What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-05-09 compared with 2021-11-03 · 91 added, 198 removed, 243 unchanged (54% of the section changed)

3 unchanged sentences

(Amounts in thousands, except share and per share data)

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Current assets:

19 unchanged sentences

Preferred stock, $ 0.0001 par value;

10,000,000 shares authorized and no shares issued or outstanding as of September 30, 2021 and December 31, 2020

10,000,000 shares authorized and no shares issued or outstanding as of March 31, 2022 and December 31, 2021

Common stock, $ 0.0001 par value;

150,000,000 shares authorized;

44,784,071 shares issued and outstanding as of September 30, 2021, and 38,268,543 shares issued and outstanding as of December 31, 2020

45,506,482 shares issued and outstanding as of March 31, 2022, and 45,300,514 shares issued and outstanding as of December 31, 2021

Additional paid-in capital 576,955 567,598

8 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Operating expenses:

6 unchanged sentences

Total other income 132 46

Loss before income taxes ( 44,700 ) ( 16,216 ) ( 108,474 ) ( 36,122 )

Benefit from (provision for) income taxes ( 5 ) — ( 5 ) 8

Net loss $ ( 68,717 ) $ ( 27,373 )

Accretion and cumulative dividends on redeemable convertible preferred stock — ( 3,943 ) — ( 8,046 )

Gain on repurchase of redeemable convertible preferred stock — — — 493

Net loss attributable to common stockholders $ ( 44,705 ) $ ( 20,159 ) $ ( 108,479 ) $ ( 43,667 )

Net loss per share attributable to common stockholders, basic and diluted $ ( 1.51 ) $ ( 0.71 )

5 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Net loss $ ( 68,717 ) $ ( 27,373 )

Unrealized gains (losses) on marketable securities, net of tax 25 — ( 25 ) —

Net unrealized losses on marketable securities, net of tax ( 430 ) ( 86 )

Comprehensive loss $ ( 69,147 ) $ ( 27,459 )

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PRAXIS PRECISION MEDICINES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Amounts in thousands, except share data)

4 unchanged sentences

Stockholders’

Equity (Deficit)

Shares Amount

1 unchanged sentence

Stock-based compensation expense — — 7,886 — — 7,886

Issuance of common stock from at-the-market public offerings, net of issuance costs 70,410 — 1,368 — — 1,368

Vesting of restricted stock units 81,130 — — — — —

Shares withheld for taxes for vesting of restricted stock units ( 17,850 ) — ( 230 ) — — ( 230 )

Issuance of common stock upon exercise of stock options 72,278 — 333 — — 333

Unrealized loss on marketable securities, net of tax — — — — ( 86 ) ( 86 )

Change in unrealized loss on marketable securities, net of tax — — — — ( 430 ) ( 430 )

Net loss — — — ( 68,717 ) — ( 68,717 )

Balance at March 31, 2022 45,506,482 $ 5 $ 576,955 $ ( 385,332 ) $ ( 606 ) $ 191,022

Stock-based compensation expense — — 5,400 — — 5,400

Issuance of common stock from follow-on public offering, net of offering costs of $ 229

5,750,000 1 98,412 — — 98,413

Issuance of common stock upon exercise of stock options 322,113 — 809 — — 809

Change unrealized loss on marketable securities, net of tax — — — — 36 36

Net loss — — — ( 36,401 ) — ( 36,401 )

Balance at June 30, 2021 44,693,162 $ 5 $ 547,145 $ ( 213,328 ) $ ( 50 ) $ 333,772

Stock-based compensation expense — — 6,521 — — 6,521

Issuance of common stock upon exercise of stock options 90,909 — 309 — — 309

Change unrealized loss on marketable securities, net of tax — — — — 25 25

Net loss — — — ( 44,705 ) — ( 44,705 )

Balance at September 30, 2021 44,784,071 $ 5 $ 553,975 $ ( 258,033 ) $ ( 25 ) $ 295,922

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

PRAXIS PRECISION MEDICINES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (continued)

(Amounts in thousands, except share data)

Preferred Stock Series B

Preferred Stock Series B-1

Preferred Stock Series C

Preferred Stock Series C-1

Preferred Stock Common Stock Additional

Common Stock Additional

Capital Accumulated

2 unchanged sentences

Stockholders’

Equity (Deficit)

Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount

Shares Amount

Balance at December 31, 2020 38,268,543 $ 4 $ 437,007 $ ( 149,554 ) $ — $ 287,457

Repurchase of Series C redeemable convertible preferred stock — — — — — — ( 5,825,243 ) ( 30,493 ) — — — — — 493 — 493

Series C redeemable convertible preferred stock issuance costs — — — — — — — ( 37 ) — — — — — — — —

Vesting of restricted common stock awards — — — — — — — — — — 13,143 — — — — —

Stock-based compensation expense — — 4,666 — — 4,666

Accretion of redeemable convertible preferred stock to redemption value — 160 — 890 — 199 — 815 — — — — ( 147 ) ( 1,917 ) — ( 2,064 )

Net loss — — — — — — — — — — — — — ( 8,330 ) — ( 8,330 )

Balance at March 31, 2020 8,075,799 $ 10,092 14,913,704 $ 50,859 2,666,666 $ 10,630 3,980,584 $ 21,074 — $ — 1,635,023 $ 1 $ — $ ( 90,763 ) $ — $ ( 90,762 )

Issuance of Series C redeemable convertible preferred stock, net of issuance costs of $ 4

— — — — — — 4,563,108 23,496 — — — — — — — —

Vesting of restricted common stock awards — — — — — — — — — — 13,142 — — — — —

Stock-based compensation expense — — — — — — — — — — — — 285 — — 285

Accretion of redeemable convertible preferred stock to redemption value — 162 — 890 — 198 — 789 — — — — ( 285 ) ( 1,754 ) — ( 2,039 )

Net loss — — — — — — — — — — — — — ( 11,568 ) — ( 11,568 )

Balance at June 30, 2020 8,075,799 $ 10,254 14,913,704 $ 51,749 2,666,666 $ 10,828 8,543,692 $ 45,359 — $ — 1,648,165 $ 1 $ — $ ( 104,085 ) $ — $ ( 104,084 )

Issuance of Series C-1 redeemable convertible preferred stock, net of issuance costs of $ 154

— — — — — — — — 19,444,453 110,096 — — — — — —

Vesting of restricted common stock awards — — — — — — — — — — 13,142 — — — — —

Stock-based compensation expense — — — — — — — — — — — — 953 — — 953

Issuance of common stock upon exercise of stock options 352,506 — 851 — — 851

Accretion of redeemable convertible preferred stock to redemption value — 162 — 899 — 201 — 885 — 1,796 — — ( 980 ) ( 2,963 ) — ( 3,943 )

Change in unrealized loss on marketable securities, net of tax — — — — ( 86 ) ( 86 )

Net loss — — — ( 27,373 ) — ( 27,373 )

Balance at September 30, 2020 8,075,799 $ 10,416 14,913,704 $ 52,648 2,666,666 $ 11,029 8,543,692 $ 46,244 19,444,453 $ 111,892 1,672,935 $ 1 $ — $ ( 123,264 ) $ — $ ( 123,263 )

Balance at March 31, 2021 38,621,049 $ 4 $ 442,524 $ ( 176,927 ) $ ( 86 ) $ 265,515

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

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(Amounts in thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities:

10 unchanged sentences

Operating lease liabilities ( 26 ) ( 185 )

Other 15 ( 4 )

Net cash used in operating activities ( 54,109 ) ( 25,722 )

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Cash flows from financing activities:

Proceeds from follow-on public offering, net of issuance costs 98,480 —

Payment of issuance costs for initial public offering and issuance of redeemable convertible preferred stock ( 575 ) ( 1,117 )

Proceeds from at-the-market offerings, net of issuance costs 1,368 —

Payment of issuance costs for at-the-market offerings and initial public offering ( 262 ) ( 575 )

Payments of tax withholdings related to vesting of restricted stock units ( 230 ) —

Proceeds from exercise of options to purchase common stock 333 851

Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs — 133,442

Repurchase of Series C redeemable convertible preferred stock — ( 30,000 )

Net cash provided by financing activities 1,209 276

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Supplemental disclosures of non-cash activities:

Operating lease right-of-use assets obtained in exchange for operating lease liabilities $ 4,086 $ —

Deferred offering costs included in accrued expenses $ 68 $ 925

Purchases of property and equipment included in accrued expenses $ 116 $ —

Accretion of redeemable convertible preferred stock to redemption value $ — $ 8,046

Purchases of property and equipment included in accrued expenses and accounts payable $ — $ 51

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

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Praxis Precision Medicines, Inc.

(“Praxis” or the “Company”) is a clinical-stage biopharmaceutical company translating genetic insights into the development of therapies for central nervous system (“CNS”) disorders characterized by neuronal imbalance.

The Company has established a broad portfolio, including multiple disclosed programs across CNS disorders, including depression, epilepsy, movement disorders and pain syndromes, with three clinical-stage product candidates.

The Company intends to develop differentiated therapies that can deliver long-term benefits to human health by meaningfully impacting patients and society.

The Company’s most advanced programs, PRAX-114 and PRAX-944, are currently in Phase 2/3 and Phase 2 development, respectively.

PRAX-114 is an extrasynaptic GABA A receptor preferring positive allosteric modulator currently being developed for the treatment of major depressive disorder and for the treatment of women with menopausal and mood symptoms.

The Company plans to initiate Phase 2 trials of PRAX-114 in post-traumatic stress disorder and essential tremor ("ET") in the fourth quarter of 2021 and intends to disclose plans for a Phase 2b trial in women with menopausal and mood symptoms in the fourth quarter of 2021.

PRAX-944 is a selective small molecule inhibitor of T-type calcium channels currently being developed for the treatment of ET.

The Company plans to initiate a Phase 2 trial of PRAX-944 in Parkinson's disease in the first half of 2022.

In addition, the Company completed a Phase 1 healthy volunteer trial of its third clinical program, PRAX-562, a persistent sodium current blocker, for the potential treatment of a broad range of rare CNS disorders, such as severe pediatric epilepsies and rare adult cephalgias.

The Company plans to initiate a Phase 2 trial in rare adult cephalgias in the fourth quarter of 2021.

In addition to the clinical programs, the Company has multiple disclosed preclinical and discovery product candidates in development for severe genetic epilepsies and multiple undisclosed preclinical and discovery product candidates for a range of CNS disorders.

(“Praxis” or the “Company”) is a clinical-stage biopharmaceutical company translating genetic insights into the development of therapies for central nervous system ("CNS") disorders characterized by neuronal excitation-inhibition imbalance.

Normal brain function requires a delicate balance of excitation and inhibition in neuronal circuits, which, when dysregulated, can lead to abnormal function and disease.

The Company is applying insights from genetic epilepsies to both rare and more prevalent neurological and psychiatric disorders, using its understanding of shared biological targets and circuits in the brain.

The Company applies a deliberate and pragmatic precision approach, leveraging a suite of translational tools including novel transgenic and predictive translational animal models and electrophysiology markers, to enable an efficient path to proof-of-concept in patients.

Through this approach, the Company has established a broad CNS portfolio with multiple programs, including product candidates across psychiatric disorders, movement disorders and epilepsy, with three clinical-stage product candidates.

Each of the Company's clinical-stage product candidates is advancing in more than one indication and the Company anticipates expansion into additional indications.

The Company expects multiple topline readouts from its clinical-stage programs and anticipates the launch of two additional clinical development programs in 2022.

In addition, the Company has established a robust pipeline of preclinical stage programs through internal research and in-licensing.

Praxis was incorporated in 2015 and commenced operations in 2016.

The Company has funded its operations primarily with proceeds from the issuance of convertible debt and redeemable convertible preferred stock, and from the sale of common stock through an initial public offering and a follow-on public offering.

From inception through September 30, 2021, the Company raised $ 509.4 million in aggregate cash proceeds from these transactions, net of issuance costs.

In May 2021, the Company completed a follow-on public offering in which the Company issued and sold 5,750,000 shares of its common stock at a public offering price of $ 18.25 per share, including 750,000 shares of common stock issued and sold pursuant to the underwriters' exercise, in full, of their option to purchase additional shares of common stock, for aggregate gross proceeds of $ 104.9 million.

The Company received approximately $ 98.4 million in net proceeds after deducting discounts, commissions and offering expenses payable by the Company.

The Company has funded its operations primarily with proceeds from the issuance of redeemable convertible preferred stock and from the sale of common stock through an initial public offering, a follow-on public offering and at-the-market offerings under its shelf registration statement.

From inception through March 31, 2022, the Company raised $ 517.8 million in aggregate cash proceeds from these transactions, net of issuance costs.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including but not limited to, risks associated with completing preclinical studies and clinical trials, receiving regulatory approvals for product candidates, development by competitors of new biopharmaceutical products, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations.

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In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40) , the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these condensed consolidated financial statements are issued.

The Company has incurred recurring losses since its inception, including net losses of $ 108.5 million for the nine months ended September 30, 2021.

In addition, as of September 30, 2021, the Company had an accumulated deficit of $ 258.0 million.

The Company has incurred recurring losses since its inception, including a net loss of $ 68.7 million for the three months ended March 31, 2022.

In addition, as of March 31, 2022, the Company had an accumulated deficit of $ 385.3 million.

The Company expects to continue to generate operating losses for the foreseeable future.

The Company expects that its cash, cash equivalents and marketable securities as of September 30, 2021 of $ 314.4 million will be sufficient to fund the operating expenses and capital expenditure requirements necessary to advance its research efforts and clinical trials for at least one year from the date of issuance of these condensed consolidated financial statements.

The Company expects that its cash, cash equivalents and marketable securities as of March 31, 2022 of $ 222.5 million will be sufficient to fund the operating expenditures and capital expenditure requirements necessary to advance its research efforts and clinical trials for at least one year from the date of issuance of these condensed consolidated financial statements.

The future viability of the Company is dependent on its ability to raise additional capital to finance its operations.

The Company’s inability to raise capital as and when needed could have a negative impact on its financial condition and ability to pursue its business strategies.

There can be no assurance that the current operating plan will be achieved or that additional funding will be available on terms acceptable to the Company, or at all.

There can be no assurance that the

current operating plan will be achieved or that additional funding will be available on terms acceptable to the Company, or at all.

Summary of Significant Accounting Policies

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Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and ASUs of the FASB.

The significant accounting policies used in preparation of these condensed consolidated financial statements for the three and nine months ended September 30, 2021 are consistent with those discussed in Note 2 to the consolidated financial statements included in the Company's 2020 Annual Report on Form 10-K, other than as noted below.

The significant accounting policies used in preparation of these condensed consolidated financial statements for the three months ended March 31, 2022 are consistent with those discussed in Note 2 to the consolidated financial statements included in the Company's 2021 Annual Report on Form 10-K, other than as noted below.

Unaudited Interim Condensed Consolidated Financial Information

The accompanying condensed consolidated balance sheet as of September 30, 2021, the condensed consolidated statements of operations for the three and nine months ended September 30, 2021 and 2020, the condensed consolidated statements of comprehensive loss for the three and nine months ended September 30, 2021 and 2020, the condensed consolidated statements of cash flows for the nine months ended September 30, 2021 and 2020 and the condensed consolidated statements of redeemable convertible preferred stock and stockholders’ equity (deficit) for the three and nine months ended September 30, 2021 and 2020 are unaudited.

The unaudited interim financial statements have been prepared on the same basis as the audited annual consolidated financial statements, and in the opinion of management reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the Company’s financial position as of September 30, 2021, the results of its operations for the three and nine months ended September 30, 2021 and 2020 and its cash flows for the nine months ended September 30, 2021 and 2020.

Financial statement disclosures for the three and nine months ended September 30, 2021 and 2020 are condensed and do not include all disclosures required for an annual set of financial statements in accordance with GAAP.

The results for the three and nine months ended September 30, 2021 are not necessarily indicative of results to be expected for the year ended December 31, 2021, any other interim periods, or any future year or period.

The accompanying condensed consolidated balance sheet as of March 31, 2022, the condensed consolidated statements of operations for the three months ended March 31, 2022 and 2021, the condensed consolidated statements of comprehensive loss for the three months ended March 31, 2022 and 2021, the condensed consolidated statements of cash flows for the three months ended March 31, 2022 and 2021 and the condensed consolidated statements of stockholders’ equity for the three months ended March 31, 2022 and 2021 are unaudited.

The unaudited interim financial statements have been prepared on the same basis as the audited annual consolidated financial statements, and in the opinion of management reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the Company’s financial position as of March 31, 2022, the results of its operations for the three months ended March 31, 2022 and 2021 and its cash flows for the three months ended March 31, 2022 and 2021.

Financial statement disclosures for the three months ended March 31, 2022 and 2021 are condensed and do not include all disclosures required for an annual set of financial statements in accordance with GAAP.

The results for the three months ended March 31, 2022 are not necessarily indicative of results to be expected for the year ended December 31, 2022, any other interim periods, or any future year or period.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of expenses during the reporting periods.

Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, the accrual for research and development expense, stock-based compensation expense, and the valuation of equity awards prior to the Company's initial public offering.

Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, accrued and prepaid research and development expenses, stock-based compensation expense and the recoverability of the Company’s net deferred tax assets and related valuation allowance.

Estimates are periodically reviewed in light of changes in circumstances, facts and experience.

1 unchanged sentence

Actual results could differ materially from those estimates.

Marketable Securities

The Company invests its excess cash in money market funds and debt instruments of the U.S.

Treasury, financial institutions, corporations and U.S.

government agencies with strong credit ratings and an investment grade rating at or above A-1 or P-1 by two of the three nationally recognized statistical rating organizations.

The Company does not believe that it is exposed to more than a nominal amount of credit risk in its marketable securities.

The Company has established guidelines relative to diversification and maturities that maintain safety and liquidity, and periodically reviews and modifies these guidelines to maximize trends in yields and interest rates without compromising safety and liquidity.

The Company classifies its investments in debt instruments as available-for-sale.

Available-for-sale investments are reported at fair value at each balance sheet date, and include any unrealized holding gains and losses in accumulated other comprehensive gain (loss), a component of stockholders’ equity.

Realized gains and losses are included in the Company's condensed consolidated statements of operations.

All of the Company's available-for-sale securities are available for use in its current operations.

As a result, the Company has categorized all of these securities as current assets even though the stated maturity of some individual securities may be one year or more beyond the balance sheet date.

The Company evaluates securities for impairment at the end of each reporting period.

Impairment is evaluated considering numerous factors, and their relative significance varies depending on the situation.

Factors considered include whether a decline in fair value below the amortized cost basis is due to credit-related factors or non-credit-related factors, the financial condition and near-term prospects of the Company, and the Company's intent and ability to hold the investment to allow for an anticipated recovery in fair value.

A credit-related impairment is recognized as an allowance on the balance sheet with a corresponding adjustment to earnings.

Any impairment that is not credit-related is recognized in other comprehensive (loss) income, net of applicable taxes unless deemed other than temporary.

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In December 2019, the FASB issued ASU No.

2019-12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes ("ASU 2019-12").

The ASU simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740, Income Taxes, related to the approach for allocating income tax expense or benefit for the year to continuing operations, discontinued operations, other comprehensive income, and other charges or credits recorded directly to shareholders’ equity;

the methodology for calculating income taxes in an interim period;

and the recognition of deferred tax liabilities for outside basis differences.

On January 1, 2021, the Company early adopted ASU 2019-12 on a prospective basis, with no material impact on its condensed consolidated financial statements and related disclosures.

Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU No.

2016-13, Financial Instruments—Credit Losses (Topic 326)—Measurement of Credit Losses on Financial Instruments, which has been subsequently amended by ASU No.

2018-19, ASU No.

2019-04, ASU No.

2019-05, ASU No.

2019-10, ASU No.

2019-11 and ASU No.

2020-03 (“ASU 2016-13”).

The provisions of ASU 2016-13 modify the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology and require a consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

ASU 2016-13 is effective for the Company on January 1, 2023, with early adoption permitted.

Given the Company will lose its emerging growth company status on December 31, 2021, it expects to reflect the adoption of this standard in its annual report on Form 10-K for the year ended December 31, 2021.

The Company is evaluating the potential impact that this standard may have on its financial position and results of operations, but does not expect the impact to be significant.

The Company does not expect any recently issued accounting pronouncements to have a material impact on its financial statements .

Marketable Securities

The following is a summary of the Company's investment portfolio at September 30, 2021 (in thousands).

The Company did not have any marketable securities as of December 31, 2020.

The following is a summary of the Company's investment portfolio as of March 31, 2022 and December 31, 2021 (in thousands).

As of March 31, 2022

Gross Unrealized Estimated

2 unchanged sentences

Corporate debt securities $ 54,259 $ — $ ( 438 ) $ 53,821

Debt securities issued by U.S.

government agencies 46,073 2 ( 70 ) 46,005

Commercial paper 32,907 — — 32,907

Total securities with a maturity of one year or less $ 133,239 $ 2 $ ( 508 ) $ 132,733

Corporate debt securities 12,029 — ( 100 ) 11,929

Total securities with a maturity of one to two years $ 12,029 $ — $ ( 100 ) $ 11,929

Total available-for-sale securities $ 145,268 $ 2 $ ( 608 ) $ 144,662

As of December 31, 2021

Gross Unrealized Estimated

Cost Gains Losses Fair Value

Available-for-sale securities:

Corporate debt securities $ 52,214 $ — $ ( 31 ) $ 52,183

Commercial paper 34,993 — — 34,993

Debt securities issued by U.S.

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Total available-for-sale securities $ 137,383 $ 1 $ ( 177 ) $ 137,207

As of September 30, 2021, the Company had 14 securities with a total fair market value of $ 87.5 million in an unrealized loss position.

As of March 31, 2022, the Company had 15 securities with a total fair market value of $ 90.8 million in an unrealized loss position.

As of December 31, 2021, the Company had 14 securities with a total fair market value of $ 95.8 million in an unrealized loss position.

The Company believes that any unrealized losses associated with the decline in value of its securities is temporary and primarily related to the change in market interest rates since purchase, and believes that it is more likely than not that it will be able to hold its debt securities to maturity.

Therefore, the Company anticipates a full recovery of the amortized cost basis of its debt securities at maturity.

Therefore, the Company anticipates a full recovery of the amortized cost basis of its debt securities at maturity and an allowance was not recognized.

Securities are evaluated for impairment at the end of each reporting period.

The Company did not record any impairment related to its available-for-sale securities during the three and nine months ended September 30, 2021.

The Company did not record any impairment related to its available-for-sale securities during the three months ended March 31, 2022 and 2021.

Fair Value Measurements

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Prices or valuation techniques that require inputs that are both significant to the valuation of the asset and unobservable.

The following tables present information about the Company’s financial assets measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values (in thousands):

As of September 30, 2021

The following tables present information about the Company’s financial assets measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values as of March 31, 2022 and December 31, 2021 (in thousands):

As of March 31, 2022

Level 1 Level 2 Level 3 Total

3 unchanged sentences

Corporate debt securities — 65,750 — 65,750

Commercial paper — 41,976 — 41,976

Debt securities issued by U.S.

government agencies 46,005 — — 46,005

Other debt securities — 6,427 — 6,427

Commercial paper — 32,907 — 32,907

$ 90,170 $ 98,657 $ — $ 188,827

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Money market funds $ 131,372 $ — $ — $ 131,372

Marketable securities:

Corporate debt securities — 83,712 — 83,712

Commercial paper — 34,993 — 34,993

Debt securities issued by U.S.

government agencies 12,103 — — 12,103

Other debt securities — 6,399 — 6,399

$ 143,475 $ 125,104 $ — $ 268,579

1 unchanged sentence

Accrued expenses consisted of the following (in thousands):

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Accrued external research and development expenses $ 26,092 $ 17,763

Accrued personnel-related expenses 2,341 7,180

Accrued professional services 1,324 133

Accrued other 2,496 1,901

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Commitments and Contingencies

In May 2021, the Company entered into a sublease agreement for office space located in Boston, Massachusetts, which became the Company's corporate headquarters beginning on October 1, 2021.

The sublease expires on January 31, 2026, with no option to renew or terminate early.

The base rent increases by approximately 2 % annually.

The Company issued a letter of credit to the landlord for $ 0.4 million related to the security deposit, secured by restricted cash, which is reflected within other non-current assets on the accompanying condensed consolidated balance sheet as of September 30, 2021.

This lease qualifies as an operating lease.

At inception, the Company recorded an operating lease right-of-use asset and operating lease liability of $ 4.1 million.

As of September 30, 2021, the Company had an operating lease right-of-use asset of $ 3.8 million, current operating lease liability of approximately $ 0.5 million, and non-current operating lease liability of approximately $ 3.7 million included in the condensed consolidated balance sheet.

Future lease payments under the non-cancellable sublease agreement as of September 30, 2021 were as follows (in thousands):

Year Ended December 31, Future Lease Payments

Total future lease payments $ 5,157

interest ( 942 )

Present value of operating lease liabilities $ 4,215

As of September 30, 2021, the remaining lease term and discount rate of the sublease agreement was 4.3 years and 9.0 %, respectively.

In October 2018, the Company entered into a sublease agreement for office space located in Cambridge, Massachusetts that expires on December 31, 2021, with no option to renew or terminate early.

In May 2021, the Company entered into a sublease agreement for office space located in Boston, Massachusetts that expires on January 31, 2026, with no option to renew or terminate early.

The base rent increases by approximately 2 % annually.

The Company issued a letter of credit to the landlord for $ 0.6 million related to the security deposit, secured by restricted cash, which is reflected within prepaid expenses and other current assets on the accompanying condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020, as the lease term expires less than twelve months from the condensed consolidated balance sheet dates.

The Company issued a letter of credit to the landlord related to the security deposit, secured by restricted cash, which is reflected within other non-current assets on the accompanying condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021.

This lease qualifies as an operating lease.

Common Stock and Preferred Stock

As of September 30, 2021 and December 31, 2020, the authorized capital stock of the Company included 150,000,000 shares of common stock, $ 0.0001 par value.

As of September 30, 2021 and December 31, 2020, the Company did no t hold any treasury shares.

As of March 31, 2022 and December 31, 2021, the authorized capital stock of the Company included 150,000,000 shares of common stock, $ 0.0001 par value.

As of March 31, 2022 and December 31, 2021, the Company did no t hold any treasury shares.

Shares Reserved for Future Issuance

The Company has reserved the following shares of common stock for future issuance:

September 30,

2022 December 31,

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Preferred Stock

As of September 30, 2021 and December 31, 2020, the authorized capital stock of the Company included 10,000,000 shares of undesignated preferred stock, $ 0.0001 par value.

As of March 31, 2022 and December 31, 2021, the authorized capital stock of the Company included 10,000,000 shares of undesignated preferred stock, $ 0.0001 par value.

Stock-Based Compensation

2020 Stock Option and Incentive Plan

The total number of shares of common stock authorized for issuance under the 2020 Stock Option and Incentive Plan (the "2020 Plan”) as of September 30, 2021 and December 31, 2020 was 5,184,455 shares and 3,271,028 shares, respectively.

The total number of shares of common stock authorized for issuance under the 2020 Stock Option and Incentive Plan (the "2020 Plan”) as of March 31, 2022 and December 31, 2021 was 7,449,480 shares and 5,184,455 shares, respectively.

2017 Stock Incentive Plan

The total number of shares of common stock authorized for issuance under the 2017 Stock Incentive Plan (the "2017 Plan”) as of September 30, 2021 and December 31, 2020 was 5,937,763 shares.

The total number of shares of common stock authorized for issuance under the 2017 Stock Incentive Plan (the "2017 Plan”) as of March 31, 2022 and December 31, 2021 was 5,937,763 shares.

Any authorization to issue new options under the 2017 Plan was cancelled upon the effectiveness of the 2020 Plan and no further awards will be granted under the 2017 Plan.

2020 Employee Stock Purchase Plan

The total number of shares of common stock authorized for issuance under the 2020 Employee Stock Purchase Plan (the "2020 ESPP”) as of September 30, 2021 and December 31, 2020 was 654,204 shares and 327,102 shares, respectively.

The total number of shares of common stock authorized for issuance under the 2020 Employee Stock Purchase Plan (the "2020 ESPP”) as of March 31, 2022 and December 31, 2021 was 981,306 shares and 654,204 shares, respectively.

Restricted Stock Units

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Issued 520,328 17.33

Vested ( 81,130 ) 51.78

Forfeited ( 39,000 ) 23.43

Unvested as of September 30, 2021 383,196 $ 46.58

Unvested as of March 31, 2022 840,277 $ 26.57

As of March 31, 2022, total unrecognized compensation cost related to unvested restricted stock units was $ 20.9 million, which is expected to be recognized over a weighted-average period of 3.32 years.

Stock Options

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Cancelled or Forfeited ( 165,545 ) 21.50

Outstanding as of September 30, 2021 6,414,070 $ 16.75 8.80 $ 54,154

Exercisable as of September 30, 2021 1,702,574 $ 6.17 8.23 $ 21,152

Vested and expected to vest as of September 30, 2021 6,414,070 $ 16.75 8.80 $ 54,154

The aggregate intrinsic value of stock options outstanding, exercisable, and vested and expected to vest is calculated as the difference between the exercise price of the underlying stock options and the estimated fair value of the Company’s common stock for those stock options that had exercise prices lower than the estimated fair value of the Company’s common stock at September 30, 2021.

Outstanding as of March 31, 2022 7,862,576 $ 17.10 8.68 $ 14,030

Exercisable as of March 31, 2022 2,496,400 $ 13.35 8.03 $ 8,116

Vested and expected to vest as of March 31, 2022 7,862,576 $ 17.10 8.68 $ 14,030

The aggregate intrinsic value of stock options exercised is calculated as the difference between the exercise price of the underlying stock options and the estimated fair value of the Company’s common stock on the date of exercise for those stock options that had exercise prices lower than the estimated fair value of the Company’s common stock on the exercise date.

Stock Option Valuation

The weighted-average assumptions that the Company used in the Black-Scholes option pricing model to determine the grant-date fair value of stock options granted to employees and non-employees on the date of grant were as follows for the three and nine months ended September 30, 2021:

Three Months Ended

September 30, Nine Months Ended

September 30,

Risk-free interest rate 1.61 %

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Expected dividend yield — %

The weighted-average grant-date fair value of the Company’s stock options granted during the three and nine months ended September 30, 2021 was $ 13.45 per share and $ 30.91 per share, respectively.

Weighted average grant-date fair value per share $ 13.20

As of March 31, 2022, total unrecognized compensation cost related to unvested stock options was $ 70.0 million, which is expected to be recognized over a weighted-average period of 2.76 years.

Stock-Based Compensation

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Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Research and development $ 3,214 $ 2,318

1 unchanged sentence

Total stock-based compensation expense $ 7,886 $ 4,666

As of September 30, 2021, total unrecognized compensation expense related to unvested stock-based awards was $ 75.2 million, which is expected to be recognized over a weighted-average period of 2.85 years.

Net Loss per Share

Basic and diluted net loss per share attributable to common stockholders was calculated as follows (in thousands, except share and per share data):

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Net loss $ ( 44,705 ) $ ( 16,216 ) $ ( 108,479 ) $ ( 36,114 )

Accretion and cumulative dividends on redeemable convertible preferred stock — ( 3,943 ) — ( 8,046 )

Gain on repurchase of redeemable convertible preferred stock — — — 493

Net loss attributable to common stockholders $ ( 44,705 ) $ ( 20,159 ) $ ( 108,479 ) $ ( 43,667 )

Weighted average common shares outstanding, basic and diluted 44,714,941 1,665,902 41,608,017 1,645,982

Net loss per share attributable to common stockholders, basic and diluted $ ( 1.00 ) $ ( 12.10 ) $ ( 2.61 ) $ ( 26.53 )

The following potential shares of common stock, presented based on amounts outstanding at each period end, were excluded from the calculation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have been anti-dilutive:

The following potential shares of common stock, presented based on amounts outstanding at each period end, were excluded from the calculation of diluted net loss per share for the periods indicated because including them would have been anti-dilutive:

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Outstanding stock options 7,862,576 6,648,367

Unvested restricted common stock and restricted stock units 383,196 8,763 383,196 8,763

Series A redeemable convertible preferred stock — 3,773,820 — 3,773,820

Series B redeemable convertible preferred stock — 6,969,173 — 6,969,173

Series B-1 redeemable convertible preferred stock — 1,246,133 — 1,246,133

Series C redeemable convertible preferred stock — 3,992,463 — 3,992,463

Series C-1 redeemable convertible preferred stock — 9,086,388 — 9,086,388

Unvested restricted stock units 840,277 328,363

Potential shares issuable under the 2020 ESPP 30,341 —

8,733,194 6,976,730

The shares of common stock issuable upon conversion of the redeemable convertible preferred stock for the three and nine months ended September 30, 2020 assumed automatic conversion in the event of a qualified public offering.

Related Party Transactions

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Expenses incurred during all periods presented were not material.

As of September 30, 2021, the Company had accrued expenses of $ 0.3 million due to RogCon under the License Agreement.

As of March 31, 2022, the Company had accrued expenses of $ 0.3 million due to RogCon under the License Agreement.

Subsequent Events

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements