RIGEL PHARMACEUTICALS INC 10-Q

Item 1. Financial Statements ​ RIGEL PHARMACEUTICALS, INC. CONDENSED BALANCE SHEET S (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2022 2021 (1) ​ ​ (unaudited) ​ ​ ​ Assets ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 24,679 ​ $ 18,890 Short-term investments ​ 82,840 ​ 106,077 Accounts receivable, net ​ 15,240 ​ 15,472 Inventories ​ ​ 6,764 ​ 6,616 Prepaid and other current assets ​ 9,415 ​ 7,412 Total current assets ​ 138,938 ​ 154,467 Property and equipment, net ​ 2,140 ​ 2,184 Operating lease right-of-use asset ​ ​ 7,532 ​ ​ 9,703 Other assets ​ 464 ​ 974 ​ ​ $ 149,074 ​ $ 167,328 Liabilities and stockholders’ equity ​ ​ ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 4,614 ​ $ 3,795 Accrued compensation ​ 6,628 ​ 10,690 Accrued research and development ​ 9,492 ​ 10,384 Other accrued liabilities ​ 16,505 ​ 12,691 Lease liabilities, current portion ​ ​ 8,296 ​ ​ 9,892 Deferred revenue ​ ​ 2,097 ​ ​ 2,596 Other long-term liabilities, current portion ​ ​ 11,593 ​ ​ 13,506 Total current liabilities ​ 59,225 ​ 63,554 ​ ​ ​ ​ ​ ​ ​ Long-term portion of lease liabilities ​ — ​ 759 Loans payable, net of discount ​ ​ 29,847 ​ ​ 19,914 Other long-term liabilities ​ 53,204 ​ 52,727 ​ ​ ​ ​ ​ ​ ​ Commitments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders’ equity: ​ ​ ​ ​ ​ ​ Preferred stock ​ — ​ — Common stock ​ 172 ​ 172 Additional paid-in capital ​ 1,358,373 ​ 1,354,190 Accumulated other comprehensive loss ​ ( 416 ) ​ ( 102 ) Accumulated deficit ​ ( 1,351,331 ) ​ ( 1,323,886 ) Total stockholders’ equity ​ 6,798 ​ 30,374 ​ ​ $ 149,074 ​ $ 167,328 (1) The balance sheet as of December 31, 2021 has been derived from the audited financial statements included in Rigel’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (SEC) on March 1, 2022 . ​ See Accompanying Notes to Condensed Financial Statements ​ 3 ​ Table of Contents ​ RIGEL PHARMACEUTICALS, INC. CONDENSED STATEMENTS OF OPERATION S (In thousands, except per share amounts) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2022 2021 Revenues: ​ ​ ​ ​ ​ ​ Product sales, net ​ $ 16,197 ​ $ 12,376 Contract revenues from collaborations ​ ​ 538 ​ ​ 65,642 Government contract ​ ​ — ​ ​ 3,000 Total revenues ​ ​ 16,735 ​ ​ 81,018 ​ ​ ​ ​ ​ ​ ​ Costs and expenses: ​ ​ ​ ​ ​ ​ Cost of product sales ​ ​ 121 ​ ​ 316 Research and development ​ 15,474 ​ 16,826 Selling, general and administrative ​ 27,401 ​ 22,121 Total costs and expenses ​ 42,996 ​ 39,263 ​ ​ ​ ​ ​ ​ ​ Income (loss) from operations ​ ( 26,261 ) ​ 41,755 Interest income ​ 21 ​ 1 Interest expense ​ ​ ( 1,205 ) ​ ​ ( 485 ) Income (loss) before income taxes ​ ​ ( 27,445 ) ​ ​ 41,271 Provision for income taxes ​ ​ — ​ ​ 1,771 Net income (loss) ​ $ ( 27,445 ) ​ $ 39,500 ​ ​ ​ ​ ​ ​ ​ Net income (loss) per share ​ ​ ​ ​ ​ ​ Basic ​ $ ( 0.16 ) ​ $ 0.23 Diluted ​ $ ( 0.16 ) ​ $ 0.22 ​ ​ ​ ​ ​ ​ ​ Weighted average shares used in computing net income (loss) per share ​ ​ ​ ​ ​ ​ Basic ​ ​ 171,774 ​ ​ 169,800 Diluted ​ ​ 171,774 ​ ​ 176,069 ​ See Accompanying Notes to Condensed Financial Statements ​ 4 ​ Table of Contents RIGEL PHARMACEUTICALS, INC. CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In thousands) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2022 2021 Net income (loss) ​ $ ( 27,445 ) ​ $ 39,500 Other comprehensive income (loss): ​ ​ ​ ​ ​ ​ Net unrealized gain (loss) on short-term investments ​ ( 314 ) ​ 3 Comprehensive income (loss) ​ $ ( 27,759 ) ​ $ 39,503 ​ See Accompanying Notes to Condensed Financial Statements ​ 5 ​ Table of Contents RIGEL PHARMACEUTICALS, INC. CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY (In thousands, except share amounts) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Other ​ ​ ​ ​ Total ​ ​ Common Stock ​ Paid-in ​ Comprehensive ​ Accumulated ​ Stockholders’ ​ Shares Amount Capital Loss Deficit Equity Balance as of January 1, 2022 171,602,226 ​ $ 172 ​ $ 1,354,190 ​ $ ( 102 ) ​ $ ( 1,323,886 ) ​ $ 30,374 Net loss — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 27,445 ) ​ ( 27,445 ) Net unrealized loss on short-term investments — ​ ​ — ​ ​ — ​ ​ ( 314 ) ​ ​ — ​ ( 314 ) Issuance of common stock upon exercise of options 420,521 ​ ​ — ​ ​ 940 ​ ​ — ​ ​ — ​ 940 Issuance of common stock upon vesting of restricted stock units ​ 22,500 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Stock-based compensation expense — ​ ​ — ​ ​ 3,243 ​ ​ — ​ ​ — ​ 3,243 Balance as of March 31, 2022 172,045,247 ​ $ 172 ​ $ 1,358,373 ​ $ ( 416 ) ​ $ ( 1,351,331 ) ​ $ 6,798 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Other ​ ​ ​ ​ Total ​ ​ Common Stock ​ Paid-in ​ Comprehensive ​ Accumulated ​ Stockholders’ ​ Shares Amount Capital Loss Deficit Equity Balance as of January 1, 2021 169,316,782 ​ $ 169 ​ $ 1,339,833 ​ $ ( 4 ) ​ $ ( 1,305,972 ) ​ $ 34,026 Net income — ​ ​ — ​ ​ — ​ ​ — ​ ​ 39,500 ​ 39,500 Net unrealized gain on short-term investments — ​ ​ — ​ ​ — ​ ​ 3 ​ ​ — ​ 3 Issuance of common stock upon exercise of options 813,854 ​ ​ 1 ​ ​ 2,096 ​ ​ — ​ ​ — ​ 2,097 Stock-based compensation expense — ​ ​ — ​ ​ 2,672 ​ ​ — ​ ​ — ​ 2,672 Balance as of March 31, 2021 170,130,636 ​ $ 170 ​ $ 1,344,601 ​ $ ( 1 ) ​ $ ( 1,266,472 ) ​ $ 78,298 ​ ​ ​ ​ ​ ​ ​ ​ See Accompanying Notes to Condensed Financial Statements ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 6 ​ Table of Contents ​ RIGEL PHARMACEUTICALS, INC. CONDENSED STATEMENTS OF CASH FLOW S (In thousands) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2022 2021 Operating activities ​ ​ ​ ​ ​ ​ Net income (loss) ​ $ ( 27,445 ) ​ ​ 39,500 Adjustments to reconcile net income (loss) to net cash used in operating activities: ​ ​ ​ ​ ​ ​ Stock-based compensation expense ​ 3,207 ​ ​ 2,639 Depreciation and amortization ​ 237 ​ ​ 239 Non-cash interest expense ​ ​ 682 ​ ​ 60 Net amortization and accretion of discount on short-term investments and term loan ​ ​ 28 ​ ​ 85 Changes in assets and liabilities: ​ ​ ​ ​ ​ ​ Accounts receivable, net ​ 232 ​ ​ ( 126,222 ) Inventories ​ ​ ( 112 ) ​ ​ ( 5,272 ) Prepaid and other current assets ​ ( 2,003 ) ​ ​ 5,774 Other assets ​ 510 ​ ​ 6 Right-of-use assets ​ 2,171 ​ ​ 1,976 Accounts payable ​ 850 ​ ​ 1,394 Accrued compensation ​ ( 4,062 ) ​ ​ ( 2,997 ) Accrued research and development ​ ( 892 ) ​ ​ 479 Other accrued liabilities ​ 3,814 ​ ​ 61 Lease liability ​ ​ ( 2,355 ) ​ ​ ( 2,059 ) Deferred revenue ​ ​ ( 499 ) ​ ​ 6,482 Other current and long-term liabilities ​ — ​ 57,900 Net cash used in operating activities ​ ( 25,637 ) ​ ( 19,955 ) Investing activities ​ ​ ​ ​ ​ ​ Purchases of short-term investments ​ ( 6,997 ) ​ ​ ( 4,297 ) Maturities of short-term investments ​ 29,850 ​ ​ 11,900 Capital expenditures ​ ( 224 ) ​ ​ ( 71 ) Net cash provided by investing activities ​ 22,629 ​ 7,532 Financing activities ​ ​ ​ ​ ​ ​ Cost share payment to a collaboration partner ​ ​ ( 2,118 ) ​ ​ — Net proceeds from issuances of common stock upon exercise of options ​ 940 ​ ​ 2,097 Net proceeds from term loan financing ​ ​ 9,975 ​ ​ — Net cash provided by financing activities ​ 8,797 ​ 2,097 Net increase (decrease) in cash and cash equivalents ​ 5,789 ​ ( 10,326 ) Cash and cash equivalents at beginning of period ​ 18,890 ​ ​ 30,373 Cash and cash equivalents at end of period ​ $ 24,679 ​ $ 20,047 Supplemental disclosure of cash flow information ​ ​ ​ ​ ​ ​ Interest paid ​ $ 393 ​ $ 358 ​ See Accompanying Notes to Condensed Financial Statements ​ ​ 7 ​ Table of Contents Rigel Pharmaceuticals, In c. Notes to Condensed Financial Statements (unaudited) In this report, “Rigel,” “we,” “us” and “our” refer to Rigel Pharmaceuticals, Inc. 1. Organization and Summary of Significant Accounting Policies Description of Business We are a biotechnology company dedicated to discovering, developing and providing novel small molecule drugs that significantly improve the lives of patients with hematologic disorders, cancer and rare immune diseases. Our pioneering research focuses on signaling pathways that are critical to disease mechanisms. Our first product approved by the US Food and Drug Administration (FDA) is TAVALISSE® (fostamatinib disodium hexahydrate) tablets, the only approved oral spleen tyrosine kinase (SYK) inhibitor, for the treatment of adult patients with chronic immune thrombocytopenia (ITP) who have had an insufficient response to a previous treatment. The product is also commercially available in Europe, United Kingdom (UK) (TAVLESSE) and Canada (TAVALISSE) for the treatment of chronic ITP in adult patients. Fostamatinib is currently being studied in a Phase 3 trial for the treatment of warm autoimmune hemolytic anemia (wAIHA); a Phase 3 clinical trial for the treatment of hospitalized high-risk patients with COVID-19; and a National Institute of Health (NIH)/National Heart, Lung, and Blood Institute (NHLBI) sponsored Phase 3 trial (ACTIV-4 Host Tissue Trial) for the treatment of COVID-19 in hospitalized patients. Our other clinical programs include our interleukin receptor-associated kinase (IRAK) inhibitor program and a receptor-interacting serine/threonine-protein kinase (RIPK1) inhibitor program in clinical development with partner Eli Lilly and Company (Lilly). In addition, we have product candidates in clinical development with partners BerGenBio ASA (BerGenBio) and Daiichi Sankyo (Daiichi). Basis of Presentation Our accompanying unaudited condensed financial statements have been prepared in accordance with United States generally accepted accounting principles (US GAAP), for interim financial information and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Act of 1933, as amended (Securities Act). Accordingly, they do not include all the information and notes required by US GAAP for complete financial statements. These unaudited condensed financial statements include only normal and recurring adjustments that we believe are necessary to fairly state our financial position and the results of our operations and cash flows. Interim-period results are not necessarily indicative of results of operations or cash flows for a full-year or any subsequent interim period. The balance sheet as of December 31, 2021 has been derived from audited financial statements at that date but does not include all disclosures required by US GAAP for complete financial statements. Because certain disclosures required by US GAAP for complete financial statements are not included herein, these interim unaudited condensed financial statements and the notes accompanying them should be read in conjunction with our audited financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 1, 2022. Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ from these estimates. Significant Accounting Policies Our significant accounting policies are described in “Note 1 – Description of Business and Summary of Significant Accounting Policies” to our “Notes to Financial Statements” contained in “Part II, Item 8, Financial Statements and Supplementary Data” of our Annual Report on Form 10-K for the year ended December 31, 2021. There have been no material changes to these accounting policies. 8 ​ Table of Contents Liquidity As of March 31, 2022, we had approximately $ 107.5 million in cash, cash equivalents and short-term investments. Since inception, we have financed our operations primarily through sales of equity securities, debt financing arrangement, contract payments under our collaboration agreements and from product sales. Based on our current operating plan, we believe that our existing cash, cash equivalents, and short-term investments will be sufficient to fund our expenses and capital expenditure requirements for at least the next 12 months from the date of issuance of this Form 10-Q. Recently Issued Accounting Standards No new accounting guidance adopted during the period. Recently issued accounting guidance is not applicable or did not have, or is not expected to have, a material impact to us. 2. Net Income (Loss) Per Share Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period and the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. Potentially dilutive securities include stock options, restricted stock units and shares issuable under our Employee Stock Purchase Plan (Purchase Plan). The dilutive effect of these potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of our common stock can result in a greater dilutive effect from potentially dilutive securities. The following table sets forth the computation of basic and diluted earnings per share (in thousands except per share amounts): ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2022 2021 EPS Numerator: ​ ​ ​ ​ ​ ​ Net income (loss) ​ $ ( 27,445 ) ​ $ 39,500 EPS Denominator—Basic and Diluted: ​ ​ ​ ​ ​ ​ Weighted-average common shares outstanding ​ 171,774 ​ 169,800 EPS Denominator—Diluted: ​ ​ ​ ​ ​ ​ Weighted-average common shares outstanding ​ 171,774 ​ ​ 169,800 Dilutive effect of stock options, restricted stock units and shares under Purchase Plan ​ — ​ ​ 6,269 Weighted-average shares outstanding and common stock equivalents ​ 171,774 ​ 176,069 ​ ​ ​ ​ ​ ​ ​ Net income (loss) per share ​ ​ ​ ​ ​ ​ Basic ​ $ ( 0.16 ) ​ $ 0.23 Diluted ​ $ ( 0.16 ) ​ $ 0.22 ​ The potential shares of common stock that were excluded from the computation of diluted net income (loss) per share for the periods presented because including them would have been antidilutive are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2022 2021 Outstanding stock options ​ ​ 32,639 ​ ​ 8,183 Restricted stock units ​ ​ 1,206 ​ ​ 2 Purchase Plan ​ ​ 312 ​ ​ — Total ​ ​ 34,157 ​ ​ 8,185 ​ ​ ​ ​ ​ 9 ​ Table of Contents 3. Revenues ​ Revenues disaggregated by category were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ 2022 2021 ​ Product sales: ​ ​ ​ ​ ​ ​ ​ Gross product sales ​ $ 22,618 ​ $ 16,109 ​ Discounts and allowances ​ ​ ( 6,421 ) ​ ​ ( 3,733 ) ​ Total product sales, net ​ ​ 16,197 ​ ​ 12,376 ​ Revenues from collaborations: ​ ​ ​ ​ ​ ​ ​ License revenues ​ ​ 208 ​ ​ 64,618 ​ Research and development services and others ​ ​ 330 ​ ​ 1,024 ​ Total revenues from collaborations ​ ​ 538 ​ ​ 65,642 ​ Government contract ​ ​ — ​ ​ 3,000 ​ Total revenues ​ $ 16,735 ​ $ 81,018 ​ ​ Our net product sales include sales of TAVALISSE in the US, net of chargebacks, discounts and fees, government and other rebates and returns. The following tables summarize the activities in chargebacks, discounts and fees, government and other rebates and returns that were accounted for within other accrued liabilities, for each of the periods presented (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Chargebacks, ​ Government ​ ​ ​ ​ ​ ​ Discounts and ​ and Other ​ ​ ​ ​ ​ ​ Fees ​ Rebates ​ Returns ​ Total Balance as of January 1, 2022 $ 3,404 ​ $ 2,494 ​ $ 2,017 ​ $ 7,915 Provision related to current period sales ​ ​ 4,345 ​ ​ 1,397 ​ ​ 378 ​ ​ 6,120 Credit or payments made during the period ​ ​ ( 3,322 ) ​ ​ ( 1,227 ) ​ ​ ( 31 ) ​ ​ ( 4,580 ) Balance as of March 31, 2022 $ 4,427 ​ $ 2,664 ​ $ 2,364 ​ $ 9,455 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Chargebacks, ​ Government ​ ​ ​ ​ ​ ​ ​ ​ Discounts and ​ and Other ​ ​ ​ ​ ​ ​ ​ ​ Fees ​ Rebates ​ Returns ​ Total Balance as of January 1, 2021 $ 2,461 $ 2,115 ​ $ 1,489 ​ $ 6,065 Provision related to current period sales ​ ​ 1,952 ​ ​ 1,146 ​ ​ 201 ​ ​ 3,299 Credit or payments made during the period ​ ​ ( 2,727 ) ​ ​ ( 988 ) ​ ​ ( 243 ) ​ ​ ( 3,958 ) Balance as of March 31, 2021 $ 1,686 ​ $ 2,273 ​ $ 1,447 ​ $ 5,406 ​ Of the $ 6.4 million discounts and allowances from gross product sales for the three months ended March 31, 2022, $ 6.1 million was accounted for as additions to other accrued liabilities and $ 0.3 million as reductions in accounts receivable (as it relates to allowance for prompt pay discount) and prepaid and other current assets (as it relates to certain chargebacks and other fess that were prepaid) in the condensed balance sheet. ​ Of the $ 3.7 million discounts and allowances from gross product sales for the three months ended March 31, 2021, $ 3.3 million was accounted for as additions to other accrued liabilities and $ 0.4 million as reductions in accounts receivable (as it relates to allowance for prompt pay discount) and prepaid and other current assets (as it relates to certain chargebacks and other fess that were prepaid) in the condensed balance sheet. ​ For detailed discussions of our revenues from collaboration and government contract, see “Note 4 – Sponsored Research and License Agreements and Government Contract” below. ​ 10 ​ Table of Contents The following table summarizes the percentages of revenues from each of our customers who individually accounted for 10% or more (wherein * denotes less than 10%) of the total net product sales and revenues from collaborations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2022 2021 McKesson Specialty Care Distribution Corporation ​ ​ 38 % ​ ​ * ASD Healthcare and Oncology Supply ​ ​ 31 % ​ ​ * Cardinal Healthcare ​ ​ 28 % ​ ​ * Lilly ​ ​ * ​ ​ 78 % ​ 4. Sponsored Research and License Agreements and Government Contract Sponsored Research and License Agreements We conduct research and development programs independently and in connection with our corporate collaborators. As of March 31, 2022, we are a party to collaboration agreements with Lilly to develop and commercialize R552, a RIPK1 inhibitor, for the treatment of non-central nervous system (non-CNS) diseases and collaboration aimed at developing additional RIPK1 inhibitors for the treatment of central nervous system (CNS) diseases; with Grifols S.A. (Grifols) to commercialize fostamatinib for human diseases in all indications, including chronic ITP and autoimmune hemolytic anemia (AIHA), in Europe and Turkey; with Kissei Pharmaceutical Co., Ltd. (Kissei) to develop and commercialize fostamatinib in Japan, China, Taiwan and the Republic of Korea; and with Medison Pharma Trading AG (Medison Canada) and Medison Pharma Ltd. (Medison Israel and, together with Medison Canada, Medison) to commercialize fostamatinib in all indications, including chronic ITP and AIHA, in Canada and Israel, respectively. Further, we are also a party to collaboration agreements, but do not have ongoing performance obligations with BerGenBio for the development and commercialization of AXL inhibitors in oncology, and with Daiichi to pursue research related to MDM2 inhibitors, a novel class of drug targets called ligases. We have an agreement with AstraZeneca AB (AZ) for the development and commercialization of R256, an inhaled JAK inhibitor. In December 2021, AZ provided a notice to terminate the agreement effective April 19, 2022 and returned to us the full rights to our propriety JAK inhibitor. Under the above existing agreements that we entered into in the ordinary course of business, we received or may be entitled to receive upfront cash payments, payments contingent upon specified events achieved by such partners and royalties on any net sales of products sold by such partners under the agreements. Total future contingent payments to us under all of above existing agreements, excluding terminated or terminating agreements, could exceed $ 1.3 billion if all potential product candidates achieved all of the payment triggering events under all of our current agreements (based on a single product candidate under each agreement). Of this amount, $ 279.5 million relates to the achievement of development events, $ 285.6 million relates to the achievement of regulatory events and $ 778.5 million relates to the achievement of certain commercial or launch events. This estimated future contingent amount does not include any estimated royalties that could be due to us if the partners successfully commercialize any of the licensed products. Future events that may trigger payments to us under the agreements are based solely on our partners’ future efforts and achievements of specified development, regulatory and/or commercial events. Global Exclusive License Agreement with Lilly ​ On February 18, 2021, we entered into a global exclusive license agreement and strategic collaboration with Lilly (Lilly Agreement), which became effective on March 27, 2021, to develop and commercialize R552, a RIPK1 inhibitor, for the treatment of non-CNS diseases. In addition, the collaboration is aimed at developing additional RIPK1 inhibitors for the treatment of CNS diseases. Pursuant to the terms of the license agreement, we granted to Lilly exclusive rights to develop and commercialize R552 and related RIPK1 inhibitors in all indications worldwide. The agreement became effective in March 2021 upon clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The parties’ collaboration is governed through a joint governance committee and appropriate subcommittees. ​ 11 ​ Table of Contents We are responsible for 20 % of development costs for R552 in the US, Europe, and Japan, up to a specified cap. Lilly is responsible for funding the remainder of all development activities for R552 and other non-CNS disease development candidates. We have the right to opt-out of co-funding the R552 development activities in the US, Europe and Japan at two different specified times. If we exercise our first opt-out right (no later than September 30, 2023), under the Lilly Agreement, we are required to fund our share of the R552 development activities in the US, Europe, and Japan up to a maximum funding commitment of $ 65.0 million through April 1, 2024. If we decide not to exercise our opt-out rights, we will be required to share in global development costs of up to certain amounts at a specified cap, as provided for in the Lilly Agreement. ​ We are responsible for performing and funding initial discovery and identification of CNS disease development candidates. Following candidate selection, Lilly will be responsible for performing and funding all future development and commercialization of the CNS disease development candidates. ​ Under the terms of the license agreement, we were entitled to receive a non-refundable and non-creditable upfront cash payment amounting to $ 125.0 million, which we received in April 2021, and a potential for an additional $ 330.0 million in milestone payments upon the achievement of specified development and regulatory milestones by non-CNS disease products and $ 255.0 million in milestone payments upon the achievement of specified development and regulatory milestones by CNS disease products. We are also eligible to receive up to $ 100.0 million in sales milestone payments on a product-by-product basis for non-CNS disease products and up to $ 150.0 million in sales milestone payments on a product-by-product basis for CNS disease products. In addition, depending on the extent of our co-funding of R552 development activities, we would be entitled to receive tiered royalty payments on net sales of non-CNS disease products at percentages ranging from the mid-single digits to high-teens, subject to certain standard reductions and offsets. We would be entitled to receive tiered royalty payments on net sales of CNS disease products up to low-double digits, subject to certain standard reductions and offsets. ​ We accounted for this agreement under ASC 606 and identified the following distinct performance obligations at inception of the agreement: (a) granting of the license rights over the non-CNS penetrant intellectual property (IP), and (b) granting of the license rights over the CNS penetrant IP which will be delivered to Lilly upon completion of the additional research and development efforts specified in the agreement. We concluded each of these performance obligations is distinct. We based our assessment on the assumption that Lilly can benefit from each of the licenses on its own by developing and commercializing the underlying product using its own resources. ​ Under the Lilly Agreement, we are required to share 20 % of the development costs for R552 in the US, Europe and Japan up to a specified cap. Given our rights to opt-out from the development of R552, we believe at the minimum, we have a commitment to fund the development costs up to $ 65.0 million as discussed above. We considered this commitment to fund the development costs as a significant financing component of the contract, which we accounted for as a reduction of the upfront fee to derive the transaction price. This financing component was recorded as a liability at its net present value of approximately $ 57.9 million using a 6.4 % discount rate. Interest expense is being accreted on such liability over the expected commitment period. Interest expense accreted during the three months ended March 31, 2022 and 2021 was $ 0.7 million and $ 0.1 million, respectively. As of March 31, 2022 and December 31, 2021, the outstanding financing liability to Lilly was $ 59.2 million and $ 60.7 million, respectively, and included within other long-term liabilities, current portion, and other long-term liabilities in the condensed balance sheet. Through March 31, 2022, Lilly billed us $ 4.9 million for our share of development costs under this agreement, of which, $ 2.1 million was paid as of March 31, 2022. We allocated the net transaction price of $ 67.1 million to each performance obligation based on our best estimate of its relative standalone selling price using the adjusted market assessment approach. We concluded that the license rights over the non-CNS penetrant IP represents functional IP that is not expected to change over time, and we have no ongoing or undelivered obligations relative to such IP that Lilly will benefit from the use of such IP on the delivery date. As such, the transaction price allocated to the non-CNS penetrant IP of $ 60.4 million was recognized as revenue during the three months ended March 31, 2021 upon delivery of the non-CNS penetrant IP to Lilly in March 2021. For the delivery of license rights over the CNS penetrant IP, we are obligated to perform additional research and development efforts before Lilly can accept the license. The allocated transaction price to the CNS penetrant IP of $ 6.7 million was recognized as revenue from the effective date of the Lilly Agreement through the eventual acceptance by Lilly using the input method. During the three months ended March 31, 2022 and 2021, we recognized $ 0.2 million of 12 ​ Table of Contents revenue for both periods for activities related to the delivery of CNS penetrant IP. As of March 31, 2022, there was $ 0.3 million of deferred revenue related to delivery of the CNS penetrant IP. ​ The remaining future variable consideration related to future milestone payments as discussed above were fully constrained because we cannot conclude that it is probable that a significant reversal of the amount of cumulative revenue recognized will not occur, given the inherent uncertainty of success with these future milestones. For sales-based milestones and royalties, we determined that the license is the predominant item to which the royalties or sales-based milestones relate. Accordingly, we will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). We will re-evaluate the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur. Grifols License Agreement ​ In January 2019, we entered into an exclusive license agreement with Grifols to commercialize fostamatinib in all indications, including chronic ITP and AIHA, in Europe and Turkey. Under the agreement, we received an upfront payment of $ 30.0 million, with the potential for $ 297.5 million in total regulatory and commercial milestones. We will also receive stepped double-digit royalty payments based on tiered net sales which may reach 30 % of net sales. In return, Grifols received exclusive rights to commercialize fostamatinib for human diseases, including chronic ITP, AIHA, and IgAN, in Europe and Turkey. Grifols also received an exclusive option to expand the territory under its exclusive and non-exclusive licenses to include the Middle East, North Africa and Russia (including Commonwealth of Independent States). In November 2020, Grifols exercised its option to include these territories as part of the licensed territories under the agreement. The agreement also required us to continue to conduct our long-term open-label extension study on patients with ITP through European Medicines Agency (EMA) approval of ITP in Europe or until the study ends as well as conduct the Phase 3 trial of fostamatinib in AIHA. ​ In December 2019, we entered into a Drug Product Purchase Agreement with Grifols wherein we agreed to supply and sell to Grifols at 30 % mark up the drug product requested under an anticipated first and only purchase order until Grifols enters into a supply agreement directly with a third-party drug product manufacturer. In October 2020, we entered into a Commercial Supply Agreement with Grifols. In January 2020, the European Commission granted a centralized Marketing Authorization (MA) for fostamatinib valid throughout the European Union and in the UK after the departure of the UK from the European Union for the treatment of chronic immune thrombocytopenia in adult patients who are refractory to other treatments. With this approval, we received in February 2020 a $ 20.0 million non-refundable payment, comprised of a $ 17.5 million payment due upon Marketing Authorization Application (MAA) approval by the EMA of fostamatinib for the first indication and a $ 2.5 million creditable advance royalty payment, based on the terms of our collaboration agreement with Grifols. The above milestone payment was allocated to the distinct performance obligations in the collaboration agreement with Grifols. ​ We accounted for this agreement under ASC 606 and identified the following distinct performance obligations at inception of the agreement: (a) granting of the license, (b) performance of research and regulatory services related to our ongoing long-term open-label extension study on patients with ITP, and (c) performance of research services related to our Phase 3 study in AIHA. In October 2020, we entered into a commercial supply agreement for the licensed territories. We concluded each of these performance obligations is distinct. We based our assessment on the following: (i) our assessment that Grifols can benefit from the license on its own by developing and commercializing the underlying product using its own resources, and (ii) the fact that the manufacturing services are not highly specialized in nature and can be performed by other vendors. Upon execution of our agreement with Grifols, we determined that the upfront fee of $ 5.0 million, which is the non-refundable portion of the $ 30.0 million upfront fee, represented the transaction price. In the first quarter of 2020, we revised the transaction price to include the $ 25.0 million of the upfront payment that is no longer refundable under our agreement and the $ 20.0 million payment received that is no longer constrained. We allocated the updated transaction price to the distinct performance obligations in our collaboration agreement based on our best estimate of the relative standalone selling price as follows: (a) for the license, we estimated the standalone selling price using the adjusted market assessment approach to estimate its standalone selling price in the licensed territories; (b) for the research and regulatory services, we estimated the standalone selling price using the cost plus expected margin approach. As a result of the adjusted transaction price, adjustments are recorded on a cumulative catch- 13 ​ Table of Contents up basis, and recorded as part of contract revenues from collaborations in the first quarter of 2020. As of March 31, 2022 and December 31, 2021, the remaining deferred revenue was $ 0.4 million and $ 0.7 million, respectively, related to the performance of research services. During the three months ended March 31, 2022 and 2021, we recognized $ 0.3 million and none , respectively, in revenue related to the research and development services. During the three months ended March 31, 2022 and 2021, we recognized none and $ 1.0 million, respectively, in revenues for the delivery of drug supplies to Grifols for its commercialization . The remaining future variable consideration of $ 277.5 million related to future regulatory and commercial milestones were fully constrained because we cannot conclude that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur, given the inherent uncertainty of success with these future milestones. We are recognizing revenues related to the research and regulatory services throughout the term of the respective clinical programs using the input method. For sales-based milestones and royalties, we determined that the license is the predominant item to which the royalties or sales-based milestones relate. Accordingly, we will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). We will re-evaluate the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur. ​ Kissei License Agreement ​ In October 2018, we entered into an exclusive license and supply agreement with Kissei to develop and commercialize fostamatinib in all current and potential indications in Japan, China, Taiwan and the Republic of Korea. Kissei is responsible for performing and funding all development activities for fostamatinib in the above-mentioned territories. We received an upfront cash payment of $ 33.0 million, with the potential for up to an additional $ 147.0 million in development, regulatory and commercial milestone payments, and will receive mid- to upper twenty percent, tiered, escalated net sales-based payments for the supply of fostamatinib. Under the agreement, we granted Kissei the license rights to fostamatinib in the territories above and are obligated to supply Kissei with drug product for use in clinical trials and pre-commercialization activities. We are also responsible for the manufacture and supply of fostamatinib for all future development and commercialization activities under the agreement. ​ We accounted for this agreement under ASC 606 and identified the following distinct performance obligations at inception of the agreement: (a) granting of the license, (b) supply of fostamatinib for clinical use and (c) material right associated with discounted fostamatinib that are supplied for use other than clinical or commercial. In addition, we will provide commercial product supply if the product is approved in the licensed territory. We concluded that each of these performance obligations is distinct. We based our assessment on the following: (i) our assessment that Kissei can benefit from the license on its own by developing and commercializing the underlying product using its own resources and (ii) the fact that the manufacturing services are not highly specialized in nature and can be performed by other vendors. Moreover, we determined that the upfront fee of $ 33.0 million represented the transaction price and was allocated to the performance obligations based on our best estimate of the relative standalone selling price as follows: (a) for the license, we estimated the standalone selling price using the adjusted market assessment approach to estimate its standalone selling price in the licensed territories; (b) for the supply of fostamatinib and the material right associated with discounted fostamatinib, we estimated the standalone selling price using the cost plus expected margin approach. Variable consideration of $ 147.0 million related to future development and regulatory milestones was fully constrained because we cannot conclude that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur, given the inherent uncertainty of success with these future milestones. We will recognize revenues related to the supply of fostamatinib and material right upon delivery of fostamatinib to Kissei. For sales-based milestones and royalties, we determined that the license is the predominant item to which the royalties or sales-based milestones relate to. Accordingly, we will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). We will re-evaluate the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur. ​ During the three months ended March 31, 2022 and 2021, we recognized an immaterial amount of revenue and no revenue, respectively, related to the supply of fostamatinib and material right upon delivery of fostamatinib to Kissei. As of March 31, 2022 and December 31, 2021, the remaining deferred revenue was $ 1.4 million. 14 ​ Table of Contents Medison Commercial and License Agreements In October 2019, we entered into two exclusive commercial and license agreements with Medison for the commercialization of fostamatinib for chronic ITP in Israel and in Canada, pursuant to which we received a $ 5.0 million upfront payment with respect to the agreement in Canada. We accounted for the agreement made with an upfront payment under ASC 606 and identified the following combined performance obligations at inception of the agreement: (a) granting of the license and (b) obtaining regulatory approval in Canada of fostamatinib in ITP. We determined that the non-refundable upfront fee of $ 5.0 million represented the transaction price. However, under the agreement, we have the option to buy back all rights to the product in Canada within six months from obtaining regulatory approval for the treatment of AIHA in Canada. The buyback option precludes us from transferring control of the license to Medison under ASC 606. We believe that the buyback provision, if exercised, will require us to repurchase the license at an amount equal to or more than the upfront $ 5.0 million. As such, this arrangement was accounted for as a financing arrangement. As of March 31, 2022 and December 31, 2021, the outstanding financing liability to Medison of $ 5.6 million was included within other long-term liabilities in the condensed balance sheet. Other license agreements In February 2021, we entered into a non-exclusive license agreement with an unrelated third party whereby we granted such unrelated third party rights to a certain patent. In consideration for the license rights granted, we received a one-time fee of $ 4.0 million. All the deliverables under the agreement had been delivered and the one-time fee was recognized as revenue during the three months ended March 31, 2021. Government Contract - US Department of Defense’s JPEO-CBRND In January 2021, we were awarded up to $ 16.5 million by the US Department of Defense to support our ongoing Phase 3 clinical trial to evaluate the safety and efficacy of fostamatinib for the treatment of hospitalized high-risk patients with COVID-19. The amount of award we will receive from the US Department of Defense is subject to submission of proper documentation as evidence of completion of certain clinical trial events or milestones as specified in the agreement, and approval by the US Department of Defense that such events or milestones have been met. We determined that this government award should be accounted for under IAS 2, Accounting for Government Grants and Disclosure of Government Assistance, which is outside of the scope of Topic 606, as the US Department of Defense is not receiving reciprocal value for their contributions. We record government contract revenue in the statement of operations in the period when it is probable that we will receive the award, which is when we comply with the conditions associated with the award and obtain approval from the US Department of Defense that such conditions have been met. For the three months ended March 31, 2022 and 2021, we recognized no revenue and $ 3.0 million of revenue, respectively, related to this grant. Through March 31, 2022, we recognized $ 10.5 million revenue and we expect to receive the remaining award of $ 6.0 million throughout the period we conduct our clinical trial, subject to us meeting certain clinical trial events or milestones and approval by the US Department of Defense as specified in the agreement. 5. Stock-Based Compensation ​ Stock-based compensation for the periods presented was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2022 2021 Selling, general and administrative ​ $ 2,739 ​ $ 2,053 Research and development ​ ​ 468 ​ ​ 586 Total stock-based compensation expense ​ $ 3,207 ​ $ 2,639 ​ In March 2022, our Board of Directors approved to extend the exercise period of the stock option grants made to two members of our Board of Directors whose terms will expire in the next stockholders’ meeting in May 2022. As a result of this modification, we recorded an incremental stock-based compensation expense of approximately $ 0.8 million during the three months ended March 31, 2022. The amount was included within selling, general and administrative expense in the condensed statement of operations. 15 ​ Table of Contents During the three months ended March 31, 2022, we granted stock options to purchase 4,470,747 shares of common stock with weighted-average grant-date fair value of $ 1.58 per share, and 420,521 stock options were exercised. As of March 31, 2022, there were 32,639,145 stock options outstanding, of which, 2,410,000 are outstanding performance-based stock options wherein the achievement of the corresponding corporate-based milestones were not considered probable as of March 31, 2022. Accordingly, none of the $ 4.7 million grant date fair value for these awards has been recognized as stock-based compensation expense through March 31, 2022. The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model. The following table summarizes the weighted-average assumptions relating to options granted pursuant to our Equity Incentive Plans (2018 Equity Incentive Plan and Inducement Plan) for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2022 2021 Risk-free interest rate ​ 1.7 % 1.0 % Expected term (in years) ​ 6.4 ​ 6.5 ​ Dividend yield ​ 0.0 % 0.0 % Expected volatility ​ 70.0 % 70.6 % ​ During the three months ended March 31, 2022, we granted 1,012,612 restricted stock units (RSUs) with a grant-date weighted-average fair value of $ 2.42 per share, and 22,500 RSUs were released. The RSUs granted generally vest over 4 years . As of March 31, 2022, there were 1,206,182 RSUs outstanding. ​ As of March 31, 2022, there was approximately $ 19.4 million of unrecognized stock-based compensation which is expected to be recognized over a remaining weighted-average period of 3.04 years related to time-based stock options, RSUs and performance-based stock options where achievement of the corresponding corporate-based milestones was considered probable as of March 31, 2022. ​ In September 2021 and January 2022, our Board of Directors approved increases of 469,000 shares and 610,000 shares, respectively, in common stock reserved for issuance under the Inducement Plan which became effective following the filing of a Registration Statement to register the additional shares available for issuance on March 1, 2022. As of March 31, 2022, there were 7,130,256 shares of common stock available for future grant under our Equity Incentive Plans. ​ In April 2022, our Board of Directors approved the increase of 626,000 shares of common stock reserved for issuance under the Inducement Plan. ​ Employee Stock Purchase Plan ​ Our Purchase Plan permits our eligible employees to purchase common stock at a discount through payroll deductions during the offering period. Our Purchase Plan provides for a twenty-four -month offering period comprised of four six-month purchase periods with a look-back option. A look-back option is a provision in our Purchase Plan under which eligible employees can purchase shares of our common stock at a price per share equal to the lesser of 85 % of the fair market value on the first day of the offering period or 85 % of the fair market value on the purchase date. Our Purchase Plan also includes a feature that provides for a new offering period to begin when the fair market value of our common stock on any purchase date during an offering period falls below the fair market value of our common stock on the first day of such offering period. This feature is called a “reset.” Participants are automatically enrolled in the new offering period. Our existing twenty-four -month offering period under our Purchase Plan is from July 1, 2020 to June 30, 2022. As of March 31, 2022, the unrecognized stock-based compensation cost related to our Purchase Plan was $ 0.05 million, which is expected to be recognized over the remaining weighted average period of 0.24 years. ​ As of March 31, 2022, there were 4,584,484 shares reserved for future issuance under the Purchase Plan. 16 ​ Table of Contents 6. Inventories Inventories for the periods presented consist of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2022 2021 Raw materials ​ $ 4,555 ​ $ 5,142 Work in process ​ ​ 1,040 ​ ​ 162 Finished goods ​ ​ 1,169 ​ ​ 1,312 Total ​ $ 6,764 ​ $ 6,616 ​ As of March 31, 2022, we have $0.7 million in advance payments to the manufacturer of our raw materials, which was included within prepaid and other current assets in the condensed balance sheet. ​ 7. Cash, Cash Equivalents and Short-Term Investments Cash, cash equivalents and short-term investments for the periods presented consist of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2022 2021 Cash ​ $ 4,070 ​ $ 6,249 Money market funds ​ 12,363 ​ 6,842 US treasury bills ​ 35,170 ​ 35,366 Government-sponsored enterprise securities ​ 15,559 ​ 14,678 Corporate bonds and commercial paper ​ 40,357 ​ 61,832 ​ ​ $ 107,519 ​ $ 124,967 Reported as: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 24,679 ​ $ 18,890 Short-term investments ​ 82,840 ​ 106,077 ​ ​ $ 107,519 ​ $ 124,967 ​ Cash equivalents and short-term investments include the following securities with gross unrealized gains and losses (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Gross ​ ​ ​ ​ Amortized ​ Unrealized ​ Unrealized ​ ​ ​ March 31, 2022 ​ Cost ​ Gains ​ Losses ​ Fair Value US treasury bills ​ $ 35,353 ​ $ — ​ $ ( 183 ) ​ $ 35,170 ​ Government-sponsored enterprise securities ​ ​ 15,677 ​ ​ — ​ ​ ( 118 ) ​ ​ 15,559 ​ Corporate bonds and commercial paper ​ 40,472 ​ — ​ ( 115 ) ​ 40,357 ​ Total ​ $ 91,502 ​ $ — ​ $ ( 416 ) ​ $ 91,086 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Gross ​ ​ ​ ​ Amortized ​ Unrealized ​ Unrealized ​ ​ ​ December 31, 2021 ​ Cost ​ Gains ​ Losses ​ Fair Value US treasury bills ​ $ 35,416 ​ $ — ​ $ ( 50 ) ​ $ 35,366 ​ Government-sponsored enterprise securities ​ ​ 14,705 ​ ​ — ​ ​ ( 27 ) ​ ​ 14,678 ​ Corporate bonds and commercial paper ​ 61,857 ​ 2 ​ ( 27 ) ​ 61,832 ​ Total ​ $ 111,978 ​ $ 2 ​ $ ( 104 ) ​ $ 111,876 ​ ​ As of March 31, 2022 and December 31, 2021, our cash equivalents and short-term investments had a weighted-average time to maturity of approximately 166 days and 196 days , respectively. Our short-term investments are classified as available-for-sale securities. Accordingly, we have classified certain securities as short-term investments on our condensed balance sheets as they are available for use in the current operations. As of March 31, 2022, we had no 17 ​ Table of Contents investments that had been in a continuous unrealized loss position for more than 12 months. As of March 31, 2022, a total of 44 individual securities had been in an unrealized loss position for 12 months or less, and the losses were determined to be temporary. The gross unrealized losses above were caused by interest rate increases. No significant facts or circumstances have arisen to indicate that there has been any significant deterioration in the creditworthiness of the issuers of the securities held by us. Based on our review of these securities, including our assessment of the duration and severity of unrealized losses, there were no other-than-temporary impairments for these securities as of March 31, 2022. The following table shows the fair value and gross unrealized losses of our investments in individual securities that are in an unrealized loss position, aggregated by investment category (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2022 Fair Value Unrealized Losses US treasury bills ​ $ 35,170 ​ $ ( 183 ) ​ Government-sponsored enterprise securities ​ ​ 15,559 ​ ​ ( 118 ) ​ Corporate bonds and commercial paper ​ ​ 39,607 ​ ​ ( 115 ) ​ Total ​ $ 90,336 ​ $ ( 416 ) ​ ​ ​ ​ ​ 8. Fair Value ​ The table below summarizes the fair value of our cash equivalents and short-term investments measured at fair value on a recurring basis, and are categorized based upon the lowest level of significant input to the valuations (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets at Fair Value as of March 31, 2022 ​ Level 1 Level 2 Level 3 Total Money market funds ​ $ 12,363 ​ $ — ​ $ — ​ $ 12,363 US treasury bills ​ ​ — ​ ​ 35,170 ​ ​ — ​ ​ 35,170 Government-sponsored enterprise securities ​ — ​ 15,559 ​ — ​ 15,559 Corporate bonds and commercial paper ​ — ​ 40,357 ​ — ​ 40,357 Total ​ $ 12,363 ​ $ 91,086 ​ $ — ​ $ 103,449 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets at Fair Value as of December 31, 2021 ​ Level 1 Level 2 Level 3 Total Money market funds ​ $ 6,842 ​ $ — ​ $ — ​ $ 6,842 US treasury bills ​ ​ — ​ ​ 35,366 ​ ​ — ​ ​ 35,366 Government-sponsored enterprise securities ​ — ​ 14,678 ​ — ​ 14,678 Corporate bonds and commercial paper ​ — ​ 61,832 ​ — ​ 61,832 Total ​ $ 6,842 ​ $ 111,876 ​ $ — ​ $ 118,718 ​ ​ ​ 9. Debt We have a Credit and Security Agreement (Credit Agreement) with MidCap Financial Trust (MidCap) entered on September 27, 2019 (Closing Date) and amended on March 29, 2021 (First Amendment) and February 11, 2022 (Second Amendment). The Credit Agreement provides for a $ 60.0 million term loan credit facility. At the Closing Date, $ 10.0 million was funded (Tranche 1). In May 2020, an additional $ 10.0 million was funded (Tranche 2). In March 2021, we entered into the First Amendment to the Credit Agreement to extend the period through which Tranche 3 will be available to us through March 31, 2022 at our option, subject to the satisfaction of certain conditions set forth in the Credit Agreement. In February 2022, we entered into the Second Amendment to our Credit Agreement which, among other things, amended the applicable funding conditions, applicable commitments and certain other terms relating to available credit facilities (Tranches 3 and 4), added additional term loan credit facility (Tranche 5), and revised certain terms related to the financial covenants. Following the Second Amendment, the Credit Agreement gives us the ability to access the following available credit facilities: (i) on the closing date of the Second Amendment, $ 10.0 million term loan facility (Tranche 3), (ii) at our option, an additional $ 10.0 million aggregate principal amount of term loan facility available on the Second Amendment effective date through March 31, 2023 (Tranche 4), which is subject to satisfaction of certain conditions if Tranche 4 is drawn on or after August 31, 2022, and (iii) at our option and 18 ​ Table of Contents upon the satisfaction of certain conditions contained in the Credit Agreement, as amended, an additional $ 20.0 million aggregate principal amount of term loan available through March 31, 2023 (Tranche 5). At the Second Amendment effective date, $ 10.0 million was funded (Tranche 3). As of March 31, 2022, the outstanding principal balance of the loan was $ 30.0 million. To date, the facility gives us the ability to access an additional $ 30.0 million at our option, subject to the achievement of certain customary conditions as discussed above. The outstanding principal balance of the loan bears interest at an annual rate of one-month LIBOR ( or a comparable applicable index rate determined pursuant to the Credit Agreement if the LIBOR is no longer available) plus 5.65 % , subject to a LIBOR floor of 1.50 % and is payable monthly in arrears. Commencing on October 1, 2019, the Credit Agreement provides that we initially make interest-only payments for 24 months followed by 36 months of amortization payments. The interest-only period can be extended to 36 months (first interest-only extension) and again to 48 months (second interest-only extension) upon the satisfaction of certain conditions set forth in the Credit Agreement. In June 2021, we satisfied the first interest-only extension conditions under the Credit Agreement which effectively extended the interest-only period to 36 months or through October 1, 2022. All unpaid principal and accrued interest are due and payable no later than September 1, 2024. A final payment fee of 2.5 % of principal is due on the final payment of the term loan. We may make voluntary prepayments, in whole or in part, subject to certain prepayment premiums and additional interest payments. The Credit Agreement also contains certain provisions, such as event of default and change in control provisions, which, if triggered, would require us to make mandatory prepayments on the term loan, which are subject to certain prepayment premiums and additional interest payments. The obligations under the Credit Agreement are secured by a perfected security interest in all of our assets except for intellectual property and certain other customary excluded property pursuant to the terms of the Credit Agreement. As of March 31, 2022 and December 31, 2021, the outstanding balance of the loan, net of unamortized debt discount, was $ 29.8 million and $ 19.9 million, respectively. As of March 31, 2022, we deemed that it is probable that we will satisfy the second interest-only criteria. Accordingly, we classified our outstanding loan as a long-term liability in the accompanying condensed balance sheet. Debt issuance costs are recorded as a direct deduction from the term loan on the condensed balance sheet with the resultant discount being amortized ratably as interest expense over the term of the loan, using the effective interest method. As of March 31, 2022 and December 31, 2021, the unamortized issuance costs and debt discounts amounted to $ 0.2 million and $ 0.1 million, respectively. For the three months ended March 31, 2022 and 2021, interest expense, including amortization of the debt discount and accretion of the final fees related to the Credit Agreement was $ 0.5 million and $ 0.4 million, respectively. Accrued interest of $ 0.6 million was included within other accrued liabilities in the condensed balance sheet as of March 31, 2022. The following table presents the future minimum principal payments of the outstanding loan as of March 31, 2022 under the current interest-only period as discussed above (in thousands): ​ ​ ​ ​ Remainder of 2022 ​ $ 3,750 2023 ​ ​ 15,000 2024 ​ ​ 11,250 Principal amount (Tranches 1, 2 and 3) ​ $ 30,000 ​ The Credit Agreement contains certain covenants which, among others, require us to deliver financial reports at designated times of the year and maintain minimum trailing net revenues and cash, cash equivalents and short-term investments balance. As of March 31, 2022, we were not in violation of any covenants. 19 ​ Table of Contents 10. Leases We currently lease our research and office space under a noncancelable lease agreement with our landlord, Healthpeak Properties, Inc. (formerly known as HCP BTC, LLC), which originally set to expire in 2018, and was extended in July 2017 for another five years through January 2023. In March 2022, we entered an amendment to the lease agreement to waive our option or right to further extend the term of the lease. We have a sublease agreement originally entered in December 2014, and subsequently amended in February 2017 and July 2017, with an unrelated third party to occupy a portion of our research and office space which expire in January 2023. As of March 31, 2022, we expect to receive approximately $ 3.9 million in future sublease income (excluding our subtenant’s share of facilities operating expenses) through January 2023. As of March 31, 2022 and December 31, 2021, we had operating lease right-of-use asset of $ 7.5 million and $ 9.7 million, respectively, and lease liability of $ 8.3 million and $ 10.7 million, respectively, in the respective condensed balance sheets. The weighted average remaining term of our lease as of March 31, 2022 was 0.83 year. As of March 31, 2022, we received from our landlord leasehold improvement incentives amounting to $ 0.6 million related to leasehold improvements. We record these leasehold improvement incentives as a reduction to operating lease right-of-use asset and lease liability until the lease ends and the asset is transferred. We recorded rent expense on a straight-line basis for our lease, net of sublease income. For our sublease arrangement which we classified as an operating lease, our loss on the sublease was comprised of the present value of our future payments to our landlord less the present value of our future rent payments expected from our subtenant over the term of the sublease. The components of our operating lease expense were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2022 ​ 2021 Fixed operating lease expense $ 1,340 $ 1,340 Variable operating lease expense ​ ​ 266 ​ ​ 229 Total operating lease expense $ 1,606 $ 1,569 ​ Supplemental information related to our operating lease were as follow (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2022 ​ 2021 Cash payments included in the measurement of operating lease liabilities ​ $ 2,596 ​ $ 2,496 ​ Supplemental information related to our operating sublease was as follow (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2022 ​ 2021 Fixed sublease expense $ 1,095 $ 1,095 Variable sublease expense ​ ​ 244 ​ ​ 241 Sublease income ​ ​ ( 1,339 ) ​ ​ ( 1,336 ) Net $ — $ — ​ The following table presents the future lease payments of our operating lease liabilities as of March 31, 2022 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Lease ​ ​ Sublease Receipts ​ ​ Net Remainder of 2022 ​ $ 7,889 ​ ​ ( 3,548 ) ​ ​ 4,341 2023 ​ ​ 877 ​ ​ ( 394 ) ​ ​ 483 Total minimum payments required ​ $ 8,766 ​ $ ( 3,942 ) ​ $ 4,824 20 ​ Table of Contents ​ ​ ​ 11. Income Taxes For the three months ended March 31, 2022, we did no t recognize provision for income taxes due to our pre-tax book loss as we continue to record a full valuation allowance on our deferred tax assets considering our cumulative losses in prior years and forecasted losses in the future. For the three months ended March 31, 2021, we recorded a provision for income tax of $ 1.8 million. The provision for income tax for the three months ended March 31, 2021 was estimated using our effective tax rate on our year-to-date income (loss). We estimated a state tax liability over our pre-tax income (loss) for 2021, which is primarily due to revenue recognized for the Lilly Agreement. We did not estimate a provision for federal income taxes due to the sufficient net operating loss carryforwards that were generated prior to enactment of the Tax Cuts and Jobs Act, as well as our ability to utilize significant research and development credit carryforwards.