0001558370-24-015623 | 10-Q | XBRL Viewer

Stock-based compensation

9 Months Ended

Sep. 30, 2024

7.	Stock-Based Compensation

The 2023 Stock Option and Incentive Plan (2023 Plan) was adopted by the board of directors, approved by the Company’s stockholders on July 4, 2023, and became effective on July 13, 2023, replacing the 2017 Equity Incentive Plan. The number of shares initially reserved for issuance under the 2023 Plan was 2,585,968, which automatically increased by 855,016 shares on January 1, 2024 and will increase each January 1 thereafter, by (i) 4% of the outstanding number of shares of the Company’s Series A common stock on the immediately preceding December 31 or (ii) a lesser number of shares as determined by the compensation committee of the board of directors. As of September 30, 2024, the aggregate maximum number of shares reserved for issuance under the 2023 Plan was 3,440,984, of which 1,729,910 shares were available for future grant. Option grants issued under the 2023 Plan are exercisable for up to 10 years from the date of issuance.

In March 2024, the Company established a pool of 1,000,000 shares of Series A common stock (Inducement Pool) from which grants of stock-based compensation awards may be issued as inducement for new employees to accept employment offers from the Company or individuals returning to employment after a bona fide period of non-employment with the Company. Inducement Pool grants are granted outside of the 2023 Plan and do not require approval from the Company’s stockholders pursuant to the Nasdaq inducement grant exception in accordance with Nasdaq Listing Rule 5635(c)(4). As of September 30, 2024, 364,672 shares were available for future grants from the Inducement Pool.

Total stock-based compensation recorded in the condensed statements of operations and comprehensive loss related to stock options and restricted stock units for employees and non-employees was as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Stock options	$	1,316	$	1,855	$	2,903	$	3,679
Restricted stock units		230		—		851		—
Total stock-based compensation expense	$	1,546	$	1,855	$	3,754	$	3,679
Included in:
General and administrative expense	$	1,311	$	1,649	$	3,005	$	3,103
Research and development expense		235		206		749		576
Total stock-based compensation expense	$	1,546	$	1,855	$	3,754	$	3,679

Stock options

The Company grants stock options which consist of (i) time-based options, which vest and become exercisable, subject to the participant’s continued employment or service through the applicable vesting date and (ii) performance-based options, which vest based on performance measures against predetermined objectives that include successful completion of qualified equity offerings or announced

topline results for clinical trials and positive clinical results over a specified performance period. The Company’s time-based options have various vesting schedules that range from vesting immediately to vesting over a four-year period.

The following table summarizes stock option activity for the nine months ended September 30, 2024 (in thousands, except share and per share data):


				Weighted-
	Number of			Average
	Shares	Weighted-		Remaining
	Underlying	Average		Contractual	Aggregate
	Outstanding	Exercise		Term	Intrinsic
	Options	Price		(in Years)	Value
Outstanding, January 1, 2024	3,753,507	$	7.99	7.1	$	8
Options granted	1,375,296		4.43
Options exercised	(17,995)		6.36
Options forfeited/expired	(788,441)		8.50
Outstanding, September 30, 2024 ⁽¹⁾	4,322,367	$	6.77	7.5	$	—
Vested and exercisable as of September 30, 2024	2,314,801	$	7.26	6.3	$	—

____________

(1)

Includes 492,729 performance-based options with a weighted-average exercise price of $6.42, of which 490,372 were fully vested and exercisable.

During the nine months ended September 30, 2024 and 2023, the weighted average grant-date fair value per share of stock options granted was $3.42 and $10.28, respectively. The total intrinsic value of stock options exercised during the nine months ended September 30, 2024 and 2023, was $0.1 million and $0.1 million, respectively. Additionally, during the nine months ended September 30, 2024 and 2023, cash received from the exercise of stock options was $0.1 million and approximately $6,000, respectively.

As of September 30, 2024, there was $9.5 million of unrecognized compensation expense, which is expected to be recognized over a remaining weighted-average period of 2.4 years.

Restricted stock units

The Company’s restricted stock units generally vest over a four-year period in equal amounts on an annual basis, provided the employee remains continuously employed with the Company. The fair value of the restricted stock units is equal to the closing price of the Company’s Series A common stock on the grant date.

The following table summarizes restricted stock unit activity:


		Weighted-Average
	Restricted	Grant Date
	Stock Units	Fair Value
Outstanding, January 1, 2024	1,132,410	$	2.96
Granted	49,330		5.23
Vested/released	(281,458)		2.96
Forfeited/expired	(55,900)		4.96
Outstanding, September 30, 2024	844,382	$	2.96

As of September 30, 2024, the total unrecognized compensation expense related to unvested restricted stock units was $2.3 million, which is expected to be recognized over a remaining weighted-average period of 2.8 years.

Valuation assumptions

The fair value of each stock option granted was estimated on the date of grant using the Black-Scholes option pricing model using the following assumptions:


	Nine Months Ended September 30,
	2024		2023
Expected volatility	91 - 96	%	89 - 91	%
Risk-free interest rate	3.9 - 4.5	%	3.6	%
Dividend yield	—		—
Expected term (in years)	5.3 - 6.1		5.0 - 7.0

The expected term of the stock options represents the average of the contractual term of the options and the weighted-average expected vesting period. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected volatility rate was based on the historical volatilities of comparable companies in the Company’s industry. The Company has never declared or paid any cash dividends and does not presently plan to pay cash dividends in the foreseeable future. Consequently, the Company used an expected dividend yield of zero.

Employee stock purchase plan

The 2023 Employee Stock Purchase Plan (the ESPP) was adopted by the board of directors in July 2023 with an initial total of 215,497 shares of Series A common stock reserved for issuance. Under the ESPP plan, the amount of shares reserved will automatically increase each January 1 through January 1, 2033, by the least of (i) 215,497 shares of Series A common stock, (ii) 1% of the outstanding number of shares of the Company’s Series A common stock on the immediately preceding December 31 or (iii) such lesser number of shares of Series A common stock as determined by the administrator of the ESPP. On January 1, 2024, in accordance with the ESPP, the authorized shares were increased by 213,754 shares for a total of 429,251 shares of Series A common stock available under the ESPP. No shares of Series A common stock have been issued under the ESPP to date.

Stock-based compensation (Tables)

9 Months Ended

Sep. 30, 2024

Stock-based compensation

Schedule of stock-based compensation expense


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Stock options	$	1,316	$	1,855	$	2,903	$	3,679
Restricted stock units		230		—		851		—
Total stock-based compensation expense	$	1,546	$	1,855	$	3,754	$	3,679
Included in:
General and administrative expense	$	1,311	$	1,649	$	3,005	$	3,103
Research and development expense		235		206		749		576
Total stock-based compensation expense	$	1,546	$	1,855	$	3,754	$	3,679

Schedule of option activity transactions

The following table summarizes stock option activity for the nine months ended September 30, 2024 (in thousands, except share and per share data):


				Weighted-
	Number of			Average
	Shares	Weighted-		Remaining
	Underlying	Average		Contractual	Aggregate
	Outstanding	Exercise		Term	Intrinsic
	Options	Price		(in Years)	Value
Outstanding, January 1, 2024	3,753,507	$	7.99	7.1	$	8
Options granted	1,375,296		4.43
Options exercised	(17,995)		6.36
Options forfeited/expired	(788,441)		8.50
Outstanding, September 30, 2024 ⁽¹⁾	4,322,367	$	6.77	7.5	$	—
Vested and exercisable as of September 30, 2024	2,314,801	$	7.26	6.3	$	—

____________

(1)

Includes 492,729 performance-based options with a weighted-average exercise price of $6.42, of which 490,372 were fully vested and exercisable.

Schedule of restricted stock unit activity


		Weighted-Average
	Restricted	Grant Date
	Stock Units	Fair Value
Outstanding, January 1, 2024	1,132,410	$	2.96
Granted	49,330		5.23
Vested/released	(281,458)		2.96
Forfeited/expired	(55,900)		4.96
Outstanding, September 30, 2024	844,382	$	2.96

Schedule of fair value assumptions


	Nine Months Ended September 30,
	2024		2023
Expected volatility	91 - 96	%	89 - 91	%
Risk-free interest rate	3.9 - 4.5	%	3.6	%
Dividend yield	—		—
Expected term (in years)	5.3 - 6.1		5.0 - 7.0

CONDENSED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) - Temporary Equity - USD ($) $ in Thousands	Redeemable convertible preferred stock	Total
Beginning balance, Temporary equity at Dec. 31, 2022	$ 214,620
Beginning balance, Temporary equity (in shares) at Dec. 31, 2022	1,373,730,625
Increase (Decrease) in Temporary Equity
Conversion of redeemable convertible preferred stock to Series A and Series B common stock (in shares)	0
Net loss	$ 0
Ending balance, Temporary equity at Mar. 31, 2023	$ 214,620
Ending balance, Temporary equity (in shares) at Mar. 31, 2023	1,373,730,625
Increase (Decrease) in Temporary Equity
Conversion of redeemable convertible preferred stock to Series A and Series B common stock (in shares)	0
Net loss	$ 0
Ending balance, Temporary equity at Jun. 30, 2023	$ 214,620
Ending balance, Temporary equity (in shares) at Jun. 30, 2023	1,373,730,625
Increase (Decrease) in Temporary Equity
Conversion of redeemable convertible preferred stock to Series A and Series B common stock	$ (214,620)	$ 214,620
Conversion of redeemable convertible preferred stock to Series A and Series B common stock (in shares)	(1,373,730,625)
Net loss	$ 0
Ending balance, Temporary equity at Sep. 30, 2023	$ 0
Ending balance, Temporary equity (in shares) at Sep. 30, 2023	0

- Definition

Carrying amount, attributable to parent, of an entity's issued and outstanding stock which is not included within permanent equity. Temporary equity is a security with redemption features that are outside the control of the issuer, is not classified as an asset or liability in conformity with GAAP, and is not mandatorily redeemable. Includes any type of security that is redeemable at a fixed or determinable price or on a fixed or determinable date or dates, is redeemable at the option of the holder, or has conditions for redemption which are not solely within the control of the issuer. Includes stock with a put option held by an ESOP and stock redeemable by a holder only in the event of a change in control of the issuer.

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+ Details

Fair value measurements and fair value of financial instruments (Tables)

9 Months Ended

Sep. 30, 2024

Fair value measurements and fair value of financial instruments

Schedule of marketable securities, available-for-sale

The following tables set forth the Company’s financial assets that were measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):


		September 30, 2024
	Valuation	Amortized		Unrealized		Unrealized
	Hierarchy	cost		Gains		Losses		Fair Value
Assets
Cash equivalents:
Money market funds	Level 1	$	76,427	$	—	$	—	$	76,427
Total cash equivalents			76,427		—		—		76,427
Short-term marketable securities:
Commercial paper	Level 2		19,469		56		—		19,525
Corporate debt securities	Level 2		9,442		20		—		9,462
U.S. Treasury securities	Level 2		32,447		133		—		32,580
Agency securities	Level 2		11,396		22		—		11,418
Asset-backed securities	Level 2		2,480		7		—		2,487
Total short-term marketable securities			75,234		238		—		75,472
Long-term marketable securities:
U.S. Treasury securities	Level 2		12,291		165		—		12,456
Asset-backed securities	Level 2		4,977		38		—		5,015
Total long-term marketable securities			17,268		203		—		17,471
Total cash equivalents and marketable securities		$	168,929	$	441	$	—	$	169,370


		December 31, 2023
	Valuation	Amortized		Unrealized		Unrealized
	Hierarchy	cost		Gains		Losses		Fair Value
Assets
Cash equivalents:
Money market funds	Level 1	$	69,516	$	—	$	—	$	69,516
Corporate debt securities	Level 2		4,622		—		—		4,622
Total cash equivalents			74,138		—		—		74,138
Short-term marketable securities:
Commercial paper	Level 2		9,879		19		—		9,898
Corporate debt securities	Level 2		2,945		4		—		2,949
U.S. Treasury securities	Level 2		6,904		7		—		6,911
Total short-term marketable securities			19,728		30		—		19,758
Total cash equivalents and marketable securities		$	93,866	$	30	$	—	$	93,896

- Definition

Tabular disclosure of investment in debt security measured at fair value with change in fair value recognized in other comprehensive income (available-for-sale).

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+ Details

Commitments and contingencies - Lease (Details)		1 Months Ended	3 Months Ended		9 Months Ended
Commitments and contingencies - Lease (Details)	Mar. 12, 2019 USD ($) ft²	Apr. 30, 2024 USD ($)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)
Leases
Operating lease term	38 months
Rented area (in square feet) \| ft²	3,030
Monthly lease payments	$ 12,000	$ 13,000
Change in operating lease liability		$ 100,000			$ 149,000
Operating lease cost			$ 42,000	$ 37,000	$ 116,000	$ 111,000

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

Commitments and contingencies

9 Months Ended

Sep. 30, 2024

Commitments and contingencies

Commitments and contingencies

6.	Commitments and Contingencies

License and other agreements

Ascletis BioScience Co. Ltd

In January 2019, the Company entered into a license agreement that became effective in February 2019 with Ascletis BioScience Co. Ltd. (Ascletis), a subsidiary of Ascletis Pharma Inc. (Ascletis Pharma), a biotechnology company incorporated in the Cayman Islands and headquartered in Hangzhou, China. Ascletis Pharma, through a subsidiary, was the lead investor in the Company’s Series E redeemable convertible preferred stock financing in February 2019. The parties entered into this agreement with the intention to develop, manufacture, and commercialize the Company’s proprietary FASN inhibitor, denifanstat, which Ascletis refers to as ASC40. Under the terms of the license agreement, the Company granted Ascletis and its affiliates an exclusive, royalty-bearing sublicensable right and license under the Company’s intellectual property to develop, manufacture, commercialize and otherwise exploit denifanstat and other products containing denifanstat-related compounds in Greater China, consisting of the People’s Republic of China, Hong Kong, Macau and Taiwan.

The Company is eligible to receive development and commercial milestone payments from Ascletis in aggregate of up to $122.0 million as well as tiered royalties ranging from percentages in the high single digits to mid-teens on future net sales of denifanstat in Greater China. The license and the research and development services components of this license agreement are representative of a relationship with a customer, and therefore, the Company evaluated the license agreement under the provisions of ASC 606, Revenue from Contracts with Customers. The developmental and commercial event-based milestone payments represent variable consideration, and the Company used the most likely amount method to estimate this variable consideration because the potential milestone payment is a binary event, as the Company will either receive the milestone payment or it will not. Given the high degree of uncertainty around achievement of these milestones, the Company determined the milestone amounts to be fully constrained and will not recognize revenue until the uncertainty associated with these payments is resolved. Any consideration related to royalties will be recognized if and when the related sales occur. The Company re-assesses the transaction price in each reporting period and when events whose outcomes are resolved or other changes in circumstances occur.

In July 2023, the Company recognized $2.0 million of revenue related to a development milestone triggered by the initial dosing of a Phase 3 trial for recurrent glioblastoma multiforme (GBM), of which $1.7 million was received from Ascletis in August 2023, net of applicable taxes, which are recorded in general and administrative expense in the statement of operations and comprehensive loss.

In July 2023, the Company entered into an Assignment and Assumption Agreement with Ascletis and Ascletis’ affiliate Gannex Pharma Co., Ltd. (Gannex) under which Ascletis, while remaining responsible for performance under the license agreement, assigned all of its rights and obligations under the license agreement to Gannex and Gannex assumed such rights and obligations, effective as of October 2019.

Contract Research Organization

In June 2024, the Company entered into a contract with a global CRO to perform certain research and related services in connection with certain of the Company’s clinical trials and research studies (CRO Services Agreement). The terms of the CRO Services Agreement require the Company to pay to the CRO certain direct fees, investigator grants and other pass-through costs, generally on an upfront prepaid basis. These payments are capitalized at the time of payment and expensed in the period in which the research and development activity is performed. The Company may terminate the CRO Services Agreement or underlying statement of work at will with 60 days’ written notice.

Facility lease agreement

On March 12, 2019, the Company executed a 38-month non-cancelable operating lease agreement for 3,030 square feet of office space for its headquarters facility in San Mateo, California, which commenced April 1, 2019. The lease provides for monthly payments of approximately $12,000 with annual increases. In December 2021, the lease agreement was amended to extend the term of the lease through June 2024; in April 2024, the Company amended the lease agreement to (i) extend the lease through June 30, 2025 and (ii) increase the monthly lease payment to approximately $13,000 beginning on July 1, 2024, which resulted in an increase in the Company’s operating lease right-of-use asset and corresponding operating lease liability of $0.1 million on the amendment date.

Operating lease costs were $42,000 and $37,000 for the three months ended September 30, 2024 and 2023, respectively, and $116,000 and $111,000 for the nine months ended September 30, 2024 and 2023, respectively.

Guarantees and indemnifications

In the normal course of business, the Company enters into agreements that contain a variety of representations and provide for general indemnification. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future. In addition, the Company has entered into indemnification agreements with members of its board of directors and its executive officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. As of September 30, 2024, the Company does not have any material indemnification claims that were probable or reasonably possible and consequently has not recorded related liabilities.

Legal Proceedings

From time to time, the Company may become involved in various legal proceedings that arise in the ordinary course of its business. The Company is not party to any material legal proceedings as of September 30, 2024.

Fair value measurements and fair value of financial instruments - Fair value (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Fair value on a recurring basis
Cash equivalents fair value	$ 76,400	$ 74,100
Unrealized Gains	441
Level 2
Fair value on a recurring basis
Marketable securities	92,900	19,800
Amortized cost
Fair value on a recurring basis
Cash equivalents fair value	76,427
Total assets fair value	168,929
Amortized cost \| Level 1 \| Money market funds
Fair value on a recurring basis
Cash equivalents fair value	76,427	69,516
Amortized cost \| Level 2 \| Corporate debt securities
Fair value on a recurring basis
Cash equivalents fair value		4,622
Short-term
Fair value on a recurring basis
Unrealized Gains	238
Short-term \| Level 2 \| Commercial paper
Fair value on a recurring basis
Unrealized Gains	56	19
Short-term \| Level 2 \| Corporate debt securities
Fair value on a recurring basis
Unrealized Gains	20	4
Short-term \| Level 2 \| U.S. Treasury securities
Fair value on a recurring basis
Unrealized Gains	133	7
Short-term \| Level 2 \| Agency securities
Fair value on a recurring basis
Unrealized Gains	22
Short-term \| Level 2 \| Asset-backed securities
Fair value on a recurring basis
Unrealized Gains	7
Short-term \| Amortized cost
Fair value on a recurring basis
Marketable securities	75,234
Short-term \| Amortized cost \| Level 2 \| Commercial paper
Fair value on a recurring basis
Marketable securities	19,469	9,879
Short-term \| Amortized cost \| Level 2 \| Corporate debt securities
Fair value on a recurring basis
Marketable securities	9,442	2,945
Short-term \| Amortized cost \| Level 2 \| U.S. Treasury securities
Fair value on a recurring basis
Marketable securities	32,447	6,904
Short-term \| Amortized cost \| Level 2 \| Agency securities
Fair value on a recurring basis
Marketable securities	11,396
Short-term \| Amortized cost \| Level 2 \| Asset-backed securities
Fair value on a recurring basis
Marketable securities	2,480
Long-term
Fair value on a recurring basis
Unrealized Gains	203
Long-term \| Level 2 \| U.S. Treasury securities
Fair value on a recurring basis
Unrealized Gains	165
Long-term \| Level 2 \| Asset-backed securities
Fair value on a recurring basis
Unrealized Gains	38
Long-term \| Amortized cost
Fair value on a recurring basis
Marketable securities	17,268
Long-term \| Amortized cost \| Level 2 \| U.S. Treasury securities
Fair value on a recurring basis
Marketable securities	12,291
Long-term \| Amortized cost \| Level 2 \| Asset-backed securities
Fair value on a recurring basis
Marketable securities	4,977
Recurring
Fair value on a recurring basis
Unrealized Gains		30
Recurring \| Amortized cost
Fair value on a recurring basis
Cash equivalents fair value		74,138
Total assets fair value		93,866
Recurring \| Estimated Fair Value
Fair value on a recurring basis
Cash equivalents fair value	76,427	74,138
Total assets fair value	169,370	93,896
Recurring \| Estimated Fair Value \| Level 1 \| Money market funds
Fair value on a recurring basis
Cash equivalents fair value	76,427	69,516
Recurring \| Estimated Fair Value \| Level 2 \| Corporate debt securities
Fair value on a recurring basis
Cash equivalents fair value		4,622
Recurring \| Short-term
Fair value on a recurring basis
Unrealized Gains		30
Recurring \| Short-term \| Amortized cost
Fair value on a recurring basis
Marketable securities		19,728
Recurring \| Short-term \| Estimated Fair Value
Fair value on a recurring basis
Marketable securities	75,472	19,758
Recurring \| Short-term \| Estimated Fair Value \| Level 2 \| Commercial paper
Fair value on a recurring basis
Marketable securities	19,525	9,898
Recurring \| Short-term \| Estimated Fair Value \| Level 2 \| Corporate debt securities
Fair value on a recurring basis
Marketable securities	9,462	2,949
Recurring \| Short-term \| Estimated Fair Value \| Level 2 \| U.S. Treasury securities
Fair value on a recurring basis
Marketable securities	32,580	$ 6,911
Recurring \| Short-term \| Estimated Fair Value \| Level 2 \| Agency securities
Fair value on a recurring basis
Marketable securities	11,418
Recurring \| Short-term \| Estimated Fair Value \| Level 2 \| Asset-backed securities
Fair value on a recurring basis
Marketable securities	2,487
Recurring \| Long-term \| Estimated Fair Value
Fair value on a recurring basis
Marketable securities	17,471
Recurring \| Long-term \| Estimated Fair Value \| Level 2 \| U.S. Treasury securities
Fair value on a recurring basis
Marketable securities	12,456
Recurring \| Long-term \| Estimated Fair Value \| Level 2 \| Asset-backed securities
Fair value on a recurring basis
Marketable securities	$ 5,015

Summary of significant accounting policies - EPS (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Sep. 30, 2023
Numerator:
Net Income (Loss)	$ (14,619)	$ (8,118)	$ (6,629)	$ (6,353)	$ (6,785)	$ (6,587)	$ (29,366)	$ (19,725)
Denominator:
Weighted-average shares outstanding, basic (in shares)	32,143,336			18,194,682			31,036,271	6,131,541
Weighted-average shares outstanding, diluted (in shares)	32,143,336			18,194,682			31,036,271	6,131,541
Net loss per share, basic (in dollars per share)	$ (0.45)			$ (0.35)			$ (0.95)	$ (3.22)
Net loss per share, diluted (in dollars per share)	$ (0.45)			$ (0.35)			$ (0.95)	$ (3.22)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References

+ Details

- 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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+ Details

Description of Business and Basis of Presentation

9 Months Ended

Sep. 30, 2024

Description of Business and Basis of Presentation

Description of Business and Basis of Presentation

SAGIMET BIOSCIENCES INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS (unaudited)

1.	Description of Business and Basis of Presentation

Sagimet Biosciences Inc. (the Company), a Delaware corporation headquartered in San Mateo, California, is a clinical-stage biopharmaceutical company developing novel therapeutics called fatty acid synthase (FASN) inhibitors that target dysfunctional metabolic and fibrotic pathways in diseases resulting from the overproduction of the fatty acid, palmitate. The Company’s lead drug candidate, denifanstat, is an oral, once-daily pill and selective FASN inhibitor for the treatment of metabolic dysfunction-associated steatohepatitis (MASH), formerly known as nonalcoholic steatohepatitis (NASH). In January 2024, the Company announced positive topline results from the Phase 2b FASCINATE-2 clinical trial evaluating denifanstat in biopsy-confirmed MASH patients with stage F2 or F3 fibrosis compared to placebo at week 52. In June 2024, the Company presented additional 52-week intention to treat (ITT) and F3 subgroup efficacy data from the Phase 2b FASCINATE-2 clinical trial.

In October 2024, the U.S. Food and Drug Administration (FDA) granted Breakthrough Therapy designation to denifanstat for the treatment of non-cirrhotic MASH with moderate to advanced liver fibrosis (consistent with stages F2 to F3 fibrosis). Breakthrough Therapy designation of denifanstat was supported by positive data from the Phase 2b FASCINATE-2 clinical trial in biopsy-confirmed MASH patients with stage 2 or stage 3 fibrosis.

In October 2024, the Company completed successful end-of-Phase 2 interactions with the FDA, supporting the advancement of denifanstat into Phase 3 in MASH. The planned program will include two Phase 3 trials: FASCINATE-3, evaluating patients with F2/F3 (non-cirrhotic) MASH, and FASCINIT, evaluating patients with suspected or confirmed diagnosis of metabolic dysfunction-associated steatotic liver disease (MASLD)/MASH. The Phase 3 program is expected to initiate by the end of 2024.

In addition to MASH, the Company is exploring the use of its FASN inhibitors in acne and in select forms of cancer, diseases in which dysregulation of fatty acid metabolism also plays a key role. Denifanstat is currently being tested in China by the Company’s license partner, Ascletis BioScience Co. Ltd. (Ascletis), a subsidiary of Ascletis Pharma Inc. (Ascletis Pharma), in a Phase 3 clinical trial for moderate to severe acne vulgaris and a Phase 3 trial in recurrent glioblastoma multiforme (GBM) in combination with bevacizumab. In November 2024, Ascletis announced completion of enrollment of 480 patients in the acne Phase 3 clinical trial. The Company has completed Investigational New Drug (IND)-enabling studies for a second FASN inhibitor, TVB-3567.

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted (GAAP) in the United States. 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) promulgated by the Financial Accounting Standards Board (FASB). Certain prior year amounts have been reclassified to conform to the current year presentation.

These unaudited interim financial statements and accompanying notes should be read in conjunction with the Company’s annual financial statements and the notes thereto included in the Company’s Form 10-K, as filed with the Securities and Exchange Commission (SEC) on March 25, 2024. The accompanying interim financial statements as of September 30, 2024 and for the three and nine months ended September 30, 2024 and 2023 are unaudited but include all adjustments that management believes to be necessary for a fair presentation of the periods presented. Interim results are not necessarily indicative of results for a full year. Balance sheet amounts as of December 31, 2023 have been derived from the audited financial statements as of that date.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Such estimates include accruals of research and development expenses, accrued costs for services rendered under agreements with third-party contract research organizations (CROs), preferred stock and common stock valuations prior to the Company’s initial public offering of Series A common stock (IPO) and stock option valuations and stock-based compensation. On an ongoing basis, the Company evaluates its estimates and judgments, which are based on historical and anticipated results and trends and on various other assumptions that management believes to be reasonable under the circumstances. Actual results could differ from those estimates.

Emerging growth company status

The Company is an emerging growth company (EGC) as defined in the Jumpstart Our Business Startups Acts of 2012, as amended (the JOBS Act), and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not EGCs. The Company may take advantage of these exemptions until it is no longer an EGC under Section 107 of the JOBS Act and has elected to use the extended transition period for complying with new or revised accounting standards. As a result of this election, the Company’s financial statements may not be comparable to those issued by companies that comply with the effective dates pursuant to public company FASB standards.

Liquidity

The accompanying unaudited financial statements have been prepared assuming the Company will continue as a going concern, which contemplates continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company will require substantial additional capital to fund its research and development and ongoing operating expenses. As of September 30, 2024, the Company has relied on public and private equity and debt financings and proceeds from licensing arrangements to fund its operations. The Company has incurred recurring losses and negative cash flows from operations since inception, and, as of September 30, 2024, had an accumulated deficit of $279.1 million and cash, cash equivalents and marketable securities of $170.0 million. The Company expects to incur additional losses and negative cash flows from operations for the foreseeable future.

In July and August 2023, the Company completed its IPO, and inclusive of the partial exercise of the underwriters’ overallotment option, the Company sold an aggregate of 6,026,772 shares of Series A common stock at a public offering price of $16.00 per share and received $86.2 million in net proceeds. In January 2024, the Company completed a follow-on offering whereby it sold 9,000,000 shares of its Series A common stock at price of $12.50 per share and received $104.7 million in proceeds, net of issuance costs of $7.8 million.

The Company expects that its cash, cash equivalents and marketable securities as of September 30, 2024 will be sufficient to fund the Company’s operating expenses for at least the next 12 months from the issuance of these financial statements. In the future, the Company will need to raise additional funds until it is able to generate sufficient revenues to fund its development activities, if ever. The Company’s future operating activities, coupled with its plans to raise capital or issue debt financing, may provide additional liquidity in the future, however these actions are not solely within the control of the Company and the Company is unable to predict the outcome of these actions to generate the liquidity ultimately required.

In August 2024, the Company entered into a Controlled Equity Offering Sales Agreement with Cantor Fitzgerald & Co. to establish an at-the-market offering (ATM Offering) through which the Company may sell, from time to time at its sole discretion up to $75.0 million of shares of its Series A common stock. There were no sales under the ATM Offering during the three and nine months ended September 30, 2024.

Stock-based compensation (Details) - shares	Jan. 01, 2024	Jul. 13, 2023	Sep. 30, 2024
2023 Equity incentive plan
Stock-based compensation
Common stock reserved for future issuance (in shares)		2,585,968	3,440,984
Annual increase in reserved shares (as a percent)		4.00%
Increase in future issuance (in shares)	855,016
Available for grant (in shares)			1,729,910
Contractual term		10 years
2024 Inducement Grants
Stock-based compensation
Common stock reserved for future issuance (in shares)			1,000,000
Available for grant (in shares)			364,672
Employee Stock Purchase Plan
Stock-based compensation
Common stock reserved for future issuance (in shares)		215,497
Annual increase in reserved shares (as a percent)		1.00%
Employee Stock Purchase Plan \| Series A Common Stock
Stock-based compensation
Common stock reserved for future issuance (in shares)		215,497
Increase in future issuance (in shares)	213,754
Available for grant (in shares)	429,251

Summary of significant accounting policies - Dilutive (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Antidilutive securities
Potentially dilutive securities (in shares)	5,167,749	3,767,505	5,167,749	3,767,505
Stock options
Antidilutive securities
Potentially dilutive securities (in shares)	4,322,367	3,766,505	4,322,367	3,766,505
Warrants
Antidilutive securities
Potentially dilutive securities (in shares)	1,000	1,000	1,000	1,000
Restricted stock units
Antidilutive securities
Potentially dilutive securities (in shares)	844,382		844,382

Prepaid expenses and other current assets

9 Months Ended

Sep. 30, 2024

Prepaid expenses and other current assets

Prepaid expenses and other current assets

4.	Prepaid Expenses and Other Current Assets

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


	As of
	September 30,		December 31,
	2024		2023
Prepaid clinical costs	$	2,933	$	—
Prepaid research and development costs		684		767
Prepaid insurance		680		585
Deferred financing costs⁽¹⁾		306		323
Other		101		74
Total prepaid expenses and other current assets	$	4,704	$	1,749

____________

(1)

Amount as of September 30, 2024 relates to deferred financing costs related to the ATM Offering entered into during August 2024. Amount as of December 31, 2023 relates to deferred financing costs related to the Company’s January 2024 follow-on offering.

Prepaid expenses and other current assets (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Prepaid expenses and other current assets
Prepaid clinical expenses	$ 2,933
Prepaid research and development	684	$ 767
Prepaid insurance	680	585
Deferred financing costs	306	323
Other	101	74
Total	$ 4,704	$ 1,749

Prepaid expenses and other current assets (Tables)

9 Months Ended

Sep. 30, 2024

Prepaid expenses and other current assets

Schedule of prepaid expenses and other current assets

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


	As of
	September 30,		December 31,
	2024		2023
Prepaid clinical costs	$	2,933	$	—
Prepaid research and development costs		684		767
Prepaid insurance		680		585
Deferred financing costs⁽¹⁾		306		323
Other		101		74
Total prepaid expenses and other current assets	$	4,704	$	1,749

____________

(1)

CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Accrued expenses and other current liabilities	$ 2,824	$ 5,403
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Related party
Accrued expenses and other current liabilities	$ 0	$ 31
Series A Common Stock
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	30,674,855	21,375,402
Common stock, shares outstanding	30,674,855	21,375,402
Series B Common Stock
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	15,000,000	15,000,000
Common stock, shares issued	1,520,490	1,520,490
Common stock, shares outstanding	1,520,490	1,520,490

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Revenue:
License revenue		$ 2,000		$ 2,000
Revenue from Contract with Customer, Product and Service [Extensible Enumeration]		us-gaap:LicenseMember		us-gaap:LicenseMember
Operating expenses:
Research and development	$ 12,653	$ 4,958	$ 24,228	$ 14,121
General and administrative	4,249	4,494	12,031	9,153
Total operating expenses	16,902	9,452	36,259	23,274
Loss from operations	(16,902)	(7,452)	(36,259)	(21,274)
Other income (expense):
Interest income and other, net	2,283	1,095	6,893	1,546
Total other income	2,283	1,099	6,893	1,549
Net loss	$ (14,619)	$ (6,353)	$ (29,366)	$ (19,725)
Net loss per share, basic (in dollars per share)	$ (0.45)	$ (0.35)	$ (0.95)	$ (3.22)
Net loss per share, diluted (in dollars per share)	$ (0.45)	$ (0.35)	$ (0.95)	$ (3.22)
Weighted-average shares outstanding, basic (in shares)	32,143,336	18,194,682	31,036,271	6,131,541
Weighted-average shares outstanding, diluted (in shares)	32,143,336	18,194,682	31,036,271	6,131,541
Other comprehensive income:
Net loss	$ (14,619)	$ (6,353)	$ (29,366)	$ (19,725)
Net unrealized income on marketable securities	464		411	84
Comprehensive loss	$ (14,155)	(6,353)	$ (28,955)	(19,641)
Redeemable convertible preferred stock warrant
Other income (expense):
Change in fair value of stock warrant liability				(1)
Series A common stock warrant
Other income (expense):
Change in fair value of stock warrant liability		$ 4		$ 4

Accrued expenses and other current liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Accrued expenses and other current liabilities
Accrued payroll-related costs	$ 995	$ 1,105
Accrued clinical costs	814	2,668
Accrued research and development costs	785	632
Accrued general and administrative costs	219	442
Accrued deferred offering costs		323
Other	11	233
Total	$ 2,824	$ 5,403

Stock-based compensation - Stock options (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Number of Shares
Balance at the beginning	3,753,507
Options granted	1,375,296
Options exercised	(17,995)
Options forfeited/expired	(788,441)
Balance at the end	4,322,367		3,753,507
Shares vested and exercisable at the end	2,314,801
Weighted-Average Exercise Price
Balance at the beginning (in dollars per share)	$ 7.99
Options granted (in dollars per share)	4.43
Options exercised (in dollars per share)	6.36
Options forfeited/expired (in dollars per share)	8.50
Balance at the end (in dollars per share)	6.77		$ 7.99
Vested and Exercisable at the end (in dollars per share)	$ 7.26
Term and Intrinsic Value
Weighted- Average Remaining Contractual Term, Outstanding	7 years 6 months		7 years 1 month 6 days
Weighted- Average Remaining Contractual Term, Exercisable	6 years 3 months 18 days
Aggregate Intrinsic Value, Outstanding			$ 8
Weighted average grant date fair value	$ 3.42	$ 10.28
Intrinsic value options exercised	$ 100	$ 100
Proceeds from exercise of stock options	$ 114	$ 6
Time-based options
Term and Intrinsic Value
Vesting period	4 years
Total unrecognized compensation cost	$ 9,500
Remaining weighted-average period for unrecognized compensation cost	2 years 4 months 24 days
Performance-based options
Number of Shares
Balance at the end	492,729
Shares vested and exercisable at the end	490,372
Weighted-Average Exercise Price
Balance at the end (in dollars per share)	$ 6.42

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2024	Nov. 08, 2024
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2024
Document Transition Report	false
Entity File Number	001-41742
Entity Registrant Name	Sagimet Biosciences Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-5991472
Entity Address, Address Line One	155 Bovet Road, Suite 303
Entity Address, City or Town	San Mateo
Entity Address State Or Province	CA
Entity Address, Postal Zip Code	94402
City Area Code	650
Local Phone Number	561-8600
Title of 12(b) Security	Series A Common Stock,$0.0001 par value per share
Trading Symbol	SGMT
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		30,674,855
Entity Central Index Key	0001400118
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Amendment Flag	false

Summary of significant accounting policies (Tables)

9 Months Ended

Sep. 30, 2024

Summary of significant accounting policies

Schedule of basic and diluted loss per share


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Numerator:
Net loss	$	(14,619)	$	(6,353)	$	(29,366)	$	(19,725)
Denominator:
Weighted-average shares of Series A and Series B common stock outstanding, basic and diluted		32,143,336		18,194,682		31,036,271		6,131,541
Net loss per share of Series A and Series B common stock outstanding, basic and diluted	$	(0.45)	$	(0.35)	$	(0.95)	$	(3.22)

Schedule of potentially dilutive securities


	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
Options to purchase Series A common stock	4,322,367	3,766,505	4,322,367	3,766,505
Warrants to purchase Series A common stock	1,000	1,000	1,000	1,000
Unvested restricted stock units	844,382	—	844,382	—
Total	5,167,749	3,767,505	5,167,749	3,767,505

Related parties

9 Months Ended

Sep. 30, 2024

Related parties

Related parties

8.	Related Party Transactions

Jinzi J. Wu, Ph.D., a member of the Company’s board of directors until June 2024, founded and serves as the chief executive officer of Ascletis, Gannex, and Ascletis Pharma.

During the nine months ended September 30, 2024 and 2023, the Company recognized $0.1 million and nil of expenses, respectively, related to its portion of expenses owed under the Ascletis license agreement, which are recorded in research and development expense in the unaudited condensed statements of operations and comprehensive loss. As of September 30, 2024 and December 31, 2023, the Company recorded nil and $31,000, respectively, of accruals related to the Ascletis license agreement. During the nine months ended September 30, 2024 and 2023, the Company paid Ascletis $0.2 million and nil, respectively, under the Ascletis manufacturing arrangement.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Name Accounting Standards Codification
-Section 50
-Paragraph 2
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-URI https://asc.fasb.org/1943274/2147480990/946-20-50-2

Reference 2: 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

Accrued expenses and other current liabilities

Schedule of accrued expenses and other current liabilities

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


	As of
	September 30,		December 31,
	2024		2023
Accrued payroll-related costs	$	995	$	1,105
Accrued clinical costs		814		2,668
Accrued research and development costs		785		632
Accrued general and administrative costs		219		442
Accrued offering costs		—		323
Other		11		233
Total accrued expenses and other current liabilities	$	2,824	$	5,403

CONDENSED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) - Parenthetical $ in Thousands	3 Months Ended
	Sep. 30, 2023 USD ($)
CONDENSED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT))
Issuance costs	$ 10,267

Stock-based compensation - Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Stock-based compensation
Total stock-based compensation	$ 1,546	$ 1,855	$ 3,754	$ 3,679
Stock options
Stock-based compensation
Total stock-based compensation	1,316	1,855	2,903	3,679
Restricted Stock Units
Stock-based compensation
Total stock-based compensation	230		851
General and administrative
Stock-based compensation
Total stock-based compensation	1,311	1,649	3,005	3,103
Research and development
Stock-based compensation
Total stock-based compensation	$ 235	$ 206	$ 749	$ 576

Commitments and contingencies - Licenses (Details) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended	9 Months Ended
	Aug. 31, 2023	Jul. 31, 2023	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Commitments and contingencies
Maximum eligible development and commercial milestone payments				$ 122,000
License revenue			$ 2,000		$ 2,000
Amount received as reimbursement	$ 1,700
Ascletis
Commitments and contingencies
License revenue		$ 2,000

- 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

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

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+ Details

CONDENSED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 77,014	$ 75,139
Short-term marketable securities	75,472	19,758
Prepaid expenses and other current assets	4,704	1,749
Total current assets	157,190	96,646
Long-term marketable securities	17,471
Operating lease right-of-use assets	114	73
Total assets	174,775	96,719
Current liabilities:
Accounts payable	1,152	186
Accrued expenses and other current liabilities (includes nil and $31 payable to related parties as of September 30, 2024 and December 31, 2023, respectively)	2,824	5,403
Operating lease liabilities	116	65
Total liabilities	4,092	5,654
Commitments and contingencies (Note 6)
Stockholders' equity, $0.0001 par value:
Undesignated preferred stock, $0.0001 per share: 10,000,000 shares authorized; no shares issued and outstanding at September 30, 2024 and December 31, 2023
Additional paid-in capital	449,349	340,777
Accumulated deficit	(279,110)	(249,744)
Accumulated other comprehensive income	441	30
Total stockholders' equity	170,683	91,065
Total liabilities and stockholders' equity	174,775	96,719
Series A Common Stock
Stockholders' equity, $0.0001 par value:
Common stock	3	2
Series B Common Stock
Stockholders' equity, $0.0001 par value:
Common stock

Stock-based compensation - Restricted Stock Units (Details) $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2024 USD ($) $ / shares shares
Restricted Stock Units
Stock-based compensation
Vesting period	4 years
Balance at the beginning (in shares)	1,132,410
Granted (in shares)	49,330
Vested/released (in shares)	(281,458)
Forfeited/expired (in shares)	(55,900)
Balance at the end (in shares)	844,382
Weighted average grant date fair value, beginning (in dollars per shares) \| $ / shares	$ 2.96
Weighted average grant date fair value, granted (in dollars per shares) \| $ / shares	5.23
Weighted average grant date fair value, vested (in dollars per share) \| $ / shares	2.96
Weighted average grant date fair value, forfeited/expired (in dollars per shares) \| $ / shares	4.96
Weighted average grant date fair value, ending (in dollars per shares) \| $ / shares	$ 2.96
Unrecognized compensation expense \| $	$ 2.3
Remaining weighted-average period for unrecognized compensation cost	2 years 9 months 18 days
Employee Stock Purchase Plan \| Series A Common Stock
Stock-based compensation
Granted (in shares)	0

Accrued expenses and other current liabilities

9 Months Ended

Sep. 30, 2024

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities

5.	Accrued Expenses and Other Current Liabilities

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


	As of
	September 30,		December 31,
	2024		2023
Accrued payroll-related costs	$	995	$	1,105
Accrued clinical costs		814		2,668
Accrued research and development costs		785		632
Accrued general and administrative costs		219		442
Accrued offering costs		—		323
Other		11		233
Total accrued expenses and other current liabilities	$	2,824	$	5,403

Summary of significant accounting policies (Details)	Jul. 18, 2023 shares	Jul. 07, 2023
Summary of significant accounting policies
Reverse stock split		0.012582
Common Class A
Summary of significant accounting policies
Shares issued upon conversion (in shares)	15,117,912
Series B Common Stock
Summary of significant accounting policies
Shares issued upon conversion (in shares)	1,520,490

Stock-based compensation - Fair value input (Details) - Employee Stock Option	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Stock-based compensation
Expected volatility, minimum	91.00%	89.00%
Expected volatility, maximum	96.00%	91.00%
Risk-free interest rate		3.60%
Risk-free interest rate, Minimum	3.90%
Risk-free interest rate, Maximum	4.50%
Dividend yield	0.00%	0.00%
Minimum
Stock-based compensation
Expected term	5 years 3 months 18 days	5 years
Maximum
Stock-based compensation
Expected term	6 years 1 month 6 days	7 years

Related parties (Details) - USD ($)	1 Months Ended		3 Months Ended		9 Months Ended
Related parties (Details) - USD ($)	Aug. 31, 2023	Jul. 31, 2023	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Related parties
Research and development			$ 12,653,000	$ 4,958,000	$ 24,228,000	$ 14,121,000
Accrued expenses and other current liabilities			2,824,000		2,824,000		$ 5,403,000
Amount received as reimbursement	$ 1,700,000
Maximum eligible development and commercial milestone payments					122,000,000.0
License revenue				$ 2,000,000		2,000,000
Ascletis
Related parties
License revenue		$ 2,000,000.0
Related party
Related parties
Accrued expenses and other current liabilities			0		0		31,000
Related party \| Ascletis
Related parties
Research and development					100,000	0
Accrued expenses and other current liabilities			$ 0		0		$ 31,000
License agreement payments					$ 200,000	$ 0

- Definition

+ References

+ Details

CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended				9 Months Ended		12 Months Ended
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	Sep. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023	Dec. 31, 2022
Cash flows from operating activities:
Net loss	$ (14,619)	$ (6,629)	$ (6,353)	$ (6,587)	$ (29,366)	$ (19,725)
Adjustments to reconcile net loss to net cash used in operating activities:
Accretion of discount on marketable securities, net					(1,197)	(39)
Non-cash operating lease expense					108	103
Stock-based compensation expense					3,754	3,679
Changes in operating assets and liabilities:
Prepaid expenses and other current assets					(3,261)	(390)
Accounts payable, accrued expenses and other current liabilities					(1,351)	(200)
Operating lease liabilities					(98)	(108)
Net cash used in operating activities					(31,411)	(16,683)
Cash flows from investing activities:
Purchases of marketable securities					(94,329)
Sales and maturities of marketable securities					22,796	32,200
Net cash (used in) provided by investing activities					(71,533)	32,200
Cash flows from financing activities:
Proceeds from sale of Series A common stock, net of issuance costs					105,750
Proceeds from initial public offering, net of underwriters' commissions and discounts						86,161
Payment of financing costs					(1,045)
Proceeds from exercise of stock options					114	6
Net cash provided by financing activities					104,819	86,167
Net increase in cash and cash equivalents							$ 1,875	$ 101,684
Cash and cash equivalents at beginning of period		$ 75,139		$ 158	75,139	158	158
Cash and cash equivalents at end of period	$ 77,014		101,842		77,014	101,842	$ 75,139	$ 158
Supplemental non-cash investing and financing activities:
Deferred financing costs included in accounts payable and accrued expenses					75
Right-of-use assets obtained in exchange for operating lease obligations					$ 149
Conversion of redeemable convertible preferred stock to Series A and Series B common stock			214,620
Series A common stock warrant
Adjustments to reconcile net loss to net cash used in operating activities:
Change in fair value of stock warrant liability			$ (4)			(4)
Redeemable convertible preferred stock warrant
Adjustments to reconcile net loss to net cash used in operating activities:
Change in fair value of stock warrant liability						$ 1

Description of Business and Basis of Presentation (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended		2 Months Ended	3 Months Ended		9 Months Ended
	Aug. 31, 2024	Jan. 31, 2024	Aug. 31, 2023	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Dec. 31, 2023
Organization and description of business
Accumulated deficit				$ (279,110)		$ (279,110)	$ (249,744)
Cash and cash equivalents and marketable securities				170,000		170,000
Issuance costs					$ 10,267
Series A Common Stock
Organization and description of business
Shares issued (in shares)		9,000,000	6,026,772
Share price (in dollars per share)		$ 12.50	$ 16.00
Net proceeds		$ 104,700	$ 86,200
Issuance costs		$ 7,800
At market arrangement
Organization and description of business
Net proceeds				$ 0		$ 0
Maximum value of sales under the arrangement	$ 75,000

Summary of significant accounting policies (Policies)

9 Months Ended

Sep. 30, 2024

Summary of significant accounting policies

Reverse stock split

A one-for-79.4784 reverse stock split of the Company’s issued and outstanding common stock was effected on July 7, 2023. Stockholders entitled to fractional shares as a result of the reverse stock split received a cash payment in lieu of receiving fractional shares. Accordingly, all share and per share amounts for all periods presented in the accompanying unaudited condensed financial statements and notes thereto have been retroactively adjusted, where applicable, to reflect the effects of the reverse stock split. Shares of common stock underlying outstanding stock options and common stock warrants were proportionately reduced and the respective exercise prices, if applicable, were proportionately increased in accordance with the terms of the agreements governing such securities. Shares of common stock reserved for issuance upon the conversion of the Company’s preferred stock were proportionately reduced and the respective conversion prices were proportionately increased.

Net loss per share and reclassification of common stock

Basic and diluted net loss per share is computed using the two-class method required for multiple classes of common stock and participating securities. The Company’s participating securities do not have a contractual obligation to share in the Company’s losses. As such, the net loss was attributed entirely to common stockholders for all periods presented. Basic net loss per common share attributable to common stockholders is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period, without consideration of potentially dilutive securities. Diluted net loss per share attributable to common stockholders is computed by dividing the net loss by the weighted-average number of common shares and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share attributable to common stockholders calculation, common stock options, restricted stock units and common stock warrants are considered to be potentially dilutive securities. As the Company has reported a net loss for the periods presented, basic and diluted net loss per share attributable to common stockholders is the same as all potentially dilutive securities would have an anti-dilutive impact.

On July 18, 2023, each share of the Company’s common stock issued and outstanding became reclassified as one share of Series A common stock. Any stock certificate that immediately prior to July 18, 2023 represented shares of the Company’s common stock was deemed to represent shares of Series A common stock, without the need for surrender or exchange thereof. Additionally, in connection with the IPO, the Company’s outstanding redeemable convertible preferred stock automatically converted into 15,117,912 shares of Series A common stock and 1,520,490 shares of Series B common stock. The rights of the holders of Series A common stock and Series B common stock are substantially identical, except with respect to voting and conversion. Each share of Series A common stock is entitled to one vote and shares of Series B common stock are non-voting, except as may be required by law. Each share of Series B common stock may be converted at any time into one share of Series A common stock at the option of its holder, subject to certain ownership limitations. As such, basic and diluted net loss per share attributable to common stockholders is presented on a combined basis as undistributed earnings, when allocated to each series of common stock, result in the same net loss per share for all periods presented.

The following table presents the calculation of basic and diluted net loss per share for the three and nine months ended September 30, 2024 and 2023 (in thousands, except share and per share data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Numerator:
Net loss	$	(14,619)	$	(6,353)	$	(29,366)	$	(19,725)
Denominator:
Weighted-average shares of Series A and Series B common stock outstanding, basic and diluted		32,143,336		18,194,682		31,036,271		6,131,541
Net loss per share of Series A and Series B common stock outstanding, basic and diluted	$	(0.45)	$	(0.35)	$	(0.95)	$	(3.22)

The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of Series A and Series B common stock outstanding, as their effect would have been anti-dilutive:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
Options to purchase Series A common stock	4,322,367	3,766,505	4,322,367	3,766,505
Warrants to purchase Series A common stock	1,000	1,000	1,000	1,000
Unvested restricted stock units	844,382	—	844,382	—
Total	5,167,749	3,767,505	5,167,749	3,767,505

New accounting pronouncements not yet adopted

Recently adopted accounting pronouncements

The Company considers the applicability and impact of all ASUs. ASUs not discussed below were assessed and either determined to be not applicable or expected to have minimal impact on the Company’s financial statements.

In August 2020, the FASB issued ASU No. 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40); Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which address issues identified as a result of the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity. This amendment is effective for fiscal years beginning after December 15, 2023, including interim periods within. The adoption of this standard had no impact on the Company’s financial statements and related disclosures.

New accounting pronouncements not yet adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280)—Improvements to Reportable Segment Disclosures. ASU 2023-07 requires disclosure of incremental segment information on an interim and annual basis and provides new segment disclosure requirements for entities with a single reportable segment. ASU 2023-07 is effective for all public companies for fiscal years beginning after December 15, 2023, and interim periods within fiscal periods beginning after December 15, 2024, and requires retrospective application to all prior periods presented in the financial statements. The Company is assessing the impact of the adoption of this standard on its disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740)—Improvements to Income Tax Disclosures, a final standard on improvements to income tax disclosures. The standard requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions and applies to all entities subject to income taxes. The new standard is effective for annual periods beginning after December 15, 2024. The Company is assessing the impact of the adoption of this standard on its disclosures.

Fair value measurements and fair value of financial instruments - Warrants (Details) - Series A common stock warrant	Sep. 30, 2024 $ / shares shares
Redeemable Convertible Preferred Stock Warrant Liability
Warrants issued (in shares) \| shares	1,000
Exercise price of warrant (in dollars per share) \| $ / shares	$ 69.64

CONDENSED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)) - USD ($) $ in Thousands	Common stock Series A Common Stock	Common stock Series B Common Stock	Common stock	Additional paid-in capital	Accumulated deficit	Accumulated Other Comprehensive (Loss) Income	Series A Common Stock	Series B Common Stock	Total
Beginning balance at Dec. 31, 2022			$ 1	$ 35,001	$ (221,868)	$ (84)			$ (186,950)
Beginning balance (in shares) at Dec. 31, 2022			185,084
Increase (Decrease) In Stockholders' Deficit
Stock-based compensation expense				767					767
Unrealized gain (loss) on investments in marketable securities						71			71
Net loss					(6,587)				(6,587)
Ending balance at Mar. 31, 2023			$ 1	35,768	(228,455)	(13)			(192,699)
Ending balance (in shares) at Mar. 31, 2023			185,084
Beginning balance at Dec. 31, 2022			$ 1	35,001	(221,868)	(84)			(186,950)
Beginning balance (in shares) at Dec. 31, 2022			185,084
Increase (Decrease) In Stockholders' Deficit
Unrealized gain (loss) on investments in marketable securities									84
Net loss									(19,725)
Ending balance at Sep. 30, 2023	$ 2			339,466	(241,593)				97,875
Ending balance (in shares) at Sep. 30, 2023	21,375,402	1,520,490
Beginning balance at Mar. 31, 2023			$ 1	35,768	(228,455)	(13)			(192,699)
Beginning balance (in shares) at Mar. 31, 2023			185,084
Increase (Decrease) In Stockholders' Deficit
Exercise of common stock warrants (in shares)			25,231
Stock-based compensation expense				1,057					1,057
Unrealized gain (loss) on investments in marketable securities						13			13
Net loss					(6,785)				(6,785)
Ending balance at Jun. 30, 2023			$ 1	36,825	(235,240)				(198,414)
Ending balance (in shares) at Jun. 30, 2023			210,315
Increase (Decrease) In Stockholders' Deficit
Conversion of redeemable convertible preferred stock to Series A and Series B common stock	$ 1			214,619					214,620
Conversion of redeemable convertible preferred stock to Series A and Series B common stock (in shares)	15,117,912	1,520,490
Reclass of common stock to Series A common stock	$ 1		$ (1)
Reclass of common stock to Series A common stock (in shares)	210,315		(210,315)
Sale of Series A common stock, net of issuance costs				86,161					86,161
Sale of Series A common stock, net of issuance costs (in shares)	6,026,772
Issuance of Series A Common Stock upon exercise of stock options				6					6
Issuance of Series A Common Stock upon exercise of stock options (in shares)	7,614
Exercise of common stock warrants (in shares)	12,789
Stock-based compensation expense				1,855					1,855
Net loss					(6,353)				(6,353)
Ending balance at Sep. 30, 2023	$ 2			339,466	(241,593)				97,875
Ending balance (in shares) at Sep. 30, 2023	21,375,402	1,520,490
Beginning balance at Dec. 31, 2023	$ 2			340,777	(249,744)	30			91,065
Beginning balance (in shares) at Dec. 31, 2023	21,375,402	1,520,490					21,375,402	1,520,490
Increase (Decrease) In Stockholders' Deficit
Sale of Series A common stock, net of issuance costs	$ 1			104,731					104,732
Sale of Series A common stock, net of issuance costs (in shares)	9,000,000
Issuance of Series A Common Stock upon exercise of stock options				114					114
Issuance of Series A Common Stock upon exercise of stock options (in shares)	17,995
Stock-based compensation expense				759					759
Unrealized gain (loss) on investments in marketable securities						(23)			(23)
Net loss					(6,629)				(6,629)
Ending balance at Mar. 31, 2024	$ 3			446,381	(256,373)	7			190,018
Ending balance (in shares) at Mar. 31, 2024	30,393,397	1,520,490
Beginning balance at Dec. 31, 2023	$ 2			340,777	(249,744)	30			$ 91,065
Beginning balance (in shares) at Dec. 31, 2023	21,375,402	1,520,490					21,375,402	1,520,490
Increase (Decrease) In Stockholders' Deficit
Issuance of Series A Common Stock upon exercise of stock options (in shares)									17,995
Unrealized gain (loss) on investments in marketable securities									$ 411
Net loss									(29,366)
Ending balance at Sep. 30, 2024	$ 3			449,349	(279,110)	441			170,683
Ending balance (in shares) at Sep. 30, 2024	30,674,855	1,520,490					30,674,855	1,520,490
Beginning balance at Mar. 31, 2024	$ 3			446,381	(256,373)	7			190,018
Beginning balance (in shares) at Mar. 31, 2024	30,393,397	1,520,490
Increase (Decrease) In Stockholders' Deficit
Issuance costs related to sale of Series A common stock				(27)					(27)
Stock-based compensation expense				1,449					1,449
Unrealized gain (loss) on investments in marketable securities						(30)			(30)
Net loss					(8,118)				(8,118)
Ending balance at Jun. 30, 2024	$ 3			447,803	(264,491)	(23)			183,292
Ending balance (in shares) at Jun. 30, 2024	30,393,397	1,520,490
Increase (Decrease) In Stockholders' Deficit
Issuance of Series A Common Stock for vesting of restricted stock units (in shares)	281,458
Stock-based compensation expense				1,546					1,546
Unrealized gain (loss) on investments in marketable securities						464			464
Net loss					(14,619)				(14,619)
Ending balance at Sep. 30, 2024	$ 3			$ 449,349	$ (279,110)	$ 441			$ 170,683
Ending balance (in shares) at Sep. 30, 2024	30,674,855	1,520,490					30,674,855	1,520,490

Summary of significant accounting policies

9 Months Ended

Sep. 30, 2024

Summary of significant accounting policies

Summary of significant accounting policies

2.	Significant Accounting Policies

The Company’s significant accounting policies are disclosed in the audited financial statements and the notes thereto, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on March 25, 2024. Since the date of those audited financial statements, there have been no material changes to the Company’s significant accounting policies.

Reverse stock split

Net loss per share and reclassification of common stock

The following table presents the calculation of basic and diluted net loss per share for the three and nine months ended September 30, 2024 and 2023 (in thousands, except share and per share data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Numerator:
Net loss	$	(14,619)	$	(6,353)	$	(29,366)	$	(19,725)
Denominator:
Weighted-average shares of Series A and Series B common stock outstanding, basic and diluted		32,143,336		18,194,682		31,036,271		6,131,541
Net loss per share of Series A and Series B common stock outstanding, basic and diluted	$	(0.45)	$	(0.35)	$	(0.95)	$	(3.22)


	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
Options to purchase Series A common stock	4,322,367	3,766,505	4,322,367	3,766,505
Warrants to purchase Series A common stock	1,000	1,000	1,000	1,000
Unvested restricted stock units	844,382	—	844,382	—
Total	5,167,749	3,767,505	5,167,749	3,767,505

Recently adopted accounting pronouncements

New accounting pronouncements not yet adopted

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)	$ (14,619)	$ (8,118)	$ (6,629)	$ (6,353)	$ (6,785)	$ (6,587)	$ (29,366)	$ (19,725)

- Definition

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

+ References

+ Details

Fair value measurements and fair value of financial instruments

9 Months Ended

Sep. 30, 2024

Fair value measurements and fair value of financial instruments

Fair value measurements and fair value of financial instruments

3.	Fair Value Measurements and Fair Value of Financial Instruments

The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

As of September 30, 2024 and December 31, 2023, financial assets measured at fair value on a recurring basis consisted of cash equivalents and marketable securities. Cash equivalents consist primarily of money market funds and other investments that are readily convertible into cash and have maturities of three months or less at the time of acquisition. The fair value of cash equivalents was $76.4 million and $74.1 million as of September 30, 2024 and December 31, 2023, respectively. The Company considers marketable securities with maturities greater than three months at the time of acquisition to be available for sale securities. The fair value of available for sale

securities was $92.9 million and $19.8 million as of September 30, 2024 and December 31, 2023, respectively. These available for sale securities have expected maturities ranging from 0.3 to 16.8 months, and securities with an expected maturity greater than 12 months as of the balance sheet date, are classified in long-term. The fair value of marketable securities, which are Level 2 financial instruments, is based upon market prices quoted on the last day of the fiscal period or other observable market inputs. The Company obtains pricing information from its investment manager and generally determines the fair value of investment securities using standard observable inputs, including reported trades, broker-dealer quotes, bids and/or offers.

The Company evaluates securities with unrealized losses, if any, to determine whether the decline in fair value has resulted from credit loss or other factors, including various qualitative factors. As of September 30, 2024, the Company has not recognized any impairment or credit losses on the Company’s available for sale securities. While the Company classifies these securities as available for sale, the Company does not intend to sell its investments and based on its current plans, the Company currently believes it has the ability to hold these investments until maturity.

The carrying values of the Company’s accounts payable and accrued expenses and other current liabilities approximate their fair values due to the short-term nature of these liabilities.

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability.

The Company’s Level 3 liabilities that are measured at fair value on a recurring basis consist of the Series A common stock warrant liability related to the warrant to purchase 1,000 shares of Series A common stock with an exercise price of $69.64 per share and an expiration date of July 18, 2026, the third anniversary date of the closing of the Company’s IPO. The fair value of Series A common stock warrant liability was immaterial as of September 30, 2024 and December 31, 2023, as well as the change in fair value during the three and nine months ended September 30, 2024 and 2023. There were no transfers within the hierarchy during the periods presented.

The following tables set forth the Company’s financial assets that were measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):


		September 30, 2024
	Valuation	Amortized		Unrealized		Unrealized
	Hierarchy	cost		Gains		Losses		Fair Value
Assets
Cash equivalents:
Money market funds	Level 1	$	76,427	$	—	$	—	$	76,427
Total cash equivalents			76,427		—		—		76,427
Short-term marketable securities:
Commercial paper	Level 2		19,469		56		—		19,525
Corporate debt securities	Level 2		9,442		20		—		9,462
U.S. Treasury securities	Level 2		32,447		133		—		32,580
Agency securities	Level 2		11,396		22		—		11,418
Asset-backed securities	Level 2		2,480		7		—		2,487
Total short-term marketable securities			75,234		238		—		75,472
Long-term marketable securities:
U.S. Treasury securities	Level 2		12,291		165		—		12,456
Asset-backed securities	Level 2		4,977		38		—		5,015
Total long-term marketable securities			17,268		203		—		17,471
Total cash equivalents and marketable securities		$	168,929	$	441	$	—	$	169,370


		December 31, 2023
	Valuation	Amortized		Unrealized		Unrealized
	Hierarchy	cost		Gains		Losses		Fair Value
Assets
Cash equivalents:
Money market funds	Level 1	$	69,516	$	—	$	—	$	69,516
Corporate debt securities	Level 2		4,622		—		—		4,622
Total cash equivalents			74,138		—		—		74,138
Short-term marketable securities:
Commercial paper	Level 2		9,879		19		—		9,898
Corporate debt securities	Level 2		2,945		4		—		2,949
U.S. Treasury securities	Level 2		6,904		7		—		6,911
Total short-term marketable securities			19,728		30		—		19,758
Total cash equivalents and marketable securities		$	93,866	$	30	$	—	$	93,896

- 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.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 107
-Publisher FASB
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-Topic 820
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+ Details