Altimmune, Inc. 10-Q

Item 1. Financial Statements ALTIMMUNE, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share and per-share amounts) ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ ​ 2023 ​ 2022 ​ ​ (Unaudited) ​ ​ ​ ASSETS ​ ​ ​ Current assets: ​ ​ Cash and cash equivalents ​ $ 102,352 ​ $ 111,097 Restricted cash ​ 41 ​ 34 Total cash, cash equivalents and restricted cash ​ 102,393 ​ 111,131 Short-term investments ​ 57,602 ​ 73,783 Accounts receivable ​ 136 ​ 173 Income tax and R&D incentive receivables ​ 3,579 ​ 2,368 Prepaid expenses and other current assets ​ 5,822 ​ 5,358 Total current assets ​ 169,532 ​ 192,813 Property and equipment, net ​ 882 ​ 1,081 Indefinite-lived intangible asset ​ 12,419 ​ 12,419 Other assets ​ 483 ​ 615 Total assets ​ $ 183,316 ​ $ 206,928 LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ Current liabilities: ​ ​ Accounts payable ​ $ 4,035 ​ $ 4,804 Accrued expenses and other current liabilities ​ 7,402 ​ 12,250 Total current liabilities ​ 11,437 ​ 17,054 Other long-term liabilities ​ 4,165 ​ 4,581 Total liabilities ​ 15,602 ​ 21,635 Commitments and contingencies (Note 10) ​ ​ Stockholders’ equity: ​ ​ Common stock, $ 0.0001 par value; 200,000,000 shares authorized; 52,657,661 and 49,199,845 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively ​ ​ 5 ​ ​ 5 Additional paid-in capital ​ 586,908 ​ 568,399 Accumulated deficit ​ ( 414,019 ) ​ ( 377,884 ) Accumulated other comprehensive loss, net ​ ( 5,180 ) ​ ( 5,227 ) Total stockholders’ equity ​ 167,714 ​ 185,293 Total liabilities and stockholders’ equity ​ $ 183,316 ​ $ 206,928 ​ The accompanying notes are an integral part of the unaudited consolidated financial statements. ​ 1 Table of Contents ALTIMMUNE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) (In thousands, except share and per-share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ ​ June 30, ​ June 30, ​ ​ 2023 2022 2023 2022 Revenues ​ $ 6 ​ $ 8 ​ $ 27 ​ $ 40 Operating expenses: ​ ​ ​ ​ Research and development ​ 13,253 ​ 15,993 ​ 30,502 ​ 31,097 General and administrative ​ 4,760 ​ 4,410 ​ 9,291 ​ 8,837 Total operating expenses ​ 18,013 ​ 20,403 ​ 39,793 ​ 39,934 Loss from operations ​ ( 18,007 ) ​ ( 20,395 ) ​ ( 39,766 ) ​ ( 39,894 ) Other income (expense): ​ ​ ​ ​ Interest expense ​ ( 2 ) ​ ( 65 ) ​ ( 4 ) ​ ( 127 ) Interest income ​ 1,835 ​ 328 ​ 3,503 ​ 349 Other income (expense), net ​ 113 ​ 25 ​ 132 ​ 135 Total other income (expense), net ​ 1,946 ​ 288 ​ 3,631 ​ 357 Net loss ​ ( 16,061 ) ​ ( 20,107 ) ​ ( 36,135 ) ​ ( 39,537 ) Other comprehensive income — unrealized (loss) gain on short-term investments ​ ( 79 ) ​ ( 120 ) ​ 47 ​ ( 120 ) Comprehensive loss ​ $ ( 16,140 ) ​ $ ( 20,227 ) ​ $ ( 36,088 ) ​ $ ( 39,657 ) Net loss per share, basic and diluted ​ $ ( 0.32 ) ​ $ ( 0.42 ) ​ $ ( 0.72 ) ​ $ ( 0.90 ) Weighted-average common shares outstanding, basic and diluted ​ 50,691,558 ​ 47,502,599 ​ 50,410,184 ​ 44,150,835 ​ The accompanying notes are an integral part of the unaudited consolidated financial statements. ​ ​ 2 Table of Contents ​ ALTIMMUNE, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited) (In thousands, except share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Other ​ Total ​ Common Stock Paid-In Accumulated Comprehensive Stockholders’ ​ ​ Shares ​ Amount ​ Capital ​ Deficit ​ Loss ​ Equity Balance at December 31, 2022 ​ 49,199,845 ​ $ 5 ​ $ 568,399 ​ $ ( 377,884 ) ​ $ ( 5,227 ) ​ $ 185,293 Stock-based compensation — ​ — ​ 2,675 ​ — ​ — ​ 2,675 Exercise of stock options 19,303 ​ — ​ 61 ​ — ​ — ​ 61 Vesting of restricted stock awards including withholding, net ​ 54,347 ​ ​ — ​ ​ ( 484 ) ​ ​ — ​ ​ — ​ ​ ( 484 ) Issuance of common stock from Employee Stock Purchase Plan 13,215 ​ — ​ 135 ​ — ​ — ​ 135 Unrealized (loss) gain on short-term investments — ​ — ​ — ​ — ​ 126 ​ 126 Net loss ​ — ​ ​ — ​ ​ — ​ ​ ( 20,074 ) ​ ​ — ​ ​ ( 20,074 ) Balance at March 31, 2023 49,286,710 $ 5 $ 570,786 $ ( 397,958 ) $ ( 5,101 ) $ 167,732 Stock-based compensation — $ — $ 2,786 $ — $ — $ 2,786 Vesting of restricted stock awards including withholding, net 6,320 ​ — ​ ( 16 ) ​ — ​ — ​ ( 16 ) Issuance of common stock in at-the-market offerings, net ​ 3,364,631 ​ ​ — ​ ​ 13,352 ​ ​ — ​ ​ — ​ ​ 13,352 Unrealized (loss) gain on short-term investments — ​ — ​ — ​ — ​ ( 79 ) ​ ( 79 ) Net loss — ​ — ​ — ​ ( 16,061 ) ​ — ​ ( 16,061 ) Balance at June 30, 2023 52,657,661 $ 5 $ 586,908 $ ( 414,019 ) $ ( 5,180 ) $ 167,714 ​ The accompanying notes are an integral part of the unaudited consolidated financial statements. ​ 3 Table of Contents ​ ​ ALTIMMUNE, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited) (In thousands, except share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Other ​ Total ​ Common Stock Paid-In Accumulated Comprehensive Stockholders’ ​ ​ Shares ​ Amount ​ Capital ​ Deficit ​ Loss ​ Equity Balance at December 31, 2021 ​ 40,993,768 ​ $ 4 ​ $ 497,342 ​ $ ( 293,171 ) ​ $ ( 5,040 ) ​ $ 199,135 Stock-based compensation — ​ — ​ 2,033 ​ — ​ — ​ 2,033 Exercise of stock options 95,771 ​ — ​ 197 ​ — ​ — ​ 197 Vesting of restricted stock awards including withholding, net 17,568 ​ ​ — ​ ​ ( 170 ) ​ ​ — ​ ​ — ​ ( 170 ) Issuance of common stock from Employee Stock Purchase Plan 16,450 ​ — ​ 113 ​ — ​ — ​ 113 Issuance of common stock in at-the-market offerings, net 335,485 ​ — ​ 2,990 ​ ​ — ​ ​ — ​ 2,990 Issuance of common stock upon exercise of warrants 1,760,854 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ — Net loss ​ — ​ ​ — ​ ​ — ​ ​ ( 19,430 ) ​ ​ — ​ ​ ( 19,430 ) Balance at March 31, 2022 43,219,896 $ 4 $ 502,505 $ ( 312,601 ) $ ( 5,040 ) $ 184,868 Stock-based compensation — $ — $ 2,048 $ — $ — $ 2,048 Exercise of stock options ​ 152,913 ​ ​ — ​ ​ 403 ​ ​ — ​ ​ — ​ ​ 403 Vesting of restricted stock awards including withholding, net ( 5,865 ) ​ — ​ ( 80 ) ​ — ​ — ​ ( 80 ) Issuance of common stock in at-the-market offerings, net 2,157,717 ​ 1 ​ 21,346 ​ — ​ — ​ 21,347 Issuance of common stock related to contingent consideration liability ​ 847,444 ​ ​ — ​ ​ 6,176 ​ ​ — ​ ​ — ​ ​ 6,176 Unrealized (loss) gain on short-term investments — ​ — ​ — ​ — ​ ( 120 ) ​ ( 120 ) Net loss — ​ — ​ — ​ ( 20,107 ) ​ — ​ ( 20,107 ) Balance at June 30, 2022 46,372,105 $ 5 $ 532,398 $ ( 332,708 ) $ ( 5,160 ) $ 194,535 ​ The accompanying notes are an integral part of the unaudited consolidated financial statements. ​ ​ 4 Table of Contents ​ ALTIMMUNE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended ​ ​ June 30, ​ ​ 2023 ​ 2022 CASH FLOWS FROM OPERATING ACTIVITIES: ​ ​ Net loss ​ $ ( 36,135 ) ​ $ ( 39,537 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ Change in fair value of contingent consideration liability ​ — ​ 86 Stock-based compensation expense ​ 5,461 ​ 4,081 Depreciation and amortization ​ ( 861 ) ​ 172 Loss on foreign currency exchange ​ ( 132 ) ​ ( 134 ) Changes in operating assets and liabilities: ​ ​ ​ ​ Accounts receivable ​ 37 ​ 233 Prepaid expenses and other assets ​ ( 250 ) ​ 3,397 Accounts payable ​ ( 769 ) ​ 838 Accrued expenses and other liabilities ​ ( 4,930 ) ​ 1,124 Income tax and R&D incentive receivables ​ ( 1,211 ) ​ ( 490 ) Net cash used in operating activities ​ ( 38,790 ) ​ ( 30,230 ) CASH FLOWS FROM INVESTING ACTIVITIES: ​ ​ Proceeds from sales and maturities of short-term investments ​ 60,565 ​ — Purchases of short-term investments ​ ( 43,229 ) ​ ( 48,949 ) Purchases of property and equipment, net ​ ( 47 ) ​ ( 28 ) Net cash provided by (used in) investing activities ​ 17,289 ​ ( 48,977 ) CASH FLOWS FROM FINANCING ACTIVITIES: ​ ​ Payments of deferred offering costs ​ ​ ( 195 ) ​ ​ ( 36 ) Proceeds from issuance of common stock in at-the-market offerings, net ​ 13,352 ​ 24,337 Proceeds from issuance of common stock from Employee Stock Purchase Plan ​ 135 ​ 113 Payment of conditional economic incentive ​ ​ ( 90 ) ​ ​ — Proceeds from exercises of stock options ​ 61 ​ 600 Payments for tax withholding in share-based compensation ​ ( 500 ) ​ ( 250 ) Net cash provided by financing activities ​ 12,763 ​ 24,764 Net decrease in cash and cash equivalents and restricted cash ​ ( 8,738 ) ​ ( 54,443 ) Cash, cash equivalents and restricted cash at beginning of period ​ 111,131 ​ 190,335 Cash, cash equivalents and restricted cash at end of period ​ $ 102,393 ​ $ 135,892 ​ ​ ​ ​ ​ ​ ​ SUPPLEMENTAL NON-CASH ACTIVITIES: ​ ​ ​ ​ Fair value of common stock retired in exchange for issuance of common stock warrant ​ $ — ​ $ 6,176 ​ The accompanying notes are an integral part of the unaudited consolidated financial statements. ​ 5 Table of Contents ALTIMMUNE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Nature of Business and Basis of Presentation Nature of Business Altimmune, Inc., headquartered in Gaithersburg, Maryland, United States, together with its subsidiaries (collectively, the “Company” or “Altimmune”) is a clinical stage biopharmaceutical company incorporated under the laws of the State of Delaware. The Company is focused on developing treatments for obesity and liver diseases. The Company’s pipeline includes next generation peptide therapeutics for obesity and non-alcoholic steatohepatitis (“NASH”) (for both, pemvidutide, formerly known as ALT-801), and for chronic hepatitis B (“HepTcell TM ”). Since its inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff and raising capital, and has financed its operations through the issuance of common and preferred stock, long-term debt and proceeds from research grants and government contracts. The Company has not generated any revenues from the sale of any products to date, and there is no assurance of any future revenues from product sales. Basis of Presentation The accompanying unaudited consolidated financial statements are prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States (“U.S. GAAP”) for complete consolidated financial statements and should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2022 included in the Annual Report on Form 10-K which was filed with the SEC on February 28, 2023. In the opinion of management, the Company has prepared the accompanying unaudited consolidated financial statements on the same basis as the audited consolidated financial statements, and these consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of the interim periods presented. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full year 2023 or any future years or periods. The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The accompanying unaudited consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets, and the satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and liabilities that might be necessary should the Company be unable to continue as a going concern. 2. Summary of Significant Accounting Policies During the six months ended June 30, 2023, there have been no significant changes to the Company’s summary of significant accounting policies contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the SEC, except for the recently adopted accounting standard for ASU No. 2016-13 as disclosed below. Use of Estimates The preparation of these financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates and assumptions made in the accompanying condensed consolidated financial statements include, but are not 6 Table of Contents limited to, the valuation of share-based awards, income taxes, and accruals for research and development activities. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable. However, actual results could differ from those estimates and there may be changes to the Company’s estimates in future periods. Short-term Investments The Company’s short-term investments are comprised of U.S. Treasuries, corporate debt securities and certificates of deposit that have original maturities less than or equal to one year and are classified as available-for-sale (“AFS”) securities. Such securities are carried at estimated fair value, net of allowance for credit loss determined based on the Current Expected Credit Loss. Any unrealized holding gains or losses are reported as accumulated other comprehensive income or loss, which is a separate component of stockholders’ equity. In the event that the AFS security's fair value is below the amortized cost and (i) the Company intends to sell the AFS security and (ii) the AFS security is required to be sold before recovery of the loss, the AFS security's amortized cost base will be written down to its fair value and the loss will be recognized in the income statement. If the Company intends not to sell the AFS security and the AFS security is not required to be sold before recovery of the loss, the Company evaluates whether a portion of the unrealized loss is a result of credit loss. The portion of unrealized loss related to credit loss will be recorded as allowance for credit loss in the balance sheet with the corresponding credit loss in the income statement and the portion of unrealized loss not related to credit loss will be recognized in other comprehensive income (“OCI”). Dividend and interest income are recognized in other income when earned. The cost of securities sold is calculated using the specific identification method. The Company places all investments with government agencies, or corporate institutions whose debt is rated as investment grade. As of June 30, 2023, none of the unrealized losses on the Company’s short-term investments are a result of credit loss, and therefore, the unrealized losses were recognized in OCI. Income Taxes Due to a full valuation allowance, the Company did not record an income tax expense (benefit) for either of the three and six months ended June 30, 2023 or 2022. The Company calculates its quarterly income tax provision based on an estimated, annual effective tax rates applied to ordinary income (or loss) and other known items computed and recognized as they occur. The Company’s total provision is based on the United States statutory rate, increased by state and foreign taxes and reduced by a full valuation allowance on the Company’s deferred tax assets. Recently adopted accounting pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU No. 2016-13”) . ASU No. 2016-13 requires financial assets measured at amortized cost to be presented at the net amount expected to be collected and any unrealized loss relating to available-for-sale debt securities to be recorded through an allowance for credit losses. The Company adopted this new accounting standard on January 1, 2023 using a modified retrospective method. Adoption of this update did not have a material impact on the Company’s financial statements and related disclosures. 3. Fair Value Measurements The Company’s assets measured at fair value on a recurring basis as of June 30, 2023 consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurement at June 30, 2023 ​ Total Level 1 Level 2 Level 3 Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash equivalents - money market funds ​ $ 89,918 ​ $ 89,918 ​ $ — ​ $ — Short-term investments ​ 57,602 ​ — ​ 57,602 ​ — Total ​ $ 147,520 ​ $ 89,918 ​ $ 57,602 ​ $ — ​ 7 Table of Contents The Company’s assets measured at fair value on a recurring basis as of December 31, 2022 consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurement at December 31, 2022 ​ Total Level 1 Level 2 Level 3 Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash equivalents - money market funds ​ $ 105,794 $ 105,794 ​ $ — ​ $ — Short-term investments ​ 73,783 ​ — ​ 73,783 ​ — Total ​ $ 179,577 ​ $ 105,794 ​ $ 73,783 ​ $ — ​ ​ Short-term investments have been initially valued at the transaction price and subsequently valued at the end of each reporting period utilizing third party pricing services or other market observable data (Level 2). The pricing services utilize industry standard valuation models, including both income and market-based approaches and observable market inputs to determine value. Short-term investments with quoted prices as of June 30, 2023 as shown below (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2023 ​ ​ Amortized Cost ​ Unrealized (Loss) Gain ​ Credit loss ​ Market Value United States treasury securities $ 11,861 $ ( 13 ) $ — $ 11,848 Commercial paper and corporate debt securities ​ ​ 33,127 ​ ​ ( 92 ) ​ ​ — ​ ​ 33,035 Asset backed securities ​ 6,876 ​ ( 17 ) ​ — ​ 6,859 Agency debt securities ​ ​ 5,878 ​ ​ ( 18 ) ​ ​ — ​ ​ 5,860 Total ​ $ 57,742 ​ $ ( 140 ) ​ $ — ​ $ 57,602 ​ Short-term investments with quoted prices as of December 31, 2022 as shown below (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ Amortized Cost ​ Unrealized (Loss) Gain ​ Credit Loss ​ Market Value United States treasury securities $ 15,868 $ ( 86 ) $ — $ 15,782 Commercial paper and corporate debt securities ​ ​ 50,747 ​ ​ ( 71 ) ​ ​ — ​ ​ 50,676 Asset backed securities ​ 5,427 ​ ( 35 ) ​ — ​ 5,392 Agency debt securities ​ ​ 1,928 ​ ​ 5 ​ ​ — ​ ​ 1,933 Total ​ $ 73,970 ​ $ ( 187 ) ​ $ — ​ $ 73,783 ​ Separate disclosure is required for assets and liabilities measured at fair value on a recurring basis from those measured at fair value on a non-recurring basis. Assets recorded at fair value on a non-recurring basis, such as property and equipment and intangible assets are recognized at fair value when they are impaired. During the six months ended June 30, 2023 and year ended December 31, 2022, the Company had no significant assets or liabilities that were measured at fair value on a non-recurring basis. 4. Operating Leases The Company’s operating leases consist of leases for office and laboratory space in the United States, which expire in April 2025. Rent expense under the Company’s operating leases was $ 0.1 million and $ 0.3 million during the three and six months ended June 30, 2023. During the three and six months ended June 30, 2022, rent expense under the Company’s operating leases was $ 0.1 million and $ 0.2 million, respectively. Rent expense includes short-term leases and variable lease costs that are not included in the lease obligation. Short-term leases are leases having a term of twelve months or less. The Company recognizes short-term leases on a straight-line basis and does not record a related lease asset or liability for such leases. 8 Table of Contents The office space lease provides for increases in future minimum annual rental payments as defined in the lease agreements. The office space lease also includes an option to renew the lease as of the end of the term. The Company has determined that the lease renewal option is not reasonably certain of being exercised. The cash paid for operating lease liabilities for each of the six months ended June 30, 2023 and 2022 was $ 0.3 million. Supplemental other information related to the operating leases balance sheet information is as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2023 ​ December 31, 2022 Operating lease obligations (see Note 5 and 6) $ 903 $ 1,124 ​ Operating lease right-of-use assets (included in "Other assets" in Balance Sheet) ​ $ 484 ​ $ 596 ​ Weighted-average remaining lease term (years) ​ 1.8 ​ 2.3 ​ Weighted-average discount rate ​ 7.2 % 7.2 % ​ ​ 5. Accrued Expenses Accrued expenses and other current liabilities consist of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2023 ​ December 31, 2022 Accrued professional services $ 263 $ 276 Accrued payroll and employee benefits ​ 1,748 ​ 2,955 Accrued research and development ​ 4,800 ​ 7,295 Lease obligation, current portion (see Note 4) ​ 474 ​ 452 Excess tax refund payable ​ ​ 56 ​ ​ 1,169 Accrued interest and other ​ 61 ​ 103 Total accrued expenses and other current liabilities ​ $ 7,402 ​ $ 12,250 ​ ​ ​ 6. Other Long-Term Liabilities The Company’s other long-term liabilities are summarized as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2023 ​ December 31, 2022 Research and development incentive credit ​ $ 3,524 ​ $ 3,599 Lease obligation, long-term portion (see Note 4) ​ 429 ​ 672 Conditional economic incentive grants ​ 160 ​ 250 Other ​ 52 ​ 60 Total other long-term liabilities ​ $ 4,165 ​ $ 4,581 ​ ​ 7. Common Stock The Amended and Restated Certificate of Incorporation, as amended (“Charter”), authorizes the Company to issue 200,000,000 shares of common stock, par value $ 0.0001 per share. As of June 30, 2023, the Company had 52,657,661 shares of common stock issued and outstanding . Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are not entitled to receive dividends, unless declared by the board of directors. The Charter also authorizes the Company to issue 1,000,000 shares of preferred stock, par value $ 0.0001 per share. As of June 30, 2023, the Company had no shares of preferred stock issued and outstanding . 9 Table of Contents At-the-Market Offerings On February 28, 2023, the Company entered into an Equity Distribution Agreement (the “2023 Agreement”) with Evercore Group L.L.C., JMP Securities LLC and B. Riley Securities, Inc., serving as sales agents (the “Sales Agents”), with respect to an at-the-market offerings program under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, having an aggregate offering price of up to $ 150.0 million (the “Shares”) through the Sales Agents (the “2023 Offering”). All Shares offered and sold in the 2023 Offering will be issued pursuant to the Company’s Registration Statement on Form S-3ASR filed with the SEC on February 28, 2023, which was declared effective immediately, the prospectus supplement relating to the 2023 Offering filed with the SEC on February 28, 2023 and any applicable additional prospectus supplements related to the 2023 Offering that form a part of the Registration Statement. The Company capitalized approximately $ 0.2 million of other offering costs which will offset the proceeds received from the shares sold under the 2023 Agreement. During the six months ended June 30, 2023, the Company sold 3,364,631 shares of common stock under the 2023 Agreement resulting in approximately $ 13.4 million in proceeds, net of $ 0.4 million commission and other offering costs. As of June 30, 2023, $ 136.2 million remained available to be sold under the 2023 Agreement. As of June 30, 2023, there was $ 0.2 million deferred offering costs included in prepaid expenses and other current assets on the accompanying consolidated balance sheets. On February 25, 2021, the Company entered into an Equity Distribution Agreement (the “2021 Agreement”) with Piper Sandler & Co., Evercore Group L.L.C. and B. Riley Securities, Inc., serving as sales agents (the “2021 Sales Agents”), with respect to an at-the-market offerings program under which the Company offered and sold shares of its common stock, having an aggregate offering price of up to $ 125.0 million (the “2021 Shares”) through the 2021 Sales Agents (the “2021 Offering”). All 2021 Shares offered and sold in the 2021 Offering were issued pursuant to the Company’s Registration Statement on Form S-3 filed with the SEC on December 31, 2020, which was declared effective on January 11, 2021, the prospectus supplement relating to the 2021 Offering filed with the SEC on February 25, 2021 and any applicable additional prospectus supplements related to the 2021 Offering that form a part of the Registration Statement. Under the 2021 Agreement, the Company sold 10,004,869 shares of common stock resulting in approximately $ 121.0 million in proceeds, net of $ 4.0 million commission and other offering costs. As of June 30, 2023, there were no remaining shares available under the 2021 Agreement. Public Offering On July 16, 2020, the Company offered and sold (i) 3,369,564 shares of common stock, at a price to the public of $ 23.00 per share, and (ii) pre-funded warrants of the Company to purchase 1,630,436 shares of common stock at an exercise price equal to $ 0.0001 per share (the “Pre-Funded Warrants”), at a price to the public of $ 22.9999 per share of common stock underlying the Pre-Funded Warrants (equal to the public offering price per share of common stock, minus the exercise price of each Pre-Funded Warrant). The Pre-Funded Warrants are exercisable at any time, provided that each Pre-Funded Warrant holder will be prohibited from exercising such Pre-Funded Warrants into shares of the Company’s common stock if, as a result of such exercise, the holder, together with its affiliates, would own more than 4.99 % of the total number of shares of the Company’s common stock then issued and outstanding, which percentage may change at the holders’ election to any other number less than or equal to 19.99 % upon 61 days ’ notice to the Company. The Company has assessed the Pre-Funded Warrants for appropriate equity or liability classification and determined that the Pre-Funded Warrants are freestanding instruments that do not meet the definition of a liability pursuant to ASC 480 and do not meet the definition of a derivative pursuant to FASB Accounting Standards Codification Topic 815, Derivatives and Hedging (“ASC 815”). The Pre-Funded Warrants are indexed to the Company’s common stock and meet all other conditions for equity classification under ASC 480 and ASC 815. Accordingly, the Pre-Funded Warrants were classified as equity and are accounted for as a component of additional paid-in capital at the time of issuance. On January 24, 2022, 760,870 of the Pre-Funded Warrants were exercised, resulting in the issuance of 760,870 shares of common stock. As of June 30, 2023, there were 869,566 remaining Pre-Funded Warrants unexercised. As of June 30, 2023, including the remaining 869,566 Pre-Funded Warrants, there were 1,015,166 outstanding warrants with a weighted-average exercise price of $ 0.66 and weighted-average contractual term of 0.4 years. 10 Table of Contents ​ 8. Stock-Based Compensation Stock Options The Company’s stock option awards generally vest over four years and typically have a contractual life of ten years . As of June 30, 2023, there was $ 19.5 million of unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted-average period of 3.0 years. During the six months ended June 30, 2023, the Company granted 1,506,226 stock options with a weighted average exercise price of $ 10.91 and per share weighted average grant date fair value of $ 8.85 . Information related to stock options outstanding as of June 30, 2023 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-Average ​ ​ ​ ​ ​ ​ Weighted- ​ Remaining ​ ​ ​ ​ ​ Number of ​ Average ​ Contractual Term ​ Aggregate Intrinsic ​ ​ Stock Options ​ Exercise Price ​ (Years) ​ Value (In thousands) Outstanding 4,825,831 ​ $ 9.66 6.0 ​ $ 726 Exercisable 2,049,291 ​ $ 8.68 5.8 ​ $ 640 Unvested 2,776,540 ​ $ 10.39 6.1 ​ $ 86 ​ Restricted Stock Units (RSUs) During the six months ended June 30, 2023, the Company granted 319,700 shares of RSUs with a weighted average grant date fair value of $ 13.20 which vest over four years . As of June 30, 2023, the Company had unvested RSUs of 620,417 shares with total unrecognized compensation expense of $ 5.6 million, which the Company expects to recognize over a weighted average period of approximately 3.0 years. During the six months ended June 30, 2023, the Company issued 60,667 shares of unrestricted common stock as a result of the vesting of 98,768 RSUs net of 38,101 shares of common stock withheld to satisfy tax withholding obligations. 2019 Employee Stock Purchase Plan (ESPP) Under the ESPP, employees purchased 13,215 shares for $ 0.1 million during the six months ended June 30, 2023. During the three and six months ended June 30, 2023, the Company recognized compensation expense of $ 0.1 million and $ 0.2 million, respectively. During the three and six months ended June 30, 2022, the Company recognized compensation expense of $ 47,000 and $ 0.1 million, respectively. Stock-based Compensation Expense Stock-based compensation expense is classified in the unaudited consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2023 and 2022 as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended Six Months Ended ​ ​ June 30, ​ June 30, ​ ​ 2023 2022 ​ 2023 2022 Research and development ​ $ 1,209 ​ $ 663 ​ $ 2,396 ​ $ 1,281 General and administrative ​ 1,577 ​ 1,385 ​ 3,065 ​ 2,800 Total ​ $ 2,786 ​ $ 2,048 ​ $ 5,461 ​ $ 4,081 ​ ​ ​ 9. Net Loss Per Share Because the Company has reported a net loss attributable to common stockholders for the six months ended June 30, 2023 and 2022, basic and diluted net loss per share attributable to common stockholders in each period are the same. Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average numbers of shares of common stock outstanding for the period. Basic 11 Table of Contents shares outstanding includes the weighted average effect of the Company’s outstanding pre-funded warrants, the exercise of which requires little or no consideration for the delivery of shares of common stock. Diluted net loss per share is calculated by adjusting weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period. As such, all unvested restricted stock, RSUs, common stock warrants, and stock options have been excluded from the computation of diluted weighted average shares outstanding because such securities would have an anti-dilutive impact for all periods presented. Potential common shares issuable upon conversion, vesting or exercise of unvested restricted stock, RSUs, common stock warrants, and stock options that are excluded from the computation of diluted weighted-average shares outstanding, as they are anti-dilutive, are as follows: ​ ​ ​ ​ ​ ​ ​ Six Months Ended ​ ​ June 30, ​ ​ 2023 ​ 2022 Common stock warrants 145,600 145,600 Common stock options 4,838,961 3,372,768 Restricted stock units 620,417 ​ 472,150 Restricted stock — 33,636 ​ ​ ​ 10. Commitments and Contingencies Spitfire Acquisition In July 2019, the Company entered into the Spitfire merger agreement to acquire all of the equity interests of Spitfire Pharma, Inc. (“Spitfire”). As part of the agreement, the Company is obligated to make payments of up to $ 80.0 million upon the achievement of specified worldwide net sales of all products developed using the technology acquired from Spitfire Pharma Inc. (the “Sales Milestone”) within ten years following the approval of a new drug application filed with the FDA. The contingent payments related to the Sales Milestones are predominately cash-based payments accounted for under FASB Accounting Standards Codification Topic 450, Contingencies . Accordingly, the Company will recognize the Sales Milestones when the contingency is probable and the amount can be reasonably estimated. Litigation The Company is a party in various contracts and subject to disputes, litigation, and potential claims arising in the ordinary course of business none of which are currently reasonably possible or probable of material loss. ​ ​ 12 Table of Contents