Nature of the business and basis of presentation	3 Months Ended
Mar. 31, 2020
Nature of the business and basis of presentation
Nature of the business and basis of presentation	1. Nature of the business and basis of presentation Akero Therapeutics, Inc., together with its wholly owned subsidiary Akero Securities Corporation, (“Akero” or the “Company”) is a clinical-stage biotechnology company developing pioneering medicines designed to restore metabolic balance and improve overall health for patients with nonalcoholic steatohepatitis “NASH”. NASH is a severe form of nonalcoholic fatty liver disease “NAFLD” characterized by inflammation and fibrosis in the liver that can progress to cirrhosis, liver failure, cancer and death. Our lead product candidate is AKR‑001, an analog of fibroblast growth factor 21 (“FGF21”). We are currently conducting a Phase 2a randomized, double-blind, placebo-controlled clinical trial, the BALANCED study, which is evaluating AKR-001 in the treatment of adult NASH patients. The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, ability to secure additional capital to fund operations, completion and success of clinical testing, compliance with governmental regulations, development by competitors of new technological innovations, dependence on key personnel and protection of proprietary technology. AKR‑001 will require extensive clinical testing prior to regulatory approval and commercialization. These efforts require significant amounts of additional capital, adequate personnel, and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s drug development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. Basis of presentation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company after elimination of all intercompany accounts and transactions. All adjustments necessary for the fair presentation of the Company’s condensed consolidated financial statements for the periods have been reflected. The Company’s significant accounting policies are disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, dated and filed on March 16, 2020 with the U.S. Securities and Exchange Commission. Since the date of those financial statements, other than the adoption of Accounting Standards Update No. 2016‑02, Leases (Topic 842) as discussed in Note 2, there have been no changes to the Company’s significant accounting policies. Liquidity In accordance with Accounting Standards Update (“ASU”) No. 2014‑15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205‑40), the Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued. Since its inception, the Company has funded its operations primarily with proceeds from sales of redeemable convertible preferred stock and most recently with proceeds from its initial public offering (“IPO”) in June 2019. The Company has incurred recurring losses since its inception, including a net loss of $11,886 and $5,362 for the three months ended March 31, 2020 and 2019, respectively and net losses of $43,755 and $81,714 for the years ended December 31, 2019 and 2018, respectively. In addition, as of March 31, 2020, the Company had an accumulated deficit of $142,206. The Company expects to continue to generate operating losses for the foreseeable future. As of May 13, 2020, the issuance date of these condensed consolidated financial statements, the Company expects that its existing cash, cash equivalents and short-term marketable securities of $125,285 as of March 31, 2020, will be sufficient to fund its operating expenses and capital expenditure requirements for at least 12 months from the issuance date of these condensed consolidated financial statements. The Company expects that it will require additional funding beyond this time to complete the clinical development of AKR‑001, to commercialize AKR‑001 if it receives regulatory approval, and to pursue in-licenses or acquisitions of other product candidates. If the Company is unable to obtain funding, the Company will be forced to delay, reduce or eliminate some or all of its research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect its business prospects, or the Company may be unable to continue operations. 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.

1. Nature of the business and basis of presentation

Akero Therapeutics, Inc., together with its wholly owned subsidiary Akero Securities Corporation, (“Akero” or the “Company”) is a clinical-stage biotechnology company developing pioneering medicines designed to restore metabolic balance and improve overall health for patients with nonalcoholic steatohepatitis “NASH”. NASH is a severe form of nonalcoholic fatty liver disease “NAFLD” characterized by inflammation and fibrosis in the liver that can progress to cirrhosis, liver failure, cancer and death. Our lead product candidate is AKR‑001, an analog of fibroblast growth factor 21 (“FGF21”). We are currently conducting a Phase 2a randomized, double-blind, placebo-controlled clinical trial, the BALANCED study, which is evaluating AKR-001 in the treatment of adult NASH patients.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, ability to secure additional capital to fund operations, completion and success of clinical testing, compliance with governmental regulations, development by competitors of new technological innovations, dependence on key personnel and protection of proprietary technology. AKR‑001 will require extensive clinical testing prior to regulatory approval and commercialization. These efforts require significant amounts of additional capital, adequate personnel, and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s drug development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

Basis of presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company after elimination of all intercompany accounts and transactions. All adjustments necessary for the fair presentation of the Company’s condensed consolidated financial statements for the periods have been reflected.

The Company’s significant accounting policies are disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, dated and filed on March 16, 2020 with the U.S. Securities and Exchange Commission. Since the date of those financial statements, other than the adoption of Accounting Standards Update No. 2016‑02, Leases (Topic 842) as discussed in Note 2, there have been no changes to the Company’s significant accounting policies.

Liquidity

In accordance with Accounting Standards Update (“ASU”) No. 2014‑15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205‑40), the Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued.

Since its inception, the Company has funded its operations primarily with proceeds from sales of redeemable convertible preferred stock and most recently with proceeds from its initial public offering (“IPO”) in June 2019. The Company has incurred recurring losses since its inception, including a net loss of $11,886 and $5,362 for the three months ended March 31, 2020 and 2019, respectively and net losses of $43,755 and $81,714 for the years ended December 31, 2019 and 2018, respectively. In addition, as of March 31, 2020, the Company had an accumulated deficit of $142,206. The Company expects to continue to generate operating losses for the foreseeable future. As of May 13, 2020, the issuance date of these condensed consolidated financial statements, the Company expects that its existing cash, cash equivalents and short-term marketable securities of $125,285 as of March 31, 2020, will be sufficient to fund its operating expenses and capital expenditure requirements for at least 12 months from the issuance date of these condensed consolidated financial statements. The Company expects that it will require additional funding beyond this time to complete the clinical development of AKR‑001, to commercialize AKR‑001 if it receives regulatory approval, and to pursue in-licenses or acquisitions of other product candidates.

If the Company is unable to obtain funding, the Company will be forced to delay, reduce or eliminate some or all of its research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect its business prospects, or the Company may be unable to continue operations. 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.