UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2022

OR

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

For the transition period from ________to ________

Commission File Number: 001-38981

Mirum Pharmaceuticals, Inc.

(Exact name of registrant as specified in its charter)

Delaware	83-1281555
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
950 Tower Lane, Suite 1050, Foster City, California	94404
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (650) 667-4085

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

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

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

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

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

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

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

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

As of May 2, 2022 the registrant had 31,835,369 shares of common stock, $0.0001 par value per share, outstanding.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Comprehensive Loss	3
	Condensed Consolidated Statements of Stockholders’ Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	33
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	87
Item 3.	Defaults Upon Senior Securities	87
Item 4.	Mine Safety Disclosures	87
Item 5.	Other Information	87
Item 6.	Exhibits	88
Signatures		89

i

SUMMARY OF RISKS ASSOCIATED WITH OUR BUSINESS

An investment in shares of our common stock involves a high degree of risk. Below is a list of the more significant risks associated with our business. This summary does not address all of the risks that we face. Additional discussion of the risks listed in this summary, as well as other risks that we face, are set forth under Part I, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q.

•LIVMARLI® (maralixibat) oral solution (“Livmarli”) is our only U.S. Food and Drug Administration (“FDA”) approved product and the success of our business depends, in part, on its continued successful commercialization.

•As a company we currently have limited marketing and sales experience. If we are unable to adequately maintain and scale our marketing and sales capabilities or enter into or lose rights pursuant to agreements with third parties to market and sell our products, we may not be able to generate viable product revenues. Even if we adequately establish and further maintain such capabilities, market acceptance or reimbursement of our products may be lower than expected.

•Livmarli may fail to achieve the broad degree of physician and patient adoption and use necessary for commercial success.

•We rely completely on third parties to supply, manufacture and distribute drug supplies for Livmarli, including certain sole-source suppliers and manufacturers.

•We have a very limited operating history, and we have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future.

•Our business depends, in part, on the success of our product candidates, each of which requires significant clinical testing before we can seek regulatory approval and potentially launch commercial sales.

•We have encountered and may continue to encounter delays and difficulties enrolling patients in our clinical trials, and as a result, our clinical development activities could be delayed or otherwise adversely affected.

•Our product candidates are subject to extensive regulation and compliance, which is costly and time consuming, and such regulation may cause unanticipated delays or prevent the receipt of the required approvals to commercialize our product candidates.

•Our clinical trials may fail to adequately demonstrate the safety and efficacy of our product candidates, which could prevent or delay regulatory approval and commercialization.

•Clinical drug development involves a lengthy and expensive process with uncertain outcomes, and results of earlier studies and trials may not be predictive of future trial results.

•Any delays in the commencement or completion, or termination or suspension, of our clinical trials could result in increased costs for us, delay or limit our ability to generate revenue and adversely affect our commercial prospects.

•Our applications for marketing authorization with regulatory authorities may not be accepted or may require additional studies, regulatory actions, or manufacturing requirements to be completed before marketing authorization is granted.

•Even if we obtain regulatory approval for our product candidates, our product candidates may not gain market acceptance among physicians, patients, tertiary care centers, transplant centers and others in the medical community.

•We face significant competition from other biotechnology and pharmaceutical companies with products that may directly or indirectly compete with ours, and our operating results will suffer if we fail to compete effectively.

•We will need substantial additional financing to continue our commercialization efforts for Livmarli, develop our product candidates and implement our operating plans. If we fail to obtain additional financing, we may be forced to delay, reduce or eliminate our product development programs or commercialization efforts.

•We depend on intellectual property licensed from third parties and termination of any of these licenses could result in the loss of significant rights, which would harm our business.

•If we are unable to obtain and maintain sufficient intellectual property protection for Livmarli and our product candidates, or if the scope of the intellectual property protection is not sufficiently broad, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize Livmarli and our other product candidates, if approved, may be adversely affected.

ii

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Mirum Pharmaceuticals, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)

	March 31,			December 31,
	2022			2021
	(Unaudited)			(Note 2)
Assets
Current assets:
Cash and cash equivalents	$	46,272		$	31,340
Short-term investments		93,636			125,201
Accounts receivable		7,872			3,267
Inventory		1,580			1,513
Prepaid expenses and other current assets		5,908			5,271
Total current assets		155,268			166,592
Restricted cash equivalents		100,000			100,000
Long-term investments		—			4,983
Property and equipment, net		898			981
Operating lease right-of-use assets		1,468			1,569
Intangible assets, net		18,481			18,740
Other assets		2,033			1,786
Total assets	$	278,148		$	294,651
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	4,943		$	9,166
Accrued expenses		26,883			30,723
Operating lease liabilities		731			711
Derivative liability		1,996			1,996
Total current liabilities		34,553			42,596
Revenue interest liability, net		132,940			129,923
Operating lease liabilities, noncurrent		1,713			1,903
Other liabilities		10			17
Total liabilities		169,216			174,439
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value; 10,000,000 shares authorized,    and zero shares issued and outstanding as of March 31, 2022    and December 31, 2021, respectively		—			—
Common stock, $0.0001 par value; 200,000,000 shares    authorized; 31,801,908 shares issued and 31,712,842 shares outstanding,    excluding 89,066 shares subject to repurchase as of March 31, 2022;    and 30,705,060 shares issued and 30,582,596 shares outstanding,    excluding 122,464 shares subject to repurchase as of December 31, 2021		3			3
Additional paid-in capital		402,825			377,403
Accumulated deficit		(293,765	)		(257,159	)
Accumulated other comprehensive loss		(131	)		(35	)
Total stockholders’ equity		108,932			120,212
Total liabilities and stockholders’ equity	$	278,148		$	294,651

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

1

Mirum Pharmaceuticals, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except share and per share data)

	Three Months Ended March 31,
	2022			2021
Revenue:
Product sales, net	$	10,892		$	—
License revenue		2,000			—
Total revenue		12,892			—
Operating expenses:
Cost of sales		2,424			—
Research and development		24,088			38,134
Selling, general and administrative		19,116			9,479
Total operating expenses		45,628			47,613
Loss from operations		(32,736	)		(47,613	)
Other income (expense):
Interest income		69			149
Interest expense		(3,774	)		(3,381	)
Change in fair value of derivative liability		—			334
Other expense, net		(154	)		(16	)
Net loss before provision for income taxes		(36,595	)		(50,527	)
Provision for income taxes		11			5
Net loss	$	(36,606	)	$	(50,532	)
Net loss per share, basic and diluted	$	(1.17	)	$	(1.68	)
Weighted-average shares of common stock outstanding, basic and diluted		31,296,223			30,105,017

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

2

Mirum Pharmaceuticals, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited)

(In thousands)

	Three Months Ended March 31,
	2022			2021
Net loss	$	(36,606	)	$	(50,532	)
Other comprehensive gain (loss):
Unrealized loss on available-for-sale investments		(93	)		(74	)
Cumulative translation adjustments		(3	)		(9	)
Comprehensive loss	$	(36,702	)	$	(50,615	)

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

3

Mirum Pharmaceuticals, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

(In thousands, except share and per share data)

	Common Stock				Additional Paid-In		Accumulated			Accumulated Other Comprehensive			Total Stockholders’
	Shares		Amount		Capital		Deficit			Income (Loss)			Equity
Balance as of December 31, 2021		30,582,596	$	3	$	377,403	$	(257,159	)	$	(35	)	$	120,212
Issuance of common stock in connection with    equity award plans		100,951		—		1,477		—			—			1,477
Issuance of common stock in public offering,    net of issuance costs of $601		995,897		—		17,384		—			—			17,384
Restricted common stock vested in the period		33,398		—		—		—			—			—
Stock-based compensation	—			—		6,561		—			—			6,561
Net loss	—			—		—		(36,606	)		—			(36,606	)
Other comprehensive loss	—			—		—		—			(96	)		(96	)
Balance as of March 31, 2022		31,712,842	$	3	$	402,825	$	(293,765	)	$	(131	)	$	108,932
	Common Stock				Additional Paid-In		Accumulated			Accumulated Other Comprehensive			Total Stockholders’
	Shares		Amount		Capital		Deficit			Income (Loss)			Equity
Balance as of December 31, 2020		29,776,544	$	3	$	345,180	$	(173,171	)	$	83		$	172,095
Issuance of common stock in connection with    common stock option exercises		12,535		—		80		—			—			80
Issuance of common stock in public offering,    net of issuance costs of $476		375,654		—		7,038		—			—			7,038
Restricted common stock vested in the period		33,396		—		—		—			—			—
Stock-based compensation		—		—		5,285		—			—			5,285
Net loss		—		—		—		(50,532	)		—			(50,532	)
Other comprehensive loss		—		—		—		—			(83	)		(83	)
Balance as of March 31, 2021		30,198,129	$	3	$	357,583	$	(223,703	)	$	—		$	133,883

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

4

Mirum Pharmaceuticals, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

	Three Months Ended March 31,
	2022			2021
Operating activities
Net loss	$	(36,606	)	$	(50,532	)
Reconciliation of net loss to net cash used in operating activities:
Stock-based compensation		6,561			5,285
Depreciation and amortization		342			90
Amortization of operating lease right-of-use assets		101			95
Net (accretion) amortization of discounts on investments		(45	)		6
Non-cash interest expense related to revenue interest liability		3,774			3,381
Change in fair value of derivative liability		—			(334	)
Change in operating assets and liabilities:
Accounts receivable		(4,605	)		—
Prepaid expenses and other current assets		(637	)		(112	)
Inventory		(67	)		—
Other assets		(247	)		(160	)
Accounts payable, accrued expenses and other liabilities		(8,070	)		17,228
Operating lease liabilities		(170	)		(157	)
Net cash used in operating activities		(39,669	)		(25,210	)
Investing activities
Proceeds from maturities of investments		36,500			48,600
Proceeds from paydown of investments		—			2,000
Purchase of investments		—			(83,381	)
Purchase of property and equipment		—			(3	)
Net cash provided by (used in) provided by investing activities		36,500			(32,784	)
Financing activities
Proceeds from issuance of common stock in public offerings, net of issuance costs		17,384			6,914
Proceeds from issuance of common stock pursuant to equity award plans		1,477			80
Payments of issuance costs related to revenue interest liability		—			(400	)
Payments on revenue interest liability		(757	)		—
Net cash provided by financing activities		18,104			6,594
Effect of exchange rate on cash, cash equivalents and restricted cash equivalents		(3	)		(9	)
Net increase (decrease) in cash, cash equivalents and restricted cash equivalents		14,932			(51,409	)
Cash, cash equivalents and restricted cash equivalents at beginning of period		131,340			142,086
Cash, cash equivalents and restricted cash equivalents at end of period	$	146,272		$	90,677
Supplemental disclosure of cash flow information:
Operating cash flows paid for operating lease	$	219		$	212

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

5

Mirum Pharmaceuticals, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(Unaudited)

1. Organization and Description of Business

Mirum Pharmaceuticals, Inc. (the “Company”) was incorporated in the State of Delaware on May 2, 2018, and is headquartered in Foster City, California. The Company is a biopharmaceutical company focused on the identification, acquisition, development and commercialization of novel therapies for debilitating rare and orphan diseases.

The Company received U.S. Food and Drug Administration (“FDA”) approval for LIVMARLI® (maralixibat) oral solution (“Livmarli”), the first and only FDA-approved medication for the treatment of cholestatic pruritus in patients with Alagille syndrome (“ALGS”) one year of age and older, on September 29, 2021.

The Company’s development pipeline consists of two clinical-stage product candidates, Livmarli and volixibat. The Company commenced significant operations in November 2018.

The Company views its operations and manages its business as one operating segment.

Liquidity

The Company has a limited operating history, has incurred significant operating losses since its inception, and the revenue and income potential of the Company’s business and market are unproven. As of March 31, 2022, the Company had an accumulated deficit of $293.8 million and cash, cash equivalents, restricted cash equivalents and investments of $239.9 million. The Company believes that its cash, unrestricted cash equivalents and investments of $139.9 million as of March 31, 2022 provide sufficient capital resources to continue its operations for at least twelve months from the issuance date of the accompanying unaudited condensed consolidated financial statements. The unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. Management expects to continue to incur additional substantial losses in the foreseeable future as a result of the Company’s research and development activities.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and pursuant to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Accordingly, the accompanying unaudited condensed consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements. The unaudited interim financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results for the periods presented. All such adjustments are of a normal and recurring nature. The consolidated balance sheet as of December 31, 2021 has been derived from the audited consolidated financial statements at that date but does not include all information and footnotes required by GAAP for complete financial statements. The operating results presented in these unaudited condensed consolidated financial statements are not necessarily indicative of the results that may be expected for any future periods. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto in the Company’s Annual Report on Form 10-K (“Annual Report”) for the fiscal year ended December 31, 2021, as filed with the SEC on March 9, 2022.

Use of Estimates

The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in the financial statements and accompanying notes. These estimates and assumptions are based upon historical experience, knowledge of current events and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results could differ materially from those estimates.

In December 2019, a novel strain of coronavirus, which causes COVID-19, was identified. Due to the rapid and global spread of the virus, on March 11, 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. To slow the proliferation

6

of COVID-19, governments have implemented extraordinary measures, which include the mandatory closure of businesses, restrictions on travel and gatherings, and quarantine and physical distancing requirements.

There were no significant estimates contained in the preparation of the Company’s unaudited condensed consolidated financial statements or impacts to the Company’s unaudited condensed consolidated financial statements that were directly a result of the COVID-19 pandemic. The Company is not aware of any specific event or circumstance that would require an update to its estimates, judgments and assumptions or a revision of the carrying value of the Company’s assets or liabilities.

Significant Accounting Policies

There have been no significant changes to the accounting policies during the three months ended March 31, 2022, as compared to the significant accounting policies described in Note 2 of the “Notes to Consolidated Financial Statements” in the Company’s audited consolidated financial statements included in the Annual Report, except as discussed below.

Cash, Cash Equivalents and Restricted Cash Equivalents

The Company considers all highly liquid investments that are readily convertible into cash without penalty and with original maturities of three months or less at the date of purchase to be cash equivalents. The carrying amounts reported in the condensed consolidated balance sheets for cash and cash equivalents are valued at cost, which approximate their fair value.

Restricted cash equivalents consists of deposits placed in a segregated bank account as required under the terms of the Company’s Revenue Interest Purchase Agreement (“RIPA”), as amended September 2021, with Mulholland SA LLC, an affiliate of Oberland Capital LLC, as agent for the purchasers party thereto (the “Purchasers”), and the Purchasers in connection with the sale of a Rare Pediatric Disease Priority Review Voucher in December 2021.

The following table provides a reconciliation of cash, cash equivalents and restricted cash equivalents reported within the unaudited condensed consolidated balance sheets that together reflect the same amounts shown in the unaudited condensed consolidated statements of cash flows (in thousands):

	As of March 31,		As of December 31,
	2022		2021
Cash and cash equivalents	$	46,272	$	31,340
Restricted cash equivalents		100,000		100,000
Total cash, cash equivalents, and restricted cash equivalents	$	146,272	$	131,340

Intangible Assets, Net

Upon FDA approval of Livmarli in September 2021, contractual milestone payments for which the Company was then-obligated to pay to licensors were evaluated as intangible assets for the completed regulatory approval and right to commercialize the product. The evaluation of intangible assets includes assessing the amortization period for which the asset is expected to contribute to the future cash flows of the Company. The Company determined the pattern of this intangible asset’s future cash flows could not be readily determined with a high level of precision. As a result, the intangible asset is being amortized on a straight-line basis over the estimated useful life of 18 years. The Company tests its definite lived intangible assets for impairment annually and if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. If it is determined that the asset becomes impaired, the carrying value is written down to its fair value with the related impairment charge recognized in the condensed consolidated statements of operations in the period in which the impairment occurs. The Company has not recorded any impairments to its intangible assets.

The following table provides detail of the carrying amount of the Company's intangible assets (in thousands):

	March 31,			December 31,
	2022			2021
Gross carrying value	$	19,000		$	19,000
Less accumulated amortization		(519	)		(260	)
Net carrying value	$	18,481		$	18,740

Amortization expense was $0.3 million and zero for the three months ended March 31, 2022 and 2021, respectively, and was included in cost of sales on our accompanying unaudited condensed consolidated statements of operations.

7

The following table summarizes the estimated future amortization expense associated with our intangible assets as of March 31, 2022 (in thousands):

	Amount
2022 (remaining nine months)	$	779
2023		1,038
2024		1,038
2025		1,038
2026		1,038
Thereafter		13,550
	$	18,481

Product Sales, Net

The Company recognizes product sales, net when the customer obtains control of our product, which occurs at a point in time, typically upon delivery of the Company's product to the customer.

Revenues from product sales are recorded at the net sales price, or the transaction price, which may include fixed or variable consideration for discounts, government rebates, co-pay assistance, returns and other allowances that are offered within contracts with a customer relating to the sale of Livmarli. Estimates of variable consideration are calculated based on the actual product sales each reporting period. Overall, these estimates reflect the Company's best estimate of the amount of consideration to which the Company expects to be entitled based on the terms of the contract. The amount of variable consideration that is included in the transaction price may be constrained and is included in product sales, net only to the extent that it is considered probable that a significant reversal in the amount of the cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Estimates are reviewed and updated quarterly as additional information becomes known. Actual amounts of consideration ultimately received may differ materially from estimates. If actual results in the future vary from estimates, the Company will adjust these estimates, which would affect product sales, net and earnings in the period such variances are adjusted. Significant categories of sales discounts and allowances are as follows:

Government Rebates: The Company records rebates payable under Medicaid and other government programs as a reduction of revenue at the time product revenues are generated. The Company’s rebate calculations may require estimates, including estimates of customer mix, to determine which sales will be subject to rebates and the amount of such rebates. The Company updates its estimates and assumptions on a quarterly basis and records any necessary adjustments to revenue in the period identified. The liability for unpaid rebates is included in accrued expenses in the accompanying unaudited condensed consolidated balance sheets. To date, actual government rebates have not differed materially from the Company's estimates.

Other Incentives: Other incentives include a branded co-pay assistance program for eligible patients with commercial insurance in the United States. The branded co-pay assistance program assists commercially insured patients who have coverage for Livmarli and is intended to reduce each participating patient’s portion of the financial responsibility of the purchase price up to a specified dollar amount of assistance. The calculation of the accrual for co-pay assistance is based upon an identification of claims and the cost per claims associated with product that has been recognized as revenue. The Company records amounts paid under the brand specific co-pay assistance program for each patient as a reduction of revenue from product sales. To date, actual other incentives have not differed materially from the Company's estimates.

Product Returns: The Company records revenue for product sales, net of estimated product returns. Customers have limited return rights related only to the product’s damage or defect identified upon delivery of the product. The Company estimates the amount of product sales that may be returned and records the estimate as a reduction of revenue and a refund liability in the period the related product revenue is recognized. To date, actual returns have not differed materially from the Company's estimates.

Net Loss Per Share

Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average shares of common stock outstanding for the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average shares of common stock and potentially dilutive securities outstanding for the period determined using the treasury-stock and if-converted methods. Diluted net loss per share excludes the potential impact of the Company’s common stock subject to repurchase, common stock options, restricted stock units, and contingently issuable employee stock purchase plan shares because their effect would be anti-dilutive due to the Company’s net loss. Since the Company incurred a net loss in each of the periods presented, basic and diluted net loss per share were the same.

The following outstanding potentially dilutive shares have been excluded from the calculation of diluted net loss per share for the periods presented due to their anti-dilutive effect:

8

	As of March 31,		As of December 31,
	2022		2021
Options to purchase common stock and restricted stock units		8,591,673		6,940,566
Common stock subject to repurchase		89,066		122,464
Employee stock purchase plan contingently issuable		57,381		23,116
Total		8,738,120		7,086,146

Recent Accounting Pronouncements Not Yet Adopted

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 requires an entity to utilize a new impairment model that requires measurement and recognition of expected credit losses for most financial assets and certain other instruments, including but not limited to available-for-sale debt securities. Credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses rather than as a direct write-down to the security. The new guidance requires the use of forward-looking expected credit loss models based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount, which may result in earlier recognition of credit losses under the new guidance. The new guidance also modifies the impairment models for available-for-sale debt securities and for purchased financial assets with credit deterioration since their origination. Subsequent to the issuance of ASU 2016-13, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses. This ASU does not change the core principle of the guidance in ASU 2016-13, instead these amendments are intended to clarify and improve operability of certain topics included within the credit losses guidance. The FASB also subsequently issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Derivatives and Hedging (Topic 815), and Financial Instruments (Topic 842), which did not change the core principle of the guidance in ASU 2016-13 but clarified that expected recoveries of amounts previously written off and expected to be written off should be included in the valuation account and should not exceed amounts previously written off and expected to be written off. In March 2020, the FASB issued ASU No. 2020-3, Codification Improvements to Financial Instruments which makes narrow-scope improvements to various financial instruments topics, including the new credit losses standard and clarifies the following areas (i) the contractual term of a net investment in a lease should be the contractual term used to measure expected credit losses; (ii) when an entity regains control of financial assets sold, an allowance for credit losses should be recorded. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019 for public business entities, excluding smaller reporting companies. For smaller reporting companies, the guidance will be effective during the first quarter of 2023. The Company is in the process of assessing the impact adoption will have on its consolidated financial statements.

In October 2021, the FASB, issued Accounting Standards Update No. 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires an entity (acquirer) to recognize and measure contract assets and liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. This update is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption permitted. The amendments should be applied prospectively to business combinations occurring on or after the effective date of the amendments. The Company is currently evaluating the impact the standard will have on its consolidated financial statements.

3. Fair Value Measurements

Financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used in such measurements by major security type are presented in the following table (in thousands):

	March 31, 2022
	Level 1		Level 2		Level 3		Total
Financial assets:
Money market fund	$	143,853	$	—	$	—	$	143,853
Commercial paper		—		78,765		—		78,765
U.S. government bonds		—		14,870		—		14,870
Total financial assets	$