Solid Biosciences Inc. 10-Q

Item 1. Financial Statements (unaudited) SOLID BIOSCIENCES INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited, in thousands, except share and per share data) September 30, December 31, 2020 2019 Assets Current assets: Cash and cash equivalents $ 24,797 $ 76,043 Available-for-sale-securities — 7,481 Prepaid expenses and other current assets 2,365 2,778 Total current assets 27,162 86,302 Property and equipment, net 8,869 11,645 Operating lease, right-of-use assets 3,951 4,988 Other non-current assets 209 209 Restricted cash 327 327 Total assets $ 40,518 $ 103,471 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 4,083 $ 7,124 Accrued expenses 8,550 9,178 Operating lease liabilities 1,930 1,736 Finance lease liabilities 202 186 Other current liabilities — 52 Total current liabilities 14,765 18,276 Operating lease liabilities, excluding current portion 2,943 4,414 Finance lease liabilities, excluding current portion 579 733 Total liabilities 18,287 23,423 Commitments and contingencies (Note 11) Preferred stock, $ 0.001 par value; 10,000,000 shares authorized at September 30, 2020 and December 31, 2019; no shares issued and outstanding at September 30, 2020 and December 31, 2019 — — Common stock, $ 0.001 par value; 300,000,000 shares authorized at September 30, 2020 and December 31, 2019; 46,178,519 shares issued and outstanding at September 30, 2020 and 45,987,571 shares issued and outstanding at December 31, 2019; 2,295,699 pre-funded warrants outstanding at September 30, 2020 and December 31, 2019 48 48 Additional paid-in capital 405,389 396,278 Accumulated other comprehensive income — 1 Accumulated deficit ( 383,206 ) ( 316,279 ) Total stockholders’ equity 22,231 80,048 Total liabilities and stockholders’ equity $ 40,518 $ 103,471 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 2 SOLID BIOSCIENCES INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in thousands, except share and per share data) Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Revenue $ — $ — $ — $ — Operating expenses: Research and development 16,045 22,792 49,158 67,671 General and administrative 5,181 6,925 15,957 19,317 Restructuring charges — — 1,944 — Total operating expenses 21,226 29,717 67,059 86,988 Loss from operations ( 21,226 ) ( 29,717 ) ( 67,059 ) ( 86,988 ) Other income (expense): Interest (expense) income ( 20 ) 406 131 1,281 Other income — 56 1 345 Total other income (expense), net ( 20 ) 462 132 1,626 Net loss $ ( 21,246 ) $ ( 29,255 ) $ ( 66,927 ) $ ( 85,362 ) Net loss per share attributable to common stockholders, basic and diluted $ ( 0.44 ) $ ( 0.67 ) $ ( 1.39 ) $ ( 2.26 ) Weighted average shares of common stock outstanding, basic and diluted 48,295,468 43,467,618 48,172,686 37,727,640 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 3 SOLID BIOSCIENCES INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (unaudited, in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Net loss $ ( 21,246 ) $ ( 29,255 ) $ ( 66,927 ) $ ( 85,362 ) Other comprehensive loss: Unrealized (loss) gain on available-for-sale securities — ( 5 ) ( 1 ) 3 Comprehensive loss $ ( 21,246 ) $ ( 29,260 ) $ ( 66,928 ) $ ( 85,359 ) The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 SOLID BIOSCIENCES INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (unaudited, in thousands, except share / unit data) For the Three Months Ended September 30, 2020 Common Stock Amount Additional paid in capital Accumulated other comprehensive income (loss) Accumulated Deficit Total Stockholders' Equity Balance at June 30, 2020 48,364,092 $ 48 $ 402,625 $ — $ ( 361,960 ) $ 40,713 Equity-based compensation — — 2,764 — — 2,764 Net loss — — — — ( 21,246 ) ( 21,246 ) Vesting of restricted stock units 162,725 — — — — — Forfeiture of restricted stock awards ( 52,599 ) — — — — — Balance at September 30, 2020 48,474,218 $ 48 $ 405,389 $ — $ ( 383,206 ) $ 22,231 For the Nine Months Ended September 30, 2020 Common Stock Amount Additional paid in capital Accumulated other comprehensive income (loss) Accumulated Deficit Total Stockholders' Equity Balance at December 31, 2019 48,283,270 $ 48 $ 396,278 $ 1 $ ( 316,279 ) $ 80,048 Equity-based compensation — — 9,111 — — 9,111 Net loss — — — — ( 66,927 ) ( 66,927 ) Vesting of restricted stock units 284,700 — — — — — Forfeiture of restricted stock awards ( 93,752 ) — — — — — Unrealized loss on available for sale securities — — — ( 1 ) — ( 1 ) Balance at September 30, 2020 48,474,218 $ 48 $ 405,389 $ — $ ( 383,206 ) $ 22,231 5 For the Three Months Ended September 30, 2019 Common Stock Amount Additional paid in capital Accumulated other comprehensive income (loss) Accumulated Deficit Total Stockholders' Equity Balance at June 30, 2019 35,398,894 $ 35 $ 331,620 $ 3 $ ( 255,163 ) $ 76,495 Equity-based compensation — — 3,392 — — 3,392 Sale of common stock, net of issuance costs of $ 2,079 10,607,525 11 47,235 — — 47,246 Sale of pre-funded warrants 2,295,699 2 10,650 — — 10,652 Net loss — — — — ( 29,255 ) ( 29,255 ) Repurchase of shares of common stock ( 7,475 ) — — — — — Unrealized loss on available for sale securities — — — ( 5 ) — ( 5 ) Balance at September 30, 2019 48,294,643 $ 48 $ 392,897 $ ( 2 ) $ ( 284,418 ) $ 108,525 For the Nine Months Ended September 30, 2019 Common Stock Amount Additional paid in capital Accumulated other comprehensive income (loss) Accumulated Deficit Total Stockholders' Equity Balance at December 31, 2018 35,432,460 $ 35 $ 324,209 $ ( 5 ) $ ( 199,056 ) $ 125,183 Equity-based compensation — — 10,803 — — 10,803 Sale of common stock, net of issuance costs of $ 2,079 10,607,525 11 47,235 — — 47,246 Sale of pre-funded warrants 2,295,699 2 10,650 — — 10,652 Net loss — — — — ( 85,362 ) ( 85,362 ) Repurchase of shares of common stock ( 41,041 ) — — — — — Unrealized gain on available for sale securities — — — 3 — 3 Balance at September 30, 2019 48,294,643 $ 48 $ 392,897 $ ( 2 ) $ ( 284,418 ) $ 108,525 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 6 SOLID BIOSCIENCES INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in thousands) Nine Months Ended September 30, 2020 2019 Cash flows from operating activities: Net loss $ ( 66,927 ) $ ( 85,362 ) Adjustments to reconcile net loss to net cash used in operating activities: Amortization of (discount)/premium on available-for-sale securities ( 20 ) ( 246 ) Equity-based compensation expense 9,111 10,803 Depreciation expense 3,126 2,018 Loss on sale of property and equipment — 2 Changes in operating assets and liabilities: Prepaid expenses and other current and non-current assets 1,450 ( 1,106 ) Accounts payable ( 2,602 ) 8 Accrued expenses and other current and non-current liabilities ( 2,044 ) 2,414 Net cash used in operating activities ( 57,906 ) ( 71,469 ) Cash flows from investing activities: Purchases of property and equipment ( 839 ) ( 3,742 ) Proceeds from sale and maturities of available-for-sale securities 7,900 56,899 Purchases of available-for-sale securities ( 401 ) ( 31,496 ) Net cash provided by investing activities 6,660 21,661 Cash flows from financing activities: Proceeds from issuance of common stock — 49,325 Proceeds from issuance of warrants — 10,652 Payment of offering costs — ( 1,815 ) Net cash provided by financing activities — 58,162 Net (decrease)/increase in cash, cash equivalents and restricted cash ( 51,246 ) 8,354 Cash, cash equivalents, and restricted cash at beginning of period 76,370 86,693 Cash, cash equivalents, and restricted cash at end of period $ 25,124 $ 95,047 Supplemental disclosure of non-cash investing and financing activities: Operating lease liabilities arising from obtaining right-of-use asset $ — $ 1,629 Property and equipment included in accounts payable and accruals $ — $ 51 Offering costs included in accounts payable and accruals $ — $ 264 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 7 SOLID BIOSCIENCES INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited, amounts in thousands, except share / unit and per share / unit data) 1. Nature of the Business and Basis of Presentation Nature of Business Solid Biosciences Inc. was organized in March 2013 under the name SOLID Ventures Management, LLC. In October 2013, the company changed its name to Solid Ventures, LLC and in June 2015, the company changed its name to Solid Biosciences, LLC. The company operated as a Delaware limited liability company under the name Solid Biosciences, LLC until immediately prior to the effectiveness of its registration statement on Form S-1 on January 25, 2018, at which time it completed a statutory corporate conversion into a Delaware corporation (the “Corporate Conversion”) and changed its name to Solid Biosciences Inc. (the “Company”). In addition, entities formed solely for the purpose of holding membership interests in the Company’s limited liability company were merged with and into the Company. As a result of the Corporate Conversion, all of the Series 1 and 2 Senior Preferred, Junior Preferred Units, Series A, B, C and D Common Units of Solid Biosciences, LLC converted into shares of common stock of Solid Biosciences Inc. on a one for 0.8485 basis and all of the unit holders of Solid Biosciences, LLC became holders of common stock of Solid Biosciences Inc. The Company’s mission is to cure Duchenne muscular dystrophy (“Duchenne”), a genetic muscle-wasting disease predominantly affecting boys. It is caused by mutations in the dystrophin gene, which result in the absence or near-absence of dystrophin protein. Dystrophin protein works to strengthen muscle fibers and protect them from daily wear and tear. Without functioning dystrophin and certain associated proteins, muscles suffer excessive damage from normal daily activities and are unable to regenerate, leading to the build-up of fibrotic, or scar, and fat tissue. The Company’s lead product candidate, SGT-001, is a gene transfer candidate under investigation for its ability to drive functional dystrophin protein expression in patients’ muscles and improve the course of the disease. SGT-001 has been granted Rare Pediatric Disease Designation and Fast Track in the United States and Orphan Drug Designations in both the United States and European Union. The Company filed an Investigational New Drug application (“IND”) in September 2017 and initiated a Phase I/II clinical trial for SGT-001 in the United States during the fourth quarter of 2017 , which is called IGNITE DMD. In November 2019, IGNITE DMD was placed on clinical hold by the U.S. Food and Drug Administration (“FDA”). In April 2020, the Company submitted a response to the FDA that included changes to the clinical protocol designed to enhance patient safety, as well as information related to improvements to its manufacturing process. The FDA responded by maintaining the clinical hold and requesting further data and analyses relating to this manufacturing process. In June 2020, the Company submitted a response to the FDA that provided data related to manufacturing process improvements. In July 2020, the Company announced that the FDA responded by maintaining the clinical hold and requesting further manufacturing information and updated safety and efficacy data for all patients dosed in the trial, as well as providing direction on the total viral load to be administered per patient. In October 2020, the Company announced that the FDA lifted the clinical hold placed on the Company’s IGNITE DMD Phase I/II clinical trial. The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on licenses, protection of proprietary technology, dependence on key personnel, compliance with government regulations and the need to obtain additional financing to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical studies and clinical trials and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel infrastructure and extensive compliance and reporting capabilities. The Company’s product candidates are in development. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained, that any products developed will obtain necessary government regulatory approval or that any approved products will be commercially viable. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate significant revenue from product sales. The Company operates in an environment of rapid change in technology and substantial competition from, among others, other pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees, partners and consultants. Liquidity The accompanying condensed consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business. Through September 30, 2020, the Company has funded its operations primarily with the proceeds from the sale of redeemable preferred units and member units as well as the sale of common stock and prefunded warrants to purchase shares of its common stock in private placements and the sale of common stock in its initial public offering. 8 In accordance with Accounting Standards Codification (“ASC”) 205-40, Going Concern, the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements are issued. As of September 30, 2020, the Company had an accumulated deficit of $ 383,206 . During the three and nine months ended September 30, 2020, the Company incurred a net loss of $ 21,246 and $ 66,927 , respectively, and the Company used $ 57,906 of cash in operations for the nine months ended September 30, 2020. The Company expects to continue to generate operating losses in the foreseeable future. Based upon its current operating plan, the Company expects that its cash and cash equivalents of $ 24,797 as of September 30, 2020, together with the proceeds of $ 40,000 received in October 2020 from the sale of shares of common stock to Ultragenyx Pharmaceutical, Inc. (“Ultragenyx”) as well as the net proceeds of $ 23,209 received from the sale of shares of common stock in October 2020 pursuant to a sales agreement, dated March 13, 2019, between the Company and Jefferies LLC (the “ATM Sales Agreement”) will be sufficient to fund its operating expenses and capital requirements into the second half of 2021. In accordance with the requirements of ASC 205-40, the Company determined that there is substantial doubt about the Company’s ability to continue as a going concern within twelve months of the issuance date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Although the Company has been successful in raising capital in the past, there is no assurance that it will be successful in obtaining such additional financing on terms acceptable to the Company, if at all, nor is it considered probable under the accounting standards. As such, under the requirements of ASC 205-40, management may not consider the potential for future capital raises or management plans to reduce costs that are not considered probable in its assessment of the Company’s ability to meet its obligations for the next twelve months. If the Company is unable to obtain funding, the Company would be forced to delay, reduce or eliminate some or all of its research and development programs, preclinical and clinical testing or commercialization efforts, which could adversely affect its business prospects. The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying condensed consolidated financial statements include the accounts of Solid Biosciences Inc. and its wholly owned or controlled subsidiaries. All intercompany accounts and transactions have been eliminated. In the opinion of management, the Company’s accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring accruals, necessary for a fair statement of the Company’s financial statements for interim periods in accordance with GAAP. The information included in this quarterly report on Form 10-Q should be read in conjunction with the Company’s consolidated financial statements and the accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The year-end condensed consolidated balance sheet data presented for comparative purposes was derived from the Company’s audited financial statements but does not include all disclosures required by GAAP. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the operating results for the full year or for any other subsequent interim period. 2. Summary of Significant Accounting Policies The Company’s accounting policies are described in the “Notes to Consolidated Financial Statements” in its Annual Report on Form 10-K for the year ended December 31, 2019 and updated, as necessary, in this report. Use of Estimates The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, the recognition of research and development expenses and equity-based compensation. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. The full extent to which the COVID-19 pandemic will directly or indirectly impact the Company’s business, results of operations and financial condition, including clinical trials and employee-related amounts, will depend on future developments that are highly uncertain, including new information that may emerge concerning COVID-19 and the actions taken to contain it or treat its impact. The Company has made estimates of the impact of COVID-19 within its financial statements and there may be changes to those estimates in future periods. Actual results could differ from the Company’s estimates. Cash Equivalents The Company considers all short-term, highly liquid investments with original maturities of 90 days or less at acquisition date to be cash equivalents. 9 Restricted Cash The Company held restricted cash of $ 327 in separate restricted bank accounts as security deposits for leases of the Company’s facilities as of September 30, 2020 and December 31, 2019. The Company has included restricted cash of $ 327 as a non-current asset as of September 30, 2020 and December 31, 2019. A reconciliation of the amounts of cash and cash equivalents and restricted cash from the cash flow statement to the balance sheet is as follows: September 30, 2020 December 31, 2019 Cash and cash equivalents as presented on balance sheet $ 24,797 $ 76,043 Restricted cash, non-current, as presented on balance sheet 327 327 Cash and cash equivalents and restricted cash as presented on cash flow statement $ 25,124 $ 76,370 Segment Data The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The Company’s singular focus is on developing treatments through gene therapy and other means for patients with Duchenne. All of the Company’s tangible assets are held in the United States. Recently Adopted Accounting Pronouncements In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-13 , Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement . This new standard modifies certain disclosure requirements on fair value measurements. This new standard became effective for the Company on January 1, 2020 . The adoption of this new standard did not have a material impact on the Company’s disclosures. Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (‘‘ASU 2016-13’’), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes may result in earlier recognition of credit losses. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses , which narrowed the scope and changed the effective date for non-public entities for ASU 2016-13. The FASB subsequently issued supplemental guidance within ASU No. 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief (‘‘ASU 2019-05’’). ASU 2019-05 provides an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For public entities that are Securities and Exchange Commission filers, excluding entities eligible to be smaller reporting companies, ASU 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. For all other entities, ASU 2016-13 is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. This standard will be effective for the Company on January 1, 2023 . The Company is currently evaluating the potential impact that this standard may have on its financial statements and related disclosures . 3. Fair Value of Financial Assets and Liabilities The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values: Fair Value Measurements as of September 30, 2020 Using: Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ — $ 14,462 $ — $ 14,462 $ — $ 14,462 $ — $ 14,462 10 Fair Value Measurements as of December 31, 2019 Using: Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ — $ 50,037 $ — $ 50,037 Available-for-sale securities — 7,481 — 7,481 $ — $ 57,518 $ — $ 57,518 As of September 30, 2020, there were no available-for-sale securities. As of December 31, 2019, the fair values of the Company’s available-for-sale debt securities were determined using Level 2 inputs. At December 31, 2019, the Company’s portfolio of available-for-sale securities consisted of corporate bond securities and commercial paper. During the nine months ended September 30, 2020 and the year ended December 31, 2019, there were no transfers between Level 1, Level 2 and Level 3. The fair value of the Company’s cash, restricted cash, accounts payable, and accrued expenses and other current liabilities approximate their carrying value due to their short-term maturities. 4. Available-for-Sale Securities As of September 30, 2020, there were no available-for-sale securities. As of December 31, 2019, the fair value of available-for-sale securities by type of security was as follows: December 31, 2019 Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value Investments: Corporate bond securities $ 1,502 $ 1 $ — $ 1,503 Commercial paper 5,978 — — 5,978 $ 7,480 $ 1 $ — $ 7,481 The estimated fair value and amortized cost of the Company’s available-for-sale securities by contractual maturity are summarized as follows: December 31, 2019 Amortized Cost Fair Value Due in one year or less $ 7,480 $ 7,481 Total available-for-sale securities $ 7,480 $ 7,481 The weighted average maturity of the Company’s available-for-sale securities as of December 31, 2019 was approximately 0.2 years. 11 5. Property and Equipment Property and equipment consists of the following: September 30, 2020 December 31, 2019 Furniture and fixtures $ 203 $ 203 Laboratory equipment 9,616 9,425 Leasehold improvements 4,713 4,686 Computer equipment 436 428 Computer software 553 372 Construction in process 1,265 1,322 16,786 16,436 Less accumulated depreciation 7,917 4,791 $ 8,869 $ 11,645 Depreciation expense was $ 766 and $ 3,126 for the three and nine months ended September 30, 2020, respectively, and $ 764 and $ 2,018 for the three and nine months ended September 30, 2019, respectively. 6. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following: September 30, 2020 December 31, 2019 Prepaid research and development expenses $ 587 $ 1,290 Prepaid expenses and other assets 1,778 1,488 $ 2,365 $ 2,778 7. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following: September 30, 2020 December 31, 2019 Accrued research and development $ 3,099 $ 3,742 Accrued compensation 3,961 3,583 Accrued other 1,490 1,853 $ 8,550 $ 9,178 8. Stockholders’ Equity On July 30, 2019, the Company issued and sold in a private placement (i) 10,607,525 shares of its common stock at a price per share of $ 4.65 and (ii) 2,295,699 pre-funded warrants to purchase shares of its common stock at a price per warrant of $ 4.64 . Each pre-funded warrant is exercisable for one share of common stock at an exercise price of $ 0.01 and the pre-funded warrants have no expiration date. The Company received gross proceeds from the private placement of $ 59,977 , before deducting offering costs of $ 2,079 . No warrants were exercised during the three and nine months ended September 30, 2020 and 2019. 9. Equity-Based Compensation In connection with the closing of the Company’s initial public offering, the board of directors and stockholders approved the 2018 Omnibus Incentive Plan, which provides for the reservation of 5,001,000 shares of common stock for equity awards. On June 16, 2020, the Company’s stockholders approved the 2020 Equity Incentive Plan (“2020 Plan”) which consists of (i) 3,000,000 shares of common stock and (ii) additional shares of common stock (up to 4,879,025 ) as is equal to (i) the number of shares reserved under the Company’s 2018 Omnibus Incentive Plan (“2018 Plan”) that remain available for grant under the 2018 Plan as of immediately prior to 12 the date the 2020 Plan was approved by the Company’s stockholders and (ii) the number of shares subject to awards granted under the 2018 Plan which awards expire, terminate or are otherwise surrendered, cancelled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right. During the three and nine months ended September 30, 2020, the Company granted options for the purchase of 41,440 and 1,439,356 shares of common stock, respectively. During the three and nine months ended September 30, 2020, the Company granted 0 and 1,393,720 restricted stock units, respectively. The Company recorded equity-based compensation expense related to all of its share-based awards to employees and non-employees in the following captions within its condensed consolidated statements of operations: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Research and development $ 1,524 $ 2,070 $ 4,379 $ 6,003 General and administrative 1,240 1,322 3,881 4,800 Restructuring — — 851 — Total $ 2,764 $ 3,392 $ 9,111 $ 10,803 10. Income Taxes During the three and nine months ended September 30, 2020 and 2019, the Company recorded no income tax benefits for the net operating losses incurred or for the research and development tax credits and orphan drug credits generated in each year due to its uncertainty of realizing a benefit from those items. The Company has provided a valuation allowance for the full amount of its net deferred tax assets because, at September 30, 2020 and December 31, 2019, it was more likely than not that any future benefit from deductible temporary differences and net operating loss and tax credit carryforwards would not be realized. As of September 30, 2020, and December 31, 2019, the Company had no t recorded any amounts for unrecognized tax benefits. The Company files income tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable. There are currently no pending income tax examinations. The Company’s C-Corporation tax years beginning with the year ended December 31, 2018 are open under statute. Any tax credit or net operating loss carryforward can be adjusted in future periods after the respective year of generation’s statute of limitation has closed. 11. Commitments and Contingencies Legal Proceedings The Company may periodically become subject to legal proceedings and claims arising in connection with ongoing business activities, including claims or disputes related to patents that have been issued or that are pending in the field of research on which the Company is focused. The Company is not aware of any material claims as of September 30, 2020. 12. Net Loss per Share Basic and diluted net loss per share attributable to common stockholders were calculated as follows: The numerator for basic and diluted net loss per share attributable to common stockholders is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Net loss attributable to common stockholders $ ( 21,246 ) $ ( 29,255 ) $ ( 66,927 ) $ ( 85,362 ) 13 The denominator is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Weighted average shares of common stock outstanding, basic and diluted 45,999,769 41,945,470 45,876,987 37,214,682 Weighted average shares of pre-funded warrants to purchase common stock 2,295,699 1,522,148 2,295,699 512,958 Total 48,295,468 43,467,618 48,172,686 37,727,640 Net loss per share attributable to common stockholders, basic and diluted is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Net loss per share attributable to common stockholders $ ( 0.44 ) $ ( 0.67 ) $ ( 1.39 ) $ ( 2.26 ) The following potential common stock equivalents, presented based on amounts outstanding at each period end, were excluded from the calculation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect for the three and nine months ended September 30 : 2020 2019 Options to purchase shares of common stock 3,324,885 2,662,162 Unvested shares of common stock 102,753 430,683 Unvested restricted stock units 1,254,545 264,650 4,682,183 3,357,495 13. Restructuring In January 2020, the Company’s board of directors approved a restructuring plan to reduce operating costs and better align the Company’s workforce with the needs of its business following the Company’s November 2019 announcement that the SGT-001 IGNITE DMD trial was placed on clinical hold by the U.S. Food and Drug Administration. Under the restructuring plan, the Company made changes to its management team and reduced headcount by approximately 30 percent. Affected employees were eligible to receive severance payments and outplacement services in connection with the restructuring plan. During the three and nine months ended September 30, 2020, the Company recorded aggregate restructuring charges of $ 0 and $ 1,944 , respectively, related to severance payments and other employee-related costs. The Company does not expect to incur any additional significant costs associated with this restructuring. During the three and nine months ended September 30, 2020, $ 246 and $ 1,671 , respectively, of the estimated restructuring charges were paid. The Company expects the remaining accrued restructuring costs of $ 273 will be paid in the next three months. The following table shows the total amount expected to be incurred and the liability related to the 2020 restructuring for the three and nine months ended September 30, 2020: One-Time Employee Termination Benefits Accrued restructuring costs as of December 31, 2019 $ - Restructuring charges incurred during the period 1,944 Amounts paid during the period ( 963 ) Accrued restructuring costs as of March 31, 2020 $ 981 Amounts paid during the period ( 462 ) Accrued restructuring costs as of June 30, 2020 $ 519 Amounts paid during the period ( 246 ) Accrued restructuring costs as of September 30, 2020 $ 273 14 14. Subsequent Events Ultragenyx Collaboration Agreement On October 22, 2020 the Company entered into a collaboration and license agreement (the “Collaboration Agreement”) with Ultragenyx, to focus on the development and commercialization of new gene therapies for Duchenne. The Company granted Ultragenyx an exclusive worldwide license for any pharmaceutical product that expresses the Company’s proprietary microdystrophin construct from AAV8 and variants thereof in clade E for the treatment of Duchenne and other diseases resulting from the lack of functional dystrophin. The Company will conduct certain activities agreed to by the parties with respect to the development of licensed products. Ultragenyx will reimburse the Company for personnel and out-of-pocket costs that the Company incurs in conducting such development activities. Otherwise, Ultragenyx has decision-making authority with respect to the development, manufacturing and commercialization of licensed products. The Company retains exclusive rights to all other uses of its microdystrophin proteins, including under its existing SGT-001 program. In connection with the execution of the Collaboration Agreement, Ultragenyx and the Company also entered into a stock purchase agreement , pursuant to which the Company issued and sold 7,825,797 shares of its common stock to Ultragenyx at a price of $ 5.1113 per share, which represented a 33 % premium to the volume weighted average price of the Company’s common stock for the 10 trading days prior to the closing date, for an aggregate purchase price of approximately $ 40,000 . Ultragenyx also agreed to pay up to $ 255,000 in cumulative milestone payments per product upon achievement of specified milestone events, and tiered royalties on worldwide net sales at low double digit to mid-teens percentages. Upon achievement of proof-of-concept, the Company has the right to opt-in to co-fund collaboration programs in return for participation in a profit share or increased royalty payments. At-the-Market Offering In October 2020, the Company sold 6,302,632 shares of common stock pursuant to the ATM Sales Agreement resulting in net proceeds to the Company of $ 23,209 . 15