2 unchanged sentences
(In thousands, except share and par value amounts)
−Removed: September 30,
Current assets:
Cash and cash equivalents
−Removed: Short-term investments
+Added: Short-term marketable securities
Prepaid expenses and other current assets
Total current assets
+Added: Long-term marketable securities
Property and equipment, net
1 unchanged sentence
Restricted cash
−Removed: Liabilities, Convertible Preferred Stock and Stockholders' Equity (Deficit)
+Added: Liabilities and Stockholders' Equity
Current liabilities:
4 unchanged sentences
Operating lease liabilities, net of current portion
−Removed: Preferred stock purchase right liability
Total liabilities
Commitments and contingencies (Note 12)
−Removed: Convertible preferred stock (Series A, B-1 and B-2), $ 0.0001 par value;
−Removed: no shares and 97,622,409 shares authorized as of September 30, 2021 and December 31, 2020, respectively;
−Removed: no shares and 69,584,682 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively;
−Removed: aggregate liquidation preference of $ 0 and $ 230,924 as of September 30, 2021 and December 31, 2020, respectively
−Removed: Stockholders' equity (deficit):
+Added: Stockholders' equity:
Preferred stock, $ 0.0001 par value;
−Removed: 80,000,000 shares and no shares authorized as of September 30, 2021 and December 31, 2020, respectively;
−Removed: no shares issued and outstanding as of September 30, 2021 and December 31, 2020
+Added: 80,000,000 shares authorized as of March 31, 2022 and December 31, 2021;
+Added: no shares issued and outstanding as of March 31, 2022 and December 31, 2021
Common stock, $ 0.0001 par value;
−Removed: 800,000,000 and 147,027,681 shares authorized as of September 30, 2021 and December 31, 2020, respectively;
−Removed: 121,250,375 and 25,189,673 shares issued at September 30, 2021 and December 31, 2020, respectively;
−Removed: 118,645,593 and 21,923,173 shares outstanding at September 30, 2021 and December 31, 2020, respectively
+Added: 800,000,000 shares authorized as of March 31, 2022 and December 31, 2021;
+Added: 121,732,846 and 121,382,547 shares issued at March 31, 2022 and December 31, 2021, respectively;
+Added: 119,875,630 and 119,102,505 shares outstanding at March 31, 2022 and December 31, 2021, respectively
Additional paid-in capital
−Removed: Accumulated other comprehensive income
+Added: Accumulated other comprehensive loss
Accumulated deficit
−Removed: Total stockholders' equity (deficit)
−Removed: Total liabilities, convertible preferred stock and stockholders' equity (deficit)
+Added: Total stockholders' equity
+Added: Total liabilities and stockholders' equity
The accompanying notes are an integral part of these condensed consolidated financial statements.
1 unchanged sentence
(In thousands, except share and per share amounts)
−Removed: Three Months Ended September 30,
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
Operating expenses:
2 unchanged sentences
General and administrative
−Removed: Contribution of common stock to Erasca Foundation
Total operating expenses
8 unchanged sentences
Other comprehensive income (loss):
−Removed: Unrealized gain (loss) on investments, net
+Added: Unrealized loss on marketable securities, net
Comprehensive loss
6 unchanged sentences
Stockholders'
−Removed: Income (Loss)
−Removed: Equity (Deficit)
Balance at December 31, 2021
−Removed: Issuance of Series B-2 convertible preferred stock for cash, net of $ 95 in issuance costs
−Removed: Issuance of common stock in connection with asset acquisition
Exercise of stock options
Vesting of early exercised stock options
+Added: Repurchases of early exercised stock options and restricted stock
Stock-based compensation expense
−Removed: Unrealized loss on investments, net
+Added: Unrealized loss on marketable securities, net
Balance at March 31, 2022
−Removed: Issuance of common stock in connection with license agreement
−Removed: Exercise of stock options
−Removed: Vesting of early exercised stock options
−Removed: Stock-based compensation expense
−Removed: Unrealized loss on investments, net
−Removed: Balance at June 30, 2021
−Removed: Conversion of convertible preferred stock into common stock upon initial public offering
−Removed: Issuance of common stock in initial public offering, net of $ 28,001 in discounts and offering costs
−Removed: Issuance of common stock to Erasca Foundation
−Removed: Disgorgement of stockholder's short-swing profits
−Removed: Exercise of stock options
−Removed: Vesting of early exercised stock options
−Removed: Stock-based compensation expense
−Removed: Unrealized gain on investments, net
−Removed: Balance at September 30, 2021
−Removed: Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’
−Removed: (In thousands, except share data)
Preferred Stock
3 unchanged sentences
Balance at December 31, 2020
−Removed: Exercise of stock options
−Removed: Stock-based compensation expense
−Removed: Unrealized loss on investments, net
−Removed: Balance at March 31, 2020
−Removed: Issuance of Series B-1 convertible preferred stock for cash, net of $ 403 in issuance costs and preferred stock purchase right liability of $ 7,355
−Removed: Stock-based compensation expense
−Removed: Unrealized gain on investments, net
−Removed: Balance at June 30, 2020
−Removed: Issuance of Series B-1 convertible preferred stock for cash, net of $ 27 in issuance costs and preferred stock purchase right liability of $ 1,618
+Added: Issuance of Series B-2 convertible preferred stock for cash, net of $ 95 in issuance costs
+Added: Issuance of common stock in connection with asset acquisition
Exercise of stock options
1 unchanged sentence
Stock-based compensation expense
−Removed: Unrealized gain on investments, net
−Removed: Balance at September 30, 2020
+Added: Unrealized loss on marketable securities, net
+Added: Balance at March 31, 2021
The accompanying notes are an integral part of these condensed consolidated financial statements.
1 unchanged sentence
(In thousands)
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
Cash flows from operating activities:
3 unchanged sentences
In-process research and development expenses
−Removed: Issuance of common stock to Erasca Foundation
−Removed: Amortization (accretion) on investments, net
+Added: Amortization on marketable securities, net
Change in fair value of preferred stock purchase right liability
6 unchanged sentences
Cash flows from investing activities:
−Removed: Purchases of investments
−Removed: Maturities of investments
+Added: Purchases of marketable securities
+Added: Maturities of marketable securities
In-process research and development
+Added: Payment made for investment in equity securities
Purchases of property and equipment
1 unchanged sentence
Cash flows from financing activities:
−Removed: Proceeds from the issuance of common stock in initial public offering, net of discounts and offering costs
Proceeds from the issuance of convertible preferred stock, net of issuance costs
Proceeds from the exercise of stock options, net of repurchases
−Removed: Proceeds from the disgorgement of stockholder's short-swing profits
Net cash provided by financing activities
−Removed: Net increase in cash, cash equivalents and restricted cash
+Added: Net (decrease) increase in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at beginning of the period
1 unchanged sentence
Supplemental disclosure of noncash investing and financing activities:
−Removed: Issuance of common stock to Erasca Foundation
Issuance of common stock in connection with asset acquisition
−Removed: Issuance of common stock in connection with license agreement
Amounts accrued for purchases of property and equipment
−Removed: Conversion of preferred stock to common stock upon initial public offering
Vesting of early exercised options
−Removed: Preferred stock purchase right liability
+Added: Amounts accrued for deferred offering costs
Supplemental disclosure of noncash operating activities:
−Removed: Operating lease assets obtained in exchange for lease obligation
Tenant improvement allowance included in operating lease liabilities
4 unchanged sentences
(Erasca or the Company) is a clinical-stage precision oncology company singularly focused on discovering, developing, and commercializing therapies for RAS/MAPK pathway-driven cancers.
−Removed: The Company has assembled a wholly-owned or controlled RAS/MAPK pathway-focused pipeline comprising 11 modality-agnostic programs aligned with its three therapeutic strategies of:
+Added: The Company has assembled a wholly-owned or controlled RAS/MAPK pathway-focused pipeline including 11 disclosed modality-agnostic programs aligned with its three therapeutic strategies of:
(i) targeting key upstream and downstream signaling nodes in the RAS/MAPK pathway;
5 unchanged sentences
(ASN) (the Asana Merger Agreement), pursuant to which ASN became the Company's wholly-owned subsidiary.
−Removed: In March 2021, the Company established a wholly-owned subsidiary, Erasca Ventures, LLC (Erasca Ventures), to potentially make equity investments in early-stage biotechnology companies that are aligned with the Company’s mission and strategy.
+Added: In March 2021, the Company established a wholly-owned subsidiary, Erasca Ventures, LLC (Erasca Ventures), to make equity investments in early-stage biotechnology companies that are aligned with the Company’s mission and strategy.
Since inception, the Company has devoted substantially all of its efforts and resources to organizing and staffing the Company, business planning, raising capital, identifying, acquiring and in-licensing the Company’s product candidates, establishing its intellectual property portfolio, conducting research, preclinical studies, and clinical trials, establishing arrangements with third parties for the manufacture of its product candidates and related raw materials, and providing general and administrative support for these operations.
−Removed: As of September 30, 2021, the Company had $ 486.6 million in cash, cash equivalents, and short-term investments.
−Removed: As of September 30, 2021, the Company had an accumulated deficit of $ 207.7 million.
+Added: As of March 31, 2022, the Company had $ 392.5 million in cash, cash equivalents, and short-term marketable securities, and $ 29.2 million in long-term marketable securities.
+Added: As of March 31, 2022, the Company had an accumulated deficit of $ 274.6 million.
The Company has incurred significant operating losses and negative cash flows from operations.
−Removed: From its inception through September 30, 2021, the Company’s financial support has primarily been provided from the sale of its convertible preferred stock and the sale of its common stock in its initial public offering (IPO).
−Removed: As the Company continues its expansion, it expects to use its cash, cash equivalents, and short-term investments to fund research and development, working capital, and other general corporate purposes.
+Added: From its inception through March 31, 2022, the Company’s financial support has primarily been provided from the sale of its convertible preferred stock and the sale of its common stock in its initial public offering (IPO).
+Added: As the Company continues its expansion, it expects to use its cash, cash equivalents, and short-term marketable securities to fund research and development, working capital, and other general corporate purposes.
The Company does not expect to generate any revenues from product sales unless and until the Company successfully completes development and obtains regulatory approval for any of its product candidates, which will not be for at least the next several years, if ever.
2 unchanged sentences
The Company’s failure to raise capital or enter into such other arrangements when needed would have a negative impact on the Company’s financial condition and could force the Company to delay, limit, reduce or terminate its research and development programs or other operations, or grant rights to develop and market product candidates that the Company would otherwise prefer to develop and market itself.
−Removed: The Company believes its cash, cash equivalents, and short-term investments as of September 30, 2021 will be sufficient for the Company to fund operations for at least one year from the issuance date of these condensed consolidated financial statements.
+Added: The Company believes its cash, cash equivalents, and short-term marketable securities as of March 31, 2022 will be sufficient for the Company to fund operations for at least one year from the issuance date of these condensed consolidated financial statements.
Initial public offering
7 unchanged sentences
Basis of presentation
−Removed: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with US generally accepted accounting principles (US GAAP).
+Added: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with US generally accepted accounting principles (US 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).
+Added: Accordingly, they do not include all of the information and notes required by US GAAP for complete financial statements.
Any reference in these notes to applicable guidance is meant to refer to US GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Updates (ASU) promulgated by the Financial Accounting Standards Board (FASB).
−Removed: Principles of consolidation and foreign currency transactions
−Removed: The Company’s consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Erasca Australia, ASN, and Erasca Ventures.
−Removed: Erasca Australia was registered under the laws of Australia on September 1, 2020, ASN was incorporated under the laws of the State of Delaware on November 23, 2020, and Erasca Ventures was formed under the laws of the State of Delaware on March 30, 2021.
+Added: The Company’s condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Erasca Australia, ASN, and Erasca Ventures.
All intercompany balances and transactions have been eliminated.
−Removed: The functional currency of the Company and its wholly-owned subsidiaries is the US dollar.
−Removed: Assets and liabilities that are not denominated in the functional currency are remeasured into US dollars at foreign currency exchange rates in effect at the balance sheet date except for nonmonetary assets, which are remeasured at historical foreign currency exchange rates in effect at the date of transaction.
−Removed: Net realized and unrealized gains and losses from foreign currency transactions and remeasurement are reported in other income (expense), in the consolidated statements of operations and comprehensive loss and were not material for all periods presented.
Summary of significant accounting policies
Use of estimates
−Removed: The preparation of the Company’s consolidated financial statements in conformity with US GAAP requires the Company to make estimates and assumptions that impact the reported amounts of assets, liabilities, expenses, and the disclosure of contingent assets and liabilities in the consolidated financial statements and accompanying notes.
−Removed: Accounting estimates and management judgments reflected in the consolidated financial statements include, but are not limited to, the accrual of research and development expenses, fair value of common stock, preferred stock and freestanding instruments, stock-based compensation expense, and the incremental borrowing rate for determining the operating lease asset and liability.
+Added: The preparation of the Company’s condensed consolidated financial statements in conformity with US GAAP requires the Company to make estimates and assumptions that impact the reported amounts of assets, liabilities, expenses, and the disclosure of contingent assets and liabilities in the condensed consolidated financial statements and accompanying notes.
+Added: Accounting estimates and management judgments reflected in the condensed consolidated financial statements include, but are not limited to, the accrual of research and development expenses, fair value of common stock, preferred stock and freestanding instruments, stock-based compensation expense, and the incremental borrowing rate for determining the operating lease asset and liability.
Management evaluates its estimates on an ongoing basis.
1 unchanged sentence
Unaudited interim financial information
−Removed: The accompanying condensed consolidated balance sheet as of September 30, 2021, the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2021 and 2020, the condensed consolidated statements of convertible preferred stock and stockholders’
−Removed: deficit for the three and nine months ended September 30, 2021 and 2020 and the condensed consolidated statements of cash flows for the nine months ended September 30, 2021 and 2020 are unaudited.
−Removed: The unaudited 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 statement of the Company’s condensed consolidated financial position as of September 30, 2021 and the condensed consolidated results of its operations and cash flows for the three and nine months ended September 30, 2021 and 2020.
−Removed: The condensed consolidated financial data and other information disclosed in these notes related to the three and nine months ended September 30, 2021 and 2020 are unaudited.
−Removed: The condensed consolidated results for the three and nine months ended September 30, 2021 are not necessarily indicative of results to be expected for the year ending December 31, 2021, any other interim periods, or any future year or period.
+Added: The accompanying condensed consolidated balance sheet as of March 31, 2022, the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2022 and 2021, the condensed consolidated statements of convertible preferred stock and stockholders’
+Added: equity (deficit) for the three months ended March 31, 2022 and 2021 and the condensed consolidated statements of cash flows for the three months ended March 31, 2022 and 2021 are unaudited.
+Added: The unaudited 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 statement of the Company’s condensed consolidated financial position as of March 31, 2022 and the condensed consolidated results of its operations and cash flows for the three months ended March 31, 2022 and 2021.
+Added: The condensed consolidated financial data and other information disclosed in these notes related to the three months ended March 31, 2022 and 2021 are unaudited.
+Added: The condensed consolidated results for the three months ended March 31, 2022 are not necessarily indicative of results to be expected for the year ending December 31, 2022 , any other interim periods, or any future year or period.
+Added: These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 24, 2022.
Concentration of credit risk and off-balance sheet risk
−Removed: Financial instruments which potentially subject the Company to significant concentration of credit risk consist of cash and cash equivalents and investments.
+Added: Financial instruments which potentially subject the Company to significant concentration of credit risk consist of cash and cash equivalents and marketable securities.
The Company maintains deposits in federally insured financial institutions in excess of federally insured limits.
2 unchanged sentences
Cash, cash equivalents and restricted cash
−Removed: Cash and cash equivalents include cash in readily available checking and savings accounts, money market funds, commercial paper, and corporate debt securities.
+Added: Cash and cash equivalents include cash in readily available checking and savings accounts, money market funds, and corporate debt securities.
The Company considers all highly liquid investments with an original maturity of three months or less from the date of purchase to be cash equivalents.
−Removed: The Company had deposited cash of $ 408,000 and $ 312,000 as of September 30, 2021 and December 31, 2020, respectively, to secure a letter of credit in connection with the lease of the Company’s facilities (see Note 11).
+Added: The Company had deposited cash of $ 408,000 as of March 31, 2022 and December 31, 2021 to secure a letter of credit in connection with the lease of the Company’s facilities (see Note 11).
The Company has classified the restricted cash as a noncurrent asset on its condensed consolidated balance sheets.
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same amounts shown in the condensed consolidated statements of cash flows (in thousands):
−Removed: September 30,
Cash and cash equivalents
Restricted cash
−Removed: Total cash, cash equivalents and restricted cash as shown on the condensed
−Removed: consolidated statements of cash flows
+Added: Total cash, cash equivalents and restricted cash
+Added: Marketable securities and investments
The Company classifies all marketable securities as available-for-sale, as the sale of such securities may be required prior to maturity.
−Removed: Management determines the appropriate classification of its investments in debt securities at the time of purchase.
−Removed: Investments with original maturities beyond three months at the date of purchase and which mature at, or less than 12 months from, the balance sheet date are classified as short-term investments.
+Added: Management determines the appropriate classification of its marketable securities at the time of purchase.
+Added: Marketable securities with original maturities beyond three months at the date of purchase and which mature at, or less than 12 months from, the balance sheet date are classified as short-term marketable securities.
Available-for-sale securities are carried at fair value, with the unrealized gains and losses reported as accumulated other comprehensive income (loss) until realized.
1 unchanged sentence
Such amortization and accretion are included in interest income.
−Removed: The Company regularly reviews all its investments for other-than-temporary declines in fair value.
+Added: The Company regularly reviews all its marketable securities for declines in fair value.
The review includes the consideration of the cause of the impairment, including the creditworthiness of the security issuers, the number of securities in an unrealized loss position, the severity and duration of the unrealized losses, whether the Company has the intent to sell the securities and whether it is more likely than not that the Company will be required to sell the securities before the recovery of their amortized cost basis.
−Removed: When the Company determines that the decline in fair value of an investment is below its accounting basis and the decline is other-than-temporary, the Company reduces the carrying value of the security it holds and records a loss for the amount of such decline.
−Removed: Realized gains and losses and declines in value judged to be other than temporary, if any, on available-for-sale securities are included in other income or expense.
+Added: If the decline in fair value is due to credit-related factors, a loss is recognized in net income, whereas if the decline in fair value is not due to credit-related factors, the loss is recorded in other comprehensive income (loss).
+Added: Realized gains and losses on available-for-sale securities are included in other income or expense.
The cost of securities sold is based on the specific identification method.
Interest and dividends on securities classified as available-for-sale are included in interest income.
+Added: Through its wholly-owned subsidiary, Erasca Ventures, the Company has also invested in equity securities of a company whose securities are not publicly traded and whose fair value is not readily available.
+Added: This investment is recorded using cost minus impairment, plus or minus changes in its estimated fair value resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.
+Added: Investments in equity securities without readily determinable fair values are assessed for potential impairment on a quarterly basis based on qualitative factors.
+Added: This investment is included in other assets in the Company's condensed consolidated balance sheets.
Fair value measurements
6 unchanged sentences
Level 3—Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).
−Removed: Property and equipment, net
−Removed: Property and equipment are stated at cost less accumulated depreciation.
−Removed: Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the respective assets, generally three to seven years .
−Removed: Leasehold improvements are amortized over the shorter of the estimated useful lives of the assets or the remaining lease term.
−Removed: Impairment of long-lived assets
−Removed: The Company continually evaluates long-lived assets for potential impairment when events or changes in circumstances indicate the carrying value of the assets may not be recoverable.
−Removed: Recoverability is measured by comparing the book values of the assets to the expected future net undiscounted cash flows that the assets are expected to generate.
−Removed: If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the book values of the assets exceed their fair value.
−Removed: The Company did no t recognize any impairment losses for the three and nine months ended September 30, 2021 and 2020 .
−Removed: The Company leases real estate facilities and equipment under non-cancelable and cancelable operating leases with various expiration dates through fiscal year 2032.
−Removed: At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present, the existence of an identified asset(s), if any, and the Company’s control over the use of the identified asset(s), if applicable.
−Removed: Operating leases are included in operating lease assets and in operating lease liabilities in the accompanying condensed consolidated balance sheets.
−Removed: Operating lease assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease.
−Removed: Operating lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term discounted based on the more readily determinable of (i) the rate implicit in the lease or (ii) the Company’s incremental borrowing rate (which is the estimated rate the Company would be required to pay for a collateralized borrowing equal to the total lease payments over the term of the lease).
−Removed: Because the Company’s operating leases generally do not provide an implicit rate, the Company estimates its incremental borrowing rate based on the information available at lease commencement date for borrowings with a similar term.
−Removed: The Company’s operating lease assets are measured based on the corresponding operating lease liability adjusted for (i) payments made to the lessor at or before the commencement date, (ii) initial direct costs incurred and (iii) tenant incentives under the lease.
−Removed: The Company does not assume renewals or early terminations unless it is reasonably certain to exercise these options at commencement.
−Removed: The Company elected the practical expedient which allows the Company to not allocate consideration between lease and non-lease components.
−Removed: Variable lease payments are recognized in the period in which the obligations for those payments are incurred.
−Removed: In addition, the Company elected the practical expedient such that it does not recognize lease assets or lease liabilities for leases with a term of 12 months or less of all asset classes.
−Removed: Operating lease expense is recognized on a straight-line basis over the lease term.
−Removed: Certain of the Company's real estate leases include tenant improvement allowances, which are recognized as lease incentives and amortized on a straight-line basis over the lease term as an offset to rent expense.
−Removed: Research and development expense
−Removed: Research and development expenses consist of external and internal costs associated with the Company’s research and development activities, including its discovery and research efforts and the preclinical and clinical development of its product candidates.
−Removed: Research and development costs are expensed as incurred.
−Removed: The Company’s research and development expenses include external costs, consisting of expenses incurred under arrangements with third parties, such as contract research organizations (CROs), contract manufacturing organizations (CMOs), consultants and its scientific advisors;
−Removed: and internal costs, consisting of employee-related expenses, including salaries, benefits, and stock-based compensation for those individuals involved in research and development efforts, the costs of laboratory supplies and acquiring, developing and manufacturing preclinical study materials, and facilities and depreciation, which include direct and allocated expenses for rent of facilities and depreciation of equipment.
−Removed: The Company records accruals for estimated research and development costs, comprising payments for work performed by third party contractors, laboratories, and others.
−Removed: Some of these contractors bill monthly based on actual services performed, while others bill periodically based upon achieving certain contractual milestones.
−Removed: For the latter, the Company accrues the expenses as goods or services are used or rendered.
−Removed: Non-refundable advance payments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized as prepaid expenses until the related goods are delivered or services are performed.
−Removed: In-process research and development expense
−Removed: The Company has acquired rights as part of asset acquisitions or in-licenses to develop and commercialize product candidates.
−Removed: Upfront payments that relate to the acquisition of a new drug compound, as well as pre-commercial milestone payments, are immediately expensed as in-process research and development (IPR&D) in the period in which they are incurred, provided that the new drug compound did not also include processes or activities that would constitute a “business”
−Removed: as defined under US GAAP, the drug has not achieved regulatory approval for marketing and, absent obtaining such approval, has no established alternative future use.
−Removed: The Company accounts for contingent consideration payable upon achievement of certain regulatory, development or sales milestones in such asset acquisitions when the underlying contingency is resolved.
−Removed: Milestone payments made to third parties subsequent to regulatory approval will be capitalized as intangible assets and amortized over the estimated remaining useful life of the related product.
−Removed: The Company expenses all costs as incurred in connection with patent applications (including direct application fees, and the legal and consulting expenses related to making such applications) and such costs are included in general and administrative expenses in the consolidated statements of operations and comprehensive loss.
−Removed: Deferred offering costs
−Removed: The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated.
−Removed: After consummation of the equity financing, these costs are recorded in stockholders’
−Removed: deficit as a reduction of proceeds generated as a result of the offering.
−Removed: Should the in-process equity financing be abandoned, the deferred offering costs will be expensed immediately as a charge to operating expenses in the consolidated statements of operations and comprehensive loss.
−Removed: There were no deferred offering costs as of September 30, 2021 and December 31, 2020 .
−Removed: Common stock valuation
−Removed: Due to the absence of an active market for the Company’s common stock prior to the IPO, the Company utilized methodologies, approaches and assumptions consistent with the American Institute of Certified Public Accountants’
−Removed: Audit and Accounting Practice Guide:
−Removed: Valuation of Privately-Held Company Equity Securities Issued as Compensation to estimate the fair value of its common stock.
−Removed: In determining the exercise prices for options granted, the Company has considered the fair value of the common stock as of the grant date.
−Removed: Prior to the IPO, the fair value of the common stock was determined based upon a variety of factors, including valuations of the Company’s common stock performed with the assistance of independent third-party valuation specialists;
−Removed: the Company’s stage of development and business strategy, including the status of research and development efforts of its product candidates, and the material risks related to its business and industry;
−Removed: the Company’s business conditions and projections;
−Removed: the Company’s results of operations and financial position, including its levels of available capital resources;
−Removed: the valuation of publicly traded companies in the life sciences and biotechnology sectors, as well as recently completed mergers and acquisitions of peer companies;
−Removed: the lack of marketability of the Company’s common stock as a private company;
−Removed: the prices of the Company’s convertible preferred stock sold to investors in arm’s length transactions and the rights, preferences and privileges of its convertible preferred stock relative to those of its common stock;
−Removed: the likelihood of achieving a liquidity event for the holders of the Company’s common stock, such as an initial public offering or a sale of the Company given prevailing market conditions;
−Removed: trends and developments in its industry;
−Removed: the hiring of key personnel and the experience of management;
−Removed: and external market conditions affecting the life sciences and biotechnology industry sectors.
−Removed: Significant changes to the key assumptions underlying the factors used could result in different fair values of common stock at each valuation date.
−Removed: After the completion of the IPO, the fair value of each share of common stock is based on the closing price of the Company’s common stock as reported by the Nasdaq Global Select Market (Nasdaq).
−Removed: Stock-based compensation
−Removed: The Company measures employee and nonemployee stock-based awards based on the fair value on the date of grant and records compensation expense on a straight-line basis over the requisite service period of the award.
−Removed: The Company records the expense for stock-based awards subject to performance-based milestone vesting over the implied service period when management determines that achievement of the milestone is probable.
−Removed: Management evaluates when the achievement of a performance-based milestone is probable based on the expected satisfaction of the performance conditions at each reporting date.
−Removed: All stock-based compensation costs are recorded in the consolidated statements of operations and comprehensive loss based upon the underlying employees or nonemployee’s roles within the Company.
−Removed: Forfeitures are accounted for as they occur.
−Removed: The fair value of stock option grants and shares purchasable under the Company's 2021 Employee Stock Purchase Plan (ESPP) is estimated on the date of grant using the Black-Scholes options-pricing model, which requires inputs based on certain subjective assumptions, including the:
−Removed: Fair value of common stock.
−Removed: As there was no active market for the Company’s common stock prior to the IPO, the Company estimated the fair value of common stock on the date of grant based on the then current facts and circumstances.
−Removed: Risk-free interest rate.
−Removed: The risk-free interest rate is based on the US Treasury zero-coupon issues in effect at the time of grant for periods corresponding with the expected term of the stock-based awards.
−Removed: Expected volatility.
−Removed: Given that the Company’s common stock was privately held prior to the IPO, there was no active trading market for its common stock.
−Removed: The Company derived the expected volatility from the average historical volatilities over a period approximately equal to the expected term of comparable publicly traded companies within its peer group that were deemed to be representative of future stock price trends.
−Removed: The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available.
−Removed: Expected term.
−Removed: The expected term represents the period that the stock-based awards are expected to be outstanding.
−Removed: The expected term of stock options issued is determined using the simplified method (based on the mid-point between the vesting date and the end of the contractual term) as the Company has concluded that its stock option exercise history does not provide a reasonable basis upon which to estimate expected term.
−Removed: Expected dividend yield.
−Removed: The Company has never paid dividends on its common stock and does not anticipate paying any dividends in the foreseeable future.
−Removed: Therefore, the Company used an expected dividend yield of zero .
−Removed: The fair value of each restricted common stock award is estimated on the date of grant based on the fair value of the Company’s common stock on that same date.
−Removed: Classification and accretion of convertible preferred stock
−Removed: The Company’s convertible preferred stock is classified outside of stockholders’
−Removed: deficit on the consolidated balance sheets because the holders of such shares have liquidation rights in the event of a deemed liquidation that, in certain situations, are not solely within the control of the Company and would require the redemption of the then-outstanding convertible preferred stock.
−Removed: The convertible preferred stock is not redeemable, except in the event of a deemed liquidation.
−Removed: Because the occurrence of a deemed liquidation event is not currently probable, the carrying values of the convertible preferred stock are not being accreted to their redemption values.
−Removed: Subsequent adjustments to the carrying values of the convertible preferred stock would be made only when a deemed liquidation event becomes probable.
−Removed: Preferred stock purchase right liabilities
−Removed: The Company has entered into convertible preferred stock financings where, in addition to the initial closing, investors agree to buy, and the Company agrees to sell, additional shares of that convertible preferred stock at a fixed price in the event that certain conditions are met or agreed upon milestones are achieved.
−Removed: The Company evaluates this purchase right and assesses whether it meets the definition of a freestanding instrument and, if so, determines the fair value of the purchase right liability and records it on the balance sheet with the remainder of the proceeds raised allocated to convertible preferred stock.
−Removed: The preferred stock purchase right liability is revalued at each reporting period with changes in the fair value of the liability recorded as change in fair value of preferred stock purchase right liability in the consolidated statements of operations and comprehensive loss.
−Removed: The preferred stock purchase right liability is revalued at settlement and the resultant fair value, if any, is then reclassified to convertible preferred stock at that time.
−Removed: The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s consolidated financial statements or tax returns.
−Removed: Under this method, deferred tax assets and liabilities are determined based on differences between the financial statement carrying amounts and the tax bases of the assets and liabilities using the enacted tax rates in effect in the years in which the differences are expected to reverse.
−Removed: A valuation allowance against deferred tax assets is recorded if, based on the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
−Removed: The Company accounts for uncertainty in income taxes recognized in the consolidated financial statements by applying a two-step process to determine the amount of tax benefit to be recognized.
−Removed: First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities.
−Removed: If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the consolidated
−Removed: financial statements.
−Removed: The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement.
−Removed: The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties.
−Removed: As of September 30, 2021 , the Company’s tax years since inception are subject to examination by taxing authorities due to the Company’s unutilized net operating losses and tax credits.
−Removed: Comprehensive income (loss)
−Removed: The Company reports all components of comprehensive income (loss), including net loss, in the consolidated financial statements in the period in which they are recognized.
−Removed: Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources, including unrealized gains and losses on investments.
−Removed: Other comprehensive income includes unrealized gains and losses on investments, which was the only difference between net loss and comprehensive loss for the applicable periods.
−Removed: Net loss per share
−Removed: The Company’s net loss is equivalent to net loss attributable to common stockholders for all periods presented.
−Removed: Basic net loss per share is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period, without consideration of potentially dilutive securities.
−Removed: Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and potentially dilutive securities outstanding for the period.
−Removed: For purposes of the diluted net loss per share calculation, the convertible preferred stock, options to purchase common stock, shares purchasable under the ESPP and common stock subject to repurchase related to unvested restricted stock and options early exercised are considered to be potentially dilutive securities.
−Removed: Basic and diluted net loss per share is presented in conformity with the two-class method required for participating securities as the convertible preferred stock is considered a participating security because it participates in dividends with common stock.
−Removed: The Company also considers the shares issued upon the early exercise of stock options subject to repurchase to be participating securities because holders of such shares have non-forfeitable dividend rights in the event a dividend is paid on common stock.
−Removed: The Company’s participating securities do not have a contractual obligation to share in the Company’s losses.
−Removed: As such, the net loss was attributed entirely to common stockholders.
−Removed: As the Company has reported a net loss for all periods presented, diluted net loss per common share is the same as basic net loss per common share for those periods, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.
−Removed: The Company has determined that its chief executive officer is the chief operating decision maker (CODM).
−Removed: The Company operates and manages the business as one reporting and one operating segment, which is the business of discovering and developing precision medicines for the benefit of patients with cancer.
−Removed: The Company’s CODM reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance.
−Removed: All of the Company’s assets are located in the United States.
Recently adopted accounting pronouncements
−Removed: In August 2018, the FASB issued ASU 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement.
−Removed: The primary focus of the standard is to improve the effectiveness of the disclosure requirements for fair value measurements.
−Removed: The Company adopted this guidance on January 1, 2020 , with no material impact on its consolidated financial statements or related disclosures.
−Removed: In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (ASU 2018-15).
−Removed: The new standard will align the requirements for capitalizing implementation costs for hosting arrangements (services) with costs for internal-use software (assets).
−Removed: As a result, certain implementation costs incurred in hosting arrangements will be deferred and amortized.
−Removed: The Company adopted ASU 2018-15 on January 1, 2021 , and the adoption had an immaterial impact on its consolidated financial statements and related disclosures.
−Removed: Recently issued accounting pronouncements not yet adopted
−Removed: From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that the Company adopts as of the specified effective date.
−Removed: The Company qualifies as an “emerging growth company”
−Removed: as defined in the Jumpstart Our Business Startups Act of 2012 (JOBS Act) and has elected not to “opt out”
−Removed: of the extended transition related to complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public and nonpublic companies, the Company can adopt the new or revised standard at the time nonpublic companies adopt the new or revised standard and can do so until such time that the Company either (i) irrevocably elects to “opt out”
−Removed: of such extended transition period or (ii) no longer qualifies as an emerging growth company.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326):
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Effective Dates, whereby the effective date of this standard for smaller reporting companies was deferred to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and early adoption is still permitted.
−Removed: The Company is currently evaluating the potential impact ASU 2016-13, and related updates, will have on its consolidated financial statements and related disclosures upon adoption.
+Added: The Company adopted ASU 2016-13, and related updates, on a modified retrospective basis on January 1, 2022 , and the adoption had an immaterial impact on its condensed consolidated financial statements and related disclosures.
In August 2020, the FASB issued ASU 2020-06, Debt:
1 unchanged sentence
This guidance is effective for the Company in its annual reporting period beginning after December 15, 2023, including interim periods within that reporting period, with early adoption permitted only as of annual reporting periods beginning after December 15, 2020.
−Removed: The Company is currently assessing the impact this standard will have on its consolidated financial statements and related disclosures upon adoption.
+Added: The Company adopted ASU 2020-06 on a modified retrospective basis on January 1, 2022 , and the adoption had no impact on its condensed consolidated financial statements and related disclosures.
+Added: In January 2020, the FASB issued ASU 2020-01, Clarifying the Interactions Between Topic 321, Topic 323, and Topic 815 (ASU 2020-01), which clarifies that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method.
+Added: In addition, ASU 2020-01 states that for the purpose of applying paragraph 815-10-15-141(a), an entity should not consider whether, upon the settlement of the forward contract or exercise of the purchased option, individually or with existing investments, the underlying securities would be accounted for under the equity method in Topic 323 or the fair value option in accordance with the financial instruments guidance in Topic 825.
+Added: The Company adopted the provisions of ASU 2020-01 prospectively as of January 1, 2022 , and the adoption had no impact on its condensed consolidated financial statements and related disclosures.
+Added: Recently issued accounting pronouncements not yet adopted
+Added: From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that the Company adopts as of the specified effective date.
+Added: The Company qualifies as an “emerging growth company”
+Added: as defined in the Jumpstart Our Business Startups Act of 2012 (JOBS Act) and has elected not to “opt out”
+Added: of the extended transition related to complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public and nonpublic companies, the Company can adopt the new or revised standard at the time nonpublic companies adopt the new or revised standard and can do so until such time that the Company either (i) irrevocably elects to “opt out”
+Added: of such extended transition period or (ii) no longer qualifies as an emerging growth company.
Fair value measurements
−Removed: The following tables summarize the Company’s financial assets and liabilities measured at fair value on a recurring basis and their respective input levels based on the fair value hierarchy (in thousands):
−Removed: Fair value measurements as of September 30, 2021 using
+Added: The following tables summarize the Company’s financial assets measured at fair value on a recurring basis and their respective input levels based on the fair value hierarchy (in thousands):
+Added: Fair value measurements as of March 31, 2022 using
Quoted prices in
active markets
−Removed: September 30,
for identical
2 unchanged sentences
Money market funds (1)
−Removed: US government securities (2)
Corporate debt securities (1)
+Added: US treasury securities (2)
+Added: Corporate debt securities (2)
Commercial paper (2)
−Removed: Supranational debt securities (2)
+Added: US treasury securities (3)
Total fair value of assets
(1) Included as cash and cash equivalents on the condensed consolidated balance sheets.
−Removed: (2) Included as short-term investments on the condensed consolidated balance sheets.
−Removed: As of September 30, 2021 , there were no financial liabilities measured at fair value on a recurring basis.
+Added: (2) Included as short-term marketable securities on the condensed consolidated balance sheets.
+Added: (3) Included as long-term marketable securities on the condensed consolidated balance sheets.
Fair value measurements as of December 31, 2021 using
5 unchanged sentences
Money market funds (1)
−Removed: Commercial paper (1)
US treasury securities (2)
1 unchanged sentence
Commercial paper (2)
+Added: Supranational debt securities (2)
+Added: US treasury securities (3)
Total fair value of assets
−Removed: Preferred stock purchase right liability
−Removed: Total fair value of liabilities
−Removed: (1) Included as cash and cash equivalents on the consolidated balance sheets.
−Removed: (2) Included as short-term investments on the consolidated balance sheets.
+Added: (1) Included as cash and cash equivalents on the condensed consolidated balance sheets.
+Added: (2) Included as short-term marketable securities on the condensed consolidated balance sheets.
+Added: (3) Included as long-term marketable securities on the condensed consolidated balance sheets.
The carrying amounts of the Company’s financial instruments, including cash, prepaid and other current assets, accounts payable, and accrued expenses and other current liabilities, approximate fair value due to their short maturities.
+Added: As of March 31, 2022, the Company has recorded a $ 2.0 million equity investment in Affini-T Therapeutics, Inc.
+Added: at cost, subject to impairment in accordance with ASC 321, Investments—Equity Securities.
None of the Company’s non-financial assets or liabilities are recorded at fair value on a non-recurring basis.
No transfers between levels have occurred during the periods presented.
−Removed: There are uncertainties on the fair value measurement of the instrument classified under Level 3 due to the use of unobservable inputs and interrelationships between these unobservable inputs, which could result in higher or lower fair value measurements.
−Removed: Cash equivalents consist of money market funds and commercial paper, and short-term investments consist of US treasury and government securities, corporate debt securities, commercial paper and supranational debt securities.
−Removed: The Company obtains pricing information from its investment manager and generally determines the fair value of investment securities using standard observable inputs, including reported trades, broker/dealer quotes, and bid and/or offers.
−Removed: Preferred stock purchase right liability
−Removed: As of December 31, 2020, the quantitative elements associated with the Company’s Level 3 inputs impacting the fair value measurement of the preferred stock purchase right liability include the fair value per share of the underlying Series B-1 Preferred Stock, the expected term of the purchase right liability, risk-free interest rate, expected dividend yield and expected volatility of the price of the underlying preferred stock.
−Removed: The most significant assumption in the Black-Scholes option-pricing model impacting the fair value of the preferred stock purchase right liability was the fair value of the Company’s convertible preferred stock as of each measurement date.
−Removed: The Company determined the fair value per share of the underlying preferred stock by taking into consideration its most recent sales of its convertible preferred stock as well as additional factors that the Company deemed relevant.
−Removed: The Company lacks company-specific historical and implied volatility information of its stock.
−Removed: Therefore, it estimated its expected preferred stock volatility based on the historical volatility of publicly traded peer companies for a term equal to the expected term of the purchase right liability.
−Removed: The risk-free interest rate was determined by reference to the US Treasury yield curve for time periods approximately equal to the expected term of the purchase right liability.
−Removed: The Company estimated a 0% dividend yield based on the expected dividend yield and the fact that the Company never paid or declared dividends.
−Removed: The change in fair value of the purchase right liability was a gain of $ 555,000 and $ 2.3 million for the three and nine months ended September 30, 2020 , respectively, included in other income (expense) within the condensed consolidated statements of operations and comprehensive loss.
−Removed: Upon the issuance of the shares of the Company’s Series B-2 convertible preferred stock in January 2021, the purchase right liability was revalued with the gain of $ 1.6 million recorded in change in fair value of the purchase right liability for the nine months ended September 30, 2021 within the condensed consolidated statements of operations and comprehensive loss.
−Removed: Significant changes in the assumptions could have a material impact on the value of the preferred stock purchase right liability.
−Removed: The assumptions used in the Black-Scholes option pricing model to determine the fair value of the preferred stock purchase right liability at settlement date and December 31, 2020 were as follows:
−Removed: Settlement Date
−Removed: December 31, 2020
−Removed: Fair value of underlying preferred stock
−Removed: Risk-free interest rate
−Removed: Expected volatility
−Removed: Expected term (in years)
−Removed: Expected dividend yield
−Removed: The following tables summarize the Company’s investments accounted for as available-for-sale securities (in thousands, except years):
−Removed: September 30, 2021
−Removed: US government securities
+Added: Cash equivalents consist of money market funds and corporate debt securities, short-term marketable securities consist of US treasury securities, corporate debt securities, commercial paper and supranational debt securities, and long-term marketable securities consist of US treasury securities.
+Added: The Company obtains pricing information from its investment manager and generally determines the fair value of marketable securities usi ng standard observable inputs, including reported trades, broker/dealer quotes, and bid and/or offers.
+Added: Marketable securities
+Added: The following tables summarize the Company’s marketable securities accounted for as available-for-sale securities (in thousands, except years):
+Added: March 31, 2022
+Added: US treasury securities
Corporate debt securities
Commercial paper
−Removed: Supranational debt securities
+Added: US treasury securities
December 31, 2021
2 unchanged sentences
Commercial paper
−Removed: As of September 30, 2021, there were two av ailable-for-sale securities with an estimated fair value of $ 3.0 million i n gross unrealized loss positions.
+Added: Supranational debt securities
+Added: US treasury securities
+Added: As of March 31, 2022, there were 17 av ailable-for-sale securities with an estimated fair value of $ 61.2 million i n gross unrealized loss positions.
None had been in such position for greater than 12 months.
−Removed: As of December 31, 2020, there were six available-for-sale securities with an estimated fair value of $ 15.8 million in gross unrealized loss positions.
−Removed: Based on the Company’s review of its investments, the Company believes that the unrealized losses were not other-than-temporary as of September 30, 2021 and December 31, 2020 .
+Added: As of December 31, 2021 , there were 19 available-for-sale securities with an estimated fair value of $ 68.0 million in gross unrealized loss positions.
+Added: As of March 31, 2022 and December 31, 2021 , unrealized losses on available-for-sale securities are not attributed to credit risk.
+Added: The Company believes that an allowance for credit losses is unnecessary because the unrealized losses on certain of the Company’s available-for-sale securities are due to market factors.
Property and equipment, net
Property and equipment, net consisted of the following (in thousands):
−Removed: September 30,
−Removed: Leasehold improvements
−Removed: Construction in progress
+Added: Construction in process
Laboratory equipment
Furniture and fixtures
−Removed: Office equipment
−Removed: Computer equipment
+Added: Leasehold improvements
+Added: Computer equipment and software
Property and equipment
1 unchanged sentence
Property and equipment, net
−Removed: Depreciation and amortization expense related to property and equipment was $ 191,000 and $ 509,000 for the three and nine months ended September 30, 2021 , respectively, and $ 139,000 and $ 394,000 for the three and nine months ended September 30, 2020 , respectively.
+Added: Depreciation and amortization expense related to property and equipment was $ 403,000 and $ 149,000 for the three months ended March 31, 2022 and 2021 , respectively.
Accrued expenses and other current liabilities
Accrued expenses and other current liabilities consisted of the following (in thousands):
−Removed: September 30,
Accrued research and development expenses
1 unchanged sentence
Unvested early exercised stock option liability
−Removed: Accrued construction in progress
−Removed: Accrued legal
+Added: Accrued property and equipment
+Added: Accrued professional services
Other accruals
1 unchanged sentence
The following purchased assets were accounted for as asset acquisitions as substantially all of the fair value of the assets acquired were concentrated in a group of similar assets, and the acquired assets did not have outputs or employees.
−Removed: Because the assets had not yet received regulatory approval, the fair value attributable to these assets was recorded as in-process research and development expenses in the Company’s consolidated statements of operations and comprehensive loss.
+Added: Because the assets had not yet received regulatory approval, the fair value attributable to these assets was recorded as in-process research and development expenses in the Company’s condensed consolidated statements of operations and comprehensive loss.
Asana BioSciences, LLC
1 unchanged sentence
Asana and ASN had previously entered into a license agreement, which was amended and restated prior to the closing of the merger transaction (the Asana License Agreement, and collectively with the Asana Merger Agreement, the Asana Agreements), pursuant to which ASN acquired an exclusive, worldwide license to certain intellectual property rights relating to inhibitors of ERK1 and ERK2 owned or controlled by Asana to develop and commercialize ERAS-007 and certain other related compounds for all applications.
−Removed: The Company has the right to sublicense (through multiple tiers) the licensed rights under the Asana Agreements, subject to certain conditions.
−Removed: The foregoing license is subject to Asana’s non-exclusive right to practice the
−Removed: licensed rights to research and conduct preclinical pharmacology activities with a specified combination of compounds, subject to certain specified conditions.
−Removed: Pursuant to the Asana License Agreement, neither Asana nor ASN can directly or indirectly exploit certain classes of competing products, subject to specified exceptions.
−Removed: In addition, the Company is required to use commercially reasonable efforts to develop and obtain regulatory approval for ERAS-007 in the United States, at least one major market country in Europe, and either China or Japan.
Under the Asana Merger Agreement, the Company made an upfront payment of $ 20.0 million and issued 4,000,000 shares of its Series B-2 convertible preferred stock to Asana at a value of $ 7.50 per share or a total fair value of $ 30.0 million.
+Added: In connection with the Company’s IPO, these shares of Series B-2 convertible preferred stock were converted into 3,333,333 shares of the Company’s common stock.
The Company is obligated to make future development and regulatory milestone cash payments for a licensed product in an amount of up to $ 90.0 million.
2 unchanged sentences
The Company recorded IPR&D expense of $ 50.0 million during the year ended December 31, 2020 in connection with the asset acquisition.
−Removed: No IPR&D expense was recorded during the three and nine months ended September 30, 2021 and 2020.
−Removed: As of September 30, 2021 and December 31, 2020 , no milestones had been accrued as the underlying contingencies had not yet been resolved.
−Removed: Upon the Company’s payment to Asana of all merger consideration, including upfront cash and equity payments, the equity payment related to the proof-of-concept development milestone, and all other development milestone payments, with the exception of a specific milestone that does not need to be achieved at such time and will remain subject to payment in the event that such milestone is achieved at a later time, all licensed rights will become fully paid-up, perpetual, and irrevocable.
−Removed: The Asana License Agreement may be terminated by either Asana or the Company in the event of an uncured material breach by the other party.
−Removed: Asana also has the right to terminate the Asana License Agreement if the Company fails to engage in material activities in support of clinical development and commercialization of ERAS-007 for a period of 12 consecutive months, excluding reasons outside of its reasonable control and subject to certain limitations.
−Removed: However, Asana’s right to terminate the Asana License Agreement for any reason ends once the Company has paid to Asana all merger consideration, or if Asana’s equity interest in the Company becomes publicly traded and exceeds a certain threshold value.
−Removed: The Company may terminate the Asana License Agreement at any time upon the provision of prior written notice to Asana.
+Added: No IPR&D expense was recorded during the three months ended March 31, 2022 and 2021.
+Added: As of March 31, 2022 and December 31, 2021 , no milestones had been accrued as the underlying contingencies were not probable or estimable.
Emerge Life Sciences, Pte.
2 unchanged sentences
Under the terms of the ELS Purchase Agreement, the Company made an upfront payment of $ 2.0 million and issued to ELS 500,000 shares of the Company’s common stock at a value of $ 3.36 per share or a total fair value of $ 1.7 million.
−Removed: Under the ELS Purchase Agreement, ELS is committed to performing certain studies on the applicable antibodies to assist in development activities, the costs of which shall be mutually agreed upon and for which the Company will be responsible.
−Removed: The Company recorded IPR&D expense of $ 0 and $ 3.7 million during the three and nine months ended September 30, 2021 in connection with the asset acquisition.
+Added: Under the ELS Purchase Agreement, ELS was committed to performing certain studies on the applicable antibodies to assist in development activities, the costs of which were mutually agreed upon and for which the Company was responsible.
+Added: The Company recorded IPR&D expense of $ 0 and $ 3.7 million during the three months ended March 31, 2022 and 2021, respectively, in connection with the asset acquisition.
Pursuant to the ELS Purchase Agreement, at any time between 12 months and 36 months after the effective date of the ELS Purchase Agreement, if the Company reasonably determines that none of the Antibodies should be taken into human clinical trials due to safety, efficacy or chemistry, manufacturing and controls (CMC) issues, then the Company has the option to select another antibody developed and solely owned by ELS that is not the subject of a license, collaboration, or option to a third party (the Option).
6 unchanged sentences
(NiKang) under which the Company was granted an exclusive, worldwide license to certain intellectual property rights owned or controlled by NiKang related to certain SHP2 inhibitors to develop and commercialize ERAS-601 and certain other related compounds for all applications.
−Removed: The Company has the right to sublicense (through multiple tiers) its rights under the NiKang Agreement, subject to certain conditions, and is required to use commercially reasonable efforts to develop and commercialize licensed products.
−Removed: The parties are obligated to negotiate in good faith for a certain period of time to grant NiKang the exclusive commercial distribution rights in greater China once a licensed product reaches a certain development stage.
Under the NiKang Agreement, the Company made an upfront payment of $ 5.0 million to NiKang and reimbursed NiKang $ 0.4 million for certain initial manufacturing costs.
In addition, the Company paid $ 7.0 million in April 2020 related to the publication of a US patent application that covered the composition of matter of ERAS-601.
−Removed: The Company is also obligated to pay (i) development and regulatory milestone payments in an aggregate amount of up to $ 16.0 million for the first licensed product and $ 12.0 million for a second licensed product, and (ii) commercial milestone payments in an aggregate amount of up to $ 157.0 million for the first licensed product and $ 151.0 million for a second licensed product.
+Added: The Company is also obligated to pay (i) development and regulatory milestone payments in an aggregate amount of up to $ 16.0 million for the first licensed product, of which $ 4.0 million was paid in January 2021, and $ 12.0 million for a second licensed product, and (ii) commercial milestone payments in an aggregate amount of up to $ 157.0 million for the first licensed product and $ 151.0 million for a second licensed product.
The Company is also obligated to:
1 unchanged sentence
and (ii) equally split all net sublicensing revenues earned under sublicense agreements that the Company enters into with any third party before commencement of the first Phase I clinical trial for a licensed product.
−Removed: As of September 30, 2021 and December 31, 2020 , the Company had accrued $ 0 and $ 4.0 million related to a development milestone, respectively.
−Removed: The Company recorded IPR&D expense of $ 0 during the three and nine months ended September 30, 2021 and $ 0 and $ 12.0 million during the three and nine months ended September 30, 2020, respectively, related to the upfront and milestone payments.
−Removed: The NiKang Agreement will expire upon the last to expire royalty term, which is determined on a licensed product-by-licensed product and country-by-country basis, and is the later of (i) ten years from the date of first commercial sale, (ii) the last to expire valid claim within the licensed patent rights covering such licensed product, or (iii) the expiration of all regulatory exclusivity for the licensed product in such country.
−Removed: Upon expiration of the NiKang Agreement, on a licensed product-by-licensed product and country-by-country basis, the Company will have a fully paid-up, non-exclusive license to conduct research and to develop and commercialize the licensed products.
−Removed: The NiKang Agreement may be terminated in its entirety by NiKang in the event of the Company’s uncured material breach, which includes its failure to use commercially reasonable efforts to satisfy certain specified clinical development diligence milestones.
−Removed: In addition, NiKang may terminate if the Company, directly or indirectly, commences a legal action challenging the validity or enforceability of any licensed patents.
−Removed: Further, if the Company acquires more than 50 % of the equity or assets of a company that owns a competing small molecule that is designed to prevent the same target as set forth in the NiKang Agreement from switching to an enzymatically active state, then the Company must either divest such competing product or terminate the NiKang Agreement.
−Removed: The Company may terminate the NiKang Agreement at any time upon the provision of prior written notice to NiKang.
−Removed: Upon termination of the NiKang Agreement for any reason, all rights and licenses granted to the Company, as well as any sublicenses that the Company granted thereunder, will terminate.
−Removed: In addition, upon any termination (but not expiration) of the NiKang Agreement and upon NiKang’s request, the parties are obligated to meet and negotiate in good faith the terms of a license from the Company to NiKang to allow NiKang’s continued development, manufacture, and commercialization of the licensed products.
+Added: No IPR&D expense was recorded during the three months ended March 31, 2022 and 2021.
Katmai Pharmaceuticals, Inc.
1 unchanged sentence
(Katmai) under which the Company was granted an exclusive, worldwide, royalty-bearing license to certain patent rights and know-how controlled by Katmai related to the development of small molecule therapeutic and diagnostic products that modulate EGFR and enable the identification, diagnosis, selection, treatment, and/or monitoring of patients for neuro-oncological applications to develop, manufacture, use, and commercialize ERAS-801 and certain other related compounds in all fields of use.
−Removed: The Company has the right to sublicense (through multiple tiers) its rights under the Katmai Agreement, subject to certain limitations and conditions, and is required to use commercially reasonable efforts to develop, manufacture, and commercialize licensed products and to meet certain specified development and launch milestones by certain dates.
−Removed: The Company is obligated to use commercially reasonable efforts to develop the licensed products first for use within the neuro-oncology field before expanding its development efforts to include other indications in the oncology field.
−Removed: Following the first achievement of a clinical
−Removed: proof-of-concept for any indication, the Company has the right to submit a non-binding offer to Katmai for (i) the purchase of all licensed patent rights, know-how, and other assets owned by Katmai that are necessary or useful for the exploitation of the licensed products or (ii) for the purchase of Katmai.
−Removed: Pursuant to the Katmai Agreement, neither Katmai nor the Company can directly or indirectly exploit certain specified classes of competing products.
−Removed: The license granted under the Katmai Agreement is subject to The Regents of the University of California’s reserved right to (i) use the licensed patent rights and know-how for educational and non-commercial research purposes, and to publish results arising therefrom, and (ii) grant licenses to the licensed know-how to third parties without notice because the licensed know-how is non-exclusively licensed to Katmai by The Regents of the University of California.
−Removed: Further, the license granted under the Katmai Agreement is subject to the rights of the United States government under the Bayh-Dole Act, including (i) a non-exclusive, non-transferable, irrevocable, paid-up license to practice or have practiced the invention claimed by the licensed patent rights throughout the world and (ii) the obligation that any licensed products used or sold in the United States be manufactured substantially in the United States.
Under the Katmai Agreement, the Company made an upfront payment of $ 5.7 million and Katmai agreed to purchase shares of the Company’s Series B-1 convertible preferred stock and Series B-2 convertible preferred stock having an aggregate value of $ 2.7 million.
In April 2020, Katmai purchased 356,000 shares of the Company’s Series B-1 convertible preferred stock for $ 1.8 million, and in January 2021, Katmai purchased 118,666 shares of the Company’s Series B-2 convertible preferred stock for $ 0.9 million.
+Added: In connection with the Company's IPO, these shares of Series B-1 convertible preferred stock and Series B-2 convertible preferred stock were converted into 395,555 shares of the Company's common stock, in the aggregate.
The Company is obligated to make future development and regulatory milestone payments of up to $ 24.0 million and commercial milestone payments of up to $ 101.0 million.
The Company is also obligated to pay tiered royalties on net sales of each licensed product, at rates ranging from the mid- to high-single digit percentages, subject to a minimum annual royalty payment in the low six figures and certain permitted deductions.
−Removed: No IPR&D expense was recorded for the three and nine months ended September 30, 2021 .
−Removed: The Company recorded IPR&D expense of $ 0 and $ 5.7 million in connection with the upfront payment during the three and nine months ended September 30, 2020, respectively.
−Removed: The Company’s royalty obligations and the Katmai Agreement will expire, on a licensed product-by-licensed product and country-by-country basis, on the earlier of (i) the ten-year anniversary of the expiration of all valid claims included in the licensed patents covering the composition of matter or method of use of such licensed product in such country or (ii) the twentieth anniversary of the first commercial sale of such licensed product in such country.
−Removed: Upon the expiration of the Katmai Agreement, the Company will have a fully paid-up and irrevocable license.
−Removed: The Katmai Agreement may be terminated in its entirety by either party (i) in the event of an uncured material breach by the other party or (ii) in the event the other party becomes subject to specified bankruptcy, insolvency, or similar circumstances.
−Removed: Provided that the Company is in full compliance with the Katmai Agreement, the Company may terminate the Katmai Agreement upon written notice to Katmai.
−Removed: Upon termination of the Katmai Agreement for any reason, all rights and licenses granted to the Company thereunder will terminate.
−Removed: Upon termination of the Katmai Agreement, the Company is obligated, among other things, to (i) grant an exclusive license to Katmai under all of the Company’s right, title and interest in all inventions and know-how developed under the Katmai Agreement existing at the time of termination that are specific to the licensed compounds or products, including without limitation all data and results related to Katmai’s exploitation and (ii) transfer to Katmai ownership and possession of all regulatory filings related to the licensed compounds and products.
−Removed: Unless the Katmai Agreement is terminated for the Company’s material breach, the parties will negotiate in good faith the financial terms pursuant to which the foregoing actions will be conducted, provided that the Company’s performance of such actions may not be conditioned upon the conduct or completion of such negotiations.
−Removed: If the parties are unable to agree upon such terms within the specified time period, then the parties will submit all unresolved matters for resolution by arbitration.
+Added: The Company recorded IPR&D expense of $ 2.0 million in connection with a development milestone payment made during the three months ended March 31, 2022.
+Added: No IPR&D expense was recorded during the three months ended March 31, 2021.
In April 2020, the Company entered into a license agreement with LifeArc (the LifeArc Agreement) under which the Company was granted an exclusive, worldwide license to certain materials, know-how, and intellectual property rights owned or controlled by LifeArc to develop, manufacture, use, and commercialize certain ULK inhibitors for all applications.
−Removed: The Company also has the right to sublicense (through multiple tiers) its rights under the LifeArc Agreement, subject to certain conditions.
−Removed: The foregoing license is subject to LifeArc’s retained non-exclusive, irrevocable, worldwide, sublicensable (to its academic collaborators), royalty-free right to use the licensed intellectual property rights within all fields of use for LifeArc’s own non-commercial, non-clinical academic research.
−Removed: Notwithstanding its retained rights, LifeArc will not seek to develop or undertake any other ULK1/2 therapeutic development programs either in-house or via third parties until April 2025.
−Removed: The Company is required to use diligent efforts to achieve certain development and regulatory milestones with respect to submission of an IND, initiation of clinical trials, submission of an NDA, and commencement of commercial sales.
Under the LifeArc Agreement, the Company was granted the license at no upfront cost and a period of three months after the effective date to conduct experiments on LifeArc’s compounds.
2 unchanged sentences
The Company is also obligated to pay royalties on net sales of all licensed products, in the low-single digit percentages, subject to certain reductions.
−Removed: No IPR&D expense was recorded during the three and nine months ended September 30, 2021 .
−Removed: The Company recorded IPR&D expense of $ 75,000 for the three and nine months ended September 30, 2020.
−Removed: The Company’s royalty obligations and the LifeArc Agreement will expire, on a licensed product-by-licensed product and country-by-country basis, on the later of (i) ten years from the date of first commercial sale, (ii) when there is no longer a valid patent claim covering such licensed product, or (iii) expiration of regulatory exclusivity for the licensed product in such country.
−Removed: Upon expiration of the LifeArc Agreement, all rights and licenses granted to the Company and under the LifeArc Agreement will continue on a fully paid-up basis.
−Removed: The LifeArc Agreement may be terminated in its entirety by either LifeArc or the Company in (i) the event of an uncured material breach by the other party or (ii) in the event the other party becomes subject to an order by a court of competent jurisdiction for winding-up or dissolution or similar circumstances.
−Removed: Further, LifeArc may terminate the LifeArc Agreement by giving written notice to the Company if (i) the Company fails to comply with its diligence obligations and fails to take remedial actions, (ii) the Company fails to agree on a mechanism to cure a persistent breach, or (iii) the Company fails to provide proof of the insurance coverage as required under the LifeArc Agreement.
−Removed: The Company may terminate the agreement at any time upon the provision of written notice to LifeArc.
−Removed: Upon termination of the LifeArc Agreement for any reason, all rights and licenses granted to the Company, as well as any sublicenses the Company granted thereunder, will terminate.
−Removed: In addition, upon termination of the LifeArc Agreement for any reason other than its natural expiration or termination by the Company for LifeArc’s material breach, LifeArc has an option to negotiate an exclusive, worldwide, sublicensable license to commercialize any patent rights, technical and clinical data, and any development results relating to the licensed products that are owned or controlled by the Company for the purpose of developing, manufacturing and commercializing the licensed products on terms to be negotiated between the parties.
+Added: No IPR&D expense was recorded during the three months ended March 31, 2022 and 2021.
University of California, San Francisco
1 unchanged sentence
The UCSF Agreement was amended in May 2021.
−Removed: The Company has the right to sublicense (through multiple tiers) its rights under the UCSF Agreement, subject to certain conditions.
−Removed: The foregoing license is subject to various retained rights and restrictions, including (i) the Regents’
−Removed: reserved right to make, use and practice the licensed patent rights and any technology relating thereto for educational and research purposes, (ii) Howard Hughes Medical Institute’s non-exclusive, fully paid-up, irrevocable worldwide license to use the licensed patent rights for research purposes, (iii) Howard Hughes Medical Institute’s statement of policy on research tools, and (iv) the obligations to the US government under the Bayh-Dole Act, including the obligation to report on the utilization of the invention covered by the licensed patent rights and a non-exclusive, non-transferable, irrevocable, paid-up license to practice or have practiced such invention throughout the world.
−Removed: The Company is required to use diligent efforts to proceed with the development and commercialization of licensed products including by achieving certain milestone events within the specified time periods.
Under the UCSF Agreement, the Company made upfront payments of $ 50,000 to the Regents and pays the Regents an annual license maintenance fee during the term of the license, but such fee will not be due on any anniversary if, on that date, the Company is making royalty payments to the Regents.
5 unchanged sentences
In August 2021, following the achievement of the Corporate Milestone, the Company made a cash payment to the Regents in the amount of $ 1.7 million.
−Removed: The Company recorded IPR&D expense of $ 1.7 million and $ 7.2 million during the three and nine months ended September 30, 2021 , respectively, related to the issuance of these 944,945 common stock shares and the Corporate Milestone cash payment.
−Removed: No IPR&D expense was recorded during the three and nine months ended September 30, 2020.
−Removed: The UCSF Agreement will expire upon the expiration of the last of the licensed patent rights.
−Removed: The UCSF Agreement may be terminated in its entirety by the Regents (i) for the Company’s uncured breach;
−Removed: (ii) for the Company’s bankruptcy;
−Removed: or (iii) if the Company challenges, directly or indirectly, the validity or enforceability of any licensed patents.
−Removed: Further, if the Company fails to satisfy any diligence milestones, the Regents has the right and option to either terminate the UCSF Agreement or modify the exclusive license granted thereunder to a non-exclusive license.
−Removed: The Company may terminate the UCSF Agreement in its entirety or on a country-by-country basis at any time upon the provision of written notice to the Regents.
−Removed: Upon termination of the UCSF Agreement for any reason, all rights and licenses granted to the Company thereunder will terminate.
+Added: No IPR&D expense was recorded during the three months ended March 31, 2022 and 2021 .
Stockholders’
−Removed: Under its Amended and Restated Certificate of Incorporation dated April 15, 2020, the Company was authorized to issue 147,027,681 shares of its common stock, par value of $ 0.0001 per share.
−Removed: In February 2021, the Company’s Board of Directors increased the authorized number of shares of its common stock to 156,000,000 shares.
In connection with the IPO, on July 20, 2021, the Company amended and restated its certificate of incorporation to, among other things, (i) increase the number of authorized shares of common stock from 156,000,000 to 800,000,000 and (ii) authorize 80,000,000 shares of undesignated preferred stock with a par value of $ 0.0001 per share.
Convertible preferred stock
−Removed: In 2018 and 2019, the Company issued a total of 38,103,681 shares of its Series A convertible preferred stock at $ 1.667 per share.
−Removed: The Company received proceeds of approximately $ 63.4 million, net of issuance costs.
−Removed: In April 2020, the Company entered into a Series B convertible preferred stock purchase agreement (the Series B Agreement) under which it issued 27,481,001 shares of its Series B-1 convertible preferred stock at various closing dates in 2020, for cash, at a price of $ 5.00 per share, for net proceeds of $ 137.0 million (the Series B-1 Closing).
−Removed: The Series B Agreement contained provisions that potentially obligates the Company to issue 13,175,191 shares of Series B-2 convertible preferred stock at $ 7.50 per share in an additional closing to certain Series B-1 Closing purchasers, upon the achievement of certain milestones as defined in the Series B Agreement, which purchase right terminates on September 30, 2022 or at certain specified events, including an initial public offering of the Company, if any (the Series B-2 Closing).
−Removed: In the event that a Series B-1 Closing purchaser fails to purchase all of its required shares in the subsequent Series B-2 Closing, each of the Series B-1 convertible preferred shares held by such purchaser will automatically be converted into one -tenth of a share of the Company’s common stock.
−Removed: The Company determined its obligation to issue additional shares of its Series B-2 convertible preferred stock in the Series B-1 Closing represented a freestanding financial instrument that required liability accounting.
−Removed: This freestanding preferred stock purchase right liability for the Series B-2 Closing was recorded at fair value and is remeasured at each reporting period.
−Removed: As of the Series B-1 Closing, the estimated fair value of the preferred stock purchase right liability was $ 9.0 million.
−Removed: The Company records any changes in the fair value of the Series B-2 convertible preferred stock purchase right liability as changes in the fair value of convertible preferred stock purchase right liability in the accompanying consolidated statements of operations and comprehensive loss, and recorded a gain of $ 7.4 million for the year ended December 31, 2020.
−Removed: To satisfy its obligation, in January 2021, the Company sold 13,175,191 shares of its Series B-2 convertible preferred stock and an additional 2,756,581 shares of its Series B-2 convertible preferred stock at a price of $ 7.50 per share and received aggregate net proceeds of $ 119.4 million.
−Removed: Also in 2020, the Company issued 4,000,000 shares of its Series B-2 convertible preferred stock at $ 7.50 per share in connection with an asset acquisition (see Note 7).
−Removed: Convertible preferred stock consisted of the following as of December 31, 2020 (in thousands, except share data):
−Removed: December 31, 2020
−Removed: Preferred shares
−Removed: issuable upon
−Removed: Series A preferred stock
−Removed: Series B-1 preferred stock
−Removed: Series B-2 preferred stock
Upon the closing of the IPO in July 2021, all shares of convertible preferred stock then outstanding converted into 71,263,685 shares of common stock.
−Removed: There were no shares of convertible preferred stock outstanding as of September 30, 2021.
−Removed: Convertible preferred stock rights and preferences
−Removed: The rights and preferences for convertible preferred stock are detailed in the Company’s final prospectus (the Prospectus) filed with the Securities and Exchange Commission (the SEC) pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended (the Securities Act), on July 16, 2021.
−Removed: The Company had 800,000,000 and 147,027,681 shares of its common stock authorized as of September 30, 2021 and December 31, 2020 , respectively.
−Removed: The Company had 121,250,375 and 25,189,673 shares of its common stock issued and 118,645,593 and 21,923,173 shares of common stock outstanding as of September 30, 2021 and December 31, 2020, respectively.
+Added: Prior to conversion, t he Company’s convertible preferred stock was classified outside of stockholders’
+Added: equity (deficit) on the consolidated balance sheets because the holders of such shares had liquidation rights in the event of a deemed liquidation that, in certain situations, were not solely within the control of the Company and would require the redemption of the then-outstanding convertible preferred stock.
+Added: There were no shares of convertible preferred stock outstanding as of March 31, 2022 and December 31, 2021.
+Added: The Company had 800,000,000 shares of its common stock authorized as of March 31, 2022 and December 31, 2021 .
+Added: The Company had 121,732,846 and 121,382,547 shares of its common stock issued and 119,875,630 and 119,102,505 shares of common stock outstanding as of March 31, 2022 and December 31, 2021, respectively.
Shares of common stock subject to repurchase
2 unchanged sentences
Any shares subject to repurchase by the Company are not deemed, for accounting purposes, to be outstanding until those shares vest.
−Removed: As of September 30, 2021 and December 31, 2020 , 303,820 shares and 577,259 shares of common stock, respectively, were subject to repurchase by the Company.
+Added: As of March 31, 2022 and December 31, 2021 , 121,530 shares and 212,674 shares of common stock, respectively, were subject to repurchase by the Company.
The unvested stock liability related to these awards is immaterial for all periods presented.
−Removed: For the three and nine months ended September 30, 2021 , 91,146 and 273,439 shares vested, respectively.
−Removed: For the three and nine months ended September 30, 2020 , 91,146 and 273,438 shares vested, respectively.
+Added: For the three months ended March 31, 2022 and 2021, 91,144 and 91,147 shares vested, respectively.
Stock-based compensation
In July 2021, the Company’s board of directors adopted and the Company’s stockholders approved the Company’s 2021 Incentive Award Plan (the 2021 Plan), which became effective in connection with the IPO.
−Removed: Upon the adoption of the 2021 Plan, the Company ceased making equity grants under its 2018 Equity Incentive Plan (the Prior Plan).
+Added: Upon the adoption of the 2021 Plan, the Company ceased making equity grants under its 2018 Equity Incentive Plan (the 2018 Plan).
Under the 2021 Plan, the Company may grant stock options, restricted stock, restricted stock units, stock appreciation rights, and other stock or cash-based awards to individuals who are then employees, officers, directors or non-entity consultants of the Company.
A total of 15,150,000 shares of common stock were initially reserved for issuance under the 2021 Plan.
−Removed: In addition, the number of shares of common stock available for issuance under the 2021 Plan will be increased annually on the first day of each fiscal year during the term of the 2021 Plan, beginning with the 2022 fiscal year, by an amount equal to the lesser of (i) 5 % of the shares of common stock outstanding on the final day of the immediately preceding calendar year or (ii) such smaller number of shares as determined by the Company’s board of directors.
−Removed: As of September 30, 2021 , there were 14,775,660 stock-based awards available for future grant under the 2021 Plan.
−Removed: Subsequent to July 2021, no further awards will be granted under the Prior Plan and all future stock-based awards will be granted under the 2021 Plan.
−Removed: To the extent outstanding options granted under the Prior Plan are cancelled, forfeited or otherwise terminated without being exercised and would otherwise have been returned to the share reserve under the Prior Plan, the number of shares underlying such awards will be available for future grant under the 2021 Plan.
+Added: In addition, the number of shares of common stock available for issuance under the 2021 Plan may be increased annually on the first day of each calendar year during the term of the 2021 Plan, beginning in 2022, by an amount equal to the lesser of (i) 5 % of the shares of common stock outstanding on the final day of the immediately preceding calendar year or (ii) such smaller number of shares as determined by the Company’s board of directors or an authorized committee of the board of directors.
+Added: As of March 31, 2022 , there were 16,923,767 stock-based awards available for future grant under the 2021 Plan.
+Added: Subsequent to July 2021, no further awards will be granted under the 2018 Plan and all future stock-based awards will be granted under the 2021 Plan.
+Added: To the extent outstanding options or restricted stock granted under the 2018 Plan are cancelled, forfeited, repurchased, or otherwise terminated without being exercised or becoming vested, and would otherwise have been returned to the share reserve under the 2018 Plan, the number of shares underlying such awards will be available for future grant under the 2021 Plan.
Options granted are exercisable at various dates as determined upon grant and will expire no more than ten years from their date of grant.
3 unchanged sentences
For holders of more than 10% of the Company’s total combined voting power of all classes of stock, incentive stock options may not be granted at less than 110 % of the fair market value of the Company’s common stock on the date of grant and for a term that exceeds five years .
−Removed: Early exercise is permitted for certain grants under the Prior Plan.
+Added: Early exercise is permitted for certain grants under the 2018 Plan.
Stock options
−Removed: A summary of the Company’s stock option activity under the 2021 Plan and Prior Plan is as follows (in thousands, except share and per share data and years):
+Added: A summary of the Company’s stock option activity under the 2021 Plan and 2018 Plan is as follows (in thousands, except share and per share data and years):
average remaining
1 unchanged sentence
Outstanding at December 31, 2021
−Removed: Outstanding at September 30, 2021
−Removed: Options exercisable at September 30, 2021
−Removed: The weighted-average grant date fair value of options granted for the three and nine months ended September 30, 2021 was $ 12.29 and $ 3.96 , respectively, and for the three and nine months ended September 30, 2020 was $ 0.83 and $ 0.81 , respectively.
−Removed: As of September 30, 2021, the unrecognized compensation cost related to unvested stock option grants was $ 32.3 million and is expected to be recognized as expense over approximately 3.11 years.
−Removed: The aggregate fair value of stock options that vested for the three and nine months ended September 30, 2021 was $ 0.4 million and $ 1.0 million, respectively, and for the three and nine months ended September 30, 2020 was $ 0.1 million and $ 0.2 million, respectively.
−Removed: Certain individuals were granted the ability to early exercise their stock options.
+Added: Outstanding at March 31, 2022
+Added: Options exercisable at March 31, 2022
+Added: The weighted-average grant date fair value of options granted for the three months ended March 31, 2022 and 2021 was $ 8.36 and $ 2.37 , respectively.
+Added: As of March 31, 2022, the unrecognized compensation cost related to unvested stock option grants was $ 62.4 million and is expected to be recognized as expense over approximately 3.00 years.
+Added: The intrinsic value of the options exercised for the three months ended March 31, 2022 and 2021 was $ 3.4 million and $ 424,000 , respectively.
+Added: Prior to the Company's IPO, certain individuals were granted the ability to early exercise their stock options.
The shares of common stock issued from the early exercise of unvested stock options are restricted and continue to vest in accordance with the original vesting schedule.
1 unchanged sentence
The shares purchased by the employees and non-employees pursuant to the early exercise of stock options are not deemed, for accounting purposes, to be outstanding until those shares vest.
−Removed: The cash received in exchange for exercised and unvested shares related to stock options granted is recorded as a liability for the early exercise of stock options on the accompanying consolidated balance sheets and will be transferred into common stock and additional paid-in capital as the shares vest.
−Removed: As of September 30, 2021 and December 31, 2020 , there were 2,001,823 shares and 2,131,510 shares subject to repurchase by the Company, respectively.
−Removed: As of September 30, 2021 and December 31, 2020 , the Company recorded $ 3.1 million and $ 2.5 million of liabilities associated with shares issued with repurchase rights, respectively, which is recorded in accrued expenses and other current liabilities.
−Removed: In January 2019, the Company granted 250,000 options that vest based on a performance milestone.
−Removed: For the three and nine months ended September 30, 2021 , the Company recognized $ 0 and $ 115,000 of stock-based compensation associated with the performance-based options as the performance milestone was determined to be probable as of March 31, 2021.
−Removed: As of December 31, 2020, the milestone for the performance-based options was not probable of achievement, and therefore, no compensation expense for performance-based options had been recognized.
+Added: The cash received in exchange for exercised and unvested shares related to stock options granted is recorded as a liability for the early exercise of stock options on the accompanying condensed consolidated balance sheets and will be transferred into common stock and additional paid-in capital as the shares vest.
+Added: As of March 31, 2022 and December 31, 2021 , there were 1,615,888 shares and 1,854,427 shares subject to repurchase by the Company, respectively.
+Added: As of March 31, 2022 and December 31, 2021 , the Company recorded $ 2.4 million and $ 2.9 million of liabilities associated with shares issued with repurchase rights, respectively, which is recorded in accrued expenses and other current liabilities.
The assumptions used in the Black-Scholes option pricing model to determine the fair value of the employee and nonemployee stock option grants were as follows:
−Removed: Three Months Ended September 30,
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
Risk-free interest rate
1 unchanged sentence
0.59 %- 1.01 %
−Removed: 0.59 %- 1.09 %
−Removed: 0.37 %- 1.22 %
Expected volatility
1 unchanged sentence
83.4 %- 83.9 %
−Removed: 81.93 %- 84.98 %
−Removed: 74.72 %- 77.81 %
Expected term (in years)
5 unchanged sentences
A total of 1,260,000 shares of common stock was initially reserved for issuance under the ESPP.
−Removed: The Company recognized $ 278,000 of stock-based compensation expense related to the ESPP during the three and nine months ended September 30, 2021.
−Removed: As of September 30, 2021, the unrecognized compensation cost related to the ESPP was $ 2.6 million and is expected to be recognized as expense over approximately 1.12 years.
−Removed: As of September 30, 2021, $ 604,000 has been withheld on behalf of employees for future purchase under the ESPP and is included in accrued expenses and other current liabilities on the condensed consolidated balance sheet.
−Removed: As of September 30, 2021, no shares have been issued under the ESPP.
+Added: In addition, the number of shares of common stock available for issuance under the ESPP may be increased annually on the first day of each calendar year during the term of the ESPP, beginning in 2022, by an amount equal to the lesser of (i) 1% of the shares of common stock outstanding on the final day of the immediately preceding calendar year or (ii) such smaller number of shares as determined by the Company’s board of directors or an authorized committee of the board of directors.
+Added: The Company recognized $ 501,000 of stock-based compensation expense related to the ESPP during the three months ended March 31, 2022.
+Added: As of March 31, 2022 , the unrecognized compensation cost related to the ESPP was $ 3.0 million and is expected to be recognized as expense over approximately 1.71 years.
+Added: As of March 31, 2022, $ 620,000 h as been withheld on behalf of employees for future purchase under the ESPP and is included in accrued expenses and other current liabilities on the condensed consolidated balance sheet.
+Added: As of March 31, 2022 , 91,987 shares have been issued under the ESPP.
Restricted stock
1 unchanged sentence
The weighted-average grant date fair value of restricted stock granted in 2018 was $ 0 .
−Removed: No shares of restricted stock were granted during the three and nine months ended September 30, 2021 and 2020.
+Added: No shares of restricted stock were granted during the three months ended March 31, 2022 and 2021.
The restricted stock shares are subject to forfeiture upon the stockholders’
2 unchanged sentences
As such, the Company recognizes the measurement date fair value of the restricted stock over the vesting period as compensation expense.
−Removed: As of September 30, 2021 and December 31, 2020 , 299,139 shares and 557,731 shares of common stock, respectively, were subject to forfeiture.
−Removed: The summary of the Company’s restricted stock activity during the nine months ended September 30, 2021 is as follows:
+Added: As of March 31, 2022 and December 31, 2021 , 119,798 shares and 212,941 shares of common stock, respectively, were subject to forfeiture.
+Added: The summary of the Company’s restricted stock activity during the three months ended March 31, 2022 is as follows:
Nonvested at December 31, 2021
−Removed: Nonvested at September 30, 2021
−Removed: At September 30, 2021 , the total unrecognized compensation related to unvested restricted stock awards granted was $ 0 .
+Added: Nonvested at March 31, 2022
+Added: At March 31, 2022 , the total unrecognized compensation related to unvested restricted stock awards granted was $ 0 .
Stock-based compensation expense
The allocation of stock-based compensation for all stock awards was as follows (in thousands):
−Removed: Three Months Ended September 30,
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
Research and development
1 unchanged sentence
Common stock reserved for future issuance
−Removed: Common stock reserved for future issuance consisted of the following as of September 30, 2021 and December 31, 2020:
−Removed: September 30,
−Removed: Conversion of preferred stock outstanding
−Removed: Conversion of preferred stock in future issuance (B-2)
+Added: Common stock reserved for future issuance consisted of the following as of March 31, 2022 and December 31, 2021:
Stock options issued and outstanding
3 unchanged sentences
The Company has facility leases for office space under non-cancellable and cancelable operating leases with various expiration dates through 2032 and equipment under a non-cancellable operating lease with a term expiring in 2026 .
−Removed: Operating lease cost was approximately $ 905,000 and $ 1.6 million, including variable lease costs of $ 96,000 and $ 324,000 , and short-term lease costs of $ 30,000 and $ 89,000 during the three and nine months ended September 30, 2021 , respectively.
−Removed: Operating lease cost was approximately $ 342,000 and $ 1.0 million, including variable lease costs of $ 94,000 and $ 269,000 , and short-term lease costs of $ 26,000 and $ 67,000 during the three and nine months ended September 30, 2020 , respectively.
−Removed: The Company paid $ 803,000 and $ 726,000 in ca sh for operating leases that were included in the operating activities section of the consolidated statements of cash flows for the nine months ended September 30, 2021 and 2020, respectively.
−Removed: The weighted-average remaining lease term and the weighted-average discount rate of the Company’s operating leases was 9 .36 years and 7.1 % a t September 30, 2021 , respectively.
+Added: Operating lease cost was approximately $ 1.0 million, including variable lease costs of $ 117,000 , and short-term lease costs of $ 31,000 during the three months ended March 31, 2022 .
+Added: Operating lease cost was approximately $ 361,000 , including variable lease costs of $ 105,000 , and short-term lease costs of $ 29,000 during the three months ended March 31, 2021 .
+Added: The Company paid $ 273,000 and $ 268,000 in ca sh for operating leases that were included in the operating activities section of the condensed consolidated statements of cash flows for the three months ended March 31, 2022 and 2021, respectively.
+Added: The weighted-average remaining lease term and the weighted-average discount rate of the Company’s operating leases was 9 .84 years and 7.0 % a t March 31, 2022 , respectively.
The weighted-average remaining lease term and the weighted-average discount rate of the Company’s operating leases was 9.86 years and 6.9 % at December 31, 2021, respectively.
2 unchanged sentences
Facility leases
−Removed: In 2018, the Company entered into a lease agreement for approximately 11,000 square feet of office space in San Diego, California which was subsequently amended resulting in a total of approximately 16,153 square feet of office space leased.
−Removed: The amended space is accounted for as a separate lease.
−Removed: The non-cancellable operating leases expire in May 2024 .
−Removed: The Company’s lease payments consist primarily of fixed rental payments for the right to use the underlying leased assets over the lease terms.
+Added: In 2018, the Company entered into a lease agreement for approximately 11,000 square feet of office space in San Diego, California which was subsequently amended resulting in a total of 16,153 square feet of office space leased (the 2018 Lease).
+Added: The amended space was accounted for as a separate lease.
+Added: The 2018 Lease was again modified in November 2021 to amend the termination date from May 2024 to April 2022 .
+Added: The Company remeasured the associated lease liability using the incremental borrowing rate at the date of the amendment selected on the basis of the remaining lease term and remaining lease payments and adjusted the operating lease asset accordingly, resulting in a $ 539,000 gain on remeasurement, which was recorded as other income (expense), net in the consolidated statements of operations and comprehensive loss.
+Added: The 2018 Lease was again modified in April 2022 to amend the termination date from April 2022 to May 2022 .
+Added: The Company’s lea se payments consist primarily of fixed rental payments for the right to use the underlying leased assets over the lease term.
The Company is responsible for operating expenses over base operating expenses as defined in the original lease agreement.
−Removed: In September 2020, the Company entered into a lease agreement for 59,407 square feet of laboratory and office space in San Diego, California (2020 Lease), which represented a portion of a new facility that is under construction.
−Removed: The construction and design of the asset is the primary responsibility of the lessor.
−Removed: The Company is involved in certain aspects of construction and design for certain interior features and leasehold improvements that will be beneficial to the Company to better suit its business needs and intended purpose of the space.
+Added: In September 2020, the Company entered into a lease agreement for 59,407 square feet of laboratory and office space in San Diego, California, which represented a portion of a new facility that was under construction and which was subsequently amended in March 2021 to expand the rented premises by 18,421 square feet (the 2020 Lease).
+Added: The construction and design of the asset was the primary responsibility of the lessor.
+Added: The Company was involved in certain aspects of construction and design for certain interior features and leasehold improvements that will be beneficial to the Company to better suit its business needs and intended purpose of the space.
The lease is accounted for as an operating lease and commenced in August 2021 .
−Removed: The lease has an initial term of 10.5 years and includes aggregate monthly payments to the lessor of approximately $ 39.5 million beginning in January 2023 with a rent escalation clause, and a tenant improvement allowance of approximately $ 13.4 million.
+Added: In April 2022, the 2020 Lease was modified to amend the rent commencement date from February 2022 to May 2022 .
+Added: The 2020 Lease, as amended, has an initial term of 10.75 years and includes aggregate monthly payments to the lessor of approximately $ 51.6 million beginning in April 2023 with a rent escalation clause, and a tenant improvement allowance of approximately $ 16.8 million.
The 2020 Lease is cancellable at the Company’s request after the 84 th month with 12 months written notice and a lump-sum cancellation payment of $ 2.5 million.
As discussed in Note 2, the Company provided a letter of credit to the lessor for $ 408,000 , which expires October 31, 2031 .
−Removed: In March 2021, the Company entered into the first amendment to the 2020 Lease to expand the rented premises by 18,421 square feet for additional consideration of $ 96,000 per month starting in January 2023 with a rent escalation clause and to receive an additional $ 3.4 million tenant improvement allowance.
−Removed: The payment associated with the option to cancel the lease after the 84 th month was increased to $ 2.5 million, and the letter of credit provided to the lessor was increased to $ 408,000 .
−Removed: Future minimum lease payments under the operating leases with initial lease terms in excess of one year as of September 30, 2021 are as follows (in thousands):
+Added: In December 2021, the Company entered into a lease agreement for 29,542 square feet of office and laboratory space in South San Francisco, California (the 2021 Lease).
+Added: The lease will be accounted for as an operating lease with the associated operating lease assets and liabilities recorded upon commencement which is expected to be in July 2022 .
+Added: The non-cancellable operating lease has an initial term of 124 months with an option to extend the lease term by 5 years at the then current market rates and includes aggregate monthly payments to the lessor of approximately $ 34.4 million beginning in November 2022 with a rent escalation clause and a tenant improvement allowance of approximately $ 8.2 million.
+Added: The construction and design of the tenant improvements is the primary responsibility of the lessor.
+Added: While the Company is involved in certain aspects of construction and design for certain interior features and leasehold improvements that will be beneficial to the Company to better suit its business needs and intended purpose of the space, all construction is handled directly by the landlord.
+Added: The Company was not deemed to be the accounting owner of the tenant improvements prior to or after the construction period.
+Added: All payments made by the Company for landlord-owned tenant improvements are recorded as prepaid rent on the condensed consolidated balance sheets prior to lease commencement.
+Added: In February 2022, the actual project costs exceeded the tenant improvement allowances by $ 5.1 million which was paid directly to the landlord by the Company and was recorded as prepaid rent in the condensed consolidated balance sheet and as a cash outflow from operating activities in the condensed consolidated statement of cash flows.
+Added: The Company paid a security deposit of $ 874,000 in December 2021 which was recorded as other assets in the condensed consolidated balance sheets.
+Added: Future minimum lease payments under the operating leases with initial lease terms in excess of one year (excluding the 2021 Lease) as of March 31, 2022 are as follows (in thousands):
Year ending December 31,
−Removed: 2021 (three months remaining)
+Added: 2022 (remaining nine months)
Total lease payments
3 unchanged sentences
Commitments and contingencies
−Removed: As of September 30, 2021 and December 31, 2020 , there was no litigation against the Company.
−Removed: No provision for federal, state or foreign income taxes has been recorded for the three and nine months ended September 30, 2 0 21 and 2 0 20 .
−Removed: The Company has incurred net operating losses for all the periods presented and has not reflected any benefit of such net operating loss carryforwards in the accompanying consolidated financial statements due to uncertainty around utilizing these tax attributes within their respective carryforward periods.
+Added: Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated.
+Added: There are no matters currently outstanding for which any such liabilities have been accrued.
+Added: No provision for federal, state or foreign income taxes has been recorded for the three months ended March 31, 2 0 22 and 2 0 21 .
+Added: The Company has incurred net operating losses for all the periods presented and has not reflected any benefit of such net operating loss carryforwards in the accompanying condensed consolidated financial statements due to uncertainty around utilizing these tax attributes within their respective carryforward periods.
The Company has recorded a full valuation allowance against all of its deferred tax assets as it is not more likely than not that such assets will be realized in the near future.
The Company’s policy is to recognize interest expense and penalties related to income tax matters as tax expense.
−Removed: For the three and nine months ended September 30, 2021 and 2020 , the Company has no t recognized any interest or penalties related to income taxes.
+Added: For the three months ended March 31, 2022 and 2021 , the Company has no t recognized any interest or penalties related to income taxes.
Net loss per share
The following table summarizes the computation of basic and diluted net loss per share of the Company (in thousands, except share and per share data):
−Removed: Three Months Ended September 30,
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
Weighted-average shares of common stock used in computing net loss per share, basic and diluted
Net loss per share, basic and diluted
−Removed: The Company’s potentially dilutive securities, which include its convertible preferred stock, options to purchase common stock, shares purchasable under the ESPP and common stock subject to repurchase related to unvested restricted stock and options early exercised, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share.
+Added: The Company’s potentially dilutive securities, which include its convertible preferred stock prior to the IPO, options to purchase common stock, shares purchasable under the ESPP and common stock subject to repurchase related to unvested restricted stock and options early exercised, 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 common shares outstanding used to calculate both basic and diluted net loss per share is the same.
The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect:
−Removed: Three Months Ended September 30,
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
Convertible preferred stock issued
−Removed: Conversion of convertible preferred stock in future issuance (B-2)
Options to purchase common stock
3 unchanged sentences
Total potentially dilutive shares
−Removed: Retirement plan
−Removed: The Company sponsors an employee savings plan that qualifies as a deferred salary arrangement under Section 401(k) of the US Internal Revenue Code (IRC).
−Removed: Participating employees may defer up to the Internal Revenue Service (IRS) annual contribution limit.
−Removed: Beginning in 2021, the Company provides a safe harbor contribution of 3.0 % of the employee’s compensation, not to exceed eligible limits.
−Removed: For the three and nine months ended September 30, 2021, the Company incurre d $ 146,000 and $ 378,000 in expenses related to the safe harbor contribution, respectively.
−Removed: No expenses were incurred for the three and nine months ended September 30, 2020 related to the safe harbor contribution.
COVID-19 pandemic
The current COVID-19 pandemic, which is impacting worldwide economic activity, poses the risk that the Company or its employees, contractors, suppliers, and other partners may be prevented from conducting business activities for an indefinite period of time, including due to shutdowns that may be requested or mandated by governmental authorities.
−Removed: During the three and nine months ended September 30, 2021 and 2020 , the Company has not experienced significant impact from the pandemic.
+Added: During the three months ended March 31, 2022 and 2021, the Company has not experienced significant impact from the pandemic.
The extent to which the COVID-19 pandemic will impact the Company’s business will depend on future developments that are highly uncertain and cannot be predicted at this time.
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Erasca Foundation
−Removed: In May 2021, the Company established the Erasca Foundation to provide support such as direct research grants, hardship grants, patient advocacy, patient education in underserved populations, and funding for other initiatives to positively impact society.
+Added: In May 2021, the Company established the Erasca Foundation to provide support such as direct research grants, hardship grants, patient advocacy, patient education in underserved populations, and funding for other initiatives to positively impact society that align with the Company’s mission.
The Company's chief executive officer and certain board members serve as directors of the Erasca Foundation and the Company's chief executive officer, chief financial officer, and general counsel are also officers of the Erasca Foundation.
−Removed: In July 2021, the Company issued 1,093,557 shares of its common stock to the Erasca Foundation as a contribution and recorded $ 17.5 million to contribution of common stock to Erasca Foundation in the condensed consolidated statements of operations and comprehensive loss.
−Removed: Disgorgement of stockholder's short-swing profits
−Removed: In August 2021, the Company received $ 553,000 related to the recovery of short-swing profits from a private investment fund affiliated with one of its board members, a related party, under Section 16(b) of the Securities Exchange Act of 1934, as amended (the Exchange Act).
−Removed: The Company recognized these proceeds as a capital contribution from a stockholder with an increase to additional paid-in-capital in its condensed consolidated balance sheet and as cash provided by financing activities in its condensed consolidated statement of cash flows.
+Added: In December 2021, the Company loaned the Erasca Foundation $ 100,000 in exchange for a non-interest bearing promissory note that matures one year following the date of the note.
+Added: As of March 31, 2022, $ 100,000 is recorded as a receivable in prepaid expenses and other current assets in the condensed consolidated balance sheet.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
−Removed: The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2020, included in our Prospectus filed pursuant to Rule 424(b) under the Securities Act, with the SEC on July 16, 2021.
+Added: The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2021, included in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 24, 2022.
Cautionary Note Regarding Forward-Looking Statements
−Removed: This Quarterly Report contains forward-looking statements within the meaning of Section 21E of the Exchange Act.
+Added: This Quarterly Report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act).
All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future results of operations and financial position, business strategy, research and development plans, the anticipated timing, costs, design and conduct of our ongoing and planned preclinical studies and planned clinical trials for our product candidates, the timing and likelihood of regulatory filings and approvals for our product candidates, our ability to commercialize our product candidates, if approved, the impact of the COVID-19 pandemic on our business, the pricing and reimbursement of our product candidates, if approved, the potential to develop future product candidates, the potential benefits of current and future licenses, acquisitions, and strategic arrangements with third parties, and our intent to enter into any future strategic arrangements, the timing and likelihood of success, plans and objectives of management for future operations and future results of anticipated product development efforts, are forward-looking statements.
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We are a clinical-stage precision oncology company singularly focused on discovering, developing, and commercializing therapies for patients with RAS/MAPK pathway-driven cancers.
−Removed: Molecular alterations in RAS, the most frequently mutated oncogene, and the MAPK pathway, one of the most frequently altered signaling pathways in cancer, account for approximately 5.5 million new patients diagnosed globally each year.
+Added: Molecular alterations in RAS, the most frequently mutated oncogene, and the MAPK pathway, one of the most frequently altered signaling pathways in cancer, account for approximately 5.5 million new patients diagnosed with cancer globally each year.
Our company was co-founded by leading pioneers in precision oncology and RAS targeting to create novel therapies and combination regimens designed to comprehensively shut down the RAS/MAPK pathway for the treatment of cancer.
−Removed: We have assembled what we believe to be the deepest, wholly-owned or controlled RAS/MAPK pathway-focused pipeline in the industry, comprising 11 modality-agnostic programs aligned with our three therapeutic strategies of:
+Added: We have assembled what we believe to be the deepest, wholly-owned or controlled RAS/MAPK pathway-focused pipeline in the industry, including 11 disclosed modality-agnostic programs aligned with our three therapeutic strategies of:
(1) targeting key upstream and downstream signaling nodes in the RAS/MAPK pathway;
3 unchanged sentences
The target breadth and molecular diversity represented in our pipeline enable us to pursue a systematic, data-driven clinical development effort to identify single agent and combination approaches with the goal of prolonging survival in numerous patient populations with high unmet medical needs.
−Removed: Our modality-agnostic approach seeks to selectively and potently inhibit or degrade critical signaling nodes with small molecule therapeutics, large molecule therapeutics, and protein degraders.
−Removed: Our purpose-built pipeline includes two clinical-stage programs (ERK and SHP2 inhibitors), two preclinical-stage programs (CNS-penetrant KRAS G12C and EGFR inhibitors), and seven discovery-stage programs targeting other key oncogenic drivers.
+Added: Our modality-agnostic approach aims to allow us to selectively and potently inhibit or degrade critical signaling nodes with small molecule therapeutics, large molecule therapeutics, and protein degraders.
+Added: Our purpose-built pipeline includes three clinical-stage programs (ERK and SHP2 inhibitors, which together comprise our first, innovative MAPKlamp approach, and an EGFR inhibitor), one preclinical-stage program (central nervous system (CNS)-penetrant KRAS G12C inhibitor), and seven discovery-stage programs targeting other key oncogenic drivers.
+Added: In 2023, we expect to have four product candidates in the clinic.
+Added: In addition, we expect to file an additional investigational new drug application (IND) every 12-18 months through 2026.
We believe our world-class team’s capabilities and experience, further guided by our scientific advisory board, which includes the world’s leading experts in the RAS/MAPK pathway, uniquely position us to achieve our bold mission of erasing cancer.
−Removed: Our lead product candidates are ERAS-007 (our oral ERK1/2 inhibitor) and ERAS-601 (our oral SHP2 inhibitor), which together comprise our first MAPKlamp approach to target upstream and downstream nodes of the RAS/MAPK pathway.
−Removed: ERAS-007 is the first prong of our first MAPKlamp.
−Removed: We are pursuing a broad clinical development plan for ERAS-007, which we refer to as our HERKULES series of clinical trials, across multiple tumor types that includes both monotherapy and combinations with approved and investigational agents, such as RTK, SHP2, RAS, RAF, and/or cell cycle inhibitors.
−Removed: The first four HERKULES Phase 1b/2 proof-of-concept (POC) clinical trials will explore both tissue agnostic and tissue specific indications in patients with solid tumors and hematologic malignancies, including non-small cell lung cancer (NSCLC), colorectal cancer (CRC), and acute myeloid leukemia.
−Removed: In May 2021, we dosed the first patient in HERKULES-1, a Phase 1b/2 clinical trial evaluating ERAS-007 as a single agent and in combination with ERAS-601 (our first MAPKlamp) in advanced solid tumors.
+Added: Our lead product candidates are ERAS-007 (our oral ERK1/2 inhibitor) and ERAS-601 (our oral SHP2 inhibitor), which target upstream and downstream nodes of the RAS/MAPK pathway.
+Added: We are pursuing a broad clinical development plan across multiple tumor types for ERAS-007, which we refer to as our HERKULES series of clinical trials, that includes both monotherapy and combinations with approved and investigational agents, such as RTK, SHP2, RAS, and/or RAF inhibitors.
+Added: The first four HERKULES Phase 1b/2 clinical trials are exploring both tissue agnostic and tissue specific indications in patients with solid tumors and hematologic malignancies, including non-small cell lung cancer (NSCLC), colorectal cancer (CRC), and acute myeloid leukemia (AML).
+Added: In May 2021, we dosed the first patient in HERKULES-1, a Phase 1b/2 clinical trial designed to evaluate ERAS-007 as a single agent and in combination with various RAS/MAPK pathway targeting agents in advanced solid tumors.
+Added: We expect to report Phase 1b monotherapy data from HERKULES-1 in the second half of 2022.
+Added: These data will include preliminary monotherapy safety and pharmacokinetics to support dose selection for combinations of ERAS-007.
In September 2021, we dosed the first patient in HERKULES-2, a Phase 1b/2 master protocol clinical trial for ERAS-007 and/or ERAS-601 in combination with various agents in patients with NSCLC.
−Removed: In September 2021, we dosed the first patient in HERKULES-3, a Phase 1b/2 master protocol clinical trial for ERAS-007/MAPKlamp in combination with various agents in patients with gastrointestinal malignancies, with an initial focus on advanced CRC.
+Added: In September 2021, we dosed the first patient in HERKULES-3, a Phase 1b/2 master protocol clinical trial for ERAS-007 in combination with various agents in patients with gastrointestinal (GI)
+Added: cancers, with an initial focus on advanced CRC.
In September 2021, we announced a clinical trial collaboration and supply agreement with Pfizer Inc.
(Pfizer) in connection with the HERKULES-3 trial.
−Removed: Under the terms of the collaboration, we are sponsoring and funding the clinical trial and Pfizer is providing its BRAF inhibitor, encorafenib (BRAFTOVI ® ), at no cost.
−Removed: Finally, in the first quarter of 2022, we plan to dose the first patient in HERKULES-4, a Phase 1b/2 master protocol clinical trial for ERAS-007 and/or
−Removed: ERAS-601 in combination with various agents in patients with hematologic malignancies.
−Removed: While providing POC data, these trials may be expanded to enable potential accelerated approvals in their respective indications.
−Removed: The second prong of our first MAPKlamp, ERAS-601, is designed to be a potent and selective oral inhibitor of SHP2, a convergent node for upstream RTK signaling and a critical “on/off switch”
+Added: Under the terms of the agreement, we are sponsoring and funding the clinical trial and Pfizer is providing its BRAF inhibitor, encorafenib (BRAFTOVI), at no cost.
+Added: Additionally, in March 2022, we announced a clinical trial collaboration and supply agreement with Eli Lilly and Company (Lilly) in connection with the HERKULES-3 trial.
+Added: Under the terms of the agreement, we are sponsoring and funding the clinical trial and Lilly is providing its EGFR antibody, cetuximab (ERBITUX), at no cost.
+Added: Finally, HERKULES-4 is a Phase 1b/2 master protocol clinical trial for ERAS-007 and/or ERAS-601 in combination with various agents in patients with hematologic malignancies, with an initial focus on AML.
+Added: The master protocols for each of the HERKULES-2, -3, and -4 Phase 1b/2 clinical trials provide the flexibility to explore additional combinations and expand into other NSCLC, GI cancer, and hematological malignancy indications, respectively.
+Added: These three trials are expected to provide proof-of-concept data and may be expanded to enable potential accelerated approvals in their respective indications.
+Added: ERAS-601 is designed to be a potent and selective oral inhibitor of SHP2, a convergent node for upstream RTK signaling and a critical “on/off switch”
that activates RAS-GTP signaling.
2 unchanged sentences
In the fourth quarter of 2020, we dosed the first patient in FLAGSHP-1, a Phase 1 clinical trial for ERAS-601 in patients with advanced solid tumors.
−Removed: We expect to file an investigational new drug application (IND) with the US Food and Drug Administration (FDA) for ERAS-3490, the development candidate nominated from our CNS-penetrant KRAS G12C inhibitor program, in the second half of 2022.
−Removed: We are conducting IND-enabling studies for ERAS-801, our CNS-penetrant EGFR inhibitor, and expect to file an IND for development in refractory glioblastoma multiforme in the first quarter of 2022.
+Added: ERAS-601 combinations are being evaluated in the FLAGSHP-1, HERKULES-2, and HERKULES-4 clinical trials for patients with CRC, head and neck cancer, NSCLC, and AML.
+Added: We expect to report Phase 1 monotherapy data from FLAGSHP-1 in the second half of 2022.
+Added: These data will include preliminary monotherapy safety and pharmacokinetics to support dose selection for combinations of ERAS-601.
+Added: In February 2022, we dosed the first patient in our THUNDERBBOLT-1 Phase 1 clinical trial for ERAS-801, our CNS-penetrant EGFR inhibitor, in patients with recurrent glioblastoma multiforme (GBM).
+Added: In the second half of 2022, we expect to file an IND with the US Food and Drug Administration (FDA) for ERAS-3490, the development candidate we nominated from our CNS-penetrant KRAS G12C inhibitor program.
We are also advancing seven other programs targeting key oncogenic drivers in the RAS/MAPK pathway, which we will need to successfully progress through discovery and IND-enabling activities prior to advancing these programs into clinical development, if at all.
3 unchanged sentences
We are also in the process of locating and qualifying additional manufacturers to build redundancies into our supply chain.
−Removed: In addition, we rely on third parties to package, label, store, and distribute our product candidates, and we intend to rely on third parties for our commercial products if marketing approval is obtained.
+Added: In addition, we rely on third parties to package, label, store, and distribute our product candidates, and we intend to continue to rely on third parties with respect to our commercial products if marketing approval is obtained.
We believe that this strategy allows us to maintain a more efficient infrastructure by eliminating the need for us to invest in our own manufacturing facilities, equipment, and personnel while also enabling us to focus our expertise and resources on the design and development of our product candidates.
−Removed: In July 2021, we completed our IPO and issued 21,562,500 shares of our common stock, including the exercise in full by the underwriters of their option to purchase 2,812,500 shares of our common stock, at a price to the public of $16.00 per share.
+Added: In July 2021, we completed our initial public offering (IPO) and issued 21,562,500 shares of our common stock, including the exercise in full by the underwriters of their option to purchase 2,812,500 shares of our common stock, at a price to the public of $16.00 per share.
Our aggregate net proceeds from the offering were $317.0 million, net of underwriting discounts and commissions of $24.2 million and offering costs of $3.8 million.
1 unchanged sentence
We do not have any products approved for sale and have not generated any revenue.
−Removed: As of September 30, 2021, we have raised a total of $665.4 million to fund our operations, comprised primarily of gross proceeds from our IPO and the sale and issuance of convertible preferred stock.
−Removed: As of September 30, 2021, we had cash, cash equivalents and investments of $486.6 million.
+Added: As of March 31, 2022, we have raised a total of $665.4 million to fund our operations, comprised primarily of gross proceeds from our IPO and the sale and issuance of convertible preferred stock.
+Added: As of March 31, 2022, we had cash, cash equivalents and marketable securities of $421.8 million.
We have incurred significant operating losses since inception.
−Removed: Our net losses were $46.1 million and $10.6 million for the three months ended September 30, 2021 and 2020, respectively, and $92.3 million and $39.8 million for the nine months ended September 30, 2021 and 2020, respectively.
−Removed: As of September 30, 2021, we had an accumulated deficit of $207.7 million.
+Added: Our net losses were $36.5 million and $18.0 million for the three months ended March 31, 2022 and 2021, respectively.
+Added: As of March 31, 2022, we had an accumulated deficit of $274.6 million.
We expect our expenses and operating losses will increase substantially for the foreseeable future, particularly if and as we conduct our ongoing and planned clinical trials and preclinical studies;
8 unchanged sentences
Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and preclinical studies and our expenditures on other research and development activities.
−Removed: Based upon our current operating plans, we believe that our cash, cash equivalents and investments as of September 30, 2021 will be sufficient to fund our operations for at least the next 24 months.
+Added: Based upon our current operating plans, we believe that our cash, cash equivalents and marketable securities as of March 31, 2022 will be sufficient to fund our operations into the second half of 2024.
We do not expect to generate any revenues from product sales until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which we expect will take a number of years and may never occur.
12 unchanged sentences
Our acquisition and license agreements
−Removed: We have entered into in-license and acquisition agreements pursuant to which we in-licensed or acquired certain intellectual property rights related to our product candidates and development programs, including the Asana Agreements, the ELS Purchase Agreement, the NiKang Agreement, the Katmai Agreement, the LifeArc Agreement, and the UCSF Agreement.
+Added: We have entered into in-license and acquisition agreements pursuant to which we in-licensed or acquired certain intellectual property rights related to our product candidates and development programs.
For additional information regarding these agreements, see the section titled “Business—Our acquisition and license agreements”
−Removed: in our Prospectus.
+Added: in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 24, 2022.
Components of results of operations
−Removed: We do not expect to generate any revenue from the sale of products unless and until such time that our product candidates have advanced through clinical development and regulatory approval, if ever.
+Added: We do not expect to generate any revenue from the sale of products unless and until such time that our product candidates have advanced through clinical development and obtained regulatory approval, if ever.
If we fail to complete preclinical and clinical development of product candidates or obtain regulatory approval for them, our ability to generate future revenues, and our results of operations and financial position would be adversely affected.
4 unchanged sentences
Our research and development expenses include:
−Removed: external costs, including expenses incurred under arrangements with third parties, such as CROs, CMOs, consultants and our scientific advisors;
+Added: external costs, including expenses incurred under arrangements with third parties, such as contract research organizations (CROs), contract manufacturing organizations (CMOs), consultants and our scientific advisors;
internal costs, including:
3 unchanged sentences
The following table summarizes our research and development expenses incurred for the following periods (in thousands):
−Removed: Three Months Ended
−Removed: September 30,
−Removed: Nine Months Ended
−Removed: September 30,
+Added: Three Months Ended March 31,
+Added: Other clinical program
Other discovery and preclinical programs
−Removed: Total research and development
−Removed: (1) ERAS-007 was acquired in November 2020.
+Added: Total research and development expenses
We expect our research and development expenses to increase substantially for the foreseeable future as we continue to conduct our ongoing research and development activities, conduct clinical trials and advance our preclinical research programs toward clinical development, particularly as more of our product candidates move into later stages of development, which typically cost more.
2 unchanged sentences
The timelines and costs with research and development activities are uncertain, can vary significantly for each product candidate and program and are difficult to predict.
−Removed: We anticipate we will make determinations as to which product candidates and programs to pursue and how much funding to direct to each product candidate and program on an ongoing basis in response to preclinical and clinical results, regulatory developments, ongoing assessments as to each product candidate’s and program’s commercial potential, and our ability to enter into collaborations, to the extent we determine the resources or expertise of a collaborator would be beneficial for a given product candidate or program.
+Added: We anticipate we will make determinations as to which product candidates and programs to pursue and how much funding to direct to each product candidate and program on an ongoing basis in response to preclinical and clinical results, regulatory developments, ongoing assessments as to each product candidate’s and program’s commercial potential, and our ability to enter into collaborations, licenses, or other similar agreements to the extent we determine the resources or expertise of a third-party would be beneficial for a given product candidate or program.
We will need to raise substantial additional capital in the future.
−Removed: In addition, we cannot forecast which product candidates and programs may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.
+Added: In addition, we cannot forecast which product candidates and programs may be subject to future collaborations, licenses, or other agreements, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.
Our development costs may vary significantly based on factors such as:
14 unchanged sentences
the timing, receipt and terms of any approvals from applicable regulatory authorities;
−Removed: maintaining a continued acceptable safety profile of our products candidates following approval, if any;
+Added: maintaining a continued acceptable safety profile of our products following approval, if any;
significant and changing government regulation and regulatory guidance;
3 unchanged sentences
In-process research and development expenses include rights acquired as part of asset acquisitions or in-licenses to develop and commercialize product candidates.
−Removed: Upfront payments that relate to the acquisition of a new drug compound, as well as pre-commercial milestone payments, are immediately expensed as in-process research and development in the period in which they are incurred, provided that the new drug compound did not also include processes or activities that would constitute a “business”
−Removed: as defined under US generally accepted accounting principles (US GAAP), the drug has not achieved regulatory approval for marketing and, absent obtaining such approval, has no established alternative future use.
−Removed: In-process research and development expenses consist primarily of our upfront payment and issuance of our Series B-2 convertible preferred stock to Asana in connection with the Asana Agreements, our upfront and milestone payments to NiKang in connection with the NiKang Agreement, our upfront payment to Katmai in connection with the Katmai Agreement, our upfront payment and issuance of our common stock to ELS in connection with the ELS Purchase Agreement, and issuance of our common stock and cash payment to the Regents in connection with the UCSF Agreement.
+Added: Upfront payments that relate to the acquisition of a new product candidate, as well as pre-commercial milestone payments, are immediately expensed as in-process research and development in the period in which they are incurred, provided that the new product candidate did not also include processes or activities that would constitute a “business”
+Added: as defined under US generally accepted accounting principles (US GAAP), the product candidate has not achieved regulatory approval for marketing and, absent obtaining such approval, has no established alternative future use.
+Added: In-process research and development expenses consist primarily of our upfront payments, milestone payments, and our stock issuances in connection with our acquisition and in-license agreements.
General and administrative
7 unchanged sentences
Interest income
−Removed: Interest income consists primarily of interest earned on our cash, cash equivalents and investments.
+Added: Interest income consists primarily of interest earned on our cash, cash equivalents and marketable securities.
Change in fair value of preferred stock purchase right liability
2 unchanged sentences
This freestanding preferred stock purchase right liability for the Series B-2 convertible preferred stock was recorded at fair value upon issuance and was subsequently remeasured to fair value at each reporting date.
−Removed: Changes in the fair value of the preferred stock purchase right liability were recognized in the consolidated statements of operations and comprehensive loss until the obligation for the Series B-2 shares was fulfilled upon the Series B-2 issuance in January 2021.
+Added: Changes in the fair value of the preferred stock purchase right liability were recognized in the condensed consolidated statements of operations and comprehensive loss until the obligation for the Series B-2 shares was fulfilled upon the Series B-2 issuance in January 2021.
Results of operations
−Removed: Comparison of the three months ended September 30, 2021 and 2020
−Removed: The following table summarizes our results of operations for the three months ended September 30, 2021 and 2020 (in thousands):
−Removed: Three Months Ended September 30,
−Removed: Operating expenses:
−Removed: Research and development
−Removed: In-process research and development
−Removed: General and administrative
−Removed: Contribution of common stock to Erasca Foundation
−Removed: Total operating expenses
−Removed: Loss from operations
−Removed: Total other income (expense), net
−Removed: Research and development expenses
−Removed: Research and development expenses were $20.0 million for the three months ended September 30, 2021 compared to $9.1 million for the three months ended September 30, 2020.
−Removed: The increase of $10.9 million was primarily driven by a $4.2 million increase in expenses incurred in connection with clinical trials and preclinical studies, a $3.8 million increase in personnel costs, a $1.6 million increase in stock-based compensation expense, and a $1.1 million increase in outsourced services and consulting.
−Removed: In-process research and development expenses
−Removed: In-process research and development expenses were $1.7 million for the three months ended September 30, 2021 related to the cash payment of $1.7 million following the achievement of the Corporate Milestone in connection with the UCSF Agreement.
−Removed: There were $75,000 in in-process research and development expenses related to the LifeArc Agreement for the three months ended September 30, 2020.
−Removed: General and administrative expenses
−Removed: General and administrative expenses were $6.9 million for the three months ended September 30, 2021 compared to $2.0 million for the three months ended September 30, 2020.
−Removed: The increase of $4.9 million was primarily driven by an increase of $1.8 million in personnel costs, an increase of $1.3 million in stock-based compensation expense, and increases of $1.0 million in insurance costs and $0.1 million in legal fees.
−Removed: Contribution of common stock to Erasca Foundation
−Removed: Contribution of common stock to Erasca Foundation of $17.5 million was recognized for the three months ended September 30, 2021 in connection with the issuance of 1,093,557 shares of our common stock as a contribution to the Erasca Foundation in conjunction with our IPO.
−Removed: No such expenses were recognized for the three months ended September 30, 2020.
−Removed: Other income (expense), net
−Removed: Other income (expense), net was $(25,000) for the three months ended September 30, 2021 compared to $0.6 million for the three months ended September 30, 2020.
−Removed: The decrease of $0.6 million was primarily related to the change in fair value of the preferred stock purchase right liability of $0.6 million recorded in the three months ended September 30, 2020 and no such change in fair value recorded in the three months ended September 30, 2021 as a result of the obligation of the Series B-2 shares being fulfilled upon the Series B-2 issuance in January 2021.
−Removed: Comparison of the nine months ended September 30, 2021 and 2020
−Removed: The following table summarizes our results of operations for the nine months ended September 30, 2021 and 2020 (in thousands):
−Removed: Nine Months Ended September 30,
+Added: Comparison of the three months ended March 31, 2022 and 2021
+Added: The following table summarizes our results of operations for the three months ended March 31, 2022 and 2021 (in thousands):
+Added: Three Months Ended March 31,
Operating expenses:
2 unchanged sentences
General and administrative
−Removed: Contribution of common stock to Erasca Foundation
Total operating expenses
2 unchanged sentences
Research and development expenses
−Removed: Research and development expenses were $49.8 million for the nine months ended September 30, 2021 compared to $19.5 million for the nine months ended September 30, 2020.
−Removed: The increase of $30.3 million was primarily driven by a $10.7 million increase in expenses incurred in connection with clinical trials and preclinical studies, a $9.2 million increase in personnel costs, a $6.9 million increase in outsourced services and consulting, and a $2.9 million increase in stock-based compensation expense.
+Added: Research and development expenses were $27.4 million for the three months ended March 31, 2022 compared to $12.2 million for the three months ended March 31, 2021.
+Added: The increase of $15.2 million was primarily driven by a $7.8 million increase in expenses incurred in connection with clinical trials, preclinical studies and discovery activities, a $3.4 million increase in personnel costs primarily due to an increase in headcount, a $2.2 million increase in stock-based compensation expense primarily due to increases in our stock price and headcount, a $0.8 million increase in outsourced services and consulting fees and a $0.6 million increase in facilities and depreciation
In-process research and development expenses
−Removed: In-process research and development expenses were $10.8 million for the nine months ended September 30, 2021 compared to $17.7 million for the nine months ended September 30, 2020.
−Removed: In-process research and development expenses for the nine months ended September 30, 2021 related to the cash payment of $1.7 million following the achievement of the Corporate Milestone and the issuance of 944,945 shares of our common stock at a price of $5.81 per share or a total fair value of $5.5 million in connection with the amendment to the UCSF Agreement, and a $2.0 million upfront payment and issuance of 500,000 shares of our common stock at a price of $3.36 per share or a total fair value of $1.7 million in connection with the ELS Purchase Agreement.
−Removed: In-process research and development expenses for the nine months ended September 30, 2020 related to a $5.0 million upfront payment and a $7.0 million milestone payment in connection with the NiKang Agreement, a $5.7 million upfront payment in connection with the Katmai Agreement, and a $75,000 license payment in connection with the LifeArc Agreement.
+Added: In-process research and development expenses were $2.0 for the three months ended March 31, 2022 compared to $3.7 million for the three months ended March 31, 2021.
+Added: In-process research and development expenses for the three months ended March 31, 2022 related to a development milestone payment of $2.0 million in connection with our license agreement with Katmai Pharmaceuticals, Inc.
+Added: In-process research and development expenses for the three months ended March 31, 2021 related to a $2.0 million upfront payment and issuance of 500,000 shares of our common stock at a price of $3.36 per share to Emerge Life Sciences, Pte.
+Added: (ELS) in connection with the purchase agreement we entered into in March 2021 with ELS.
General and administrative expenses
−Removed: General and administrative expenses were $15.7 million for the nine months ended September 30, 2021 compared to $5.1 million for the nine months ended September 30, 2020.
−Removed: The increase of $10.6 million was primarily driven by a $4.5 million increase in personnel costs, a $2.2 million increase in stock-based compensation expense, and increases of $1.1 million in insurance costs, $1.0 million in legal fees and $0.4 million in audit fees.
−Removed: Contribution of common stock to Erasca Foundation
−Removed: Contribution of common stock to Erasca Foundation of $17.5 million was recognized for the nine months ended September 30, 2021 in connection with the issuance of 1,093,557 shares of our common stock as a contribution to the Erasca Foundation in conjunction with our IPO.
−Removed: No such expenses were recognized for the nine months ended September 30, 2020.
+Added: General and administrative expenses were $7.1 million for the three months ended March 31, 2022 compared to $3.7 million for the three months ended March 31, 2021.
+Added: The increase of $3.4 million was primarily driven by an increase of $1.4 million in stock-based compensation expense due to increases in our stock price and headcount, an increase of $1.0 million in insurance costs, an increase of $0.7 million in personnel costs primarily due to an increase in headcount, and increases of $0.3 million in facilities and office related expenses and $0.1 million in accounting fees, partially offset by a decrease in legal fees of $0.3 million.
Other income (expense), net
−Removed: Other income (expense), net was $1.5 million for the nine months ended September 30, 2021 compared to $2.5 million for the nine months ended September 30, 2020.
−Removed: The decrease of $1.0 million was primarily related to the decrease of $0.2 million in interest and accretion income earned on our cash, cash equivalents and investments and a decrease of $0.7 million in the change in fair value of the preferred stock purchase right liability.
+Added: Other income (expense), net was $47,000 for the three months ended March 31, 2022 compared to $1.6 million for the three months ended March 31, 2021.
+Added: The decrease of $1.5 million was primarily related to the change in fair value of the preferred stock purchase right liability of $1.6 million recorded in the three months ended March 31, 2021 and no such change in fair value recorded in the three months ended March 31, 2022 as a result of the obligation of the Series B-2 shares being fulfilled upon the Series B-2 issuance in January 2021.
Liquidity and capital resources
4 unchanged sentences
Future capital requirements
−Removed: As of September 30, 2021, we had cash, cash equivalents and investments of $486.6 million, which includes net proceeds of $317.0 million received in July 2021 from the sale of shares in our IPO.
−Removed: Based upon our current operating plans, we believe that our cash, cash equivalents and investments, will be sufficient to fund our operations for at least the next 24 months.
+Added: As of March 31, 2022, we had cash, cash equivalents and marketable securities of $421.8 million.
+Added: Based upon our current operating plans, we believe that our cash, cash equivalents and marketable securities will be sufficient to fund our operations into the second half of 2024.
However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially.
2 unchanged sentences
Our future capital requirements are difficult to forecast and will depend on many factors, including but not limited to:
−Removed: the type, number, scope, progress, expansions, results, costs and timing of discovery, preclinical studies and clinical trials of our product candidates which we are pursuing or may choose to pursue in the future, including the costs of any third-party products used in our combination clinical trials that are not covered by such third party or other sources;
−Removed: the costs and timing of manufacturing for our product candidates, including commercial manufacturing if any product candidate is approved;
+Added: the type, number, scope, progress, expansions, results, costs and timing of discovery, preclinical studies and clinical trials of our product candidates that we are pursuing or may choose to pursue in the future, including the costs of any third-party products used in our combination clinical trials that are not covered by such third party or other sources;
+Added: the costs and timing of manufacturing for our product candidates with CMOs, including commercial manufacturing, if any product candidate is approved;
the costs, timing and outcome of regulatory review of our product candidates;
1 unchanged sentence
our efforts to enhance operational systems and hire additional personnel to satisfy our obligations as a public company, including enhanced internal controls over financial reporting;
−Removed: the costs associated with hiring additional personnel and consultants as our preclinical and clinical activities increase;
+Added: the costs associated with hiring additional personnel, consultants, and CROs as our preclinical and clinical activities increase;
the timing and amount of the milestone or other payments we must make to the licensors and other third parties from whom we have in-licensed or acquired our product candidates or technologies;
11 unchanged sentences
Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.
−Removed: If we raise additional funds through other collaborations or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us.
+Added: If we raise additional funds through collaborations, licensing, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs 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 research and development programs or other operations, or grant rights to develop and market product candidates to third parties that we would otherwise prefer to develop and market ourselves.
The following table shows a summary of our cash flows for the periods presented (in thousands):
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
Net cash (used in) provided by:
2 unchanged sentences
Financing activities
−Removed: Net increase in cash, cash equivalents and restricted cash
+Added: Net (decrease) increase in cash, cash equivalents and restricted cash
Operating activities
−Removed: Cash used in operating activities was $57.1 million during the nine months ended September 30, 2021, primarily resulting from a net loss of $92.3 million, partially reduced by the issuance of common stock to the Erasca Foundation of $17.5 million, which is reflected in noncash investing and financing activities, in-process research and development expenses of $10.8 million, which are reflected in noncash and investing activities, stock-based compensation of $5.4 million, changes in operating assets and liabilities of $2.4 million and depreciation expense of $0.5 million, partially offset by a $1.6 million change in fair value of the preferred stock purchase right liability.
−Removed: Net cash provided by changes in operating assets and liabilities consisted primarily of increases in accounts payable, accrued expenses and other current liabilities of $7.6 million, partially offset by an increase in prepaid expenses and other current and long-term assets of $5.6 million.
−Removed: Cash used in operating activities was $19.6 million during the nine months ended September 30, 2020, primarily resulting from a net loss of $39.8 million, partially reduced by in-process research and development expenses of $17.7 million, which is reflected in investing activities, changes in operating assets and liabilities of $4.0 million, depreciation expense of $0.4 million and stock-based compensation expense of $0.4 million, partially offset by a $2.3 million change in fair value of the preferred stock purchase right liability.
−Removed: Net cash provided by changes in operating assets and liabilities consisted primarily of increases in accrued expenses and other current liabilities of $4.5 million, partially offset by an increase in prepaid expenses and other current and long-term assets of $0.4 million.
+Added: Cash used in operating activities was $25.8 million during the three months ended March 31, 2022, primarily resulting from a net loss of $36.5 million, partially reduced by stock-based compensation of $4.4 million, changes in operating assets and liabilities of $3.8 million, in-process research and development expenses of $2.0 million, which are reflected in investing activities, and depreciation expense of $0.4 million.
+Added: Net cash provided by changes in operating assets and liabilities consisted primarily of an increase in operating lease assets and liabilities of $11.1 million primarily due to the receipt of $10.3 million in reimbursement from our landlord for tenant improvements and an increase in accounts payable of $1.9 million, partially offset by an increase in prepaid expenses and other current and long-term assets of $5.5 million, and a decrease of accrued expenses and other current liabilities of $3.7 million.
+Added: Cash used in operating activities was $15.7 million during the three months ended March 31, 2021, primarily resulting from a net loss of $18.0 million, partially reduced by in-process research and development expenses of $3.7 million, which is reflected in noncash and investing activities, stock-based compensation expense of $0.8 million and depreciation expense of $0.1 million, partially offset by a $1.6 million change in fair value of the preferred stock purchase right liability and changes in operating assets and liabilities of $0.7 million.
+Added: Net cash provided by changes in operating assets and liabilities consisted primarily of an increase in prepaid expenses and other current and long-term assets of $1.2 million, partially offset by increases in accounts payable, accrued expenses and other current liabilities of $0.5 million.
Investing activities
−Removed: Net cash used in investing activities was $0.6 million during the nine months ended September 30, 2021 as compared to cash used in investing activities of $87.8 million during the nine months ended September 30, 2020.
−Removed: The decrease in cash used in investing activities of $87.1 million was primarily the result of a decrease in purchases of investments of $55.7 million, additional maturities of investments of $25.8 million, and a decrease in in-process research and development of $10.1 million, offset by an increase in purchases of property and equipment of $4.5 million.
+Added: Net cash used in investing activities was $1.8 million during the three months ended March 31, 2022 as compared to cash used in investing activities of $0.2 million during the three months ended March 31, 2021.
+Added: The increase in cash used in investing activities of $1.6 million was primarily the result of a decrease in maturities of marketable securities of $8.7 million, an increase in purchases of property and equipment of $7.2 million, and the $2.0 million payment made for our investment in Affini-T Therapeutics, Inc., partially offset by a $12.2 million decrease in purchases of marketable securities and a $4.0 million decrease in in-process research and development.
Financing activities
−Removed: Net cash provided by financing activities was $438.3 million during the nine months ended September 30, 2021 as compared to $140.1 million during the nine months ended September 30, 2020.
−Removed: During the nine months ended September 30, 2021, we received $317.0 million from the issuance of common stock in our IPO, net of underwriting discounts and commissions and offering costs, $119.4 million from the sale of shares of our Series B-2 convertible preferred stock, net of issuance costs, $1.3 million from the exercise of stock options and $0.6 million from the disgorgement of a stockholder's short-swing profits.
−Removed: During the nine months ended September 30, 2020, we received $137.0 million from the sale of shares of our Series B-1 convertible preferred stock, net of issuance costs, and $3.1 million from the exercise of stock options.
+Added: Net cash provided by financing activities was $0.5 million during the three months ended March 31, 2022 as compared to $120.5 million during the three months ended March 31, 2021.
+Added: During the three months ended March 31, 2022, we received $0.5 million from the exercise of stock options.
+Added: During the three months ended March 31, 2021, we received $119.4 million from the sale of shares of our Series B-2 convertible preferred stock, net of issuance costs, and $1.1 million from the exercise of stock options.
Contractual obligations and commitments
−Removed: As of September 30, 2021, there have been no material changes outside the ordinary course of our business to the contractual obligations we reported in “Management’s discussion and analysis of financial condition and results of operations –
−Removed: Contractual obligations and commitments,”
−Removed: included in the Prospectus.
+Added: As of March 31, 2022, there have been no material changes outside the ordinary course of our business to the contractual obligations we reported in “Management’s discussion and analysis of financial condition and results of operations –
+Added: Cash requirements due to contractual obligations and other commitments,”
+Added: included in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 24, 2022.
Off-balance sheet arrangements
2 unchanged sentences
This management discussion and analysis of financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with US GAAP.
−Removed: The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses.
+Added: The preparation of these condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses.
On an ongoing basis, we evaluate these estimates and judgments.
2 unchanged sentences
Actual results may differ materially from these estimates.
−Removed: As of September 30, 2021, there have been no material changes to our critical accounting policies and estimates from those disclosed in “Management’s discussion and analysis of financial condition and results of operations –
+Added: As of March 31, 2022, there have been no material changes to our critical accounting policies and estimates from those disclosed in “Management’s discussion and analysis of financial condition and results of operations –
Critical accounting policies and estimates,”
−Removed: included in the Prospectus.
+Added: included in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 24, 2022.
Recently issued and adopted accounting pronouncements
−Removed: 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 consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.
+Added: See Note 2 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for recently issued and adopted accounting pronouncements.
Emerging growth company and smaller reporting company status
−Removed: As an emerging growth company under the JOBS Act, we can take advantage of an extended transition period for complying with new or revised accounting standards.
+Added: As an emerging growth company under the Jumpstart Our Business Startups Act of 2012 (the JOBS Act), we can take advantage of an extended transition period for complying with new or revised accounting standards.
This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
−Removed: We have elected to avail ourselves of this exemption from new or revised accounting standards and, therefore, our consolidated financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
−Removed: We also intend to rely on other exemptions provided by the JOBS Act, including without limitation, not being required to comply with the auditor attestation requirements of Section 404(b) of Sarbanes-Oxley.
+Added: We have elected to avail ourselves of this exemption from new or revised accounting standards and, therefore, our condensed consolidated financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
+Added: We also intend to rely on other exemptions provided by the JOBS Act, including without limitation, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley).
We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of the consummation of our IPO;
7 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.