
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Total |
$ | $ | $ | ( |
) | $ | ||||||||||
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Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
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U.S. treasury notes (due within one year) |
$ | $ | $ | ( |
) | $ | ||||||||||
U.S. treasury notes (due after one year through two years) |
( |
) | ||||||||||||||
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Total |
$ | $ | $ | ( |
) | $ | ||||||||||
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Fair Value Measurements at March 31, 2022 Using: |
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Level 1 |
Level 2 |
Level 3 |
Total |
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Cash equivalents: |
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Money market funds |
$ |
$ |
— | $ |
— | $ |
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Marketable securities: |
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U.S. treasury notes |
— | — | ||||||||||||||
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Total |
$ |
$ |
$ |
— | $ |
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Fair Value Measurements at December 31, 2021 Using: |
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Level 1 |
Level 2 |
Level 3 |
Total |
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Cash equivalents: |
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Money market funds |
$ | $ | — | $ | — | $ | ||||||||||
Marketable securities: |
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U.S. treasury notes |
— | — | ||||||||||||||
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Total |
$ | $ | $ | — | $ | |||||||||||
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March 31, 2022 |
December 31, 2021 |
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Accrued external research and development expenses |
$ | $ | ||||||
Accrued payroll and related expenses |
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Deferred rent, current portion |
— | |||||||
Accrued professional fees |
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Accrued other |
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$ | $ | |||||||
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Three Months Ended March 31, |
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2022 |
2021 |
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Research and development expenses |
$ | $ | ||||||
General and administrative expenses |
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$ | $ | |||||||
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Three Months Ended |
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March 31, 2022 |
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Operating lease cost |
$ | |||
Short-term lease cost |
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Variable lease cost |
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$ | ||||
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Three Months Ended |
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March 31, 2022 |
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Cash paid for amounts included in the measurement of operating lease liabilities |
$ | |||
Operating lease liabilities arising from obtaining right-of-use |
$ |
March 31, 2022 |
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Weighted-average remaining lease term—operating lease (in years) |
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Weighted-average discount rate—operating lease |
% |
2022 (nine months) |
$ | |||
2023 |
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2024 |
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2025 |
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2026 |
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Thereafter |
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Total future minimum lease payments |
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Less: imputed interest |
( |
) | ||
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Total operating lease liabilities |
$ | |||
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March 31, 2022 |
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Current operating lease liability |
$ | |||
Operating lease liability, net of current portion |
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Total operating lease liabilities |
$ | |||
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2022 |
$ | |||
2023 |
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2024 |
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2025 |
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2026 |
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Thereafter |
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$ | ||||
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ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
• | our expectation that our existing capital resources will be sufficient to enable us to fund our currently planned development of MGTA-117, MGTA-145 and our other product candidates; |
• | the anticipated benefits of our revised operating plan and our expectation that our existing cash, cash equivalents and marketable securities will enable us to fund our operating expenses and capital expenditure requirements into the second quarter of 2024; |
• | the initiation, timing and success of clinical trials of MGTA-117, MGTA-145 and any other product candidates; |
• | our ability to commence and enroll patients in our clinical trials at the pace that we project; |
• | regulatory actions with respect to our product candidates or our competitors’ products and product candidates; |
• | the outcomes of our preclinical studies; |
• | our ability to manufacture MGTA-117, MGTA-145 or any other product candidate in conformity with the U.S. Food and Drug Administration’s requirements and to scale up manufacturing of our product candidates to commercial scale, if approved; |
• | whether the results of our trials will be sufficient to support domestic or foreign regulatory approvals for MGTA-117, MGTA-145 or any other product candidates we may develop; |
• | our reliance on third parties to conduct our clinical trials; |
• | our reliance on third-party contract development and manufacturer organizations to manufacture and supply our product candidates for us; |
• | our ability to establish clinical programs moving forward in multiple indications, with a rapidly advancing portfolio and sustainable platform; |
• | our ability to obtain, including on an expedited basis, and maintain regulatory approval of MGTA-117, MGTA-145 or any other product candidates we may develop; |
• | the level of expenses related to any of our product candidates or clinical development programs; |
• | the benefits of the use of MGTA-117, MGTA-145 or any other product candidate, if approved; |
• | our ability to successfully commercialize MGTA-117, MGTA-145 or any other product candidates we may identify and pursue, if approved; |
• | the rate and degree of market acceptance of MGTA-117, MGTA-145 or any other product candidates we may identify and pursue; |
• | our expectations regarding government and third-party payor coverage and reimbursement; |
• | our ability to obtain and maintain intellectual property protection for MGTA-117, MGTA-145 or any other product candidates we may identify and pursue; |
• | our ability to obtain orphan drug designation for any of our product candidates we may identify and pursue; |
• | our ability to successfully build a specialty sales force and commercial infrastructure; |
• | our ability to compete with companies currently producing or engaged in the clinical development of treatments for the disease indications that we pursue and treatment modalities that we develop; |
• | our ability to successfully find collaborators for any of our current and future programs and product candidates; |
• | our ability to retain and recruit key personnel; |
• | our estimates of our expenses, ongoing losses, future revenue, capital requirements and our needs for or ability to obtain additional financing; |
• | our expectations regarding the time during which we will continue to be an emerging growth company or smaller reporting company as defined in federal securities regulations; |
• | our financial performance; and |
• | developments and projections relating to our competitors or our industry. |
• | initiate, enroll and conduct a Phase 1/2 clinical trial for MGTA-117 and Phase 2 clinical trial for MGTA-145; |
• | initiate and conduct preclinical studies and clinical trials of our other product candidates; |
• | develop any other future product candidates we may choose to pursue; |
• | seek marketing approval for any of our product candidates that successfully complete clinical development, if any; |
• | maintain compliance with applicable regulatory requirements; |
• | develop and scale up our capabilities to support our ongoing preclinical activities and clinical trials for our product candidates and commercialization of any of our product candidates for which we obtain marketing approval, if any; |
• | maintain, expand, protect and enforce our intellectual property portfolio; |
• | develop and expand our sales, marketing and distribution capabilities for our product candidates for which we obtain marketing approval, if any; and |
• | expand our operational, financial and management systems and increase personnel, including to support our clinical development and commercialization efforts and our operations as a public company. |
• | employee-related expenses, including salaries and related costs, and stock-based compensation expense, for employees engaged in research and development functions; |
• | expenses incurred in connection with the preclinical and clinical development of our product candidates, including under agreements with contract research organizations, or CROs; |
• | the cost of consultants and third-party contract development and manufacturing organizations, or CDMOs, that manufacture drug products for use in our preclinical studies and clinical trials; |
• | facilities, depreciation and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance and supplies; and |
• | payments made under third-party licensing agreements. |
• | successful completion of preclinical studies and clinical trials; |
• | receipt and related terms of marketing approvals from applicable regulatory authorities; |
• | raising additional funds necessary to complete clinical development of and commercialize our product candidates; |
• | obtaining and maintaining patent, trade secret and other intellectual property protection and regulatory exclusivity for our product candidates; |
• | making arrangements with third-party manufacturers, or establishing manufacturing capabilities, for both clinical and commercial supplies of our product candidates; |
• | developing and implementing marketing and reimbursement strategies; |
• | establishing sales, marketing and distribution capabilities and launching commercial sales of our products, if and when approved, whether alone or in collaboration with others; |
• | acceptance of our products, if and when approved, by patients, the medical community and third-party payors; |
• | effectively competing with other therapies; |
• | obtaining and maintaining third-party coverage and adequate reimbursement; |
• | protecting and enforcing our rights in our intellectual property portfolio; |
• | maintaining a continued acceptable safety profile of the products following approval; and |
• | the continuing impact of the COVID-19 pandemic on our industry, the healthcare system, and our current and future operations. |
Three Months Ended March 31, |
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2022 |
2021 |
Change |
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(in thousands) |
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Operating expenses: |
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Research and development |
$ | 16,547 | $ | 11,728 | $ | 4,819 | ||||||
General and administrative |
7,287 | 6,969 | 318 | |||||||||
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Total operating expenses |
23,834 | 18,697 | 5,137 | |||||||||
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Loss from operations |
(23,834 | ) | (18,697 | ) | (5,137 | ) | ||||||
Interest and other income, net |
884 | 1,208 | (324 | ) | ||||||||
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Net loss |
$ | (22,950 | ) | $ | (17,489 | ) | $ | (5,461 | ) | |||
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Three Months Ended March 31, |
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2022 |
2021 |
Change |
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(in thousands) |
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Direct research and development expenses by program: |
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Conditioning |
$ | 6,436 | $ | 2,355 | $ | 4,081 | ||||||
Mobilization |
1,132 | 1,010 | 122 | |||||||||
Cell therapy |
31 | 399 | (368 | ) | ||||||||
Unallocated expenses: |
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Personnel related (including stock-based compensation) |
5,888 | 4,540 | 1,348 | |||||||||
Consultant (including stock-based compensation) |
277 | 237 | 40 | |||||||||
Facility related and other |
2,783 | 3,187 | (404 | ) | ||||||||
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|
|||||||
Total research and development expenses |
$ | 16,547 | $ | 11,728 | $ | 4,819 | ||||||
|
|
|
|
|
|
Three Months Ended March 31, |
||||||||||||
2022 |
2021 |
Change |
||||||||||
(in thousands) |
||||||||||||
Personnel related (including stock-based compensation) |
$ | 3,452 | $ | 3,270 | $ | 182 | ||||||
Professional and consultant |
1,612 | 1,762 | (150 | ) | ||||||||
Facility related and other |
2,223 | 1,937 | 286 | |||||||||
|
|
|
|
|
|
|||||||
Total general and administrative expenses |
$ | 7,287 | $ | 6,969 | $ | 318 | ||||||
|
|
|
|
|
|
Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
(in thousands) |
||||||||
Net cash used in operating activities |
$ | (19,741 | ) | $ | (16,774 | ) | ||
Net cash provided by (used in) investing activities |
(40,144 | ) | 7,493 | |||||
Net cash provided by financing activities |
— | 418 | ||||||
|
|
|
|
|||||
Net decrease in cash, cash equivalents and restricted cash |
$ | (59,885 | ) | $ | (8,863 | ) | ||
|
|
|
|
• | accrued research and development expenses; and |
• | stock-based compensation. |
ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS. |
ITEM 4. |
CONTROLS AND PROCEDURES. |
ITEM 1. |
LEGAL PROCEEDINGS. |
ITEM 1A. |
RISK FACTORS. |
• | the initiation, progress, timing, costs and results of research, preclinical studies and clinical trials for our product candidates; |
• | the costs to develop, maintain, and enhance a sustainable, scalable, reproducible, and transferable manufacturing process for our product candidates; |
• | the clinical development plans we establish for these product candidates; |
• | the number and characteristics of product candidates that we develop or may in-license; |
• | the cost of milestone or other payments under any current or future license, acquisition, collaboration or other strategic transaction agreements; |
• | the outcome, timing and cost of meeting regulatory requirements established by the FDA, the European Medical Agency, or EMA, and other comparable foreign regulatory authorities; |
• | the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights; |
• | the cost of defending material intellectual property disputes, including patent infringement actions brought by third parties against us or our product candidates; |
• | the effect of competing technological and market developments; |
• | the cost and timing of completion of commercial-scale outsourced manufacturing activities; |
• | the cost of seeking to attract, hire and retain skilled personnel; |
• | the cost of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products on our own; and |
• | the cost of, and ability to maintain on reasonable commercial and economic terms, sufficient office and laboratory space to support our operations. |
• | identify product candidates and complete research and preclinical and clinical development of any product candidates we may identify; |
• | seek and obtain regulatory and marketing approvals for any of our product candidates for which we complete clinical trials; |
• | launch and commercialize any of our product candidates for which we obtain regulatory and marketing approval by establishing a sales force, marketing, and distribution infrastructure or, alternatively, collaborating with a commercialization partner; |
• | qualify for adequate coverage and reimbursement by government and third-party payors for any of our product candidates for which we obtain regulatory and marketing approval; |
• | develop, maintain, and enhance a sustainable, scalable, reproducible, and transferable manufacturing process for the product candidates we may develop; |
• | establish and maintain supply and manufacturing relationships with third parties that can provide adequate, in both amount and quality, products and services to support clinical development and the market demand for any of our product candidates for which we obtain regulatory and marketing approval; |
• | obtain market acceptance of any product candidates we may develop as viable treatment options; |
• | address competing technological and market developments; |
• | implement internal systems and infrastructure, as needed; |
• | negotiate favorable terms in any collaboration, licensing, or other arrangements into which we may enter and perform our obligations in such collaborations; |
• | maintain, protect, and expand our portfolio of intellectual property rights, including patents, trade secrets, and know-how; |
• | avoid and defend against third-party interference or infringement claims; and |
• | attract, hire, and retain qualified personnel. |
• | successful completion of preclinical studies and successful enrollment and completion of clinical trials, including toxicology studies, biodistribution studies and minimally efficacious dose studies in animals, where applicable, under the FDA’s current Good Clinical Practices, or cGCPs, and the FDA’s current Good Laboratory Practices; |
• | effective IND applications or Clinical Trial Authorizations that allow commencement of our planned clinical trials or future clinical trials for our product candidates; |
• | positive results from our preclinical and clinical programs that support a finding of safety and effectiveness and an acceptable risk-benefit profile of our product candidates in the intended populations; |
• | receipt of regulatory approvals from applicable regulatory authorities; |
• | establishment of arrangements with third-party manufacturers for clinical supply and, where applicable, commercial manufacturing capabilities; |
• | successful development of our internal or external manufacturing processes or transfer to larger-scale facilities operated by either a third-party contract development and manufacturing organization, or CDMO, or by us; |
• | establishment and maintenance of patent and trade secret protection or regulatory exclusivity for our product candidates; |
• | commercial launch of our product candidates, if and when approved, whether alone or in collaboration with others; |
• | acceptance of our product candidates, if and when approved, by patients, the medical community and third-party payors; |
• | effective competition against other therapies; |
• | establishment and maintenance of healthcare coverage and adequate reimbursement; |
• | enforcement and defense of intellectual property rights and claims; and |
• | maintenance of a continued acceptable safety profile of our product candidates following approval. |
• | preclinical study results may show the therapies to be less effective than desired or to have harmful or problematic side effects; |
• | clinical trial results may show the therapies to be less effective than expected (e.g., the trial failed to meet its primary endpoint or the results are not competitive compared to other therapeutic alternatives) or to have unacceptable side effects or toxicities; |
• | failure to receive the necessary regulatory approvals or a delay in receiving such approvals, which delays may be caused by, among other things, slow enrollment in clinical trials, delays due to investigations concerning safety, length of time to achieve study endpoints, additional requirements for data by regulatory agencies, additional time requirements for data analysis, or biologics license application, or BLA, preparation, discussions with the FDA, an FDA request for additional preclinical or clinical data, or unexpected safety or manufacturing issues; |
• | manufacturing costs, formulation issues, pricing or reimbursement issues, or other factors that make the therapy uneconomical; and |
• | the proprietary rights of others and their competing products and technologies that may prevent the therapy from being commercialized. |
• | regulators, IRBs, or ethics committees may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; |
• | we may experience delays in reaching, or fail to reach, agreement on acceptable terms with prospective trial sites and prospective contract research organization, or CROs, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; |
• | clinical trials of any product candidates may fail to show safety or efficacy, produce negative or inconclusive results and we may decide, or regulators may require us, to conduct additional preclinical studies or clinical trials or we may decide to abandon product development programs; |
• | the number of patients required for clinical trials of any product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, or participants may drop out of these clinical trials or fail to return for post-treatment follow-up at a higher rate than we anticipate; |
• | our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all, or may deviate from the clinical trial protocol or drop out of the trial, which may require that we add new clinical trial sites or investigators; |
• | we may elect to, or regulators, IRBs or ethics committees may require, that we or our investigators, suspend or terminate clinical research or trials for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; |
• | the cost of preclinical studies and clinical trials of any product candidates may be greater than we anticipate, and/or greater than we have budgeted for; |
• | the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; and |
• | our product candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulators, IRBs or ethics committees to suspend or terminate the trials, or reports may arise from preclinical or clinical testing of other blood and immune reset and cell-based therapies that raise safety or efficacy concerns about our product candidates. |
• | the patient eligibility criteria defined in the protocol; |
• | the size of the patient population required for analysis of the trial’s primary endpoints; |
• | the proximity of patients to trial sites; |
• | the design of the trial; |
• | our ability to recruit clinical trial investigators with the appropriate competencies and experience; |
• | our ability to obtain and maintain patient consents; and |
• | the risk that patients enrolled in clinical trials will drop out of the trials before completion. |
• | the research methodology used may not be successful in identifying potential indications and/or product candidates; |
• | potential product candidates may, after further study, be shown to have harmful adverse effects or other characteristics that indicate they are unlikely to be effective drugs; or |
• | it may take greater human and financial resources than we will possess to identify additional therapeutic opportunities for our product candidates or to develop suitable potential product candidates through internal research programs, thereby limiting our ability to develop, diversify and expand our product portfolio. |
• | reliance on the third party for regulatory compliance and quality assurance; |
• | the possible breach of the manufacturing agreement by the third party; |
• | regulatory or judicial termination or modification of our agreement with the third party due to the third party’s insolvency or winddown, a change in regulations or other reason; |
• | the possible misappropriation of our proprietary information, including our trade secrets and know-how; and |
• | the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us. |
• | the efficacy, durability and safety of such product candidates as demonstrated in clinical trials; |
• | the potential and perceived advantages of product candidates over alternative treatments; |
• | the cost of treatment relative to alternative treatments; |
• | our ability to offer the product for sale at competitive prices; |
• | the clinical indications for which the product candidate is approved by the FDA or the EMA; |
• | the product’s convenience and ease of administration compared to alternative treatments; |
• | the willingness of physicians to prescribe new therapies; |
• | the willingness of the target patient population to try new therapies; |
• | the prevalence and severity of any side effects; |
• | product labeling or product insert requirements of the FDA, EMA or other regulatory authorities, including any limitations or warnings contained in a product’s approved labeling; |
• | relative convenience and ease of administration; |
• | the strength of marketing and distribution support; |
• | the timing of market introduction of competitive products; |
• | publicity concerning our products or competing products and treatments; |
• | changes in the standard of care for the targeted indications for the product; and |
• | sufficient third-party payor coverage and adequate reimbursement. |
• | a covered benefit under its health plan; |
• | safe, effective and medically necessary; |
• | appropriate for the specific patient; |
• | cost-effective; and |
• | neither experimental nor investigational. |
• | the scope of rights, if any, granted under the license agreement and other interpretation-related issues; |
• | whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the license agreement; |
• | whether our licensor or its licensor had the right to grant the license agreement; |
• | whether third parties are entitled to compensation or equitable relief, such as an injunction, for our use of the intellectual property without their authorization; |
• | our right to sublicense patent and other rights to third parties under collaborative development relationships; |
• | whether we are complying with our obligations with respect to the use of the licensed technology in relation to our development and commercialization of product candidates; |
• | our involvement in the prosecution of the licensed patents and our licensors’ overall patent enforcement strategy; |
• | the allocation of ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and by us and our partners; and |
• | the amounts of royalties, milestones or other payments due under the license agreement. |
• | the USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process. There are situations in which noncompliance can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, competitors might be able to enter the market earlier than would otherwise have been the case; |
• | patent applications may not result in any patents being issued; |
• | patents that may be issued or in-licensed may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable or otherwise may not provide any competitive advantage; |
• | our competitors, many of whom have substantially greater resources and many of whom have made significant investments in competing technologies, may seek or may have already obtained patents that will limit, interfere with or eliminate our ability to make, use, and sell our potential product candidates; |
• | there may be significant pressure on the U.S. government and international governmental bodies to limit the scope of patent protection both inside and outside the U.S. for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; and |
• | countries other than the U.S. may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign competitors a better opportunity to create, develop and market competing product candidates. |
• | others may be able to make products that are similar to any product candidates we may develop or utilize similar technology but that are not covered by the claims of the patents that we license or own; |
• | we, or our current or future licensors might not have been the first to make the inventions covered by the issued patent or pending patent application that we license or own; |
• | we, or our current or future licensors might not have been the first to file patent applications covering certain of our or their inventions; |
• | others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our owned or licensed intellectual property rights; |
• | it is possible that our pending owned or licensed patent applications or those that we may own or license in the future will not lead to issued patents; |
• | issued patents that we hold rights to may be held invalid or unenforceable, including as a result of legal challenges by our competitors; |
• | our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; |
• | we may not develop additional proprietary technologies that are patentable; |
• | the patents of others may harm our business; and |
• | we may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property. |
• | Collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations. |
• | Collaborators may not pursue development and commercialization of any product candidates we may develop or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborator’s strategic focus, available funding or external factors such as an acquisition that diverts resources or creates competing priorities. |
• | Collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials, or require a new formulation of a product candidate for clinical testing. |
• | A collaborator’s product candidate may have a safety or efficacy profile that would impact the collaborator’s ability to continue to pursue the development and commercialization of its product candidate, which in turn, would negatively impact our ability to continue to pursue the development and commercialization of our product candidate. |
• | Collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our medicines or product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours. |
• | Collaborators with marketing and distribution rights to one or more medicines may not commit sufficient resources to the marketing and distribution of such medicine or medicines. |
• | Collaborators may not properly obtain, maintain, enforce, or defend our intellectual property or proprietary rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our proprietary information or expose us to potential litigation. |
• | Material disputes may arise between the collaborators and us that result in the delay or termination of the research, development, or commercialization of our medicines or product candidates or that result in costly litigation or arbitration that diverts management attention and resources. |
• | We may lose certain valuable rights under circumstances identified in our collaborations, including if we undergo a change of control. |
• | Collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates. |
• | Collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all. If a present or future collaborator of ours were to be involved in a business combination, the continued pursuit and emphasis on our product development or commercialization program under such collaboration could be delayed, diminished, or terminated. |
• | The COVID-19 pandemic has had, and will likely continue to have, an adverse impact on various aspects of our ongoing and planned clinical trials, and preclinical studies. |
• | Other potential impacts of the COVID-19 pandemic on our various clinical trials include impacts on patient dosing and study monitoring, which may be paused or delayed due to changes in policies at various clinical sites; federal, state, local or foreign laws, rules and regulations, including quarantines or other travel restrictions; the prioritization of healthcare resources toward pandemic efforts, including diminished attention from physicians serving as our clinical trial investigators and reduced availability of site staff supporting the conduct of our clinical trials; and interruption or delays in the operations of the U.S. Food and Drug Administration, or FDA, among other reasons related to the COVID-19 pandemic. If the COVID-19 pandemic continues, other aspects of our clinical trials will likely be adversely affected, delayed or interrupted, including, for example, site initiation, patient recruitment and enrollment, availability of clinical trial materials and data analysis. Some patients and clinical investigators may not be able to comply with clinical trial protocols and patients may choose to withdraw from our studies or we may choose to, or be required to, pause enrollment and or patient dosing in our ongoing clinical trials in order to preserve health resources and protect trial participants. It is unknown how long these pauses or disruptions could continue. |
• | We currently rely on third parties, including CROs, CDMOs, and other contractors and consultants to, among other things, conduct our preclinical and clinical trials, manufacture raw materials, manufacture and supply our product candidates, ship investigational drugs and clinical trial samples, perform quality testing and supply other goods and services to run our business. If any such third party is adversely impacted by restrictions resulting from the COVID-19 pandemic, including staffing shortages, production slowdowns and disruptions in delivery systems, our supply chain may be disrupted, which could limit our ability to manufacture our product candidates for our clinical trials and conduct our research and development operations. |
• | We have established a hybrid work-from-home policy for all employees, as well as safety measures for those using our offices and laboratory facilities that are designed to comply with applicable federal, state and local guidelines instituted in response to the COVID-19 pandemic. Our increased reliance on personnel working from home may negatively impact productivity, or disrupt, delay, or otherwise adversely impact our business. In addition, this could increase our cyber security risk, create data accessibility concerns and make us more susceptible to communication disruptions, any of which could adversely impact our business operations or delay necessary interactions with local and federal regulators, ethics committees, manufacturing sites, research or clinical trial sites and other important agencies and contractors. |
• | Our employees and contractors conducting non-business critical research and development activities may not be able to access our laboratory for an extended period of time as a result of the COVID-19 pandemic and the possibility that governmental authorities further modify current restrictions. This could delay timely completion of preclinical activities, including completing Investigational New Drug, or IND, enabling studies or our ability to select future development candidates, and initiation of additional clinical trials for our other product candidates. |
• | Certain government agencies, such as health regulatory agencies and patent offices, within the U.S. or internationally have experienced, and may continue to experience, disruptions in their operations as a result of the COVID-19 pandemic. The FDA and comparable foreign regulatory agencies may have slower response times or be under-resourced to continue to monitor our clinical trials and, as a result, review, inspection and other timelines may be materially delayed. It is unknown how long these disruptions could continue. Any elongation or de-prioritization of our clinical trials or delay in regulatory review resulting from such disruptions could materially affect the development and study of our product candidates. For example, regulatory authorities may require that we not distribute a product candidate lot until the relevant agency authorizes its release. Such release authorization may be delayed as a result of the COVID-19 pandemic, which would likely result in delays to our ongoing clinical trials. |
• | The trading prices for our common stock and those of other biopharmaceutical companies have been highly volatile, partly due to the COVID-19 pandemic. As a result, we may face difficulties raising capital through sales of our common stock or such sales may be on unfavorable terms. In addition, a recession, depression or other sustained adverse market event resulting from the COVID-19 pandemic could materially and adversely affect our business and the value of our common stock. |
• | identifying, recruiting, integrating, maintaining and motivating additional employees; |
• | managing our internal development efforts effectively, including the clinical, FDA and international regulatory review process for our product candidates, while complying with our contractual obligations to contractors and other third parties; and |
• | improving our operational, financial and management controls, reporting systems and procedures. |
• | decreased demand for our products; |
• | injury to our reputation; |
• | withdrawal of clinical trial participants and inability to continue clinical trials; |
• | initiation of investigations by regulators; |
• | costs to defend the related litigation; |
• | a diversion of management’s time and our resources; |
• | substantial monetary awards to trial participants or patients; |
• | product recalls, withdrawals or labeling, marketing or promotional restrictions; |
• | loss of revenue; |
• | exhaustion of any available insurance and our capital resources; |
• | the inability to commercialize any product candidate; and |
• | a decline in our share price. |
• | the success of existing or new competitive products or technologies; |
• | regulatory actions with respect to our product candidates or our competitors’ products and product candidates; |
• | announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments; |
• | the timing and results of preclinical studies for any of our product candidates; |
• | the timing and results of clinical trials of MGTA-117, MGTA-145 and any other product candidates; |
• | commencement or termination of collaborations for any of our current and future programs and product candidates; |
• | failure or discontinuation of any of our development programs; |
• | results of clinical trials of product candidates of our competitors; |
• | regulatory or legal developments in the U.S. and other countries; |
• | developments or material disputes concerning patent applications, issued patents or other proprietary rights; |
• | the recruitment or departure of key personnel; |
• | the level of expenses related to any of our product candidates or clinical development programs; |
• | the results of our efforts to develop additional product candidates or products; |
• | actual or anticipated changes in estimates as to financial results or development timelines; |
• | announcement or expectation of additional financing efforts; |
• | sales of our common stock by us, our insiders or other stockholders; |
• | variations in our financial results or those of companies that are perceived to be similar to us; |
• | changes in estimates or recommendations by securities analysts, if any, that cover us; |
• | changes in the structure of healthcare payment systems; |
• | market conditions in the pharmaceutical and biotechnology sectors; |
• | disruptions to political, governmental or regulatory systems, including shutdowns of the government and its agencies; |
• | general economic, industry and market conditions; and |
• | the other factors described in this “Risk Factors” section. |
• | establish a classified board of directors such that all members of the board are not elected at one time; |
• | allow the authorized number of our directors to be changed only by resolution of our board of directors; |
• | limit the manner in which stockholders can remove directors from the board; |
• | establish advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted on at stockholder meetings; |
• | require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent; |
• | limit who may call a special meeting of stockholders; |
• | authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors; and |
• | require the approval of the holders of at least 66.67% of the votes that all our stockholders would be entitled to cast to amend or repeal certain provisions of our charter or bylaws. |
ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
ITEM 6. |
EXHIBITS. |
* | Filed herewith. |
** | Furnished herewith. |
# | Represents management compensation plan, contract or arrangement. |
MAGENTA THERAPEUTICS, INC. | ||||||
Date: May 16, 2022 | By: | /s/ Stephen Mahoney | ||||
Stephen Mahoney | ||||||
Chief Financial and Operating Officer (Principal Financial and Accounting Officer) |
Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO
RULE 13A-14(A) / RULE 15D-14(A) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I, Jason Gardner, D.Phil., certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Magenta Therapeutics, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: May 16, 2022
/s/ Jason Gardner |
Jason Gardner, D.Phil. |
President, Chief Executive Officer and Director |
(Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO
RULE 13A-14(A) / RULE 15D-14(A) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I, Stephen Mahoney, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Magenta Therapeutics, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: May 16, 2022 |
/s/ Stephen Mahoney |
Stephen Mahoney |
Chief Financial and Operating Officer |
(Principal Financial and Accounting Officer) |
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 this Quarterly Report on Form 10-Q of Magenta Therapeutics, Inc. (the Company) for the quarter ended March 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the Report), each of the undersigned officers hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his or her knowledge:
1. | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: May 16, 2022
/s/ Jason Gardner |
Jason Gardner, D.Phil. |
President, Chief Executive Officer and Director |
(Principal Executive Officer) |
/s/ Stephen Mahoney |
Stephen Mahoney |
Chief Financial and Operating Officer |
(Principal Financial and Accounting Officer) |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Mar. 31, 2022 |
Dec. 31, 2021 |
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Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, Shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, Shares issued | 0 | 0 |
Preferred stock, Shares outstanding | 0 | 0 |
Common stock, Par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, Shares issued | 58,799,157 | 58,799,157 |
Common stock, Shares outstanding | 58,799,157 | 58,799,157 |
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2022 |
Mar. 31, 2021 |
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Operating expenses: | ||
Research and development | $ 16,547 | $ 11,728 |
General and administrative | 7,287 | 6,969 |
Total operating expenses | 23,834 | 18,697 |
Loss from operations | (23,834) | (18,697) |
Interest and other income, net | 884 | 1,208 |
Net loss | $ (22,950) | $ (17,489) |
Net loss per share, basic | $ (0.39) | $ (0.36) |
Net loss per share, diluted | $ (0.39) | $ (0.36) |
Weighted average common shares outstanding, basic | 58,799,157 | 48,567,106 |
Weighted average common shares outstanding, diluted | 58,799,157 | 48,567,106 |
Comprehensive loss: | ||
Net loss | $ (22,950) | $ (17,489) |
Other comprehensive loss: | ||
Unrealized gains (losses) on marketable securities | (439) | 32 |
Total other comprehensive income (loss) | (439) | 32 |
Total comprehensive loss | $ (23,389) | $ (17,457) |
Nature of the Business and Basis of Presentation |
3 Months Ended |
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Mar. 31, 2022 | |
Nature of the Business and Basis of Presentation | 1. Nature of the Business and Basis of Presentation Magenta Therapeutics, Inc. (the “Company”) is a clinical-stage biotechnology company developing novel medicines designed to bring the curative power of stem cell transplants to more patients with blood cancers, genetic diseases and autoimmune diseases. The Company was incorporated under the laws of the State of Delaware in as HSCTCo Therapeutics, Inc. In February 2016, the Company changed its name to Magenta Therapeutics, Inc. and in June 2018 the Company completed its initial public offering. The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, the continuing impact of the novel coronavirus (“COVID-19”) pandemic and the ability to secure additional capital to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. The Company has a shelf registration statement on Form S-3 (the “Shelf”) on file with the SEC, which covers the offering, issuance and sale of up to an aggregate of $350.0 million of common stock, preferred stock, debt securities, warrants and/or units of any combination thereof. The Company simultaneously entered into a sales agreement with Cowen and Company, LLC, as sales agent, to provide for the issuance and sale by the Company of up to $100.0 million of common stock from time to time in “at-the-market” The Company has incurred recurring losses since inception, including net losses of $23.0 million for the three months ended March 31, 2022 and $71.1 million the year ended December 31, 2021. As of March 31, 2022, the Company had an accumulated deficit of $348.5 million. The Company expects to continue to generate operating losses for the foreseeable future. The Company expects that its cash, cash equivalents and marketable securities will be sufficient to fund its operating expenses and capital expenditure requirements through at least 12 months from the issuance date of these consolidated financial statements. The future viability of the Company beyond that point is dependent on its ability to raise additional capital to fund its operations. The Company will need to obtain substantial additional funding in connection with continuing operations, particularly as the Company advances its preclinical activities and clinical trials for its product candidates in development. If the Company is unable to raise capital when needed, or on attractive terms, it could be forced to delay, reduce or eliminate its research or drug development programs or any future commercialization efforts. Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient funding on terms acceptable to the Company to fund continuing operations, if at all. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany balances and transactions have been eliminated. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). |
Summary of Significant Accounting Policies |
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Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, the accrual for research and development expenses and the valuation of stock-based awards. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates. Unaudited Interim Financial Information The consolidated balance sheet at December 31, 2021 was derived from audited financial statements but does not include all disclosures required by GAAP. The accompanying unaudited consolidated financial statements as of March 31, 2022 and for the three months ended March 31, 2022 and 2021 have been prepared by the Company pursuant to the rules and regulations of the SEC for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The Company believes, however, that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K, on file with SEC. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s consolidated financial position as of March 31, 2022 and consolidated results of operations for the three months ended March 31, 2022 and 2021 and consolidated cash flows for the three months ended March 31, 2022 and 2021 have been made. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2022 or any other interim period. Fair Value Measurements Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:
The Company’s cash equivalents and marketable securities are carried at fair value, determined according to the fair value hierarchy described above (see Note 3). The carrying values of the Company’s accounts payable and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities. Income Taxes The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company’s tax returns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The Company accounts for uncertainty in income taxes recognized in its consolidated financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the consolidated financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties. Leases Prior to January 1, 2022, the Company accounted for leases under ASC 840, Leases (“ASC 840”). Effective January 1, 2022, the Company accounts for leases under ASC 842, Leases (“ASC 842”). Therefore, as of December 31, 2021 and for the three months ended March 31 2021, the Company’s consolidated financial statements continue to be presented in accordance with ASC 840, the accounting standard originally in effect for such periods. As of and for the three months ended March 31, 2022, the Company’s consolidated financial statements are presented in accordance with ASC 842. In accordance with ASC 842, the Company accounts for a contract as a lease when it has the right to control the asset for a period of time while obtaining substantially all of the asset’s economic benefits. The Company determines if an arrangement is a lease or contains an embedded lease at inception. For arrangements that meet the definition of a lease, the Company determines the initial classification and measurement of its right-of-use In addition to rent, the leases may require the Company to pay additional costs, such as utilities, maintenance and other operating costs, which are generally referred to as non-lease components. The Company has elected to not separate lease and non-lease components. Only the fixed costs for lease components and their associated non-lease components are accounted for as a single lease component and recognized as part of a right-of-use Comprehensive Loss Comprehensive loss includes net loss as well as other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders. For the three months ended March 31, 2022 and 2021, the Company’s only element of other comprehensive income (loss) was unrealized gains (losses) on marketable securities. Net Loss per Share Basic net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common stock outstanding for the period. Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period, including potential dilutive common shares assuming the dilutive effect of outstanding stock options. For periods in which the Company has reported net losses, diluted net loss per common share is the same as basic net loss per common share, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. The Company reported a net loss for the three months ended March 31, 2022 and 2021. The following potential dilutive securities, presented based on amounts outstanding at each period end, have been excluded from the calculation of diluted net loss per share because including them would have had an anti-dilutive impact:
Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) No. 2019-10, which deferred the effective date for nonpublic entities to annual reporting periods beginning after December 15, 2022, including interim periods within those fiscal years. The Company does not believe the guidance will have a material impact on its consolidated financial statements. Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which require lessees to recognize most leases on their balance sheet as a right-of-use asset and a lease liability. In general, lease arrangements exceeding a twelve-month term must be recognized as assets and liabilities on the balance sheet. Under ASU 2016-02, a right-of-use asset and lease obligation is recorded for all leases, whether operating or financing, while the income statement reflects lease expense for operating leases and amortization and interest expense for financing leases. The FASB also issued ASU 2018-10, Codification Improvements to Topic 842 Leases , and ASU 2018-11, Targeted Improvements to Topic 842 Leases , which allows the new lease standard to be applied as of the adoption date with a cumulative-effect adjustment to the opening balance of retained earnings rather than retroactive restatement of all periods presented. The Company adopted the new leasing standards on January 1, 2022 using a modified retrospective approach applied at the beginning of the period of adoption. The Company elected the “package of practical expedients,” which permits the Company not to reassess under the new standards for prior conclusions about lease identification, lease classification and initial direct costs. The Company did not apply the hindsight practical expedient when determining the lease term for existing leases and assessing impairment of expired or existing leases. The Company elected to utilize its incremental borrowing rate based on the remaining lease term as of the date of adoption. In connection with the adoption of ASU
2016-02, the Company recognized a right-of-use right-of-use |
Fair Value of Financial Assets |
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Fair Value of Financial Assets | 3. Fair Value of Financial Assets As of March 31, 2022, marketable securities by security type consisted of (in thousands):
As of December 31, 2021, marketable securities by security type consisted of (in thousands):
The following tables present information about the Company’s financial assets measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values (in thousands):
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Accrued Expenses and Other Current Liabilities |
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Accrued Expenses and Other Current Liabilities | 4. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands):
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Stock-Based Awards |
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Stock-Based Awards | 5. Stock-Based Awards 2018 Stock Option and Incentive Plan The Company grants stock-based awards under the Magenta Therapeutics, Inc. 2018 Stock Option and Incentive Plan (the “ 2018 Plan”). The Company also has outstanding stock options under the Magenta Therapeutics, Inc. 2016 Stock Option and Grant Plan, as amended (the “ 2016 Plan”), but is no longer granting awards under the 2016 Plan. As of March 31, 2022, 4,046,204 shares of common stock were available for issuance under the 2018 Plan. Grant of Stock Options During the three months ended March 31, 2022, the Company granted options to certain employees and consultants with service-based vesting conditions for the purchase of 1,788,720 shares of common stock with a weighted average grant date fair value of $2.20 per share. Stock-based compensation expense is being recognized over the requisite service period of generally four years. Grant of Restricted Stock Units During the three months ended March 31, 2022, the Company granted 51,935 restricted stock units to certain employees with a weighted average grant date fair value of $3.19 per share. Stock-based compensation expense is being recognized over the requisite service period of four years. 2019 Employee Stock Purchase Plan Employees may elect to participate in The Magenta Therapeutics, Inc. 2019 Employee Stock Purchase Plan (the “ESPP”). The purchase price of common stock under the ESPP is equal to 85% of the lower of the fair market value of the common stock on the offering date or the exercise date. The six-month offering periods begin in December and June of each year. During the three months ended March 31, 2022 and 2021, there were no shares of common stock purchased under the ESPP. As of March 31, 2022, 713,252 shares remained available for issuance under the ESPP. Stock-Based Compensation Stock-based compensation expense was classified in the statements of operations and comprehensive loss as follows (in thousands):
As of March 31, 2022, unrecognized compensation expense related to unvested share-based awards with service-based vesting conditions was $20.2 million, which is expected to be recognized over a weighted average period of 2.8 years. Additionally, the Company had unrecognized compensation cost of $1.9 million related to the unvested performance restricted stock units for which the performance conditions were not considered probable of achievement as of March 31, 2022. |
Leases |
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Leases | 6. Leases The Company has a sublease, as amended, for up to approximately 69,000 square feet of office and laboratory space in Cambridge, Massachusetts. The sublease is subject and subordinate to a prime lease between the sublandlord and the prime landlord. The term of the sublease commenced in June 2018 and expires in February 2028. The sublandlord has the right to terminate the sublease after five years. The Company classified this sublease as an operating lease under ASC 842. The Company is obligated to pay real estate taxes and other costs related to the premises, including costs of operations and management of the leased premises. To the extent these costs are variable, they were not included in the measurement of the right-of-use As of December 31, 2021, the Company had long-term deferred rent of $6.4 million related to lease incentives and payment escalations. As of December 31, 2021, the short-term portion of deferred rent of $0.6 million was included in accrued expenses and other current liabilities. In connection with the adoption of ASC 842 on January 1, 2022, these amounts were recorded as a reduction to the operating lease, right-of-use The components of the Company’s lease expense under ASC 842 w er as follows (in thousands):e
Supplemental disclosure of cash flow information related to the lease was as follows (in thousands):
The weighted average remaining lease term and discount rate were as follows:
Because the interest rate implicit in the lease was not readily determinable, the Company’s estimated incremental borrowing rate was used to calculate the present value of the lease. As of March 31, 2022, the future minimum lease payments due under the noncancelable operating lease was as follows (in thousands):
The following table represents the lease liabilities on the consolidated balance sheet (in thousands):
As previously disclosed in the Company’s Annual Report on Form 10-K and under the previous lease accounting standard, ASC 840, Leases,
In 2018, the Company entered into two
sub-subleases of approximately 27,000 square feet of office space in Cambridge, Massachusetts. One of the sub-subleases, as amended, expired in December 2021. The remaining sub-sublease, as amended, was set to expire in April 2022 but was further amended in January 2022 to increase the square footage from 13,643 square feet to 26,114 square feet and to extend the expiration to April 2023. As of March 31, 2022, the remaining base rent payments due to the Company under the amended sub-sublease was $2.7 million. The Company recorded other income of $0.8 million and $1.2 million during the three months ended March 31, 2022 and 2021, respectively, related to its sub-subleases. |
Commitments and Contingencies |
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Mar. 31, 2022 | |
Commitments and Contingencies | 7. Commitments and Contingencies Leases The Company’s commitments under its leases are described in Note 6. Collaboration Agreement In March 2018, the Company entered into a collaboration agreement with Heidelberg Pharma Research GmbH (“HDPR”) whereby the parties agreed to combine the Company’s stem cell platform with proprietary antibodies across up to four exclusive targets with HDPR’s proprietary Antibody Targeted Amanitin Conjugates platform. Under the agreement, the Company may pay upfront technology access fees, research exclusivity fees and payment for research support. Additionally, upon the exercise of certain license rights, the Company may be obligated to pay HDPR development, regulatory and commercial milestone payments of up to million per target as well as royalties on net sales of products licensed under the agreement. During each of the three months ended March 31, 2022 and 2021, the Company recorded million of research and development expense related to this agreement for upfront technology access fees, research exclusivity fees and research support. During the three months ended March 31, 2022, the Company recorded Intellectual Property Licenses The Company has a license agreement with the President and Fellows of Harvard College (“Harvard”), entered into in November 2016, for an exclusive, worldwide, royalty-bearing license for certain technologies related to conditioning and mobilization. The Company is obligated to pay Harvard maintenance fees of $0.1 million annually and to reimburse qualified expenses related to the patents. The Company is also obligated to pay milestone payments of up to $7.4 million for the first two licensed products upon the achievement of certain development and regulatory milestones and to pay royalties on a product-by-product country-by-country no t incur any expense related to the achievement of these milestones. The Company has agreements with third parties in the normal course of business, under which it can license certain developed technologies. If the Company exercises its rights to license the respective technologies, it may be subject to additional fees and milestone payments. During the three months ended March 31, 2022, the Company recorded research and development expense of $0.1 million related to the license of certain developed technologies under these agreements. During the three months ended March 31, 2021, the Company did not incur any expense related to these licenses. Indemnification Agreements In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors and senior management that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company is not aware of any claims under indemnification arrangements, and it has not accrued any liabilities related to such obligations in its consolidated financial statements as of March 31, 2022. Legal Proceedings The Company is not currently a party to any material legal proceedings. At each reporting date, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company expenses the costs related to its legal proceedings as they are incurred. |
401(k) Savings Plan |
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401(k) Savings Plan | 8. 401(k) Savings Plan The Company has a 401(k) available for participating employees who meet certain eligibility requirements. Eligible employees may defer a portion of their salary as defined by the plan. Company contributions to the plan may be made at the discretion of the board of directors of the Company. Effective August 2021, the Company began making matching contributions of up to 2% of eligible wages. During the three months ended March 31, 2022, the Company recorded $ 0.1 million of expense related to this matching contribution. |
Related Parties |
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Mar. 31, 2022 | |
Related Parties | 9. Related Parties Effective March 2018, Amy Lynn Ronneberg, the then serving President of Be The Match BioTherapies, LLC, became a member of the Company’s board of directors and subsequently was appointed Chief Executive Officer of the National Marrow Donor Program/Be The Match, or NMDP/Be The Match, organization in June 2020. The Company has collaboration agreements with the National Marrow Donor Program (as successor in interest to Be The Match BioTherapies Collection Services, LLC (formerly known as Be The Match BioTherapies, LLC)) and a research agreement with an affiliated organization, Center for International Blood and Marrow Transplant Research. In addition, in June 2020, the Company entered into a clinical collaboration agreement with NMDP/Be The Match to evaluate the potential utility of MGTA-145 for mobilizing and collecting hematopoietic stem cells from donors in a single day and then using them for allogeneic transplants in patients. Under the terms of this agreement, the Company shall fund up to fifty percent of NMDP/Be The Match clinical trial costs and provide the trial drugs which will be included in research and development expense. For each of the three months ended March 31, 2022 and 2021, the Company recorded expense of $0.1 million related to these agreements. As of March 31, 2022 and December 31, 2021, amounts on the consolidated balance sheets related to these agreements were $0.1 million and $0.2 million, respectively, which amounts were included in accounts payable and accrued expenses and other current liabilities and less than $0.1 million which amounts were included in prepaid expenses and other current assets. |
Summary of Significant Accounting Policies (Policies) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, the accrual for research and development expenses and the valuation of stock-based awards. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates. |
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Unaudited Interim Financial Information | Unaudited Interim Financial Information The consolidated balance sheet at December 31, 2021 was derived from audited financial statements but does not include all disclosures required by GAAP. The accompanying unaudited consolidated financial statements as of March 31, 2022 and for the three months ended March 31, 2022 and 2021 have been prepared by the Company pursuant to the rules and regulations of the SEC for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The Company believes, however, that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K, on file with SEC. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s consolidated financial position as of March 31, 2022 and consolidated results of operations for the three months ended March 31, 2022 and 2021 and consolidated cash flows for the three months ended March 31, 2022 and 2021 have been made. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2022 or any other interim period. |
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Fair Value Measurements | Fair Value Measurements Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:
The Company’s cash equivalents and marketable securities are carried at fair value, determined according to the fair value hierarchy described above (see Note 3). The carrying values of the Company’s accounts payable and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities. |
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Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company’s tax returns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The Company accounts for uncertainty in income taxes recognized in its consolidated financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the consolidated financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties. |
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Leases | Leases Prior to January 1, 2022, the Company accounted for leases under ASC 840, Leases (“ASC 840”). Effective January 1, 2022, the Company accounts for leases under ASC 842, Leases (“ASC 842”). Therefore, as of December 31, 2021 and for the three months ended March 31 2021, the Company’s consolidated financial statements continue to be presented in accordance with ASC 840, the accounting standard originally in effect for such periods. As of and for the three months ended March 31, 2022, the Company’s consolidated financial statements are presented in accordance with ASC 842. In accordance with ASC 842, the Company accounts for a contract as a lease when it has the right to control the asset for a period of time while obtaining substantially all of the asset’s economic benefits. The Company determines if an arrangement is a lease or contains an embedded lease at inception. For arrangements that meet the definition of a lease, the Company determines the initial classification and measurement of its right-of-use In addition to rent, the leases may require the Company to pay additional costs, such as utilities, maintenance and other operating costs, which are generally referred to as
non-lease components. The Company has elected to not separate lease and non-lease components. Only the fixed costs for lease components and their associated non-lease components are accounted for as a single lease component and recognized as part of a right-of-use |
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Comprehensive Loss | Comprehensive Loss Comprehensive loss includes net loss as well as other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders. For the three months ended March 31, 2022 and 2021, the Company’s only element of other comprehensive income (loss) was unrealized gains (losses) on marketable securities. |
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Net Loss per Share | Net Loss per Share Basic net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common stock outstanding for the period. Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period, including potential dilutive common shares assuming the dilutive effect of outstanding stock options. For periods in which the Company has reported net losses, diluted net loss per common share is the same as basic net loss per common share, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. The Company reported a net loss for the three months ended March 31, 2022 and 2021. The following potential dilutive securities, presented based on amounts outstanding at each period end, have been excluded from the calculation of diluted net loss per share because including them would have had an anti-dilutive impact:
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Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU
No. 2016-13, Financial Instruments – Credit Losses (Topic 326) No. 2019-10, which deferred the effective date for nonpublic entities to annual reporting periods beginning after December 15, 2022, including interim periods within those fiscal years. The Company does not believe the guidance will have a material impact on its consolidated financial statements. |
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Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which require lessees to recognize most leases on their balance sheet as a right-of-use asset and a lease liability. In general, lease arrangements exceeding a twelve-month term must be recognized as assets and liabilities on the balance sheet. Under ASU 2016-02, a right-of-use asset and lease obligation is recorded for all leases, whether operating or financing, while the income statement reflects lease expense for operating leases and amortization and interest expense for financing leases. The FASB also issued ASU 2018-10, Codification Improvements to Topic 842 Leases , and ASU 2018-11, Targeted Improvements to Topic 842 Leases , which allows the new lease standard to be applied as of the adoption date with a cumulative-effect adjustment to the opening balance of retained earnings rather than retroactive restatement of all periods presented. The Company adopted the new leasing standards on January 1, 2022 using a modified retrospective approach applied at the beginning of the period of adoption. The Company elected the “package of practical expedients,” which permits the Company not to reassess under the new standards for prior conclusions about lease identification, lease classification and initial direct costs. The Company did not apply the hindsight practical expedient when determining the lease term for existing leases and assessing impairment of expired or existing leases. The Company elected to utilize its incremental borrowing rate based on the remaining lease term as of the date of adoption. In connection with the adoption of ASU
2016-02, the Company recognized a right-of-use right-of-use |
Summary of Significant Accounting Policies (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following potential dilutive securities, presented based on amounts outstanding at each period end, have been excluded from the calculation of diluted net loss per share because including them would have had an anti-dilutive impact:
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Fair Value of Financial Assets (Tables) |
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Schedule of Marketable Securities by Security Type | As of March 31, 2022, marketable securities by security type consisted of (in thousands):
As of December 31, 2021, marketable securities by security type consisted of (in thousands):
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Schedule of Financial Assets Measured at Fair Value on Recurring Basis | The following tables present information about the Company’s financial assets measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values (in thousands):
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Accrued Expenses and Other Current Liabilities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands):
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Stock-Based Awards (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock Based Compensation Expense | Stock-based compensation expense was classified in the statements of operations and comprehensive loss as follows (in thousands):
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Leases (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of the Company's Lease Expense | The components of the Company’s lease expense under ASC 842 w er as follows (in thousands):e
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Schedule of Supplemental Disclosure Of Cash Flow Information Related To The Lease | Supplemental disclosure of cash flow information related to the lease was as follows (in thousands):
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Schedule of Weighted Average Remaining Lease Term And Discount Rate | The weighted average remaining lease term and discount rate were as follows:
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Schedule of Future Minimum Lease Payments Due Under Noncancelable Operating Lease | As of March 31, 2022, the future minimum lease payments due under the noncancelable operating lease was as follows (in thousands):
As previously disclosed in the Company’s Annual Report on Form 10-K and under the previous lease accounting standard, ASC 840, Leases,
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Schedule of Lease Liabilities | The following table represents the lease liabilities on the consolidated balance sheet (in thousands):
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Nature of the Business and Basis of Presentation - Additional Information (Detail) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Aug. 08, 2019 |
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
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Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||
Entity incorporation date | Jun. 01, 2015 | |||
Entity incorporation state code | DE | |||
Net loss | $ (22,950) | $ (17,489) | $ (71,100) | |
Accumulated deficit | $ (348,517) | $ (325,567) | ||
Maximum [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||
Shelf offering value | $ 350,000 | |||
Cowen and Company LLC [Member] | Maximum [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||
ATM offering value | $ 100,000 |
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Jan. 01, 2022 |
Dec. 31, 2021 |
---|---|---|---|
Summary Of Significant Accounting Policies [Line Items] | |||
Operating Lease, Right-of-Use Asset | $ 25,389 | $ 0 | |
Operating Lease, Liability | 32,350 | ||
Accounting Standards Update 2016-02 [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Operating Lease, Right-of-Use Asset | 26,100 | ||
Operating Lease, Liability | $ 33,000 | ||
Deferred rent balance | $ 7,000 |
Fair Value of Financial Assets - Schedule of Marketable Securities by Security Type (Detail) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Marketable Securities [Line Items] | ||
Amortized Cost | $ 85,308 | $ 45,306 |
Gross Unrealized Gains | ||
Gross Unrealized Losses | (469) | (30) |
Estimated Fair Value | 84,839 | 45,276 |
US Treasury Notes [Member] | Due With In One Year [Member] | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 85,308 | 30,213 |
Gross Unrealized Gains | ||
Gross Unrealized Losses | (469) | (20) |
Estimated Fair Value | $ 84,839 | 30,193 |
US Treasury Notes [Member] | Due After One Year Through Two Years [Member] | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 15,093 | |
Gross Unrealized Gains | ||
Gross Unrealized Losses | (10) | |
Estimated Fair Value | $ 15,083 |
Accrued Expenses and Other Current Liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Detail) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accrued external research and development expenses | $ 3,525 | $ 2,813 |
Accrued payroll and related expenses | 1,634 | 3,346 |
Deferred rent, current portion | 555 | |
Accrued professional fees | 560 | 477 |
Accrued other | 690 | 632 |
Total | $ 6,409 | $ 7,823 |
Stock-Based Awards - Schedule of Stock Based Compensation Expense (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock based compensation expense | $ 1,905 | $ 2,192 |
Research and Development Expenses [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock based compensation expense | 527 | 945 |
General and Administrative Expenses [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock based compensation expense | $ 1,378 | $ 1,247 |
Leases - Schedule of Components of the Company's Lease Expense (Detail) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2022
USD ($)
| |
Lease, Cost [Abstract] | |
Operating lease cost | $ 1,602 |
Short-term lease cost | 0 |
Variable lease cost | 506 |
Lease cost | $ 2,108 |
Leases - Schedule of Supplemental Disclosure Of Cash Flow Information Related To The Lease (Detail) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2022
USD ($)
| |
Leases [Abstract] | |
Cash paid for amounts included in the measurement of operating lease liabilities | $ 1,595 |
Operating lease liabilities arising from obtaining right-of-use asset | $ 0 |
Leases - Schedule of Weighted Average Remaining Lease Term And Discount Rate (Detail) |
Mar. 31, 2022 |
---|---|
Leases [Abstract] | |
Weighted-average remaining lease term—operating lease (in years) | 5 years 11 months 1 day |
Weighted-average discount rate—operating lease | 11.00% |
Leases - Schedule of Future Minimum Lease Payments Due Under Noncancelable Operating Lease (Detail) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Leases [Abstract] | ||
2022 (nine months) | $ 4,971 | |
2022/2023 | 6,936 | $ 6,375 |
2023/2024 | 7,313 | 6,734 |
2024/2025 | 7,679 | 7,100 |
2025/2026 | 8,062 | 7,455 |
2026 | 7,828 | |
Thereafter | 9,906 | 9,617 |
Total future minimum lease payments | 44,867 | $ 45,109 |
Less: imputed interest | (12,517) | |
Total operating lease liabilities | $ 32,350 |
Leases - Schedule of Lease Liabilities (Detail) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Operating Lease Liabilities, Gross Difference, Amount [Abstract] | ||
Current operating lease liability | $ 3,246 | $ 0 |
Operating lease liability, net of current portion | 29,104 | $ 0 |
Total operating lease liabilities | $ 32,350 |
Leases - Additional Information (Detail) $ in Thousands |
3 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Mar. 31, 2022
USD ($)
|
Mar. 31, 2021
USD ($)
|
Dec. 31, 2019
USD ($)
|
Dec. 31, 2018
ft²
Sublease
|
Jan. 01, 2022
ft²
|
Dec. 31, 2021
USD ($)
ft²
|
|
Leases [Line Items] | ||||||
Restricted cash | $ 1,780 | $ 1,780 | ||||
Long-term deferred rent | $ 0 | 6,399 | ||||
Deferred rent, current portion | $ 555 | |||||
Property sublease, description | The Company has a sublease, as amended, for up to approximately 69,000 square feet of office and laboratory space in Cambridge, Massachusetts. The sublease is subject and subordinate to a prime lease between the sublandlord and the prime landlord. The term of the sublease commenced in June 2018 and expires in February 2028. The sublandlord has the right to terminate the sublease after five years. | |||||
Sublease termination period | 5 years | |||||
Sublease expiration period | 2028-02 | |||||
Sublease commencement period | 2018-06 | |||||
Sub Sublease [Member] | ||||||
Leases [Line Items] | ||||||
Square feet of property subject to sublease | ft² | 27,000 | 26,114 | 13,643 | |||
Number of Sub-sublease | Sublease | 2 | |||||
Rental payments receivable | $ 2,700 | |||||
Other income from sub-sublease | 800 | $ 1,200 | ||||
Office and Lab Sublease [Member] | Letter of Credit [Member] | ||||||
Leases [Line Items] | ||||||
Restricted cash | $ 1,800 | |||||
Office and Lab Sublease [Member] | Paid By Sublandlord [Member] | ||||||
Leases [Line Items] | ||||||
Payments for tenant improvements | $ 5,200 |
401(k) Savings Plan - Additional Information (Detail) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2022
USD ($)
| |
Retirement Benefits [Abstract] | |
Defined contribution plan,Employers matching contributions subject to time based vesting requirements | 2.00% |
Defined Contribution Plan, Employer Discretionary Contribution Amount | $ 0.1 |
Related Parties - Additional Information (Detail) - Match Bio Therapies [Member] - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
|
Related Party Transaction [Line Items] | |||
Expenses paid to related party | $ 0.1 | $ 0.1 | |
Accounts Payable, Accrued Expenses and Other Current Liabilities [Member] | |||
Related Party Transaction [Line Items] | |||
Amounts owed to related party | 0.1 | $ 0.2 | |
Prepaid Expenses and Other Current Assets [Member] | Maximum [Member] | |||
Related Party Transaction [Line Items] | |||
Prepaid expense and other current assets related parties | $ 0.1 |
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