What changed in this filing

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Item 1. Financial Statements

2022-11-08 compared with 2022-08-04 · 111 added, 79 removed, 491 unchanged (28% of the section changed)

3 unchanged sentences

(In thousands, except share and per share data)

September 30,

Current assets:

23 unchanged sentences

Common stock, $ 0.00001 par value, 90,000,000 shares authorized;

48,683,931 and 47,838,330 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively

49,198,411 and 47,838,330 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively

Additional paid-in capital

8 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

License and collaboration revenue - related party

13 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Other comprehensive loss:

Loss on translation of foreign operations

Unrealized (loss) gain on marketable securities

Unrealized gain (loss) on marketable securities

Comprehensive loss

5 unchanged sentences

Stockholders'

Three months ended June 30, 2022

Balance at March 31, 2022

Three months ended September 30, 2022

Balance at June 30, 2022

Issuance of common stock under equity incentive and employee stock purchase plans

Issuance of common stock upon exercise of Exchange Warrants

Stock-based compensation expense

Issuance costs related to prior period common stock offering

Other comprehensive loss

Balance at June 30, 2022

Other comprehensive gain

Balance at September 30, 2022

Comprehensive

Stockholders'

Three months ended June 30, 2021

Balance at March 31, 2021

Three months ended September 30, 2021

Balance at June 30, 2021

Issuance of common stock pursuant to public offering, net of issuance costs

2 unchanged sentences

Other comprehensive loss

Balance at June 30, 2021

Balance at September 30, 2021

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

4 unchanged sentences

Stockholders'

Six months ended June 30, 2022

Nine months ended September 30, 2022

Balance at December 31, 2021

1 unchanged sentence

Issuance of common stock under equity incentive and employee stock purchase plans

Issuance of common stock upon exercise of Exchange Warrants

Shares withheld for net settlement of tax withholding upon vesting of restricted stock units

2 unchanged sentences

Other comprehensive loss

Balance at June 30, 2022

Balance at September 30, 2022

Comprehensive

Stockholders'

Six months ended June 30, 2021

Nine months ended September 30, 2021

Balance at December 31, 2020

4 unchanged sentences

Other comprehensive loss

Balance at June 30, 2021

Balance at September 30, 2021

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

2 unchanged sentences

(In thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash Flows from Operating Activities

17 unchanged sentences

Purchases of property and equipment

Net cash provided by investing activities

Net cash provided by (used in) investing activities

Cash Flows from Financing Activities

5 unchanged sentences

Effect of exchange rate changes on cash, cash equivalents and restricted cash

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

Net increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash, beginning of period

9 unchanged sentences

(the “Company”) is headquartered in Newark, California.

The Company is a biopharmaceutical company with peptide-based new chemical entities rusfertide, PN-943 and PN-235 in different stages of clinical development, all derived from the Company’s proprietary technology platform.

The Company is a biopharmaceutical company with peptide-based new chemical entities rusfertide and PN-235 in different stages of clinical development, all derived from the Company’s proprietary technology platform.

The Company’s clinical programs fall into two broad categories of diseases;

4 unchanged sentences

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.

As of June 30, 2022, the Company had cash, cash equivalents and marketable securities of $ 291.9 million.

The Company has incurred net losses from operations since inception and had an accumulated deficit of $ 471.3 million as of June 30, 2022.

As of September 30, 2022, the Company had cash, cash equivalents and marketable securities of $ 267.4 million.

The Company has incurred net losses from operations since inception and had an accumulated deficit of $ 502.6 million as of September 30, 2022.

The Company’s ultimate success depends upon the outcome of its research and development and collaboration activities.

8 unchanged sentences

The Company’s future results of operations and liquidity could be adversely impacted by further delays in existing and planned clinical trials, continued difficulty in recruiting patients for these clinical trials, delays in manufacturing and collaboration activities, supply chain disruptions, and the ongoing impact on its operating activities and employees.

In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect our business.

The extent of the impact of the COVID-19 pandemic remains difficult to predict as this event is ongoing and information continues to evolve.

5 unchanged sentences

The Company continues to monitor these events and the potential impact on its business.

Although the Company does not believe that inflation has had a material impact on its financial position or results of operations to date, it may be adversely affected in the future due to domestic and global monetary and fiscal policy, supply chain constraints, consequences associated

with COVID-19 and the ongoing conflict between Russia and Ukraine, and such factors may lead to increases in the cost of manufacturing for and initiation of studies in the Company’s product candidates.

Although the Company does not believe that inflation has had a material impact on its financial position or results of operations to date, it may be adversely affected

in the future due to domestic and global monetary and fiscal policy, supply chain constraints, consequences associated with COVID-19 and the ongoing conflict between Russia and Ukraine, and such factors may lead to increases in the cost of manufacturing for and initiation of studies in the Company’s product candidates.

Summary of Significant Accounting Policies

1 unchanged sentence

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting.

As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted, and accordingly the condensed consolidated balance sheet as of June 30, 2022 has been derived from the Company’s audited consolidated financial statements at that date but does not include all of the information required by GAAP for complete consolidated financial statements.

As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted, and accordingly the condensed consolidated balance sheet as of September 30, 2022 has been derived from the Company’s unaudited consolidated financial statements at that date but does not include all of the information required by GAAP for complete consolidated financial statements.

These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements and, in the opinion of management, reflect all adjustments (consisting of normal recurring adjustments) that are necessary for a fair presentation of the Company’s condensed consolidated financial statements.

The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any other interim period or for any other future year.

The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any future period.

The accompanying condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K, filed with the SEC on February 28, 2022.

15 unchanged sentences

Cash as reported in the condensed consolidated statements of cash flows consists of (in thousands):

September 30,

Cash and cash equivalents

2 unchanged sentences

Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies during the three and six months ended June 30, 2022 as compared to those disclosed in Note 2.

There have been no material changes to the Company’s significant accounting policies during the three and nine months ended September 30, 2022 as compared to those disclosed in Note 2.

Significant Accounting Policies included in our Annual Report on Form 10-K for the year ended December 31, 2021.

Recently Issued Accounting Pronouncements Not Yet Adopted as of June 30, 2022

Recently Issued Accounting Pronouncements Not Yet Adopted as of September 30, 2022

In June 2016, the FASB issued ASU No.

34 unchanged sentences

and (c) up to $ 25.0 million in costs related to up to two Phase 2 trials evaluating second-generation compounds.

The Company’s continuing development expense obligations under the Restated Agreement are as follows:

The Company’s continuing development expense obligations under the Restated Agreement were as follows:

(a) the Company funded 20 % of the costs related to the Phase 2a trial evaluating PTG-200 for the treatment of CD (subject to a $ 20.0 million cap);

50 unchanged sentences

Therefore, the consideration payable to Janssen is accounted for as a reduction in the transaction price.

The transaction price of the initial performance obligation under the Restated Agreement was $ 131.7 million as of June 30, 2022, an increase of $ 0.2 million from the transaction price of $ 131.5 million as of March 31, 2022.

The final transaction price of the initial performance obligation under the Restated Agreement was $ 131.7 million as of June 30, 2022.

In order to determine the transaction price, the Company evaluated all payments to be received during the duration of the contract, net of development costs reimbursement expected to be payable to Janssen.

The transaction price as of June 30, 2022 included $ 112.5 million of nonrefundable payments received to date, $ 17.9 million of reimbursement from Janssen for services performed for IL-23 receptor antagonist compound research costs and other services, and variable consideration consisting of $ 8.2 million of development cost reimbursement from Janssen, partially offset by $ 6.9 million of net cost reimbursement due to Janssen for services performed.

The Company concluded that the variable consideration constraint is appropriately reflected in the estimated transaction price as of June 30, 2022, and that the achievement of future milestones is subject to additional development and/or regulatory uncertainty and therefore it is not probable at June 30, 2022 that a material reversal of such revenues would not occur.

Janssen also opted in for certain additional services to be performed by the Company that are outside the initial performance obligation.

Revenue for these additional services is recognized as these services are performed.

The Company concluded that the variable consideration constraint was appropriately reflected in the estimated transaction price as of June 30, 2022, and that the achievement of future milestones was subject to additional development and/or regulatory uncertainty and therefore it was not probable at June 30, 2022 that a material reversal of such revenues would not occur.

Janssen also opted in for certain additional services to be performed by the Company that were outside the initial performance obligation.

Revenue for these additional services was recognized as these services were performed.

The Company utilizes a cost-based input method to measure proportional performance and to calculate the corresponding amount of revenue to recognize.

7 unchanged sentences

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

For the three and six months ended June 30, 2022, the Company recognized license and collaboration revenue of $ 0.9 million and $ 26.6 million, respectively.

License and collaboration revenue for the three and six months ended June 30, 2022 was primarily related to the transaction price under the Restated Agreement recognized based on proportional performance.

The Company completed its performance obligation under the collaboration as of June 30, 2022.

For the three and six months ended June 30, 2021, the Company recognized license and collaboration revenue of $ 2.1 million and $ 7.7 million, respectively, which was primarily related to the transaction price under the Restated Agreement recognized based on proportional performance.

In addition, the Company recognized $ 0.2 million and $ 0.8 million in revenue for the three and six months ended June 30, 2021, respectively, related to additional services provided by the Company under the agreement.

For the nine months ended September 30, 2022, the Company recognized license and collaboration revenue of $ 26.6 million.

No license and collaboration revenue was recognized for the three months ended September 30, 2022 because the Company completed its performance obligation under the collaboration as of June 30, 2022.

License and collaboration revenue for the nine months ended September 30, 2022 was primarily related to the transaction price under the Restated Agreement recognized based on proportional performance.

For the three and nine months ended September 30, 2021, the Company recorded a cumulative catch-up adjustment increasing license and collaboration revenue by $ 8.0 million, and also recognized license and collaboration revenue of $ 2.3 million and $ 9.9 million, respectively, related to the contract modification under the Restated Agreement entered in July 2021.

In addition, the Company recognized $ 0.8 million in revenue for the nine months ended September 30, 2021 related to additional services provided by the Company under the agreement.

No revenue related to additional services provided by the Company under the Restated Agreement was recognized for the three months ended September 30, 2021.

The following tables present changes in the Company’s contract assets and liabilities during the periods presented (in thousands):

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Contract assets:

3 unchanged sentences

Payable to collaboration partner - related party

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Contract assets:

3 unchanged sentences

Payable to collaboration partner - related party

During the three and six months ended June 30, 2022, the Company recognized revenue of $ 0.9 million from amounts included in the deferred revenue contract liability balance at the beginning of each period.

During the three and six months ended June 30, 2021, the Company recognized revenue of $ 0.4 million and $ 1.5 million, respectively, from amounts included in the deferred revenue contract liability balance at the beginning of each period.

During the three and nine months ended September 30, 2022, the Company recognized revenue of zero and $ 0.9 million, respectively, from amounts included in the deferred revenue contract liability balance at the beginning of each period.

During the three and nine months ended September 30, 2021, the Company recognized revenue of $ 0.2 million and $ 1.7 million, respectively, from amounts included in the deferred revenue contract liability balance at the beginning of each period.

None of the costs to obtain or fulfill the contract were capitalized.

10 unchanged sentences

The following table presents the fair value of the Company’s financial assets determined using the inputs defined above (in thousands).

June 30, 2022

September 30, 2022

Money market funds

16 unchanged sentences

Cash equivalents and marketable securities consisted of the following (in thousands):

June 30, 2022

September 30, 2022

Gross Unrealized

20 unchanged sentences

Total cash equivalents and marketable securities

Marketable securities – current of $ 171.7 million and $ 203.2 million held at June 30, 2022 and December 31, 2021, respectively, had contractual maturities of less than one year .

Marketable securities – current of $ 114.6 million and $ 203.2 million held at September 30, 2022 and December 31, 2021, respectively, had contractual maturities of less than one year .

The Company does not intend to sell its securities that are in an unrealized loss position, and it is not more likely than not that the Company will be required to sell its securities before recovery of their amortized cost basis, which may be at maturity.

4 unchanged sentences

Prepaid expenses and other current assets consisted of the following (in thousands):

September 30,

Prepaid clinical and research related expenses

5 unchanged sentences

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

September 30,

Laboratory equipment

6 unchanged sentences

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

September 30,

Accrued clinical and research related expenses

14 unchanged sentences

Milestone payments to collaboration partners are recorded as research and development expense in the period that the expense is incurred.

No research and development expense was recorded under the Zealand collaboration agreement for the three and six months ended June 30, 2022 and 2021.

No research and development expense was recorded under the Zealand collaboration agreement for the three and nine months ended September 30, 2022.

The Company recognized $ 4.0 million in research and development expense under the agreement for the three and nine months ended September 30, 2021, respectively.

Research and Development Tax Incentive

The Company did no t recognize any research and development cash tax incentive from Australian Tax Office (“ATO”) during the three and six months ended June 30, 2022.

During the three and six months ended June 30, 2021, the Company recognized AUD 1.3 million ($ 1.0 million) and AUD 2.3 million ($ 1.7 million), respectively, as a reduction of research and development expenses in connection with the research and development cash tax incentive from the ATO.

As of June 30, 2022 and December 31, 2021, the research and development cash tax incentive receivable was AUD 3.8 million ($ 2.6 million) and AUD 3.8 million ($ 2.8 million), respectively.

The Company did no t recognize any research and development cash tax incentive from the Australian Tax Office (“ATO”) during the three and nine months ended September 30, 2022.

During the three and nine months ended September 30, 2021, the Company recognized AUD 0.6 million ($ 0.5 million) and AUD 2.9 million ($ 2.2 million), respectively, as a reduction of research and development expenses in connection with the research and development cash tax incentive from the ATO.

As of December 31, 2021, the research and development cash tax incentive receivable was AUD 3.8 million ($ 2.8 million).

There was no cash tax incentive receivable balance as of September 30, 2022 .

Commitments and Contingencies

7 unchanged sentences

On August 4, 2021, the Company and Zealand agreed to resolve the dispute and reached an Arbitration Resolution Agreement.

Under the Arbitration Resolution Agreement, (1) the Company is required to make an additional payment of $ 1.5 million to Zealand in August 2022 with respect to rusfertide, (2) all development milestones with respect of rusfertide were reduced by 50 %, except that the Company agreed to pay in full within two (2) business days after the effective date of the Agreement (and timely paid):

Under the Arbitration Resolution Agreement, (1) the Company was required to make an additional payment of $ 1.5 million to Zealand in August 2022 with respect to rusfertide, (2) all development milestones with respect of rusfertide were reduced by 50 %, except that the Company agreed to pay in full within two (2) business days after the effective date of the Agreement (and timely paid):

(i) a $ 1.0 million milestone for initiation of a Phase 2b clinical trial;

13 unchanged sentences

Warrants to purchase 1,375,000 shares of the Company’s common stock have an exercise price of $ 10.00 per share and Warrants to purchase 1,375,000 shares of the Company’s common stock have an exercise price of $ 15.00 per share.

The exercise price and number of shares of common stock issuable upon the exercise of the Warrants (the “Warrant Shares”) are subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar

transaction, as described in the Warrants.

The exercise price and number of shares of common stock issuable upon the exercise of the Warrants (the “Warrant Shares”) are subject to

adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described in the Warrants.

Under certain circumstances, the Warrants may be exercisable on a “cashless” basis.

1 unchanged sentence

The common stock and warrants are classified as equity in accordance with Accounting Standards Codification Topic 480 , Distinguishing Liabilities from Equity (“ASC 480”), and the net proceeds from the transaction were recorded as a credit to additional paid-in capital.

As of June 30, 2022, none of the Warrants have been exercised.

As of September 30, 2022, none of the Warrants have been exercised.

In December 2018, the Company entered into an exchange agreement (the “Exchange Agreement”) with an Investor and its affiliates (the “Exchanging Stockholders”), pursuant to which the Company exchanged an aggregate of 1,000,000 shares of the Company’s common stock, par value $ 0.00001 per share, owned by the Exchanging Stockholders for pre-funded warrants (the “Exchange Warrants”) to purchase an aggregate of 1,000,000 shares of common stock (subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described in the Exchange Warrants), with an exercise price of $ 0.00001 per share.

4 unchanged sentences

The Company determined that the fair value of the Exchange Warrants is substantially similar to the fair value of the retired shares on the issuance date due to the negligible exercise price for the Exchange Warrants.

As of June 30, 2022, 400,000 of the Exchange Warrants remain unexercised.

During the year ended December 31, 2019, Exchange Warrants to purchase 600,000 shares of the Company’s common stock were net exercised, resulting in the issuance of 599,997 shares of common stock.

On July 1, 2022, Exchange Warrants to purchase 400,000 shares of the Company’s common stock were net exercised, resulting in the issuance of 399,997 shares of common stock.

There were no outstanding Exchange Warrants as of September 30, 2022.

In October 2019, the Company filed a registration statement on Form S-3 (File No.

2 unchanged sentences

In January 2022, the Company sold 422,367 shares of its common stock under its ATM financing facility pursuant to the 2019 Sales Agreement for net proceeds of $ 14.6 million, after deducting issuance costs.

As of June 30, 2022, a total of $ 79.3 million of securities remained available for sale under the 2019 Form S-3, $ 17.0 million of which remained available for sale under the ATM financing facility.

The 2019 Form S-3 expires in October 2022.

As of September 30, 2022, a total of $ 79.3 million of securities remained available for sale under the 2019 Form S-3, $ 17.0 million of which remained available for sale under the ATM financing facility.

The 2019 Form S-3 expired in October 2022.

In December 2020, the Company filed an automatic registration statement on Form S-3ASR and an accompanying prospectus (File No.

2 unchanged sentences

The Form S-3ASR expires in December 2023.

In August 2022, the Company filed a registration statement on Form S-3 (File No.

333-266595) that was declared effective as of August 16, 2022, and permits the offering, issuance, and sale by the Company of up to a maximum aggregate offering price of $ 300.0 million of its common stock, preferred stock, debt securities and warrants (the “2022 Form S-3”).

Up to a maximum of $ 100.0 million of the maximum aggregate offering price of $ 300.0 million may be issued and sold pursuant to an at-the-market (“ATM”) financing facility under a sales agreement entered into by the Company on August 5, 2022 (the “2022 Sales Agreement”).

As of September 30, 2022, no offering, issuance or sale

of common stock, preferred stock, debt securities or warrants was made under the 2022 Form S-3 or the 2022 Sales Agreement.

Equity Incentive Plan

2 unchanged sentences

Awards granted under the 2016 Plan expire no later than ten years from the date of grant.

As of June 30, 2022, 817,303 shares were available for issuance under the 2016 Plan.

As of September 30, 2022, 1,118,375 shares were available for issuance under the 2016 Plan.

Inducement Plan

3 unchanged sentences

Awards granted under the 2018 Inducement Plan expire no later than ten years from the date of grant.

As of June 30, 2022, 601,042 shares were available for issuance under the 2018 Inducement Plan, as amended.

As of September 30, 2022, 690,147 shares were available for issuance under the 2018 Inducement Plan, as amended.

Stock Options

5 unchanged sentences

Options forfeited

Balances at June 30, 2022

Options exercisable – June 30, 2022

Options vested and expected to vest – June 30, 2022

(1) The aggregate intrinsic values were calculated as the difference between the exercise price of the options and the closing price of the Company’s common stock on June 30, 2022.

The calculation excludes options with an exercise price higher than the closing price of the Company’s common stock on June 30, 2022.

The estimated weighted-average grant-date fair value of common stock underlying options granted to employees during the six months ended June 30, 2022 was $ 19.92 per share.

Balances at September 30, 2022

Options exercisable – September 30, 2022

Options vested and expected to vest – September 30, 2022

(1) The aggregate intrinsic values were calculated as the difference between the exercise price of the options and the closing price of the Company’s common stock on September 30, 2022.

The calculation excludes options with an exercise price higher than the closing price of the Company’s common stock on September 30, 2022.

The estimated weighted-average grant-date fair value of common stock underlying options granted to employees during the nine months ended September 30, 2022 was $ 18.67 per share.

Stock Options Valuation Assumptions

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Expected term (in years)

23 unchanged sentences

Unvested RSUs at December 31, 2021

Unvested RSUs at June 30, 2022

Unvested RSUs at September 30, 2022

Performance Stock Units

1 unchanged sentence

Unvested PSUs at December 31, 2021

Unvested PSUs at June 30, 2022

Unvested PSUs at September 30, 2022

The terms of the unvested PSUs provide for 100 % of shares to be earned based on the achievement of certain pre-determined performance objectives, subject to the participant’s continued employment.

The PSUs will vest, if at all, upon certification by the Compensation Committee of the Company’s Board of Directors of the actual achievement of the related performance objective, subject to specified change of control exceptions.

The PSUs will vest, if at all, upon certification by the Compensation Committee of the Company’s Board of Directors of the actual achievement of the related performance objectives, subject to specified change of control exceptions.

Stock-based compensation expense associated with PSUs is based on the fair value of the Company’s common stock on the grant date, which equals the closing price of the Company’s common stock on the grant date.

Company recognizes compensation expense over the vesting period of the awards that are ultimately expected to vest when the achievement of the related performance objectives becomes probable.

The total grant date fair value of unvested PSUs as of June 30, 2022 was $ 3.4 million.

As of June 30, 2022, the achievement of the related performance objective was deemed not probable and, accordingly, no stock-based compensation for the PSUs has been recognized as expense as of June 30, 2022.

The Company recognizes compensation expense over the vesting period of the awards that are ultimately expected to vest when the achievement of the related performance objectives becomes probable.

The total grant date fair value of unvested PSUs outstanding as of September 30, 2022 was $ 2.9 million.

As of September 30, 2022, the achievement of the related performance objectives was deemed not probable and, accordingly, no stock-based compensation for the PSUs has been recognized as expense as of September 30, 2022.

Employee Stock Purchase Plan

1 unchanged sentence

At the end of each offering period, eligible employees are able to purchase shares at 85 % of the lower of the fair market value of the Company’s common stock at the beginning of the offering period or at the end of each applicable purchase period.

During the six months ended June 30, 2022, a total of 28,931 shares of common stock were issued under the 2016 ESPP, and 1,285,068 shares remain available for issuance as of June 30, 2022.

During the nine months ended September 30, 2022, a total of 58,709 shares of common stock were issued under the 2016 ESPP, and 1,255,290 shares remained available for issuance as of September 30, 2022.

Stock-Based Compensation

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Research and development

1 unchanged sentence

Total stock-based compensation expense

As of June 30, 2022, total unrecognized stock-based compensation expense was approximately $ 69.0 million, which the Company expects to recognize over a weighted-average period of approximately 2.7 years.

As of September 30, 2022, total unrecognized stock-based compensation expense was approximately $ 56.4 million, which the Company expects to recognize over a weighted-average period of approximately 2.5 years.

2022 Tax Law Updates

On August 16, 2022, the Inflation Reduction Act (“IRA”) was signed into law.

The IRA contains two main tax provisions:

a new corporate alternative minimum tax imposed on certain corporations and an excise tax imposed upon shares repurchased by certain publicly traded corporations.

The provisions are effective for tax years beginning after December 31, 2022.

The Company is evaluating the impact of these provisions on its condensed financial statements and expects that the adoption of this act will not have a material impact on its financial statements.

Net Loss per Share

As the Company had net losses for the three and six months ended June 30, 2022 and 2021, all potential weighted average dilutive common shares were determined to be anti-dilutive.

As the Company had net losses for the three and nine months ended September 30, 2022 and 2021, all potential weighted average dilutive common shares were determined to be anti-dilutive.

The following table sets forth the computation of basic and diluted net loss per share (in thousands, except share and per share data):

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Weighted-average shares used to compute net loss per common share, basic and diluted

1 unchanged sentence

The following outstanding shares of potentially dilutive securities have been excluded from diluted net loss per share computations for the periods presented because their inclusion would be anti-dilutive:

September 30,

Options to purchase common stock

2 unchanged sentences

Performance stock units

Subsequent Event

On July 1, 2022, Exchange Warrants to purchase 400,000 shares of the Company’s common stock were net exercised, resulting in the issuance of 399,997 shares of common stock.

There were no outstanding Exchange Warrants following this transaction.

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