What changed in this filing

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Item 1. Financial Statements

2023-04-13 compared with 2022-10-06 · 179 added, 229 removed, 337 unchanged (55% of the section changed)

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(in thousands, except share and per share amounts)

2023 November 30,

Current assets:

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Marketable securities, current 243,575 244,667

Accounts receivable

Income tax receivable

Prepaid expenses and other current assets 11,183 9,308

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Restricted cash 901 901

Other assets 3,841 4,022

Total assets $ 370,154 $ 416,759

Liabilities and stockholdersʼ equity

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Stockholdersʼ equity:

Preferred stock, $ 0.001 par value— 10,000,000 shares authorized as of August 31, 2022 and November 30, 2021;

no shares issued and outstanding as of August 31, 2022 and November 30, 2021

Common stock, $ 0.001 par value— 500,000,000 shares authorized as of August 31, 2022 and November 30, 2021;

47,147,781 and 44,664,371 shares issued and outstanding as of August 31, 2022 and November 30, 2021, respectively

Preferred stock, $ 0.001 par value— 10,000,000 shares authorized as of February 28, 2023 and November 30, 2022;

no shares issued and outstanding as of February 28, 2023 and November 30, 2022

Common stock, $ 0.001 par value— 500,000,000 shares authorized as of February 28, 2023 and November 30, 2022;

47,444,853 and 47,172,299 shares issued and outstanding as of February 28, 2023 and November 30, 2022, respectively

Additional paid-in capital 719,237 709,220

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Three Months Ended

Nine Months Ended

Collaboration revenue $ 12,685 $ 9,621

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Interest and other income, net 2,219 211

Loss before income taxes

Provision for (benefit from) income taxes

Net loss $ ( 40,733 ) $ ( 42,533 )

Net loss per share, basic and diluted $ ( 0.75 ) $ ( 0.95 )

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Three Months Ended

Nine Months Ended

Other comprehensive loss, net of tax:

Unrealized loss on available-for-sale securities

Net loss $ ( 40,733 ) $ ( 42,533 )

Other comprehensive income (loss), net of tax:

Unrealized gain (loss) on available-for-sale marketable securities 1,072 ( 1,458 )

Total comprehensive loss $ ( 39,661 ) $ ( 43,991 )

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(in thousands, except share amounts)

Common stock Additional

capital Accumulated

comprehensive

income (loss) Accumulated

deficit Total

stockholders’

income (loss)

Shares Amount

Balance as of November 30, 2021 44,664,371 $ 45 $ 563,757 $ ( 608 ) $ ( 220,892 ) $ 342,302

Exercise of stock options 117,870 — 424 — — 424

Repurchase of unvested early exercised stock options

Vesting of early exercised stock options — — 47 — — 47

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Stock-based compensation — — 6,071 — — 6,071

Unrealized loss on available-for-sale securities

Unrealized loss on available-for-sale marketable securities — — — ( 1,458 ) — ( 1,458 )

Net loss — — — — ( 42,533 ) ( 42,533 )

Balance as of February 28, 2022 44,853,448 45 571,363 ( 2,066 ) ( 263,425 ) 305,917

Issuance of common stock in connection with equity offering, net of offering costs of $ 643

Exercise of stock options

Vesting of early-exercised stock options

Stock-based compensation

Unrealized loss on available-for-sale securities

Balance as of May 31, 2021

Exercise of stock options

Vesting of early-exercised stock options

Issuance under employee stock purchase plan

Stock-based compensation

Unrealized loss on available-for-sale securities

Balance as of August 31, 2021

Common stock Additional

capital Accumulated

comprehensive

income (loss) Accumulated

deficit Total

stockholders’

income (loss)

Shares Amount

Balance as of November 30, 2022 47,172,299 $ 47 $ 709,220 $ ( 4,319 ) $ ( 401,252 ) $ 303,696

Exercise of stock options 8,768 — 28 — — 28

Vesting of early-exercised stock options

Issuance under employee stock purchase plan

Stock-based compensation

Unrealized loss on available-for-sale securities

Balance as of February 28, 2022

Exercise of stock options

Vesting of restricted stock units 98,571 — — — — —

Vesting of early exercised stock options — — 31 — — 31

Stock-based compensation

Unrealized loss on available-for-sale securities

Balance as of May 31, 2022

Issuance of pre-funded warrants, net of issuance costs of $ 234

Issuance of common stock in “at the market” financing, net of issuance costs of $ 672

Exercise of stock options

Vesting of restricted stock units

Vesting of early-exercised stock options

Issuance under employee stock purchase plan 165,215 — 1,453 — — 1,453

Stock-based compensation — — 8,505 — — 8,505

Unrealized loss on available-for-sale securities

Balance as of August 31, 2022

Unrealized gain on available-for-sale marketable securities — — — 1,072 — 1,072

Net loss — — — — ( 40,733 ) ( 40,733 )

Balance as of February 28, 2023 47,444,853 47 719,237 ( 3,247 ) ( 441,985 ) 274,052

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

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(in thousands)

Nine Months Ended August 31,

Three Months Ended February 28,

Cash flows from operating activities

Net loss $ ( 40,733 ) $ ( 42,533 )

Adjustments to reconcile net loss to net cash used in operating activities:

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Changes in operating assets and liabilities:

Accounts receivable

Income tax receivable

Prepaid expenses and other assets ( 1,627 ) ( 1,514 )

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Purchases of marketable securities ( 22,642 ) ( 15,245 )

Sales of marketable securities

Maturities of marketable securities 40,987 58,748

Purchases of property and equipment ( 2,277 ) ( 3,472 )

Net cash used in investing activities

Net cash provided by investing activities 16,068 40,031

Cash flows from financing activities

Proceeds from issuances of pre-funded warrants, net of issuance costs

Proceeds from issuances of common stock in equity financing, net of issuance costs

Proceeds from exercise of stock options 28 424

Proceeds from issuance under employee stock purchase plan 1,453 1,064

Repurchase of unvested early exercised stock options

Net cash provided by financing activities 1,481 1,488

Net (decrease) increase in cash, cash equivalents and restricted cash

Net decrease in cash, cash equivalents and restricted cash ( 30,903 ) ( 1,111 )

Cash, cash equivalents and restricted cash at beginning of period 65,375 80,792

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Additions to property and equipment included in accounts payable and accrued expenses and other liabilities $ 1,434 $ 2,207

Capitalized stock-based compensation related to internal-use software development $ 24 $ —

Vesting of early exercised stock options $ 31 $ 47

Issuance costs related to pre-funded warrants included in accrued expenses and other liabilities

Deferred issuance costs recognized related to equity financing

As of August 31,

As of February 28,

Reconciliation of cash, cash equivalents and restricted cash:

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Leveraging the Company’s expertise in E3 ligases together with its proprietary DNA-encoded libraries, the Company has built DELigase, an integrated discovery platform to identify and advance novel drug candidates targeting E3 ligases, a broad class of enzymes that can modulate proteins within the cell.

Targeted Protein Modulation, our drug discovery approach, either harnesses or inhibits the natural function of E3 ligases within the ubiquitin-proteasome system to selectively decrease or increase cellular protein levels to treat disease.

Initial Public Offering

On July 23, 2020, the Company’s registration statement on Form S-1 (File No.

333-239651) relating to its initial public offering (IPO) of common stock became effective.

The IPO closed on July 28, 2020 at which time the Company issued 11,000,000 shares of its common stock at a price to the public of $ 19.00 per share.

In addition, the underwriters exercised their option to purchase an additional 1,550,000 shares of the Company’s common stock on July 31, 2020, and this transaction closed on August 4, 2020.

Net proceeds from the IPO were $ 218.1 million, after deducting underwriting discounts and commissions of $ 16.7 million and expenses of $ 3.6 million.

Follow-on Offering

In March 2021, the Company completed a follow-on offering and issued 5,175,000 shares of common stock (including the exercise by the underwriters of their option to purchase an additional 675,000 shares of common stock) at a price to the public of $ 31.00 per share for net proceeds of $ 150.2 million, after deducting underwriting discounts and commissions of $ 9.6 million and expenses of $ 0.6 million.

The Company’s drug discovery approach is to either harness or inhibit the natural function of E3 ligases within the ubiquitin-proteasome system to selectively decrease or increase cellular protein levels.

The Company’s wholly owned, clinical stage pipeline includes targeted protein degraders of Bruton’s tyrosine kinase, a B-cell signaling protein, and inhibitors of Casitas B-lineage lymphoma proto-oncogene B, an E3 ligase that regulates activation of multiple immune cell types including T cells and NK cells.

The Company’s partnered drug discovery pipeline consists of ten programs under collaboration agreements with Sanofi S.A.

(Sanofi) and Gilead Sciences, Inc.

(Gilead), within which the Company retains options for co-development and co-commercialization rights in the United States for up to four drug candidates, two for each collaboration.

Equity Distribution Agreement

In August 2021, the Company filed a shelf registration statement on Form S-3 with the Securities and Exchange Commission (SEC).

This shelf registration statement, which includes a base prospectus, allows the Company at any time to offer and sell registered common stock, preferred stock, debt securities, warrants, subscriptions rights and or units or any combination of securities described in the prospectus in one or more offerings.

In August 2021, the Company filed a shelf registration statement on Form S-3 with the Securities and Exchange Commission (SEC), which was amended in February 2023.

This shelf registration statement, which includes a base prospectus, allows the Company at any time to offer and sell up to $ 450.0 million of the Company’s registered common stock, preferred stock, debt securities, warrants, subscriptions rights and or units or any combination of securities described in the prospectus in one or more offerings.

In addition, in August 2021, the Company entered into an Equity Distribution Agreement with Piper Sandler & Co.

(Piper Sandler) pursuant to which, from time to time, the Company may offer and sell through Piper Sandler up to $ 150.0 million of the common stock registered under the shelf registration statement pursuant to one or more “at the market” offerings.

The Company is no t required to sell any shares at any time during the term of the Equity Distribution Agreement.

The Company is not required to sell any shares at any time during the term of the Equity Distribution Agreement.

The Company agreed to pay Piper Sandler a commission of 3 % of the gross sales price of any shares sold pursuant to the Equity Distribution Agreement.

In June 2022, the Company issued and sold 2,000,000 shares of common stock under the Equity Distribution Agreement at a price of $ 10.0001 per share of common stock for net proceeds of approximately $ 19.3 million, after deducting offering commissions and expenses paid by the Company.

As of August 31, 2022, the Company had $ 130.0 million of common stock remaining available for sale under the Equity Distribution Agreement.

As of February 28, 2023, the Company had $ 130.0 million of common stock remaining available for sale under the Equity Distribution Agreement.

Registered Direct Offerings

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Liquidity and Management Plans

As of February 28, 2023, the Company had cash, cash equivalents and short-term marketable securities of $ 277.1 million and an accumulated deficit of $ 442.0 million.

The Company’s operations have historically been financed through the issuance of common stock, redeemable convertible preferred stock and pre-funded warrants and proceeds received under the Company’s collaboration and license agreements.

Since inception, the Company has generally incurred significant losses and negative net cash flows from operations.

As of August 31, 2022, the Company had an accumulated deficit of $ 354.5 million and will require substantial additional capital for research and development activities.

The Company does not expect its existing cash, cash equivalents and marketable securities to be sufficient to fund the completion of its clinical trials through commercialization and will need substantial additional funding to support its continuing operations and pursue its long-term business plan.

The Company anticipates incurring additional losses until such time, if ever, that it can generate significant sales of its drug candidates currently in development.

As of August 31, 2022, the Company had cash, cash equivalents and marketable securities of $ 413.6 million.

Management believes that its cash, cash equivalents and marketable securities are sufficient to continue operating activities for at least 12 months following the issuance date of these condensed consolidated financial statements.

Future capital requirements will depend on many factors, including the timing and extent of spending on research and development and payments the Company may receive under its collaboration agreements with Sanofi S.A.

(Sanofi) and Gilead Sciences, Inc.

(Gilead) or future collaboration agreements, if any.

Management believes that its cash, cash equivalents and short-term marketable securities are sufficient to continue operating activities for at least 12 months following the issuance date of these condensed consolidated financial statements.

There can be no assurance that, in the event the Company requires additional financing, such financing will be available at terms acceptable to the Company if at all.

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GAAP) and applicable rules and regulations of the SEC regarding interim financial reporting.

The Company’s condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for the fair statement of the Company’s financial position as of and for the three and nine months ended August 31, 2022.

The condensed consolidated balance sheet as of November 30, 2022, was derived from the audited annual financial statements as of that date.

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Certain prior year amounts have been reclassified for consistency with the current year cash flow presentation.

The reclassification did not impact total cashflow from operating, investing or financing activities.

The reclassification did not impact total cash flow from operating, investing or financing activities.

Principles of Consolidation

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Financial instruments that potentially subject the Company to concentration of credit risk consist of cash, cash equivalents and marketable securities.

The Company’s marketable securities consist of debt securities issued by highly rated corporate entities, the U.S.

The Company invests its cash equivalents in highly rated money market funds.

The Company’s marketable securities consist of debt securities issued by highly rated corporate entities, foreign governments, the U.S.

federal government or state and local governments.

The Company’s exposure to any individual corporate entity is limited by policy.

Deposits may, at times, exceed federally insured limits.

The Company invests its cash equivalents in highly rated money market funds.

Deposits may exceed federally insured limits, and the Company is exposed to credit risk on deposits in the event of default by the financial institutions to the extent account balances exceed the amount insured by the Federal Deposit Insurance Corporation (FDIC).

The Company is closely monitoring ongoing events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions or other companies in the financial services industry or the financial services industry generally, including Silicon Valley Bank (SVB).

On March 10, 2023, SVB, where the Company maintained an operating account with a cash balance of less than 1% of the Company's total cash, cash equivalents and marketable securities, was closed by the California Department of Financial Protection and Innovation and the FDIC was appointed as receiver.

On March 12, 2023, the U.S.

Department of the Treasury, Federal Reserve Board, and FDIC released a joint statement announcing that the FDIC would complete its resolution of SVB in a manner that fully protected all depositors at SVB and that depositors would have access to all of their money starting March 13, 2023.

On March 26, 2023, it was announced that First-Citizens Bank & Trust Company would assume all of SVB's deposits and loans as of March 27, 2023.

In light of the foregoing, the Company does not believe that it has exposure to loss as a result of SVB’s receivership.

During the periods presented, the Company has not experienced any losses on its deposits of cash, cash equivalents or marketable securities.

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Moreover, the Company is subject to risks and uncertainties as a result of the current COVID-19 pandemic and increasing financial market volatility and uncertainty.

The COVID-19 pandemic, including the resurgence of cases relating to the spread of new variants, is impacting worldwide economic activity and 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.

The COVID-19 pandemic, including the resurgence of cases relating to the spread of new variants, continues to impact worldwide economic activity and 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.

The extent to which the COVID-19 pandemic and increasing financial market volatility and uncertainty 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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The extent to which the COVID-19 pandemic and the increasing financial market volatility and uncertainty may directly or indirectly impact the Company’s financial statements is highly uncertain and subject to change.

Management considered the potential impact of the COVID-19 pandemic on its estimates and assumptions and there was not a material impact to the Company’s condensed consolidated financial statements as of and for the three and nine months ended August 31, 2022;

however, actual results could differ from those estimates and there may be changes to management’s estimates in future periods.

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To recognize revenue from a contract with a customer, the Company performs the following five steps:

identify the contract(s) with a customer;

identify the performance obligations in the contract;

determine the transaction price;

allocate the transaction price to the performance obligations in the contract;

recognize revenue when (or as) the Company satisfies a performance obligation.

(i) identify the contract(s) with a customer;

(ii) identify the performance obligations in the contract;

(iii) determine the transaction price;

(iv) allocate the transaction price to the performance obligations in the contract;

(v) recognize revenue when (or as) the Company satisfies a performance obligation.

At contract inception, the Company assesses the goods or services promised within each contract, whether each promised good or service is distinct, and determines those that are performance obligations.

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The current portion of deferred revenue represents the amount to be recognized within one year from the condensed consolidated balance sheet date based on the estimated performance period of the underlying performance obligation.

The noncurrent portion of deferred revenue represents amounts to be recognized after one year through the end of the performance period of the performance obligation.

The non-current portion of deferred revenue represents amounts to be recognized after one year through the end of the performance period of the performance obligation.

Recently Adopted Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No.

2019‑12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes (ASU 2019-12), which is intended to simplify accounting for income taxes and eliminate certain exceptions from Topic 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

ASU 2019-12 also requires the amount of tax that is based on income to be accounted for under Topic 740 as an income-based tax, with any incremental amount accounted for as a non-income-based tax recognized entirely in the period incurred.

The Company adopted ASU 2019-12 as of December 1, 2021 using the modified retrospective method, and recognized an immaterial non-income-based tax within operating expenses in the current period.

The adoption had no other impact on the Company’s condensed consolidated financial statements.

In February 2016, the FASB issued ASU No.

2016-02, Leases (Topic 842) (ASU 2016-02), which requires the lessee to recognize a ROU asset and a lease liability for operating leases, initially measured at the present value of lease payments, in its consolidated balance sheet.

On November 30, 2021, the Company adopted ASU 2016-02 using the alternative modified transition method effective as of December 1, 2020.

As a result, the Company has retrospectively changed its previously issued condensed consolidated financial statements as of August 31, 2021 and for the three and nine months ended August 31, 2021 as presented in its August 31, 2021 Quarterly Report on Form 10-Q to reflect the adoption of Topic 842 on December 1, 2020 .

The condensed consolidated financial statements for the three and nine months ended August 31, 2021 presented herein differ from the Company’s condensed consolidated financial statements included in its August 31, 2021 Quarterly Report on Form 10-Q, as those financial statements were prepared using the former accounting standard referred to as ASC Topic 840, Leases .

The following table summarizes the effect of the adoption of Topic 842 on the condensed consolidated balance sheet as of December 1, 2020 (in thousands):

As Previously Reported

Impact of Topic 842 Adoption

Operating lease right-of-use assets

Operating lease liabilities, current

Operating lease liabilities, net of current portion

Accrued and other current liabilities

Other long-term liabilities

The following table summarizes the effect of the adoption of Topic 842 on the condensed consolidated statement of cash flows for the nine months ended August 31, 2021 (in thousands):

As Previously Reported

Impact of Topic 842 Adoption

Cash flows from operating activities

Adjustments to reconcile net loss to net cash used in operating activities:

Amortization of operating lease right-of-use assets

Changes in operating assets and liabilities:

Operating lease liabilities

Accrued expenses and other liabilities

There have been no recent accounting pronouncements, changes in accounting pronouncements or recently adopted accounting guidance during the three months ended February 28, 2023 that are of significance or potential significance to the Company.

Collaboration Agreements

In June 2019, the Company entered into a global strategic collaboration agreement with Gilead, which was amended in August 2019 (the Gilead Agreement), to discover, develop and commercialize a pipeline of targeted protein degradation drugs for patients with cancer and other challenging diseases using the Company’s DELigase platform to identify novel agents that utilize E3 ligases to induce degradation of five specified drug targets.

In June 2019, the Company entered into a global strategic collaboration agreement with Gilead (as subsequently amended, the Gilead Agreement), to discover, develop and commercialize a pipeline of targeted protein degradation drugs for patients with cancer and other challenging diseases using the Company’s DELigase platform to identify novel agents that utilize E3 ligases to induce degradation of five specified drug targets.

In August 2019 and September 2022, the Company entered into the First Amendment and the Second Amendment, respectively, to the Gilead Agreement to clarify certain language of the Gilead Agreement.

These amendments had no impact on revenue recognition.

Under the Gilead Agreement, Gilead has the option to license drug candidates directed to up to five targets resulting from the collaboration and is responsible for the clinical development and commercialization of drug candidates resulting from the collaboration.

The Company retains the option to co-develop and co-promote, under a profit share structure, up to two drug candidates in the United States under certain conditions and subject to certain limitations.

The Company retains the option to co-develop and co-promote, under a profit share structure, up to two drug candidates in the United States, provided that the Company may only exercise such option once per licensed product and Gilead retains the right to veto the Company’s option selection for any one drug candidate of its choice.

The collaboration excludes the Company’s current internal protein degradation programs for which the Company retains all rights, and also excludes the Company’s future internal programs, provided that the Company has distinguished future programs as excluded from the scope of the collaboration.

In August 2019 and September 2022, the Company entered into a first amendment and a second amendment, respectively, to the collaboration agreement with Gilead to clarify certain language of the Gilead Agreement.

These amendments had no impact on revenue recognition.

In March 2023, Gilead exercised the option to exclusively license one target (Gilead License Option Exercise), the first development candidate resulting from the Gilead Agreement.

Pursuant to the Gilead Agreement, the Company received an option exercise payment of $ 20.0 million in April 2023 for the Gilead License Option Exercise.

Upon signing the Gilead Agreement, Gilead paid the Company an upfront payment of $ 45.0 million plus $ 3.0 million in additional fees.

In addition, from the signing of the Gilead Agreement to August 31, 2022, the Company has received payments of $ 32.0 million for research milestones and additional payments.

Additionally, the Company recognized a research milestone in August 2022 and anticipates a payment of $ 2.5 million in the fourth fiscal quarter of 2022.

As of August 31, 2022, the Company is eligible to receive up to approximately $ 2.3 billion in total additional payments based on certain additional fees, payments and the successful completion of certain preclinical, clinical, development and sales milestones.

In addition, from the signing of the Gilead Agreement to February 28, 2023, the Company has received payments of $ 36.0 million for research milestones and additional payments.

Additionally, the Company received a payment of $ 5.0 million in April 2023 related to a research milestone recognized in February 2023.

As of February 28, 2023, the Company is eligible to receive up to approximately $ 2.3 billion in total additional payments based on certain additional fees, payments and the successful completion of certain preclinical, clinical, development and sales milestones.

In addition, the Company is eligible to receive tiered royalties from mid-single digit to low tens percentages on annual net sales from any commercial products directed to the optioned collaboration targets, subject to certain reductions and excluding sales in the United States of any products for which the Company exercises its option to co-develop and co-promote, for which the Company and Gilead share profits and losses evenly.

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The Company determined that the transaction price at the inception of the Gilead Agreement consisted of the upfront payment of $ 45.0 million and $ 3.0 million in additional fees.

Upon the achievement of research milestones and additional fees related to target reservations, $ 34.5 million in variable consideration, which includes $ 2.5 million added during the three months ended August 31, 2022, was added to the transaction price, and a cumulative effect was recorded as revenue in the period the transaction price increased.

Upon the achievement of research milestones and additional fees related to target reservations, $ 41.0 million in variable consideration, which includes $ 6.5 million from achievements during the three months ended February 28, 2023, was added to the transaction price, and a cumulative effect was recorded as revenue in the period the transaction price increased.

The transaction price is recognized as collaboration revenue using the cost-based input method over the estimated contract term of five years .

For the three and nine months ended August 31, 2022, the Company recognized collaboration revenue related to the Gilead Agreement of $ 7.2 million and $ 19.5 million, respectively, of which $ 5.6 million and $ 14.3 million, respectively, was included in deferred revenue as of November 30, 2021, and $ 0.6 million and $ 4.1 million, respectively, was related to activities satisfied in previous periods.

For the three and nine months ended August 31, 2021, the Company recognized collaboration revenue related to the Gilead Agreement of $ 6.1 million and $ 12.5 million, respectively, of which $ 4.0 million and $ 9.6 million, respectively, was included in deferred revenue as of November 30, 2020, and $ 1.2 million and $ 1.9 million, respectively, was related to activities satisfied in previous periods.

As of August 31, 2022, deferred revenue related to the Gilead Agreement was $ 29.1 million, of which $ 15.9 million was current and includes $ 2.5 million in contract assets representing the unbilled amount related to the research milestone recognized in August 2022.

For the three months ended February 28, 2023, the Company recognized collaboration revenue related to the Gilead Agreement of $ 7.4 million, of which $ 2.8 million was included in deferred revenue as of November 30, 2022, and $ 4.1 million was related to activities satisfied in previous periods.

For the three months ended February 28, 2022, the Company recognized collaboration revenue related to the Gilead Agreement of $ 6.2 million of which $ 3.3 million was included in deferred revenue as of November 30, 2021, and $ 2.5 million was related to activities satisfied in previous periods.

As of February 28, 2023, deferred revenue related to the Gilead Agreement was $ 21.5 million, of which $ 16.3 million was current and includes $ 5.0 million in contract assets representing the unbilled amount related to the research milestone recognized in February 2023.

As of November 30, 2022, deferred revenue related to the Gilead Agreement was $ 27.4 million, of which $ 18.2 million was current.

Additionally, as of November 30, 2021, $ 6.0 million was recorded in accounts receivable representing the billed amount related to the research milestones recognized in November 2021.

In December 2019, the Company entered into a strategic collaboration with Genzyme Corporation, a subsidiary of Sanofi, which became effective in January 2020 (as subsequently expanded and amended, the Sanofi Agreement), to discover, develop and commercialize a pipeline of targeted protein degradation drugs for patients with challenging diseases in multiple therapeutic areas using the Company’s DELigase platform to identify small molecules designed to induce degradation of three specified initial drug targets.

In January 2021, as part of the existing collaboration agreement, Sanofi paid the Company $ 22.0 million to exercise its option to expand the number of targets in the collaboration agreement from three to a total of five targets.

In January 2021, the Company and Sanofi entered into a first amendment to the collaboration agreement to modify the research term on all targets (the First Sanofi Amendment) .

In January 2021, the Company and Sanofi entered into the First Amendment to the Sanofi Agreement to modify the research term on all targets (the First Sanofi Amendment).

Over time and subject to certain limitations, Sanofi may elect to replace the drug targets with other reserved targets.

In December 2021, the Company and Sanofi entered into a second amendment to extend the substitution deadline on certain targets.

Under the Sanofi Agreement, Sanofi has exclusive rights and is responsible for the clinical development, commercialization and manufacture of drug candidates resulting from the collaboration, while the Company retains the option to co-develop, co-promote and co-commercialize up to two targets, subject to certain conditions and limitations.

In July 2022, the Company entered into a third amendment to further extend the substitution deadline on certain targets.

In December 2021, the Company and Sanofi entered into the Second Amendment to the Sanofi Agreement to extend the substitution deadline on certain targets.

In July 2022, the Company entered into the Third Amendment to the Sanofi Agreement to further extend the substitution deadline on certain targets.

The extensions of the substitution deadline had no impact on revenue recognition.

Also in July 2022, Sanofi elected to replace certain drug targets, and the substitution extended the research term of those targets by one year to 5.25 years and increased overall forecasted costs, which had an immaterial impact on revenue recognition.

In August 2022, the Company entered into a fourth amendment to modify the research plan for a certain target, which had no impact on revenue recognition.

In August 2022, the Company entered into the Fourth Amendment to the Sanofi Agreement to modify the research plan for a certain target, which had no impact on revenue recognition.

Upon signing the Sanofi Agreement, Sanofi paid the Company an upfront payment of $ 55.0 million.

Subsequently, in January 2021, Sanofi paid the Company an additional $ 22.0 million to exercise its option to expand the number of targets beyond the initial targets included in the collaboration.

In addition, from the signing of the Sanofi Agreement to August 31, 2022, the Company has received payments of $ 3.0 million for research milestones.

As of August 31, 2022, the Company is eligible to receive up to approximately $ 2.5 billion in total additional payments based on certain additional fees, payments and the successful completion of certain research development, regulatory and sales milestones, as well as tiered royalties ranging from mid-single digit to low teen percentages on annual net sales of any commercial products that may result from the collaboration, subject to certain reductions and excluding sales in the United States of any products for which the Company exercises its option to co-develop and co-promote, for which the parties share profits and losses evenly.

In addition, from the signing of the Sanofi Agreement to February 28, 2023, the Company has received payments of $ 5.0 million for research milestones.

As of February 28, 2023, the Company is eligible to receive up to approximately $ 2.5 billion in total additional payments based on certain additional fees, payments and the successful completion of certain research development, regulatory and sales milestones, as well as tiered royalties ranging from mid-single digit to low teen percentages on annual net sales of any commercial products that may result from the collaboration, subject to certain reductions and excluding sales in the United States of any products for which the Company exercises its option to co-develop and co-promote, for which the parties share profits and losses evenly.

The Company re-evaluates the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur.

At the inception of the Sanofi Agreement, the Company determined that the transaction price consisted of the upfront payment of $ 55.0 million for three initial drug targets and $ 22.0 million for two additional targets.

Subsequently, upon the achievement of research milestones, $ 3.0 million in variable consideration was added to the transaction price, and a cumulative effect was recorded as revenue in the period the transaction price increased.

Subsequently, upon the achievement of research milestones, $ 5.0 million in variable consideration, which includes $ 1.0 million from an achievement during the three months ended February 28, 2023, was added to the transaction price and a cumulative effect was recorded as revenue in the period the transaction price increased.

Revenue is recognized using the cost-based input method over the research term of 4.25 years, the revised research period that was agreed to in January 2021 in the First Sanofi Amendment for certain targets, and 5.25 years, the revised research period due to the target substitutions in July 2022, for certain other targets.

For the three and nine months ended August 31, 2022, the Company recognized collaboration revenue related to the Sanofi Agreement of $ 3.6 million and $ 12.4 million, respectively, of which $ 3.6 million and $ 11.8 million, respectively, was included in deferred revenue as of November 30, 2021 and zero and $ 0.4 million, respectively, was related to activities satisfied in previous periods.

For the three and nine months ended August 31, 2021, the Company recognized collaboration revenue related to the Sanofi Agreement of $ 4.2 million and $ 9.8 million, respectively, of which $ 4.0 million and $ 9.6 million, respectively, was included in deferred revenue as of November 30, 2020.

As of August 31, 2022 and November 30, 2021, deferred revenue related to the Sanofi Agreement was $ 48.8 million, of which $ 20.5 million was current, and $ 59.2 million, of which $ 21.3 million was current, respectively.

For the three months ended February 28, 2023, the Company recognized collaboration revenue related to the Sanofi Agreement of $ 5.3 million, of which $ 4.9 million was included in deferred revenue as of November 30, 2022, and $ 0.4 million was related to activities satisfied in previous periods.

For the three months ended February 28, 2022, the Company recognized collaboration revenue related to the Sanofi Agreement of $ 3.4 million, of which $ 2.9 million was included in deferred revenue as of November 30, 2021 and $ 0.4 million was related to activities satisfied in previous periods.

As of February 28, 2023, deferred revenue related to the Sanofi Agreement was $ 42.9 million, of which $ 22.0 million was current.

As of November 30, 2022, deferred revenue related to the Sanofi Agreement was $ 46.2 million, of which $ 19.4 million was current and includes $ 1.0 million in contract assets representing the unbilled amount related to the research milestone recognized in November 2022.

Condensed Consolidated Balance Sheet Components

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Property and equipment, net, consisted of the following (in thousands):

2023 November 30,

Laboratory equipment $ 28,021 $ 26,385

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Furniture and fixtures 452 452

Software 4,683 4,688

Software in progress 891 697

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Total property and equipment, net $ 17,717 $ 17,163

Depreciation and amortization expense was $ 1.5 million and $ 0.7 million for the three months ended August 31, 2022 and 2021, respectively, and $ 3.7 million and $ 2.0 million for the nine months ended August 31, 2022 and 2021, respectively.

All long-lived assets are maintained in the United States.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

2023 November 30,

Accrued compensation $ 6,710 $ 13,164

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Accrued taxes 89 85

Other 1,020 1,503

Total accrued expenses and other current liabilities $ 15,388 $ 22,428

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The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and considers factors specific to the asset or liability.

The following tables present the Company’s investments, which consist of cash equivalents and available-for-sale marketable securities, that are measured at fair value on a recurring basis as of August 31, 2022 and November 30, 2021 (in thousands):

August 31, 2022

Money market funds

treasury securities

Corporate debt securities

government agency securities

Corporate commercial paper

Foreign government securities

Municipal securities

The following tables present the Company’s investments, which consist of cash equivalents and available-for-sale marketable securities, that are measured at fair value on a recurring basis as of February 28, 2023 and November 30, 2022 (in thousands):

February 28, 2023 Level Amortized

cost Unrealized

gain Unrealized

loss Estimated

Money market funds Level 1 $ 28,110 $ — $ — $ 28,110

treasury securities Level 1 86,257 — ( 746 ) 85,511

Corporate debt securities Level 2 70,850 — ( 697 ) 70,153

government agency securities Level 2 31,733 — ( 301 ) 31,432

Corporate commercial paper Level 2 49,485 — — 49,485

Foreign government securities Level 2 7,007 — ( 13 ) 6,994

Long-term marketable securities:

treasury securities

Corporate debt securities

government agency securities

Corporate debt securities Level 2 3,491 — ( 182 ) 3,309

government agency securities Level 2 46,448 — ( 1,308 ) 45,140

Total $ 323,381 $ — $ ( 3,247 ) $ 320,134

Included in cash and cash equivalents $ 28,110 $ — $ — $ 28,110

Included in Short-term marketable securities

Included in Long-term marketable securities

November 30, 2021

Money market funds

treasury securities

Corporate debt securities

government agency securities

Corporate commercial paper

Municipal securities

Included in marketable securities, current $ 245,332 $ — $ ( 1,757 ) $ 243,575

Included in marketable securities, non-current $ 49,939 $ — $ ( 1,490 ) $ 48,449

November 30, 2022 Level Amortized

cost Unrealized

gain Unrealized

loss Estimated

Money market funds Level 1 $ 59,452 $ — $ — $ 59,452

treasury securities Level 1 75,322 — ( 1,120 ) 74,202

Corporate debt securities Level 2 81,026 — ( 1,279 ) 79,747

government agency securities Level 2 8,998 — ( 135 ) 8,863

Corporate commercial paper Level 2 74,896 — — 74,896

Foreign government securities Level 2 7,051 — ( 92 ) 6,959

Long-term marketable securities:

treasury securities

Corporate debt securities

government agency securities

Municipal securities

treasury securities Level 1 5,779 — ( 98 ) 5,681

Corporate debt securities Level 2 3,492 — ( 217 ) 3,275

government agency securities Level 2 56,301 1 ( 1,379 ) 54,923

Total $ 372,317 $ 1 $ ( 4,320 ) $ 367,998

Included in cash and cash equivalents $ 59,452 $ — $ — $ 59,452

Included in Short-term marketable securities

Included in Long-term marketable securities

The accrued interest receivable related to the Company’s marketable securities was $ 1.1 million and $ 0.9 million as of August 31, 2022 and November 30, 2021, respectively, and was included in prepaid expenses and other current assets on the condensed consolidated balance sheet.

Included in marketable securities, current $ 247,293 $ — $ ( 2,626 ) $ 244,667

Included in marketable securities, non-current $ 65,572 $ 1 $ ( 1,694 ) $ 63,879

The accrued interest receivable related to the Company’s marketable securities was $ 1.2 million and $ 1.1 million as of February 28, 2023 and November 30, 2022, respectively, and was included in prepaid expenses and other current assets on the condensed consolidated balance sheet.

Long-term marketable securities held by the Company generally mature within two years from the balance sheet date.

The Company classifies its money market funds and U.S.

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The Company classifies its marketable securities in corporate debt securities, U.S.

government agency securities, corporate commercial paper, foreign government securities and municipal securities as Level 2 assets within the fair value hierarchy.

government agency securities, corporate commercial paper and foreign government securities as Level 2 assets within the fair value hierarchy.

The fair values of these marketable securities are estimated by taking into consideration valuations obtained from third-party pricing services.

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These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spreads, benchmark securities, prepayment/default projections based on historical data and other observable inputs.

There were no transfers of financial instruments between valuation levels during the three and nine months ended August 31, 2022 and 2021.

As of August 31, 2022 and November 30, 2021, the unrealized losses for available-for-sale securities were non-credit related, and the Company does no t intend to sell the securities that were in an unrealized loss position, nor will it be required to sell those securities before recovery of their amortized cost basis, which may be maturity.

As of August 31, 2022 and November 30, 2021, no allowance for credit losses for the Company’s marketable securities was recorded.

During the three and nine months ended August 31, 2022 and 2021, the Company did no t recognize any impairment losses related to marketable securities.

There were no transfers of financial instruments between valuation levels during the three months ended February 28, 2023 and 2022.

As of February 28, 2023 and November 30, 2022, the unrealized losses for available-for-sale securities were non-credit related, and the Company does not intend to sell the securities that were in an unrealized loss position, nor will it be required to sell those securities before recovery of their amortized cost basis, which may be maturity.

As of February 28, 2023 and November 30, 2022, no allowance for credit losses for the Company’s marketable securities was recorded.

During the three months ended February 28, 2023 and 2022, the Company did not recognize any impairment losses related to marketable securities.

Commitments and Contingencies

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Legal fees and other costs associated with such actions are expensed as incurred.

As of August 31, 2022, the Company was not a party to any material legal proceedings.

As of February 28, 2023, the Company was not a party to any material legal proceedings.

Indemnifications

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Operating Leases

The Company leases office and laboratory facilities within the same building in San Francisco, California under several lease agreements.

The Company leases office and laboratory facilities totaling approximately 57,902 square feet within the same building in San Francisco, California under several lease agreements.

The terms of these lease agreements expire on April 30, 2025.

In July 2021, the Company entered into a lease agreement for the lease of approximately 19,320 square feet of office space in San Francisco, California, for a research and development laboratory and related uses.

The lease commenced on December 1, 2021 and will expire on June 30, 2024 , unless terminated earlier.

The lease will expire on June 30, 2024, unless terminated earlier.

In March 2022, the Company entered into a lease agreement for the lease of approximately 46,434 square feet of office space in The Woodlands, Texas, for a research and development laboratory and related uses.

The Company obtained access to the premise on August 1, 2022, and the lease is expected to commence in fiscal year 2023 when the underlying assets become available for use and will expire on March 1, 2035 , unless terminated earlier.

The Company obtained access to the premise on August 1, 2022 to commence construction of landlord-owned improvements.

The lease is expected to commence in the second half of fiscal year 2023 when the underlying assets become available for use and the Company obtains control and will expire on March 1, 2035, unless terminated earlier.

The Company has an option to renew for two additional terms of five years each, and it is not reasonably certain that the Company will exercise this option.

The minimum rent payable by the Company under the lease will be approximately $ 205,000 per month, beginning on March 1, 2023, which amount will increase by 3 % per year over the term of the lease;

provided that, for the period between March 1, 2023 and February 29, 2024, the minimum rent payable by the Company under the lease will be approximately $ 154,000 per month.

The Company will also be responsible for the payment of additional rent to cover the Company’s share of the annual operating and tax expenses and utilities costs for the building.

Operating lease expenses, excluding additional rent charges for utilities, maintenance and real estate taxes, were $ 1.5 million and $ 0.9 million for the three months ended August 31, 2022 and 2021, respectively, and $ 4.4 million and $ 2.6 million for the nine months ended August 31, 2022 and 2021, respectively.

The Company will also be responsible for the payment of the tenant’s proportionate share of the operating expenses as defined in the lease agreement.

Operating lease expenses, excluding additional rent charges for utilities, maintenance and real estate taxes, were $ 1.5 million and $ 1.4 million for the three months ended February 28, 2023 and 2022, respectively.

Short-term lease expense was not material for all periods presented.

Other information related to leases were as follows (in thousands):

Nine Months Ended August 31,

Three Months Ended February 28,

Cash paid for amounts included in the measurement of lease liabilities:

2 unchanged sentences

Right-of-use assets recognized in exchange for lease obligations $ — $ 3,916

The undiscounted future non-cancellable lease payments under the Company’s lease agreements as of August 31, 2022 were as follows (in thousands):

Year ending November 30,

2022 (remaining 3 months)

Total undiscounted lease payments

imputed interest

undiscounted lease payments related to the lease in The Woodlands, Texas

Total lease liabilities

Operating lease current liabilities

Operating lease long-term liabilities

Total lease liabilities

The Company’s Restated Certificate of Incorporation authorizes the Company to issue up to 500,000,000 shares of common stock, $ 0.001 par value per share, as of August 31, 2022 and November 30, 2021.

The Company’s Restated Certificate of Incorporation authorizes the Company to issue up to 500,000,000 shares of common stock, $ 0.001 par value per share, as of February 28, 2023 and November 30, 2022.

Holders of common stock are entitled to dividends when and if declared by the Company’s board of directors, subject to the prior rights of the holders of shares of preferred stock.

The holder of each share of common stock is entitled to one vote.

As of August 31, 2022, no dividends have been declared.

As of February 28, 2023, no dividends have been declared.

In July 2022, the Company issued pre-funded warrants to purchase an aggregate of 6,814,920 shares of the Company’s common stock in RDOs at a price of $ 13.939 per pre-funded warrant.

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A holder of the pre-funded warrants may increase or decrease this percentage not in excess of 19.99 % by providing at least 61 days’ prior notice to the Company.

As of August 31, 2022 , all of the pre-funded warrants remained available for exercise.

As of February 28, 2023, all of the pre-funded warrants remained available for exercise.

The pre-funded warrants were classified as a component of permanent equity in the Company's condensed consolidated balance sheet as they are freestanding financial instruments that are immediately exercisable, do not embody an obligation for the Company to repurchase its own shares and permit the holders to receive a fixed number of shares of common stock upon exercise.

All of the shares underlying the pre-funded warrants have been included in the weighted-average number of shares of common stock used to calculate net loss per share attributable to common stockholders because the shares may be issued for little or no consideration, are fully vested and are exercisable after the original issuance date of the pre-funded warrants.

Common stock reserved for future issuance, on an as-if converted basis, as of August 31, 2022 and November 30, 2021, consists of the following:

Options under stock option plan issued and outstanding

Shares available for future stock option grants

Shares available for issuance under employee stock purchase plan

Common stock reserved for future issuance, on an as-if converted basis, as of February 28, 2023 and November 30, 2022, consists of the following:

2023 November 30,

Options to purchase common stock issued and outstanding 9,535,402 8,256,957

Restricted stock units issued and outstanding 1,595,025 784,824

Shares available for future equity grants 525,197 834,291

Shares available for issuance under employee stock purchase plan 1,632,030 1,325,523

Pre-funded warrants issued and outstanding 6,814,920 6,814,920

4 unchanged sentences

Option activity under the Stock Plans is set forth below:

(in thousands)

outstanding Weighted-

Balances as of November 30, 2022 8,256,957 $ 19.47

2 unchanged sentences

Options forfeited ( 111,387 ) 22.53

Balances as of August 31, 2022

Options vested and expected to vest as of August 31, 2022 (2)

Options exercisable as of August 31, 2022

The aggregate intrinsic values were calculated as the pre-tax difference between the exercise price of stock options and the quoted market price of the Company’s common stock on August 31, 2022 for all in-the-money stock options.

Certain stock options granted by the Company prior to the date of IPO are exercisable at the date of grant, with unvested shares subject to repurchase by the Company in the event of a voluntary or involuntary termination of employment of the stockholder.

Such exercises are recorded as a liability in the condensed consolidated balance sheets and reclassified into equity as the options vest.

As of August 31, 2022, a total of 27,424 shares of common stock were subject to repurchase by the Company at the lower of (i) the fair market value of such shares on the date of repurchase, or (ii) the original exercise price of such shares.

The corresponding exercise value of $ 0.2 million as of August 31, 2022 is recorded in share-based compensation liability.

Balances as of February 28, 2023 9,535,402 $ 18.18

RSU activity under the Stock Plans is set forth below:

Number of RSUs

Weighted-average grant date fair value

Number of RSUs Weighted-average grant date fair value

Balances as of November 30, 2022 784,824 $ 18.97

RSUs granted 925,690 10.83

RSUs vested ( 98,571 ) 19.34

RSUs forfeited ( 16,918 ) 14.68

Balances as of August 31, 2022

Balances as of February 28, 2023 1,595,025 $ 14.27

Employee Stock Purchase Plan

Under the Company’s 2020 Employee Stock Purchase Plan (the ESPP), eligible employees are entitled to purchase shares of common stock with accumulated payroll deductions.

During the nine months ended August 31, 2022, the Company issued 136,304 shares pursuant to the ESPP at a weighted-average price of $ 14.34 per share.

During the three months ended February 28, 2023, the Company issued 165,215 shares of common stock pursuant to the ESPP at a weighted-average price of $ 8.80 per share.

Stock-Based Compensation

1 unchanged sentence

Three Months Ended,

Nine Months Ended,

Research and development $ 5,154 $ 3,541

1 unchanged sentence

Total stock-based compensation $ 8,481 $ 6,071

As of August 31, 2022, the total compensation cost related to stock-based awards not yet recognized was $ 85.9 million, which is expected to be amortized on a straight-line basis over the weighted-average remaining vesting period of approximately 2.9 years.

As of February 28, 2023, the total compensation cost related to stock-based awards not yet recognized was $ 90.2 million, which is expected to be amortized on a straight-line basis over the weighted-average remaining vesting period of approximately 2.7 years.

Defined Contribution Plan

The Company sponsors a defined-contribution savings plan under Section 401(k) of the Internal Revenue Code of 1986, as amended (the 401(k) Plan), which provides for the Company to make discretionary matching or discretionary annual contributions to the 401(k) Plan, for its employees.

Substantially all of the Company’s employees are eligible to participate.

Substantially all of the Company’s employees are eligible to participate in the 401(k) Plan.

Employees may contribute a percentage of their annual compensation to the plan, subject to statutory limitations.

The Company has made contributions to the 401(k) Plan and recorded contribution expense of $ 0.1 million and $ 0.1 million during the three months ended August 31, 2022 and 2021, respectively, and $ 0.8 million and $ 0.5 million during the nine months ended August 31, 2022 and 2021, respectively.

For the three and nine months ended August 31, 2022, the Company did no t record any current income tax expense or provision and for the three and nine months ended August 31, 2021, the Company recorded a current income tax benefit of $ 0.1 million and an expense of $ 0.1 million, respectively.

The Company has made contributions to the 401(k) Plan and recorded contribution expense of $ 0.6 million and $ 0.5 million during the three months ended February 28, 2023 and 2022, respectively.

For the three months ended February 28, 2023 and 2022, the Company did not record any current income tax expense or provision.

Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Realization of the deferred tax assets is dependent upon future taxable income, the amount, if any, and timing of which are uncertain.

The Company has generated losses since inception and has established a valuation allowance to offset deferred tax assets as of August 31, 2022 and 2021 due to the uncertainty of realizing future tax benefits from its net operating loss carryforwards and other deferred tax assets.

In August 2022, the U.S.

Inflation Reduction Act (the Act) was enacted into law.

The Act includes various tax provisions, including an excise tax on stock repurchases, expanded tax credits for clean energy incentives and a corporate alternative minimum tax that generally applies to U.S.

corporations with adjusted financial statement income in excess of $1.0 billion.

The Company does not expect the Act to have a material impact on its financial statements.

In January 2019, the California Franchise Tax Board (the FTB) commenced an examination of the Company’s California income tax returns for the tax years ending in 2015, 2016, 2017 and 2018.

The Company has generated losses since inception and has established a valuation allowance to offset deferred tax assets as of February 28, 2023 and 2022 due to the uncertainty of realizing future tax benefits from its net operating loss carryforwards and other deferred tax assets.

In January 2019, the California Franchise Tax Board (FTB) initiated an examination of the Company’s California tax return for the tax years ending in 2015, 2016, 2017 and 2018.

During the year ended November 30, 2021, the FTB issued proposed audit assessments related to revenue sourcing and R&D credits.

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The Company maintains an unrecognized tax benefit related to its California R&D credits for all years.

In December 2017, the Tax Cuts and Jobs Act (TCJA) was signed into law, significantly reforming the Internal Revenue Code of 1986, as amended (IRC).

The TCJA included a provision impacting Section 174 that requires taxpayers to capitalize and amortize, rather than deduct, research and experimental (R&E) expenses for tax years beginning on or after January 1, 2022.

For the year ending November 30, 2023, the Company anticipates capitalizing a significant portion of its total R&E expenses.

The Company does not expect a significant current income tax liability as a result of the enactment of IRC Section 174.

The Company will continue to monitor IRS guidance on this provision.

Net Loss Per Share

1 unchanged sentence

Three Months Ended

Nine Months Ended

Net loss $ ( 40,733 ) $ ( 42,533 )

Weighted-average number of shares outstanding, basic and diluted (1)

54,028,238 44,693,812

Net loss per share, basic and diluted $ ( 0.75 ) $ ( 0.95 )

The shares underlying the pre-funded warrants to purchase an aggregate of 6,814,920 shares of the Company’s common stock have been included in the calculation of the weighted-average number of shares outstanding, basic and diluted, for the three and nine months ended August 31, 2022.

(1) The shares underlying the pre-funded warrants to purchase an aggregate of 6,814,920 shares of the Company’s common stock have been included in the calculation of the weighted-average number of shares outstanding, basic and diluted, for the three months ended February 28, 2023.

The following potentially dilutive securities were excluded from the computation of the diluted net loss per share of common stock for the periods presented because their effect would have been anti-dilutive:

Options to purchase common stock

Options to purchase common stock issued and outstanding 9,535,402 6,523,560

Options early exercised subject to vesting 17,069 41,522

Restricted stock units issued and outstanding 1,595,025 649,382

Shares expected to be purchased under employee stock purchase plan 103,194 73,851

Restricted stock

Total 11,250,690 7,288,315

Related Party Transactions

The Company’s Chief Financial Officer is a trustee for the Company’s healthcare plan provider.

Expenses related to the healthcare plan premiums were $ 1.0 million and $ 0.7 million for the three months ended August 31, 2022 and 2021, respectively, and $ 2.9 million and $ 1.8 million for the nine months ended August 31, 2022 and 2021, respectively.

As of August 31, 2022 and November 30, 2021, the amount recorded in accrued liabilities and accounts payable in connection with this healthcare plan provider was not material.

The Company’s Chief Financial Officer is a trustee for the multiple employer welfare association that facilitates the acquisition and administration of the Company’s healthcare plans.

Expenses related to the healthcare plan premiums were $ 1.1 million and $ 0.9 million for the three months ended February 28, 2023 and 2022, respectively.

As of February 28, 2023 and November 30, 2022, the amount recorded in accounts payable and accrued expenses and other current liabilities in connection with this healthcare plan provider was not material.

Subsequent Events

Refer to Note 3 for the Gilead License Option Exercise.

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.

What changed 10-Q

Item 1. Financial Statements