0000950170-24-122377 | 10-Q | XBRL Viewer

Accrued Expenses and Other Current Liabilities

9 Months Ended

Sep. 30, 2024

Accrued Expenses and Other Current Liabilities

6. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:


(in thousands)	September 30, 2024		December 31, 2023
Compensation and related benefits	$	7,594	$	9,157
Research and development		5,184		5,666
Other		801		945
	$	13,579	$	15,768

Commitments (Tables)

9 Months Ended

Sep. 30, 2024

Schedule of Supplemental Balance Sheet and Other Information related to Operating and Finance Leases

Supplemental balance sheet and other information related to our operating and finance leases as of September 30, 2024 and December 31, 2023 were as follows:


(in thousands)
Leases	Classification	September 30, 2024			December 31, 2023
Assets
Operating	Operating lease right-of-use assets	$	29,182		$	30,412
Finance	Property and equipment, net		553			—
Total leased assets		$	29,735		$	30,412
Liabilities
Current:
Operating	Current liabilities, operating lease liability	$	2,365		$	1,481
Finance	Current liabilities, finance lease liability		359			—
Non-Current:
Operating	Operating lease liability		15,412			15,407
Total lease liabilities		$	18,136		$	16,888

Weighted-average discount rate
Operating lease			15.0	%		15.0	%
Finance lease			10.5	%
Weighted-average remaining lease term (years)
Operating lease			12.7			13.5
Finance lease			0.6

Schedule of Supplemental Cash Flow Information related to leases

Supplemental cash flow information related to our leases for the nine months ended September 30, 2024 and 2023 were as follows:


	Nine months ended September 30,
(in thousands)	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating lease	$	1,051	$	1,446
Operating cash flows from finance lease	22			—
Financing cash flows from finance lease	244			—
Non-cash transaction
Right-of-use asset obtained in exchange for lease obligations:
Finance lease	603			—

Schedule of Future Minimum Annual Lease Payments Under Operating and Finance Lease

Future minimum annual lease payments for operating and finance lease at September 30, 2024 are as follows:


(in thousands)	Operating lease			Finance lease
2024 (remaining)	$	561		$	159
2025		2,746			213
2026		2,979			-
2027		3,054			-
2028		3,130			-
2029		3,209			-
Thereafter		26,427			-
Total undiscounted lease payments		42,106			372
Less imputed interest		(24,329	)		(13	)
Lease liability	$	17,777		$	359

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) (PARENTHETICAL) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023
Statement of Stockholders' Equity [Abstract]
Shares withheld for employee taxes	3,722	3,722	4,285	3,609

Marketable Securities (Tables)

9 Months Ended

Sep. 30, 2024

Investments, Debt and Equity Securities [Abstract]

Schedule of Marketable Securities

The following provides detail of the Company's marketable securities.


(in thousands)	Amortized Cost		Gross unrealized gain		Gross unrealized loss			Fair Value
September 30, 2024
Marketable securities:
Agency securities	$	8,570	$	6	$	—		$	8,576
Corporate debt securities		68,170		128		(7	)		68,291
U.S. government securities		65,585		41		(1	)		65,625
Total marketable securities	$	142,325	$	175	$	(8	)	$	142,492

December 31, 2023
Marketable securities:
Agency securities	$	10,431	$	19	$	—		$	10,450
Corporate debt securities		67,806		193		(20	)		67,979
U.S. government securities		129,184		72		(41	)		129,215
Total marketable securities	$	207,421	$	284	$	(61	)	$	207,644

Commitments - Additional Information (Details) $ in Thousands	1 Months Ended	3 Months Ended				9 Months Ended
	May 31, 2024 USD ($)	Dec. 31, 2024 USD ($)	Sep. 30, 2024 USD ($) ft²	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2024 USD ($) ft² Extension	Sep. 30, 2023 USD ($)
Other Commitments [Line Items]
Operating lease cost			$ 1,200	$ 500		$ 3,300	$ 1,600
Cash paid in the measurement of operating lease liabilities						1,051	1,446
Reimbursements for development of lab space						$ 2,400
Reimbursements for development of lab space period						3 years
Reimbursements for development of lab space previous expiration year						2023
Reimbursements for development of lab space expiration year						2026
Additional grant for development of lab space					$ 1,000
Grant for development of lab space						$ 3,400
Disbursement incurred costs for lab space						3,400
Grant received for increasing job			500			$ 500
Defined contribution plan, maximum annual contributions per employee, percent						100.00%
Defined contribution plan, employer matching contribution, percent of employee's gross pay						3.00%
Defined contribution plan, employer discretionary contribution amount			200	$ 100		$ 600	$ 500
License Agreement
Other Commitments [Line Items]
Transaction price	$ 3,000
Deferred revenue recognized			3,000
Upfront, non-refundable fee	3,000
Near term payment upon transfer of materials	4,000
API Transfer
Other Commitments [Line Items]
Transaction price	4,000
Scenario Forecast \| License Agreement
Other Commitments [Line Items]
Deferred revenue recognized		$ 4,000
Maximum
Other Commitments [Line Items]
Approved grant receivable to increasing jobs			$ 3,100			$ 3,100
Maximum \| License Agreement
Other Commitments [Line Items]
Potential developmental milestones receivable	37,000
Potential sales milestone	$ 100,000
Chestnut Run Lease
Other Commitments [Line Items]
Lease renewal period			5 years			5 years
Area of lease premises \| ft²			81,000			81,000
Initial term of lease						162 months
Number of lease extensions \| Extension						3
Chestnut Run Lease \| Letter of Credit
Other Commitments [Line Items]
Security deposit			$ 4,000			$ 4,000
Chestnut Run Lease \| Letter of Credit \| Pro Forma
Other Commitments [Line Items]
Security deposit			$ 500			$ 500

Stock-Based Compensation

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

9. Stock-Based Compensation

The Company has two equity incentive plans: the 2016 Equity Incentive Plan, as amended, and the 2020 Equity Incentive Plan. New awards can only be granted under the 2020 Equity Incentive Plan (the “Plan”) and as of September 30, 2024, 4,591,896 shares were available for future grants. The number of shares of the Company’s common stock that may be issued pursuant to rights granted under the Plan shall automatically increase on January 1st of each year and continuing for ten years beginning on January 1, 2021, in an amount equal to five percent of the total number of shares of the Company’s common stock outstanding on December 31st of the preceding calendar year, subject to the discretion of the Company's board of directors or compensation committee to determine a lesser number of shares shall be added for such year. On January 1, 2024, 2,745,712 shares were added to the Plan. The Plan provides for the granting of common stock, incentive stock options, nonqualified stock options, restricted stock awards, restricted stock units and/or stock appreciation rights to employees, directors, and other persons, as determined by the Company’s board of directors. The Company’s stock options vest based on the terms in each award agreement, generally over four-year periods with 25% of options vesting after one year and then monthly thereafter, and have a term of ten years.

The Company measures stock-based awards at their grant-date fair value and records compensation expense on a straight-line basis over the vesting period of the awards. The Company recorded stock-based compensation expense in the following expense categories in its accompanying statements of operations:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Research and development	$	3,403	$	3,319	$	9,834	$	9,544
General and administrative		2,523		3,396		7,737		10,160
	$	5,926	$	6,715	$	17,571	$	19,704

Stock Options

The following table summarizes stock option activity for the periods indicated:


	Number of shares			Weighted average exercise price per share		Weighted average remaining contractual term (years)
Outstanding at January 1, 2024		11,898,446		$	10.60		7.77
Granted		3,830,800		$	4.48
Exercised		(14,955	)	$	3.98
Forfeited		(677,420	)	$	12.18
Outstanding at September 30, 2024		15,036,871		$	8.98		7.58
Exercisable at September 30, 2024		8,148,514		$	11.04		6.57

At September 30, 2024, the aggregate intrinsic value of both outstanding options and exercisable options was $0.5 million.

The following table summarizes information about stock options outstanding at September 30, 2024 under the Plan:


	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$0.31 - $4.56		2,899,916		6.43	$	2.48		2,008,650	$	1.87
$4.57 - $5.13		4,105,590		8.89		4.68		768,257		4.86
$5.14 - $11.72		4,571,039		8.06		7.79		2,225,341		8.09
$11.73 - $88.98		3,460,326		6.35		21.10		3,146,266		20.49
		15,036,871						8,148,514

The weighted-average grant date fair value of options granted was $3.31 and $4.97 per option for the nine months ended September 30, 2024 and 2023, respectively. The Company recorded stock-based compensation expense of $5.8 million and $6.5 million for the three months ended September 30, 2024 and 2023, respectively, related to stock options. The Company recorded stock-based compensation expense of $17.1 million and $18.9 million for the nine months ended September 30, 2024 and 2023, respectively, related to stock options. As of September 30, 2024, the total unrecognized compensation expense related to unvested stock option awards was $29.9 million, which the Company expects to recognize over a weighted-average period of 2.59 years.

The fair value of each option was estimated on the date of grant using the weighted average assumptions in the table below:


	Nine months ended September 30,
	2024			2023
Expected volatility		84.97	%		83.53	%
Risk-free interest rate		4.19	%		3.81	%
Expected life (in years)		6.05			6.02
Expected dividend yield		—			—

Restricted Stock Awards and Units

The Company issues restricted stock awards (“RSA”) to employees that generally vest over a four-year period with 25% of awards vesting after one year and then monthly thereafter. Any unvested shares will be forfeited upon termination of services. The fair value of an RSA is equal to the fair market value price of the Company’s common stock on the date of grant. RSA expense is recorded on a straight-line basis over the vesting period.

The following table summarizes activity related to RSA stock-based payment awards:


	Number of shares			Weighted-average grant date fair value
Unvested balance at January 1, 2024		27,008		$	3.26
Vested		(27,008	)	$	3.26
Unvested balance at September 30, 2024		—		$	—

The Company recorded stock-based compensation expense of $0.1 million and $0.4 million for the nine months ended September 30, 2024 and 2023, respectively, related to RSAs. As of September 30, 2024, there was no unrecognized expense related to RSAs.

The Company granted restricted stock units (“RSU”) to employees that generally vest over a four-year period with 25% of awards vesting after one year and then quarterly thereafter. Any unvested units will be forfeited upon termination of services.

The following table summarizes activity related to RSU stock-based payment awards:


	Number of shares			Weighted-average grant date fair value
Unvested balance at January 1, 2024		103,750		$	6.16
Vested		(31,875	)	$	6.44
Unvested balance at September 30, 2024		71,875		$	6.03

The Company recorded stock-based compensation expense of $0.1 million for both the three months ended September 30, 2024 and 2023, related to RSUs. The Company recorded stock-based compensation expense of $0.2 million for both the nine months ended September 30, 2024 and 2023, related to RSUs. At September 30, 2024, the total unrecognized expense related to the RSUs was $0.4 million, which the Company expects to recognize over 1.38 years.

Employee Stock Purchase Plan

The Company has an Employee Stock Purchase Plan (the “ESPP”), which, as of September 30, 2024, had 2,089,518 shares of common stock reserved for future issuance. The number of shares of the Company’s common stock that may be issued pursuant to rights granted under the ESPP shall automatically increase on January 1st of each year and continuing for ten years beginning in 2021, in an amount equal to one percent of the total number of shares of all classes of the Company’s common stock outstanding on December 31st of the preceding calendar year, subject to the discretion of the Company's board of directors or compensation committee to determine a lesser number of shares shall be added for such year. On January 1, 2024, 549,142 shares were added to the ESPP.

Under the ESPP, eligible employees can purchase the Company’s common stock through accumulated payroll deductions at such times as are established by the Company's compensation committee. Eligible employees may purchase the Company’s common stock at 85% of the lower of the fair market value of the Company’s common stock on the first day of the offering period or on the last day of the offering period. Eligible employees may contribute up to 15% of their eligible compensation. Under the ESPP, a participant may not accrue rights to purchase more than $25,000 worth of the Company’s common stock for each calendar year in which such right is outstanding.

The ESPP is considered compensatory under the FASB stock compensation rules. Accordingly, share-based compensation expense is determined based on the option’s grant-date fair value as estimated by applying the Black Scholes option-pricing model and is recognized over the withholding period. The Company recognized share-based compensation expense of $0.2 million for both the nine months ended September 30, 2024 and 2023 related to the ESPP.

Stock-Based Compensation - Summary of Information about Stock Options Outstanding (Details)	9 Months Ended
	Sep. 30, 2024 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Options Outstanding, Number \| shares	15,036,871
Options Exercisable, Number Exercisable \| shares	8,148,514
$0.31 - $4.56
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Range of Exercise Prices, Minimum	$ 0.31
Range of Exercise Prices, Maximum	$ 4.56
Options Outstanding, Number \| shares	2,899,916
Options Outstanding, Weighted Average Remaining Contractual Life (in years)	6 years 5 months 4 days
Options Outstanding, Weighted Average Exercise Price	$ 2.48
Options Exercisable, Number Exercisable \| shares	2,008,650
Options Exercisable, Weighted Average Exercise Price	$ 1.87
$4.57 - $5.13
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Range of Exercise Prices, Minimum	4.57
Range of Exercise Prices, Maximum	$ 5.13
Options Outstanding, Number \| shares	4,105,590
Options Outstanding, Weighted Average Remaining Contractual Life (in years)	8 years 10 months 20 days
Options Outstanding, Weighted Average Exercise Price	$ 4.68
Options Exercisable, Number Exercisable \| shares	768,257
Options Exercisable, Weighted Average Exercise Price	$ 4.86
$5.14 - $11.72
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Range of Exercise Prices, Minimum	5.14
Range of Exercise Prices, Maximum	$ 11.72
Options Outstanding, Number \| shares	4,571,039
Options Outstanding, Weighted Average Remaining Contractual Life (in years)	8 years 21 days
Options Outstanding, Weighted Average Exercise Price	$ 7.79
Options Exercisable, Number Exercisable \| shares	2,225,341
Options Exercisable, Weighted Average Exercise Price	$ 8.09
$11.73 - $88.98
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Range of Exercise Prices, Minimum	11.73
Range of Exercise Prices, Maximum	$ 88.98
Options Outstanding, Number \| shares	3,460,326
Options Outstanding, Weighted Average Remaining Contractual Life (in years)	6 years 4 months 6 days
Options Outstanding, Weighted Average Exercise Price	$ 21.1
Options Exercisable, Number Exercisable \| shares	3,146,266
Options Exercisable, Weighted Average Exercise Price	$ 20.49

Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

5. Fair Value of Financial Instruments

Fair value is the price that could be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value determination in accordance with applicable accounting guidance requires that a number of significant judgments be made. Additionally, fair value is used on a nonrecurring basis to evaluate assets for impairment or as required for disclosure purposes by applicable accounting guidance on disclosures about fair value of financial instruments. Depending on the nature of the assets and liabilities, various valuation techniques and assumptions are used when estimating fair value. The Company follows the provisions of ASC 820, Fair Value Measurement, for financial assets and liabilities measured on a recurring basis. The guidance requires fair value measurements be classified and disclosed in one of the following three categories:

•

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

•

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liabilities.

•

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

The following fair value hierarchy table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis:


	Fair value measurement at reporting date using
(in thousands)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
September 30, 2024
Assets
Cash equivalents:
Money Market Funds	$	6,149	$	—	$	—
U.S. government securities		—		3,499		—
Total cash equivalents		6,149		3,499		—

Marketable securities:
Agency securities	$	—	$	8,576	$	—
Corporate debt securities		—		68,291		—
U.S. government securities		—		65,625		—
Total marketable securities		—		142,492		—
Total financial assets	$	6,149	$	145,991	$	—

December 31, 2023
Assets
Cash equivalents:
Money Market Funds	$	24,369	$	—	$	—

Marketable securities:
Agency securities	$	—	$	10,450	$	—
Corporate debt securities		—		67,979		—
U.S. government securities		—		129,215		—
Total marketable securities		—		207,644		—
Total financial assets	$	24,369	$	207,644	$	—

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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+ Details

Marketable Securities - Additional Information (Details) $ in Millions	Sep. 30, 2024 USD ($) Security
Investments, Debt and Equity Securities [Abstract]
Number of marketable securities \| Security	9
Securities fair market value unrealized loss position \| $	$ 23.0

Summary of Significant Accounting Policies - Schedule of Reconciliation of Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Accounting Policies [Abstract]
Cash and cash equivalents	$ 11,134	$ 25,291
Restricted cash	4,044	4,044
Total cash, cash equivalents, and restricted cash shown in statement of cash flows	$ 15,178	$ 29,335

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Stock-Based Compensation - Summary of Activity related to RSU Stock-Based Payment Awards (Details) - Restricted Stock Units	9 Months Ended
	Sep. 30, 2024 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares, Unvested balance at beginning of period \| shares	103,750
Number of shares, Vested \| shares	(31,875)
Number of shares, Unvested balance at end of period \| shares	71,875
Weighted-average grant date fair value, Unvested balance at beginning of period \| $ / shares	$ 6.16
Weighted-average grant date fair value, Vested \| $ / shares	6.44
Weighted-average grant date fair value, Unvested balance at end of period \| $ / shares	$ 6.03

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

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+ Details

Commitments - Schedule of Supplemental Balance Sheet and Other Information related to Operating and Finance Leases (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Lease Liability [Line Items]
Operating	$ 29,182	$ 30,412
Finance	$ 553
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Property, Plant and Equipment, Net	Property, Plant and Equipment, Net
Total leased assets	$ 29,735	$ 30,412
Operating lease liability	2,365	1,481
Finance lease liability	359
Operating lease liability	15,412	15,407
Total lease liabilities	$ 18,136	$ 16,888
Weighted-average discount rate, Operating lease	15.00%	15.00%
Weighted-average discount rate, Finance lease	10.50%
Weighted-average remaining lease term, Operating lease (years)	12 years 8 months 12 days	13 years 6 months
Weighted-average remaining lease term, Finance lease (years)	7 months 6 days

Stock-Based Compensation - Schedule of Fair Value of Each Option Estimated on Date of Grant Using Weighted Average Assumptions (Details) - Stock Options	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected volatility	84.97%	83.53%
Risk-free interest rate	4.19%	3.81%
Expected life (in years)	6 years 18 days	6 years 7 days

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

Summary of Significant Accounting Policies - Schedule of Potentially Dilutive Securities Excluded from Computation of Diluted Weighted-average Shares of Common Stock Outstanding (Details) - shares	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	15,207,896	12,376,854
Unvested Restricted Stock Awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share		54,026
Unvested Restricted Stock Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	71,875	114,375
Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	15,036,871	12,134,205
Employee Stock Purchase Plan
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	99,150	74,248

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

3. Summary of significant accounting policies

The complete summary of significant accounting policies included in the Company’s financial statements for the year ended December 31, 2023 can be found in “Note 3. Summary of significant accounting policies” of the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 15, 2024.

Basis of presentation

The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. The accompanying unaudited interim financial statements should be read in conjunction with the annual audited financial statements and related notes as of and for the year ended December 31, 2023 found in the Company's Annual Report on Form 10-K filed with the SEC on February 15, 2024. Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).

Use of estimates

The preparation of the unaudited interim financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and contingent liabilities at the date of the unaudited interim financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Estimates and assumptions are periodically reviewed, and the effects of the revisions are reflected in the accompanying unaudited interim financial statements in the period they are determined to be necessary. The most significant estimate relates to accrued clinical trial expenses.

Income taxes

Based upon the historical and anticipated future losses, management has determined that the deferred tax assets generated by net operating losses and research and development credits do not meet the more likely than not threshold for realizability. Accordingly, a full valuation allowance has been recorded against the Company’s net deferred tax assets as of September 30, 2024 and December 31, 2023.

Cash, Cash Equivalents and Restricted cash

The Company’s cash equivalents include short-term highly liquid investments with an original maturity of 90 days or less when purchased and are carried at fair value in the accompanying balance sheets.

Restricted cash consists of a letter of credit for the benefit of the landlord in connection with the Company’s Chestnut Run Lease. See Note 8 for further details.

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the balance sheet that total to the amounts shown in the statement of cash flows:


(in thousands)	September 30, 2024		December 31, 2023
Cash and cash equivalents	$	11,134	$	25,291
Restricted cash		4,044		4,044
Total cash, cash equivalents, and restricted cash shown in statement of cash flows	$	15,178	$	29,335

Marketable Securities

The Company’s marketable securities consist of investments in corporate debt securities, United States (“U.S.”) government debt securities, and agency securities that are classified as available-for-sale. The securities are carried at fair value with the unrealized gains and losses, net of tax, included in accumulated other comprehensive loss, a component of stockholders’ equity. Realized gains and losses as well as credit losses, if any, on marketable securities are included in the Company’s statements of operations. The Company classifies marketable securities that are available for use in current operations as current assets on the balance sheets.

Revenue Recognition

The Company recognizes revenue under Accounting Standard Codification 606 – Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. The Company's revenue recognition analysis consists of the following steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations; and (v) recognition of revenue as we satisfy each performance obligation.

The Company evaluates all promised goods and services within a customer contract and determines which goods and services are separate performance obligations. This evaluation includes an assessment of whether the good or service is capable of being distinct and whether the good or service is separable from other promises in the contract.

The transaction price is determined based on the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer. The Company recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligations when (or as) the performance obligations are satisfied. The Company recognizes a liability when the Company has received payment but has not yet satisfied the related performance obligations.

Net Loss Per Share

Basic net loss per share of common stock is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during each period, including pre-funded warrants to purchase shares of common stock. The weighted-average number of shares of common stock outstanding used in the basic net loss per share calculation does not include unvested restricted stock awards as these instruments are considered contingently issuable shares until they vest. Diluted net loss per share of common stock includes the effect, if any, from the potential exercise of securities, such as stock options, and the effect from unvested restricted stock awards and restricted stock units which would result in the issuance of incremental shares of common stock. For diluted net loss per share, the weighted-average number of shares of common stock is the same for basic net loss per share due to the fact that when a net loss exists, dilutive securities are not included in the calculation as the impact is anti-dilutive. The Company’s unvested restricted stock awards entitle the holder to participate in dividends and earnings of the Company, and, if the Company were to recognize net income, it would have to use the two-class method to calculate earnings per share. The two-class method is not applicable during periods with a net loss, as the holders of the unvested restricted stock awards have no obligation to fund losses.

The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive:


	September 30,
	2024		2023
Unvested restricted stock awards		—		54,026
Unvested restricted stock units		71,875		114,375
Stock options		15,036,871		12,134,205
Employee stock purchase plan		99,150		74,248
		15,207,896		12,376,854

Amounts in the above table reflect the common stock equivalents.

Recently Issued Accounting Pronouncements

Emerging Growth Company Status

The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these unaudited interim financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

Accounting guidance not yet adopted

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU"), 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures. This ASU expands segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount for other segment items and a description of its composition, and interim disclosures of a reportable segment’s profit or loss and assets. The disclosures required under ASU 2023-07 are also required for public entities with a single reportable segment. The amendments in this ASU are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of this standard but does not expect that it will have a material impact on the financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes - Improvements to Income Tax Disclosures. ASU 2023-09 requires enhanced income tax disclosures related to the rate reconciliation and income taxes paid information. For public business entities, the amendments in this ASU are effective for annual periods beginning after December 15, 2024 with early adoption permitted. The Company is currently evaluating the impact of this standard but does not expect that it will have a material impact on the financial statements and related disclosures.

Fair Value of Financial Instruments - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Agency Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, assets	$ 8,576	$ 10,450
Corporate Debt Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, assets	68,291	67,979
U.S. Government Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, assets	65,625	129,215
Recurring Basis \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, assets	6,149
Fair value measurement, assets	6,149	24,369
Fair value measurement, assets	0	0
Recurring Basis \| Quoted Prices in Active Markets for Identical Assets (Level 1) \| Agency Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, assets	0	0
Recurring Basis \| Quoted Prices in Active Markets for Identical Assets (Level 1) \| Corporate Debt Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, assets	0	0
Recurring Basis \| Quoted Prices in Active Markets for Identical Assets (Level 1) \| U.S. Government Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, assets	0
Fair value measurement, assets	0	0
Recurring Basis \| Quoted Prices in Active Markets for Identical Assets (Level 1) \| Money Market Funds
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, assets	6,149	24,369
Recurring Basis \| Significant other observable inputs (Level 2)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, assets	3,499
Fair value measurement, assets	145,991	207,644
Fair value measurement, assets	142,492	207,644
Recurring Basis \| Significant other observable inputs (Level 2) \| Agency Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, assets	8,576	10,450
Recurring Basis \| Significant other observable inputs (Level 2) \| Corporate Debt Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, assets	68,291	67,979
Recurring Basis \| Significant other observable inputs (Level 2) \| U.S. Government Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, assets	65,625
Fair value measurement, assets	3,499	129,215
Recurring Basis \| Significant other observable inputs (Level 2) \| Money Market Funds
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, assets	0	0
Recurring Basis \| Significant unobservable inputs (Level 3)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, assets	0
Fair value measurement, assets	0	0
Fair value measurement, assets	0	0
Recurring Basis \| Significant unobservable inputs (Level 3) \| Agency Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, assets	0	0
Recurring Basis \| Significant unobservable inputs (Level 3) \| Corporate Debt Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, assets	0	0
Recurring Basis \| Significant unobservable inputs (Level 3) \| U.S. Government Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, assets	0
Fair value measurement, assets	0	0
Recurring Basis \| Significant unobservable inputs (Level 3) \| Money Market Funds
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, assets	$ 0	$ 0

Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis

The following fair value hierarchy table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis:


	Fair value measurement at reporting date using
(in thousands)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
September 30, 2024
Assets
Cash equivalents:
Money Market Funds	$	6,149	$	—	$	—
U.S. government securities		—		3,499		—
Total cash equivalents		6,149		3,499		—

Marketable securities:
Agency securities	$	—	$	8,576	$	—
Corporate debt securities		—		68,291		—
U.S. government securities		—		65,625		—
Total marketable securities		—		142,492		—
Total financial assets	$	6,149	$	145,991	$	—

December 31, 2023
Assets
Cash equivalents:
Money Market Funds	$	24,369	$	—	$	—

Marketable securities:
Agency securities	$	—	$	10,450	$	—
Corporate debt securities		—		67,979		—
U.S. government securities		—		129,215		—
Total marketable securities		—		207,644		—
Total financial assets	$	24,369	$	207,644	$	—

BALANCE SHEETS (PARENTHETICAL) - $ / shares	Sep. 30, 2024	Dec. 31, 2023
Voting Common Stock
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	487,149,741	487,149,741
Common stock, shares, issued	42,178,012	42,063,995
Common stock, shares, outstanding	42,178,012	42,063,995
Non-voting Common Stock
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	12,850,259	12,850,259
Common stock, shares, issued	12,850,259	12,850,259
Common stock, shares, outstanding	12,850,259	12,850,259

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Operating expenses:
Revenue from license agreement	$ 3,000		$ 3,000
Research and development	29,457	$ 26,261	86,375	$ 73,061
General and administrative	7,919	7,124	22,508	21,837
Total operating expenses	37,376	33,385	108,883	94,898
Loss from operations	(34,376)	(33,385)	(105,883)	(94,898)
Other income, net	2,105	2,777	7,441	6,141
Net loss	$ (32,271)	$ (30,608)	$ (98,442)	$ (88,757)
Per share information:
Net loss per share of common stock, basic	$ (0.43)	$ (0.45)	$ (1.3)	$ (1.55)
Net loss per share of common stock, diluted	$ (0.43)	$ (0.45)	$ (1.3)	$ (1.55)
Weighted average common shares outstanding, basic	75,855,949	67,639,993	75,784,902	57,278,795
Weighted average common shares outstanding, diluted	75,855,949	67,639,993	75,784,902	57,278,795
Comprehensive loss
Net Income (Loss)	$ (32,271)	$ (30,608)	$ (98,442)	$ (88,757)
Unrealized gain (loss) on marketable securities, net of tax	457	106	(56)	1,087
Comprehensive loss	$ (31,814)	$ (30,502)	$ (98,498)	$ (87,670)

Accrued Expenses and Other Current Liabilities - Summary of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Payables and Accruals [Abstract]
Compensation and related benefits	$ 7,594	$ 9,157
Research and development	5,184	5,666
Other	801	945
Accrued expenses and other current liabilities	$ 13,579	$ 15,768

Commitments - Schedule of Future Minimum Annual Lease Payments Under Operating and Finance Lease (Details) $ in Thousands	Sep. 30, 2024 USD ($)
Lease Liability [Line Items]
2024 (remaining)	$ 561
2025	2,746
2026	2,979
2027	3,054
2028	3,130
2029	3,209
Thereafter	26,427
Total undiscounted lease payments	42,106
Less imputed interest	(24,329)
Lease liability	17,777
Finance lease
2024 (remaining)	159
2025	213
Total undiscounted lease payments	372
Less imputed interest	(13)
Lease liability	$ 359

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2024	Nov. 04, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2024
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Trading Symbol	PRLD
Entity Registrant Name	PRELUDE THERAPEUTICS INC
Entity Central Index Key	0001678660
Entity Current Reporting Status	Yes
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Common Stock, Shares Outstanding		55,035,170
Entity Shell Company	false
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Security Exchange Name	NASDAQ
Entity Interactive Data Current	Yes
Entity File Number	001-39527
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	81-1384762
Entity Address, Address Line One	175 Innovation Boulevard
Entity Address, City or Town	Wilmington
Entity Address, State or Province	DE
Entity Address, Postal Zip Code	19805
City Area Code	302
Local Phone Number	467-1280
Document Quarterly Report	true
Document Transition Report	false

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Schedule of Reconciliation of Cash and Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the balance sheet that total to the amounts shown in the statement of cash flows:


(in thousands)	September 30, 2024		December 31, 2023
Cash and cash equivalents	$	11,134	$	25,291
Restricted cash		4,044		4,044
Total cash, cash equivalents, and restricted cash shown in statement of cash flows	$	15,178	$	29,335

Schedule of Potentially Dilutive Securities Excluded from Computation of Diluted Weighted-average Shares of Common Stock Outstanding

The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive:


	September 30,
	2024		2023
Unvested restricted stock awards		—		54,026
Unvested restricted stock units		71,875		114,375
Stock options		15,036,871		12,134,205
Employee stock purchase plan		99,150		74,248
		15,207,896		12,376,854

Common Stock

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

Common Stock

7. Common Stock

The Company has two classes of common stock: “voting common stock” and “non-voting common stock.” The holders of the voting common stock are entitled to one vote for each share of voting common stock held at all meetings of stockholders. Except as otherwise required by law, the holders of non-voting common stock shall not be entitled to vote at any meetings of stockholders (or written actions in lieu of meetings) and the shares of non-voting common stock shall not be included in determining the number of shares voting or entitled to vote on any matter. Unless required by law, there shall be no cumulative voting. Any holder of non-voting common stock may elect to convert each share of non-voting common stock into one fully paid and non-assessable share of voting common stock at any time by providing written notice to the Company; provided that as a result of such conversion, such holder, together with its affiliates and any members of a Schedule 13(d) group with such holder, would not beneficially own in excess of 9.99% of the Company’s common stock immediately prior to and following such conversion, unless otherwise as expressly provided for in the Company’s restated certificate of incorporation. However, this ownership limitation may be increased (not to exceed 19.99%) or decreased to any other percentage designated by such holder of non-voting common stock upon 61 days’ notice to the Company.

Shelf Registration Statements

In November 2021, the Company filed a shelf registration statement (the "2021 Shelf Registration Statement") which permits the offering of up to $400.0 million aggregate dollar amount of shares of our common stock or preferred stock, debt securities, warrants to purchase our common stock, preferred stock or debt securities, subscription rights to purchase our common stock, preferred stock or debt securities and/or units consisting of some or all of these securities, in one or more offerings and in any combination. The 2021 Shelf Registration Statement expires on November 24, 2024, and as of September 30, 2024, there was $187.0 million remaining under the 2021 Shelf Registration Statement.

In May 2024, the Company filed a shelf registration statement (the "2024 Shelf Registration Statement") with the SEC for the issuance of common stock, preferred stock, debt securities, warrants, subscription rights and units up to an aggregate amount of $400 million. The 2024 Shelf Registration statement was declared effective on June 10, 2024. The 2024 Shelf Registration statement expires in May 2027, and as of September 30, 2024, there was $400.0 million remaining under the 2024 Shelf Registration statement.

Open Market Sales Agreement

In March 2023, in connection with filing a prospectus supplement to its 2021 Shelf Registration Statement, the Company entered into an Open Market Sales Agreement (the "Sales Agreement") with Jefferies LLC, as the sales agent, pursuant to which the Company may offer and sell shares of its common stock having an aggregate offering amount of up to $75.0 million. The $75.0 million of common stock that may be issued and sold pursuant to the Sales Agreement is included in the $400.0 million of securities that may be issued and sold pursuant to the 2021 Shelf Registration Statement. The Company will pay Jefferies LLC a commission rate of up to 3.0% of the aggregate gross proceeds from the sale of any shares of common stock pursuant to the Sales Agreement. At September 30, 2024, there was $75.0 million remaining under the Sales Agreement.

2023 Financings

During the second quarter of 2023, the Company sold 6,761,200 shares of its common stock which comprised of (i) 5,312,978 shares of its voting common stock and (ii) 1,448,222 shares of its non-voting common stock at a price of $5.75 per share and to certain investors in lieu of common stock, the Company sold pre-funded warrants to purchase 12,895,256 shares of voting common stock at a price of $5.7499 per pre-funded warrant, resulting in gross proceeds to the Company of $113.0 million. Of the voting common stock issued, 2,264,456 shares were purchased by the Company’s underwriters in connection with a 30-day option at a price of $5.75 per share. Offering costs of $2.6 million, of which $0.3 million were previously paid and deferred, were recorded to additional paid-in capital in the accompanying balance sheets, resulting in net proceeds of $110.4 million.

During the fourth quarter of 2023, the Company sold in a private placement pre-funded warrants to purchase 7,936,759 shares of voting common stock at a price of $3.1499 per pre-funded warrant, resulting in net proceeds of $24.8 million after deducting offering costs of $0.2 million.

The purchase price per share of each pre-funded warrant represents the per share offering price for the common stock, minus the $0.0001 per share exercise price of such pre-funded warrant. As of September 30, 2024, no pre-funded warrants had been exercised.

The pre-funded warrants were classified as a component of permanent stockholders’ equity within additional paid-in capital and were recorded at the issuance date using a relative fair value allocation method. The pre-funded warrants are equity classified because they (i) are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, (ii) are immediately exercisable, (iii) do not embody an obligation for the Company to repurchase its shares, (iv) permit the holders to receive a fixed number of shares of common stock upon exercise, (v) are indexed to the Company’s common stock and (vi) meet the equity classification criteria. In addition, such pre-funded warrants do not provide any guarantee of value or return.

The Company did not conduct any financings during the nine months ended September 30, 2024.

- Definition

The entire disclosure for equity.

+ References

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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Accrued Expenses and Other Current Liabilities (Tables)

9 Months Ended

Sep. 30, 2024

Payables and Accruals [Abstract]

Schedule of Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:


(in thousands)	September 30, 2024		December 31, 2023
Compensation and related benefits	$	7,594	$	9,157
Research and development		5,184		5,666
Other		801		945
	$	13,579	$	15,768

STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Cash flows used in operating activities:
Net loss	$ (98,442)	$ (88,757)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,283	838
Noncash lease expense	1,203	1,328
Stock-based compensation	17,571	19,704
Amortization of premium and discount on marketable securities, net	(3,688)	(2,402)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	(107)	(2,053)
Accounts payable	1,495	(1,805)
Accrued expenses and other liabilities	(2,375)	(1,873)
Long-term prepaid expenses and other long-term assets		(7,108)
Operating lease liabilities	916	(1,357)
Net cash used in operating activities	(82,144)	(83,485)
Cash flows provided by investing activities:
Purchases of marketable securities	(45,366)	(162,248)
Proceeds from maturities of marketable securities	114,150	122,250
Purchases of property and equipment	(711)	(2,384)
Net cash provided by (used in) investing activities	68,073	(42,382)
Cash flows used in financing activities:
Payment of offering costs	(110)
Proceeds from issuance of common stock and pre-funded warrants, net of offering costs		110,795
Proceeds from the issuance of common stock under ESPP	255	348
Proceeds from the issuance of common stock in connection with the exercise of stock options	60	31
Payment of withholding taxes related to stock-based compensation to employees	(47)	(16)
Principal payments on finance lease liabilities	(244)
Net cash (used in) provided by financing activities	(86)	111,158
Net decrease in cash, cash equivalents and restricted cash	(14,157)	(14,709)
Cash, cash equivalents, and restricted cash at beginning of period	29,335	34,649
Cash, cash equivalents, and restricted cash at end of period	15,178	19,940
Supplemental disclosures of non-cash activities:
Property and equipment in accounts payable and accrued expenses and other current liabilities	9	254
Offering costs in accrued expenses and other current liabilities		28
Offering costs in accounts payable		34
Unrealized (loss) gain on marketable securities	$ (56)	$ 1,087

Commitments - Schedule of Supplemental Cash Flow Information related to leases (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Operating cash flows from operating lease	$ 1,051	$ 1,446
Operating cash flows from finance lease	22
Financing cash flows from finance lease	244
Finance lease right-of-use asset obtained in exchange for lease oblgations	$ 603

Common Stock - Additional Information (Details) - USD ($)	1 Months Ended	3 Months Ended		9 Months Ended
	Mar. 31, 2023	Dec. 31, 2023	Jun. 30, 2023	Sep. 30, 2024	May 31, 2024	Nov. 30, 2021
Class Of Stock [Line Items]
Amount of securities that may be issued and sold	$ 400,000,000
Gross proceeds from issuance of common stock and prefunded warrants			$ 113,000,000
Offering costs		$ 200,000	2,600,000
Offering costs previously paid and deferred			300,000
Net proceeds from issuance		$ 24,800,000	$ 110,400,000
2021 Shelf Registration
Class Of Stock [Line Items]
Maximum aggregate offering amount						$ 400,000,000
Shelf Registration statement expiration period				Nov. 24, 2024
Shelf registration statement remaining amount				$ 187,000,000
2024 Shelf Registration
Class Of Stock [Line Items]
Maximum aggregate offering amount					$ 400,000,000
Shelf Registration statement expiration period				2027-05
Shelf registration statement remaining amount				$ 400,000,000
Open Market Sales Agreement \| Jefferies LLC
Class Of Stock [Line Items]
Amount remaining under the sales agreement				$ 75,000,000
Maximum \| Open Market Sales Agreement \| Jefferies LLC
Class Of Stock [Line Items]
Common stock aggregate offering amount	$ 75,000,000
Percentage of commission on gross proceeds from sale of common stock	3.00%
Pre-Funded Warrants
Class Of Stock [Line Items]
Warrants exercise price per share		$ 0.0001
Warrants exercised				0
Pre-Funded Warrants \| Voting Common Stock
Class Of Stock [Line Items]
Shares issued price per share			$ 5.7499
Warrants to purchase common stock			12,895,256
Pre-Funded Warrants \| Voting Common Stock \| Private Placement
Class Of Stock [Line Items]
Shares issued price per share		$ 3.1499
Warrants to purchase common stock		7,936,759
Common Stock
Class Of Stock [Line Items]
Common stock, voting rights				The holders of the voting common stock are entitled to one vote for each share of voting common stock held at all meetings of stockholders
Number of shares sold			6,761,200
Shares issued price per share			$ 5.75
Common Stock \| Minimum
Class Of Stock [Line Items]
Beneficial ownership percentage				9.99%
Common Stock \| Maximum
Class Of Stock [Line Items]
Beneficial ownership percentage				19.99%
Common Stock \| Voting Common Stock
Class Of Stock [Line Items]
Number of shares sold			5,312,978
Shares issued during period			5,312,978
Shares purchased by underwriters			2,264,456
Common Stock \| Non-voting Common Stock
Class Of Stock [Line Items]
Number of shares sold			1,448,222
Shares issued during period			1,448,222

BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 11,134	$ 25,291
Marketable securities	142,492	207,644
Prepaid expenses and other current assets	2,761	2,654
Total current assets	156,387	235,589
Restricted cash	4,044	4,044
Property and equipment, net	7,202	7,325
Operating lease right-of-use asset	29,182	30,412
Other assets	405	295
Total assets	197,220	277,665
Current liabilities:
Accounts payable	5,921	4,580
Accrued expenses and other current liabilities	13,579	15,768
Operating lease liability	2,365	1,481
Finance lease liability	359
Total current liabilities	22,224	21,829
Other liabilities	3,153	3,339
Operating lease liability	15,412	15,407
Total liabilities	40,789	40,575
Commitments (Note 8)
Stockholders’ equity:
Additional paid-in capital	711,091	693,252
Accumulated other comprehensive income	167	223
Accumulated deficit	(554,832)	(456,390)
Total stockholders’ equity	156,431	237,090
Total liabilities and stockholders’ equity	197,220	277,665
Voting Common Stock
Stockholders’ equity:
Common stock	4	4
Non-voting Common Stock
Stockholders’ equity:
Common stock	$ 1	$ 1

Stock-Based Compensation - Summary of Activity related to RSA Stock-Based Payment Awards (Details) - Restricted Stock Awards	9 Months Ended
	Sep. 30, 2024 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares, Unvested balance at beginning of period \| shares	27,008
Number of shares, Vested \| shares	(27,008)
Weighted-average grant date fair value, Unvested balance at beginning of period \| $ / shares	$ 3.26
Weighted-average grant date fair value, Vested \| $ / shares	$ 3.26

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

Stock-Based Compensation - Additional Information (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2024 USD ($) shares	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($) Plan $ / shares shares	Sep. 30, 2023 USD ($) $ / shares	Jan. 01, 2024 shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of equity incentive plans \| Plan			2
Aggregate intrinsic value of outstanding options	$ 500,000		$ 500,000
Aggregate intrinsic value of exercisable options	500,000		500,000
Stock-based compensation expense	5,926,000	$ 6,715,000	$ 17,571,000	$ 19,704,000
Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Weighted-average grant date fair value of options granted \| $ / shares			$ 3.31	$ 4.97
Stock-based compensation expense	5,800,000	6,500,000	$ 17,100,000	$ 18,900,000
Total unrecognized compensation expense related to unvested stock option awards	29,900,000		$ 29,900,000
Total unrecognized compensation expense, weighted-average period			2 years 7 months 2 days
Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting period			4 years
Stock-based compensation expense			$ 100,000	400,000
Share-based payment arrangement, nonvested award, unrecognized expense	0		$ 0
Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting period			4 years
Stock-based compensation expense	100,000	$ 100,000	$ 200,000	200,000
Total unrecognized compensation expense, weighted-average period			1 year 4 months 17 days
Share-based payment arrangement, nonvested award, unrecognized expense	$ 400,000		$ 400,000
2020 Equity Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares available for future grants \| shares	4,591,896		4,591,896
Terms of award			The number of shares of the Company’s common stock that may be issued pursuant to rights granted under the Plan shall automatically increase on January 1st of each year and continuing for ten years beginning on January 1, 2021, in an amount equal to five percent of the total number of shares of the Company’s common stock outstanding on December 31st of the preceding calendar year, subject to the discretion of the Company's board of directors or compensation committee to determine a lesser number of shares shall be added for such year. On January 1, 2024, 2,745,712 shares were added to the Plan.
Award term			10 years
Percentage of shares outstanding used to calculate annual increase in number of shares that can be issued			5.00%
Number of shares authorized \| shares					2,745,712
2020 Equity Incentive Plan \| Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting period			4 years
2020 Equity Incentive Plan \| Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting period			1 year
2020 Employee Stock Purchase Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares available for future grants \| shares	2,089,518		2,089,518
Terms of award			The number of shares of the Company’s common stock that may be issued pursuant to rights granted under the ESPP shall automatically increase on January 1st of each year and continuing for ten years beginning in 2021, in an amount equal to one percent of the total number of shares of all classes of the Company’s common stock outstanding on December 31st of the preceding calendar year, subject to the discretion of the Company's board of directors or compensation committee to determine a lesser number of shares shall be added for such year.
Award term			10 years
Percentage of shares outstanding used to calculate annual increase in number of shares that can be issued			1.00%
Stock-based compensation expense			$ 200,000	$ 200,000
Common stock additional capital shares reserved for future issuance \| shares					549,142
Eligible employees purchase common stock percentage of lower of fair market value			85.00%
Participants accrue rights to purchase maximum common stock amount			$ 25,000
2020 Employee Stock Purchase Plan \| Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Eligible employees contribution percentage			15.00%
Vesting After One Year \| Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage of stock options vested			25.00%
Vesting After One Year \| Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage of stock options vested			25.00%
Vesting After One Year \| 2020 Equity Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage of stock options vested			25.00%

Marketable Securities

9 Months Ended

Sep. 30, 2024

Investments, Debt and Equity Securities [Abstract]

Marketable Securities

4. Marketable Securities

The following provides detail of the Company's marketable securities.


(in thousands)	Amortized Cost		Gross unrealized gain		Gross unrealized loss			Fair Value
September 30, 2024
Marketable securities:
Agency securities	$	8,570	$	6	$	—		$	8,576
Corporate debt securities		68,170		128		(7	)		68,291
U.S. government securities		65,585		41		(1	)		65,625
Total marketable securities	$	142,325	$	175	$	(8	)	$	142,492

December 31, 2023
Marketable securities:
Agency securities	$	10,431	$	19	$	—		$	10,450
Corporate debt securities		67,806		193		(20	)		67,979
U.S. government securities		129,184		72		(41	)		129,215
Total marketable securities	$	207,421	$	284	$	(61	)	$	207,644

The Company’s marketable securities generally have contractual maturity dates of 16 months or less. As of September 30, 2024, the Company had 9 securities with a total fair market value of $23.0 million in an unrealized loss position. The Company believes any unrealized losses associated with the decline in value of its securities is temporary and is primarily related to market factors. Furthermore, the Company believes it is more likely than not that it will be able to hold its marketable securities to maturity. Therefore, the Company anticipates a full recovery of the amortized cost basis of its marketable securities at maturity and an allowance for credit losses was not recognized.

Risks and Liquidity - Additional Information (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Risks And Liquidity [Abstract]
Accumulated deficit	$ (554,832)	$ (456,390)

- Definition

Amount of accumulated undistributed earnings (deficit).

+ References + Details

Stock-Based Compensation - Schedule of Stock-Based Compensation Expense Recorded in Statements of Operations (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 5,926	$ 6,715	$ 17,571	$ 19,704
Research and Development
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	3,403	3,319	9,834	9,544
General and Administrative
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 2,523	$ 3,396	$ 7,737	$ 10,160

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

Stock-Based Compensation - Summary of Stock Option Activity (Details) - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]
Number of shares, Outstanding at beginning of period	11,898,446
Number of shares, Granted	3,830,800
Number of shares, Exercised	(14,955)
Number of shares, Forfeited	(677,420)
Number of shares, Outstanding at end of period	15,036,871	11,898,446
Number of shares, Exercisable at September 30, 2024	8,148,514
Weighted average exercise price per share, Outstanding at beginning of period	$ 10.60
Weighted average exercise price per share, Granted	4.48
Weighted average exercise price per share, Exercised	3.98
Weighted average exercise price per share, Forfeited	12.18
Weighted average exercise price per share, Outstanding at end of period	8.98	$ 10.60
Weighted average exercise price per share, Exercisable at September 30, 2024	$ 11.04
Weighted average remaining contractual term (years), Outstanding	7 years 6 months 29 days	7 years 9 months 7 days
Weighted average remaining contractual term (years), Exercisable	6 years 6 months 25 days

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ (32,271)	$ (34,740)	$ (31,431)	$ (30,608)	$ (30,431)	$ (27,718)	$ (98,442)	$ (88,757)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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Reference 16: http://www.xbrl.org/2003/role/disclosureRef
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Reference 27: http://www.xbrl.org/2003/role/disclosureRef
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Reference 28: http://www.xbrl.org/2003/role/disclosureRef
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Reference 29: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Schedule of Stock-Based Compensation Expense Recorded in Statements of Operations

The Company recorded stock-based compensation expense in the following expense categories in its accompanying statements of operations:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Research and development	$	3,403	$	3,319	$	9,834	$	9,544
General and administrative		2,523		3,396		7,737		10,160
	$	5,926	$	6,715	$	17,571	$	19,704

Summary of Stock Option Activity

The following table summarizes stock option activity for the periods indicated:


	Number of shares			Weighted average exercise price per share		Weighted average remaining contractual term (years)
Outstanding at January 1, 2024		11,898,446		$	10.60		7.77
Granted		3,830,800		$	4.48
Exercised		(14,955	)	$	3.98
Forfeited		(677,420	)	$	12.18
Outstanding at September 30, 2024		15,036,871		$	8.98		7.58
Exercisable at September 30, 2024		8,148,514		$	11.04		6.57

Summary of Information about Stock Options Outstanding

The following table summarizes information about stock options outstanding at September 30, 2024 under the Plan:


	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$0.31 - $4.56		2,899,916		6.43	$	2.48		2,008,650	$	1.87
$4.57 - $5.13		4,105,590		8.89		4.68		768,257		4.86
$5.14 - $11.72		4,571,039		8.06		7.79		2,225,341		8.09
$11.73 - $88.98		3,460,326		6.35		21.10		3,146,266		20.49
		15,036,871						8,148,514

Schedule of Fair Value of Each Option Estimated on Date of Grant Using Weighted Average Assumptions

The fair value of each option was estimated on the date of grant using the weighted average assumptions in the table below:


	Nine months ended September 30,
	2024			2023
Expected volatility		84.97	%		83.53	%
Risk-free interest rate		4.19	%		3.81	%
Expected life (in years)		6.05			6.02
Expected dividend yield		—			—

Summary of Activity related to RSA Stock-Based Payment Awards

The following table summarizes activity related to RSA stock-based payment awards:


	Number of shares			Weighted-average grant date fair value
Unvested balance at January 1, 2024		27,008		$	3.26
Vested		(27,008	)	$	3.26
Unvested balance at September 30, 2024		—		$	—

Summary of Activity related to RSU Stock-Based Payment Awards

The following table summarizes activity related to RSU stock-based payment awards:


	Number of shares			Weighted-average grant date fair value
Unvested balance at January 1, 2024		103,750		$	6.16
Vested		(31,875	)	$	6.44
Unvested balance at September 30, 2024		71,875		$	6.03

The Company recorded stock-based compensation expense of $0.1 million for both the three months ended September 30, 2024 and 2023, related to RSUs.

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Basis of presentation

Use of estimates

Income taxes

Cash, Cash Equivalents and Restricted Cash

Cash, Cash Equivalents and Restricted cash

Restricted cash consists of a letter of credit for the benefit of the landlord in connection with the Company’s Chestnut Run Lease. See Note 8 for further details.

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the balance sheet that total to the amounts shown in the statement of cash flows:


(in thousands)	September 30, 2024		December 31, 2023
Cash and cash equivalents	$	11,134	$	25,291
Restricted cash		4,044		4,044
Total cash, cash equivalents, and restricted cash shown in statement of cash flows	$	15,178	$	29,335

Marketable Securities

Revenue Recognition

Net Loss Per Share

The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive:


	September 30,
	2024		2023
Unvested restricted stock awards		—		54,026
Unvested restricted stock units		71,875		114,375
Stock options		15,036,871		12,134,205
Employee stock purchase plan		99,150		74,248
		15,207,896		12,376,854

Amounts in the above table reflect the common stock equivalents.

Recently Issued Accounting Pronouncements

Emerging Growth Company Status

Accounting guidance not yet adopted

- Definition

Disclosure of accounting policy for income taxes, which may include its accounting policies for recognizing and measuring deferred tax assets and liabilities and related valuation allowances, recognizing investment tax credits, operating loss carryforwards, tax credit carryforwards, and other carryforwards, methodologies for determining its effective income tax rate and the characterization of interest and penalties in the financial statements.

+ References + Details

Marketable Securities - Schedule of Marketable Securities (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Agency Securities
Marketable Securities [Line Items]
Marketable securities, Amortized cost	$ 8,570	$ 10,431
Marketable securities, Gross unrealized gain	6	19
Marketable securities, Fair value	8,576	10,450
Corporate Debt Securities
Marketable Securities [Line Items]
Marketable securities, Amortized cost	68,170	67,806
Marketable securities, Gross unrealized gain	128	193
Marketable securities, Gross unrealized loss	(7)	(20)
Marketable securities, Fair value	68,291	67,979
U.S. Government Securities
Marketable Securities [Line Items]
Marketable securities, Amortized cost	65,585	129,184
Marketable securities, Gross unrealized gain	41	72
Marketable securities, Gross unrealized loss	(1)	(41)
Marketable securities, Fair value	65,625	129,215
Marketable Securities
Marketable Securities [Line Items]
Marketable securities, Amortized cost	142,325	207,421
Marketable securities, Gross unrealized gain	175	284
Marketable securities, Gross unrealized loss	(8)	(61)
Marketable securities, Fair value	$ 142,492	$ 207,644

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands	Total	Common Stock Voting Common Stock	Common Stock Non-voting Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit
Beginning balance at Dec. 31, 2022	$ 195,437	$ 4	$ 1	$ 531,682	$ (1,692)	$ (334,558)
Beginning balance (shares) at Dec. 31, 2022		36,496,994	11,402,037
Issuance of common stock upon exercise of stock options & vesting of RSUs	28			28
Issuance of common stock upon exercise of stock options & vesting of RSUs, (shares)		17,224
Unrealized gain (loss) on marketable securities, net of tax	1,294				1,294
Stock-based compensation expense, net of forfeitures of restricted stock awards	6,256			6,256
Net loss	(27,718)					(27,718)
Ending balance at Mar. 31, 2023	175,297	$ 4	$ 1	537,966	(398)	(362,276)
Ending balance (shares) at Mar. 31, 2023		36,514,218	11,402,037
Beginning balance at Dec. 31, 2022	195,437	$ 4	$ 1	531,682	(1,692)	(334,558)
Beginning balance (shares) at Dec. 31, 2022		36,496,994	11,402,037
Net loss	(88,757)
Ending balance at Sep. 30, 2023	238,257	$ 4	$ 1	662,172	(605)	(423,315)
Ending balance (shares) at Sep. 30, 2023		41,965,472	12,850,259
Beginning balance at Mar. 31, 2023	175,297	$ 4	$ 1	537,966	(398)	(362,276)
Beginning balance (shares) at Mar. 31, 2023		36,514,218	11,402,037
Issuance of common stock upon exercise of stock options & vesting of RSUs	3			3
Issuance of common stock upon exercise of stock options & vesting of RSUs, (shares)		40,461
Issuance of common stock and prefunded warrants, net of issuance costs of $2.6 million (shares)		5,312,978	1,448,222
Issuance of common stock and prefunded warrants, net of issuance costs of $2.6 million	110,423			110,423
Issuance of common stock under ESPP	348			348
Issuance of common stock under ESPP, (shares)		90,799
Unrealized gain (loss) on marketable securities, net of tax	(313)				(313)
Stock-based compensation expense, net of forfeitures of restricted stock awards	6,733			6,733
Net loss	(30,431)					(30,431)
Ending balance at Jun. 30, 2023	262,060	$ 4	$ 1	655,473	(711)	(392,707)
Ending balance (shares) at Jun. 30, 2023		41,958,456	12,850,259
Issuance of common stock upon exercise of stock options & vesting of RSUs	(16)			(16)
Issuance of common stock upon exercise of stock options & vesting of RSUs, (shares)		7,016
Unrealized gain (loss) on marketable securities, net of tax	106				106
Stock-based compensation expense, net of forfeitures of restricted stock awards	6,715			6,715
Net loss	(30,608)					(30,608)
Ending balance at Sep. 30, 2023	238,257	$ 4	$ 1	662,172	(605)	(423,315)
Ending balance (shares) at Sep. 30, 2023		41,965,472	12,850,259
Beginning balance at Dec. 31, 2023	237,090	$ 4	$ 1	693,252	223	(456,390)
Beginning balance (shares) at Dec. 31, 2023		42,063,995	12,850,259
Issuance of common stock upon exercise of stock options & vesting of RSUs	(14)			(14)
Issuance of common stock upon exercise of stock options & vesting of RSUs, (shares)		7,510
Unrealized gain (loss) on marketable securities, net of tax	(458)				(458)
Stock-based compensation expense, net of forfeitures of restricted stock awards	5,547			5,547
Net loss	(31,431)					(31,431)
Ending balance at Mar. 31, 2024	210,734	$ 4	$ 1	698,785	(235)	(487,821)
Ending balance (shares) at Mar. 31, 2024		42,071,505	12,850,259
Beginning balance at Dec. 31, 2023	237,090	$ 4	$ 1	693,252	223	(456,390)
Beginning balance (shares) at Dec. 31, 2023		42,063,995	12,850,259
Net loss	(98,442)
Ending balance at Sep. 30, 2024	156,431	$ 4	$ 1	711,091	167	(554,832)
Ending balance (shares) at Sep. 30, 2024		42,178,012	12,850,259
Beginning balance at Mar. 31, 2024	210,734	$ 4	$ 1	698,785	(235)	(487,821)
Beginning balance (shares) at Mar. 31, 2024		42,071,505	12,850,259
Issuance of common stock upon exercise of stock options & vesting of RSUs	(16)			(16)
Issuance of common stock upon exercise of stock options & vesting of RSUs, (shares)		7,803
Issuance of common stock under ESPP	255			255
Issuance of common stock under ESPP, (shares)		78,916
Unrealized gain (loss) on marketable securities, net of tax	(55)				(55)
Stock-based compensation expense, net of forfeitures of restricted stock awards	6,098			6,098
Net loss	(34,740)					(34,740)
Ending balance at Jun. 30, 2024	182,276	$ 4	$ 1	705,122	(290)	(522,561)
Ending balance (shares) at Jun. 30, 2024		42,158,224	12,850,259
Issuance of common stock upon exercise of stock options & vesting of RSUs	43			43
Issuance of common stock upon exercise of stock options & vesting of RSUs, (shares)		19,788
Unrealized gain (loss) on marketable securities, net of tax	457				457
Stock-based compensation expense, net of forfeitures of restricted stock awards	5,926			5,926
Net loss	(32,271)					(32,271)
Ending balance at Sep. 30, 2024	$ 156,431	$ 4	$ 1	$ 711,091	$ 167	$ (554,832)
Ending balance (shares) at Sep. 30, 2024		42,178,012	12,850,259

Background

9 Months Ended

Sep. 30, 2024

Background [Abstract]

Background

1. Background

Prelude Therapeutics Incorporated (the “Company”) is a clinical-stage fully integrated oncology company built on a foundation of drug discovery excellence to deliver novel precision cancer medicines to underserved patients. Since beginning operations in 2016, the Company has devoted substantially all its efforts to research and development, conducting preclinical and clinical studies, recruiting management and technical staff, administration, and raising capital.

Commitments

9 Months Ended

Sep. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments

8. Commitments

Leases

The Company leases office and laboratory space in Wilmington, Delaware under a noncancelable lease (the “Chestnut Run Lease”). The premises include approximately 81,000 rentable square feet and has an initial term of 162 months with 3 five-year extension options and certain expansion rights. Neither the option to extend nor the expansion rights were recognized as part of the Company's measurement of the right-of-use ("ROU") asset and operating lease liability as of September 30, 2024. Under the terms of the Chestnut Run Lease, the landlord provided an allowance towards the cost of completing tenant improvements for the premises. The Company concluded that the improvements resulting from both the landlord's build-out and the tenant improvements are the landlord's assets for accounting purposes. Costs incurred by the Company related to tenant improvements in excess of the landlord's allowance were treated as prepaid rent and increased the right-of-use asset on the commencement date.

In April 2024, the Company entered into a 12 month finance lease for equipment.

Our operating lease costs for the three and nine months ended September 30, 2024 were $1.2 million and $3.3 million, respectively. Our operating lease costs for the three and nine months ended September 30, 2023 were $0.5 million and $1.6 million, respectively. Supplemental balance sheet and other information related to our operating and finance leases as of September 30, 2024 and December 31, 2023 were as follows:


(in thousands)
Leases	Classification	September 30, 2024			December 31, 2023
Assets
Operating	Operating lease right-of-use assets	$	29,182		$	30,412
Finance	Property and equipment, net		553			—
Total leased assets		$	29,735		$	30,412
Liabilities
Current:
Operating	Current liabilities, operating lease liability	$	2,365		$	1,481
Finance	Current liabilities, finance lease liability		359			—
Non-Current:
Operating	Operating lease liability		15,412			15,407
Total lease liabilities		$	18,136		$	16,888

Weighted-average discount rate
Operating lease			15.0	%		15.0	%
Finance lease			10.5	%
Weighted-average remaining lease term (years)
Operating lease			12.7			13.5
Finance lease			0.6

Supplemental cash flow information related to our leases for the nine months ended September 30, 2024 and 2023 were as follows:


	Nine months ended September 30,
(in thousands)	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating lease	$	1,051	$	1,446
Operating cash flows from finance lease	22			—
Financing cash flows from finance lease	244			—
Non-cash transaction
Right-of-use asset obtained in exchange for lease obligations:
Finance lease	603			—

Future minimum annual lease payments for operating and finance lease at September 30, 2024 are as follows:


(in thousands)	Operating lease			Finance lease
2024 (remaining)	$	561		$	159
2025		2,746			213
2026		2,979			-
2027		3,054			-
2028		3,130			-
2029		3,209			-
Thereafter		26,427			-
Total undiscounted lease payments		42,106			372
Less imputed interest		(24,329	)		(13	)
Lease liability	$	17,777		$	359

The Company paid a security deposit for the Chestnut Run Lease in the form of a letter of credit of $4.0 million, which is included in the accompanying balance sheet as restricted cash as of September 30, 2024. The security deposit may be reduced to $0.5 million over time in accordance with the terms of the Chestnut Run Lease.

In connection with the Company’s expansion of operations in the State of Delaware, the Company was approved for a grant from the State of Delaware in 2021 that will provide up to $2.4 million in reimbursements over three years for the development of lab space and up to $3.1 million to increase jobs in Delaware to meet specific targeted levels through 2023, which was extended to 2026 during the second quarter of 2024. During the third quarter of 2022, the Company was approved for an additional grant from the State of Delaware for the development of lab space in the amount of $1.0 million. In 2022, the Company received cash grants of $3.4 million from the State of Delaware for the development of lab space. The Company has met the minimum requirements stated in the grant agreement in order to not be required to pay back any portion of the $3.4 million disbursed. The Company deferred the recognition of these grant funds as they relate to capitalized costs and has classified them as long-term liabilities in the accompanying balance sheet. The Company recognizes the grant funds in other income as grant income over the length of the lease term. Additionally, if the Company leaves the State of Delaware within five years of the disbursement, the Company is required to return an amount equal to the amount of grant funds disbursed on a pro-rated basis. As of September 30, 2024, the Company has received $0.5 million for increasing jobs since the date the grant was approved, which has been recorded in other income.

Employment Agreements

The Company entered into employment agreements with key personnel providing for compensation and severance in certain circumstances, as defined in the respective employment agreements.

401(k) Defined Contribution Plan

The Company sponsors a 401(k) defined‑contribution plan covering all employees. Participants are permitted to contribute up to 100% of their eligible annual pretax compensation up to an established federal limit on aggregate participant contributions. The Company provides a match of a maximum amount of 3% of the participant’s compensation. For the three months ended September 30, 2024 and 2023, the Company made matching contributions of $0.2 million and $0.1 million, respectively. For nine months ended September 30, 2024 and 2023, the Company made matching contributions of $0.6 million and $0.5 million, respectively.

Research Collaboration Agreement

In 2023, the Company entered into a multi-year, multi-program agreement with AbCellera Biologics Incorporated ("AbCellera") to jointly discover, develop, and commercialize novel oncology medicines for up to five programs. Under the terms of the agreement, AbCellera will lead manufacturing activities and the Company will lead clinical development and global commercialization, subject to AbCellera’s option to co-promote any resulting commercial products in the United States. If, at any point one party in the collaboration opts-out of future co-development cost sharing, that party will be entitled to a royalty from commercialization of the collaboration target, dependent on the proportion of their co-development contributions compared to the total development costs of a target as defined within the agreement. The Company concluded that the agreement with AbCellera will be accounted for under the scope of ASC 808, Collaborative Arrangements, as both parties will actively participate in joint operating activities and are exposed to significant risks and rewards. Under ASC 808, certain transactions between collaborative arrangement participants should follow the accounting for revenue under ASC 606, Revenue from Contracts with Customers, when the collaborative arrangement participant is a customer for a distinct good or service. The Company determined that co-development arrangement as defined in our agreement with AbCellera does not meet the definition of a customer as defined by ASC 606. As a result, these activities will be accounted for as

research and development costs. Costs related to the AbCellera collaboration were not material for the three and nine months ended September 30, 2024.

License Agreement

In May 2024, the Company and Pathos AI, Inc. ("Pathos") entered into a license agreement under which the Company granted to Pathos an exclusive, sublicensable, world-wide license to its selective, brain-penetrant PRMT5 inhibitor, PRT811. Under the terms of the license agreement, the Company received a $3.0 million upfront, non-refundable payment. The agreement also includes a near term $4.0 million payment upon the earlier of 180 days following the effective date of the license agreement or the execution of a quality agreement between the parties pursuant to which the Company will transfer title to certain quantities of Active Pharmaceutical Ingredient (“API”). In addition, the Company may receive potential developmental milestone payments up to $37.0 million, potential sales milestone payments up to $100 million and a range of high single-digit to low double-digit royalties on PRT811 global net sales.

The Company assessed the license agreement with Pathos in accordance with ASC 606, Revenue from Contracts with Customer, and concluded that Pathos is a customer. The license agreement with Pathos includes the transfer of the following goods or services: (i) exclusive license to PRT811, (ii) transfer of licensed know-how and materials (i.e. datasets, regulatory and manufacturing documents, etc.), (iii) participation in a Joint Communication Committee ("JCC"), and (iv) execution of a quality agreement pursuant to which the Company will transfer title to certain API. The Company evaluated all of the promised goods or services within the contract and determined which goods and services were separate performance obligations. The Company determined that Pathos could not benefit from the license separately from the related know-how and materials, accordingly they represent one combined performance obligation. The execution of a quality agreement pursuant to which the Company will transfer title to certain API was identified as a separate performance obligation. The Company also determined the participation in the JCC is immaterial in the context of the license agreement as the Company has no decision-making ability through its participation in the JCC.

The transaction price is allocated to the performance obligation based upon relative standalone selling prices, which were estimated for (i) the exclusive license and know-how and materials at $3.0 million using an adjusted market approach and (ii) execution of a quality agreement pursuant to which the Company will transfer title to certain API at $4.0 million using a cost plus margin approach.

With respect to the accounting principles identified above, each performance obligation will be recognized at a point in time. The Company determined that the performance obligation for the license and transfer of related know-how and materials would be fully satisfied when the license is granted and key know-how and materials are transferred to Pathos as that is the point at which Pathos can fully use and benefit from the license to PRT811. The performance obligation for the execution of a quality agreement pursuant to which the Company will transfer title to certain API will be satisfied when the legal title to the API is transferred. During the third quarter of 2024, the Company satisfied the performance obligation related to the exclusive license and transfer of related know-how and materials which resulted in the recognition of revenue for $3.0 million previously deferred. The Company will recognize revenue of $4.0 million in the fourth quarter of 2024 as the performance obligation for the execution of the quality agreement pursuant to which the Company transferred title to certain API was completed in early October 2024.

Other Research and Development Arrangements

The Company enters into agreements with clinical research organizations ("CROs") to assist in the performance of research and development activities. Expenditures to CROs represent a significant cost in clinical development for the Company.

Risks and Liquidity

9 Months Ended

Sep. 30, 2024

Risks And Liquidity [Abstract]

Risks and Liquidity

2. Risks and liquidity

The Company faces a number of risks common to early-stage companies in the biotechnology industry. Principal among these risks are the uncertainties in the development process, development of the same or similar technological innovations by competitors, protection of proprietary technology, dependence on key personnel, compliance with government regulations and approval requirements, 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 and clinical testing and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel infrastructure, and extensive compliance-reporting capabilities. There can be no assurance that the Company’s research and development will be successfully completed, adequate protection for the Company’s technology will be obtained, any products developed will obtain necessary government regulatory approval, or any approved products will be commercially viable. The Company operates in an environment of rapid change in technology and substantial competition from pharmaceutical and biotechnology companies.

Since its inception, the Company has incurred operating losses and had an accumulated deficit of $554.8 million at September 30, 2024. The Company has no product revenue to-date and devotes its efforts to research and development. The Company anticipates incurring additional losses until such time, if ever, that it can generate significant sales of its product candidates currently in development.

The Company believes its cash, cash equivalents, and marketable securities as of September 30, 2024 will be sufficient to fund its operating expenses and capital expenditure requirements for at least the next twelve months from the filing date of this Quarterly Report on Form 10-Q.

To fund its operating expenses and capital expenditure requirements after that date, the Company plans to seek additional funding through public or private equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements. The Company may not be able to obtain financing on acceptable terms, or at all, and the Company may not be able to enter into strategic alliances or other arrangements on favorable terms, or at all. The terms of any financing may adversely affect the holdings or the rights of the Company’s stockholders. If the Company is unable to obtain funding, it could be required to delay, reduce or eliminate research and development programs, product portfolio expansion or future commercialization efforts, which could adversely affect its business prospects.