What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-27 compared with 2023-03-09 · 205 added, 242 removed, 561 unchanged (44% of the section changed)

1 unchanged sentence

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting F ir m (PCAOB ID No.

Balance Sheets as of December 31, 202 2 and 202 1

Statements of Operations and Comprehensive Loss for the Years ended December 31, 202 2 and 2021

Statements of Stockholders’ Equity for the Years ended December 31, 202 2 and 202 1

Statements of Cash Flows for the Years ended December 31, 202 2 and 202 1

Report of Independent Registered Public Accounting Firm (PCAOB ID No.

Balance Sheets

Statements of Operations and Comprehensive Gain ( Loss )

Statements of Stockholders’ Equity

Statements of Cash Flows

Notes to Financial Statements

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We have audited the accompanying balance sheets of Pliant Therapeutics, Inc.

(the "Company") as of December 31, 2022 and 2021, the related statements of operations and comprehensive loss, stockholders’ equity, and cash flows, for each of the two years in the period ended December 31, 2022, 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 as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

(the "Company") as of December 31, 2023 and 2022, the related statements of operations and comprehensive loss, stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2023, 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 as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 27, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting

Basis for Opinion

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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.

We are a public accounting firm registered with the 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.

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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.

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Accrued Research and Development Liabilities and Prepaid Expenses and Other Current Assets – Accrued and Prepaid Research and Development Expenses — Refer to Notes 2 and 5 to the financial statements

Accrued Research and Development and Prepaid Expenses and Other Current Assets – Accrued and Prepaid Research and Development Expenses related to Contract Research Organizations (CROs) — Refer to Notes 2 and 5 to the financial statements

Critical Audit Matter Description

The Company records accrued expenses for costs of research and development activities which include the conduct of clinical studies and preclinical studies by third-party service providers, based upon the estimated amount of services provided but not yet invoiced.

The Company records accrued expenses for costs of research and development activities which include the conduct of clinical studies by third-party CRO service providers, based upon the estimated amount of services provided but not yet invoiced.

Any payments made in advance of services provided are recorded as prepaid assets, which are expensed as the contracted services are performed.

The Company estimates the amount of work completed through review of detailed budgets and timelines included in its contracts and agreements, and updates these estimates with information obtained from third-party service providers and internal personnel on a quarterly basis.

As of December 31, 2022, accrued research and development expenses were $11.2 million and prepaid research and development expenses were $3.4 million.

Given the significant judgments made by management in estimating the progress or stage of completion of the services, auditing the Company’s accrued and prepaid research and development expenses was especially challenging.

Specifically, because the amount of accrued and prepaid research and development expenses is dependent on management’s receipt of

timely and accurate reporting from third-party service providers, management’s estimates of work completed as of the balance sheet date, and management’s estimates of the period over which this work will be performed, auditing accrued and prepaid research and development expenses required a high degree of auditor judgment and an increased extent of effort.

Specifically, because the amount of accrued and prepaid research and development expenses is dependent on management’s receipt of timely and accurate reporting from third-party service providers, management’s estimates of work completed as of the balance sheet date, and management’s estimates of the period over which this work will be performed,

auditing accrued and prepaid research and development expenses related to CROs required a high degree of auditor judgment and an increased extent of effort.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the Company’s accrued and prepaid research and development expenses included the following, among others:

• We tested the effectiveness of controls over the estimation of accrued and prepaid research and development expenses related to CROs.

• For a sample of agreements and contracts, we read the related statement of work, purchase order, and inspected information the Company received from its third-party service providers.

We tested the accuracy and completeness of the underlying information used in the estimates and evaluated the significant assumptions that are used by management to estimate the recorded amounts by performing the following procedures:

◦ Performed corroborating inquiries with the Company’s research and development personnel that oversee the preclinical and clinical studies to obtain information regarding the nature and extent of progress of preclinical and clinical studies.

◦ Obtained external written confirmations from the Company’s third-party service providers regarding the accuracy and completeness of contracted amounts and percentage of completion.

◦ Performed corroborating inquiries with the Company’s research and development personnel that oversee the contract research organization’s studies to obtain information regarding the nature and extent of progress of the clinical studies.

◦ Obtained written confirmations directly from the Company’s third-party service providers regarding the accuracy and completeness of contracted amounts and percentage of completion.

◦ Evaluated management’s judgments using the evidence obtained.

◦ For a sample of agreements and contracts, we obtained the corresponding invoices and evidence of payment to test the Company’s disbursements made to third-party service providers as of December 31, 2023.

• We compared invoices received by the Company subsequent to December 31, 2022 to the accrued research and development expenses recognized by the Company as of that date.

• We compared invoices received by the Company subsequent to December 31, 2023 to the accrued research and development expenses related to CROs recognized by the Company as of that date.

/s/ Deloitte & Touche LLP

San Francisco, California

March 9, 2023

February 27, 2024

We have served as the Company's auditor since 2018.

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Operating lease right-of-use assets 1,211 5,422

Restricted cash

Other non-current assets 392 394

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Accrued research and development 12,456 11,218

Accrued and other liabilities (Note 6) 8,658 6,123

Accrued liabilities (Note 6) 10,219 8,658

Lease liabilities, current 1,318 2,457

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Stockholders’ equity

Preferred stock, $ 0.0001 par value 10,000,000 shares authorized at December 31, 2023 and 2022, none issued or outstanding at December 31, 2023 and 2022

Common stock, $ 0.0001 par value;

300,000,000 shares authorized at December 31, 2023 and 2022;

and 48,941,254 and 36,083,301 shares issued and outstanding at December 31, 2022 and 2021, respectively;

and 59,921,002 and 48,941,254 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively;

Additional paid-in capital 972,973 653,707

Accumulated deficit ( 499,748 ) ( 338,412 )

Accumulated other comprehensive loss ( 1,958 ) ( 201 )

Accumulated other comprehensive gain (loss) 345 ( 1,958 )

Total stockholders’ equity 473,576 313,342

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Pliant Therapeutics, Inc.

Statements of Operations and Comprehensive Loss

Statements of Operations and Comprehensive Gain (Loss)

(In thousands, except number of shares and per share amounts)

Year Ended December 31,

2023 2022 2021

Revenue $ 1,580 $ 9,685 $ 7,572

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Net loss $ ( 161,336 ) $ ( 123,321 ) $ ( 97,263 )

Net loss attributable to common stockholders $ ( 123,321 ) $ ( 97,263 )

Net loss per share, attributable to common stockholders:

Basic $ ( 2.94 ) $ ( 2.71 )

Diluted $ ( 2.94 ) $ ( 2.71 )

Shares used in computing net loss per share attributable to common

stockholders:

Basic 42,015,908 35,846,421

Diluted 42,015,908 35,846,421

Net loss per share - basic and diluted $ ( 2.75 ) $ ( 2.94 ) $ ( 2.71 )

Weighted average shares used in computing net loss per share - basic and diluted 58,719,083 42,015,908 35,846,421

Comprehensive loss:

Net loss $ ( 161,336 ) $ ( 123,321 ) $ ( 97,263 )

Other comprehensive loss:

Net unrealized loss on short-term investments ( 1,757 ) ( 169 )

Total other comprehensive loss ( 1,757 ) ( 169 )

Net unrealized gain (loss) on short-term investments 2,303 ( 1,757 ) ( 169 )

Total other comprehensive gain (loss) 2,303 ( 1,757 ) ( 169 )

Comprehensive loss $ ( 159,033 ) $ ( 125,078 ) $ ( 97,432 )

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Comprehensive

Loss Accumulated

(Loss) Gain Accumulated

Deficit Total

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Balance at December 31, 2020 35,552,795 $ 3 $ 400,918 $ ( 32 ) $ ( 117,828 ) $ 283,061

Issuance of common stock under benefit plans 427,342 — 2,984 — — 2,984

Vesting of restricted stock awards 103,164 — 9 — — 9

21,841 — 2 — — 2

Option exercises

403,680 — 1,360 — — 1,360

Stock-based compensation expense — — 10,437 — — 10,437

— — 22,598 — — 22,598

Net unrealized loss on short-term investments — — — ( 169 ) — ( 169 )

— — — ( 1,757 ) — ( 1,757 )

Common stock issued in a public offering, net of offering expenses 12,432,432 2 215,399 — — 215,401

— — — — ( 123,321 ) ( 123,321 )

Balance at December 31, 2022 48,941,254 $ 5 $ 653,707 $ ( 1,958 ) $ ( 338,412 ) $ 313,342

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

Pliant Therapeutics, Inc.

Statements of Stockholders’ Equity

(In thousands, except number of shares and per share amounts)

Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total

Stockholders'

Shares Amount

Net loss — — — — ( 97,263 ) ( 97,263 )

Balance at December 31, 2021 36,083,301 $ 3 $ 414,348 $ ( 201 ) $ ( 215,091 ) $ 199,059

Common stock issued in a public offering, net of offering expenses 12,432,432 2 215,399 — — 215,401

Issuance of common stock under benefit plans 403,680 — 1,360 — — 1,360

Vesting of restricted stock awards 21,841 — 2 — — 2

103,164 — 9 — — 9

Option exercises

427,342 — 2,984 — — 2,984

Stock-based compensation expense — — 22,598 — — 22,598

— — 10,437 — — 10,437

Net unrealized loss on short-term investments — — — ( 1,757 ) — ( 1,757 )

— — — ( 169 ) — ( 169 )

— — — — ( 97,263 ) ( 97,263 )

Net loss — — — — ( 123,321 ) ( 123,321 )

Balance at December 31, 2022 48,941,254 $ 5 $ 653,707 $ ( 1,958 ) $ ( 338,412 ) $ 313,342

Common stock issued in a public offering, net of offering expenses 9,583,334 1 269,781 — — 269,782

Issuance of common stock under benefit plans 1,396,414 — 5,002 — — 5,002

Stock-based compensation expense — — 44,483 — — 44,483

Net unrealized gain on short-term investments — — — 2,303 — 2,303

Net loss — — — — ( 161,336 ) $ ( 161,336 )

Balance at December 31, 2023 59,921,002 $ 6 $ 972,973 $ 345 $ ( 499,748 ) $ 473,576

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

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Year Ended December 31,

2023 2022 2021

Cash flows from operating activities

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Stock-based compensation expense 44,483 22,598 10,437

Noncash lease expense 1,858 1,669

(Accretion) amortization on short-term investments ( 1,806 ) 1,262

Non-cash operating lease expense 2,390 1,858 1,669

(Accretion) amortization on short-term investments and debt ( 4,990 ) ( 1,806 ) 1,262

Changes in operating assets and liabilities:

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Proceeds from sale of common stock in a public offering 270,251 216,201 —

Proceeds term loan, net of issuance costs 9,850 —

Proceeds from issuances of common stock under benefit plans 5,001 1,360 2,984

Payment of offering costs ( 847 ) ( 557 ) ( 457 )

Payment of debt issuance costs — ( 150 ) —

Proceeds from term loan — 10,000 —

Net cash provided by financing activities 274,405 226,854 2,527

Net (decrease) increase in cash and cash equivalents ( 17,981 ) 783

Net increase (decrease) in cash and cash equivalents 31,032 ( 17,981 ) 783

Cash and cash equivalents at beginning of period 33,684 51,665 50,882

Cash and cash equivalents at end of period $ 33,684 $ 51,665

Cash, cash equivalents and restricted cash at end of period $ 64,716 $ 33,684 $ 51,665

Supplemental disclosures of cash flow information:

Cash paid for interest $ 1,149 $ 615 $ —

Reconciliation of cash, cash equivalents, and restricted cash reported in the balance sheets

Cash and cash equivalents $ 63,234 $ 33,684 $ 51,665

Restricted cash 1,482 — —

Total cash, cash equivalents, and restricted cash shown in the statements of cash flows $ 64,716 $ 33,684 $ 51,665

Supplemental disclosures of noncash investing and financing activities:

Purchase of property and equipment in accounts payable and accrued liabilities $ — $ 57

Net unrealized gain(loss) on short-term investments $ 2,303 $ ( 1,757 ) $ ( 169 )

Purchase of property and equipment in accounts payable $ — $ — $ 57

Reclassification of restricted stock awards from liabilities to common stock upon vesting $ — $ 2 $ 9

Net unrealized loss on short-term investments $ ( 1,757 ) $ ( 169 )

Supplemental disclosures of cash flow information related to leases:

Cash paid for operating lease liabilities in operating cash flows $ 3,846 $ 2,657

Right-of-use assets obtained in exchange for new operating lease liabilities $ — $ 950 $ —

Decrease in right-of -use assets and liabilities from lease modifications $ 1,821 $ — $ —

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

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Pliant Therapeutics, Inc.

(the “Company” or "Pliant" or “we” or “our” or “us”) is a clinical stage biopharmaceutical company focused on discovering and developing novel therapies for the treatment of fibrosis with an initial focus on treating fibrosis by inhibiting integrin-mediated activation of TGF-β.

(the “Company” or "Pliant" or “we” or “our” or “us”) is a late stage clinical stage biopharmaceutical company focused on discovering and developing novel therapies for the treatment of fibrosis with an initial focus on treating fibrosis by inhibiting integrin-mediated activation of TGF-β.

Fibrosis refers to the abnormal thickening and scarring of connective tissue due to the production and deposition of excess collagen in the extra-cellular matrix.

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The Company is located in South San Francisco, California, and was incorporated in the state of Delaware in June 2015.

Public Offering

Public Offerings

In July 2022, the Company completed a public offering of 12,432,432 shares of common stock, including the exercise in full of the underwriters' option to purchase 1,621,621 additional shares of common stock.

The shares were offered at a price of $ 18.50 per share, resulting in aggregate proceeds of approximately $ 215.4 million, net of underwriting discounts, commissions and offering expenses.

In January 2023, the Company completed a public offering of 9,583,334 shares of common stock, including the exercise in full of the underwriters' option to purchase 1,250,000 additional shares of common stock.

The shares were offered at a price of $ 30.00 per share, resulting in aggregate proceeds of approximately $ 269.8 million, net of underwriting discounts, commissions and offering expenses payable by us.

Summary of Significant Accounting Policies

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As part of accounting for this arrangement, we must apply judgment to determine whether the performance obligations are distinct, and develop assumptions in determining the stand-alone selling price for each distinct performance obligation identified in the contract.

To determine the stand-alone selling price, we rely on assumptions which may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success.

To determine the stand-alone selling price, we rely on assumptions which may include

forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success.

Licenses of Intellectual Property

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The Company limits its credit risk associated with its cash and cash equivalents by placing them with banks and institutions it believes are highly credit worthy and in highly rated investments.

However, the Company had deposits in excess of the Federal Deposit Insurance Corporation (“FDIC”) insured limit of $250,000.

The Company performs credit evaluations of its customer, and the risk with respect to accounts receivable is further mitigated by the short duration of customer payment terms, generally within 60 days, and the pedigree

of the customer base.

However, the Company had deposits in excess of the Federal Deposit Insurance Corporation (“FDIC”)

insured limit of $250,000.

During the years ended December 31, 2023, 2022 and 2021, Novartis accounted for 100 % of the Company’s revenue and accounts receivable.

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The Company’s chief executive officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for allocating and evaluating financial performance.

The single operating segment constitutes all of the Company activity, the chief operating decision maker regularly reviews the entity-wide operating results and performance .

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

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government agency securities and corporate debt securities and are stated at fair value.

Restricted Cash

Our restricted cash balance of $ 1.4 million as of December 31, 2023 represented cash required to be held as collateral by a financial institution to guarantee lease payments due to our landlord at Oyster Point Blvd, South San Francisco, California (the "Oyster Point Lease").

Short-Term Investments

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As a result, short-term investments may include securities with maturities beyond twelve months that are classified within current assets in the Balance Sheets.

As of December 31, 2022 and 2021, all of the Company’s short-term investments were classified as available-for-sale and were carried at fair market value with unrealized losses recorded in other comprehensive loss in the statements of operations and comprehensive loss.

As of December 31, 2023 and 2022, all of the Company’s short-term investments were classified as available-for-sale and were carried at fair market value with unrealized losses recorded in other comprehensive gain (loss) in the statements of operations and comprehensive loss.

See Note 3 for further details.

Short-term investments are considered impaired when a decline in fair value is judged to be other-than-temporary.

The Company consults with its investment managers and considers available quantitative and qualitative evidence in evaluating potential impairment of its short-term investments on a quarterly basis.

If the cost of an individual investment exceeds its fair value, the Company evaluates, among other factors, general market conditions, the duration and extent to which the fair value is less than cost and its intent and ability to hold the investment.

Once a decline in fair value is determined to be other-than-temporary, an impairment charge will be recorded to other expense, net, in the statements of operations and comprehensive loss and a new cost basis in the short-term investment will be established.

As of December 31, 2022, the Company had not recorded any impairment related to other-than-temporary declines in the fair value of short-term investments and long lived assets.

The Company records an allowance for credit losses using an expected loss model.

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To determine whether to record a credit loss, the Company considers issuer specific credit ratings and historical losses as well as current economic conditions and its expectations for future economic conditions.

The Company has not recorded any credit losses during the three years ended December 31, 2023, 2022 and 2021.

Property and Equipment, Net

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Stock-Based Compensation

The Company’s stock-based equity awards include restricted stock awards, stock options, restricted stock units ("RSUs"), performance-based restricted stock units ("PSUs"), and shares that will be issued under the Company’s 2020 Employee Stock Purchase Plan (“ESPP”).

The Company’s stock-based equity awards include restricted stock awards, stock options, restricted stock units ("RSUs") and performance-based restricted stock units ("PSUs"), issued under the Company's 2020 Stock Option and Incentive Plan (the “2020 Plan”), 2022 Inducement Plan ("Inducement Plan") and shares issued under the Company’s 2020 Employee Stock Purchase Plan (“ESPP”).

Stock-based compensation for awards that are granted to employees is accounted at fair value on the award grant date and the expense is recognized over the period the employee is required to provide service in exchange for the award, which is generally on a straight-line basis over the vesting period of the award.

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Comprehensive loss includes net loss as well as other changes in stockholders' equity that result from transactions and economic events other than those with stockholders.

The Company's comprehensive loss represents unrealized losses on short-term investments.

Interest and other income

Interest and other income includes interest income from our short-term investment portfolio.

The Company's comprehensive gain (loss) represents unrealized losses on short-term investments.

Interest and other income(expense)

Interest and other income (expense) includes interest income from our short-term investment portfolio.

Net Loss Per Share

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The Company reported a net loss attributable to common stockholders during the years ended December 31, 2023, 2022 and 2021.

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280), or Topic 280, which improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

We adopted the provisions of Topic 280 and the adoption did not have a material impact to our financial statements.

Recently Announced Accounting Pronouncements

I n October 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-06 "Disclosure Improvements - Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative", which amends the disclosure or presentation requirements related to various subtopics in the FASB Accounting Standard Codification (the "Codification").

This ASU will become effective on the date the SEC removes the applicable disclosure from Regulation S-X or Regulation S-K, with early adoption prohibited.

If by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not be become effective for any entity.

The Company expects the new guidance will have an immaterial impact on its financial statements, and intends to adopt the guidance when it becomes effective.

In December 2023, the FASB issued ASU 2023-09 "Income Taxes (Topic 740):

Improvements to Income Tax Disclosures", which expands disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid both in the U.S.

and foreign jurisdictions.

The guidance is effective for the Company beginning in the fourth quarter of fiscal year 2026.

The Company expects the new guidance will have an immaterial impact on its financial statements, and intends to adopt the guidance prospectively when it becomes effective in the fourth quarter of fiscal year 2026.

Financial Instruments

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As a result, short-term investments may include securities with maturities beyond twelve months that are classified within current assets in the Balance Sheets.

The Company’s short-term investments classified as available-for-sale are carried at fair market value with unrealized losses or income recognized in other comprehensive loss.

The Company’s short-term investments classified as available-for-sale are carried at fair market value with unrealized gain or loss recognized in other comprehensive gain (loss).

Assets and liabilities recorded at fair value on a recurring basis in the Balance Sheets and assets and liabilities measured at fair value on a non-recurring basis or disclosed at fair value, are categorized based upon the level of judgment associated with inputs used to measure their fair values.

The accounting guidance for fair value provides a framework for measuring fair value and requires certain disclosures about how fair value is determined.

Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date.

The accounting guidance also establishes a three-level valuation hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based upon whether such inputs are observable or unobservable.

Accounting guidance establishes a three-level valuation hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based upon whether such inputs are observable or unobservable.

Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions made by the reporting entity.

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• Level 3 —Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data.

The Company’s cash equivalent Money Market Funds are classified as Level 1 because they are valued using quoted market prices.

The fair value of the Company’s cash equivalent Money Market Funds are classified as Level 1 because they are valued using quoted market prices.

The fair value of the Company’s U.S.

Treasury securities, U.S.

government agency securities and corporate debt securities are classified as Level 2 because they are valued using observable inputs to quoted market prices, benchmark yields, reported trades, broker/dealer quotes or alternative pricing sources with reasonable levels of price transparency and include U.S.

government agency securities, U.S.

Treasury securities and corporate debt securities.

These Level 2 instruments require more management judgment and subjectivity compared to Level 1 instruments which include determining which instruments are most similar to the instrument being priced, determining whether the market is active and determining which model-derived valuations are to be used when calculating fair value.

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The following tables show the Company’s cash and cash equivalents and short-term investments by significant investment category as of December 31, 2023 and 2022 (in thousands):

As of December 31, 2022

As of December 31, 2023 As of December 31, 2022

Cost Unrealized

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Losses Market

Money Market Funds $ 28,312 $ — $ — $ 28,312

Treasury securities included in cash and cash equivalents and short-term investments 4,446 — ( 5 ) 4,441

government agency securities included in short-term investments

28,746 — ( 111 ) 28,635

Corporate debt securities included in cash and cash equivalents and short-term investments

266,267 45 ( 1,887 ) 264,425

Total financial assets $ 327,771 $ 45 $ ( 2,003 ) $ 325,813

As of December 31, 2021

Value Adjusted

Cost Unrealized

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Losses Market

Money Market Funds $ 15,329 $ — $ — $ 15,329

government agency securities included in short-term investments

5,003 — — 5,003

Corporate debt securities included in cash and cash

equivalents and short-term investments 163,626 1 ( 202 ) 163,425

Money Market Funds Level 1 $ 57,241 $ — $ — $ 57,241 $ 28,312 $ — $ — $ 28,312

Treasury securities Level 2 27,250 46 ( 8 ) 27,288 4,446 — ( 5 ) 4,441

Government Agency Securities Level 2 133,655 563 ( 132 ) 134,086 28,746 — ( 111 ) 28,635

Corporate debt securities Level 2 269,761 213 ( 337 ) 269,637 266,267 45 ( 1,887 ) 264,425

Total financial assets $ 487,907 $ 822 $ ( 477 ) $ 488,252 $ 327,771 $ 45 $ ( 2,003 ) $ 325,813

As of December 31, 2023 As of December 31, 2022

Classified as:

Cost Unrealized

Gains Unrealized

Losses Market

Value Adjusted

Cost Unrealized

Gains Unrealized

Losses Market

Cash equivalents $ 57,241 $ — $ — $ 57,241 $ 28,312 $ — $ — $ 28,312

Short-term investments 430,666 822 ( 477 ) 431,011 299,459 45 ( 2,003 ) 297,501

Total $ 487,907 $ 822 $ ( 477 ) $ 488,252 $ 327,771 $ 45 $ ( 2,003 ) $ 325,813

The Company may sell certain of its short-term securities prior to their stated maturities for reasons including, but not limited to, managing liquidity, credit risk, duration and asset allocation.

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There have been no transfers between fair value measurement levels during the years ended December 31, 2023 and 2022.

addition, there were no assets or liabilities measured at fair value on a non-recurring basis as of December 31, 2022 and 2021.

As of December 31, 2022, the Company had not recorded any impairment related to other-than-temporary declines in the fair value of short-term investments.

In addition, there were no assets or liabilities measured at fair value on a non-recurring basis as of December 31, 2023 and 2022.

The Company records interest income and accretion income earned on Money Market Funds and U.S.

Treasury, U.S.

government agency and corporate debt securities to interest and other income in its statement of operations and comprehensive loss.

government agency and corporate debt securities to interest and other income(expense),net in its statement of operations and comprehensive gain (loss).

Property and Equipment, net

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Total property and equipment, net $ 3,567 $ 4,486

Depreciation expense during the years ended December 31, 2022, and 2021 was $ 1.8 million and $ 1.5 million, respectively.

Depreciation expense during the years ended December 31, 2023 and 2022 was $ 1.8 million, and for 2021 depreciation expense was $ 1.5 million.

Prepaid Expenses and Other Current Assets

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Total prepaid expenses and other current assets $ 11,257 $ 7,058

Accrued and Other Liabilities

Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):

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Other accrued liabilities 1,177 1,458

Total accrued and other liabilities $ 8,658 $ 6,123

Total accrued liabilities

$ 10,219 $ 8,658

Accrued compensation and benefits consist primarily of accrued bonuses and accrued vacation.

In May 2022, as amended in October 2022, we entered into a term loan facility (the “Oxford Loan Agreement”) with Oxford Finance LLC (the "Lender") for up to $ 100.0 million.

At closing, we entered into a term loan for $ 10.0 million of an initial $ 25.0 million tranche, with the remaining $ 15.0 million available through mid-February 2023.

The Oxford Loan Agreement provides for an additional $ 75.0 million over three tranches, $ 50.0 million of which is at our option upon the satisfaction of certain conditions related to the development of bexotegrast and one of our preclinical product candidates, and $ 25.0 million at the Lender's discretion.

At closing, we entered into a term loan for $ 10.0 million and we decided not to draw upon the additional $ 65.0 million that became available to us over the course of 2023 as certain conditions related to the development of bexotegrast and one of our preclinical product candidates were satisfied.

As of December 31, 2023, the time period to draw upon the additional $ 65.0 million had lapsed.

In connection with the Oxford Loan Agreement, we granted a security interest in substantially all of our current and future assets.

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Borrowings under the Oxford Loan Agreement bear interest at a rate per annum equal to 1-month term Secured Overnight Financing Rate (SOFR) plus 8.5 %, subject to an agreed upon floor and cap.

The Oxford Loan Agreement requires the Company to make monthly interest-only payments until July 1, 2026 (extendable to July 1, 2027) with monthly interest and principal payments thereafter until the maturity date of May 1, 2027 (extendable to May 1, 2028).

The Oxford Loan Agreement requires the Company to make monthly interest-only payments until July 1, 2026 with monthly interest and principal payments thereafter until the maturity date of May 1, 2027.

The estimated fair value of the term loan as of December 31, 2023 was measured using Level 3 inputs and approximates the carrying value recorded to the balance sheet.

The effective interest rate for the term loan is 12.69 % and interest expense during the year ended December 31, 2022 was $ 0.8 million.

We had no outstanding debt and did not incur interest expense in 2021.

The effective interest rate for the term loan is 12.69 % and interest expense during the years ended December 31, 2023 and 2022 was $ 1.3 million and $ 0.8 million, respectively.

Future maturities of debt as of December 31, 2023 are as follows (in thousands):

As of December 31, 2023

Thereafter $ —

Total $ 10,000

unamortized debt issuance costs ( 106 )

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Novartis Collaboration and License Agreement (the "Novartis Agreement")

In 2019, we entered into the Novartis Agreement, for the development and commercialization of our preclinical product candidate, PLN-1474 and up to three additional integrin research targets.

PLN-1474 is an internally discovered oral, small molecule selective inhibitor of integrin αvβ1, currently being developed for the treatment of liver fibrosis associated with nonalcoholic steatohepatitis (“NASH”).

Pursuant to the agreement, we received an upfront, non-refundable license fee of $ 50.0 million and were eligible to receive additional payments of $ 416.0 million contingent upon achievement of specified research, development, regulatory and commercial events and royalties on world-wide net sales thereafter.

Additionally, Novartis is funding up to $ 20.0 million associated with research and development services for PLN-1474 and up to $ 18.4 million for research and development services on the integrin research targets.

We assessed the Novartis Agreement in accordance with ASC 606 and determined that Novartis is a customer and identified the following performance obligations:

In 2019, we entered into the Novartis Agreement with Novartis Institutes for BioMedical Research, Inc.

(“Novartis”) for the development and commercialization of our preclinical product candidate, PLN-1474, and up to three additional integrin research targets.

We assessed the Novartis Agreement in accordance with ASC 606 and determined that Novartis was a customer and identified the following performance obligations:

(1) to provide worldwide license rights to PLN-1474, (2) to provide research and development services for PLN-1474, (3) to provide non-exclusive license rights to integrin research targets, and (4) to provide research and development services on integrin research targets.

We determined that the license to PLN-1474 was functional intellectual property and distinct as Novartis is capable to benefit from the license on its own or together with other resources that are readily available, and the research and development services we promise to deliver are not transformative in nature.

Additionally, we concluded that the non-exclusive license rights to integrin research targets were not distinct in the context of the arrangement as the promised research and development services on integrin research targets were expected to significantly modify the license and

Novartis could not benefit from the non-exclusive license without such services.

Therefore, the non-exclusive license rights and research and development services on integrin research targets were considered a single performance obligation.

We determined the transaction price of the PLN-1474 research and development services and integrin target research and development services was $ 20.0 million and $ 18.4 million, respectively, as of December 31, 2022, and the performance obligations associated with the aggregate unrecognized transaction price of $ 1.4 million would be satisfied in 2023.

As of December 31, 2022, variable consideration associated with specified research and development milestones totaling $ 387.0 million have been constrained from the transaction prices.

In February 2023, Novartis issued a termination notice for the collaboration and license agreement, and is returning global rights for PLN-1474 as well as the early research targets and associated compounds.

P lease refer to Note 19 to our financial statements for additional information.

We are utilizing a cost-based input method to measure proportional performance and to calculate the corresponding amount of revenue to recognize.

We believe this is the best measure of progress because other measures do not reflect how we transfer the performance obligation to our counterparty.

In applying the cost-based input method of revenue recognition, we use actual costs incurred relative to budgeted costs to fulfill the performance obligation.

These costs consist primarily of third-party contract costs and internal full-time equivalent effort.

A cost-based input method of revenue recognition requires management to make estimates of costs to complete the performance obligations.

The cumulative effect of revisions to estimated costs to complete the performance obligations will be recorded in the period in which changes are identified and amounts can be reasonably estimated.

A significant change in these assumptions and estimates could have a material impact on the timing and amount of revenue recognized in future periods.

In the second quarter of 2022, Novartis exercised their right to opt-in to a research program and secured an exclusive license to compounds associated with an integrin research target, which entitled us to a $ 4.0 million payment, which was recognized in revenue and collected during 2022.

To date, we have received $ 29.0 million in contingent payments and $ 387.0 million remain eligible for achievement.

During the year ended December 31, 2022, we recognized revenue of $ 9.7 million which consisted of revenue generated from research and development services and recognition of one contingent payment of $ 4.0 million associated with the integrin research target program.

During the year ended December 31, 2021, we recognized revenue of $ 7.6 million which consisted of revenue generated from research and development services.

As of December 31, 2022 and 2021, there was a receivable of $ 2.0 million and $ 2.0 million, respectively, related to the Novartis Agreement.

On February 17, 2023, Novartis exercised their right to terminate the Novartis Agreement as part of their new strategy focusing on a limited number of therapeutic areas.

The termination took effect on April 18, 2023, and effective upon the termination, all rights and licenses granted to Novartis under the Novartis Agreement, including PLN-1474, the related investigational new drug (“IND”), and the validated research target, reverted back to us.

The payment obligations of Novartis with respect to future milestones, royalties and research and development funding were also terminated.

Revenues associated with the Novartis Agreement for the years ended December 31, 2023, 2022 and 2021, were $ 1.6 million, $ 9.7 million and $ 7.6 million, respectively, which consisted of revenue generated from research and development services and a $ 4.0 million contingent payment received in 2022 associated with the integrin research target program.

As of December 31, 2023 and 2022, there was a receivable of nil and $ 2.0 million, respectively, related to the Novartis Agreement.

There were no contract assets or contract liabilities as of December 31, 2023 and 2022.

Preferred Stock

Under the Company’s Amended and Restated Certificate of Incorporation, the Company is authorized to issue two classes of shares:

preferred stock and common stock.

The preferred stock may be issued in series, and the Company’s board of directors is authorized to determine the rights, preferences, and terms of each series.

These rights, preferences and terms could include dividend rights, conversion rights, voting rights, terms of redemptions, liquidation preferences and

sinking fund terms.

As of December 31, 2023 and 2022, the Company was authorized to issue 10,000,000 shares of preferred stock and there was no outstanding preferred stock as of December 31, 2023 and 2022.

As of December 31, 2023 and 2022, the Company had 300,000,000 authorized shares of common stock, at a par value of $ 0.0001 per share.

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Shares of common stock available for future grants under the 2020 Stock Option and Incentive Plan 2,882,239 2,937,769

Shares of common stock available for future issuance under the 2020 Employee Stock Purchase Plan 888,184 613,098

Shares of common stock available for future issuance under the 2020 ESPP 805,756 888,184

Shares of common stock available for future issuance under the 2022 Inducement Plan 700,000 1,000,000

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The number of shares added each January 1 will be equal to the lesser of:

(i) 5 % of the outstanding shares on the immediately preceding December 31 or (ii) such amount as determined by the administrator of the 2020 Plan, which is the compensation committee of the Board of Directors of the Company.

(i) 5% of the outstanding shares on the immediately preceding December 31 or (ii) such amount as determined by the compensation committee of the Board of Directors.

The 2020 Plan provides for the grant of incentive stock options, nonqualified stock options or other awards including stock appreciation rights, restricted stock awards and restricted stock units to the Company’s employees, officers, directors, advisors and consultants.

As of December 31, 2023, the 2020 Plan had 2,882,239 shares of common stock available for future issuance.

In 2022, the Board of Directors adopted the 2022 Inducement Plan ("Inducement Plan"), under which the Company may grant restricted stock units, stock options, stock appreciation rights, and restricted stock awards.

In 2022, the Board of Directors adopted the 2022 Inducement Plan ("Inducement Plan"), under which the Company may grant nonqualified stock options or other awards including stock appreciation rights and restricted stock awards.

As of December 31, 2023, 700,000 shares of common stock were available for issuance.

Options under the 2020 Plan may be granted for periods of up to 10 years and at prices no less than the market price of the Company’s common stock on the date of grant, provided, however, that the exercise price of an incentive stock option granted to a 10 % shareholder shall not be less than 110 % of the estimated fair value of the shares on the date of grant and the option is not exercisable after the expiration of five years from the date of grant.

Restricted Common Stock Awards

The Company granted restricted stock awards under the 2015 Plan.

The purchase price of the restricted common stock awards was the estimated fair value as determined by the Company's Board of Directors at the issuance date.

The shares vest from one to four years and vesting could be accelerated upon a change in control.

A holder of an award may pay a total purchase price or a part of the purchase price for granted shares at any time during the vesting periods.

Upon termination of employment, the Company has the right to repurchase any unvested restricted shares.

The repurchase price for unvested shares of common stock will be the lower of (i) the fair market value on the date of repurchase or (ii) their original purchase price.

During the vesting term, holders of restricted stock awards are deemed to be common stock shareholders and have dividends and voting rights.

The Company accounted for restricted stock awards as early exercised options and recognized a liability in other liabilities when cash was received for the purchase of shares of restricted stock.

As shares of restricted stock vested, the Company reclassified the liability to common stock and additional paid in capital.

As of December 31, 2022 and 2021, the Company recorded a liability included in accrued expenses and other liabilities of nil and $ 2,000 , respectively.

There were no grants of restricted stock awards during the years ended December 31, 2022 and 2021.

The following table summarizes restricted stock activity during the year ended December 31, 2022:

of Shares Weighted-

Outstanding and unvested, as of December 31, 2021 21,841 $ 2.16

Vested ( 21,841 ) $ 2.16

Outstanding and unvested, as of December 31, 2022 — $ —

The aggregate fair value of restricted stock awards vested during the years ended December 31, 2022 and 2021 was $ 47,000 and $ 0.2 million, respectively.

Total intrinsic value of outstanding unvested restricted stock awards as of December 31, 2022 and 2021 was nil and $ 0.3 million, respectively.

As of December 31, 2022, there was no unrecognized compensation costs related to restricted stock awards.

Options under the 2020 Plan and Inducement Plan may be granted for periods of up to 10 years and at prices no less than the market price of the Company’s common stock on the date of grant, provided, however, that the exercise price of an incentive stock option granted to a 10 % shareholder shall not be less than 110 % of the fair value of the shares on the date of grant and the option is not exercisable after the expiration of five years from the date of grant.

Incentive Stock Options and Nonqualified Stock Options

Stock options issued under either the 2015 Plan or the 2020 Plan generally vest over four years and expire ten years from the date of grant.

Stock options issued under either the 2015 Plan, the 2020 Plan or the Inducement Plan generally vest over four years and expire ten years from the date of grant.

Certain options provide for accelerated vesting if there is a change in control, as defined in the respective plans.

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Year Ended December 31,

2023 2022 2021

Min Max Min Max Min Max

Expected volatility 80.97 % 83.28 % 73.78 % 80.64 % 74.83 % 76.31 %

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Exercisable as of December 31, 2023 3,515,801 $ 15.03 6.74 $ 23,184

Vested and expected to vest as of December 31, 2023 6,953,487 $ 17.95 7.70 $ 32,646

As of December 31, 2023, there was $ 46.4 million of unrecognized compensation costs that is expected to be recognized over the weighted-average periods of 2.5 years related to stock options.

The total intrinsic value of time-based stock options exercised was $ 2.0 million and $ 6.9 million for December 31, 2022 and 2021, respectively.

Intrinsic value represents the difference between the current fair value of the underlying stock and the exercise price of the stock option.

The weighted-average grant date fair value of options granted during years ended December 31, 2022 and 2021 was $ 7.82 per share and $ 16.94 per share, respectively.

The total intrinsic value of stock options exercised was $ 11.4 million, $ 2.0 million and $ 6.9 million for December 31, 2023, 2022 and 2021, respectively.

Intrinsic value represents the difference between the current fair value of the underlying stock and the exercise price of the stock option at the respective balance sheet dates.

The weighted-average grant date fair value of options granted during the years ended December 31, 2023, 2022 and 2021 was $ 27.22 , $ 7.82 and $ 16.94 per share, respectively.

Restricted Stock Units

The service-based condition for restricted stock units ("RSUs") is generally satisfied over two years .

The service-based condition for restricted stock units ("RSUs") is generally satisfied over two or three years .

The following table sets forth the outstanding RSUs and related activity for the year ended December 31, 2023:

Restricted Stock Units Weighted Average Grant Date Fair Value

Unvested balance as of December 31, 2021 — —

Unvested and outstanding as of December 31, 2022 507,925 $ 17.43

Granted 683,703 $ 34.36

Released ( 247,488 ) $ 17.43

Forfeited ( 69,392 ) $ 27.69

Unvested balance as of December 31, 2022 507,925 17.43

Unvested and outstanding as of December 31, 2023 874,748 $ 29.85

As of December 31, 2023, the Company had $ 17.4 million of unrecognized stock-based compensation expense related to outstanding RSUs expected to be recognized over a weighted-average period of 1.66 years.

Performance-Based Restricted Stock Units

Performance-based restricted stock units ("PSUs") vest upon the achievement of market and performance conditions.

In July 2022 the Company granted performance-based restricted stock units ("PSUs") that vest upon the achievement of market and performance conditions.

Market conditions include the Company's total shareholder return ("TSR") relative to the NASDAQ Biotechnology Index over the term of the award ending on June 30, 2024, and performance conditions consist of multiple clinical development milestones associated with bexotegrast.

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Risk free interest rate 2.84 %

The following table sets forth the outstanding PSUs associated with the TSR goal and related activity for the year ended December 31, 2022:

Performance Stock Units Weighted Average Grant Date Fair Value

Unvested balance as of December 31, 2021 — —

Granted* 354,532 29.15

The following table sets forth the outstanding PSUs associated with the TSR goal and related activity for the years ended December 31, 2023 and 2022:

Performance Stock Units

Weighed Average Grant Date Fair Value

Unvested balance as of December 31, 2021

*PSUs granted and outstanding based on target level of achievement of 100 %.

The following table sets forth the outstanding PSUs associated with clinical development milestones and related activity for the year ended December 31, 2022:

Performance Stock Units Weighted Average Grant Date Fair Value

354,532 $ 29.15

Unvested balance as of December 31, 2022

Granted* 354,532 17.57

Vested ( 177,266 ) 17.57

354,532 $ 29.15

( 25,782 ) $ 29.15

Unvested balance as of December 31, 2023

*PSUs granted and outstanding based on target level of achievement of 100 %.

In December 2022, the first milestone applicable to PSUs with clinical development vesting conditions was achieved, resulting in a $ 3.1 million cumulative catch-up of stock-based compensation expense for such PSUs.

As of December 31, 2022 the Company considered the remaining clinical development performance conditions probable of achievement.

As of December 31, 2022, the Company had $ 15.4 million of unrecognized stock-based compensation expense related to outstanding PSUs expected to be recognized over a remaining weighted-average period of 1.6 years.

328,750 $ 29.15

As of December 31, 2022 177,266 PSUs, with a weighted average grant date fair value of $ 17.57 , associated with clinical development milestones met their vesting conditions.

In March and July 2023 the second and the third clinical development vesting conditions were achieved and the remaining 531,792 PSUs relating to clinical development vesting

conditions vested, representing total stock based compensation of $ 7.3 million.

There are no remaining PSUs with clinical development performance conditions outstanding as of December 31, 2023.

As of December 31, 2023, the Company had $ 2.6 million of unrecognized stock-based compensation expense related to unvested PSUs associated with market based vesting conditions are expected to be recognized over a remaining weighted-average period of 0.54 years.

2020 Employee Stock Purchase Plan

In June 2020, the Company adopted the Company's 2020 Employee Stock Purchase Plan (the "2020 ESPP").

The Company reserved 700,000 shares of common stock for future issuance under the plan.

The 2020 ESPP provides that the number of shares reserved and available for issuance will automatically increase on January 1 of each calendar year, beginning January 1, 2021, by the least of (i) 1.0 % of the total number of shares of common stock outstanding on December 31 of the preceding calendar year, (ii) 700,000 shares or (iii) such lesser amount as determined by the administrator of the 2020 ESPP, which is the compensation committee of the Board of Directors of the Company.

Under the 2020 ESPP, eligible employees may purchase shares of our common stock through payroll deductions that cannot exceed 15 % of each employee’s salary.

In June 2020, the Company adopted the 2020 Employee Stock Purchase Plan (the "2020 ESPP") and reserved 700,000 shares of common stock for future issuance under the plan.

The 2020 ESPP is subject to automatic increases on January 1 of each calendar year, beginning January 1, 2021, by the lesser of (i) 1 % of the outstanding shares on the immediately preceding December 31, (ii) 700,000 shares or (iii) such lesser amount as determined by, the compensation committee of the Board of Directors.

Under the 2020 ESPP, eligible employees may purchase shares of our common stock through payroll deductions that cannot exceed 15 % of the employee’s salary.

The 2020 ESPP provides for a six-month offering period.

At the end of the purchase period, eligible employees are permitted to purchase shares of common stock at the lower of 85 % of the fair market value at the beginning of the offering period or 85 % of the fair market value at the end of the purchase period, subject to tax limitations on the total value of the purchase.

The 2020 ESPP is considered a compensatory plan, and the Company recorded $ 0.4 million and $ 0.5 million in stock-based compensation expense for years ended December 31, 2022, and 2021, respectively.

During the year ended December 31, 2022, 85,969 shares of common stock were issued under the 2020 ESPP.

At the end of the purchase period, eligible employees are permitted to purchase shares of common stock at the lower of 85 % of the fair market value at the beginning or end of the offering period subject to tax limitations on the total value of the purchase.

The 2020 ESPP is considered a compensatory plan, and the Company recorded $ 0.6 million, $ 0.4 million and $ 0.5 million in stock-based compensation expense for years ended December 31, 2023, 2022 and 2021, respectively.

During the years ended December 31, 2023, 2022 and 2021, 82,428 shares, 85,969 shares and 86,902 shares, respectively, of common stock were issued under the 2020 ESPP.

The Company used the Black-Scholes option pricing model to estimate stock-based compensation expense for the 2020 ESPP with the following assumptions:

Year Ended December 31,

2023 2022 2021

Risk-free interest rate 5.20 % - 5.47 %

0.60 % - 3.34 %

0.06 % - 0.07 %

Expected term of options (in years) 0.50 0.50 0.50

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63.17 % - 82.02 %

67.16 % - 89.51 %

Expected dividends — % — % — %

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Year Ended December 31,

2023 2022 2021

Restricted stock awards $ — $ 36 $ 182

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The Company had a pre-tax U.S.

book loss of $ 123.3 million, and $ 97.3 million, for the years ended December 31, 2022 and 2021, respectively.

book loss of $ 161.3 million, $ 123.3 million, and $ 97.3 million, for the years ended December 31, 2023, 2022 and 2021, respectively.

During the years ended December 31, 2023, 2022 and 2021, the Company did not record an income tax provision.

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Year Ended December 31,

2023 2022 2021

Income tax computed at federal statutory rate 21.0 % 21.0 % 21.0 %

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Other permanent differences 0.1 % ( 0.4 ) % ( 0.1 ) %

Section 162(m) ( 3.8 ) % — % — %

Change in valuation allowance ( 30.2 ) % ( 30.5 ) % ( 33.2 ) %

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Subsequent ownership changes may affect the limitation in future years.

During the years ended December 31, 2022 and 2021, the Company recorded a full valuation allowance on federal and state deferred balances since management does not forecast the Company to be in a profitable position in the near future.

During the years ended December 31, 2023 and 2022, the Company recorded a full valuation allowance on federal and state deferred balances since management does not forecast the Company to be in a profitable position in the near

Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2023 and 2022 related primarily to the increases in net operating loss carryforwards and research and development tax credit carryforwards and were as follows (in thousands):

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however, these contracts are generally cancellable on 30 days’ notice and the obligations under these contracts are largely based on services performed.

License and Collaboration Agreements

Potential payments related to the Company’s license and research agreements, including milestone and royalty payments, are detailed in Note 8.

Legal Proceedings

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The Company currently has directors’ and officers’ insurance.

On January 1, 2021, the Company adopted ASC 842 and the following disclosures as of and for the years ended December 31, 2022 and 2021 are presented under ASC 842.

In February 2018, the Company entered into a non-cancelable lease agreement (the “Lease”) for premises consisting of approximately 32,974 square feet located in South San Francisco, California (the “Premises”).

The Company moved into the Premises in July 2018.

The Premises is being used for the Company’s corporate headquarters and principal operating facility.

The term of the Lease is eighty-four months , which commenced on July 1, 2018.

Base rent was abated for the first two months of the lease term and thereafter is $ 0.2 million per month during the first year of the lease term, with specified annual increases thereafter.

The Company paid a refundable security deposit of approximately $ 0.4 million, which is included in other non-current assets in the Balance Sheets at December 31, 2022 and 2021.

The Company has the right to extend the lease term by seven years upon written notice not more than twelve months nor less than nine months prior to the expiration of the original lease term, with monthly payments equal to the “fair rental value” as defined in the Lease.

The exercise of lease renewal options is at the sole discretion of the Company and is not included in the ROU asset and lease liability as it is not reasonably certain of exercise.

This lease does not contain material variable rent payments, residual value guarantees, covenants, or other restrictions.

In August 2022, the Company entered into a non-cancelable lease agreement for premises consisting of approximately 12,456 square feet located in South San Francisco, California.

The premises is being used as additional office space for the Company.

The term of the lease is 18 months, which commenced on August 1, 2022.

Base rent is $ 0.1 million per month during the first year of the lease term, with specified annual increases of 3 % thereafter.

The Company has the right to extend the lease term by 3 years with monthly payments equal to the market rate of rent.

The exercise of lease renewal options is at the sole discretion of the Company and is not included in the right-of-use (ROU) asset and lease liability as it is not reasonably certain of exercise.

This lease does not contain material variable rent payments, residual value guarantees, covenants, or other restrictions.

For the years ended December 31, 2022 and 2021, the Company recognized expenses associated with the operating leases of $ 2.5 million and $ 2.3 million, respectively.

Additionally for those same years, the Company incurred variable lease costs of $ 0.7 million and $ 0.9 million, respectively, which is comprised primarily of the Company's proportionate share of operating expenses, property taxes, and insurance.

Short-term lease expense and variable lease payments recorded in operating expenses were immaterial for the years ended December 31, 2022 and 2021.

For the years ended December 31, 2022 and 2021, cash paid for amounts included in the measurement of operating lease liabilities was $ 2.7 million and $ 2.4 million, respectively.

On September 28, 2023, the Company entered into a lease agreement for a premise consisting of approximately 100,904 square feet located at Oyster Point Blvd, South San Francisco, California (the "Oyster Point Lease"), which the Company intends to use as laboratory and office space.

The lease term of approximately seven years will start upon the Landlord’s substantial completion of tenant improvements, and may be extended for a period of eight years at then prevailing market rates for a comparable property.

Future lease payments are approximately $ 43.7 million and are expected to start in the third quarter of 2024.

Additionally, the Company is required to provide a letter of credit to the Landlord in the amount of $ 1.4 million in connection with the Oyster Point Lease.

The Company has not recognized a right-of-use asset ("ROU") or aggregate lease liability as of December 31, 2023 for this lease as the Company did not control the underlying assets at any time during the year ended December 31, 2023.

Existing leases

In conjunction with the Oyster Point Lease, we modified the lease term of our existing lease to end upon the start date of the Oyster Point Lease.

As a result of this modification, we reduced our lease liability and our right-of-use asset by $ 1.8 million as of December 31, 2023.

Additionally, we paid a refundable security deposit of approximately $ 0.4 million at inception of the lease term which has been reclassified from other non-current assets to other current assets in the balance sheet of December 31, 2023.

Operating lease ROU assets and liabilities on our balance sheets represent the present value of our remaining lease payments over the remaining lease terms.

We use our incremental borrowing rate to calculate the present value of our lease payments, as the implicit rates in our leases are not readily determinable.

Operating lease liabilities are based on the net present value of the remaining lease payments over the remaining lease term.

In determining the present value of lease payments, the Company used its incremental borrowing rate based on the information available at the date of adoption of Topic 842 or the date of lease modification.

The undiscounted future non-cancellable lease payments of the Company's operating lease liability as of December 31, 2023 were as follows (in thousands):

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Operating Leases

Total lease payments $ 6,460

Total undiscounted lease payments 1,382

Present value discount ( 64 )

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Weighted-average discount rate 13.60 % 8.2 %

Variable lease costs comprise primarily of the Company's proportionate share of operating expenses, property taxes, and insurance.

Short-term lease expense and variable lease payments recorded in operating expenses were immaterial for the years ended December 31, 2023, 2022 and 2021.

Lease expenses for the years ended December 31, 2023, 2022 and 2021 are as follows (in thousands)

As of December 31,

2023 2022 2021

Operating lease costs $ 2,771 $ 2,501 $ 2,300

Other variable costs 766 721 949

Total expense $ 3,537 $ 3,222 $ 3,249

Related Party Transactions

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Both of the non-employee directors resigned from the Company's Board of Directors in 2022.

The shares of common stock subject to these options ve st 25 % on the first day of each calendar quarter for three quarters with the final vest date being the earlier of (i) the one-year anniversary of the grant date or (ii) the next Annual Meeting of Stockholders.

The shares of common stock subject to these options ve st have all vested .

The stock-based compensation expense related to these options was immaterial during the years ended December 31, 2022, and 2021.

There were no related party transactions during the year ended December 31, 2023.

Defined Contribution Plan

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Employee contributions are voluntary and are determined on an individual basis subject to the maximum allowable under federal tax regulations.

The Company made contributions to the plan of $ 0.8 million and $ 0.6 million during the years ended December 31, 2022 and 2021, respectively.

The Company made contributions to the plan of $ 1.0 million, $ 0.8 million and $ 0.6 million during the years ended December 31, 2023, 2022 and 2021, respectively.

Net Loss Per Share Attributable to Common Stockholders

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Year Ended December 31,

2023 2022 2021

Options to purchase common stock 6,953,487 5,569,567 3,620,180

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*PSUs outstanding based on target level of achievement of 100 %.

A reconciliation of the numerator and denominator used in the calculation of the basic and diluted net loss per share attributable to common stockholders is as follows (in thousands, except share and per share amounts):

Year Ended December 31,

Net loss per share:

Net loss $ ( 123,321 ) $ ( 97,263 )

Net loss attributable to common stockholders $ ( 123,321 ) $ ( 97,263 )

Weighted-average common shares outstanding used to calculate net loss per share attributable to common stockholders:

Basic 42,015,908 35,846,421

Diluted 42,015,908 35,846,421

Net loss per share attributable to common stockholders:

Basic $ ( 2.94 ) $ ( 2.71 )

Diluted $ ( 2.94 ) $ ( 2.71 )

Subsequent Events

The shares were

offered at a price of $ 30.00 per share, resulting in aggregate proceeds of approximately $ 269.9 million, net of underwriting discounts, commissions and offering expenses.

On February 17, 2023, we received notice from Novartis Institutes for BioMedical Research, Inc.

(“Novartis”) that Novartis has elected to exercise its right to terminate the Collaboration and License Agreement by and between the Company and Novartis, dated October 17, 2019 (the “Collaboration Agreement”), as amended by Amendment No.

1 to the Collaboration and License Agreement between the Company and Novartis, dated as of November 15, 2022 (“Amendment No.

Novartis informed the Company of its decision, as part of its new strategy focusing on a limited number of therapeutic areas, to divest clinical NASH assets and, as a result, to discontinue the development of PLN-1474, a small molecule selective inhibitor of integrin αvß1, being developed for the treatment of liver fibrosis associated with NASH.

The termination will take effect on April 18, 2023.

Effective upon the termination of the Collaboration Agreement, all rights and licenses granted thereunder, including development candidates targeting the validated Research Target, PLN-1474 and the related IND, will revert back to the Company.

The payment obligations of Novartis with respect to future milestones, royalties and research and development funding will also terminate.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

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-K

Item 8. Financial Statements and Supplementary Data