Olema Pharmaceuticals, Inc. 10-K

Item 8. Financial Statements and Supplementary Data. Olema Pharmaceuticals, Inc. Index to financial statements ​ Page Report of Independent Registered Public Accounting Firm 137 Balance Sheets 138 Statements of Operations and Comprehensive Loss 139 Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) 140 Statements of Cash Flows 141 Notes to Financial Statements 142 ​ ​ 136 Table of Contents ​ Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Olema Pharmaceuticals, Inc. ​ Opinion on the Financial Statements We have audited the accompanying balance sheets of Olema Pharmaceuticals, Inc. (the Company) as of December 31, 2020 and 2019, the related statements of operations and comprehensive loss, convertible preferred stock and stockholders’ equity (deficit), and cash flows for each of the three years in the period ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. ​ Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. ​ /s/ Ernst & Young LLP We have served as the Company‘s auditor since 2020. Redwood City, California March 17, 2021 ​ ​ 137 Table of Contents Olema Pharmaceuticals, Inc. Balance Sheets (Amounts in thousands, except share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2020 ​ 2019 Assets ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents $ 338,549 $ 68 Prepaid expenses and other current assets ​ 3,588 ​ 35 Total current assets ​ 342,137 ​ 103 Property and equipment, net ​ 75 ​ 26 Other assets ​ 510 ​ 3 Total assets ​ $ 342,722 ​ $ 132 ​ ​ ​ ​ ​ ​ ​ Liabilities, convertible preferred stock and stockholders ’ equity (deficit) ​ ​ ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 719 ​ $ 935 Other current liabilities ​ ​ 3,866 ​ 443 Total current liabilities ​ ​ 4,585 ​ 1,378 Total liabilities ​ ​ 4,585 ​ 1,378 Commitments and contingencies (Note 11) ​ ​ ​ ​ ​ ​ Convertible preferred stock (Series A, A-1, B, and C), $0.0001 par value; 0 and 12,903,514 shares authorized as of December 31, 2020 and 2019, respectively; 0 and 4,628,215 shares issued and outstanding as of December 31, 2020 and 2019, respectively; aggregate liquidation preference of $0 and $9,432 as of December 31, 2020 and 2019, respectively. ​ ​ — ​ 9,348 Stockholders ’ equity (deficit): ​ ​ ​ ​ ​ ​ Preferred stock, $0.0001 par valu e; 10,000,000 and 0 shares authorized as of December 31, 2020 and 2019, respectively; no shares issued and outstanding as of December 31, 2020 and 2019, respectively. ​ ​ — ​ ​ — Common stock, $0.0001 par valu e; 490,000,000 and 22,000,000 shares authorized as of December 31, 2020 and 2019, respectively; 40,169,738 a nd 2,804,937 shares issued as of December 31, 2020 and 2019, respectively; 39,308,238 and 2,593,316 shares outstanding as of December 31, 2020 and 2019, respectively. ​ ​ 3 ​ — Additional paid-in capital ​ ​ 371,228 ​ 168 Accumulated deficit ​ ​ (33,094) ​ (10,762) Total stockholders ’ equity (deficit) ​ ​ 338,137 ​ (10,594) Total liabilities, convertible preferred stock and stockholders ’ equity (deficit) ​ $ 342,722 ​ $ 132 ​ See accompanying notes to the financial statements. ​ 138 Table of Contents Olema Pharmaceuticals, Inc. Statements of operations and comprehensive loss (Amounts in thousands, except share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ 2020 2019 2018 Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development $ 13,704 $ 3,920 $ 1,693 General and administrative ​ 7,824 ​ 403 ​ 386 Total operating expenses ​ 21,528 ​ 4,323 ​ 2,079 Loss from operations ​ (21,528) ​ (4,323) ​ (2,079) Other (expense) income: ​ ​ ​ ​ Interest income ​ 60 ​ 7 ​ 4 Interest expense ​ (653) ​ — ​ (28) Loss on convertible notes ​ — ​ — ​ (94) Total other (expense) income, net ​ (593) ​ 7 ​ (118) Net loss and comprehensive loss ​ $ (22,121) ​ $ (4,316) ​ $ (2,197) Repurchase and retirement of Series A and Series A-1 convertible preferred stock ​ (1,869) ​ — ​ — Net loss attributable to common stockholders ​ $ (23,990) ​ $ (4,316) ​ $ (2,197) Net loss per share attributable to common stockholders, basic and diluted ​ $ (3.42) ​ $ (1.66) ​ $ (0.87) Weighted average shares used to compute net loss per share attributable to common stockholders, basic and diluted ​ 7,021,468 ​ 2,593,316 ​ 2,522,577 ​ See accompanying notes to the financial statements. ​ ​ 139 Table of Contents Olema Pharmaceuticals, Inc. Statements of convertible preferred stock and stockholders’ equity (deficit) (Amounts in thousands, except share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Convertible ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Total ​ ​ Preferred Stock ​ Common Stock ​ Paid-in ​ Accumulated ​ Stockholders' ​ Shares Amount Shares Amount Capital Deficit Equity (Deficit) Balances at December 31, 2017 ​ 1,664,309 ​ $ 3,377 ​ 2,464,217 ​ $ — ​ $ 73 ​ $ (4,249) ​ $ (4,176) Issuance of Series A-1 convertible preferred stock, net of issuance costs of $68 2,447,657 ​ 4,931 — ​ — ​ — ​ — ​ — Issuance of Series A-1 convertible preferred stock in connection with convertible notes, net of issuance costs of $15 516,249 ​ 1,040 — ​ — ​ — ​ — ​ — Issuance of common stock upon conversion of convertible notes, net of issuance costs of $1 — ​ — 129,099 ​ — ​ 94 ​ — ​ 94 Stock-based compensation expense — ​ — — ​ — ​ 1 ​ — ​ 1 Net loss and comprehensive loss — ​ — — ​ — ​ — ​ (2,197) ​ (2,197) Balances at December 31, 2018 4,628,215 ​ 9,348 2,593,316 ​ — ​ 168 ​ (6,446) ​ (6,278) Net loss and comprehensive loss — ​ — — ​ — ​ — ​ (4,316) ​ (4,316) Balances at December 31, 2019 4,628,215 ​ 9,348 2,593,316 ​ — ​ 168 ​ (10,762) ​ (10,594) Beneficial conversion option recognized upon issuance of 2020 convertible notes — ​ — — ​ — ​ 1,054 ​ — ​ 1,054 Beneficial conversion option recognized upon repurchase of 2020 convertible notes on settlement date — ​ — — ​ — ​ (2,568) ​ — ​ (2,568) Extinguishment of 2020 convertible notes ​ — ​ ​ — ​ — ​ ​ — ​ ​ 2,148 ​ ​ — ​ ​ 2,148 Issuance of Series B convertible preferred stock, net of issuance costs of $286 ​ 10,801,277 ​ ​ 50,607 ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Issuance of Series B convertible preferred stock in connection with the conversion of convertible notes ​ 638,270 ​ ​ 3,007 ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Repurchase and retirement of Series A and Series A-1 convertible preferred stock ​ (206,822) ​ ​ (420) ​ — ​ ​ — ​ ​ (1,658) ​ ​ (211) ​ ​ (1,869) Issuance of Series C convertible preferred stock, net of issuance costs of $1,662 ​ 7,904,135 ​ ​ 85,776 ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Conversion of convertible preferred units to common stock ​ (23,765,075) ​ ​ (148,318) ​ 23,765,075 ​ ​ 2 ​ ​ 148,316 ​ ​ — ​ ​ 148,318 Issuance of common stock in connection with initial public offering, net of underwriting discounts, commissions and offering costs of $19,840 ​ — ​ ​ — ​ 12,650,000 ​ ​ 1 ​ ​ 220,509 ​ ​ — ​ ​ 220,510 Exercise of stock options ​ — ​ ​ — ​ 246,046 ​ ​ — ​ ​ 151 ​ ​ — ​ ​ 151 Vesting of restricted stock awards ​ — ​ ​ — ​ 53,801 ​ ​ — ​ ​ — ​ ​ — ​ ​ — Stock-based compensation expense ​ — ​ ​ — ​ — ​ ​ — ​ ​ 3,078 ​ ​ — ​ ​ 3,078 ESPP expense ​ — ​ ​ — ​ — ​ ​ — ​ ​ 30 ​ ​ — ​ ​ 30 Net loss and comprehensive loss ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ (22,121) ​ ​ (22,121) Balances at December 31, 2020 ​ — ​ $ — ​ 39,308,238 ​ $ 3 ​ $ 371,228 ​ $ (33,094) ​ $ 338,137 ​ See accompanying notes to the financial statements. ​ ​ 140 Table of Contents Olema Pharmaceuticals, Inc. Statements of cash flows (Amounts in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2020 2019 2018 Cash flows from operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ $ (22,121) ​ $ (4,316) ​ $ (2,197) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ ​ ​ Depreciation and amortization expense ​ 11 ​ 9 ​ 8 Non-cash interest expense ​ 641 ​ — ​ 28 Stock-based compensation expense ​ 3,108 ​ — ​ 1 Loss on convertible notes ​ — ​ — ​ 94 Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ Prepaid expenses, other current assets ​ (3,553) ​ 58 ​ (78) Other assets ​ ​ (507) ​ ​ — ​ ​ — Accounts payable ​ ​ (220) ​ ​ 810 ​ ​ (100) Other current liabilities ​ 2,775 ​ 358 ​ 68 Net cash used in operating activities ​ (19,866) ​ (3,081) ​ (2,176) Cash flows from investing activities: ​ ​ ​ ​ ​ ​ Purchase of equipment ​ (56) ​ — ​ — Net cash used in investing activities ​ (56) ​ — ​ — Cash flows from financing activities: ​ ​ ​ ​ ​ ​ Proceeds from the issuance of convertible notes ​ 3,000 ​ — ​ 323 Proceeds from issuance of Series A-1 convertible preferred stock, net of issuance costs ​ — ​ — ​ 4,931 Proceeds from issuance of Series B convertible preferred stock, net of issuance costs ​ 50,637 ​ — ​ — Proceeds from issuance of Series C convertible preferred stock, net of issuance costs ​ 85,776 ​ — ​ — Repurchase of shares of Series A and Series A-1 convertible preferred stock ​ (2,289) ​ — ​ — Exercise of stock options ​ 641 ​ — ​ — Proceeds from the settlement of non-recourse notes ​ 88 ​ — ​ — Proceeds from the issuance of common stock upon initial public offering, net of issuance costs ​ ​ 220,550 ​ ​ — ​ ​ — Net cash provided by financing activities ​ 358,403 ​ — ​ 5,254 Net increase (decrease) in cash and cash equivalents ​ 338,481 ​ (3,081) ​ 3,078 Cash and cash equivalents at beginning of period ​ 68 ​ 3,149 ​ 71 Cash and cash equivalents at end of period $ 338,549 ​ $ 68 ​ $ 3,149 Supplemental disclosure of non-cash investing and financing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Conversion of convertible notes and accrued interest into Series A-1 convertible preferred stock ​ $ — ​ $ — ​ $ 1,040 Conversion of convertible notes into Series B convertible preferred stock ​ $ 3,007 ​ $ — ​ $ — Conversion of Series A, Series A-1, Series B, and Series C stock into common stock ​ $ 148,318 ​ $ — ​ $ — Offering costs included in other current liabilities ​ $ 70 ​ $ — ​ $ — ​ See accompanying notes to the financial statements. ​ 141 Table of Contents Olema Pharmaceuticals, Inc. Notes to financial statements 1. Nature of the Business and Basis of Presentation Olema Pharmaceuticals Inc. (“Olema” or the “Company”) is a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of next generation targeted therapies for women’s cancers. The Company is initially focused on developing therapies for the treatment of breast cancer. The Company’s wholly owned, lead product candidate, OP-1250, is a novel oral therapy with combined activity as both a complete estrogen receptor (“ER”) antagonist and a selective ER degrader. The Company is currently evaluating OP-1250 in a Phase 1/2 dose escalation and expansion trial for the treatment of recurrent, locally advanced or metastatic estrogen receptor-positive, human epidermal growth factor receptor 2-negative breast cancer. The Company is located in San Francisco, California and was incorporated in Delaware on August 7, 2006 under the legal name of CombiThera, Inc. and on March 25, 2009 was renamed to Olema Pharmaceuticals, Inc. All of the Company’s tangible assets are held in the United States (“U.S.”) and the Company operates in one business segment and therefore has only one reportable segment. The Company is subject to risks and uncertainties common to early-stage companies in the biopharmaceutical industry, including, but not limited to, successful discovery and development of its product candidates, development by competitors of new technological innovations, dependence on key personnel, the ability to attract and retain qualified employees, protection of proprietary technology, compliance with governmental regulations, the impact of COVID-19, the ability to secure additional capital to fund operations and commercial success of its product candidates. OP-1250 and any future product candidates the Company may develop will require extensive nonclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel, and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. Reverse Stock Split On November 13, 2020, the Company filed an amended and restated certificate of incorporation to affect a 1-for-2.788 reverse split of shares of the Company’s issued and outstanding common stock and convertible preferred stock (the "Reverse Stock Split"). The par value of the common stock and preferred stock was not adjusted as a result of the Reverse Stock Split. As part of the reverse stock split, the Company did not adjust the number of authorized shares of common stock or convertible preferred stock. All references to common stock and convertible preferred stock, options to purchase common stock, early exercised options, restricted stock awards, share data, per share data and related information contained in these financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented. Initial Public Offering In November 2020, the Company completed its initial public offering (“IPO”) of its common stock. In connection with its IPO, the Company issued and sold 12,650,000 shares of its common stock, at a price to the public of $19.00 per share. As a result of the IPO, the Company received $220.6 million in net proceeds, after deducting underwriting discounts and commissions and offering costs of $19.8 million. 142 Table of Contents Upon the closing of the IPO, 23,765,075 shares of outstanding convertible preferred stock were automatically converted into 23,765,075 shares of common stock with the related carrying value of $148.3 million reclassified to common stock and additional paid-in capital. In connection with the IPO, the Company amended and restated its amended and restated certificate of incorporation to change the authorized capital stock to 490,000,000 shares designated as common stock and 10,000,000 shares designated as preferred stock, all with a par value of $0.0001 per share. Liquidity Through December 31, 2020, the Company had received aggregate gross proceeds of $391.3 million from sales of its common stock, convertible preferred stock and issuance of convertible promissory notes since inception. The Company had $338.5 million of cash and cash equivalents at December 31, 2020, which management believes is sufficient to fund its operating expenses and capital expenditure requirements through the end of 2022. Impact of COVID-19 The extent of the impact of the COVID-19 pandemic on the Company’s business, operations and development timelines and plans remains uncertain, and will depend on certain developments, including the duration of the outbreak and its impact on the Company’s development activities, planned clinical trial enrollment, future trial sites, CROs, third-party manufacturers, and other third parties with whom the Company does business, as well as its impact on regulatory authorities and the Company’s key scientific and management personnel. During 2020, although the Company modified its operations and practices due to the COVID-19 pandemic and to comply with federal, state and local requirements, its business, operations and development timelines were not material adversely affected. However, the extent to which the COVID-19 pandemic may affect the Company’s business, operations and development timelines and plans in the future, including the resulting impact on its expenditures and capital needs, remains uncertain. 2. Summary of Significant Accounting Policies Use of Estimates The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Such estimates include the determination of useful lives for equipment, accruals of research and development expenses, accrual of research contract costs, and preferred and common stock and stock option valuations. On an ongoing basis, the Company evaluates its estimates and judgments, which are based on historical and anticipated results and trends and on various other assumptions that management believes to be reasonable under the circumstances. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents are defined as short-term, highly liquid investments with original maturities of 90 days or less at the date of purchase. Cash deposits are all in reputable financial institutions in the United States and as of December 31, 2020 and 2019, cash and cash equivalents consisted of cash on deposit with U.S. banks denominated in U.S. dollars. Concentration of Credit Risk and Other Risks and Uncertainties Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents. The Company invests its excess cash with large financial institutions. At times, the Company’s cash balances with individual banking institutions will exceed the limits insured by the Federal Deposit Insurance Corporation (“FDIC”); however, the Company has not experienced any losses on such deposits. 143 Table of Contents The Company’s future results of operations involve a number of other risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, uncertainty of results of clinical trials and reaching milestones, uncertainty of regulatory approval of the Company’s current and potential future product candidates, uncertainty of market acceptance of the Company’s product candidates, competition from substitute products and larger companies, securing and protecting proprietary technology, strategic relationships and dependence on key individuals or sole-source suppliers. The Company’s product candidates require approvals from the U.S. Food and Drug Administration and comparable foreign regulatory agencies prior to commercial sales in their respective jurisdictions. There can be no assurance that any product candidates will receive the necessary approvals. If the Company were denied approval, approval was delayed or the Company was unable to maintain approval for any product candidate, it could have a materially adverse impact on the Company. Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three levels of inputs that may be used to measure fair value are defined below: ● Level 1 — Quoted prices in active markets for identical assets or liabilities. ● Level 2 — Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 — Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The carrying values of the Company’s accounts payable and other current liabilities approximate their fair values due to the short-term nature of these assets and liabilities. Research and Development Costs Research and development costs are expensed as incurred. Research and development expenses consist of costs incurred to discover, research and develop product candidates, including personnel expenses, stock-based compensation expense, allocated facility-related and depreciation expenses, third-party license fees and external costs including fees paid to consultants and clinical research organizations (“CROs”), in connection with nonclinical studies and clinical trials, and other related clinical trial fees, such as for investigator grants, patient screening, laboratory work, clinical trial database management, clinical trial material management and statistical compilation and analysis. Non-refundable prepayments for goods or services that will be used or rendered for future research and development activities are recorded as prepaid expenses. Such amounts are recognized as an expense as the goods are delivered or the related services are performed. Costs incurred in obtaining technology licenses are charged immediately to research and development expense if the technology licensed has not reached technological feasibility and has no alternative future uses. Research Contract Costs and Accruals The Company has from time to time entered into various research and development and other agreements with commercial firms, researchers, universities and others for provisions of goods and services. These agreements 144 Table of Contents are generally cancelable, and the related costs are recorded as research and development expenses as incurred. The Company records accruals for estimated ongoing research and development costs. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies or clinical trials, including the phase or completion of events, invoices received and contracted costs. Judgments and estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ materially from the Company’s estimates. The Company’s historical accrual estimates have not been materially different from the actual costs. Patent Costs All patent-related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation, and insignificant for all periods presented. Depreciation is computed using the straight-line method over the estimated useful lives. The useful lives of equipment are as follows: ​ ​ ​ ​ ​ Estimated Useful Lives Lab equipment 5 – 7 years Computer equipment 5 years ​ When assets are sold or retired, the cost and related accumulated depreciation are removed from the balance sheets, with any resulting gain or loss recorded in operating expenses in the statements of operations and comprehensive loss. Costs of repairs and maintenance are expensed as incurred. Income Taxes Income taxes are computed using the asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements. In estimating future tax consequences, the Company considers all expected future events other than enactment of changes in tax laws or rates. A valuation allowance is recorded, if necessary, to reduce net deferred tax assets to their realizable values if management does not believe it is more likely than not that the net deferred tax assets will be realized. As of December 31, 2020 and 2019, the Company has recorded full valuation allowance against its net deferred tax assets. The Company had no unrecognized tax benefits for the years ended December 31, 2020 and 2019, respectively. With few exceptions, the Company is no longer subject to U.S. Federal, state, and local tax examinations by tax authorities for years before 2017, although carry-forward attributes that were generated prior to 2020 may still be adjusted upon examination by the taxing authorities if they either have been or will be used in a future period (see Note 9, “Income Taxes”). The Company’s policy is to recognize interest and penalties related to uncertain tax positions in the provision for income taxes. As of December 31, 2020 and 2019, the Company had no accrued interest or penalties related to uncertain tax positions. Common Stock Valuation Due to the absence of an active market for the Company’s common stock prior to its IPO, the Company utilized methodologies in accordance with the framework of the American Institute of Certified Public Accountants 145 Table of Contents Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation, to estimate the fair value of its common stock. In determining the fair value of options granted prior to the IPO, the Company estimated fair value of its common stock as of each measurement date. Significant changes to the key assumptions underlying the factors used could have resulted in different fair values of common stock at each valuation date. Follow the Company’s initial public offering, the fair market value of its common stock is determined based on the closing price of its common stock as reported by the Nasdaq Global Select Market on the date of grant. Comprehensive Loss There was no difference between net loss and comprehensive loss for each of the periods presented in the accompanying financial statements. Stock-Based Compensation All stock-based compensation cost, including grants of stock options and restricted stock awards issued under the Company’s equity incentive plans and employee stock purchase plan (“ESPP”), is measured at the grant date based on the estimated fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period, which is generally the vesting period. The Company recognizes stock compensation in accordance with ASC 718, Compensation — Stock Compensation (“ASC 718”). The Company’s determination of the fair value of stock options with time-based vesting on the date of grant utilizes the Black-Scholes option-pricing model. The Company estimates the expected contractual lives using historical data, volatility using stock prices of peer companies, risk-free rates using the implied yield currently available on U.S. Treasury zero-coupon issues with a remaining term equal to the expected term, and dividend yield using the Company’s expectations and historical data. The Company uses the simplified method to calculate the expected term of employee stock option grants. Under the simplified method, the expected term is estimated to be the mid-point between the vesting date and the contractual term of the option. For awards with graded vesting, in which specified tranches of the options vest on different dates, the Company uses a single weighted average expected life to value the entire award, which is equal to the average of the weighted average vesting period of the award and the contractual term of the award. Equity instruments issued to nonemployees are recorded at their fair value on the grant date and without subsequent remeasurement. The amount of stock-based compensation expense recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest, including awards with graded vesting. As part of the requirements of ASC 718, the Company has elected to account for forfeitures of stock option grants as they occur. Net Loss Per Common Share The Company follows the two-class method when computing net loss per common share as the Company has issued shares that meet the definition of participating securities. The two-class method determines net loss per common share for each class of common and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. Basic net loss per common share is computed by dividing the net loss per common share by the weighted average number of common shares outstanding for the period without consideration of common stock equivalents. Diluted net loss per common share is computed by adjusting net loss to reallocate undistributed earnings based on the potential impact of dilutive securities, and by dividing the diluted net loss by the weighted average number of common shares outstanding for the period, including potential dilutive common shares. For purpose of this calculation, outstanding stock options, contingently issuable common stock related to the ESPP, and convertible preferred stock are considered potential dilutive common shares. The Company’s convertible preferred stock contractually entitles the holders of such shares to participate in dividends but do not contractually require the holders of such shares to participate in losses of the Company. 146 Table of Contents Accordingly, in periods in which the Company reports a net loss, such losses are not allocated to such securities. In periods in which the Company reported a net loss, diluted net loss per common share is the same as basic net loss per common share, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. The Company reported a net loss for the years ended December 31, 2020, 2019 and 2018. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB under its ASC or other standard setting bodies. The Company is an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”). Under the JOBS Act, companies have extended transition periods available for complying with new or revised accounting standards. The Company has elected to use this exemption to delay adopting new or revised accounting standards until such time as those standards apply to private companies. Where allowable, the Company has early adopted certain standards as described below. Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2019-12, “Income Taxes (ASC 740): Simplifying the Accounting for Income Taxes,” which simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and clarifies and amends existing guidance to improve consistent application. The standard will be effective for the Company beginning in the first quarter of fiscal year beginning after December 15, 2021, with early adoption permitted. The amendments that are related to changes in ownership of foreign equity method investments or foreign subsidiaries are to be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The amendments that are related to franchise taxes that are partially based on income are to be applied on either a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. All other amendments under this ASU are to be applied on a prospective basis. The Company has early adopted the guidance effective January 1, 2020. The adoption of this new standard did not have a material impact on the Company’s financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework- Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements for fair value measurements. The Company adopted this standard on January 1, 2020. The adoption of ASU 2018-13 had no impact on the Company’s financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less may be accounted for similar to existing guidance for operating leases today. In July 2018, the FASB issued ASU No. 2018-11, Leases: Targeted Improvements, or ASU No. 2018-11. In issuing ASU No. 2018-11, the FASB is permitting another transition method for ASU 2016-02, which allows the transition to the new lease standard by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. For non-public entities, ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2021, including interim periods within those fiscal years, and early adoption is permitted. The Company expects to adopt this new guidance under ASU 2016-02 effective 147 Table of Contents January 1, 2022 and is in the process of completing its review of its existing lease agreements under Topic 842. The Company anticipates recording a right-of-use asset and lease liability to account for its facility leases and will record a cumulative-effect adjustment in the period of adoption. In August 2020, the FASB issued ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40). The new standard reduces the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models results in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. The standard also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity. For non-public entities, ASU 2020-06 is effective for annual reporting periods beginning after December 15, 2023, including interim periods within those fiscal years, and early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. The Company does not expect the adoption of ASU 2020-06 to have a material impact on its financial position, results of operations, or cash flows. 3. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2020 ​ 2019 Prepaid insurance ​ $ 1,663 ​ $ — Prepaid clinical trial costs ​ 1,148 ​ — Prepaid research contracts ​ ​ 432 ​ ​ — Prepaid rent ​ ​ 196 ​ ​ — Other 149 ​ ​ 35 ​ $ 3,588 ​ $ 35 ​ ​ ​ ​ 4. Other Current Liabilities Other current liabilities consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2020 ​ 2019 Accrued employee bonuses ​ $ 1,222 ​ $ — Accrued R&D related costs ​ ​ 609 ​ ​ — Early exercise of unvested options ​ ​ 578 ​ ​ — Accrued professional fees ​ ​ 577 ​ ​ ​ Accrued payroll taxes ​ ​ 444 ​ ​ — Accrued franchise tax ​ ​ 198 ​ ​ — Other 238 ​ ​ 443 ​ $ 3,866 ​ $ 443 ​ ​ 5. Convertible Notes 2020 Convertible Notes On January 3, 2020 (“issuance date”), the Company issued convertible promissory notes (the “2020 Notes”) in the aggregate principal amount of $3.0 million. The 2020 Notes bore interest at a rate of 1.21% per annum, 148 Table of Contents were unsecured and were due and payable, including accrued interest, on May 2, 2020 (“maturity date”). The Company was not permitted to prepay the outstanding principal and interest without the consent of the note holders. In the event of a default, all unpaid principal and accrued interest would become immediately due. On the issuance date the Company determined that the conversion option associated with the 2020 Notes met the definition of a beneficial conversion feature (“BCF”) as the fair value of the underlying instrument at the time of issuance exceeded the contractual conversion price. The BCF was recognized at its aggregate intrinsic value of $1.1 million as a debt discount with a corresponding credit to additional paid-in capital in the Company’s balance sheet. The debt discount was amortized over the term of the 2020 Notes through the recognition of interest expense via the effective interest method. On March 17, 2020 (the “settlement date”), the Company issued and sold 2,545,277 shares of Series B convertible preferred stock at $4.712 per share for gross proceeds of approximately $12.0 million (see Note 7, “Convertible Preferred Stock”). On the settlement date, the principal and accrued interest then outstanding under the 2020 Notes of $3.0 million were converted into 638,270 shares of Series B convertible preferred stock (“March 2020 conversion”). On the settlement date, the unamortized debt discount on the 2020 Notes was $0.4 million and the intrinsic value of the BCF was $2.6 million representing an increase of $1.5 million from the issuance date of the 2020 Notes. The March 2020 conversion was accounted for as a debt extinguishment. However, as the note holders were previous investors of the Company, the increase in the intrinsic value of the BCF was deemed to be a capital contribution and therefore not income attributable to common stockholders, and accordingly, the Company recorded the $1.5 million gain on extinguishment of the debt within additional paid-in capital. 6. Convertible Preferred Stock Upon the closing of the Company’s IPO, each then outstanding share of convertible preferred stock was converted into one share of common stock. As of December 31, 2019, the Company’s certificate of incorporation, as amended and restated, authorized the Company to issue 4,640,126 shares of Series A convertible preferred stock at par value of $0.0001 per share. In September 2020, the Company purchased and retired 181,503 shares of Series A convertible preferred stock from investors at a price of $11.063 per share, or approximately $2.0 million. In September 2020, the Company purchased and retired 25,319 shares of Series A-1 convertible preferred stock at a price of $11.063 per share or approximately $0.3 million. Series B Convertible Preferred Stock On March 13, 2020, the Company filed its fourth amended and restated certificate of incorporation, which authorized the Company to sell and issue up to 26,627,219 shares of Series B convertible preferred stock with a par value of $0.0001 per share. On March 17, 2020, the Company issued and sold 2,545,277 shares of Series B convertible preferred stock at $4.712 per share for gross proceeds of approximately $12.0 million. At the same time, the Company issued an additional 638,270 shares of Series B convertible preferred stock in conjunction with its conversion of the 2020 Notes (see Note 6, “Convertible Notes” “2020 Convertible Notes”), for a total of 3,183,547 shares of Series B convertible preferred stock issued on March 17, 2020. On March 20, 2020, the Company issued and sold 3,183,550 shares of Series B convertible preferred stock at $4.712 per share for gross proceeds of approximately $15.0 million. On May 28, 2020, the Company filed an amendment to its fourth amended and restated certificate of incorporation, which authorized the Company to sell and issue up to 32,781,066 shares of Series B convertible preferred stock. On June 1, 2020, the Company issued and sold 5,072,450 shares of Series B convertible preferred stock at $4.712 per share for gross proceeds of approximately $23.9 million (collectively, “Series B convertible preferred stock issuances”). In total, 11,439,547 shares of Series B convertible preferred stock were issued for gross cash proceeds of approximately $50.9 million. 149 Table of Contents The Company incurred issuance costs in connection with the sale and issuance of the Series B convertible preferred stock of $0.3 million. On September 3, 2020, the Company filed a second amendment to its fourth amended and restated certificate of incorporation. The amendment had the impact of reducing the authorized number of shares of Series B convertible preferred stock to 31,893,492. Upon the closing of the IPO, all outstanding shares of convertible preferred stock were automatically converted into shares of the Company’s common stock. Series C Convertible Preferred Stock On September 29, 2020, the Company filed its fifth amended and restated certificate of incorporation, which authorized the sale of 22,100,000 shares of Series C convertible preferred stock. On September 30, 2020, the Company issued and sold 7,904,135 shares of Series C convertible preferred stock at $11.063 per share for gross proceeds of approximately $87.4 million. The Company incurred issuance costs in connection with the sale and issuance of the Series C convertible preferred stock of $1.7 million. The Series A convertible preferred stock, Series A-1 convertible preferred stock, Series B convertible preferred stock and Series C convertible preferred stock are collectively referred to as “convertible preferred stock”. On November 23, 2020, the Company filed the seventh amended and restated certificate of incorporation in connection with the closing of the IPO, which authorizes the Company to issue 10,000,000 shares of preferred stock with a par value of $0.0001 per share. As of December 31, 2020, the Company did not have any preferred stock issued and outstanding. As of December 31, 2019, convertible preferred stock consisted of the following (in thousands, except share amounts): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2019 ​ ​ ​ ​ Convertible ​ ​ ​ ​ ​ ​ ​ Common ​ ​ Convertible ​ Preferred ​ ​ ​ ​ ​ ​ ​ Stock ​ ​ Preferred ​ stock Issued ​ ​ ​ ​ ​ ​ ​ Issuable ​ ​ stock ​ and ​ Carrying ​ Liquidation ​ Upon ​ Authorized Outstanding Value Preference Conversion​ Series A convertible preferred stock 4,640,126 1,664,309 $ 3,377 $ 3,377 1,664,309 Series A-1 convertible preferred stock 8,263,388 2,963,906 5,971 6,055 2,963,906 ​ 12,903,514 4,628,215 $ 9,348 $ 9,432 4,628,215 ​ ​ 7. Common Stock As of each of the balance sheet dates below, the Company had reserved shares of common stock for issuance in connection with the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ 2020 ​ 2019 Conversion of outstanding shares of convertible preferred stock ​ — ​ 4,628,215 Options outstanding under the 2014 Stock Plan (1)(2) ​ ​ 2,632,017 ​ ​ 111,190 Options outstanding under the 2020 Equity Incentive Plan ​ ​ 2,144,891 ​ ​ — Shares available for future grant under the 2020 Equity Incentive Plan ​ ​ 7,189 ​ ​ — Shares available for future grant under the 2014 Stock Plan ​ ​ — ​ ​ 394,548 Available for the 2020 Employee Stock Purchase Plan ​ ​ 430,416 ​ ​ — Unvested restricted stock awards outstanding under the 2014 Stock Plan 735,294 ​ ​ — ​ ​ 5,949,807 ​ ​ 5,133,953 (1) Balance as of December 31, 2019 excludes 211,621 shares that were exercised under the non-recourse receivable (“non-recourse notes”) in the aggregate amount of $0.1 million with certain employees of the Company related to their option exercises that was settled together with accrued and unpaid interest in September 2020. (2) Balance as of December 31, 2020 includes 126,206 unvested early exercised stock options (see Note 8, “Stock-Based Compensation”). 150 Table of Contents 8. Stock-Based Compensation In 2014, the Company’s Board of Directors and stockholders approved and adopted the 2014 Stock Plan (the “2014 Plan”). The 2014 Plan was intended to advance the interests of the Company and its stockholders by providing an incentive to attract, retain and reward persons performing services for the Company and by motivating such persons to contribute to the growth and profitability of the Company. The 2014 Plan permitted the grant of options and restricted stock awards (including restricted stock purchase rights and restricted stock bonus awards). The maximum aggregate number of shares that may be subject to awards and sold under the 2014 Plan as of December 31, 2019 was 717,360 shares. In March 2020, the Company’s Board of Directors and stockholders increased the number of shares under the 2014 Plan to 2,331,420 shares. In September 2020, the Company’s Board of Directors and stockholders approved additional increases under the 2014 Plan to allow for 4,124,820 shares and subsequently 4,842,180 shares. The shares may be authorized but unissued, or reacquired common stock. The exercise price for each option shall be established in the discretion of the Board; provided, however, that (i) the exercise price per share for an option shall be no less than the fair market value of a share of common stock on the effective date of the grant of the option and (ii) no incentive stock option granted to a ten percent stockholder shall have an exercise price per share less than 110% of the fair market value of a share of common stock on the effective date of the grant of the option. Specific vesting for stock options is service related and determined in each award agreement, where stock options are fully vested at the grant date or follow a graded vesting schedule. Options granted under the Plan generally expire ten years after the date of grant. During the year ended December 31, 2020, the Company granted to certain directors, employees, and consultants options to purchase 2,555,252 shares of common stock pursuant to the 2014 Plan at exercise prices ranging from $0.390 per share to $4.824 per share. The 2014 Plan was terminated on the date the 2020 Equity Incentive Plan (the “2020 Plan”), which is described below, became effective, and no additional awards will be made pursuant to the 2014 Plan. However, any outstanding awards granted under the 2014 Plan will remain outstanding, subject to the terms of the 2014 Plan and award agreements, until such outstanding options are exercised or until any awards terminate or expire by their terms. At December 31, 2020 and 2019, 0 shares and 394,548 shares, respectively, were available for future grants, under the 2014 Plan. In 2020, the Company’s Board of Directors and stockholders approved and adopted the 2020 Plan. The 2020 Plan is intended to advance the interests of the Company and its stockholders by providing an incentive to attract, retain and reward persons performing services for the Company and by motivating such persons to contribute to the growth and profitability of the Company. The maximum number of shares of common stock that may be issued under the 2020 Plan will not exceed 6,494,510 shares of the Company’s common stock, which is the sum of (i) 2,152,080 new shares, plus (ii) an additional number of shares not to exceed 4,342,430 shares, consisting of any shares of the Company’s common stock subject to outstanding stock options or other stock awards granted under the Company’s 2014 Plan that, on or after the 2020 Plan becomes effective, terminate or expire prior to exercise or settlement; are not issued because the award is settled in cash; are forfeited because of the failure to vest; or are reacquired or withheld (or not issued) to satisfy a tax withholding obligation or the purchase or exercise price. In addition, the number of shares of the Company’s common stock reserved for issuance under the 2020 Plan automatically increases on January 1 of each year for a period of ten years, beginning on January 1, 2021 and continuing through January 1, 2030, in an amount equal to the lesser of (1) 5% of the total number of shares of the Company’s common stock outstanding on December 31 of the immediately preceding year, or (2) a lesser number of shares determined by the Company’s board of directors no later than December 31 of the immediately preceding year. The maximum number of shares of the common stock that may be issued on the exercise of incentive stock options under the 2020 Plan is 19,483,530 shares. The 2020 Plan permits the grant of options restricted stock awards, stock appreciation rights, restricted stock unit awards, performance awards, and other awards. The exercise price for each option and stock appreciation right shall be established in the discretion of the Board, provided that the exercise price of a stock option generally will not be less than 100% of the fair market value of the Company’s common stock on the date of grant. Specific vesting for stock options and stock appreciation rights is service related and determined in each award agreement, where stock options and stock 151 Table of Contents appreciation rights are fully vested at the grant date or follow a graded vesting schedule. Stock options and stock appreciation rights granted under the Plan generally expire ten years after the date of grant. During the year ended December 31, 2020, the Company granted to certain directors, employees, and consultants options to purchase 2,144,891 shares of common stock pursuant to the 2020 Plan at an exercise price of $19.000 per share. At December 31, 2020 and 2019, 7,189 shares and 0 shares, respectively, were available for future grants, under the 2020 Plan. Stock Option Valuation The fair value of stock option grants is estimated using the Black-Scholes option-pricing model. The Company lacks company-specific historical and implied volatility information. Therefore, it estimated its expected stock volatility based on the historical volatility of a publicly traded set of peer companies. For options with service- based vesting conditions, the expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The expected term of stock options granted to nonemployees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is 0% since the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. The assumptions that the Company used to determine the estimated grant-date fair value of stock options granted to employees and directors under the 2020 Plan were as follows, presented as a weighted average: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ 2020 ​ 2019 ​ 2018 Weighted average risk-free interest rate ​ 0.44% ​ * ​ * Expected term (in years) ​ ​ 5.95 ​ ​ * ​ ​ * Expected volatility ​ ​ 77.13% ​ ​ * ​ ​ * Expected dividend yield — ​ ​ * ​ ​ * * There were no stock options granted during the period. Stock Option Activity The following table summarizes the stock option activity under the 2014 Plan and the 2020 Plan: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ Weighted ​ Average ​ ​ ​ ​ ​ ​ ​ Average ​ Remaining ​ ​ ​ ​ ​ Number of ​ Exercise ​ Contractual ​ Aggregate ​ ​ Shares ​ ​ Price ​ Term ​ Intrinsic Value ​ ​ ​ ​ ​ ​ (in years) ​ (in thousands) Outstanding as of December 31, 2019(1) ​ 322,811 ​ $ 0.39 ​ 6.04 ​ $ — Granted ​ 4,700,143 ​ ​ 11.01 ​ — ​ ​ — Exercised ​ (246,046) ​ ​ 0.59 ​ — ​ ​ — Forfeited ​ — ​ ​ — ​ — ​ ​ — Outstanding as of December 31, 2020(2) ​ 4,776,908 ​ $ 10.83 ​ 9.67 ​ $ 177,962 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Options vested and exercisable as of December 31, 2019 ​ 319,075 ​ $ 0.39 ​ 6.02 ​ $ — Options vested and exercisable as of December 31, 2020 ​ 499,770 ​ $ 5.03 ​ 8.81 ​ $ 21,513 Options expected to vest as of December 31, 2019 ​ 3,736 ​ $ 0.39 ​ 7.59 ​ $ — Options expected to vest as of December 31, 2020 ​ 4,277,138 ​ $ 11.50 ​ 9.78 ​ $ 156,449 (1) Inclusive of 211,621 shares that were exercised under a non-recourse note receivable that were legally issued, but not deemed outstanding for accounting purposes (see Note 7, “Common Stock”). (2) Balance as of December 31, 2020 includes 126,206 unvested early exercised stock options (see Note 7, “Common Stock”). 152 Table of Contents The weighted-average grant-date fair value per share of options granted during the year ended December 31, 2020, 2019, and 2018 was $7.26, $0, and $0, respectively. For the years ended December 2020, 2019, and 2018, there were 426,739, 2,941, and 8,878 shares vested, respectively. The weighted-average grant date fair value per share of options vested during the year ended December 31, 2020 was $3.87. The total fair value of options vested during the year ended December 31, 2020, 2019, and 2018 was $1.7 million, $1,000, and $1,000, respectively. The aggregate intrinsic value of options exercised was $0.1 million, $0, and $0 for the years ended December 2020, 2019, and 2018, respectively. As of December 31, 2020, the total unrecognized compensation expense related to unvested options was $31.3 million, which the Company expects to recognize over an estimated weighted average period of 3.2 years. Early Exercise of Stock Options In September 2020, one employee and one non-employee paid $0.6 million to early exercise 135,525 options with exercise prices ranging from $4.406 per share to $4.824 per share. As of December 31, 2020, 9,319 of such shares had vested with the remaining shares vesting over their respective terms. The terms of the 2014 Plan permit certain option holders to exercise options before their options are vested, subject to certain limitations. The early exercised options are subject to the same vesting provisions in the original stock option awards. Shares issued as a result of early exercise that have not vested are subject to repurchase by the Company upon termination of the purchaser’s employment, at the price paid by the purchaser. Such shares are not deemed to be outstanding for accounting purposes until they vest and are therefore excluded from shares outstanding and from basic and diluted net loss per share until the repurchase right lapses and the shares are no longer subject to the repurchase feature. A liability is recognized related to the cash proceeds of the unvested options and is reclassified into common stock and additional paid-in capital as the shares vest and the repurchase right lapses. Accordingly, the Company has recorded the unvested portion of the exercise proceeds of $0.6 million in other current liabilities as of December 31, 2020. Restricted Stock Awards In June 2020, the Company granted to certain employees 789,095 shares of restricted common stock (the “RSAs”) under the 2014 Plan as consideration for services with a deemed value of $2.40 per share, or $1.9 million. The following table summarizes the restricted stock activity under the Plan during the year ended December 31, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Shares ​ Grant Date Fair Value Unvested restricted stock as of December 31, 2019 ​ — $ — Granted ​ ​ 789,095 ​ ​ 2.40 Vested ​ ​ (53,801) ​ ​ 2.40 Forfeited ​ ​ — ​ ​ — Unvested restricted stock as of December 31, 2020 ​ 735,294 ​ $ 2.40 ​ The total grant date fair value of the RSAs vested during the year ended December 31, 2020, was $0.1 million . As of December 31, 2020, the total unrecognized compensation expense related to unvested RSAs was $1.6 million, which the Company expects to recognize over an estimated weighted average period of 3.5 years. 153 Table of Contents Stock-Based Compensation Expense Stock-based compensation expense related to awards granted under the 2014 Plan and the 2020 Plan was classified in the statements of operations and comprehensive loss as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ 2020 ​ 2019 ​ 2018 Research and development expenses $ 1,970 $ — $ 1 General and administrative 1,108 ​ ​ — ​ ​ — ​ $ 3,078 ​ $ — ​ $ 1 2020 Employee Stock Purchase Plan In 2020, the Company’s board of directors and stockholders approved and adopted the 2020 Employee Stock Purchase Plan (the “ESPP”). The ESPP became effective immediately prior to the date of the underwriting agreement related to the IPO. The ESPP permits eligible employees who elect to participate in an offering under the ESPP to have up to 15% of their eligible earnings withheld, subject to certain limitations, to purchase shares of common stock pursuant to the ESPP. The price of the common stock purchased under the ESPP is equal to the lesser of (i) 85% of the fair market value of a share of the Company’s common stock on the first day of an offering; or (ii) 85% of the fair market value of a share of the Company’s common stock on the date of purchase. Each offering period is not to exceed 27 months and will include one or more purchase periods (each a “Purchase Period”) as approved by the Company’s board of directors in the offering. The current offering period will consist of two (2) six month purchase periods (each a “Purchase Period”) during which payroll deductions of the participants are accumulated under the ESPP. The last business day of each Purchase Period is referred to as the “Purchase Date.” The first Purchase Period commenced on November 18, 2020 with a purchase date of May 15, 2021. The second Purchase Period will commence on May 16, 2021 and have a purchase date of November 15, 2021. A total of 430,416 shares of common stock were initially reserved for issuance pursuant to the ESPP. The ESPP is a compensatory plan as defined by the authoritative guidance for stock-based compensation. The Company uses the Black-Scholes option-pricing model to estimate the fair value of stock offered under the ESPP. Stock-based compensation expense related to the ESPP was $30 thousand for the year ended December 31, 2020. 9. Income Taxes The reconciliation of the Federal statutory income tax provision to the Company’s effective income tax provision is as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended ​ ​ December 31, ​ 2020 2019 Federal statutory income tax ​ $ 4,760 ​ $ 906 State income taxes, net of federal tax benefit ​ (1) ​ 300 Other permanent items ​ (135) ​ (3) Other deferred items ​ ​ 13 ​ ​ — Valuation allowance ​ (4,637) ​ (1,203) Provision for income taxes ​ $ — ​ $ — ​ 154 Table of Contents 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. The Company’s deferred income tax assets and liabilities at December 31, 2020 and 2019 were comprised of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ 2020 2019 Deferred tax assets: ​ ​ Net operating loss carryforwards ​ $ 6,168 ​ $ 2,706 Equity compensation ​ 500 ​ 6 Other ​ ​ 578 ​ ​ — Total deferred tax assets ​ $ 7,246 ​ $ 2,712 Deferred tax liabilities: ​ ​ Fixed assets ​ $ (15) ​ $ (4) Total deferred tax liabilities ​ ​ (15) ​ ​ (4) Valuation allowance ​ ​ (7,231) ​ ​ (2,708) Net deferred tax assets ​ $ — ​ $ — ​ In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the level of historical operating results and the uncertainty of the economic conditions, the Company has recorded a valuation allowance of $7.2 million and $2.7 million at December 31, 2020 and 2019, respectively. The change in the valuation allowance for the year end December 31, 2020 was an increase of $4.5 million. At December 31, 2020 and 2019, the Company had Federal net operating losses (NOLs) of approximately $26.1 million and $9.7 million, and state NOLs of $9.8 million and $9.7 million, respectively. As a result of the Tax Act, as modified by the CARES Act, for U.S. income tax purposes, NOLs generated in tax years beginning before January 1, 2018 can still be carried forward for up to 20 years, but net operating losses generated for tax years beginning after December 31, 2017 carryforward indefinitely and can be used to offset taxable income, but the deductibility of such Federal NOLs may be limited to 80% of current year taxable income for tax years beginning on or after December 31, 2020. Of the total Federal net operating loss of $26.1 million, $3.3 million will begin to expire in 2032 and $22.8 million will not expire. The state NOL carryover of $9.8 million will begin to expire in 2032. Pursuant to Internal Revenue Code (IRC) Sections 382 and 383, annual use of the Company’s net operating loss and research and development credit carryforwards may be limited in the event a cumulative change in ownership of more than 50% occurs within a three-year period. The Company has not completed an ownership change analysis pursuant to IRC Section 382. If ownership changes within the meaning of IRC Section 382 are identified as having occurred, the amount of remaining tax attribute carryforwards available to offset future taxable income and income tax expense in future years may be significantly restricted or eliminated. Further, the Company’s deferred tax assets associated with such tax attributes could be significantly reduced upon realization of an ownership change within the meaning of IRC Section 382 that has occurred or may occur in the future. Any adjustment to the Company’s tax attributes as a result of an ownership change will result in a corresponding decrease to the valuation allowance recorded against the Company’s deferred tax assets. 155 Table of Contents The Company’s valuation allowance increased during the years ended December 31, 2020 and 2019 due primarily to the generation of net operating losses, as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended ​ December 31, ​ 2020 2019 Valuation allowance at beginning of year ​ $ 2,708 ​ $ 1,505 Increase recorded to provision for income taxes ​ 4,523 ​ 1,203 Valuation allowance at end of year ​ $ 7,231 ​ $ 2,708 ​ The Company has not incurred any material interest or penalties as of the current reporting date with respect to income tax matters. The Company does not expect that there will be unrecognized tax benefits within 12 months of the reporting date. The Company is subject to U.S. Federal income tax as well as income tax in California. The Company’s Federal returns for tax years 2017 through 2019 remain open to examination; the Company’s state returns remain subject to examination for tax years 2017 through 2019. Carryforward attributes that were generated in years where the statute of limitations is closed may still be adjusted upon examination by the Internal Revenue Service or other respective tax authority. The unrecognized tax benefit amounts are not reflected in the determination of the Company’s deferred tax assets. If recognized, none of these amounts would affect the Company’s effective tax rate, since it would be offset by an equal corresponding adjustment in the deferred tax asset valuation allowance. 10. Net Loss Per Common Share Net Loss Per Common Share Basic and diluted net loss per common share was calculated as follows (in thousands, except share and per share amounts): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2020 2019 ​ 2018 Numerator: ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ $ (22,121) ​ $ (4,316) ​ $ (2,197) Repurchase and retirement of Series A and Series A-1 convertible preferred stock ​ (1,869) ​ — ​ — Net loss attributable to common stockholders ​ $ (23,990) ​ $ (4,316) ​ $ (2,197) Denominator: ​ ​ ​ Weighted average shares used to compute net loss per share attributable to common stockholders, basic and diluted ​ 7,021,468 ​ 2,593,316 ​ 2,522,577 Net loss per share attributable to common stockholders, basic and diluted ​ $ (3.42) ​ $ (1.66) ​ $ (0.87) ​ The Company’s potentially dilutive securities, which include unvested restricted common stock, stock options, common stock contingently issuable under the ESPP, and convertible preferred stock, have been excluded from the computation of diluted net loss per common share as the effect would be to reduce the net loss per common share. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per common 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 156 Table of Contents net loss per common share for the periods indicated because including them would have had an anti-dilutive effect: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ 2020 ​ 2019 ​ 2018 Unvested restricted common stock 735,294 — — Options to purchase common stock 4,776,908 322,811 322,811 Convertible preferred stock (as converted to common shares) ​ — ​ 4,628,215 4,628,215 Employee stock purchase plan contingently issuable ​ 5,602 — ​ — ​ ​ 5,517,804 4,951,026 4,951,026 ​ Included in the potentially dilutive options to purchase common stock noted above are 211,621 shares issued upon exercise of options under non-recourse notes receivable during 2015 (see Note 7, “Common Stock” and Note 8, “Stock-Based Compensation”). The Company determined the purchase of the stock to be non-substantive, and as such, the shares subject to the promissory notes will not be deemed outstanding until such time as the promissory notes have been repaid. Accordingly, the Company has excluded these shares from the calculation of basic and diluted net loss per share for the years ended December 31, 2019 and 2018. During the year ended December 31, 2020, all outstanding principal and accrued interest relating to the Non-Recourse Notes were settled in full by the two noteholders, and as a result, the Company issued 211,621 shares of common stock to the noteholders and included these shares in the basic and diluted net loss per share for year ended December 31, 2020. Also included in the potentially dilutive options to purchase common stock are 126,206 unvested stock options that were early exercised by an employee and a non-employee in September 2020 (see Note 8, “Stock-Based Compensation”). The Company determined the early exercises to be non-substantive as the shares were subject to repurchase rights. Accordingly, the Company has excluded these shares from the calculation of basic and diluted net loss per share for the year ended December 31, 2020. ​ 11. Commitments and Contingencies Management Services Agreement On June 1, 2013, the Company entered into a management services agreement with MandalMed, Inc. (“MandalMed”) (the “MandalMed Services Agreement”) to lease approximately 5,762 square feet of space for the use laboratory benches, lab equipment, office space, and administrative and facilities services at a monthly fee of $6,500. The Company subsequently entered into several amendments to extend the lease term to November 2020. On November 3, 2020, the Company entered into the sixth amendment to the Mandalmed Services Agreement to extend the term to December 31, 2021 with a monthly fee of $5,600. As part of the sixth amendment, the Company leased additional space of approximately 2,130 square feet (the “Additional Space”) for a three year period commencing on December 1, 2020 and ending on November 30, 2023. Rent for the Additional Space is $9,000 for the first year and $18,000 for the first and second years. The Company recorded rent expense of $0.1 million, $0.1 million and $0.1 million during the years ended December 31, 2020, 2019, and 2018, respectively. On August 27, 2020, the Company entered into a lease agreement with 512 2nd Street LLC to lease approximately 3,500 square feet of office space in San Francisco, California (the “Office Space Lease Agreement”). The Office Space Lease Agreement is for a period of two years commencing on September 1, 2020 and ending August 31, 2022. According to the terms of the Office Space Lease Agreement, the Company paid a $0.1 million security deposit and is required to pay monthly rent and common area charges. Monthly rent is $23,330 and $24,030 for the first and second years of the lease term, respectively. The Company recorded rent expense under the Office Space Lease Agreement of $0.1 million during the year ended December 31, 2020. On December 15, 2020, the Company entered into a lease agreement with Tennieh LLC to lease approximately 9,800 square feet of office space in San Francisco, California (the “Laboratory Lease Agreement”). The 157 Table of Contents Laboratory Lease Agreement is for a period of five years commencing approximately February 1, 2021 and ending January 31, 2026. According to the terms of the Office Space Lease Agreement, the Company paid a $0.4 million security deposit and is required to pay monthly rent and common area charges. Rent is $0.1 million for the first through fifth years of the lease term, respectively. The Company has not recorded rent expense for under the Laboratory Lease Agreement. The Company conducts research and development programs internally and through third parties that include, among others, arrangements with vendors, consultants, CMOs, and CROs. The Company has contractual arrangements in the normal course of business with these parties, however, the contracts with these parties are cancelable generally on reasonable notice within one year and the Company’s obligations under these contracts are primarily based on services performed. The Company included certain contracts that have significant cancellation penalties and are material, which make the continuation of these arrangements reasonable as of December 31, 2020. The following table summarizes the Company’s future contractual obligations and commitments as of December 31, 2020 (in thousands): ​ ​ ​ ​ ​ Year Ending December 31, ​ ​ 2021 $ 2,929 2022 1,161 2023 973 2024 ​ ​ 799 2025 822 Thereafter 69 ​ $ 6,753 ​ Clinical Collaboration and Supply Agreement On July 22, 2020, the Company entered into a non-exclusive clinical collaboration and supply agreement with Novartis Institutes for BioMedical Research, Inc. (“Novartis”) (the “Novartis Agreement”). The collaboration is focused on the evaluation of the safety, tolerability and efficacy of OP-1250 in combination with Novartis’ proprietary CDK4/6 inhibitor Kisqali® (ribociclib) and/or Novartis’ proprietary phosphatidylinositol 3-kinase inhibitor Piqray® (alpelisib) (collectively the “Novartis Study Drugs”) as part of the Company’s planned Phase 1b clinical trial of OP-1250 in patients with metastatic estrogen receptor-positive breast cancer. The Company will be responsible for the conduct of the clinical trials for the combined therapies in accordance with a mutually agreed development plan. As part of the collaboration, the parties granted to each other a non-exclusive, royalty- free license under certain of the parties’ respective background patent rights and other technology to use the parties’ respective study drugs in research and development, solely to the extent reasonably needed for the other party’s activities in the collaboration. All inventions and data developed in the performance of the clinical trials for the combined therapies (other than those specific to each component study drug), will be jointly owned by the parties. The Company is responsible for manufacturing, packaging and labeling OP-1250, and for packaging and labeling all drugs used in the clinical trials for the combined therapies (other than the Novartis Study Drugs). Novartis is responsible for manufacturing and delivering to the Company the Novartis Study Drugs in such quantities as reasonably needed for the clinical trials for the combined therapies. In accordance with an agreed budget, subject to certain thresholds, Novartis will reimburse the Company for a majority of the direct outside costs that the Company incurs related to conducting the activities under the agreed development plan in conducting the clinical trials for the combined therapies. The Novartis Agreement will terminate upon completion of all activities outlined in the development plan and the relevant protocols. Either party may terminate the Novartis Agreement for the uncured material breach or insolvency of the other party, if it reasonably deems it necessary in order to protect the safety, health or welfare of subjects enrolled in the clinical trials for the combined therapies due to the existence of a material safety 158 Table of Contents issue, or in certain circumstances for an unresolved clinical hold with respect to either the Novartis Study Drugs or OP-1250. In addition, Novartis may terminate the Novartis Agreement if certain disputes between the parties are not resolved after following the applicable dispute resolution procedures, and the Company may terminate the Novartis Agreement in the event the Company terminates all clinical trials of the combined therapies other than due to a material safety issue or upon a clinical hold. Clinical Trial Agreement In November 2020, the Company entered into a non-exclusive clinical trial agreement with Pfizer Inc. (“Pfizer”) (the “Pfizer Agreement”), to evaluate the safety and tolerability of OP-1250 in combination with Pfizer’s proprietary CDK4/6 inhibitor IBRANCE® (palbociclib) in patients with recurrent, locally advanced or metastatic ER+, HER2- breast cancer in a clinical trial. Under the terms of the non-exclusive agreement, the Company will be responsible for conducting the clinical trial for the combined therapies and Pfizer is responsible for supplying IBRANCE® to the Company at no cost to the Company. The Company is responsible for manufacturing, packaging and labeling OP-1250, and for packaging and labeling all drugs used in the clinical trials for the combined therapies (other than IBRANCE® (palbociclib)). Pfizer is responsible for manufacturing and delivering to us IBRANCE® (palbociclib) in such quantities as reasonably needed for the clinical trials for the combined therapies. The Pfizer Agreement will terminate upon completion of all activities outlined in the study plan and the relevant protocols. Either party may terminate the Pfizer Agreement for the uncured material breach or insolvency of the other party, if it reasonably deems it necessary in order to protect the safety, health or welfare of subjects enrolled in the clinical trials for the combined therapies due to the existence of a material safety issue, or in certain circumstances for an unresolved clinical hold with respect to either the IBRANCE® (palbociclib) or OP-1250. In addition, either party may terminate the Pfizer Agreement if certain disputes between the parties are not resolved after following the applicable dispute resolution procedures or if either party determines to discontinue clinical development for medical, scientific, legal or other reasons. The Pfizer Agreement does not grant any right of first negotiation to participate in future clinical trials, and each of the parties retains all rights and ability to evaluate their respective compounds. Contingencies From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of business. The Company accrues a liability for such matters when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated. For all periods presented, the Company was not a party to any pending material litigation or other material legal proceedings. Indemnification Agreements In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its Board of Directors and executive officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. As of December 31, 2020 and 2019, the Company had not incurred any material costs as a result of such indemnifications. ​ ​ 159 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.