10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

_______________________________________

FORM 10-Q

_______________________________________

(Mark One)

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

For the quarterly period ended September 30, 2023

OR

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

For the transition period from ______________ to ______________

Commission File Number: 001-40869

_______________________________________

THESEUS PHARMACEUTICALS, INC.

(Exact Name of Registrant as Specified in its Charter)

_______________________________________

Delaware	83-0712806
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
314 Main Street Cambridge, Massachusetts	02142
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (857) 400-9491

_______________________________________

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value per share	THRX	The Nasdaq Global Market, LLC (Nasdaq Global Select Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	x
		Emerging growth company	x

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

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

As of November 10, 2023, the registrant had 44,230,135 shares of common stock, $0.0001 par value per share, outstanding.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss	2
	Condensed Consolidated Statements of Stockholders’ Equity	3
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits	31
Signatures		33

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, or Quarterly Report, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, as well as information included in oral statements or other written statements made or to be made by us, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, that involve substantial risks and uncertainties. All statements contained in this Quarterly Report other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, market growth, and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “potentially,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “target,” “plan,” “expect,” and similar expressions are intended to identify forward-looking statements.

Forward-looking statements contained in this Quarterly Report include, but are not limited to, statements about:

•our ability to continue development of THE-349 and our BCR-ABL and KIT programs solely through partnerships;

•our ability to identify and complete a strategic transaction to maximize shareholder value;

•the effects of our workforce reduction, completed in November 2023, including costs related thereto and our ability to retain key personnel;

•our ability to obtain, and negotiate favorable terms of, any collaboration, licensing or other arrangements that may be necessary or desirable to develop our product candidate;

•our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

•our anticipated use of our existing cash resources and use of proceeds from sales of our common stock in “at-the-market” offerings and the period over which such proceeds, together with existing cash, will be sufficient to meet our operating needs;

•our financial performance;

•the period over which we estimate our existing cash, cash equivalents, and marketable securities will be sufficient to fund our future operating expenses and capital expenditure requirements;

•our expectations regarding the period during which we will remain an emerging growth company, or EGC, under the Jumpstart Our Business Startups Act of 2012, as amended, or the JOBS Act;

•developments relating to our competitors, our industry or the economy, the impact of the instability in the global financial markets and the disruptions of the financial services industry; and

•other risks and uncertainties, including those listed in the section titled “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission, or the SEC, on March 9, 2023, or the Annual Report, and subsequent reports we make with the SEC.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report.

These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described in the section titled “Risk Factors” in Part II, Item 1A of our Annual Report and elsewhere in this Quarterly Report. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Quarterly Report

ii

may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance or achievements. We undertake no obligation to update any of these forward-looking statements for any reason after the date of this Quarterly Report or to conform these statements to actual results or to changes in our expectations, except as required by law.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read this Quarterly Report and the documents that we reference in this Quarterly Report and have filed with the SEC with the understanding that our actual future results, performance and events and circumstances may be materially different from what we expect.

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PART I—FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

Theseus Pharmaceuticals, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

(Unaudited)

	SEPTEMBER 30, 2023		DECEMBER 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	46,893	$	94,605
Short-term marketable securities	158,229		103,374
Prepaid expenses and other current assets	4,464		4,137
Total current assets	209,586		202,116
Property and equipment, net	414		416
Operating lease right-of-use asset	3,920		4,334
Long-term marketable securities	20,308		13,817
Other assets	399		1,764
Total assets	$	234,627	$	222,447
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,313	$	4,973
Accrued expenses and other current liabilities	4,931		5,414
Operating lease liability, current portion	759		743
Total current liabilities	7,003		11,130
Operating lease liability, net of current portion	2,897		3,236
Restricted stock liability, net of current portion	205		466
Total liabilities	10,105		14,832
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, $0.0001 par value; 50,000,000 shares authorized as of September 30, 2023 and December 31, 2022; 0 shares issued and outstanding as of September 30, 2023 and December 31, 2022	—		—
Common stock, $0.0001 par value; 500,000,000 shares authorized as of September 30, 2023 and December 31, 2022; 43,605,080 and 38,734,446 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively	4		4
Additional paid-in capital	379,944		320,183
Accumulated deficit	(155,081)		(112,186)
Accumulated other comprehensive loss	(345)		(386)
Total stockholders’ equity	224,522		207,615
Total liabilities and stockholders’ equity	$	234,627	$	222,447

The accompanying notes are an integral part of these condensed consolidated financial statements.

1

Theseus Pharmaceuticals, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share data)

(Unaudited)

	THREE MONTHS ENDED SEPTEMBER 30,				NINE MONTHS ENDED SEPTEMBER 30,
	2023		2022		2023		2022
Operating expenses:
Research and development	$	11,519	$	11,423	$	36,839	$	25,315
General and administrative	4,884		4,525		14,206		13,292
Total operating expenses	16,403		15,948		51,045		38,607
Loss from operations	(16,403)		(15,948)		(51,045)		(38,607)
Other income, net	2,899		1,203		8,150		1,716
Total other income, net	2,899		1,203		8,150		1,716
Net loss	$	(13,504)	$	(14,745)	$	(42,895)	$	(36,891)
Net loss attributable to common stockholders—basic and diluted	$	(13,504)	$	(14,745)	$	(42,895)	$	(36,891)
Weighted-average common stock outstanding—basic and diluted	43,802,221		38,585,980		43,311,740		38,417,993
Net loss per share attributable to common stockholders—basic and diluted	$	(0.31)	$	(0.38)	$	(0.99)	$	(0.96)
Comprehensive loss:
Net loss	$	(13,504)	$	(14,745)	$	(42,895)	$	(36,891)
Other comprehensive loss:
Unrealized gain (loss) on marketable securities	$	216	$	(218)	$	41	$	(550)
Total comprehensive loss	$	(13,288)	$	(14,963)	$	(42,854)	$	(37,441)

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

Theseus Pharmaceuticals, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except share data)

(Unaudited)

	COMMON STOCK $0.0001 PAR VALUE			ADDITIONAL PAID-IN CAPITAL		ACCUMULATED OTHER COMPREHENSIVE LOSS		ACCUMULATED DEFICIT		TOTAL STOCKHOLDERS’ EQUITY
	SHARES	AMOUNT
Balance at December 31, 2022	38,422,621	$	4	$	320,183	$	(386)	$	(112,186)	$	207,615
Vesting of restricted stock	66,015	—		—		—		—		—
Stock-based compensation	—	—		2,993		—		—		2,993
Vesting of early exercised options	21,620	—		87		—		—		87
Issuance of common stock upon exercise of stock options	17,880	—		48		—		—		48
Vesting of restricted stock units, less shares withheld and retired to satisfy tax obligations	7,907	—		—		—		—		—
Issuance of common stock, net of issuance costs of $1,343	4,816,301	—		49,104		—		—		49,104
Unrealized gain on marketable securities	—	—		—		227		—		227
Net loss	—	—		—		—		(14,586)		(14,586)
Balance at March 31, 2023	43,352,344	$	4	$	372,415	$	(159)	$	(126,772)	$	245,488
Vesting of restricted stock	44,017	—		—		—		—		—
Stock-based compensation	—	—		3,573		—		—		3,573
Vesting of early exercised options	21,621	—		87		—		—		87
Vesting of restricted stock units, less shares withheld and retired to satisfy tax obligations	1,969	—		—		—		—		—
Issuance of common stock under employee stock purchase plan	24,866	—		142		—		—		142
Unrealized loss on marketable securities	—	—		—		(402)		—		(402)
Net loss	—	—		—		—		(14,805)		(14,805)
Balance at June 30, 2023	43,444,817	$	4	$	376,217	$	(561)	$	(141,577)	$	234,083
Stock-based compensation	—	—		3,640		—		—		3,640
Vesting of early exercised options	21,621	—		87		—		—		87
Vesting of restricted stock units, less shares withheld and retired to satisfy tax obligations	1,711	—		—		—		—		—
Unrealized gain on marketable securities	—	—		—		216		—		216
Net loss	—	—		—		—		(13,504)		(13,504)
Balance at September 30, 2023	43,468,149	$	4	$	379,944	$	(345)	$	(155,081)	$	224,522

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Theseus Pharmaceuticals, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except share data)

(Unaudited)

	COMMON STOCK $0.0001 PAR VALUE			ADDITIONAL PAID-IN CAPITAL		ACCUMULATED OTHER COMPREHENSIVE LOSS		ACCUMULATED DEFICIT		TOTAL STOCKHOLDERS’ EQUITY
	SHARES	AMOUNT
Balance at December 31, 2021	37,872,604	$	4	$	308,008	$	—	$	(61,578)	$	246,434
Vesting of restricted stock	85,431	—		—		—		—		—
Stock-based compensation	—	—		2,044		—		—		2,044
Unrealized loss on marketable securities	—	—		—		(129)		—		(129)
Net loss	—	—		—		—		(10,497)		(10,497)
Balance at March 31, 2022	37,958,035	$	4	$	310,052	$	(129)	$	(72,075)	$	237,852
Vesting of restricted stock	85,431	—		—		—		—		—
Stock-based compensation	—	—		2,518		—		—		2,518
Vesting of early exercised options	100,895	—		407		—		—		407
Issuance of common stock under employee stock purchase plan	10,780	—		70		—		—		70
Unrealized loss on investments	—	—		—		(203)		—		(203)
Net loss	—	—		—		—		(11,649)		(11,649)
Balance at June 30, 2022	38,155,141	$	4	$	313,047	$	(332)	$	(83,724)	$	228,995
Vesting of restricted stock	137,207	—		—		—		—		—
Stock-based compensation	—	—		4,475		—		—		4,475
Vesting of early exercised options	21,621	—		87		—		—		87
Unrealized loss on investments	—	—		—		(218)		—		(218)
Net loss	—	—		—		—		(14,745)		(14,745)
Balance at September 30, 2022	38,313,969	$	4	$	317,609	$	(550)	$	(98,469)	$	218,594

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Theseus Pharmaceuticals, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

	NINE MONTHS ENDED SEPTEMBER 30,
	2023		2022
Cash flows from operating activities:
Net loss	$	(42,895)	$	(36,891)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense	63		30
Stock-based compensation expense	10,206		9,037
Amortization and accretion of marketable securities	(3,789)		(222)
Non-cash interest income	48		(23)
Non-cash operating lease expense	414		256
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	(643)		746
Other assets	1,366		1,081
Accounts payable	(3,660)		818
Accrued expenses and other current liabilities	(483)		2,762
Operating lease liability	(322)		(602)
Net cash used in operating activities	(39,695)		(23,008)
Cash flows from investing activities:
Purchases of short-term and long-term marketable securities	(149,684)		(155,316)
Sales and maturities of short-term and long-term marketable securities	92,120		49,600
Purchases of property and equipment	(61)		(444)
Net cash used in investing activities	(57,625)		(106,160)
Cash flows from financing activities:
Proceeds from issuance of common stock through ATM sales, net of offering costs	49,438		—
Proceeds from exercise of stock options	48		—
Proceeds from issuance of common stock under employee stock purchase plan	142		70
Net cash provided by financing activities	49,628		70
Net increase (decrease) in cash, cash equivalents and restricted cash	(47,692)		(129,098)
Cash, cash equivalents and restricted cash at beginning of year	94,984		245,041
Cash, cash equivalents and restricted cash at end of period	$	47,292	$	115,943
Supplemental disclosure of cash flows:
Vesting of early exercised options	$	261	$	494
Obtaining a right-of-use asset in exchange for an operating lease liability	$	—	$	4,721

The following table provides a reconciliation of the cash, cash equivalents, and restricted cash balances as of each of the dates shown below:

	NINE MONTHS ENDED SEPTEMBER 30,
	2023		2022
Cash and cash equivalents	$	46,893	$	115,564
Restricted cash (included in other assets)	399		379
Total cash, cash equivalents, and restricted cash	$	47,292	$	115,943

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

Theseus Pharmaceuticals, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Nature of the Business

Theseus Pharmaceuticals, Inc. (“Theseus” or the “Company”) is a clinical-stage biopharmaceutical company focused on improving the lives of cancer patients through the discovery, development and commercialization of transformative targeted therapies. The Company was incorporated in December 2017 under the laws of the State of Delaware, and its principal offices are in Cambridge, Massachusetts.

Basis of Presentation

The Company’s condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).

The accompanying condensed consolidated financial statements and footnotes to the condensed consolidated financial statements have been prepared on the same basis as the most recently audited annual consolidated financial statements and, in the opinion of management, reflect all normal recurring adjustments necessary for the fair presentation of the Company’s financial position as of September 30, 2023 and the results of its operations and its cash flows for the interim periods presented. The results for the three and nine months ended September 30, 2023 are not necessarily indicative of results to be expected for the year ending December 31, 2023, any other interim periods, or any future year or period. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2022.

Liquidity

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 and the ability to secure additional capital to fund operations. The Company’s product candidate and development programs 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. Because of the numerous risks and uncertainties associated with product development, the Company is unable to predict the timing or amount of increased expenses, or when or if the Company will be able to achieve or maintain profitability. Even if the Company is able to generate revenue from product sales, the Company may not become profitable. If the Company fails to become profitable or is unable to sustain profitability on a continuing basis, then the Company may be unable to continue its operations at planned levels and be forced to reduce or terminate its operations. The Company expects to incur substantial operating losses and negative cash flows from operations for the foreseeable future.

In accordance with ASC 205-40, Going Concern, the Company has evaluated whether there are 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. As of September 30, 2023, the Company had an accumulated deficit of $155.1 million. During the nine months ended September 30, 2023, the Company incurred a loss of $42.9 million and utilized $39.7 million of cash in operations. The Company expects to continue to generate operating losses for the foreseeable future. The Company expects that its cash, cash equivalents, and marketable securities of $225.4 million at September 30, 2023 will be sufficient to fund its operating expenses and capital expenditure requirements for at least the next twelve months from issuance of the accompanying condensed consolidated financial statements.

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2. Summary of Significant Accounting Policies

The significant accounting policies and estimates used in the preparation of the accompanying condensed consolidated financial statements are described in the Company’s audited consolidated financial statements, which were included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (“SEC”) on March 9, 2023 (“Annual Report”). There have been no material changes in the Company’s significant accounting policies during the nine months ended September 30, 2023, except as noted below.

Unaudited Interim Financial Information

The accompanying condensed consolidated financial statements and the accompanying notes as of September 30, 2023 and December 31, 2022 and for the three and nine months ended September 30, 2023 and 2022 are unaudited. The condensed consolidated interim financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary for the fair presentation of the Company’s financial position as of September 30, 2023 and the results of its operations for the three and nine months ended September 30, 2023 and 2022 and its cash flows for the nine months ended September 30, 2023 and 2022.

Use of Estimates

The preparation of financial statements in conformity with U.S. 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. Estimates and judgments are based on historical information and other market-specific or various relevant assumptions, including in certain circumstances, future projections, that management believes to be reasonable under the circumstances. Actual results could differ materially from estimates. Significant estimates and assumptions are used for, but not limited to, the accruals for research and development expenses.

Concentration of Credit Risk

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents, and marketable securities. Periodically, the Company maintains deposits in accredited financial institutions in excess of federally insured limits. The Company deposits its cash in financial institutions that it believes have high credit quality and have not experienced any losses on such accounts and does not believe it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships. Such deposits have and will continue to exceed federally insured limits. The Company has not experienced any losses on its cash deposits. The Company’s short-term and long-term marketable securities are invested in high grade securities with limited concentration in any one issuer, and as a result, the Company believes represent minimal credit risk.

Recently Issued and Adopted Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its condensed consolidated financial statements and disclosures.

In June 2016, the FASB issued ASU No. 2016‑13, Financial Instruments—Credit Losses (Topic 326)—Measurement of Credit Losses on Financial Instruments, which has been subsequently amended (“ASU 2016‑13”). This updated accounting guidance significantly changes the impairment model for most financial assets and certain other instruments. ASU 2016-13 will require immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets, which will generally result in earlier recognition of allowances for credit losses on trade receivables, loans and other financial instruments. This update is effective for the Company’s fiscal year beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted this new standard on January 1, 2023, and the adoption had no material impact on the Company's consolidated financial statements.

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3. Fair Value Measurements

The carrying values of other current assets, accounts payable, and accrued expenses approximate their fair values due to the short-term nature of these instruments. The Company’s marketable securities, which may include both short-term and long-term marketable securities consisting of high-quality, marketable debt instruments of corporations are measured at fair value in accordance with the fair value hierarchy.

Assets measured at fair value on a recurring basis are as follows (in thousands):

	FAIR VALUE MEASUREMENTS AT SEPTEMBER 30, 2023
	LEVEL 1		LEVEL 2		LEVEL 3		TOTAL
Cash equivalents:
Money market funds	$	43,012	$	—	$	—	$	43,012
Marketable securities:
Commercial paper	—		74,311		—		74,311
Corporate debt securities	—		30,095		—		30,095
Asset-backed securities	—		23,386		—		23,386
Government securities	19,683		31,062		—		50,745
Total financial assets	$	62,695	$	158,854	$	—	$	221,549

	FAIR VALUE MEASUREMENTS AT DECEMBER 31, 2022
	LEVEL 1		LEVEL 2		LEVEL 3		TOTAL
Cash equivalents:
Money market funds	$	6,846	$	—	$	—	$	6,846
Commercial paper	—		3,989		—		3,989
Marketable securities:
Commercial paper	—		25,187		—		25,187
Corporate debt securities	—		45,673		—		45,673
Asset-backed securities	—		13,574		—		13,574
Government securities	—		32,757		—		32,757
Total financial assets	$	6,846	$	121,180	$	—	$	128,026

During the nine months ended September 30, 2023 and the year ended December 31, 2022, there were no transfers between fair value levels.

4. Marketable Securities

The Company’s investment policy defines allowable investments and establishes guidelines relating to credit quality, diversification, and maturities of its marketable securities to preserve principal and maintain liquidity. In accordance with the Company’s investment policy, it has invested funds in marketable securities as of September 30, 2023 and December 31, 2022. The Company’s marketable securities are classified as available-for-sale investments.

The cost, gross unrealized holding gains, gross unrealized holding losses and fair value of marketable securities by types and classes of security consisted of the following (in thousands):

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	SEPTEMBER 30, 2023
	MATURITY IN YEARS	AMORTIZED COST		UNREALIZED GAIN		UNREALIZED LOSS		FAIR VALUE
Commercial paper	less than 1	$	74,457	$	—	$	(146)	$	74,311
Corporate debt securities	less than 1	25,396		2		(49)		25,349
Asset-backed securities	less than 1	10,378		—		(76)		10,302
Government securities	less than 1	48,344		3		(80)		48,267
Short-term marketable securities		$	158,575	$	5	$	(351)	$	158,229
Corporate debt securities	1 - 2	4,759		—		(13)		4,746
Asset-backed securities	1 - 2	13,063		34		(13)		13,084
Government securities	1 - 2	2,485		—		(7)		2,478
Long-term marketable securities		$	20,307	$	34	$	(33)	$	20,308

	DECEMBER 31, 2022
	MATURITY IN YEARS	AMORTIZED COST		UNREALIZED GAIN		UNREALIZED LOSS		FAIR VALUE
Commercial paper	less than 1	$	25,187	$	—	$	—	$	25,187
Corporate debt securities	less than 1	39,071		9		(185)		38,895
Asset-backed securities	less than 1	8,555		2		(10)		8,547
Government securities	less than 1	30,892		8		(155)		30,745
Short-term marketable securities		$	103,705	$	19	$	(350)	$	103,374
Corporate debt securities	1 - 2	6,783		—		(5)		6,778
Asset-backed securities	1 - 2	5,074		—		(47)		5,027
Government securities	1 - 2	2,015		—		(3)		2,012
Long-term marketable securities		$	13,872	$	—	$	(55)	$	13,817

The Company has recorded marketable securities at fair value in its condensed consolidated balance sheets and unrealized gains and losses are reported as a component of accumulated other comprehensive income (loss). The amount of realized gains and losses reclassified into earnings are based on the specific identification of the securities sold or securities that reached maturity date. The amount of realized gains and losses reclassified into earnings have not been material to the Company’s condensed consolidated statements of operations. The Company generally does not intend to sell any marketable securities prior to recovery of their amortized cost basis for any marketable securities in an unrealized loss position.

The Company has determined that there were no material declines in fair value of its marketable securities due to credit-related factors as of September 30, 2023 and December 31, 2022.

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5. Property and Equipment, net

Property and equipment, net consisted of the following as of September 30, 2023 and as of December 31, 2022 (in thousands):

	SEPTEMBER 30, 2023		DECEMBER 31, 2022
Computer equipment	$	50	$	50
Furniture and fixtures	391		341
Office equipment	87		76
Property and equipment	528		467
Less: accumulated depreciation	(114)		(51)
Property and equipment, net	$	414	$	416

Depreciation expense for the nine months ended September 30, 2023 and 2022 was $63,369 and $30,359, respectively. There were no impairments recorded to date.

6. Accrued Expenses

Accrued expenses consisted of the following as of September 30, 2023 and as of December 31, 2022 (in thousands):

	SEPTEMBER 30, 2023		DECEMBER 31, 2022
Accrued research and development	$	1,235	$	1,498
Accrued legal	219		164
Accrued compensation and benefits	2,838		3,130
Accrued other	290		273
Restricted stock liability, current	349		349
Total accrued expenses and other current liabilities	$	4,931	$	5,414

7. License Agreement

On October 27, 2023, the Company provided written notice to ARIAD Pharmaceuticals, Inc. (“ARIAD”) of its termination of the License Agreement, dated June 13, 2018, between the Company and ARIAD (the “ARIAD License Agreement”), which termination will be effective in accordance with the terms of the termination for convenience clause of such agreement. The Company is not subject to any termination penalties related to the termination of the ARIAD License Agreement. For a summary of the terms of the ARIAD License Agreement including the Company’s accounting treatment, please refer to Note 7 to the Company’s audited consolidated financial statements for the year ended December 31, 2022, included in the Company’s Annual Report.

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8. Leases

The following table presents future lease payments under the terms of the Company’s operating leases as of September 30, 2023, including a reconciliation to the present value of operating lease liabilities recognized in the condensed consolidated balance sheet (in thousands):

Fiscal Year	Operating Lease
Remainder of 2023	$	195
2024	797
2025	821
2026	846
Thereafter	1,995
Total future minimum lease payments	4,654
Less: imputed interest	(998)
Present value of lease liabilities	$	3,656

9. Commitments and Contingencies

Legal Proceedings

The Company may from time to time be party to litigation arising in the ordinary course of business. The Company was not subject to any material legal proceedings during the nine months ended September 30, 2023, and no material legal proceedings are currently pending or, to the best of the Company’s knowledge, threatened.

Indemnification Agreements

The Company enters into standard indemnification agreements in the ordinary course of business. Pursuant to the indemnification agreements, the Company agrees to indemnify, hold harmless, and to reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company’s business partners, in connection with any U.S. patent or any copyright or other intellectual property infringement claim by any third-party with respect to the Company’s products. The term of these indemnification agreements is generally perpetual any time after execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements.

401(k) Plan

The Company maintains a defined-contribution plan under Section 401(k) of the Internal Revenue Code of 1986 (the “401(k) Plan”). The 401(k) Plan covers all employees who meet defined minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. Matching contributions to the 401(k) Plan may be made at the discretion of management. The Company contributed $0.4 million to the 401(k) Plan during the nine months ended September 30, 2023. There was $0.4 million in employer contributions made to the 401(k) Plan during the year ended December 31, 2022.

10. Stockholders’ Equity

Preferred Stock

The Company was authorized to issue up to 50,000,000 shares of preferred stock, $0.0001 par value per share, as of September 30, 2023 and December 31, 2022, respectively. There were no shares of preferred stock outstanding as of September 30, 2023 and December 31, 2022, respectively.

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Common Stock

The Company was authorized to issue 500,000,000 shares of common stock, $0.0001 par value per share, as of September 30, 2023 and as of December 31, 2022, respectively. The voting, dividend and liquidation rights of the holders of the Company’s common stock are subject to and qualified by the rights, powers and preference of the holders of any series of preferred stock.

Voting Rights

Each share of common stock entitles the holder to one vote on all matters submitted to the stockholders for a vote.

Dividends

Subject to preferences that may apply to shares of preferred stock outstanding at the time, the holders of outstanding shares of the Company’s common stock are entitled to receive dividends out of funds legally available if and when the Company's board of directors (the "Board"), in its discretion, determines to issue dividends. As of September 30, 2023, no cash dividends have been declared or paid.

Liquidation Rights

Upon the Company’s dissolution, liquidation, or winding-up, the assets legally available for distribution to stockholders are distributable ratably among holders of the Company’s common stock, subject to prior satisfaction of all outstanding debt and liabilities, and the preferential rights and payment of liquidation preferences, if any, on any outstanding shares of preferred stock.

11. Stock-Based Compensation

Equity Incentive Plans

In September 2021, the Company adopted the Theseus Pharmaceuticals, Inc. 2021 Equity Incentive Plan (the “2021 Plan”), which replaced the 2018 Stock Incentive Plan (the “2018 Plan”) and allows for the issuance of stock options, restricted stock awards, restricted stock units (“RSUs”), and other types of equity awards. No further awards were made under the 2018 Plan as of the effective date of the 2021 Plan. Any options or awards outstanding under the 2018 Plan are governed by their existing terms. On the first day of each fiscal year of the Company during the term of the Plan, commencing on January 1, 2023 and ending on (and including) January 1, 2031, the aggregate number of Common Shares that may be issued under the Plan shall automatically increase by a number equal to the lesser of (a) five percent (5%) of the total number of Common Shares actually issued and outstanding on the last day of the preceding fiscal year, or (b) a number of Common Shares determined by the Board. As of September 30, 2023 and December 31, 2022, the number of shares of common stock reserved for issuance were 11,021,034 and 9,132,930 shares, respectively. Of those shares reserved for issuance, there were 1,972,328 and 1,843,494 shares available for future grant as of September 30, 2023 and December 31, 2022, respectively.

The 2021 Plan is administered by the Board (or its compensation committee), and the exercise prices, vesting and other restrictions for the awards are determined at the discretion of the Board, except that the exercise price per share of stock options may not be less than 100% of the fair market value of the common stock on the date of grant. Stock options awarded under the 2021 Plan expire ten years after the grant date unless the Board sets a shorter term. Stock options and restricted stock units granted to employees and non-employees typically vest over four years. Shares of restricted common stock awards granted to employees, officers, members of the Board, advisors, and consultants of the Company typically vest over five years. Certain executives who are option holders are able to early exercise stock option awards prior to full satisfaction of the vesting conditions. If and when this occurs, the executive receives restricted common stock upon exercise of the option, and the shares remain subject to the Company’s right of repurchase, at exercise price, until the remaining vesting terms are met. During the year ended December 31, 2021, options to purchase 345,930 shares of common stock were exercised early. As of September 30, 2023 and December 31, 2022, the Company recognized $0.6 million and $0.8 million, respectively, as a liability related to the early exercise. The amount of remaining unvested shares related to the early exercise as of September 30, 2023 and December 31, 2022 were 136,931 and

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201,793 shares, respectively. There were no additional early exercises of options during the nine months ended September 30, 2023.

Employee Stock Purchase Plan

In September 2021, the Board adopted, and its stockholders approved, the 2021 Employee Stock Purchase Plan (the "ESPP"), which became effective on October 6, 2021. The number of shares of common stock initially reserved for issuance under the ESPP was 400,000. In addition, on the first day of each fiscal year of the Company during the term of the ESPP, commencing on January 1, 2023 and concluding on January 1, 2041, the aggregate number of shares of common stock reserved for issuance under the ESPP shall automatically increase by a number equal to the lesser of (i) one percent (1%) of the total number of shares of common stock actually issued and outstanding on the last day of the preceding fiscal year, and (ii) a number of shares of common stock determined by the Board. The ESPP enables eligible employees to purchase shares of common stock of the Company at the end of each offering period at a price equal to 85% of the lower of the fair market value of the common stock at the commencement date of each offering period or the relevant date of purchase. As of September 30, 2023, the number of shares of common stock that may be issued under the ESPP is 730,682.

Stock Option Valuation

The assumptions that the Company used in Black-Scholes option-pricing model to determine the grant-date fair value of stock options granted are as follows:

	FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023	FOR THE YEAR ENDED DECEMBER 31, 2022
Risk-free interest rate	3.54% - 4.03%	1.60% - 4.20%
Expected term (in years)	5.50 - 6.08	1.03 - 6.08
Expected volatility	87.82% - 89.15%	78.00% - 90.51%
Expected dividend yield	0%	0%

A summary of option activity under the 2021 Plan during the nine months ended September 30, 2023, is as follows (in thousands except share, per share data and contractual terms):

	SHARES	WEIGHTED-AVERAGE PER-SHARE EXERCISE PRICE		WEIGHTED-AVERAGE REMAINING CONTRACTUAL TERM	AGGREGATE INTRINSIC VALUE
Outstanding as of December 31, 2022	7,257,786	$	5.95	8.58	$	10,751
Granted	1,700,130	11.17
Exercised	(17,880)	2.70
Forfeited	(224,698)	11.37
Expired	(1,354)	11.04
Outstanding as of September 30, 2023	8,713,984	$	6.84	8.06	4,367
Options vested and exercisable as of September 30, 2023	4,135,826	$	5.03	7.61	$	3,254

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock.

The weighted-average per share grant date fair value of options granted during the nine months ended September 30, 2023 and 2022 was $8.44 and $6.80, respectively. As of September 30, 2023, there was $27.8 million of unrecognized stock-based compensation expense related to unvested stock options. The

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unrecognized stock-based compensation expense is estimated to be recognized over a period of 2.2 years as of September 30, 2023.

Restricted Stock Units

The Company issues RSUs that generally vest over a four-year period with 25% of the RSUs vesting one year from the vesting commencement date, and the remainder vesting quarterly thereafter over the following 36 months. Any unvested shares underlying an RSU will be forfeited upon termination of services. The fair value of an RSU is equal to the fair market value price of the Company’s common stock on the date of grant.

A summary of RSU activity during the nine months ended September 30, 2023 is as follows:

	SHARES	WEIGHTED-AVERAGE PER-SHARE GRANT-DATE FAIR VALUE
Unvested shares at December 31, 2022	31,650	$	11.21
Granted	333,810	8.88
Forfeited	(19,151)	9.21
Vested and released	(11,587)	11.21
Unvested shares at September 30, 2023	334,722	$	9.00

As of September 30, 2023, there was $0.9 million of unrecognized stock-based compensation expense related to unvested RSUs. The unrecognized stock-based compensation expense is estimated to be recognized over a period of 3.2 years as of September 30, 2023.

Shares of Restricted Common Stock

The Company issued shares of restricted common stock to its founders in May 2018, which vested monthly over five years through May 2023. At issuance, these shares also contained certain performance-based vesting criteria which were associated with the milestone events applicable to the formerly outstanding shares of Series A preferred stock, two of which were achieved in 2020. In conjunction with the termination of the Series A preferred stock purchase agreement, the final performance-based vesting criteria was waived, leaving only service-based vesting criteria remaining for the founders’ shares through the end of the requisite service period. As noted above, certain executives who are option holders are able to early exercise stock option awards prior to full satisfaction of the vesting conditions. If and when such exercise occurs, the executive receives shares of restricted common stock. Early exercise shares are included in the table below.

A summary of restricted common stock activity during the nine months ended September 30, 2023 is as follows:

	SHARES	WEIGHTED-AVERAGE PER-SHARE GRANT-DATE FAIR VALUE
Unvested shares at December 31, 2022	311,825	$	3.96
Vesting of restricted common stock	(174,894)	2.63
Unvested shares at September 30, 2023	136,931	$	5.67

As of September 30, 2023, there was $0.8 million of unrecognized stock-based compensation expense related to unvested restricted common stock. The unrecognized stock-based compensation expense is estimated to be recognized over a period of 1.6 years as of September 30, 2023.

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Stock-based Compensation Expense

Total stock-based compensation expense recorded as research and development and general and administrative expenses, respectively, for employees, directors and non-employees during the three and nine months ended September 30, 2023 and 2022 was as follows (in thousands):

	THREE MONTHS ENDED SEPTEMBER 30,				NINE MONTHS ENDED SEPTEMBER 30,
	2023		2022		2023		2022
Research and development	$	1,855	$	3,076	$	5,278	$	5,362
General and administrative	1,785		1,399		4,928		3,675
	$	3,640	$	4,475	$	10,206	$	9,037

12. Income Taxes

Income taxes for the three and nine months ended September 30, 2023 and 2022 have been calculated based on an estimated annual effective tax rate and certain discrete items. For the three and nine months ended September 30, 2023 and 2022, no income tax was recorded, as the Company recognized losses and maintains a full valuation allowance against its net deferred tax assets. The Company has never been examined by the Internal Revenue Service or any other jurisdiction for any tax years and, as such, all years within the applicable statutes of limitations are potentially subject to audit.

13. Net Loss Per Share

Basic and diluted loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average common shares outstanding (in thousands, except share and per share data):

	THREE MONTHS ENDED SEPTEMBER 30,				NINE MONTHS ENDED SEPTEMBER 30,
	2023		2022		2023		2022
Numerator:
Net loss	$	(13,504)	$	(14,745)	$	(42,895)	$	(36,891)
Net loss attributable to common stockholders - basic and diluted	$	(13,504)	$	(14,745)	$	(42,895)	$	(36,891)
Denominator:
Weighted-average common stock outstanding - basic and diluted	43,802,221		38,585,980		43,311,740		38,417,993
Net loss per share attributable to common stockholders - basic and diluted	$	(0.31)	$	(0.38)	$	(0.99)	$	(0.96)

The Company’s potentially dilutive securities, which include preferred stock, unvested restricted common stock, unvested RSUs and stock options, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average number of shares of common stock outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. The Company excluded the following from the computation of diluted net loss per

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share attributable to common stockholders for the three and nine months ended September 30, 2023 and 2022 because including them would have had an anti-dilutive effect:

	SEPTEMBER 30,
	2023	2022
Unvested restricted stock	136,931	399,461
Unvested RSUs	334,722	31,650
Options to purchase common stock	8,713,984	7,287,786
	9,185,637	7,718,897

14. Subsequent Event

On November 13, 2023, the Company announced that it is conducting a process to explore strategic alternatives to maximize shareholder value. In conjunction with this strategic process, the Company also announced a reduction of its workforce by 26 full-time employees, or approximately 72% of the Company’s then-current employee base. The reduction of workforce is expected to result in $5.5 million in severance costs and is expected to be incurred in the fourth quarter of 2023.

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

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report and our audited consolidated financial statements and related notes, included in our Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report includes forward-looking statements that involve risks and uncertainties, such as statements of our plans, strategies, objectives, expectations, and intentions. See “Special Note Regarding Forward-Looking Statements” and “Risk Factors” for a discussion of forward-looking statements and important factors that could cause actual results to differ materially from the results described in or implied by these forward-looking statements.

Business Overview

We are a clinical-stage biopharmaceutical company focused on improving the lives of cancer patients through the discovery, development and commercialization of transformative targeted therapies. Our product candidate and development programs are designed to address drug resistance mutations in key driver oncogenes, which are mutated genes that cause cancer.

On November 13, 2023, we announced that we are conducting a process to explore strategic alternatives to maximize shareholder value. In conjunction with the strategic process, we also announced a reduction of our workforce by 26 full-time employees, or approximately 72% of our then-current employee base. The reduction of workforce is expected to result in $5.5 million in severance costs and the incremental costs are expected to be incurred in the fourth quarter of 2023.

Our lead product candidate is THE-349, a fourth-generation epidermal growth factor receptor, or EGFR, inhibitor for the treatment of non-small cell lung cancer. THE-349 is designed to address on-target treatment resistance to existing EGFR inhibitors by targeting the common activating mutations in exons 19 and 21 alone or in combination with the most frequently observed resistance mutations, T790M and C797X. Preclinical characterization of THE-349 as central nervous system and mutant-selective inhibitor with potent activity against single-, double-, and triple-mutant EGFR variants, including T790M and C797X, was shared in a poster presentation at the 34th EORTC-NCI-AACR Symposium in Barcelona on October 26-28, 2022.

Our second program is a next-generation BCR-ABL TKI designed to be potent, selective, and pan-variant—features that we believe would balance safety and efficacy—for patients with relapsed/refractory chronic myeloid leukemia, or CML, and Philadelphia chromosome-positive, or Ph+, acute lymphoblastic leukemia, or ALL.

Our third program is a next-generation, highly selective pan-variant KIT inhibitor for the treatment of early-line GIST.

As of the date of this Quarterly Report on Form 10-Q, we plan to explore strategic alternatives for the Company and pursue these programs solely through partnerships.

Financial Overview

Since our inception in December 2017, our operations have focused on organizing and staffing our company, business planning, raising capital, establishing our intellectual property portfolio and performing research and development activities, including with respect to our product candidate and development programs. We do not have any products approved for sale and have not generated any revenue from product sales. To date, we have financed our operations primarily through the sale and issuance of our preferred stock and common stock including the aggregate net offering proceeds raised in our initial public offering, or IPO, and the sale and issuance of our common stock pursuant to our at-the-market, or ATM Program. Upon the closing of the IPO, each outstanding share of our preferred stock automatically converted into one share of common stock.

We have incurred significant operating losses since inception. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more product candidates. Our net losses were $42.9 million and $36.9 million for the nine months ended September 30, 2023 and 2022, respectively. As of September 30, 2023, we had an accumulated deficit of $155.1 million. We expect to continue to incur significant and increasing losses for the foreseeable future. We

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expect that our expenses and capital requirements will increase substantially in connection with our ongoing activities, particularly if and as we:

•advance our product candidate and development programs, and other compounds we may develop in the future, from discovery through preclinical development and clinical trials;

•seek marketing approvals for any product candidates that successfully complete clinical trials;

•obtain, expand, maintain, defend and enforce our intellectual property portfolio;

•hire additional clinical, regulatory and scientific personnel;

•ultimately establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval;

•establish agreements with CROs, and contract manufacturing organizations, or CMOs; and

•add operational, legal, compliance, financial and management information systems and personnel to support our research, product development and future commercialization efforts, as well as to support our operations as a public company.

Our net losses may fluctuate significantly from period to period, depending on the timing of expenditures related to our research and development activities.

We will not generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for a product candidate. In addition, if we obtain regulatory approval for a product candidate and do not enter into a third-party commercialization partnership, we expect to incur significant expenses related to developing our commercialization capability to support product sales, marketing, manufacturing and distribution activities.

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of equity offerings, debt financings or other capital sources, which could include collaborations, strategic alliances or licensing arrangements. We may be unable to raise additional funds or enter into such arrangements when needed, on favorable terms, or at all. Our failure to raise capital or enter into such agreements as, and when, needed, could have a material adverse effect on our business, results of operations, and financial condition, including requiring us to have to delay, reduce or eliminate product development or future commercialization efforts.

Because of the numerous risks and uncertainties associated with development of targeted oncology therapies, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate product sales, we may not become profitable. We will need to generate significant revenue to achieve profitability, and we may never do so. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.

Additionally, we continue to actively monitor macroeconomic conditions and market volatility resulting from global economic developments, political unrest, high inflation, the recent failure of certain banks and financial institutions, and health crises. While we believe there has been no significant impact to our business or financial results during the periods presented, future developments and potential impacts on our business are uncertain and cannot be predicted with confidence.

As of September 30, 2023, we had cash, cash equivalents, and marketable securities of $225.4 million. Based on our current operating plan, we believe that our existing cash, cash equivalents, and marketable securities, will be sufficient to fund our operations and capital expenses for at least the next twelve months from the filing of this Quarterly Report on Form 10-Q. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See section titled “—Liquidity and Capital Resources.”

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Components of Our Results of Operations

Revenue

We have not generated any revenue since our inception and do not expect to generate any revenue from the sale of products or from other sources in the near future, if at all. We are currently pursuing our product candidate and development programs solely through partnerships. If these partnerships are successful, or any other product candidates that we may develop in the future are successful and result in marketing approval or if we enter into collaboration or license agreements with third parties, we may generate revenue in the future from a combination of product sales or payments from such collaboration or license agreements.

Operating Expenses

Research and Development Expenses

Research and development expenses account for a significant portion of our operating expenses and consist primarily of costs incurred in connection with the discovery and preclinical development of our potential development candidates, and include:

•salaries, benefits, stock-based compensation and other related costs for individuals involved in research and development activities;

•external research and development expenses incurred under agreements with CROs and consultants that conduct our preclinical studies and other scientific development services;

•costs incurred under agreements with CMOs for manufacturing material for our preclinical studies and planned clinical trials; and

•costs related to compliance with regulatory requirements.

We expense research and development costs as incurred. We recognize external development costs based on an evaluation of the progress to completion of specific tasks using information provided to us by our vendors or our estimate of the level of service that has been performed at each reporting date. Payments for these external development activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and are reflected in our condensed consolidated financial statements as prepaid expenses or accrued expenses. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are deferred and capitalized, even when there is no alternative future use for the research and development. The capitalized amounts are expensed as the related goods are delivered or the services are performed.

A significant portion of our research and development costs have been external costs, which we track after a clinical product candidate has been identified. We utilize third-party contractors for our research and development activities and CMOs for our manufacturing activities and we do not have our own laboratory or manufacturing facilities. Therefore, we have no material facilities expenses attributed to research and development. Our internal research and development costs are primarily personnel-related costs and other indirect costs.

Research and development activities are central to our business model. If any product candidates enter into later stages of clinical development, they will generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. There are numerous factors associated with the successful development and commercialization of any product candidates we may develop in the future, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development. Additionally, future commercial and regulatory factors beyond our control will impact our clinical development program and plans.

The successful development of our product candidate, THE-349, or any product candidates we may develop in the future is highly uncertain. Therefore, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the development and commercialization of our

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product candidate, THE-349, and any product candidates we may develop. We are also unable to predict when, if ever, material net cash inflows will commence from the sale of any current or future product candidates, if approved. This is due to the numerous risks and uncertainties associated with product development, including the uncertainty of:

•the timing and progress of preclinical and clinical development activities;

•the number and scope of preclinical and clinical programs we decide to pursue;

•our ability to maintain our current research and development programs and to establish new programs;

•successful patient enrollment in, and the initiation and completion of, clinical trials;

•the successful completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA or any comparable foreign regulatory authority;

•the timing, receipt and terms of any marketing approvals from applicable regulatory authorities;

•our ability to establish new licensing or collaboration arrangements;

•the performance of our future collaborators, if any;

•our ability to establish arrangements with third-party manufacturers for the clinical supply of our product candidate and commercial supply of products that receive marketing approval, if any;

•development and timely delivery of commercial-grade drug formulations that can be used in our planned clinical trials and for commercialization;

•obtaining, maintaining, defending and enforcing patent claims and other intellectual property rights;

•commercializing product candidates, if approved, whether alone or in collaboration with others; and

•maintaining a continued acceptable safety profile of the product candidates following approval.

Any changes in the outcome of any of these variables with respect to the development of THE-349, or any future product candidates in preclinical and clinical development could mean a significant change in the costs and timing associated with the development of these product candidates. For example, if the FDA or another regulatory authority were to delay our planned start of clinical trials or require us to conduct clinical trials or other testing beyond those that we currently expect, or if we experience significant delays in enrollment in any clinical trials following the FDA’s acceptance and clearance of an IND, we could be required to expend significant additional financial resources and time to complete clinical development than we currently expect. We may never obtain regulatory approval for any product candidates that we develop.

General and Administrative Expenses

General and administrative expenses consist of personnel-related expenses, including salaries, benefits, and stock-based compensation expenses for personnel in executive, finance, accounting, human resources and other administrative functions; as well as other significant general and administrative expenses include legal fees relating to patent, intellectual property and corporate matters, and fees paid for accounting, consulting and other professional services; and expenses for rent, insurance and other operating costs.

We anticipate increased general and administrative expenses associated with our process to explore strategic alternatives, including costs for legal, advisory, insurance, consulting services, and other services.

We do not believe that inflation has had a material effect on our business. However, if our costs, in particular costs related to clinical trial expenses, preclinical expenses and/or employee-related expenses, were to become subject to significant inflationary pressures, it may adversely impact our business, operating results and financial condition.

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Other Income, Net

Other income, net primarily consists of interest income, which is earned on cash equivalents that generate interest on a monthly basis, and short-term and long-term marketable securities.

Results of Operations

Comparison of the Three Months Ended September 30, 2023 and 2022

The following table summarizes our results of operations for the three months ended September 30, 2023 and 2022 (in thousands):

	THREE MONTHS ENDED SEPTEMBER 30,				CHANGE
	2023		2022
Operating expenses:
Research and development	$	11,519	$	11,423	$	96
General and administrative	4,884		4,525		359
Total operating expenses	16,403		15,948		455
Loss from operations	(16,403)		(15,948)		(455)
Other income, net	2,899		1,203		1,696
Total other income, net	2,899		1,203		1,696
Net loss	$	(13,504)	$	(14,745)	$	1,241

Research and Development Expenses

The following table summarizes our research and development expenses for the three months ended September 30, 2023 and 2022 (in thousands):

	THREE MONTHS ENDED SEPTEMBER 30,				CHANGE
	2023		2022
Direct research and development expenses by program:
Pan-variant KIT inhibitor (THE-630)	$	2,088	$	2,417	$	(329)
Fourth-generation EGFR inhibitor (THE-349)	1,935		1,686		249
Discovery programs	2,002		1,176		826
Unallocated research and development expenses:
Personnel-related (including stock-based compensation)	5,018		5,711		(693)
Other	476		433		43
Total research and development expenses	$	11,519	$	11,423	$	96

The change in research and development expenses was primarily attributable to a $0.3 million decrease in costs related to THE-630 primarily driven by decrease in clinical costs, a $0.2 million increase in costs related to THE-349 as the program continued to advance through IND-enabling studies, a $0.8 million increase in costs related to progress on our discovery programs, and a $0.7 million decrease in personnel-related costs consisting of $1.2 million decrease of stock-based compensation expense due to stock-based compensation modification occurred in July 2022, partially offset by an increase in salary and benefit related expense of $0.5 million driven by an increase in headcount.

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General and Administrative Expenses

The following table summarizes our general and administrative expenses for the three months ended September 30, 2023 and 2022 (in thousands):

	THREE MONTHS ENDED SEPTEMBER 30,				CHANGE
	2023		2022
Personnel-related expenses (including stock-based compensation)	$	2,999	$	2,657	$	342
Facilities and supplies	206		126		80
Legal and professional fees	896		1,418		(522)
Other expenses	783		324		459
	$	4,884	$	4,525	$	359

The change in general and administrative expenses was primarily attributable to a $0.3 million increase in personnel-related costs primarily due to an increase in headcount, including an increase in stock-based compensation expense of $0.4 million partially offset by decrease of $0.1 million in salary and benefit related expense driven by a reduction of workforce in July 2023.

Total Other Income, Net

Total other income, net, was $2.9 million for the three months ended September 30, 2023, and consisted primarily of interest income of $1.2 million and amortization and accretion in marketable securities earned of $1.7 million. During the three months ended September 30, 2022, total other income, net, of $1.2 million was recorded and consisted primarily of interest income.

Comparison of the Nine Months Ended September 30, 2023 and 2022

The following table summarizes our results of operations for the nine months ended September 30, 2023 and 2022 (in thousands):

	NINE MONTHS ENDED SEPTEMBER 30,				CHANGE
	2023		2022
Operating expenses:
Research and development	$	36,839	$	25,315	$	11,524
General and administrative	14,206		13,292		914
Total operating expenses	51,045		38,607		12,438
Loss from operations	(51,045)		(38,607)		(12,438)
Other income, net	8,150		1,716		6,434
Total other income, net	8,150		1,716		6,434
Net loss	$	(42,895)	$	(36,891)	$	(6,004)

Research and Development Expenses

The following table summarizes our research and development expenses for the nine months ended September 30, 2023 and 2022 (in thousands):

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	NINE MONTHS ENDED SEPTEMBER 30,				CHANGE
	2023		2022
Direct research and development expenses by program:
Pan-variant KIT inhibitor (THE-630)	$	5,855	$	5,618	$	237
Fourth-generation EGFR inhibitor (THE-349)	$	9,222	4,196		5,026
Discovery programs	$	5,819	2,427		3,392
Unallocated research and development expenses:
Personnel-related (including stock-based compensation)	$	14,358	11,908		2,450
Other	$	1,585	1,166		419
Total research and development expenses	$	36,839	$	25,315	$	11,524

The change in research and development expenses was primarily attributable to a $0.2 million increase in costs related to THE-630 primarily driven by an increase in clinical costs, a $5.0 million increase in costs related to THE-349 as the program continued to advance through IND-enabling studies, a $3.4 million increase in costs related to progress on our discovery programs, due primarily to an increase in contract research expenses, a $2.5 million increase in personnel-related costs consisting of an increase in salary and benefit related expense of $2.5 million driven by an increase in headcount, partially offset by a decrease of $0.1 million in stock-based compensation expense, and a $0.4 million increase in other unallocated research and development expenses, primarily due to an increase in facilities and technology related costs.

General and Administrative Expenses

The following table summarizes our general and administrative expenses for the nine months ended September 30, 2023 and 2022 (in thousands):

	NINE MONTHS ENDED SEPTEMBER 30,				CHANGE
	2023		2022
Personnel-related expenses (including stock-based compensation)	$	8,828	$	7,641	$	1,187
Facilities and supplies	536		416		120
Legal and professional fees	2,584		2,848		(264)
Other expenses	2,258		2,387		(129)
	$	14,206	$	13,292	$	914

The change in general and administrative expenses was primarily attributable to a $1.2 million increase in personnel-related costs primarily driven by an increase in stock-based compensation expense of $1.3 million, partially offset by $0.1 million decrease in salary and benefit related expense; and a $0.3 million decrease in professional fees, including legal and audit expenses.

Total Other Income, Net

Total other income, net, was $8.2 million for the nine months ended September 30, 2023, and consisted primarily of interest income of $4.3 million, and amortization and accretion in marketable securities earned of $3.8 million. During the nine months ended September 30, 2022, total other income, net, of $1.7 million was recorded and consisted primarily of interest income.

Liquidity and Capital Resources

Sources of Liquidity

Since our inception, we have incurred significant losses in each period and on an aggregate basis. We have not yet commercialized any product candidates, and we do not expect to generate revenue from sales of any

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product candidates or from other sources for several years, if at all. As of September 30, 2023, we had cash, cash equivalents, and marketable securities of $225.4 million.

We have funded our operations primarily from sales of our preferred stock and common stock, including the net proceeds received from the underwriters’ partial exercise of their over-allotment option in our IPO.

On November 3, 2022, we filed a shelf registration statement on Form S-3 (File No. 333-268125), with the SEC, which was declared effective on November 10, 2022, or the Shelf Registration Statement, in relation to the registration of common stock, preferred stock, debt securities, warrants and/or units of any combination thereof for the purposes of selling, from time to time, our common stock, debt securities or other equity securities in one or more offerings. The Shelf Registration Statement also included a prospectus for “an at-the-market” program, or ATM Program, pursuant to which we may sell from time to time up to an aggregate of $100.0 million of shares of our common stock, under a Sales Agreement with Cantor Fitzgerald & Co., as Sales Agent. We will pay to the Sales Agent cash commissions of up to 3.0 percent of the aggregate gross proceeds of sales of common stock under the Sales Agreement. To date, pursuant to the ATM Program, we have sold an aggregate of 4,816,301 shares of our common stock, resulting in gross proceeds of approximately $50.4 million before fees and offering costs.

Cash Flows

The following table provides information regarding our cash flows for each of the periods presented (in thousands):

	NINE MONTHS ENDED SEPTEMBER 30,
	2023		2022
Net cash used in operating activities	$	(39,695)	$	(23,008)
Net cash used in investing activities	(57,625)		(106,160)
Net cash provided by financing activities	49,628		70
Net decrease in cash	$	(47,692)	$	(129,098)

Net Cash Used in Operating Activities

During the nine months ended September 30, 2023, net cash used in operating activities was $39.7 million, primarily due to our net loss of $42.9 million, non-cash adjustment to amortization and accretion of marketable securities of $3.8 million, a $0.6 million change in prepaid expenses and other current assets, a $3.7 million change in accounts payable, and a $0.5 million change in accrued expenses and other current liabilities, partially offset by $10.2 million of stock-based compensation expense and a $1.4 million change in other assets.

During the nine months ended September 30, 2022, net cash used in operating activities was $23.0 million, primarily due to our net loss of $36.9 million, and use of cash for our operating lease liability of $0.6 million, partially offset by $9.0 million of stock-based compensation expense, a $0.7 million change in prepaid expenses and other current assets, a $1.1 million change in other assets, a $0.8 million change in accounts payable, and a $2.8 million change in accrued expenses and other current liabilities.

Net Cash Used in Investing Activities

During the nine months ended September 30, 2023, net cash used in investing activities was $57.6 million, consisting of $149.7 million in purchases of marketable securities, partially offset by $92.1 million in proceeds from sales and maturities of marketable securities.

During the nine months ended September 30, 2022, net cash used in investing activities was $106.2 million, resulting primarily from our purchases of short-term and long-term marketable securities of $155.3 million, and purchases of property and equipment of $0.4 million, partially offset by $49.6 million in proceeds from sales and maturities of marketable securities.

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Net Cash Provided by Financing Activities

During the nine months ended September 30, 2023, net cash provided by financing activities was $49.6 million, resulting primarily from proceeds received from the sale and issuance of common stock under our ATM Program.

During the nine months ended September 30, 2022, net cash provided by financing activities was $0.1 million, resulting entirely from proceeds received from the issuance of common stock under our employee stock purchase plan.

Funding Requirements

We expect our expenses to increase substantially in connection with our ongoing research and development activities, particularly as we continue research and development and advance the preclinical development of our programs, including our product candidate, THE-349, and our BCR-ABL and KIT programs. Furthermore, we expect to continue to incur additional costs associated with operating as a public company including increased costs of accounting, audit, legal, regulatory and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance costs and investor and public relations costs. As a result, we expect to incur substantial operating losses and negative operating cash flows for the foreseeable future.

Based on our current operating plan, we believe that our cash, cash equivalents, and marketable securities of $225.4 million as of September 30, 2023 will be sufficient to fund our operations and capital expenses for at least the next twelve months from the filing of this Quarterly Report on Form 10-Q. However, we have based this estimate on assumptions that may prove to be wrong, and we could exhaust our capital resources sooner than we expect.

Because of the numerous risks and uncertainties associated with research, development and commercialization of product candidates, we are unable to estimate the exact amount of our working capital requirements. Our future funding requirements will depend on, and could increase significantly as a result of, many factors, including:

•the scope, rate of progress, success and costs of our drug discovery, preclinical development activities, laboratory testing and clinical trials for product candidates;

•the number and scope of clinical programs we decide to pursue;

•the scope and costs of manufacturing development and commercial manufacturing activities for product candidates, if approved;

•the extent to which we acquire or in-license other product candidates and technologies;

•the timing and amount of any payments required to be made under the agreements governing acquired or in-licensed product candidates or technologies;

•the cost, timing and outcome of regulatory review of product candidates;

•the cost and timing of establishing sales and marketing capabilities, if any product candidate receives marketing approval;

•the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;

•our ability to establish and maintain collaborations on favorable terms, if at all;

•the impact of global conflicts, public health crises or other external disruptions on our business, results of operations and financial position;

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•our efforts to enhance operational systems and our ability to attract, hire and retain qualified personnel, including personnel to support the development of product candidates;

•the costs associated with being a public company; and

•the cost associated with commercializing product candidates, if they receive marketing approval.

A change in the outcome of any of these or other variables with respect to the development of our product candidate or any product or development candidate we may develop in the future, could significantly change the costs and timing associated with our development plans. Further, our operating plans may change in the future, and we may need additional funds to meet operational needs and capital requirements associated with such operating plans. Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings or other capital sources, which could include collaborations, strategic alliances or licensing arrangements. We currently have no credit facility or committed sources of capital. Adequate additional funds may not be available to us on acceptable terms, or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of our existing stockholders may be diluted, and the terms of these securities may include liquidation or other preferences that could adversely affect the rights of such stockholders. Debt financing, if available, may involve agreements that include restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, that could adversely impact our ability to conduct our business.

If we raise additional funds through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research program or product candidates, or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Contractual Obligations

There have been no significant changes in our contractual obligations and outstanding indebtedness as disclosed in our Annual Report. Refer to Note 8 and Note 9 in our condensed consolidated financial statements included elsewhere in this Quarterly Report for further details.

Critical Accounting Policies and Significant Judgments and Estimates

This management’s discussion and analysis is based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these condensed consolidated financial statements requires us to make judgments and estimates that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of expenses during the reported periods. We base our estimates on historical experience, known trends and events, and various other factors that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. On an ongoing basis, we evaluate our judgments and estimates in light of changes in circumstances, facts and experience. The effects of material revisions in estimates, if any, will be reflected in the condensed consolidated financial statements prospectively from the date of change in estimates. There have been no significant changes to our critical accounting policies from those described in our Annual Report.

Emerging Growth Company Status

In April 2012, the JOBS Act was enacted. Section 107 of the JOBS Act provides that an EGC, may take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Thus, an EGC can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to use the extended transition period for new or revised accounting standards during the period in which we remain an EGC; however, we may adopt certain new or revised accounting standards early.

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We will remain an EGC until the earliest to occur of: (1) the last day of the fiscal year in which we have more than $1.235 billion in annual revenue; (2) the date we qualify as a “large accelerated filer,” with at least $700.0 million of equity securities held by non-affiliates; (3) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period; and (4) December 31, 2026, the last day of the fiscal year ending after the fifth anniversary of our IPO.

We are also a “smaller reporting company” as defined in the Securities Exchange Act of 1934, as amended, or the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an EGC. We may take advantage of certain of the scaled disclosures available to smaller reporting companies until the fiscal year following the determination that our common stock held by non-affiliates is more than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenues are more than $100.0 million during the most recently completed fiscal year and our common stock held by non-affiliates is more than $700.0 million measured on the last business day of our second fiscal quarter.

Recently Issued and Adopted Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our unaudited condensed consolidated financial statements appearing elsewhere in this Quarterly Report.

Item 3. Quantitative and Qualitative Disclosures About Market Risks

As a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are not required to provide the information requested by this Item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2023. Our disclosure controls and procedures are designed to ensure that information we are required to disclose in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures, and is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms.

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of September 30, 2023.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15(d)-15(f) under the Exchange Act) that occurred during the period covered by this Quarterly Report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings

We are from time to time subject to litigation and other legal proceedings. We believe that there are no pending lawsuits or claims that, individually or in the aggregate, may have a material effect on our business, financial condition or operating results.

Item 1A. Risk Factors

Investing in our common stock involves a high degree of risk. Information regarding risk factors appears in "Part I, Item 1A. Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2022, or the 2022 Form 10-K. Aside from the below, there have been no material changes in our risk factors from those previously disclosed in our 2022 Form 10-K.

We have terminated development of THE-630 and will continue development of THE-349 and our BCR-ABL and KIT programs solely through partnerships, and may never realize any benefit from these programs.

On July 13, 2023, we announced that we were discontinuing enrollment in our Phase 1/2 study and terminating development of THE-630 in patients with GIST. We intend to continue development of our product candidate, THE-349, and our BCR-ABL and KIT programs solely through partnerships. We are evaluating next steps for potential plans for our product candidate, THE-349, and our BCR-ABL and KIT programs and intend to seek a partner to continue development of these programs. Our realization of any benefit from these programs will depend on our ability to identify and successfully partner with third-parties on such development. In addition, we may have limited to no involvement or control in the ongoing development of these programs and there can be no assurances that any efforts will be made to advance these programs.

We are exploring strategic alternatives that could significantly impact our future operations and financial position.

In November 2023, we announced that we are exploring strategic alternatives with the goal of maximizing shareholder value. Potential strategic alternatives that may be considered as part of this process include potential sale of assets, a sale of the company, a merger or other strategic action. There can be no assurance that the exploration of strategic alternatives will result in any agreements or transactions, or that, if completed, any agreements or transactions will be successful or on attractive terms. No timetable has been established for the completion of this process, and we do not expect to disclose developments unless and until our board of directors has concluded that disclosure is appropriate or required. If we determine to change our business strategy or to seek to engage in a strategic transaction, our future business, prospects, financial position and operating results could be significantly different than those in historical periods or projected by our management. Because of the significant uncertainty regarding our future plans, we are not able to accurately predict the impact of a potential change in our business strategy and future funding requirements.

Until the review process is concluded, perceived uncertainties related to our future may result in the loss of potential business opportunities and volatility in the market price of our common stock and may make it more difficult for us to attract and retain qualified personnel and business partners.

If we do not successfully consummate a strategic transaction, our board of directors may decide to pursue a dissolution and liquidation of our company. In such an event, the amount of cash available for distribution to our stockholders will depend heavily on the timing of such liquidation as well as the amount of cash that will need to be reserved for commitments and contingent liabilities.

There can be no assurance that the process to identify a strategic transaction will result in a successfully consummated transaction. If no transaction is completed, our board of directors may decide to pursue a dissolution and liquidation of our company. In such an event, the amount of cash available for distribution to our stockholders will depend heavily on the timing of such decision and, ultimately, such liquidation, since the amount of cash available for distribution will continue to decrease as we fund our operations while we evaluate our strategic alternatives. In addition, if our board of directors were to approve and recommend, and our

28

stockholders were to approve, a dissolution and liquidation of our company, we would be required under Delaware corporate law to pay our outstanding obligations, as well as to make reasonable provision for contingent and unknown obligations, prior to making any distributions in liquidation to our stockholders. Our commitments and contingent liabilities may include, among other things, (i) obligations under our employment and related agreements with certain employees that provide for severance and other payments following a termination of employment occurring for various reasons, including a change in control of our company; (ii) potential litigation against us, and other various claims and legal actions arising in the ordinary course of business; and (iii) non-cancelable contractual obligations. As a result of this requirement, a portion of our assets may need to be reserved pending the resolution of such obligations. In addition, we may be subject to litigation or other claims related to a dissolution and liquidation of our company. If a dissolution and liquidation were pursued, our board of directors, in consultation with its advisors, would need to evaluate these matters and make a determination about a reasonable amount to reserve. Accordingly, holders of our common stock could lose all or a significant portion of their investment in the event of a liquidation, dissolution or winding up of our company.

Our workforce reduction may not achieve our intended outcome and may result in significant adverse consequences.

In November 2023, our board of directors approved a workforce reduction affecting approximately 72% of our then-current workforce. This reduction in force may result in unintended consequences and costs, such as the loss of institutional knowledge and expertise, attrition beyond the intended number of employees, decreased morale among our remaining employees, and the risk that we may not achieve the anticipated benefits of the reduction in force. In addition, while positions have been eliminated, certain functions necessary to our operations remain, and we may be unsuccessful in distributing the duties and obligations of departed employees among our remaining employees. The reduction in workforce could also make it difficult for us to pursue, or prevent us from pursuing, new opportunities and initiatives due to insufficient personnel, or require us to incur additional and unanticipated costs to hire new personnel to pursue such opportunities or initiatives, including any potential strategic alternatives. If we are unable to realize the anticipated benefits from the workforce reduction, or if we experience significant adverse consequences from the workforce reduction, our business, financial condition, and results of operations may be materially adversely affected.

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

Unregistered Sale of Securities

None.

Use of Proceeds from Initial Public Offering

On October 12, 2021, we closed our initial public offering, or the IPO, in which we sold 10,000,200 shares of our common stock at a public offering price of $16.00 per share. On October 25, 2021, the Underwriters (as defined below) exercised their option to purchase an additional 1,171,990 shares of our common stock at the public offering price of $16.00 per share. After deducting underwriting discounts, commissions and offering expenses, the aggregate net offering proceeds raised in the IPO was approximately $162.5 million. All of the shares issued and sold in the IPO were registered under the Securities Act, pursuant to a Registration Statement on Form S-1 (File No. 333-259549), which was declared effective by the SEC on October 6, 2021, and a Registration Statement on Form S-1 MEF (File No. 333-260102) filed pursuant to Rule 462(b) of the Securities Act.

Jefferies LLC, SVB Leerink LLC and Cantor Fitzgerald & Co. acted as joint book-running managers, and Wedbush Securities Inc. acted as lead manager for the offering, or collectively, the Underwriters.

Our planned use of the net proceeds from the IPO as described in our final prospectus filed with the SEC on October 7, 2021 has changed due to our decision in July 2023 to discontinue enrollment in the Phase 1/2 clinical trial of THE-630 and terminate development of THE-630 in patients with GIST and due to our decision in November 2023 that we would continue development of THE-349, and our BCR-ABL and KIT programs solely through partnerships. As a result, we currently expect to use our cash and cash equivalents, and marketable securities, which include the net proceeds from our IPO, to advance the development of THE-349 and our BCR-ABL and KIT programs solely through partnerships, explore potential strategic alternatives for the Company, as well as for general corporate purposes.

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Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

		Incorporated by Reference
No.	Description of Exhibit	Form	File No.	Referenced Exhibit	Filing Date	Filed Herewith
3.1	Amended and Restated Certificate of Incorporation of Registrant.	10-Q	001-40869	3.1	August 11, 2022
3.2	Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Registrant.	10-Q	001-40869	3.2	August 10, 2023
3.3	Amended and Restated Bylaws of Registrant.	10-Q	001-40869	3.2	August 11, 2022
4.1	Amended and Restated Investors’ Rights Agreement, dated January 22, 2021, by and among the Registrant and the other parties thereto.	S-1	333-259549	4.2	September 15, 2021
10.1*	Consulting Agreement, effective November 9, 2023, by and between the Registrant and William C. Shakespeare	8-K	001-40869	10.1	November 13, 2023
10.2*	Separation and Release Agreement, effective November 9, 2023, by and between the Registrant and William C. Shakespeare	8-K	001-40869	10.2	November 13, 2023
10.3*	Separation and Release Agreement, effective November 9, 2023, by and between the Registrant and Victor Rivera					X
10.4*	Consulting Agreement, effective November 9, 2023, by and between the Registrant and Victor Rivera					X
31.1	Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.					X
31.2	Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.					X
32.1**	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.					X
32.2**	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.					X

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101.INS	Inline XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.	X
101.SCH	Inline XBRL Taxonomy Extension Schema Document.	X
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.	X
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.	X
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.	X
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.	X
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).	X
*	Management Contract or compensatory plan or arrangement.
**	The certifications attached as Exhibit 32.1 and 32.2 that accompany this Quarterly Report are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Theseus Pharmaceuticals, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report, irrespective of any general incorporation language contained in such filing.

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SIGNATURES

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

	THESEUS PHARMACEUTICALS, INC.
Date: November 17, 2023	By:	/s/ Timothy P. Clackson, Ph.D.
		Name: Timothy P. Clackson, Ph.D.
		Title: President and Chief Executive Officer (Principal Executive Officer)
Date: November 17, 2023	By:	/s/ Bradford D. Dahms
		Name: Bradford D. Dahms
		Title: Chief Financial Officer (Principal Financial and Accounting Officer)

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EX-10.3

Contains Confidential Business Information VIA ELECTRONIC MAIL Victor Rivera vicrivera@me.com Dear Vic: As discussed, your employment with Theseus Pharmaceuticals, Inc. (the “Company”) will terminate on November 9, 2023. A copy of your Separation and Release Agreement is enclosed with this letter. Please note that the termination of your employment is an “Involuntary Termination”, which qualifies you for certain “Severance Benefits” as set forth in your Offer Letter. While the Company’s proposed transaction does not meet the criteria for a “Change in Control” under the terms of your Offer Letter, the Company is pleased to provide you with Severance Benefits beyond those set forth in Section 5(a)(i) of your Offer Letter as a recognition of your contributions to the Company. Specifically, in addition to those benefits set forth in Sections 5(a)(i) and 5(b) of your Offer Letter, you will receive your annual target bonus, prorated through your last day, as well as acceleration of your equity awards that would have vested over the twelve (12) period from your last day. Thank you for all you have done at the Company, and we wish you continued success. [Signature Page to Follow]

Regards, Theseus Pharmaceuticals, Inc. By: /s/ Brad Dahms Brad Dahms CFO

VIA ELECTRONIC MAIL Victor Rivera vicrivera@me.com Re: Separation and Release Agreement Dear Vic: The purpose of this Separation and Release Agreement (the “Agreement”) is to confirm the terms regarding your separation of employment from Theseus Pharmaceuticals, Inc. (“Theseus” or the “Company”). As more fully set forth below, the Company desires to provide you with separation benefits in exchange for certain agreements by you. This Agreement shall become effective on the 8th day following your acceptance of it, as provided below (the “Effective Date”). 1. Separation of Employment. You acknowledge that your employment with the Company shall terminate effective November 9, 2023 (the “Separation Date”). You acknowledge that from and after the Separation Date, you shall not have any authority to and shall not represent yourself as an employee or agent of the Company. Between now and the Separation Date, as a condition of the Separation Benefits (defined below) you agree to (i) remain an employee with the Company in good standing, (ii) transition any of your responsibility areas and related activities, contacts, and action items to the appropriate Theseus team members, and (iii) transition any Company documents, work product, notes or other information in your possession and/or stored on any personal device to Company devices and to the appropriate Theseus team members. On the Separation Date, the Company will provide you with your final paycheck, which will include all non-severance related salary and/or wages owed to you for work performed through the Separation Date. 2. Separation Benefits. In exchange for the mutual covenants set forth in this Agreement, and your non-revocation of this Agreement (as defined in Section 7, herein), the Company agrees to provide you with the following: (a) Payment equivalent to nine (9) months (the “Severance Period”) of your gross base salary, and your annual target bonus prorated through your Separation Date, less all applicable federal, state, local and other employment-related deductions (the “Separation Pay”). The salary portion of your Separation Pay will be paid in accordance with the Company’s

normal payroll practices during the Severance Period, and the prorated bonus portion of the Separation Pay will be paid as a lump sum. You acknowledge and agree that you will only receive the Separation Pay in exchange for your execution of this Agreement. (b) By law, and regardless of whether you sign this Agreement, you will have the right to continue your medical, dental and vision insurance pursuant to the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”). The COBRA qualifying event shall be deemed to have occurred on the Separation Date. Upon completion of the appropriate COBRA forms and your execution of this Agreement, and subject to all the requirements of COBRA, you (and your covered dependents, if applicable) will be allowed to continue participation in the Company’s health, dental and vision insurance plans. The Company will continue to pay its portion of the premium costs of coverage through the Severance Period in accordance with the terms of your Offer Letter (the Company’s payment of such portion of the premium costs, “Separation Benefits”). If eligible, after the expiration of the Severance Period you may continue to participate in the Company’s health, dental and vision insurance plans by paying the full COBRA premium for such coverage. All other employee benefits shall cease as of the Separation Date. (c) On your Separation Date, you will become fully vested in any and all equity awards that would have vested during the twelve (12) month period from your Separation Date (“Equity Acceleration”). You acknowledge and agree that you will only receive the Equity Acceleration in exchange for your execution of this Agreement. The Separation Pay, Separation Benefits, and Equity Acceleration shall hereinafter be referred to as the “Consideration.” 3. No Additional Amounts Owing. You acknowledge and agree that, as of the signing of this Agreement, the Consideration provided in this Agreement is not otherwise due or owing to you under any Company employment agreement (oral or written) or Company policy or practice, and that the Consideration to be provided to you is not intended to, and shall not constitute, a severance plan, and shall confer no benefit on anyone other than the parties hereto. You further acknowledge and agree that, as of the signing of this Agreement and except for the specific financial Consideration set forth in this Agreement, you have been paid and provided all wages, bonuses, vacation pay, holiday pay, paid time off, equity, and any other form of compensation that may be due to you now in connection with your employment with or separation from the Company or any of its affiliates or subsidiaries. You further acknowledge and agree that you shall no longer be eligible or entitled to participate in or receive benefits under any Company-provided or sponsored benefit plan, program, or practice, and that all such benefits shall cease as of the Separation Date.

4. Additional Covenants by You. You expressly acknowledge and agree to the following: (d) that, on or within three (3) business days of the Separation Date, you shall return to the Company all Company documents, property and equipment, including, but not limited to, building, office and worksite access cards or keys, corporate credit cards, Company-provided laptop computer and accessories, PDAs, any software, hardware, equipment, documents, electronic data or files, or any copies thereof, and any documents (and copies thereof) that are the property of Company vendors, partners, clients or customers, and that such property shall be returned in good working condition; (e) that all information relating in any way to the negotiation of this Agreement, including the terms and amount of financial consideration provided for in this Agreement, shall be held strictly confidential by you and shall not be publicized or disclosed to any person (other than an immediate family member, legal counsel or financial advisor; provided, that any such individual to whom disclosure is made agrees to be bound by these confidentiality obligations), business entity or government agency (except as mandated by state or federal law); (f) that (i) you are bound by certain post-employment restrictive covenants and other obligations pursuant to the Proprietary Information and Inventions Agreement between you and the Company dated May 31, 2018 (the “PIIA”), (ii) you shall honor and abide by the terms of the PIIA, which shall survive the termination of your employment with the Company, and (iii) you will abide by any and all common law and/or statutory obligations relating to protection and non-disclosure of the Company’s trade secrets and/or confidential and proprietary documents and information; (g) that you will not publish or communicate in any way any information or opinions intended to damage the business or personal reputations of the Company, provided, however, that nothing herein shall restrict you from making truthful statements in connection with a legal proceeding; and (h) that the breach of any of the foregoing covenants by you shall constitute a material breach of this Agreement and shall relieve the Company of any further obligations hereunder and, in addition to any other legal or equitable remedy available to the Company, shall entitle the Company to recover any Consideration already provided to you pursuant to Section 2 of this Agreement. Notwithstanding the foregoing, nothing in this Section 4 shall limit or otherwise restrict your right to discuss the terms and conditions of your employment with the Company in

connection with an investigation and/or action pending before the National Labor Relations Board, or to otherwise engage in protected concerted activity under Section 7 of the National Labor Relations Act. 5. Cooperation. During the period with which you are receiving Consideration, you agree to make yourself reasonably available to answer questions and provide information about any matters relating to your work for the Company. You also agree that at any time following the Separation Date, you shall cooperate fully with the Company in connection with any matter or event relating to your employment or events that occurred during your employment, including, without limitation, in the defense or prosecution of any claims or actions now in existence or which may be brought or threatened in the future against or on behalf of the Company, including any claims or actions against its affiliates and its and their officers and employees. Your cooperation in connection with such matters, actions and claims shall include, without limitation, being available, upon reasonable notice to meet with the Company regarding matters in which you have been involved, and any contract matters or audits; to prepare for, attend and participate in any proceeding (including, without limitation, depositions, consultation, discovery or trial); to provide affidavits; to assist with any audit, inspection, proceeding or other inquiry; and to act as a witness in connection with any litigation or other legal proceeding affecting the Company. You further agree that should you be contacted (directly or indirectly) by any person or entity (for example, by any party representing an individual or entity) adverse to the Company, you shall promptly notify the Company’s outside legal counsel, Goodwin Proctor LLP, at rpuopolo@goodwinlaw.com. 6. Release of Claims. You hereby agree that by signing this Agreement and accepting the Consideration to be provided to you, and other good and valuable consideration provided for in this Agreement, you are waiving and releasing your right to assert any form of legal claim against the Company3/ whatsoever for any alleged action, inaction or circumstance existing or arising from the beginning of time through the Effective Date. Your waiver and release herein is intended to bar any form of legal claim, charge, complaint or any other form of action (jointly referred to as “Claims”) against the Company seeking any form of relief including, without limitation, equitable relief (whether declaratory, injunctive or otherwise), the recovery of any damages or any other form of monetary recovery whatsoever (including, without limitation, back pay, front pay, compensatory damages, emotional distress damages, punitive damages, attorneys’ fees and any other costs) against the Company, for any alleged action, inaction or circumstance existing or arising through the Separation Date. 3/ For the purposes of this Section 7, the parties agree that the term “Company” shall include Theseus Pharmaceuticals, Inc., as well as its affiliates, parents and subsidiaries, and its and their respective officers, directors, members, managers, shareholders, unitholders, employees, attorneys, agents and assigns.

Without limiting the foregoing general waiver and release, you specifically waive and release the Company from any Claim arising from or related to your employment relationship with the Company or the termination thereof, including, without limitation: • Claims under any Massachusetts (or any other state) or federal statute, regulation or executive order (as amended through the Effective Date) relating to employment, discrimination, fair employment practices, or other terms and conditions of employment, including but not limited to the Age Discrimination in Employment Act and Older Workers Benefit Protection Act (29 U.S.C. § 621 et seq.), the Civil Rights Acts of 1866 and 1871 and Title VII of the Civil Rights Act of 1964 and the Civil Rights Act of 1991 (42 U.S.C. § 2000e et seq.), the Equal Pay Act (29 U.S.C. § 201 et seq.), the Genetic Information Non-Discrimination Act (42 U.S.C. §2000ff et seq.), the Uniformed Services Employment and Reemployment Rights Act of 1994 (38 U.S.C. § 4301 et seq.), the Equal Pay Act (29 U.S.C. § 201 et seq.), the Lily Ledbetter Fair Pay Act, the Americans with Disabilities Act of 1990 (42 U.S.C. § 12101 et seq.), the Rehabilitation Act of 1973, the Massachusetts Fair Employment Practices Statute (M.G.L. c. 151B §§ 1 et seq.), the Massachusetts Equal Rights Act (M.G.L. c. 93 §102), the Massachusetts Civil Rights Act (M.G.L. c. 12 §§ 11H & 11I), the Massachusetts Privacy Statute (M.G.L. c. 214 § 1B), the Massachusetts Sexual Harassment Statute (M.G.L. c. 214 § 1C and any similar Massachusetts or other state or federal statute. • Claims under any Massachusetts (or any other state) or federal statute, regulation or executive order (as amended through the Effective Date) relating to leaves of absence, layoffs or reductions-in-force, wages, hours, or other terms and conditions of employment, including but not limited to the Fair Labor Standards Act (29 U.S.C. § 201 et seq.), the National Labor Relations Act (29 U.S.C. § 151 et seq.), the Family and Medical Leave Act (29 U.S.C. §2601 et seq.), the Employee Retirement Income Security Act of 1974 (29 U.S.C. § 1000 et seq.), COBRA (29 U.S.C. § 1161 et seq.), the Families First Coronavirus Response Act (Public Law No: 116-127, as amended and corrected), the Coronavirus Aid, Relief, and Economic Security Act (Public Law No: 116-136), the Worker Adjustment and Retraining Notification Act (29 U.S.C. § 2101 et seq.), the Massachusetts Wage Act (M.G.L. c. 149 §§ 148 et. seq.), the Massachusetts Minimum Fair Wages Act (M.G.L. c. 151 §§ 1 et. seq.), the Massachusetts Equal Pay Act (M.G.L. c. 149 § 105A) ; and any similar Massachusetts or other state or federal statute. Please note that this section specifically includes a waiver and release of Claims that you have or may have regarding payments or amounts covered by the Massachusetts Wage Act, the Massachusetts Minimum Fair Wages Act (including, for instance, hourly wages, salary, overtime, minimum wages, commissions, vacation pay, holiday pay, sick leave pay, dismissal pay, bonus pay or severance pay), as well as Claims for retaliation under the

Massachusetts Wage Act or the Massachusetts Minimum Fair Wages Act. • Claims under any Massachusetts (or any other state) or federal common law theory, including, without limitation, wrongful discharge, breach of express or implied contract, promissory estoppel, unjust enrichment, breach of a covenant of good faith and fair dealing, violation of public policy, defamation, interference with contractual relations, intentional or negligent infliction of emotional distress, invasion of privacy, misrepresentation, deceit, fraud or negligence or any claim to attorneys’ fees under any applicable statute or common law theory of recovery. • Claims under any Massachusetts (or any other state) or federal statute, regulation or executive order (as amended through the Effective Date) relating to whistleblower protections, violation of public policy, or any other form of retaliation or wrongful termination, including but not limited to the Sarbanes-Oxley Act of 2002 and any similar Massachusetts or other state or federal statute. • Claims under any Company compensation, employment, benefit, stock, stock option, incentive compensation, bonus, carried interest, restricted stock, and/or equity plan, program, policy, practice or agreement. • Any other Claim arising under other local, state or federal law. You explicitly acknowledge that because you are over forty (40) years of age, you have specific rights under the ADEA, which prohibits discrimination on the basis of age, and that the releases set forth in this Section 6 are intended to release any right that you may have to file a claim against the Company alleging discrimination on the basis of age. Notwithstanding the foregoing, this Section 6 does not: • release the Company from any obligation expressly set forth in this Agreement or from any obligation, including without limitation obligations under the Workers Compensation laws, which as a matter of law cannot be released; • prohibit you from filing a charge with the Equal Employment Opportunity Commission (“EEOC”), the Massachusetts Commission Against Discrimination (“MCAD”), or any comparable state or local agency; • prohibit you from participating in an investigation or proceeding by the EEOC, MCAD, or any comparable state or local agency; or

• prohibit you from challenging or seeking a determination in good faith of the validity of this release or waiver under the ADEA and does not impose any condition precedent, penalty, or costs for doing so unless specifically authorized by federal law. Your waiver and release, however, are intended to be a complete bar to any recovery or personal benefit by or to you with respect to any claim whatsoever, including those raised through a charge with the EEOC or MCAD, except those which, as a matter of law, cannot be released. You acknowledge and agree that, but for providing this waiver and release, you would not be receiving the Consideration being provided to you under the terms of this Agreement. You further agree that should you breach this Section 6, the Company, in addition to any other legal or equitable remedy available to the Company, shall be entitled to recover any and all Consideration already provided to you pursuant to Section 2 of this Agreement. 7. ADEA Review and Revocation Period. It is the Company’s desire and intent to make certain that you fully understand the provisions and effects of this Agreement. To that end, you have been encouraged and given the opportunity to consult with legal counsel for the purpose of reviewing the terms of this Agreement. Also, because you are over the age of 40, and consistent with the provisions of the ADEA, which prohibits discrimination on the basis of age, the Company has attached hereto information regarding job titles and ages of other employees in your job classification or class of employees in your organization who are, and are not, eligible for the Consideration. The Company is also providing you with forty-five (45) days in which to consider and accept the terms of this Agreement (the “Review Period”) by signing below and returning it to Brad Dahms at brad.dahms@theseusrx.com. The parties agree that any modifications, material or otherwise, made to this Agreement do not and will not restart or affect in any manner whatsoever, the original forty-five (45) day Review Period already afforded to you. In addition, you may rescind your assent to this Agreement within seven (7) days after you sign it (the “Revocation Period”). To do so, you must deliver a notice of rescission to Brad Dahms at brad.dahms@theseusrx.com. To be effective, such rescission must be in writing and delivered to Brad Dahms within the Revocation Period at the email listed above. 8. Entire Agreement/Modification/Waiver/Choice of Law/Enforceability. You acknowledge and agree that, with the exception of the PIIA, which shall remain in full force and effect according to its and their terms unless otherwise expressly provided in this Agreement, this Agreement supersedes any and all prior or contemporaneous oral and/or written agreements between you and the Company, and sets forth the entire agreement between you and the Company. No variations or modifications hereof shall be deemed valid

unless reduced to writing and signed by the parties hereto. The failure of the Company to seek enforcement of any provision of this Agreement in any instance or for any period of time shall not be construed as a waiver of such provision or the Company's right to seek enforcement of such provision in the future. This Agreement shall be deemed to have been made in the Commonwealth of Massachusetts, shall take effect as an instrument under seal within the Commonwealth of Massachusetts, and shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without giving effect to conflict of law principles. You agree that any action, demand, claim or counterclaim relating to the terms and provisions of this Agreement, or to its formation or breach, shall be commenced in the Commonwealth of Massachusetts in a court of competent jurisdiction, and you further acknowledge that venue for such actions shall lie exclusively in Massachusetts and that material witnesses and documents would be located in Massachusetts. 9. Taxation. Both you and the Company intend this Agreement to be in compliance with Section 409A of the Internal Revenue Code of 1986 (as amended). You acknowledge and agree, however, that the Company does not guarantee the tax treatment or tax consequences associated with any payment or benefit arising under this Agreement, including, without limitation, to consequences related to Code Section 409A. In the event any payments or benefits are deemed by the IRS to be non-compliant, this Agreement, at your option, shall be modified to the extent practicable, so as to make it compliant by altering the payments or benefits, or the timing of their receipt, provided that no such modification shall increase the Company’s obligations hereunder. 10. At-Will Employment. You acknowledge and agree that nothing in this Agreement alters the at-will nature of your employment. Nothing in this Agreement shall be construed, nor intended as, a promise of continued employment for any specific period. 11. Voluntary Agreement. You acknowledge that you have been given sufficient time and opportunity to consult with legal counsel of your choosing for the purpose of reviewing the terms of this Agreement. By executing this Agreement, you are acknowledging that you have been afforded sufficient time to understand the terms and effects of this Agreement, that your agreements and obligations hereunder are made voluntarily, knowingly and without duress, and that neither the Company nor its agents or representatives have made any representations inconsistent with the provisions of this Agreement. 12. Counterparts. This Agreement may be signed on one or more copies, each of which when signed will be deemed to be an original, and all of which together will constitute one and the same Agreement. This Agreement may be executed via transmission of electronic signature copies and/or in counterparts, each of which taken together shall be considered one instrument.

13. Severability. The provisions of this Agreement are severable, and if for any reason any part hereof shall be found to be unenforceable, the remaining provisions shall be enforced in full; provided that, if any provision of Section 6 of this Agreement is held unenforceable by any court of law, and you proceed with any Claim (within the scope of Section 6 above) against the Company (including the Company’s divisions, affiliates, parents and subsidiaries, and its and their respective officers, directors, employees, attorneys, agents and assigns) then you agree to return all money paid to you under Section 2 hereof, and the Company will be relieved from any further obligation to provide you with any further Consideration or any other form of consideration or compensation described in this Agreement. [signature page immediately follows]

If the foregoing correctly sets forth our understanding, please sign, date and return the enclosed copy of this Agreement to me within forty-five (45) days. Regards, Theseus Pharmaceuticals, Inc. By: /s/ Brad Dahms Brad Dahms CFO Confirmed and Agreed: /s/ Victor Rivera Victor Rivera

EX-10.4

Page 1 CONSULTING AGREEMENT THIS CONSULTING AGREEMENT (the “Agreement”), dated as of November 9, 2023 (the “Effective Date”), is between Theseus Pharmaceuticals, Inc., a Delaware corporation with a place of business at 314 Main Street, Suite 04-200, Cambridge, MA 02142, USA (“Company”) and Victor Rivera, an individual having an address at 15 Lakeview St, Arlington, MA, 02476 (“Consultant”). Consultant and Company (each a “Party”; collectively, the “Parties”) agree as follows: 1. SERVICES AND PAYMENT. a. Engagement. Company agrees to retain Consultant, and Consultant agrees to provide, consulting and advisory services to Company as Company may from time to time reasonably request in accordance with the Business Terms Exhibit attached hereto as Exhibit A (the “Services”). Consultant agrees to use best efforts to undertake and complete the Services in accordance with the descriptions and schedules specified therefor. If any conflict, inconsistency or overlap arises or appears likely to arise between any of Consultant’s duties related to the Services and Consultant’s other duties or obligations, Consultant shall immediately (i) notify the Company in writing, including a reasonably detailed description of such issue and (ii) stop all work on the Services that is related to such conflicting, inconsistent or overlapping duties until such time as Company instructs Consultant in writing to resume, modify or terminate such work. b. Fees and Expenses. As the only consideration due Consultant regarding the subject matter of this Agreement, and in accordance with Company’s usual accounts payable procedures, Company will pay Consultant as specified in the Business Terms Exhibit for Services satisfactorily performed and delivered. Promptly after execution of this Agreement, Consultant shall deliver to Company a properly completed and duly executed Department of the Treasury IRS Form W-9 or, if Consultant is a non-U.S. person, a Department of the Treasury IRS Form W-8BEN (or other appropriate Form W-8). The Parties represent that as of the date of full execution of this Agreement the fees represent fair market value for Services rendered, are based upon arm’s length bargaining, and are consistent with the value of similar services. Furthermore, the Parties represent that the fees are not and have not been determined in a manner that takes into account the volume or value of any referrals or business otherwise generated by Consultant for Company or as an inducement to generate any business revenues for Company except as otherwise provided for herein. c. Company Equipment. Company may provide Consultant with a laptop computer, documents and other property as well as user accounts necessary to access various Company systems to perform the Services (collectively, “Company Equipment”). Consultant will return to Company any and all Company Equipment upon expiration or termination of this Agreement, or upon Company’s request. 2. INTELLECTUAL PROPERTY. a. Inventions Assignment. Company owns all right, title and interest (including patent rights, copyright rights, trade secret rights, mask work rights, trademark rights, sui generis database rights and all other intellectual and industrial property rights of any sort throughout the world) relating to any and all inventions (whether or not patentable), technologies, works of authorship, software, mask works, designs, know-how, ideas, data and other information and work products that are made, conceived, reduced to practice or obtained, in whole or in part, by Consultant, and that arise out of the Services or that are based on or otherwise reflect any Proprietary Information (as defined below) (collectively, “Inventions”). Consultant will promptly provide and fully disclose all Inventions to Company. All Inventions are works made for hire to the extent allowed by law and, in addition, Consultant hereby assigns all right, title and interest in and to all Inventions, and agrees to make and does hereby make all assignments necessary to

Page 2 accomplish the foregoing ownership. Consultant shall assist Company, at Company’s expense, to further evidence, confirm, record and perfect such assignments, and to perfect, obtain, maintain, enforce, and defend any rights assigned. Consultant hereby irrevocably designates and appoints Company and its officers as its agents and attorneys-in-fact (coupled with an interest), with full power of substitution, to act for and in Consultant's behalf to execute and file any document and to do all other lawfully permitted acts to further the foregoing with the same legal force and effect as if executed by Consultant. b. Proprietary Information. i. Confidentiality. Consultant agrees that all Inventions and all other financial, business, legal and technical information (including the identity of and information relating to customers, prospects, vendors, affiliates and employees) that Consultant develops, learns or obtains in connection with the Services, or that are received by or for Company in confidence, constitute “Proprietary Information.” Consultant will hold in strict confidence, and exercise all reasonable precautions to prevent unauthorized access to, and not disclose or, except in performing the Services, use any Proprietary Information. If Consultant is a corporation or other entity, Consultant will not disclose the Proprietary Information to any third party other than Consultant’s employees and agents who have a need to know for the permitted purpose and who are apprised of the confidential nature of the Proprietary Information and all of the restrictions in this Agreement and who are bound by confidentiality obligations and use restrictions at least as restrictive as those contained herein. However, Proprietary Information will not include information that Consultant can document is or becomes readily publicly available without restriction through no fault of Consultant. Upon termination and at Company's request at any other time, Consultant will promptly return to Company all materials and copies containing or embodying Proprietary Information, except that Consultant may keep its personal copy of its compensation records and this Agreement. Consultant also recognizes and agrees that Consultant has no expectation of privacy with respect to Company's telecommunications, networking or information processing systems (including stored computer files, email messages and voice messages) and that Consultant's activity, and any files or messages, on or using any of those systems may be monitored at any time without notice. ii. DTSA Notice. If Consultant is an individual, then this Agreement does not affect any immunity under 18 USC Sections 1833(b)(1) or 1833(b)(2), which read as follows (note that for purposes of this statute only, individuals performing work as contractors or consultants are considered to be employees): (1) An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that (A) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. (2) An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order. c. Restrictions. As additional protection for the Proprietary Information, Consultant agrees that during the period over which it is (or is supposed to be) providing Services: (i) and for one (1) year thereafter, Consultant will not encourage or solicit any employee, contractor or consultant of Company to leave Company for any reason, or service or solicit the business or patronage of any of Company's customers, suppliers or prospects for the benefit of Consultant or any other person, or divert, entice or otherwise take away from Company the business or patronage of any customer, supplier or prospect;

Page 3 (ii) Consultant will not (in any capacity) engage in any activity that is in any way competitive with the business or demonstrably anticipated business of Company; and (iii) Consultant will not (in any capacity) assist any other person or organization in competing or preparing to compete with any business or demonstrably anticipated business of Company. Consultant understands that the restrictions set forth in this Section 2(c) are intended to protect Company's interest in its proprietary information and established relationships and goodwill with employees and business partners, and Consultant agrees that such restrictions are reasonable and appropriate for this purpose. d. Moral Rights. To the extent allowed by law, Section 2(a) and any license to Company hereunder includes all rights of paternity, integrity, disclosure and withdrawal and any other rights that may be known as or referred to as moral rights, artist's rights, droit moral or the like. To the extent any of the foregoing is ineffective under applicable law, Consultant hereby provides any and all ratification and consents necessary to accomplish the purposes of the foregoing to the extent possible. Consultant will confirm any such ratification and consents from time to time as requested by Company. Consultant will obtain the foregoing ratification, consents and authorizations, for Company's exclusive benefit, from each person who provides any Services hereunder. e. License. If any part of the Services or Inventions is based on, incorporates or is an improvement or derivative of, or cannot be reasonably and fully exercised, practiced, made, used, reproduced, distributed, commercialized or exploited in any other manner (collectively, “Exploited”), without using or violating any technology or intellectual property right that is owned by Consultant (or any third party) and not assigned hereunder (“Licensed Rights”), then Consultant agrees to grant and does hereby grant to Company and its affiliates, successors and assigns a nonexclusive, perpetual, irrevocable, worldwide, royalty-free, sublicensable (through multiple tiers) right and license to fully Exploit all such Licensed Rights in support of Company's Exploitation of the Services, Inventions or other work performed hereunder (including any modifications, improvements and derivatives). Consultant agrees not to use or disclose any Licensed Rights for which it is not fully authorized to grant the foregoing license. 3. WARRANTY. Consultant represents and warrants that: (a) the Services will be performed in a professional and workmanlike manner; (b) none of the Services or any part of this Agreement is or will be inconsistent with any obligation Consultant may have to others; (c) all work under this Agreement shall be Consultant’s original work and none of the Services or Inventions or any development, use, production, distribution or exploitation thereof will infringe, misappropriate or violate any intellectual property or other right of any person or entity (including Consultant itself); (d) Consultant has the full right to provide Company with the assignments and rights provided for herein; and (e) Consultant will not disclose to Company or use for its benefit any trade secret or proprietary or confidential information of any third party. 4. TERM AND TERMINATION. The term of this Agreement will commence on the Effective Date and expire at the end of the period specified in the “Term” Section of the Business Terms Exhibit, unless sooner terminated pursuant to the provisions of this Section 15 or extended by mutual written agreement of the parties (the “Term”). If Company breaches a material provision of this Agreement, Consultant may terminate this Agreement on thirty (30) after receipt by Company of written notice specifying such breach from Consultant, unless the breach is cured within that period. Either Party may terminate this Agreement for convenience upon thirty (30) days’ prior written notice. If Company terminates without cause, it shall pay Consultant upon termination all unpaid amounts due for Services completed prior to termination. Sections 2 through 5 (inclusive) of this Agreement, and any remedies for breach of this Agreement, shall survive any termination or expiration. Any payments due to Consultant following the termination or completion of this Agreement are dependent upon Company’s receipt of Company Equipment (if provided) in similar condition (except for normal wear and tear) as specified above. 5. INSIDER TRADING. Consultant represents Consultant has read the Company’s Insider Trading

Page 4 Policy, attached hereto as Exhibit B (the “Insider Trading Policy”) and shall abide by such Insider Trading Policy. Contemporaneously with the execution of this Agreement, Consultant shall deliver to the Company an executed copy of the “certification” contained therein. In connection with this Agreement, material non- public information about Company may be disclosed by Company to Consultant. Consultant acknowledges that relevant securities laws prohibit any person having material non-public information about a publicly listed company from purchasing or selling securities of that company while in possession of material non- public information and from tipping or providing others who trade in the securities of that company. If any non-public information about Company is disclosed to Consultant by Company, Consultant expressly warrants not to trade, or to disclose to any others who trade, or buy or sell any security of Company, directly or indirectly through intermediaries, until such material information becomes public through disclosure by Company, or until receiving written notification from Company releasing Consultant from its obligations under this Agreement. The provisions of this Section 5 shall survive termination of this Agreement. 6. GENERAL PROVISIONS. a. Relationship. Notwithstanding any provision hereof, for all purposes of this Agreement each party shall be and act as an independent contractor and not as partner, joint venturer, employer, employee or agent of the other and shall not bind nor attempt to bind the other to any contract. Consultant is an independent contractor and is solely responsible for all taxes, withholdings, and other statutory or contractual obligations of any sort, including Workers' Compensation Insurance. Consultant agrees to defend, indemnify and hold Company harmless from any and all claims, damages, liabilities, losses, attorneys' fees and expenses on account of: (a) an alleged failure by Consultant to satisfy any such obligations or any other obligation (under this Agreement or otherwise); or (b) any other action or inaction of Consultant. If Consultant is a corporation or other entity, it will ensure that its employees and agents are bound in writing to Consultant's obligations under this Agreement. b. Transparency. Should Consultant use, recommend or comment upon the attributes of any Company product candidate in connection with the treatment of a patient, a scientific or educational presentation or publication, a media interview, or any other third-party communication or interaction, Consultant shall disclose that he or she is or has been a paid consultant of Company and any and all other of his or her financial relationships with the Company. c. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts without regard to its conflicts of law provisions. Exclusive jurisdiction and venue for any action arising under this Agreement is in the federal and state courts located in Massachusetts, and both parties hereby consent to such jurisdiction and venue for this purpose. In any action or proceeding to enforce this Agreement, the prevailing party will be entitled to recover from the other party its costs and expenses (including reasonable attorneys' fees) incurred in connection with such action or proceeding and enforcing any judgment or order obtained. As used in this Section 5(b), the term “prevailing party” means the party which, in light of the claims, causes, or action, and defenses asserted, is afforded greater relief. d. Remedies. Consultant acknowledges and agrees that in the event of any breach or threatened breach of Section 2 or 3, Company will suffer irreparable damage for which it will have no adequate remedy at law. Accordingly, Company shall be entitled to injunctive and other equitable remedies to prevent or restrain, temporarily or permanently, such breach or threatened breach, without the necessity of proving actual damages or posting any bond or surety, in addition to any other remedy that Company may have at law or in equity. e. Notice. Any notice required or permitted to be given hereunder will be effective upon receipt and shall be given in writing (which may include by electronic mail), in English and delivered in person, via

Page 5 established express courier service (with confirmation of receipt), confirmed facsimile or electronically or registered or certified mail, postage prepaid, return receipt requested, to the parties at their respective addresses given herein or at such other address designated by written notice. f. Assignment. This Agreement and the performance contemplated hereunder are personal to Consultant and Consultant shall not have the right or ability to subcontract, delegate, assign or otherwise transfer any rights or obligations under this Agreement without the prior written consent of Company. Any attempt to do otherwise shall be void and of no effect. Company may transfer this Agreement without the consent of Consultant. This Agreement will be binding upon, and inure to the benefit of, the successors, representatives and permitted assigns of the parties. g. Miscellaneous. This Agreement constitutes the entire agreement, and supersedes all prior negotiations, understandings or agreements (oral or written), between the parties concerning the subject matter of this Agreement (and all past dealing or industry custom). This Agreement may be executed in one or more counterparts, each of which is an original, but taken together constituting one and the same instrument. Execution of a facsimile or electronic copy (e.g. PDF) shall have the same force and effect as execution of an original, and a facsimile or electronic signature (e.g. DocuSign) shall be deemed an original and valid signature. No change, consent or waiver to this Agreement will be effective unless in writing and signed by the party against which enforcement is sought. The failure of a party to enforce its rights under this Agreement at any time for any period will not be construed as a waiver of such rights. Unless expressly provided otherwise, each right and remedy in this Agreement is in addition to any other right or remedy, at law or in equity, and the exercise of one right or remedy will not be deemed a waiver of any other right or remedy. In the event that any provision of this Agreement is determined to be illegal or unenforceable, that provision will be limited or eliminated to the minimum extent necessary so that this Agreement will otherwise remain in full force and effect and enforceable. In this Agreement, unless otherwise specified: (a) “includes” and “including” will mean, respectively, includes and including without limitation; (b) words denoting the singular will include the plural and vice versa and words denoting any gender will include all genders; (c) the headings in this Agreement are for information only and will not be considered in the interpretation of this Agreement; (d) general words will not be given a restrictive interpretation by reason of their being preceded or followed by words indicating a particular class of acts, matters or things; (e) the word “or” shall mean “and/or” unless the context otherwise requires; (f) a statute or statutory instrument or any of their provisions is to be construed as a reference to that statute or statutory instrument or such provision as the same may have been or may from time to time hereafter be amended or re-enacted; (g) the Exhibits and other attachments form part of the operative provision of this Agreement and references to this Agreement shall, unless the context otherwise requires, include references to the Exhibits and attachments; and (h) references to “days” will mean calendar days unless otherwise indicated. [Signature page to follow]

Page 6 IN WITNESS WHEREOF, intending to be legally bound, the parties have executed this Agreement as an instrument under seal as of the Effective Date. CONSULTANT By: _________________________________________ Name: Victor Rivera THESEUS PHARMACEUTICALS, INC. By: _________________________________________ Name: Brad Dahms Title: Chief Financial Officer /s/ Victor Rivera /s/ Brad Dahms

Page 7 EXHIBIT A BUSINESS TERMS EXHIBIT 1. Consulting Services: Consultant will provide the following Services: • Scientific analysis, advice and insights on the Company’s clinical and preclinical programs, data and strategies. Services will be performed on a schedule and at a location or locations indicated above or as otherwise mutually agreed between Consultant and Tim Clackson, CEO, the Theseus contact for this contract. In addition, Consultant will be available for a reasonable number of telephone and/or written consultations. 2. Compensation: Fees: As consideration for the Services, the Company will pay Consultant $350.00 per hour. In addition, Consultant shall continue to vest in each outstanding equity award or grant remaining (after giving effect to the twelve (12) months of vesting acceleration of Consultant’s equity awards and grants provided in the Separation and Release Agreement) in accordance with the applicable award or grant agreement, in each case, until the effective date of termination of the Agreement. Expenses: Company will reimburse Consultant for out-of-pocket expenses reasonably incurred in providing the Services; provided that individual expenses in excess of $250 USD must be approved in advance in writing by Company. Requests for reimbursement will be in a form reasonably acceptable to Company, will include supporting documentation and will accompany Consultant’s invoices. Invoicing: Consultant will invoice Company for Services rendered and approved expenses incurred on a quarterly basis. Invoices should reference this Agreement and should be submitted to Company at ap@theseusrx.com to the attention of “Accounts Payable.” Invoices will identify in detail the Services performed, the hours spent on each activity, any permitted expenses actually incurred and any other details as Company may reasonably request and will be payable in U.S. Dollars. Undisputed payments will be made by Company within forty-five (45) days after Company’s receipt of Consultant’s invoice, request for reimbursement and all supporting documentation. 3. Term: This Agreement will commence on the Effective Date and continue until terminated in accordance with Section 4 of the Agreement.

Page 8 EXHIBIT B INSIDER TRADING POLICY

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Timothy P. Clackson, certify that:

1.I have reviewed this Quarterly Report of Theseus Pharmaceuticals, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a‑15(e) and 15d‑15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

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

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 17, 2023	By:	/s/ Timothy P. Clackson, Ph.D.
		Name: Timothy P. Clackson, Ph.D.
		Title: President and Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Bradford D. Dahms, certify that:

1.I have reviewed this Quarterly Report of Theseus Pharmaceuticals, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a‑15(e) and 15d‑15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(1)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;

(2)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;

(3)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(4)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5)The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(1)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(2)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 17, 2023	By:	/s/ Bradford D. Dahms
		Name: Bradford D. Dahms
		Title: Chief Financial Officer (Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Theseus Pharmaceuticals, Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(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 result of operations of the Company.

Date: November 17, 2023	By:	/s/ Timothy P. Clackson, Ph.D.
		Name: Timothy P. Clackson, Ph.D.
		Title: President and Chief Executive Officer (Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Theseus Pharmaceuticals, Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(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 result of operations of the Company.

Date: November 17, 2023	By:	/s/ Bradford D. Dahms
		Name: Bradford D. Dahms
		Title: Chief Financial Officer (Principal Financial and Accounting Officer)

XML

Cover - shares	9 Months Ended
	Sep. 30, 2023	Nov. 10, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	001-40869
Entity Registrant Name	THESEUS PHARMACEUTICALS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	83-0712806
Entity Address, Address Line One	314 Main Street
Entity Address, City or Town	Cambridge
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02142
City Area Code	857
Local Phone Number	400-9491
Title of 12(b) Security	Common Stock, $0.0001 par value per share
Trading Symbol	THRX
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		44,230,135
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Entity Central Index Key	0001745020
Amendment Flag	false
Document Fiscal Period Focus	Q3

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 46,893	$ 94,605
Short-term marketable securities	158,229	103,374
Prepaid expenses and other current assets	4,464	4,137
Total current assets	209,586	202,116
Property and equipment, net	414	416
Operating lease right-of-use asset	3,920	4,334
Long-term marketable securities	20,308	13,817
Other assets	399	1,764
Total assets	234,627	222,447
Current liabilities:
Accounts payable	1,313	4,973
Accrued expenses and other current liabilities	4,931	5,414
Operating lease liability, current portion	759	743
Total current liabilities	7,003	11,130
Operating lease liability, net of current portion	2,897	3,236
Restricted stock liability, net of current portion	205	466
Total liabilities	10,105	14,832
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, $0.0001 par value; 50,000,000 shares authorized as of September 30, 2023 and December 31, 2022; 0 shares issued and outstanding as of September 30, 2023 and December 31, 2022	0	0
Common stock, $0.0001 par value; 500,000,000 shares authorized as of September 30, 2023 and December 31, 2022; 43,605,080 and 38,734,446 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively	4	4
Additional paid-in capital	379,944	320,183
Accumulated deficit	(155,081)	(112,186)
Accumulated other comprehensive loss	(345)	(386)
Total stockholders’ equity	224,522	207,615
Total liabilities and stockholders’ equity	$ 234,627	$ 222,447

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred stock, par value (in usd per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	50,000,000	50,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in usd per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares issued (in shares)	43,605,080	38,734,446
Common stock, shares outstanding (in shares)	43,605,080	38,734,446

XML

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Operating expenses:
Research and development	$ 11,519	$ 11,423	$ 36,839	$ 25,315
General and administrative	4,884	4,525	14,206	13,292
Total operating expenses	16,403	15,948	51,045	38,607
Loss from operations	(16,403)	(15,948)	(51,045)	(38,607)
Other income, net	2,899	1,203	8,150	1,716
Total other income, net	2,899	1,203	8,150	1,716
Net loss	(13,504)	(14,745)	(42,895)	(36,891)
Net loss attributable to common stockholders—basic	(13,504)	(14,745)	(42,895)	(36,891)
Net loss attributable to common stockholders—diluted	$ (13,504)	$ (14,745)	$ (42,895)	$ (36,891)
Weighted-average common stock outstanding—basic (in shares)	43,802,221	38,585,980	43,311,740	38,417,993
Weighted-average common stock outstanding—diluted (in shares)	43,802,221	38,585,980	43,311,740	38,417,993
Net loss per share attributable to common stockholders—basic (in usd per share)	$ (0.31)	$ (0.38)	$ (0.99)	$ (0.96)
Net loss per share attributable to common stockholders—diluted (in shares)	$ (0.31)	$ (0.38)	$ (0.99)	$ (0.96)
Comprehensive loss:
Net loss	$ (13,504)	$ (14,745)	$ (42,895)	$ (36,891)
Unrealized gain (loss) on marketable securities	216	(218)	41	(550)
Total comprehensive loss	$ (13,288)	$ (14,963)	$ (42,854)	$ (37,441)

XML

Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	COMMON STOCK	ADDITIONAL PAID-IN CAPITAL	ACCUMULATED OTHER COMPREHENSIVE LOSS	ACCUMULATED DEFICIT
Beginning balance (in shares) at Dec. 31, 2021		37,872,604
Beginning balance at Dec. 31, 2021	$ 246,434	$ 4	$ 308,008	$ 0	$ (61,578)
Increase (Decrease) in Stockholders' Equity
Vesting of restricted stock (in shares)		85,431
Stock-based compensation	2,044		2,044
Unrealized gain (loss) on marketable securities	(129)			(129)
Net loss	(10,497)				(10,497)
Ending balance (in shares) at Mar. 31, 2022		37,958,035
Ending balance at Mar. 31, 2022	237,852	$ 4	310,052	(129)	(72,075)
Beginning balance (in shares) at Dec. 31, 2021		37,872,604
Beginning balance at Dec. 31, 2021	246,434	$ 4	308,008	0	(61,578)
Increase (Decrease) in Stockholders' Equity
Unrealized gain (loss) on marketable securities	(550)
Net loss	(36,891)
Ending balance (in shares) at Sep. 30, 2022		38,313,969
Ending balance at Sep. 30, 2022	218,594	$ 4	317,609	(550)	(98,469)
Beginning balance (in shares) at Mar. 31, 2022		37,958,035
Beginning balance at Mar. 31, 2022	237,852	$ 4	310,052	(129)	(72,075)
Increase (Decrease) in Stockholders' Equity
Vesting of restricted stock (in shares)		85,431
Stock-based compensation	2,518		2,518
Vesting of early exercised options (in shares)		100,895
Vesting of early exercised options	407		407
Issuance of common stock under employee stock purchase plan (in shares)		10,780
Issuance of common stock under employee stock purchase plan	70		70
Unrealized gain (loss) on marketable securities	(203)			(203)
Net loss	(11,649)				(11,649)
Ending balance (in shares) at Jun. 30, 2022		38,155,141
Ending balance at Jun. 30, 2022	228,995	$ 4	313,047	(332)	(83,724)
Increase (Decrease) in Stockholders' Equity
Vesting of restricted stock (in shares)		137,207
Stock-based compensation	4,475		4,475
Vesting of early exercised options (in shares)		21,621
Vesting of early exercised options	87		87
Unrealized gain (loss) on marketable securities	(218)			(218)
Net loss	(14,745)				(14,745)
Ending balance (in shares) at Sep. 30, 2022		38,313,969
Ending balance at Sep. 30, 2022	218,594	$ 4	317,609	(550)	(98,469)
Beginning balance (in shares) at Dec. 31, 2022		38,422,621
Beginning balance at Dec. 31, 2022	207,615	$ 4	320,183	(386)	(112,186)
Increase (Decrease) in Stockholders' Equity
Vesting of restricted stock (in shares)		66,015
Stock-based compensation	2,993		2,993
Vesting of early exercised options (in shares)		21,620
Vesting of early exercised options	87		87
Issuance of common stock upon exercise of stock options (in shares)		17,880
Issuance of common stock upon exercise of stock options	48		48
Vesting of restricted stock units, less shares withheld and retired to satisfy tax obligations (in shares)		7,907
Issuance of common stock, net of issuance costs (in shares)		4,816,301
Issuance of common stock, net of issuance costs of $1,343	49,104		49,104
Unrealized gain (loss) on marketable securities	227			227
Net loss	(14,586)				(14,586)
Ending balance (in shares) at Mar. 31, 2023		43,352,344
Ending balance at Mar. 31, 2023	245,488	$ 4	372,415	(159)	(126,772)
Beginning balance (in shares) at Dec. 31, 2022		38,422,621
Beginning balance at Dec. 31, 2022	$ 207,615	$ 4	320,183	(386)	(112,186)
Increase (Decrease) in Stockholders' Equity
Issuance of common stock upon exercise of stock options (in shares)	17,880
Unrealized gain (loss) on marketable securities	$ 41
Net loss	(42,895)
Ending balance (in shares) at Sep. 30, 2023		43,468,149
Ending balance at Sep. 30, 2023	224,522	$ 4	379,944	(345)	(155,081)
Beginning balance (in shares) at Mar. 31, 2023		43,352,344
Beginning balance at Mar. 31, 2023	245,488	$ 4	372,415	(159)	(126,772)
Increase (Decrease) in Stockholders' Equity
Vesting of restricted stock (in shares)		44,017
Stock-based compensation	3,573		3,573
Vesting of early exercised options (in shares)		21,621
Vesting of early exercised options	87		87
Vesting of restricted stock units, less shares withheld and retired to satisfy tax obligations (in shares)		1,969
Issuance of common stock under employee stock purchase plan (in shares)		24,866
Issuance of common stock under employee stock purchase plan	142		142
Unrealized gain (loss) on marketable securities	(402)			(402)
Net loss	(14,805)				(14,805)
Ending balance (in shares) at Jun. 30, 2023		43,444,817
Ending balance at Jun. 30, 2023	234,083	$ 4	376,217	(561)	(141,577)
Increase (Decrease) in Stockholders' Equity
Stock-based compensation	3,640		3,640
Vesting of early exercised options (in shares)		21,621
Vesting of early exercised options	87		87
Vesting of restricted stock units, less shares withheld and retired to satisfy tax obligations (in shares)		1,711
Unrealized gain (loss) on marketable securities	216			216
Net loss	(13,504)				(13,504)
Ending balance (in shares) at Sep. 30, 2023		43,468,149
Ending balance at Sep. 30, 2023	$ 224,522	$ 4	$ 379,944	$ (345)	$ (155,081)

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Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($) $ / shares
Statement of Stockholders' Equity [Abstract]
Common stock, par value (in usd per share) | $ / shares	$ 0.0001
Stock issuance costs | $	$ 1,343

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Condensed Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities:
Net loss	$ (42,895,000)	$ (36,891,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense	63,369	30,359
Stock-based compensation expense	10,206,000	9,037,000
Amortization and accretion of marketable securities	(3,789,000)	(222,000)
Non-cash interest income	48,000	(23,000)
Non-cash operating lease expense	414,000	256,000
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	(643,000)	746,000
Other assets	1,366,000	1,081,000
Accounts payable	(3,660,000)	818,000
Accrued expenses and other current liabilities	(483,000)	2,762,000
Operating lease liability	(322,000)	(602,000)
Net cash used in operating activities	(39,695,000)	(23,008,000)
Cash flows from investing activities:
Purchases of short-term and long-term marketable securities	(149,684,000)	(155,316,000)
Sales and maturities of short-term and long-term marketable securities	92,120,000	49,600,000
Purchases of property and equipment	(61,000)	(444,000)
Net cash used in investing activities	(57,625,000)	(106,160,000)
Cash flows from financing activities:
Proceeds from issuance of common stock through ATM sales, net of offering costs	49,438,000	0
Proceeds from exercise of stock options	48,000	0
Proceeds from issuance of common stock under employee stock purchase plan	142,000	70,000
Net cash provided by financing activities	49,628,000	70,000
Net increase (decrease) in cash, cash equivalents and restricted cash	(47,692,000)	(129,098,000)
Cash, cash equivalents and restricted cash at beginning of year	94,984,000	245,041,000
Cash, cash equivalents and restricted cash at end of period	47,292,000	115,943,000
Supplemental disclosure of cash flows:
Vesting of early exercised options	261,000	494,000
Obtaining a right-of-use asset in exchange for an operating lease liability	$ 0	$ 4,721,000

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Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Statement of Cash Flows [Abstract]
Cash and cash equivalents	$ 46,893	$ 115,564
Restricted cash (included in other assets)	399	379
Total cash, cash equivalents, and restricted cash	$ 47,292	$ 115,943

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Nature of the Business

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of the Business

Nature of the Business

Theseus Pharmaceuticals, Inc. (“Theseus” or the “Company”) is a clinical-stage biopharmaceutical company focused on improving the lives of cancer patients through the discovery, development and commercialization of transformative targeted therapies. The Company was incorporated in December 2017 under the laws of the State of Delaware, and its principal offices are in Cambridge, Massachusetts.

Basis of Presentation

The Company’s condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).

The accompanying condensed consolidated financial statements and footnotes to the condensed consolidated financial statements have been prepared on the same basis as the most recently audited annual consolidated financial statements and, in the opinion of management, reflect all normal recurring adjustments necessary for the fair presentation of the Company’s financial position as of September 30, 2023 and the results of its operations and its cash flows for the interim periods presented. The results for the three and nine months ended September 30, 2023 are not necessarily indicative of results to be expected for the year ending December 31, 2023, any other interim periods, or any future year or period. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2022.

Liquidity

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 and the ability to secure additional capital to fund operations. The Company’s product candidate and development programs 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. Because of the numerous risks and uncertainties associated with product development, the Company is unable to predict the timing or amount of increased expenses, or when or if the Company will be able to achieve or maintain profitability. Even if the Company is able to generate revenue from product sales, the Company may not become profitable. If the Company fails to become profitable or is unable to sustain profitability on a continuing basis, then the Company may be unable to continue its operations at planned levels and be forced to reduce or terminate its operations. The Company expects to incur substantial operating losses and negative cash flows from operations for the foreseeable future.

In accordance with ASC 205-40, Going Concern, the Company has evaluated whether there are 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. As of September 30, 2023, the Company had an accumulated deficit of $155.1 million. During the nine months ended September 30, 2023, the Company incurred a loss of $42.9 million and utilized $39.7 million of cash in operations. The Company expects to continue to generate operating losses for the foreseeable future. The Company expects that its cash, cash equivalents, and marketable securities of $225.4 million at September 30, 2023 will be sufficient to fund its operating expenses and capital expenditure requirements for at least the next twelve months from issuance of the accompanying condensed consolidated financial statements.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

The significant accounting policies and estimates used in the preparation of the accompanying condensed consolidated financial statements are described in the Company’s audited consolidated financial statements, which were included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (“SEC”) on March 9, 2023 (“Annual Report”). There have been no material changes in the Company’s significant accounting policies during the nine months ended September 30, 2023, except as noted below.

Unaudited Interim Financial Information

The accompanying condensed consolidated financial statements and the accompanying notes as of September 30, 2023 and December 31, 2022 and for the three and nine months ended September 30, 2023 and 2022 are unaudited. The condensed consolidated interim financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary for the fair presentation of the Company’s financial position as of September 30, 2023 and the results of its operations for the three and nine months ended September 30, 2023 and 2022 and its cash flows for the nine months ended September 30, 2023 and 2022.

Use of Estimates

The preparation of financial statements in conformity with U.S. 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. Estimates and judgments are based on historical information and other market-specific or various relevant assumptions, including in certain circumstances, future projections, that management believes to be reasonable under the circumstances. Actual results could differ materially from estimates. Significant estimates and assumptions are used for, but not limited to, the accruals for research and development expenses.

Concentration of Credit Risk

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents, and marketable securities. Periodically, the Company maintains deposits in accredited financial institutions in excess of federally insured limits. The Company deposits its cash in financial institutions that it believes have high credit quality and have not experienced any losses on such accounts and does not believe it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships. Such deposits have and will continue to exceed federally insured limits. The Company has not experienced any losses on its cash deposits. The Company’s short-term and long-term marketable securities are invested in high grade securities with limited concentration in any one issuer, and as a result, the Company believes represent minimal credit risk.

Recently Issued and Adopted Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its condensed consolidated financial statements and disclosures.

In June 2016, the FASB issued ASU No. 2016‑13, Financial Instruments—Credit Losses (Topic 326)—Measurement of Credit Losses on Financial Instruments, which has been subsequently amended (“ASU 2016‑13”). This updated accounting guidance significantly changes the impairment model for most financial assets and certain other instruments. ASU 2016-13 will require immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets, which will generally result in earlier recognition of allowances for credit losses on trade receivables, loans and other financial instruments. This update is effective for the Company’s fiscal year beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted this new standard on January 1, 2023, and the adoption had no material impact on the Company's consolidated financial statements.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The carrying values of other current assets, accounts payable, and accrued expenses approximate their fair values due to the short-term nature of these instruments. The Company’s marketable securities, which may include both short-term and long-term marketable securities consisting of high-quality, marketable debt instruments of corporations are measured at fair value in accordance with the fair value hierarchy.

Assets measured at fair value on a recurring basis are as follows (in thousands):

	FAIR VALUE MEASUREMENTS AT SEPTEMBER 30, 2023
	LEVEL 1		LEVEL 2		LEVEL 3		TOTAL
Cash equivalents:
Money market funds	$	43,012	$	—	$	—	$	43,012
Marketable securities:
Commercial paper	—		74,311		—		74,311
Corporate debt securities	—		30,095		—		30,095
Asset-backed securities	—		23,386		—		23,386
Government securities	19,683		31,062		—		50,745
Total financial assets	$	62,695	$	158,854	$	—	$	221,549

	FAIR VALUE MEASUREMENTS AT DECEMBER 31, 2022
	LEVEL 1		LEVEL 2		LEVEL 3		TOTAL
Cash equivalents:
Money market funds	$	6,846	$	—	$	—	$	6,846
Commercial paper	—		3,989		—		3,989
Marketable securities:
Commercial paper	—		25,187		—		25,187
Corporate debt securities	—		45,673		—		45,673
Asset-backed securities	—		13,574		—		13,574
Government securities	—		32,757		—		32,757
Total financial assets	$	6,846	$	121,180	$	—	$	128,026

During the nine months ended September 30, 2023 and the year ended December 31, 2022, there were no transfers between fair value levels.

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Marketable Securities

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Marketable Securities

Marketable Securities

The Company’s investment policy defines allowable investments and establishes guidelines relating to credit quality, diversification, and maturities of its marketable securities to preserve principal and maintain liquidity. In accordance with the Company’s investment policy, it has invested funds in marketable securities as of September 30, 2023 and December 31, 2022. The Company’s marketable securities are classified as available-for-sale investments.

The cost, gross unrealized holding gains, gross unrealized holding losses and fair value of marketable securities by types and classes of security consisted of the following (in thousands):

	SEPTEMBER 30, 2023
	MATURITY IN YEARS	AMORTIZED COST		UNREALIZED GAIN		UNREALIZED LOSS		FAIR VALUE
Commercial paper	less than 1	$	74,457	$	—	$	(146)	$	74,311
Corporate debt securities	less than 1	25,396		2		(49)		25,349
Asset-backed securities	less than 1	10,378		—		(76)		10,302
Government securities	less than 1	48,344		3		(80)		48,267
Short-term marketable securities		$	158,575	$	5	$	(351)	$	158,229
Corporate debt securities	1 - 2	4,759		—		(13)		4,746
Asset-backed securities	1 - 2	13,063		34		(13)		13,084
Government securities	1 - 2	2,485		—		(7)		2,478
Long-term marketable securities		$	20,307	$	34	$	(33)	$	20,308

	DECEMBER 31, 2022
	MATURITY IN YEARS	AMORTIZED COST		UNREALIZED GAIN		UNREALIZED LOSS		FAIR VALUE
Commercial paper	less than 1	$	25,187	$	—	$	—	$	25,187
Corporate debt securities	less than 1	39,071		9		(185)		38,895
Asset-backed securities	less than 1	8,555		2		(10)		8,547
Government securities	less than 1	30,892		8		(155)		30,745
Short-term marketable securities		$	103,705	$	19	$	(350)	$	103,374
Corporate debt securities	1 - 2	6,783		—		(5)		6,778
Asset-backed securities	1 - 2	5,074		—		(47)		5,027
Government securities	1 - 2	2,015		—		(3)		2,012
Long-term marketable securities		$	13,872	$	—	$	(55)	$	13,817

The Company has recorded marketable securities at fair value in its condensed consolidated balance sheets and unrealized gains and losses are reported as a component of accumulated other comprehensive income (loss). The amount of realized gains and losses reclassified into earnings are based on the specific identification of the securities sold or securities that reached maturity date. The amount of realized gains and losses reclassified into earnings have not been material to the Company’s condensed consolidated statements of operations. The Company generally does not intend to sell any marketable securities prior to recovery of their amortized cost basis for any marketable securities in an unrealized loss position.

The Company has determined that there were no material declines in fair value of its marketable securities due to credit-related factors as of September 30, 2023 and December 31, 2022.

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Property and Equipment, net

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

Property and Equipment, net

Property and Equipment, net

Property and equipment, net consisted of the following as of September 30, 2023 and as of December 31, 2022 (in thousands):

	SEPTEMBER 30, 2023		DECEMBER 31, 2022
Computer equipment	$	50	$	50
Furniture and fixtures	391		341
Office equipment	87		76
Property and equipment	528		467
Less: accumulated depreciation	(114)		(51)
Property and equipment, net	$	414	$	416

Depreciation expense for the nine months ended September 30, 2023 and 2022 was $63,369 and $30,359, respectively. There were no impairments recorded to date.

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Accrued Expenses

9 Months Ended

Sep. 30, 2023

Payables and Accruals [Abstract]

Accrued Expenses

Accrued Expenses

Accrued expenses consisted of the following as of September 30, 2023 and as of December 31, 2022 (in thousands):

	SEPTEMBER 30, 2023		DECEMBER 31, 2022
Accrued research and development	$	1,235	$	1,498
Accrued legal	219		164
Accrued compensation and benefits	2,838		3,130
Accrued other	290		273
Restricted stock liability, current	349		349
Total accrued expenses and other current liabilities	$	4,931	$	5,414

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License Agreement	9 Months Ended
	Sep. 30, 2023
License Agreement
License Agreement	License AgreementOn October 27, 2023, the Company provided written notice to ARIAD Pharmaceuticals, Inc. (“ARIAD”) of its termination of the License Agreement, dated June 13, 2018, between the Company and ARIAD (the “ARIAD License Agreement”), which termination will be effective in accordance with the terms of the termination for convenience clause of such agreement. The Company is not subject to any termination penalties related to the termination of the ARIAD License Agreement. For a summary of the terms of the ARIAD License Agreement including the Company’s accounting treatment, please refer to Note 7 to the Company’s audited consolidated financial statements for the year ended December 31, 2022, included in the Company’s Annual Report.

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Leases

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Leases

Leases

The following table presents future lease payments under the terms of the Company’s operating leases as of September 30, 2023, including a reconciliation to the present value of operating lease liabilities recognized in the condensed consolidated balance sheet (in thousands):

Fiscal Year	Operating Lease
Remainder of 2023	$	195
2024	797
2025	821
2026	846
Thereafter	1,995
Total future minimum lease payments	4,654
Less: imputed interest	(998)
Present value of lease liabilities	$	3,656

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Legal Proceedings

The Company may from time to time be party to litigation arising in the ordinary course of business. The Company was not subject to any material legal proceedings during the nine months ended September 30, 2023, and no material legal proceedings are currently pending or, to the best of the Company’s knowledge, threatened.

Indemnification Agreements

The Company enters into standard indemnification agreements in the ordinary course of business. Pursuant to the indemnification agreements, the Company agrees to indemnify, hold harmless, and to reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company’s business partners, in connection with any U.S. patent or any copyright or other intellectual property infringement claim by any third-party with respect to the Company’s products. The term of these indemnification agreements is generally perpetual any time after execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements.

401(k) Plan

The Company maintains a defined-contribution plan under Section 401(k) of the Internal Revenue Code of 1986 (the “401(k) Plan”). The 401(k) Plan covers all employees who meet defined minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. Matching contributions to the 401(k) Plan may be made at the discretion of management. The Company contributed $0.4 million to the 401(k) Plan during the nine months ended September 30, 2023. There was $0.4 million in employer contributions made to the 401(k) Plan during the year ended December 31, 2022.

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Stockholders' Equity

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

Preferred Stock

The Company was authorized to issue up to 50,000,000 shares of preferred stock, $0.0001 par value per share, as of September 30, 2023 and December 31, 2022, respectively. There were no shares of preferred stock outstanding as of September 30, 2023 and December 31, 2022, respectively.

Common Stock

The Company was authorized to issue 500,000,000 shares of common stock, $0.0001 par value per share, as of September 30, 2023 and as of December 31, 2022, respectively. The voting, dividend and liquidation rights of the holders of the Company’s common stock are subject to and qualified by the rights, powers and preference of the holders of any series of preferred stock.

Voting Rights

Each share of common stock entitles the holder to one vote on all matters submitted to the stockholders for a vote.

Dividends

Subject to preferences that may apply to shares of preferred stock outstanding at the time, the holders of outstanding shares of the Company’s common stock are entitled to receive dividends out of funds legally available if and when the Company's board of directors (the "Board"), in its discretion, determines to issue dividends. As of September 30, 2023, no cash dividends have been declared or paid.

Liquidation Rights

Upon the Company’s dissolution, liquidation, or winding-up, the assets legally available for distribution to stockholders are distributable ratably among holders of the Company’s common stock, subject to prior satisfaction of all outstanding debt and liabilities, and the preferential rights and payment of liquidation preferences, if any, on any outstanding shares of preferred stock.

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

Equity Incentive Plans

In September 2021, the Company adopted the Theseus Pharmaceuticals, Inc. 2021 Equity Incentive Plan (the “2021 Plan”), which replaced the 2018 Stock Incentive Plan (the “2018 Plan”) and allows for the issuance of stock options, restricted stock awards, restricted stock units (“RSUs”), and other types of equity awards. No further awards were made under the 2018 Plan as of the effective date of the 2021 Plan. Any options or awards outstanding under the 2018 Plan are governed by their existing terms. On the first day of each fiscal year of the Company during the term of the Plan, commencing on January 1, 2023 and ending on (and including) January 1, 2031, the aggregate number of Common Shares that may be issued under the Plan shall automatically increase by a number equal to the lesser of (a) five percent (5%) of the total number of Common Shares actually issued and outstanding on the last day of the preceding fiscal year, or (b) a number of Common Shares determined by the Board. As of September 30, 2023 and December 31, 2022, the number of shares of common stock reserved for issuance were 11,021,034 and 9,132,930 shares, respectively. Of those shares reserved for issuance, there were 1,972,328 and 1,843,494 shares available for future grant as of September 30, 2023 and December 31, 2022, respectively.

The 2021 Plan is administered by the Board (or its compensation committee), and the exercise prices, vesting and other restrictions for the awards are determined at the discretion of the Board, except that the exercise price per share of stock options may not be less than 100% of the fair market value of the common stock on the date of grant. Stock options awarded under the 2021 Plan expire ten years after the grant date unless the Board sets a shorter term. Stock options and restricted stock units granted to employees and non-employees typically vest over four years. Shares of restricted common stock awards granted to employees, officers, members of the Board, advisors, and consultants of the Company typically vest over five years. Certain executives who are option holders are able to early exercise stock option awards prior to full satisfaction of the vesting conditions. If and when this occurs, the executive receives restricted common stock upon exercise of the option, and the shares remain subject to the Company’s right of repurchase, at exercise price, until the remaining vesting terms are met. During the year ended December 31, 2021, options to purchase 345,930 shares of common stock were exercised early. As of September 30, 2023 and December 31, 2022, the Company recognized $0.6 million and $0.8 million, respectively, as a liability related to the early exercise. The amount of remaining unvested shares related to the early exercise as of September 30, 2023 and December 31, 2022 were 136,931 and

201,793 shares, respectively. There were no additional early exercises of options during the nine months ended September 30, 2023.

Employee Stock Purchase Plan

In September 2021, the Board adopted, and its stockholders approved, the 2021 Employee Stock Purchase Plan (the "ESPP"), which became effective on October 6, 2021. The number of shares of common stock initially reserved for issuance under the ESPP was 400,000. In addition, on the first day of each fiscal year of the Company during the term of the ESPP, commencing on January 1, 2023 and concluding on January 1, 2041, the aggregate number of shares of common stock reserved for issuance under the ESPP shall automatically increase by a number equal to the lesser of (i) one percent (1%) of the total number of shares of common stock actually issued and outstanding on the last day of the preceding fiscal year, and (ii) a number of shares of common stock determined by the Board. The ESPP enables eligible employees to purchase shares of common stock of the Company at the end of each offering period at a price equal to 85% of the lower of the fair market value of the common stock at the commencement date of each offering period or the relevant date of purchase. As of September 30, 2023, the number of shares of common stock that may be issued under the ESPP is 730,682.

Stock Option Valuation

The assumptions that the Company used in Black-Scholes option-pricing model to determine the grant-date fair value of stock options granted are as follows:

	FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023	FOR THE YEAR ENDED DECEMBER 31, 2022
Risk-free interest rate	3.54% - 4.03%	1.60% - 4.20%
Expected term (in years)	5.50 - 6.08	1.03 - 6.08
Expected volatility	87.82% - 89.15%	78.00% - 90.51%
Expected dividend yield	0%	0%

A summary of option activity under the 2021 Plan during the nine months ended September 30, 2023, is as follows (in thousands except share, per share data and contractual terms):

	SHARES	WEIGHTED-AVERAGE PER-SHARE EXERCISE PRICE		WEIGHTED-AVERAGE REMAINING CONTRACTUAL TERM	AGGREGATE INTRINSIC VALUE
Outstanding as of December 31, 2022	7,257,786	$	5.95	8.58	$	10,751
Granted	1,700,130	11.17
Exercised	(17,880)	2.70
Forfeited	(224,698)	11.37
Expired	(1,354)	11.04
Outstanding as of September 30, 2023	8,713,984	$	6.84	8.06	4,367
Options vested and exercisable as of September 30, 2023	4,135,826	$	5.03	7.61	$	3,254

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock.

The weighted-average per share grant date fair value of options granted during the nine months ended September 30, 2023 and 2022 was $8.44 and $6.80, respectively. As of September 30, 2023, there was $27.8 million of unrecognized stock-based compensation expense related to unvested stock options. The

unrecognized stock-based compensation expense is estimated to be recognized over a period of 2.2 years as of September 30, 2023.

Restricted Stock Units

The Company issues RSUs that generally vest over a four-year period with 25% of the RSUs vesting one year from the vesting commencement date, and the remainder vesting quarterly thereafter over the following 36 months. Any unvested shares underlying an RSU will be forfeited upon termination of services. The fair value of an RSU is equal to the fair market value price of the Company’s common stock on the date of grant.

A summary of RSU activity during the nine months ended September 30, 2023 is as follows:

	SHARES	WEIGHTED-AVERAGE PER-SHARE GRANT-DATE FAIR VALUE
Unvested shares at December 31, 2022	31,650	$	11.21
Granted	333,810	8.88
Forfeited	(19,151)	9.21
Vested and released	(11,587)	11.21
Unvested shares at September 30, 2023	334,722	$	9.00

As of September 30, 2023, there was $0.9 million of unrecognized stock-based compensation expense related to unvested RSUs. The unrecognized stock-based compensation expense is estimated to be recognized over a period of 3.2 years as of September 30, 2023.

Shares of Restricted Common Stock

The Company issued shares of restricted common stock to its founders in May 2018, which vested monthly over five years through May 2023. At issuance, these shares also contained certain performance-based vesting criteria which were associated with the milestone events applicable to the formerly outstanding shares of Series A preferred stock, two of which were achieved in 2020. In conjunction with the termination of the Series A preferred stock purchase agreement, the final performance-based vesting criteria was waived, leaving only service-based vesting criteria remaining for the founders’ shares through the end of the requisite service period. As noted above, certain executives who are option holders are able to early exercise stock option awards prior to full satisfaction of the vesting conditions. If and when such exercise occurs, the executive receives shares of restricted common stock. Early exercise shares are included in the table below.

A summary of restricted common stock activity during the nine months ended September 30, 2023 is as follows:

	SHARES	WEIGHTED-AVERAGE PER-SHARE GRANT-DATE FAIR VALUE
Unvested shares at December 31, 2022	311,825	$	3.96
Vesting of restricted common stock	(174,894)	2.63
Unvested shares at September 30, 2023	136,931	$	5.67

As of September 30, 2023, there was $0.8 million of unrecognized stock-based compensation expense related to unvested restricted common stock. The unrecognized stock-based compensation expense is estimated to be recognized over a period of 1.6 years as of September 30, 2023.

Stock-based Compensation Expense

Total stock-based compensation expense recorded as research and development and general and administrative expenses, respectively, for employees, directors and non-employees during the three and nine months ended September 30, 2023 and 2022 was as follows (in thousands):

	THREE MONTHS ENDED SEPTEMBER 30,				NINE MONTHS ENDED SEPTEMBER 30,
	2023		2022		2023		2022
Research and development	$	1,855	$	3,076	$	5,278	$	5,362
General and administrative	1,785		1,399		4,928		3,675
	$	3,640	$	4,475	$	10,206	$	9,037

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Income Taxes	9 Months Ended
	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Income Taxes	Income TaxesIncome taxes for the three and nine months ended September 30, 2023 and 2022 have been calculated based on an estimated annual effective tax rate and certain discrete items. For the three and nine months ended September 30, 2023 and 2022, no income tax was recorded, as the Company recognized losses and maintains a full valuation allowance against its net deferred tax assets. The Company has never been examined by the Internal Revenue Service or any other jurisdiction for any tax years and, as such, all years within the applicable statutes of limitations are potentially subject to audit.

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Net Loss Per Share

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Net Loss Per Share

Net Loss Per Share

Basic and diluted loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average common shares outstanding (in thousands, except share and per share data):

	THREE MONTHS ENDED SEPTEMBER 30,				NINE MONTHS ENDED SEPTEMBER 30,
	2023		2022		2023		2022
Numerator:
Net loss	$	(13,504)	$	(14,745)	$	(42,895)	$	(36,891)
Net loss attributable to common stockholders - basic and diluted	$	(13,504)	$	(14,745)	$	(42,895)	$	(36,891)
Denominator:
Weighted-average common stock outstanding - basic and diluted	43,802,221		38,585,980		43,311,740		38,417,993
Net loss per share attributable to common stockholders - basic and diluted	$	(0.31)	$	(0.38)	$	(0.99)	$	(0.96)

The Company’s potentially dilutive securities, which include preferred stock, unvested restricted common stock, unvested RSUs and stock options, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average number of shares of common stock outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. The Company excluded the following from the computation of diluted net loss per

share attributable to common stockholders for the three and nine months ended September 30, 2023 and 2022 because including them would have had an anti-dilutive effect:

	SEPTEMBER 30,
	2023	2022
Unvested restricted stock	136,931	399,461
Unvested RSUs	334,722	31,650
Options to purchase common stock	8,713,984	7,287,786
	9,185,637	7,718,897

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Subsequent Event	9 Months Ended
	Sep. 30, 2023
Subsequent Events [Abstract]
Subsequent Event	Subsequent EventOn November 13, 2023, the Company announced that it is conducting a process to explore strategic alternatives to maximize shareholder value. In conjunction with this strategic process, the Company also announced a reduction of its workforce by 26 full-time employees, or approximately 72% of the Company’s then-current employee base. The reduction of workforce is expected to result in $5.5 million in severance costs and is expected to be incurred in the fourth quarter of 2023.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Unaudited Interim Financial Information

Unaudited Interim Financial InformationThe accompanying condensed consolidated financial statements and the accompanying notes as of September 30, 2023 and December 31, 2022 and for the three and nine months ended September 30, 2023 and 2022 are unaudited. The condensed consolidated interim financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary for the fair presentation of the Company’s financial position as of September 30, 2023 and the results of its operations for the three and nine months ended September 30, 2023 and 2022 and its cash flows for the nine months ended September 30, 2023 and 2022.

Use of Estimates

Use of EstimatesThe preparation of financial statements in conformity with U.S. 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. Estimates and judgments are based on historical information and other market-specific or various relevant assumptions, including in certain circumstances, future projections, that management believes to be reasonable under the circumstances. Actual results could differ materially from estimates. Significant estimates and assumptions are used for, but not limited to, the accruals for research and development expenses.

Concentration of Credit Risk

Concentration of Credit RiskFinancial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents, and marketable securities. Periodically, the Company maintains deposits in accredited financial institutions in excess of federally insured limits. The Company deposits its cash in financial institutions that it believes have high credit quality and have not experienced any losses on such accounts and does not believe it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships. Such deposits have and will continue to exceed federally insured limits. The Company has not experienced any losses on its cash deposits. The Company’s short-term and long-term marketable securities are invested in high grade securities with limited concentration in any one issuer, and as a result, the Company believes represent minimal credit risk.

Recently Issued and Adopted Accounting Pronouncements

Recently Issued and Adopted Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its condensed consolidated financial statements and disclosures.

In June 2016, the FASB issued ASU No. 2016‑13, Financial Instruments—Credit Losses (Topic 326)—Measurement of Credit Losses on Financial Instruments, which has been subsequently amended (“ASU 2016‑13”). This updated accounting guidance significantly changes the impairment model for most financial assets and certain other instruments. ASU 2016-13 will require immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets, which will generally result in earlier recognition of allowances for credit losses on trade receivables, loans and other financial instruments. This update is effective for the Company’s fiscal year beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted this new standard on January 1, 2023, and the adoption had no material impact on the Company's consolidated financial statements.

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Assets Measured at Fair Value on a Recurring Basis

Assets measured at fair value on a recurring basis are as follows (in thousands):

	FAIR VALUE MEASUREMENTS AT SEPTEMBER 30, 2023
	LEVEL 1		LEVEL 2		LEVEL 3		TOTAL
Cash equivalents:
Money market funds	$	43,012	$	—	$	—	$	43,012
Marketable securities:
Commercial paper	—		74,311		—		74,311
Corporate debt securities	—		30,095		—		30,095
Asset-backed securities	—		23,386		—		23,386
Government securities	19,683		31,062		—		50,745
Total financial assets	$	62,695	$	158,854	$	—	$	221,549

	FAIR VALUE MEASUREMENTS AT DECEMBER 31, 2022
	LEVEL 1		LEVEL 2		LEVEL 3		TOTAL
Cash equivalents:
Money market funds	$	6,846	$	—	$	—	$	6,846
Commercial paper	—		3,989		—		3,989
Marketable securities:
Commercial paper	—		25,187		—		25,187
Corporate debt securities	—		45,673		—		45,673
Asset-backed securities	—		13,574		—		13,574
Government securities	—		32,757		—		32,757
Total financial assets	$	6,846	$	121,180	$	—	$	128,026

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Marketable Securities (Tables)

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Schedule of Cost, Gross Unrealized Holding Gains, Gross Unrealized Holding Losses and Fair Value of Marketable Securities by Types and Classes of Security

The cost, gross unrealized holding gains, gross unrealized holding losses and fair value of marketable securities by types and classes of security consisted of the following (in thousands):

	SEPTEMBER 30, 2023
	MATURITY IN YEARS	AMORTIZED COST		UNREALIZED GAIN		UNREALIZED LOSS		FAIR VALUE
Commercial paper	less than 1	$	74,457	$	—	$	(146)	$	74,311
Corporate debt securities	less than 1	25,396		2		(49)		25,349
Asset-backed securities	less than 1	10,378		—		(76)		10,302
Government securities	less than 1	48,344		3		(80)		48,267
Short-term marketable securities		$	158,575	$	5	$	(351)	$	158,229
Corporate debt securities	1 - 2	4,759		—		(13)		4,746
Asset-backed securities	1 - 2	13,063		34		(13)		13,084
Government securities	1 - 2	2,485		—		(7)		2,478
Long-term marketable securities		$	20,307	$	34	$	(33)	$	20,308

	DECEMBER 31, 2022
	MATURITY IN YEARS	AMORTIZED COST		UNREALIZED GAIN		UNREALIZED LOSS		FAIR VALUE
Commercial paper	less than 1	$	25,187	$	—	$	—	$	25,187
Corporate debt securities	less than 1	39,071		9		(185)		38,895
Asset-backed securities	less than 1	8,555		2		(10)		8,547
Government securities	less than 1	30,892		8		(155)		30,745
Short-term marketable securities		$	103,705	$	19	$	(350)	$	103,374
Corporate debt securities	1 - 2	6,783		—		(5)		6,778
Asset-backed securities	1 - 2	5,074		—		(47)		5,027
Government securities	1 - 2	2,015		—		(3)		2,012
Long-term marketable securities		$	13,872	$	—	$	(55)	$	13,817

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Property and Equipment, net (Tables)

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment, Net

Property and equipment, net consisted of the following as of September 30, 2023 and as of December 31, 2022 (in thousands):

	SEPTEMBER 30, 2023		DECEMBER 31, 2022
Computer equipment	$	50	$	50
Furniture and fixtures	391		341
Office equipment	87		76
Property and equipment	528		467
Less: accumulated depreciation	(114)		(51)
Property and equipment, net	$	414	$	416

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Accrued Expenses (Tables)

9 Months Ended

Sep. 30, 2023

Payables and Accruals [Abstract]

Schedule of Accrued Expenses

Accrued expenses consisted of the following as of September 30, 2023 and as of December 31, 2022 (in thousands):

	SEPTEMBER 30, 2023		DECEMBER 31, 2022
Accrued research and development	$	1,235	$	1,498
Accrued legal	219		164
Accrued compensation and benefits	2,838		3,130
Accrued other	290		273
Restricted stock liability, current	349		349
Total accrued expenses and other current liabilities	$	4,931	$	5,414

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Leases (Tables)

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Schedule of Future Lease Payments

The following table presents future lease payments under the terms of the Company’s operating leases as of September 30, 2023, including a reconciliation to the present value of operating lease liabilities recognized in the condensed consolidated balance sheet (in thousands):

Fiscal Year	Operating Lease
Remainder of 2023	$	195
2024	797
2025	821
2026	846
Thereafter	1,995
Total future minimum lease payments	4,654
Less: imputed interest	(998)
Present value of lease liabilities	$	3,656

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Stock Option Valuation Assumptions

The assumptions that the Company used in Black-Scholes option-pricing model to determine the grant-date fair value of stock options granted are as follows:

	FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023	FOR THE YEAR ENDED DECEMBER 31, 2022
Risk-free interest rate	3.54% - 4.03%	1.60% - 4.20%
Expected term (in years)	5.50 - 6.08	1.03 - 6.08
Expected volatility	87.82% - 89.15%	78.00% - 90.51%
Expected dividend yield	0%	0%

Schedule of Option Activity

A summary of option activity under the 2021 Plan during the nine months ended September 30, 2023, is as follows (in thousands except share, per share data and contractual terms):

	SHARES	WEIGHTED-AVERAGE PER-SHARE EXERCISE PRICE		WEIGHTED-AVERAGE REMAINING CONTRACTUAL TERM	AGGREGATE INTRINSIC VALUE
Outstanding as of December 31, 2022	7,257,786	$	5.95	8.58	$	10,751
Granted	1,700,130	11.17
Exercised	(17,880)	2.70
Forfeited	(224,698)	11.37
Expired	(1,354)	11.04
Outstanding as of September 30, 2023	8,713,984	$	6.84	8.06	4,367
Options vested and exercisable as of September 30, 2023	4,135,826	$	5.03	7.61	$	3,254

Schedule of RSU Activity

A summary of RSU activity during the nine months ended September 30, 2023 is as follows:

	SHARES	WEIGHTED-AVERAGE PER-SHARE GRANT-DATE FAIR VALUE
Unvested shares at December 31, 2022	31,650	$	11.21
Granted	333,810	8.88
Forfeited	(19,151)	9.21
Vested and released	(11,587)	11.21
Unvested shares at September 30, 2023	334,722	$	9.00

Schedule of Restricted Common Stock Activity

A summary of restricted common stock activity during the nine months ended September 30, 2023 is as follows:

	SHARES	WEIGHTED-AVERAGE PER-SHARE GRANT-DATE FAIR VALUE
Unvested shares at December 31, 2022	311,825	$	3.96
Vesting of restricted common stock	(174,894)	2.63
Unvested shares at September 30, 2023	136,931	$	5.67

Schedule of Stock-Based Compensation Expense

Total stock-based compensation expense recorded as research and development and general and administrative expenses, respectively, for employees, directors and non-employees during the three and nine months ended September 30, 2023 and 2022 was as follows (in thousands):

	THREE MONTHS ENDED SEPTEMBER 30,				NINE MONTHS ENDED SEPTEMBER 30,
	2023		2022		2023		2022
Research and development	$	1,855	$	3,076	$	5,278	$	5,362
General and administrative	1,785		1,399		4,928		3,675
	$	3,640	$	4,475	$	10,206	$	9,037

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Net Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Loss Per Share

Basic and diluted loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average common shares outstanding (in thousands, except share and per share data):

	THREE MONTHS ENDED SEPTEMBER 30,				NINE MONTHS ENDED SEPTEMBER 30,
	2023		2022		2023		2022
Numerator:
Net loss	$	(13,504)	$	(14,745)	$	(42,895)	$	(36,891)
Net loss attributable to common stockholders - basic and diluted	$	(13,504)	$	(14,745)	$	(42,895)	$	(36,891)
Denominator:
Weighted-average common stock outstanding - basic and diluted	43,802,221		38,585,980		43,311,740		38,417,993
Net loss per share attributable to common stockholders - basic and diluted	$	(0.31)	$	(0.38)	$	(0.99)	$	(0.96)

Schedule of Antidilutive Securities Excluded from Computation of Diluted Net Loss Per Share

The Company excluded the following from the computation of diluted net loss per

share attributable to common stockholders for the three and nine months ended September 30, 2023 and 2022 because including them would have had an anti-dilutive effect:

	SEPTEMBER 30,
	2023	2022
Unvested restricted stock	136,931	399,461
Unvested RSUs	334,722	31,650
Options to purchase common stock	8,713,984	7,287,786
	9,185,637	7,718,897

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Nature of the Business (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accumulated deficit	$ 155,081						$ 155,081		$ 112,186
Net loss	13,504	$ 14,805	$ 14,586	$ 14,745	$ 11,649	$ 10,497	42,895	$ 36,891
Net cash used in operating activities							39,695	$ 23,008
Amount of cash and cash equivalents, and investments	$ 225,400						$ 225,400

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Fair Value Measurements (Details) - Fair Value, Recurring - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Assets
Total financial assets	$ 221,549	$ 128,026
Commercial paper
Assets
Fair value	74,311	25,187
Corporate debt securities
Assets
Fair value	30,095	45,673
Asset-backed securities
Assets
Fair value	23,386	13,574
Government securities
Assets
Fair value	50,745	32,757
Money market funds
Assets
Cash equivalents	43,012	6,846
Commercial paper
Assets
Cash equivalents		3,989
LEVEL 1
Assets
Total financial assets	62,695	6,846
LEVEL 1 | Commercial paper
Assets
Fair value	0	0
LEVEL 1 | Corporate debt securities
Assets
Fair value	0	0
LEVEL 1 | Asset-backed securities
Assets
Fair value	0	0
LEVEL 1 | Government securities
Assets
Fair value	19,683	0
LEVEL 1 | Money market funds
Assets
Cash equivalents	43,012	6,846
LEVEL 1 | Commercial paper
Assets
Cash equivalents		0
LEVEL 2
Assets
Total financial assets	158,854	121,180
LEVEL 2 | Commercial paper
Assets
Fair value	74,311	25,187
LEVEL 2 | Corporate debt securities
Assets
Fair value	30,095	45,673
LEVEL 2 | Asset-backed securities
Assets
Fair value	23,386	13,574
LEVEL 2 | Government securities
Assets
Fair value	31,062	32,757
LEVEL 2 | Money market funds
Assets
Cash equivalents	0	0
LEVEL 2 | Commercial paper
Assets
Cash equivalents		3,989
LEVEL 3
Assets
Total financial assets	0	0
LEVEL 3 | Commercial paper
Assets
Fair value	0	0
LEVEL 3 | Corporate debt securities
Assets
Fair value	0	0
LEVEL 3 | Asset-backed securities
Assets
Fair value	0	0
LEVEL 3 | Government securities
Assets
Fair value	0	0
LEVEL 3 | Money market funds
Assets
Cash equivalents	$ 0	0
LEVEL 3 | Commercial paper
Assets
Cash equivalents		$ 0

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Marketable Securities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Short-term marketable securities
Investments
AMORTIZED COST	$ 158,575	$ 103,705
UNREALIZED GAIN	5	19
UNREALIZED LOSS	(351)	(350)
FAIR VALUE	158,229	103,374
Long-term marketable securities
Investments
AMORTIZED COST	20,307	13,872
UNREALIZED GAIN	34	0
UNREALIZED LOSS	(33)	(55)
FAIR VALUE	20,308	13,817
Commercial paper | Short-term marketable securities
Investments
AMORTIZED COST	74,457	25,187
UNREALIZED GAIN	0	0
UNREALIZED LOSS	(146)	0
FAIR VALUE	74,311	25,187
Corporate debt securities | Short-term marketable securities
Investments
AMORTIZED COST	25,396	39,071
UNREALIZED GAIN	2	9
UNREALIZED LOSS	(49)	(185)
FAIR VALUE	25,349	38,895
Corporate debt securities | Long-term marketable securities
Investments
AMORTIZED COST	4,759	6,783
UNREALIZED GAIN	0	0
UNREALIZED LOSS	(13)	(5)
FAIR VALUE	4,746	6,778
Asset-backed securities | Short-term marketable securities
Investments
AMORTIZED COST	10,378	8,555
UNREALIZED GAIN	0	2
UNREALIZED LOSS	(76)	(10)
FAIR VALUE	10,302	8,547
Asset-backed securities | Long-term marketable securities
Investments
AMORTIZED COST	13,063	5,074
UNREALIZED GAIN	34	0
UNREALIZED LOSS	(13)	(47)
FAIR VALUE	13,084	5,027
Government securities | Short-term marketable securities
Investments
AMORTIZED COST	48,344	30,892
UNREALIZED GAIN	3	8
UNREALIZED LOSS	(80)	(155)
FAIR VALUE	48,267	30,745
Government securities | Long-term marketable securities
Investments
AMORTIZED COST	2,485	2,015
UNREALIZED GAIN	0	0
UNREALIZED LOSS	(7)	(3)
FAIR VALUE	$ 2,478	$ 2,012

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Property and Equipment, net - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Property and Equipment, net
Property and equipment	$ 528	$ 467
Less: accumulated depreciation	(114)	(51)
Property and equipment, net	414	416
Computer equipment
Property and Equipment, net
Property and equipment	50	50
Furniture and fixtures
Property and Equipment, net
Property and equipment	391	341
Office equipment
Property and Equipment, net
Property and equipment	$ 87	$ 76

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Property and Equipment, net - Narrative (Details) - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 63,369	$ 30,359
Impairments recorded to date	$ 0

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Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Accrued research and development	$ 1,235	$ 1,498
Accrued legal	219	164
Accrued compensation and benefits	2,838	3,130
Accrued other	290	273
Restricted stock liability, current	349	349
Accrued expenses and other current liabilities	$ 4,931	$ 5,414

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Leases (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Leases [Abstract]
Remainder of 2023	$ 195
2024	797
2025	821
2026	846
Thereafter	1,995
Total future minimum lease payments	4,654
Less: imputed interest	(998)
Present value of lease liabilities	$ 3,656

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Commitments and Contingencies (Details) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
401(k) Plan
Commitments and Contingencies
Amount employer contributions made to the 401(k) plan	$ 0.4	$ 0.4

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Stockholders' Equity (Details)	9 Months Ended
	Sep. 30, 2023 USD ($) vote $ / shares shares	Jun. 30, 2023 $ / shares	Mar. 31, 2023 $ / shares	Dec. 31, 2022 $ / shares shares	Sep. 30, 2022 $ / shares	Jun. 30, 2022 $ / shares	Mar. 31, 2022 $ / shares	Dec. 31, 2021 $ / shares
Equity [Abstract]
Preferred stock, shares authorized (in shares)	50,000,000			50,000,000
Preferred stock, par value (in usd per share) | $ / shares	$ 0.0001			$ 0.0001
Preferred stock outstanding (in shares)	0			0
Common stock, shares authorized (in shares)	500,000,000			500,000,000
Common stock, par value (in usd per share) | $ / shares	$ 0.0001	$ 0.0001	$ 0.0001	$ 0.0001	$ 0.0001	$ 0.0001	$ 0.0001	$ 0.0001
Number of votes per share of common stock | vote	1
Common stock, cash dividend | $	$ 0

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Stock-Based Compensation - Narrative (Details) $ / shares in Units, $ in Millions	1 Months Ended	9 Months Ended		12 Months Ended
	May 31, 2018	Sep. 30, 2023 USD ($) $ / shares shares	Sep. 30, 2022 $ / shares	Dec. 31, 2021 shares	Dec. 31, 2022 USD ($) shares	Sep. 30, 2021 shares
Stock-Based Compensation
Options to purchase common stock, exercised (in shares)		17,880
Weighted-average per share grant date fair value of options granted (in usd per share) | $ / shares		$ 8.44	$ 6.80
Unrecognized stock-based compensation expense related to unvested stock options | $		$ 27.8
Recognition period		1 year 7 months 6 days
Share-Based Payment Arrangement, Option
Stock-Based Compensation
Recognition period		2 years 2 months 12 days
Restricted Stock Units (RSUs)
Stock-Based Compensation
Vesting period		4 years
Unrecognized stock-based compensation expense related to unvested stock options | $		$ 0.9
Recognition period		3 years 2 months 12 days
Restricted Stock Units (RSUs) | Share-Based Payment Arrangement, Tranche One
Stock-Based Compensation
Award vesting rights, percentage		25.00%
Restricted Stock Units (RSUs) | Share-Based Payment Arrangement, Tranche Two
Stock-Based Compensation
Vesting period		36 months
Restricted Stock
Stock-Based Compensation
Vesting period	5 years
Unrecognized stock-based compensation expense | $		$ 0.8
Employee Stock
Stock-Based Compensation
Annual percentage increase in aggregate number of common stock reserved for issuance		0.01
Shares available for future grant under the Plan (in shares)		730,682
Share-based compensation arrangement by share-based payment award, number of shares authorized						400,000
ESPP, discount from market price, percentage		85.00%
2021 Plan
Stock-Based Compensation
Annual percentage increase in aggregate number of common stock reserved for issuance		0.05
Shares reserved under the Plan (in shares)		11,021,034			9,132,930
Shares available for future grant under the Plan (in shares)		1,972,328			1,843,494
Expiration period		10 years
Share-based compensation arrangement by share-based payment award, options, liability for early exercise | $		$ 0.6			$ 0.8
2021 Plan | Share-Based Payment Arrangement, Option
Stock-Based Compensation
Vesting period		4 years
2021 Plan | Restricted Stock Units (RSUs)
Stock-Based Compensation
Vesting period		4 years
2021 Plan | Restricted Stock
Stock-Based Compensation
Vesting period		5 years
2021 Plan | Early Exercised Stock Options
Stock-Based Compensation
Options to purchase common stock, exercised (in shares)		0		345,930
Share-based compensation arrangement by share-based payment award, options, nonvested, number of shares		136,931			201,793

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Stock-Based Compensation - Schedule of Stock Option Valuation Assumptions (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Stock-Based Compensation
Share-based compensation arrangement by share-based payment award, fair value assumptions, risk free interest rate, minimum	3.54%	1.60%
Share-based compensation arrangement by share-based payment award, fair value assumptions, risk free interest rate, maximum	4.03%	4.20%
Expected volatility, minimum	87.82%	78.00%
Expected volatility, maximum	89.15%	90.51%
Expected dividend yield	0.00%	0.00%
Minimum
Stock-Based Compensation
Expected term (in years)	5 years 6 months	1 year 10 days
Maximum
Stock-Based Compensation
Expected term (in years)	6 years 29 days	6 years 29 days

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Stock-Based Compensation - Schedule of Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
SHARES
Outstanding as of beginning of period (in shares)	7,257,786
Granted (in shares)	1,700,130
Exercised (in shares)	(17,880)
Forfeited (in shares)	(224,698)
Expired (in shares)	(1,354)
Outstanding as of end of period (in shares)	8,713,984	7,257,786
Options vested and exercisable (in shares)	4,135,826
WEIGHTED-AVERAGE PER-SHARE EXERCISE PRICE
Outstanding as of beginning of period (in usd per share)	$ 5.95
Granted (in usd per share)	11.17
Exercised (in usd per share)	2.70
Forfeited (in usd per share)	11.37
Expired (in usd per share)	11.04
Outstanding as of end of period (in usd per share)	6.84	$ 5.95
Options vested and exercisable (in usd per share)	$ 5.03
WEIGHTED-AVERAGE REMAINING CONTRACTUAL TERM
Weighted-average remaining contractual term, outstanding	8 years 21 days	8 years 6 months 29 days
Weighted-average remaining contractual term, options vested and exercisable	7 years 7 months 9 days
AGGREGATE INTRINSIC VALUE
Aggregate intrinsic value, outstanding	$ 4,367	$ 10,751
Aggregate intrinsic value, options vested and exercisable	$ 3,254

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Stock-Based Compensation - Schedule of RSU and Restricted Common Stock Activity (Details)	9 Months Ended
	Sep. 30, 2023 $ / shares shares
Restricted Stock Units (RSUs)
SHARES
Unvested shares, beginning balance (in shares) | shares	31,650
Granted (in shares) | shares	333,810
Forfeited (in shares) | shares	(19,151)
Vested and released (in shares) | shares	(11,587)
Unvested shares, ending balance (in shares) | shares	334,722
WEIGHTED-AVERAGE PER-SHARE GRANT-DATE FAIR VALUE
Unvested shares, beginning balance (in usd per share) | $ / shares	$ 11.21
Granted (in usd per share) | $ / shares	8.88
Forfeited (in usd per share) | $ / shares	9.21
Vested and released (in usd per share) | $ / shares	11.21
Unvested shares, ending balance (in usd per share) | $ / shares	$ 9.00
Restricted Common Stock
SHARES
Unvested shares, beginning balance (in shares) | shares	311,825
Vested and released (in shares) | shares	(174,894)
Unvested shares, ending balance (in shares) | shares	136,931
WEIGHTED-AVERAGE PER-SHARE GRANT-DATE FAIR VALUE
Unvested shares, beginning balance (in usd per share) | $ / shares	$ 3.96
Vested and released (in usd per share) | $ / shares	2.63
Unvested shares, ending balance (in usd per share) | $ / shares	$ 5.67

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Stock-Based Compensation - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Stock-Based Compensation
Stock-based compensation expense	$ 3,640	$ 4,475	$ 10,206	$ 9,037
Research and development
Stock-Based Compensation
Stock-based compensation expense	1,855	3,076	5,278	5,362
General and administrative
Stock-Based Compensation
Stock-based compensation expense	$ 1,785	$ 1,399	$ 4,928	$ 3,675

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Income Taxes (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Tax Disclosure [Abstract]
Income tax	$ 0	$ 0	$ 0	$ 0

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Net Loss Per Share - Schedule of Basic and Diluted Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022
Numerator:
Net loss	$ (13,504)	$ (14,805)	$ (14,586)	$ (14,745)	$ (11,649)	$ (10,497)	$ (42,895)	$ (36,891)
Net loss attributable to common stockholders - basic	(13,504)			(14,745)			(42,895)	(36,891)
Net loss attributable to common stockholders - diluted	$ (13,504)			$ (14,745)			$ (42,895)	$ (36,891)
Denominator:
Weighted-average common stock outstanding - basic (in shares)	43,802,221			38,585,980			43,311,740	38,417,993
Weighted-average common stock outstanding - diluted (in shares)	43,802,221			38,585,980			43,311,740	38,417,993
Net loss per share attributable to common stockholders - basic (in usd per share)	$ (0.31)			$ (0.38)			$ (0.99)	$ (0.96)
Net loss per share attributable to common stockholders - diluted (in usd per share)	$ (0.31)			$ (0.38)			$ (0.99)	$ (0.96)

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Net Loss Per Share - Schedule of Antidilutive Securities Excluded from Computation of Diluted Net Loss Per Share (Details) - shares	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Anti-dilutive Effect
Shares excluded since there inclusion would be anti-dilutive (in shares)	9,185,637	7,718,897
Unvested restricted stock
Anti-dilutive Effect
Shares excluded since there inclusion would be anti-dilutive (in shares)	136,931	399,461
Unvested RSUs
Anti-dilutive Effect
Shares excluded since there inclusion would be anti-dilutive (in shares)	334,722	31,650
Options to purchase common stock
Anti-dilutive Effect
Shares excluded since there inclusion would be anti-dilutive (in shares)	8,713,984	7,287,786

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Subsequent Event (Details) - Subsequent Event - Employee Severance $ in Millions	Nov. 13, 2023 USD ($) employee
Subsequent Event [Line Items]
Number of positions expected to be eliminated | employee	26
Number of positions expected to be eliminated, percent	72.00%
Expected cost | $	$ 5.5