What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-05-11 compared with 2022-11-09 · 85 added, 135 removed, 255 unchanged (46% of the section changed)

3 unchanged sentences

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

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Current assets:

12 unchanged sentences

Operating lease liabilities 1,035 1,005

Current portion of deferred revenue 2,543 2,818

Total current liabilities 29,916 34,345

1 unchanged sentence

Non-current portion of operating lease liabilities 2,225 2,495

Non-current portion of deferred revenue 1,774 2,182

Total liabilities 33,915 39,022

2 unchanged sentences

Preferred stock, $ 0.0001 par value;

10,000,000 shares authorized and no shares issued or outstanding as of September 30, 2022 and December 31, 2021

10,000,000 shares authorized and no shares issued or outstanding as of March 31, 2023 and December 31, 2022

Common stock, $ 0.0001 par value;

150,000,000 shares authorized;

46,864,327 shares issued and outstanding as of September 30, 2022, and 45,300,514 shares issued and outstanding as of December 31, 2021

57,960,387 shares issued and outstanding as of March 31, 2023, and 49,382,453 shares issued and outstanding as of December 31, 2022

Additional paid-in capital 632,580 606,918

8 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Collaboration revenue $ 683 $ —

Operating expenses:

6 unchanged sentences

Total other income 636 132

Loss before income taxes $ ( 43,945 ) $ ( 44,700 ) $ ( 172,856 ) $ ( 108,474 )

Provision for income taxes — ( 5 ) — ( 5 )

Net loss $ ( 37,455 ) $ ( 68,717 )

6 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Net loss $ ( 37,455 ) $ ( 68,717 )

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Balance at March 31, 2023 57,960,387 $ 6 $ 632,580 $ ( 568,099 ) $ ( 19 ) $ 64,468

Stock-based compensation expense — — 7,611 — — 7,611

Issuance of common stock under employee stock purchase plan 51,645 — 454 — — 454

Vesting of restricted stock units 6,361 — — — — —

Shares withheld for taxes for vesting of restricted stock units ( 2,225 ) — ( 17 ) — — ( 17 )

Issuance of common stock upon exercise of stock options 13,143 — 67 — — 67

Change in unrealized loss on marketable securities, net of tax — — — — ( 74 ) ( 74 )

Net loss — — — ( 60,194 ) — ( 60,194 )

Balance at June 30, 2022 45,575,406 $ 5 $ 585,070 $ ( 445,526 ) $ ( 680 ) $ 138,869

Stock-based compensation expense — — 6,730 — — 6,730

Issuance of common stock from at-the-market public offerings, net of issuance costs of $ 109

1,105,006 — 2,962 — — 2,962

Vesting of restricted stock units 5,312 — — — — —

Shares withheld for taxes for vesting of restricted stock units ( 1,638 ) — ( 6 ) — — ( 6 )

Issuance of common stock upon exercise of stock options 180,241 — 409 — — 409

Change in unrealized loss on marketable securities, net of tax — — — — 144 144

Net loss — — — ( 43,945 ) — ( 43,945 )

Balance at September 30, 2022 46,864,327 $ 5 $ 595,165 $ ( 489,471 ) $ ( 536 ) $ 105,163

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

PRAXIS PRECISION MEDICINES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (continued)

(Amounts in thousands, except share data)

Common Stock Additional

6 unchanged sentences

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

2 unchanged sentences

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 in 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.

2 unchanged sentences

(Amounts in thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities:

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Operating lease liabilities ( 240 ) ( 26 )

Deferred revenue ( 683 ) —

Net cash used in operating activities ( 32,846 ) ( 54,109 )

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Cash flows from financing activities:

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

Proceeds from at-the-market offerings, net of issuance costs 18,096 1,368

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

Payment of issuance costs for at-the-market offerings — ( 262 )

Payments of tax withholdings related to vesting of restricted stock units ( 127 ) ( 230 )

Proceeds from exercise of options and employee stock purchase plan contributions 1,263 1,968

Proceeds from exercise of stock options 101 333

Net cash provided by financing activities 18,070 1,209

Decrease in cash, cash equivalents and restricted cash ( 76,864 ) ( 130,513 )

Increase (decrease) in cash, cash equivalents and restricted cash 19,224 ( 61,450 )

Cash, cash equivalents and restricted cash, beginning of period 62,031 139,720

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Total cash, cash equivalents and restricted cash $ 81,255 $ 78,270

Supplemental disclosures of non-cash activities:

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

Offering costs included in accrued expenses $ — $ 68

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

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 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 disorders, using its understanding of shared biological targets and circuits in the brain, to develop patient-guided therapies.

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 including multiple programs across movement disorders and epilepsy, with four clinical-stage product candidates.

For its lead clinical-stage program, the Company expects to announce topline results from the Phase 2b clinical trial in essential tremor in the first quarter of 2023 and expects to initiate a Phase 2 clinical trial for the treatment of Parkinson's disease in the first quarter of 2023.

The Company expects the initiation of first-in-patient studies for its lead antisense oligonucleotide epilepsy program in the fourth quarter of 2022 and its lead small molecule epilepsy program in the first quarter of 2023, as well as the launch of an additional clinical epilepsy program this year.

In addition, the Company has established a robust pipeline of preclinical stage programs through internal research and in-licensing, including one of the largest portfolios of targeted epilepsy programs in the industry.

(“Praxis” or the “Company”) is a clinical-stage biopharmaceutical company translating insights from genetic epilepsies into the development of therapies for central nervous system, or 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 both rare and more prevalent neurological disorders.

The Company is applying genetic insights to the discovery and development of therapies for neurological disorders through two proprietary platforms, using its understanding of shared biological targets and circuits in the brain.

Each platform has multiple programs currently, with significant potential for additional program and indication expansion:

• Cerebrum ™, the Company's small molecule platform, utilizes deep understanding of neuronal excitability and neuronal networks and applies a series of computational and experimental tools to develop orally available precision therapies

• Solidus ™, the Company's antisense oligonucleotide, or ASO, platform, is an efficient, targeted precision medicine discovery and development engine anchored on a proprietary, computational methodology

The Company's platforms utilize a deliberate, pragmatic and patient-guided 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 diversified, multimodal CNS portfolio with four clinical-stage product candidates across movement disorders and epilepsy.

For the Company's most advanced product candidate under the Cerebrum™ platform, ulixacaltamide (also known as PRAX-944), topline results from the Phase 2b Essential1 clinical trial in essential tremor ("ET") were announced in the first quarter of 2023.

An end-of-Phase 2 meeting is scheduled with the U.S.

Food and Drug Administration in June 2023 and the Company intends to initiate a Phase 3 study in ET in the second half of 2023.

The Company initiated its PRAX-562 Phase 2 EMBOLD study in the first quarter of 2023 and expects to announce topline results in the fourth quarter of 2023.

The Company also announced positive results from its PRAX-628 Phase 1 study in May 2023 and expects to initiate a Phase 2 study in focal epilepsy in the fourth quarter of 2023.

For the Company's most advanced product candidate under the Solidus™ platform, PRAX-222, it expects to announce topline results from the first dose cohort of its EMBRAVE study in the second half of 2023.

Praxis was incorporated in 2015 and commenced operations in 2016.

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 September 30, 2022, the Company raised $ 520.8 million in aggregate cash proceeds from these transactions, net of issuance costs.

From inception through March 31, 2023, the Company raised $ 544.1 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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Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize revenue from product sales.

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 a net loss of $ 172.9 million for the nine months ended September 30, 2022.

In addition, as of September 30, 2022, the Company had an accumulated deficit of $ 489.5 million.

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 the condensed consolidated financial statements are issued.

The Company has incurred recurring losses since its inception, including a net loss of $ 37.5 million for the three months ended March 31, 2023.

In addition, as of March 31, 2023, the Company had an accumulated deficit of $ 568.1 million.

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

The analysis of the Company’s ability to continue as a going concern for the third quarter of 2022 included consideration of the Company’s current cash needs, ongoing research and development plans which are limited to advancing product candidates through, but not beyond their current clinical trial phases, anticipated cost savings resulting from its operational cost reduction plans, including ongoing efforts to eliminate costs not related to the

Company’s strategic focus.

Such estimates contain significant judgment as the Company’s ongoing efforts to eliminate costs not related to the Company’s strategic focus contains uncertainties as to whether the Company can attain such benefits.

Based on the analysis, the Company concluded that its available cash, cash equivalents and marketable securities as of September 30, 2022 will be sufficient to fund current prioritized operations and capital expenditure requirements into the first quarter of 2024, which is at least 12 months from the filing date of this Quarterly Report on Form 10-Q with the SEC.

As a result, the Company concluded that it did not identify conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date these financial statements were issued.

The Company’s current operating plan is based on assumptions that may prove to be wrong, and the Company could use its capital resources sooner than it expects, in which case the Company would evaluate further reductions in its expenses or obtaining additional financing sooner than it otherwise would, which additional financing may not be available or may only be available on terms that are not acceptable to the Company.

The Company expects that its cash, cash equivalents and marketable securities as of March 31, 2023 may not be sufficient to fund operations for at least the next twelve months from the date of issuance of these condensed consolidated financial statements which raises substantial doubt about the Company's ability to continue as a going concern, and the Company will need to obtain additional funding.

The Company expects to finance its operations through potential public or private equity financings, debt financings, collaboration agreements or other capital sources.

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.

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business.

The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

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, 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.

The significant accounting policies used in preparation of these condensed consolidated financial statements for the three months ended March 31, 2023 are consistent with those discussed in Note 2 to the consolidated financial statements included in the Company's 2022 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, 2022, the condensed consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021, the condensed consolidated statements of comprehensive loss for the three and nine months ended September 30, 2022 and 2021, the condensed consolidated statements of cash flows for the nine months ended September 30, 2022 and 2021 and the condensed consolidated statements of stockholders’ equity for the three and nine months ended September 30, 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 September 30, 2022, the results of its operations for the three and nine months ended September 30, 2022 and 2021 and its cash flows for the nine months ended September 30, 2022 and 2021.

Financial statement disclosures for the three and nine months ended September 30, 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 and nine months ended September 30, 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.

The accompanying condensed consolidated balance sheet as of March 31, 2023, the condensed consolidated statements of operations for the three months ended March 31, 2023 and 2022, the condensed consolidated statements of comprehensive loss for the three months ended March 31, 2023 and 2022, the condensed consolidated statements of cash flows for the three months ended March 31, 2023 and 2022 and the condensed consolidated statements of stockholders’ equity for the three months ended March 31, 2023 and 2022 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, 2023, the results of its operations for the three months ended March 31, 2023 and 2022 and its cash flows for the three months ended March 31, 2023 and 2022.

Financial statement disclosures for the three months ended March 31, 2023 and 2022 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, 2023 are not necessarily indicative of results to be expected for the year ended December 31, 2023, 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, 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.

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, accrued and prepaid research and development expense, collaboration revenue, 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.

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Marketable Securities

The following is a summary of the Company's investment portfolio as of September 30, 2022 and December 31, 2021 (in thousands):

As of September 30, 2022

The following is a summary of the Company's investment portfolio as of March 31, 2023 and December 31, 2022 (in thousands):

As of March 31, 2023

Gross Unrealized Estimated

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Corporate debt securities $ 5,002 $ — $ ( 19 ) $ 4,983

Commercial paper 12,996 — — 12,996

Debt securities issued by U.S.

government agencies 4,021 — ( 38 ) 3,983

Total securities with a maturity of one year or less $ 5,002 $ — $ ( 19 ) $ 4,983

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Corporate debt securities $ 35,042 $ — $ ( 163 ) $ 34,879

Commercial paper 34,993 — — 34,993

Debt securities issued by U.S.

government agencies 4,005 — ( 10 ) 3,995

Other debt securities 6,398 1 — 6,399

Total securities with a maturity of one year or less $ 39,047 $ — $ ( 173 ) $ 38,874

Corporate debt securities 31,667 — ( 138 ) 31,529

Total securities with a maturity of one to two years $ 31,667 $ — $ ( 138 ) $ 31,529

Total available-for-sale securities $ 39,047 $ — $ ( 173 ) $ 38,874

As of September 30, 2022, the Company had 9 securities with a total fair market value of $ 48.3 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.

As of March 31, 2023, the Company had 1 security with a total fair market value of $ 5.0 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.

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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, 2022 and 2021.

The Company did not record any impairment related to its available-for-sale securities during the three months ended March 31, 2023 and 2022.

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 indicate the level of the fair value hierarchy utilized to determine such fair values as of September 30, 2022 and December 31, 2021 (in thousands):

As of September 30, 2022

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, 2023 and December 31, 2022 (in thousands):

As of March 31, 2023

Level 1 Level 2 Level 3 Total

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Corporate debt securities — 4,983 — 4,983

Commercial paper — 12,996 — 12,996

Debt securities issued by U.S.

government agencies 3,983 — — 3,983

$ 62,976 $ 4,983 $ — $ 67,959

5 unchanged sentences

Corporate debt securities — 34,879 — 34,879

Commercial paper — 34,993 — 34,993

Debt securities issued by U.S.

government agencies 3,995 — — 3,995

Other debt securities — 6,399 — 6,399

$ 38,176 $ 34,879 $ — $ 73,055

1 unchanged sentence

Accrued expenses consisted of the following (in thousands):

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Accrued external research and development expenses $ 6,355 $ 10,734

Accrued personnel-related expenses 1,748 2,803

Accrued other 2,258 1,901

Accrued other expenses 1,249 2,313

Total accrued expenses $ 9,352 $ 15,850

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The base rent increases by approximately 2 % annually.

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 September 30, 2022 and December 31, 2021.

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, 2023 and December 31, 2022.

This lease qualifies as an operating lease.

UCB Option and License Agreement

In December 2022, the Company entered into an Option and License Agreement (“the Collaboration Agreement”) with UCB Biopharma SRL ("UCB") for the discovery of small molecule therapeutics as potential treatments of KCNT1-related epilepsies.

Under the terms of the Collaboration Agreement, the Company has agreed to perform general biology-related research services as part of a mutually agreed upon research plan in exchange for a $ 5.0 million upfront payment.

In addition, the Company provided UCB an exclusive option to in-license global development and commercialization rights to any resulting KCNT1 small molecule development candidate identified as part of the research plan.

If UCB exercises its option to in-license global development and commercialization rights, the Collaboration Agreement stipulates that UCB will assume research, development, manufacturing and commercialization responsibilities and costs.

Under the terms of the Collaboration Agreement, the Company will be eligible to receive an option fee and future success-based development and commercialization milestone payments, totaling up to $ 98.5 million, in addition to tiered royalties on net sales of any resulting products from the Collaboration Agreement.

The Company concluded that UCB is a customer, and as such, the arrangement falls within the scope of Topic 606.

At the commencement of the Collaboration Agreement, the Company identified one performance obligation, which was to perform the research services for UCB.

The Company determined the transaction price to be $ 5.0 million, comprised of the upfront payment it received.

The option provided to UCB was determined not to be a material right.

The Company recognizes revenue for its research services performance obligation over time using an input method over the duration of the research services.

During the three months ended March 31, 2023, the Company recognized $ 0.7 million in collaboration revenue related to the Collaboration Agreement in the condensed consolidated statement of operations.

As of March 31, 2023, $ 4.3 million was included in deferred revenue in the condensed consolidated balance sheet, of which $ 2.5 million was classified as current.

Common Stock and Preferred Stock

As of September 30, 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 September 30, 2022 and December 31, 2021, the Company did no t hold any treasury shares.

As of March 31, 2023 and December 31, 2022, the authorized capital stock of the Company included 150,000,000 shares of common stock, $ 0.0001 par value.

As of March 31, 2023 and December 31, 2022, 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,

2023 December 31,

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Preferred Stock

As of September 30, 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.

As of March 31, 2023 and December 31, 2022, 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, 2022 and December 31, 2021 was 7,449,480 shares and 5,184,455 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, 2023 and December 31, 2022 was 9,918,602 shares and 7,449,480 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, 2022 and December 31, 2021 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, 2023 and December 31, 2022 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, 2022 and December 31, 2021 was 981,306 shares and 654,204 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, 2023 and December 31, 2022 was 1,308,408 shares and 981,306 shares, respectively.

Restricted Stock Units

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Forfeited ( 117,946 ) 14.27

Unvested as of September 30, 2022 789,419 $ 23.42

As of September 30, 2022, total unrecognized compensation cost related to unvested restricted stock units was $ 14.6 million, which is expected to be recognized over a weighted-average period of 2.88 years.

Unvested as of March 31, 2023 754,756 $ 15.40

As of March 31, 2023, total unrecognized compensation cost related to unvested restricted stock units was $ 10.5 million, which is expected to be recognized over a weighted-average period of 2.50 years.

Stock Options

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Cancelled or Forfeited ( 731,577 ) 10.28

Outstanding as of September 30, 2022 9,159,415 $ 13.94 8.49 $ 327

Exercisable as of September 30, 2022 2,993,364 $ 14.69 7.55 $ 71

Vested and expected to vest as of September 30, 2022 8,956,409 $ 13.91 8.56 $ 318

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, 2022.

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, 2022:

Outstanding as of March 31, 2023 10,691,062 $ 11.53 8.23 $ 23

Exercisable as of March 31, 2023 4,517,923 $ 13.74 7.33 $ 23

Vested and expected to vest as of March 31, 2023 10,488,056 $ 11.47 8.46 $ 23

Valuation of Stock Options

Three Months Ended

September 30, Nine Months Ended

September 30,

Risk-free interest rate 3.51 %

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Weighted average grant-date fair value per share $ 2.22

As of September 30, 2022, total unrecognized compensation cost related to unvested stock options was $ 53.0 million, which is expected to be recognized over a weighted-average period of 2.38 years.

As of March 31, 2023, total unrecognized compensation cost related to unvested stock options was $ 40.8 million, which is expected to be recognized over a weighted-average period of 2.05 years.

Stock-Based Compensation

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Research and development $ 2,223 $ 3,214

2 unchanged sentences

Net Loss per Share

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:

The following potential common shares, 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:

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Outstanding stock options 10,691,062 7,862,576

10 unchanged sentences

Expenses incurred during all periods presented were not material.

As of September 30, 2022, the Company had accrued expenses of $ 0.3 million due to RogCon under the License Agreement.

Restructuring

In June 2022, the Company began a strategic realignment to focus resources on its Movement Disorders and Epilepsy franchises, which resulted in a reduction of the Company’s workforce.

The Company incurred $ 1.0 million of costs related to the realignment, of which $ 0.6 million has been recognized in research and development expenses and $ 0.4 million has been recognized in general and administrative expenses in the condensed consolidated statement of operations during the nine months ended September 30, 2022.

These costs relate to employee severance, benefits and related costs.

The Company does not expect to incur any additional significant costs related to the strategic realignment.

As of September 30, 2022, all of the $ 1.0 million costs were paid.

Subsequent Events

2 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements