0001104659-21-102114 | 10-Q | XBRL Viewer | Catabasis Pharmaceuticals INC

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Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2021	Jul. 30, 2021
Document and Entity Information
Entity Registrant Name	Catabasis Pharmaceuticals, Inc.
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2021
Entity File Number	001-37467
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	26-3687168
Entity Address, Address Line One	100 High Street Floor 28
Entity Address, City or Town	Boston
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02110
City Area Code	617
Local Phone Number	349-1971
Title of 12(b) Security	Common Stock, $0.001 par value per share
Trading Symbol	CATB
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	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		76,948,803
Entity Central Index Key	0001454789
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Amendment Flag	false

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 139,520	$ 24,930
Short-term investments		20,000
Prepaid expenses and other current assets	532	1,395
Total current assets	140,052	46,325
Right-of-use asset	717	966
Other assets	176	165
Total assets	140,945	47,456
Current liabilities:
Accounts payable	619	1,544
Accrued expenses	2,714	4,197
Current portion of operating lease liabilities	655	649
Total current liabilities	3,988	6,390
Long-term portion of operating lease liabilities	58	397
Total liabilities	4,046	6,787
Commitments
Stockholders' equity:
Common stock, $0.001 par value per share, 150,000,000 shares authorized; 76,948,803 and 20,084,337 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively	77	20
Additional paid-in capital	475,499	301,546
Accumulated deficit	(438,447)	(260,897)
Total stockholders' equity	136,899	40,669
Total liabilities and stockholders' equity	140,945	$ 47,456
Series X redeemable convertible preferred stock
Stockholders' equity:
Preferred stock, value	$ 99,770

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2021	Dec. 31, 2020
Preferred stock, par value (in dollars per share)	$ 0.001
Preferred stock, authorized (in shares)	5,000,000
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized (in shares)	150,000,000	150,000,000
Common stock, issued (in shares)	76,948,803	20,084,337
Common stock, outstanding (in shares)	76,948,803	20,084,337
Series X redeemable convertible preferred stock
Preferred stock, par value (in dollars per share)	$ 0.001
Preferred stock, authorized (in shares)	37,848
Preferred stock, issued (in shares)	32,545	0
Preferred stock, outstanding (in shares)	32,545	0

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Operating expenses:
Research and development	$ 3,478	$ 6,750	$ 6,071	$ 12,039
General and administrative	4,008	2,803	6,881	5,555
Acquired in-process research and development			164,617
Total operating expenses	7,486	9,553	177,569	17,594
Loss from operations	(7,486)	(9,553)	(177,569)	(17,594)
Other income (expense):
Interest and investment income	40	60	53	227
Other expense, net	(20)	(15)	(34)	(93)
Total other income, net	20	45	19	134
Net loss	(7,466)	(9,508)	(177,550)	(17,460)
Dividend on convertible preferred stock related to beneficial conversion feature and issuance costs	(24,437)		(24,437)
Net loss attributable to common shareholders	$ (31,903)	$ (9,508)	$ (201,987)	$ (17,460)
Net loss per share - basic and diluted	$ (0.89)	$ (0.53)	$ (6.93)	$ (1.03)
Weighted-average common shares outstanding used in net loss per share - basic and diluted	35,880,580	17,967,495	29,167,672	16,933,079

Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Condensed Consolidated Statements of Comprehensive Loss
Net loss	$ (7,466)	$ (9,508)	$ (177,550)	$ (17,460)
Other comprehensive gain:
Gain on short-term investments		16		1
Total other comprehensive gain:		16		1
Comprehensive loss	$ (7,466)	$ (9,492)	$ (177,550)	$ (17,459)

- Definition

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

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+ Details

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock - Series X redeemable convertible preferred stock - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2021
Series X redeemable convertible preferred stock
Balance, beginning of period	$ 240,881	$ 0
Balance, beginning of period (in shares)	86,077	0
Issuance of preferred stock in a private offering of public equity, net of issuance costs		$ 84,696
Issuance of preferred stock in a private offering of public equity, net of issuance costs (in shares)		35,573
Issuance of preferred stock upon acquisition of Quellis		$ 156,185
Issuance of preferred stock upon acquisition of Quellis (in shares)		50,504
Reclassification of preferred stock to permanent equity	$ (240,881)	$ (240,881)
Reclassification of preferred stock to permanent equity (in shares)	(86,077)	(86,077)
Balance, end of period	$ 0	$ 0
Balance, end of period (in shares)	0	0

Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Preferred Stock Series X redeemable convertible preferred stock	Common Stock	Additional paid-in capital	Accumulated Deficit	Accumulated other comprehensive loss	Total
Balance, beginning of period at Dec. 31, 2019	$ 0	$ 12	$ 259,305	$ (223,597)	$ 0
Balance, beginning of period (in shares) at Dec. 31, 2019	0	12,433,600
Increase (Decrease) in Shareholders' Equity
Issuance of common stock in a public offering, net of issuance costs			24,554
Issuance of common stock for at-the-market offerings		$ 2	7,328
Issuance of common stock for at-the-market offerings (in shares)		1,100,001
Issuance of common stock and warrants in public offerings		$ 5
Issuance of common stock and warrants in public offerings (in shares)		5,290,000
Stock-based compensation expense			710
Net loss				(17,460)		$ (17,460)
Realized loss on short-term investments					1	1
Balance, end of period at Jun. 30, 2020		$ 19	291,897	(241,057)	1	50,860
Balance, end of period (in shares) at Jun. 30, 2020		18,823,601
Balance, beginning of period at Mar. 31, 2020	$ 0	$ 18	285,257	(231,549)	(15)
Balance, beginning of period (in shares) at Mar. 31, 2020	0	17,897,172
Increase (Decrease) in Shareholders' Equity
Issuance of common stock for at-the-market offerings		$ 1	6,269
Issuance of common stock for at-the-market offerings (in shares)		926,429
Stock-based compensation expense			371
Net loss				(9,508)		(9,508)
Realized loss on short-term investments					16	16
Balance, end of period at Jun. 30, 2020		$ 19	291,897	(241,057)	$ 1	50,860
Balance, end of period (in shares) at Jun. 30, 2020		18,823,601
Balance, beginning of period at Dec. 31, 2020	$ 0	$ 20	301,546	(260,897)		$ 40,669
Balance, beginning of period (in shares) at Dec. 31, 2020	0	20,084,337				20,084,337
Increase (Decrease) in Shareholders' Equity
Reclassification of preferred stock to permanent equity	$ 240,881
Reclassification of preferred stock to permanent equity (in shares)	86,077
Conversion of preferred stock into common stock	$ (165,548)
Conversion of preferred stock into common stock (in shares)	(53,532)
Issuance of preferred stock in a private offering of public equity, net of issuance costs			19,565
Issuance of common stock upon acquisition of Quellis		$ 3	8,095
Issuance of common stock upon acquisition of Quellis (in shares)		3,332,669
Issuance of common stock upon the conversion of preferred stock		$ 54	165,495
Issuance of common stock upon the conversion of preferred stock (in shares)		53,531,797
Dividend on convertible preferred stock related to beneficial conversion feature and issuance costs	$ 24,437		(24,437)
Expense related to warrants inherited in acquisition of Quellis			387
Reclassification of warrant liability to additional paid-in capital			3,468
Stock-based compensation expense			1,380
Net loss				(177,550)		$ (177,550)
Balance, end of period at Jun. 30, 2021	$ 99,770	$ 77	475,499	(438,447)		$ 136,899
Balance, end of period (in shares) at Jun. 30, 2021	32,545	76,948,803				76,948,803
Balance, beginning of period at Mar. 31, 2021	$ 0	$ 23	329,813	(430,981)
Balance, beginning of period (in shares) at Mar. 31, 2021	0	23,417,006
Increase (Decrease) in Shareholders' Equity
Reclassification of preferred stock to permanent equity	$ 240,881
Reclassification of preferred stock to permanent equity (in shares)	86,077
Conversion of preferred stock into common stock	$ (165,548)
Conversion of preferred stock into common stock (in shares)	(53,532)
Issuance of common stock upon the conversion of preferred stock		$ 54	165,495
Issuance of common stock upon the conversion of preferred stock (in shares)		53,531,797
Dividend on convertible preferred stock related to beneficial conversion feature and issuance costs	$ 24,437		(24,437)
Expense related to warrants inherited in acquisition of Quellis			146
Reclassification of warrant liability to additional paid-in capital			3,468
Stock-based compensation expense			1,014
Net loss				(7,466)		$ (7,466)
Balance, end of period at Jun. 30, 2021	$ 99,770	$ 77	$ 475,499	$ (438,447)		$ 136,899
Balance, end of period (in shares) at Jun. 30, 2021	32,545	76,948,803				76,948,803

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Operating activities
Net loss	$ (177,550)	$ (17,460)
Reconciliation of net loss to net cash used in operating activities:
Non-cash portion of acquired in-process research and development	164,612
Stock-based compensation expense	1,380	710
(Gain) loss on warrants inherited in acquisiton of Quellis	(700)
Other non-cash items	10	23
Changes in assets and liabilities:
Prepaid expenses and other current assets	999	1,079
Right-of-use asset-operating	(85)	134
Accounts payable	(2,900)	(26)
Accrued expenses	(1,882)	1,085
Net cash used in operating activities	(16,116)	(14,455)
Investing activities
Purchases of short-term investments		(42,777)
Sales and maturities of short-term investments	20,000	67,110
Cash acquired in acquisition of Quellis	6,466
Purchases of property and equipment	(21)	(23)
Net cash provided by (used in) investing activities	26,445	24,310
Financing activities
Proceeds from public offerings, net of issuance costs		24,559
Proceeds from private offering of public equity, net of issuance costs	104,261
Proceeds from at-the-market offering, net of issuance costs		7,330
Net cash provided by financing activities	104,261	31,889
Net increase in cash, cash equivalents and restricted cash	114,590	41,744
Cash, cash equivalents and restricted cash, beginning of period	25,051	10,376
Cash, cash equivalents and restricted cash, end of period	139,641	$ 52,120
Supplemental disclosure of cash flow information
Conversion of Series X Preferred Stock into common stock	165,549
Non-cash dividend on convertible preferred stock	24,437
Reclassification of warrant liability to additional paid-in capital	$ 3,468

Organization and Operations

6 Months Ended

Jun. 30, 2021

Organization and Operations

Organization and Operations

1. Organization and Operations

The Company

Catabasis Pharmaceuticals, Inc. (the “Company”) is a biopharmaceutical company focused on the discovery, development and commercialization of novel therapeutics. Its mission is to bring hope with life-changing therapies to patients and families. On October 26, 2020, the Company announced that the Phase 3 PolarisDMD trial of the Company’s previous lead product candidate, edasalonexent, for the treatment of Duchenne muscular dystrophy (DMD) did not meet its primary and secondary endpoints. Based on these results, the Company announced that it was stopping activities related to the development of edasalonexent, including the Company’s ongoing open-label extension trial. On January 28, 2021, the Company acquired Quellis Biosciences, Inc (“Quellis”). The Company's lead product candidate, which was acquired in the Quellis acquisition, is QLS-215, a monoclonal antibody inhibitor of plasma kallikrein in preclinical development for the treatment of hereditary angioedema, or HAE, a rare, debilitating and potentially life-threatening disease. The Company was incorporated in the State of Delaware on June 26, 2008.

Agreement and Plan of Merger

On January 28, 2021, the Company acquired Quellis (the “Quellis Acquisition”). Under the terms of the Merger Agreement, the Company issued to the stockholders of Quellis 3,332,669 shares of the Company’s common stock, par value $0.001 per share, and 50,504 shares of newly designated Series X redeemable convertible preferred stock (“Series X Preferred Stock”) (as described below). The Series X Preferred Stock had a conversion value on the closing date of $122.7 million. In addition, the Company assumed options granted under the Quellis stock option plan, which became options to purchase 332,494 shares of the Company’s common stock, a warrant to purchase 2,805 shares of Series X Preferred Stock at an exercise price of $341.70 per share, and a warrant to purchase 185,136 shares of the Company’s common stock at an exercise price of $0.35 per share, which warrants are exercisable until December 14, 2030. Upon stockholder approval of the Conversion Proposal (as defined below) on June 2, 2021, the warrant to purchase Series X Preferred Stock was converted into the right to purchase 2,805,000 shares of the Company’s common stock, at a per share exercise price of $0.35 per share.

Stock Purchase Agreement and Series X Preferred Stock

Concurrent with the Quellis Acquisition, the Company entered into a Stock Purchase Agreement (the “Purchase Agreement”) with certain institutional and accredited investors. Pursuant to the Purchase Agreement, the Company sold an aggregate of 35,573 shares of Series X Preferred Stock for gross proceeds of approximately $110.0 million, and net proceeds of $104.3 million (the “February 2021 Financing”). In accounting for the Purchase Agreement, the Company recorded a beneficial conversion feature of $19.6 million and issuance costs of $5.7 million. The combined total was treated as a discount to the value of Series X Preferred Stock, See Note 2 – “Summary of Significant Accounting Policies” for further discussion.

As a result of the Quellis Acquisition and the February 2021 Financing, in 2021 the Company issued the following Series X Preferred Stock or warrants to purchase Series X Preferred Stock:


	Series X	Common Stock
	Preferred	Issuable Upon
	Stock at	Conversion at
	Transaction	Transaction
	Date	Date
Outstanding shares issued in merger	50,504	50,504,000
Outstanding shares issued in February 2021 Financing	35,573	35,573,000
Warrants assumed in merger	2,805	2,805,000
Total	88,882	88,882,000

At its 2021 Annual Meeting of Stockholders on June 2, 2021, the Company’s stockholders approved the conversion of the Company’s Series X Preferred Stock into shares of the Company’s common stock in accordance with Nasdaq Listing Rule 5635(a) (the “Conversion Proposal”). Following stockholder approval of the Conversion Proposal, each share of Series X Preferred Stock then

outstanding automatically converted into 1,000 shares of the Company’s common stock, subject to certain beneficial ownership limitations, including that a holder of Series X Preferred Stock is prohibited from converting shares of Series X Preferred Stock into shares of the Company’s common stock if, as a result of such conversion, such holder, together with its affiliates, would beneficially own more than a specified percentage (to be initially set at 9.99% and thereafter adjustable by the holder to a number between 4.99% and 19.99%) of the total number of shares of the Company’s common stock issued and outstanding immediately after giving effect to such conversion. As of June 30, 2021, 53,532 shares of Series X Preferred Stock were converted into 53,531,797 shares of common stock and 32,545 shares of Series X Preferred Stock remained outstanding. Outstanding shares of Series X Preferred Stock are subject to conversion at the option of the holder.

Prior to stockholder approval of the Conversion Proposal, the terms of the Series X Preferred Stock included a cash redemption feature. This cash redemption feature resulted in substantial doubt about the Company’s ability to continue as a going concern as disclosed in the Company’s annual report on Form 10-K for the year ended December 31, 2020 (the “2020 Annual Report on Form 10-K”) and the Company’s quarterly report on Form 10-Q for the three months ended March 31, 2021. Upon stockholder approval of the Conversion Proposal, the cash redemption feature was eliminated and, consequently, there is no longer substantial doubt about the Company’s ability to continue as a going concern for at least twelve months subsequent to the issuance of these financial statements.

Holders of Series X Preferred Stock are entitled to receive dividends, subject to certain beneficial ownership limitations, on shares of Series X Preferred Stock equal, on an as-if-converted-to-common-stock basis, and in the same form as dividends actually paid on shares of the Company’s common stock. Except as otherwise required by law, the Series X Preferred Stock does not have voting rights. However, as long as any shares of Series X Preferred Stock are outstanding, the Company may not, without the affirmative vote of the holders of a majority of the then outstanding shares of the Series X Preferred Stock, (i) alter or change adversely the powers, preferences or rights given to the Series X Preferred Stock or alter or amend the Certificate of Designation that authorized the Series X Preferred Stock, amend or repeal any provision of, or add any provision to, the Company’s Certificate of Incorporation or bylaws, or file any articles of amendment, certificate of designations, preferences, limitations and relative rights of any series of preferred stock, if such action would adversely alter or change the preferences, rights, privileges or powers of, or restrictions provided for the benefit of the Series X Preferred Stock, (ii) issue further shares of Series X Preferred Stock or increase or decrease (other than by conversion) the number of authorized shares of Series X Preferred Stock, or (iii) enter into any agreement with respect to any of the foregoing.

January 2020 Financing

On January 30, 2020, the Company entered into an underwriting agreement with Oppenheimer & Co. Inc. relating to an underwritten public offering (the “January 2020 Financing”) of 5,290,000 shares of common stock at a price to the public of $5.00 per share, including 690,000 shares issued upon the exercise in full by Oppenheimer & Co. Inc. of its overallotment option. This resulted in gross proceeds of $26.5 million, and net proceeds of $24.6 million.

Liquidity

The Company has entered into various sales agreements with Cowen and Company LLC (“Cowen”), pursuant to which the Company could issue and sell shares of common stock under at-the-market offering programs. On May 20, 2021, the Company terminated its sales agreement with Cowen. On June 30, 2021, the Company entered into an Open Market Sale Agreement^SM with Jefferies LLC (“Jefferies”), pursuant to which the Company could issue and sell shares of common stock of up to $25.0 million under at-the-market offering programs (collectively, with the Cowen at-the-market offering program, the “ATM Programs”). The Company pays 3% of the gross proceeds from any common stock sold through the ATM Programs. As of June 30, 2021, the Company has not sold any shares of common stock pursuant to the Jeffries agreement and $25.0 million of common stock remains available for sale under the Jefferies agreement.

During the six months ended June 30, 2020, the Company sold an aggregate of 1,100,001 shares of common stock pursuant to the ATM Programs, at an average price of $6.87 per share, for net proceeds of $7.3 million after deducting sales commissions and offering expenses. There was no activity from the ATM Programs during the six months ended June 30, 2021.

As of June 30, 2021, the Company had an accumulated deficit of $438.4 million and had available cash and cash equivalents of $139.5 million. The Company has been primarily involved with research and development activities and has incurred operating losses and negative cash flows from operations since its inception. The Company has not generated any product revenues and has financed its operations primarily through public offerings and private placements of its equity securities. There can be no assurance that the Company will be able to obtain additional debt, equity or other financing or generate product revenue or revenues from collaborative partners, on

terms acceptable to the Company, on a timely basis or at all. The failure of the Company to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on the Company's business, results of operations, and financial condition.

The Company is subject to a number of risks similar to other life science companies, including, but not limited to, successful discovery and development of its drug candidates, raising additional capital, development by its competitors of new technological innovations, protection of proprietary technology and regulatory approval and market acceptance of the Company's products. The Company has been primarily involved with research and development activities and has incurred operating losses and negative cash flows from operations since its inception. The Company anticipates that it will continue to incur significant operating losses for the next several years as it continues to develop its product candidates.

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2021

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying financial statements and the related disclosures are unaudited and have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). Additionally, certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted from this report. Accordingly, these condensed financial statements should be read in conjunction with the financial statements as of and for the year ended December 31, 2020 and notes thereto included in the 2020 Annual Report on Form 10-K.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited financial statements. In the opinion of the Company’s management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments, including those adjustments that are of a normal and recurring nature, which are necessary to fairly present the Company’s results for the interim periods presented. The results for the three and six months ended June 30, 2021 are not necessarily indicative of the results for the year ending December 31, 2021, or for any future period.

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Catabasis Securities Corporation and Quellis Biosciences, LLC, successor in interest to Quellis. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from such estimates.

The Company utilizes certain estimates to record expenses relating to research and development contracts. These contract estimates, which are primarily related to the length of service of each contract and the amount of service provided as of each measurement date, are determined by the Company based on input from internal project management, as well as from the Company’s service providers.

Net Loss Per Share

Basic net loss per share is calculated by dividing net loss attributable to common shareholders by the weighted average shares outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by adjusting weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method. For purposes of the Company’s dilutive net loss per share calculation, preferred stock, stock options and warrants to purchase common stock and preferred stock were considered to be common stock equivalents but were excluded from the calculation of diluted net loss per share, as their effect would be anti-dilutive; therefore, basic and diluted net loss per share were the same for all periods presented.

The following common stock equivalents were excluded from the calculation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect:


	Three and Six Months Ended June 30,
	2021	2020
Series X Preferred Stock (1)	32,545,203	—
Stock options	7,930,334	1,301,262
Common stock warrants	9,183,885	6,193,749
	49,659,422	7,495,011

(1) Shown as common stock equivalents

Cash, Cash Equivalents and Restricted Cash

The reconciliation of cash, cash equivalents and restricted cash reported within the applicable balance sheet that sum to the total of the same such amount shown in the statement of cash flows is as follows (in thousands):


	June 30,
	2021		2020
Cash and cash equivalents	$	139,520	$	51,885
Restricted cash (1)		121		235
Total	$	139,641	$	52,120

(1) Included in prepaid expenses and other current assets and other assets.

Acquired In-Process Research and Development

The Company measures and recognizes asset acquisitions that are not deemed to be business combinations based on the cost to acquire the assets, which includes transaction costs. Goodwill is not recognized in asset acquisitions. In an asset acquisition, the cost allocated to acquire in-process research and development (“IPR&D”) with no alternative future use is charged to expense at the acquisition date. Refer to Note 3, “Acquisition of Quellis” for a more detailed description of the accounting policy utilized for the recent asset acquisition.

Preferred Stock Discount

As discussed above, in February 2021, the Company issued Series X Preferred Stock in a private placement transaction. It was determined that this transaction resulted in recognition of a beneficial conversion feature, which was valued based on the difference between the price of the shares of common stock on the date of commitment and the conversion price on the closing date, resulting in a total value of $19.6 million. Additionally, the Company incurred total issuance costs of $5.7 million related to the private placement. Both of these features were taken as a discount on Series X Preferred Stock recognized at the close of the transaction. These features are analogous to preferred dividends and are recorded as a non-cash return to holders of Series X Preferred Stock through additional paid in capital. The discount related to the beneficial conversion feature is recognized through the earliest possible date of conversion, which occurred upon the shareholder approval of the conversion in June 2021. The issuance costs are recognized as a dividend at the time of conversion to common shares. As of June 30, 2021, $24.4 million of the above amounts were accounted for as a non-cash return related to shares of Series X Preferred Stock.

Recent Accounting Pronouncements - Not Yet Adopted

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date.

In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326). This standard requires a financial asset to be presented at amortized cost basis at the net amount expected to be collected. It also requires that credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses. In November 2019, the FASB issued an amendment making this ASU effective for annual reporting periods beginning after December 15, 2022 for

smaller reporting companies, early adoption is permitted. The Company is currently evaluating the impact that this standard will have on its consolidated financial statements.

Summary of Significant Accounting Policies

The Company’s significant accounting policies are described in Note 2, “Summary of Significant Accounting Policies,” in the Company’s 2020 Annual Report on Form 10-K, and there were no significant changes to such policies in the three and six months ended June 30, 2021 that had a material impact on the Company’s results of operations or financial position.

Acquisition of Quellis

6 Months Ended

Jun. 30, 2021

Acquisition of Quellis

Acquisition of Quellis

3. Acquisition of Quellis

On January 28, 2021, the Company completed its acquisition of Quellis in accordance with the terms of the Merger Agreement as discussed in Note 1, “Organization and Operations”. Under the terms of the Merger Agreement, the Company issued 3,332,669 shares of Common Stock and 50,504 shares of Series X Preferred Stock. Each share of Series X Preferred Stock is convertible into 1,000 shares of Common Stock, subject to certain conditions.

The Company concluded that the Quellis Acquisition was not the acquisition of a business, as substantially all of the fair value of the non-monetary assets acquired was concentrated in a single identifiable asset, QLS-215.

The Company determined that the cost to acquire the Quellis assets was $170.7 million, based on the fair value of the equity consideration issued and including direct costs of the acquisition of $1.8 million. The net assets acquired in connection with the Quellis Acquisition were recorded at their estimated fair values as of January 28, 2021, which is the date the Quellis Acquisition was completed. The following table summarizes the net assets acquired based on their estimated fair values as of January 28, 2021 (in thousands):


Acquired IPR&D	$	164,612
Cash and cash equivalents		8,307
Prepaid expenses and other assets		136
Accounts payable		(1,974)
Accrued liabilities		(400)
Net acquired tangible assets	$	170,681

In the estimation of fair value of the asset purchase consideration, the Company used the carrying value of the cash and cash equivalents, prepaid expenses, accounts payable and accrued liabilities as the most reliable indicator of fair value based on the associated short-term nature of the balances. The remaining fair value was attributable to the acquired IPR&D. As QLS-215 had not, at the time of the Quellis Acquisition, received regulatory approval in any territory, the cost attributable to the IPR&D was expensed in the Company’s consolidated statements of operations and comprehensive loss for the six months ended June 30, 2021 as the acquired IPR&D had no alternative future use, as determined by the Company in accordance with U.S. GAAP.

Financial Instruments

6 Months Ended

Jun. 30, 2021

Financial Instruments

Financial Instruments

4. Financial Instruments

The tables below present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2021 and December 31, 2020 and indicate the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize observable inputs such as quoted prices in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that are either directly or indirectly observable, such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs utilize unobservable data points for which there is little or no market data, which require the Company to develop its own assumptions for the asset or liability. There were no transfers between fair value measurement levels during the three and six months ended June 30, 2021 or 2020.

The Company’s investment portfolio may include fixed income securities that do not always trade on a daily basis. As a result, the pricing services used by the Company apply other available information as applicable through processes such as benchmark yields, benchmarking of like securities, sector groupings and matrix pricing to prepare valuations. The Company validates the prices provided by its third party pricing services by obtaining market values from other pricing sources and analyzing pricing data in certain instances. The Company has from time to time invested in certain reverse repurchase agreements which are collateralized by deposits in the form of U.S. Government Securities and Obligations for an amount no less than 102% of their value. The Company has not recorded an asset

or liability for the collateral as the Company was not permitted to sell or re-pledge the collateral. The collateral had at least the prevailing credit rating of U.S. Government Treasuries and Agencies. The Company utilized a third-party custodian to manage the exchange of funds and ensure that collateral received is maintained at 102% of the value of the reverse repurchase agreements on a daily basis.

The Company accounted for warrants to purchase its stock pursuant to Accounting Standards Codification (“ASC”) Topic 470, Debt, and ASC Topic 480, Distinguishing Liabilities from Equity, and classifies warrants for common stock and preferred stock as liabilities or equity. The warrants classified as liabilities are reported at their estimated fair value and any changes in fair value are reflected in research and development expense. The warrants classified as equity are reported at their estimated fair value with no subsequent remeasurement.

Below is a summary of assets and liabilities measured at fair value on a recurring basis (in thousands):


	As of June 30, 2021
	Quoted Prices		Significant		Significant
	in Active		Observable		Unobservable
	Markets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Cash and cash equivalents:
Money market funds	$	1,841	$	—	$	—	$	1,841
Reverse repurchase agreements		—		39,000		—		39,000
Total assets	$	1,841	$	39,000	$	—	$	40,841


	As of December 31, 2020
	Quoted Prices		Significant		Significant
	in Active		Observable		Unobservable
	Markets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Cash and cash equivalents:
Money market funds	$	22,999	$	—	$	—	$	22,999
Short-term investments:
Reverse repurchase agreements		—		20,000		—		20,000
Total assets	$	22,999	$	20,000	$	—	$	42,999

At June 30, 2021 and December 31, 2020, cash equivalents approximated their fair value due to their short-term nature.

The warrant liability was valued based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The Company estimated the fair value of the warrant liability using Black-Scholes option-pricing models and assumptions that are based on the individual characteristics of the warrants on the valuation date, as well as assumptions including the fair value per share of the underlying security, the remaining contractual term of the warrant, risk-free interest rate, expected dividend yield and expected volatility of the price of the underlying security (in thousands).


	June 30, 2021
Balance at beginning of year	$	—
Issuance of warrants		4,332
(Decrease) increase in the fair value of the warrants	$	(864)
Reclassification of warrant liability to additional paid-in capital		(3,468)
Ending balance	$	—

- 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 + Details

Short-Term Investments

6 Months Ended

Jun. 30, 2021

Short-Term Investments

Short-Term Investments

5. Short-Term Investments

The Company did not hold any short-term investments at June 30, 2021. The following table summarizes the short-term investments held at December 31, 2020 (in thousands):


			Gross Unrealized		Gross Unrealized
	Amortized Cost		Gains		Losses		Fair Value
December 31, 2020
Reverse repurchase agreements	$	20,000	$	—	$	—	$	20,000
Total	$	20,000	$	—	$	—	$	20,000

The contractual maturities of all short-term investments held at December 31, 2020 were one year or less. There were no short-term investments in an unrealized loss position at December 31, 2020.

Gross realized gains and losses on the sales of short-term investments are included in other income, net. Unrealized holding gains or losses for the period that have been included in accumulated other comprehensive income, as well as gains and losses reclassified out of accumulated other comprehensive income into other income, net were not material to the Company’s condensed consolidated results of operations. The cost of investments sold or the amount reclassified out of the accumulated other comprehensive income into other income, net is based on the specific identification method for purposes of recording realized gains and losses. All proceeds in the three and six-month periods ended June 30, 2021 and 2020 related to maturities of underlying investments. The gains on proceeds from maturities of short-term investments were not material to the Company’s condensed consolidated results of operations for the three and six months ended June 30, 2021 and 2020.

Accrued Expenses

6 Months Ended

Jun. 30, 2021

Accrued Expenses

Accrued Expenses

6. Accrued Expenses

Accrued expenses consisted of the following (in thousands):


	June 30,		December 31,
	2021		2020
Accrued compensation	$	1,018	$	1,719
Accrued contracted research costs		790		1,726
Accrued professional fees		663		356
Accrued other		180		—
Accrued severance		63		396
Total	$	2,714	$	4,197

Stockholders' Equity

6 Months Ended

Jun. 30, 2021

Stockholders' Equity

Stockholders' Equity

7. Stockholders’ Equity

Preferred Stock

Under the Company’s amended and restated certificate of incorporation, the Company has 5,000,000 shares of preferred stock authorized for issuance, with a $0.001 par value per share. Preferred stock may be issued from time to time in one or more series, each series to have such terms as stated or expressed in the resolutions providing for the issue of such series adopted by the board of directors of the Company. Preferred stock which may be redeemed, purchased or acquired by the Company may be reissued except as otherwise

provided by law. As of June 30, 2021, the Company had 32,545 shares of Series X Preferred Stock outstanding. Refer to Note 1 “Organization and Operations” regarding the Company’s issuance of Series X Preferred Stock in January 2021 and February 2021.

Outstanding Warrants

The following table presents information about warrants that are issued and outstanding at June 30, 2021:


Year Issued	Equity Instrument	Warrants Outstanding	Exercise Price		Date of Expiration
2014	Common Stock	1,227	$	122.12	8/26/2021
2015	Common Stock	1,227	$	122.12	3/30/2022
2018	Common Stock	4,199,995	$	12.00	6/21/2023
2019	Common Stock	1,991,300	$	6.25	2/7/2024
2021	Common Stock	2,990,136	$	0.35	12/14/2030
Total		9,183,885
Weighted average exercise price			$	6.99
Weighted average life in years					4.55

Reserved for Future Issuance

6 Months Ended

Jun. 30, 2021

Reserved for Future Issuance

Reserved for Future Issuance

8. Reserved for Future Issuance

The Company has reserved for future issuance the following shares of common stock:


	June 30,	December 31,
	2021	2020
Warrants for the purchase of common stock	9,183,885	6,193,749
Options outstanding to purchase common stock	7,930,334	1,367,667
Options available for future issuance to purchase common stock	1,697,308	1,936,173
Shares reserved for the employee stock purchase plan	185,421	148,951
Total	18,996,948	9,646,540

As of June 30, 2021, the Company also had 32,545 shares of Series X Preferred Stock outstanding. Each share of Series X Preferred Stock outstanding is convertible into 1,000 shares of the Company’s common stock, subject to certain beneficial ownership limitations at the holder’s option. See Note 1 “Organization and Operations” for additional detail.

Stock Incentive Plans

6 Months Ended

Jun. 30, 2021

Stock Incentive Plans

Stock Incentive Plans

9. Stock Incentive Plans

A summary of the Company’s stock option activity and related information follows:


				Weighted
				Average
		Weighted-		Remaining	Aggregate
		Average Exercise		Contractual	Intrinsic Value
	Shares	Price		Term (years)	(in thousands)
Outstanding at December 31, 2020	1,367,667	$	11.38	8.13	$	—
Granted	6,447,000	$	2.74
Assumed in Quellis Acquisition	332,494	$	0.29
Cancelled or forfeited	(208,152)	$	8.71
Expired	(8,675)	$	16.70
Outstanding at June 30, 2021	7,930,334	$	3.96	9.44	$	662
Vested and exercisable at June 30, 2021	770,141	$	14.07	7.31	$	207

There were no options exercised in the three or six months ended June 30, 2021 and 2020. The total grant date fair value of options vested for the three months ended June 30, 2021 and 2020 was $0.4 million and $0.3 million, respectively. The total grant date fair value of options vested for the six months ended June 30, 2021 and 2020 was $1.0 million and $0.8 million, respectively. The weighted-average grant date fair value of options granted to employees and non-employees for the three months ended June 30, 2021 and 2020

was $1.73 and $4.00, respectively. The weighted-average grant date fair value of options granted to employees and non-employees for the six months ended June 30, 2021 and 2020 was $1.73 and $3.64, respectively.

At June 30, 2021, the total unrecognized compensation expense related to unvested stock option awards was $12.7 million. The Company expects to recognize that cost over a weighted-average period of approximately 3.3 years.

Subsequent Events

6 Months Ended

Jun. 30, 2021

Subsequent Events

Subsequent Events

10. Subsequent Events

Reverse Stock Split

On August 4, 2021, the Company’s Board of Directors approved a reverse stock split of its outstanding shares of common stock at a ratio of one-for-six. The reverse stock split will become effective on August 19, 2021 pursuant to a Certificate of Amendment to its Certificate of Incorporation to be filed with the Secretary of State of the State of Delaware. The reverse stock split was approved by the Company's stockholders at the Company's Annual Meeting of Stockholders on June 2, 2021. All share and per share amounts of the common stock included in the accompanying consolidated financial statements have been presented without giving effect to the reverse stock split.

Summary of Significant Accounting Polices (Polices)

6 Months Ended

Jun. 30, 2021

Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

Use of Estimates

Net Loss Per Share

The following common stock equivalents were excluded from the calculation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect:


	Three and Six Months Ended June 30,
	2021	2020
Series X Preferred Stock (1)	32,545,203	—
Stock options	7,930,334	1,301,262
Common stock warrants	9,183,885	6,193,749
	49,659,422	7,495,011

(1) Shown as common stock equivalents

Cash, Cash Equivalents and Restricted Cash


	June 30,
	2021		2020
Cash and cash equivalents	$	139,520	$	51,885
Restricted cash (1)		121		235
Total	$	139,641	$	52,120

(1) Included in prepaid expenses and other current assets and other assets.

Acquired In-Process Research and Development

Preferred Stock Discount

Recent Accounting Pronouncements - Not Yet Adopted

smaller reporting companies, early adoption is permitted. The Company is currently evaluating the impact that this standard will have on its consolidated financial statements.

Summary of Significant Accounting Policies

Organization and Operations (Tables)

6 Months Ended

Jun. 30, 2021

Organization and Operations

Schedule of common stock warrants outstanding

As a result of the Quellis Acquisition and the February 2021 Financing, in 2021 the Company issued the following Series X Preferred Stock or warrants to purchase Series X Preferred Stock:


	Series X	Common Stock
	Preferred	Issuable Upon
	Stock at	Conversion at
	Transaction	Transaction
	Date	Date
Outstanding shares issued in merger	50,504	50,504,000
Outstanding shares issued in February 2021 Financing	35,573	35,573,000
Warrants assumed in merger	2,805	2,805,000
Total	88,882	88,882,000

Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2021

Summary of Significant Accounting Policies

Schedule of anti-dilutive common stock equivalents excluded from calculation of diluted net loss per share


	Three and Six Months Ended June 30,
	2021	2020
Series X Preferred Stock (1)	32,545,203	—
Stock options	7,930,334	1,301,262
Common stock warrants	9,183,885	6,193,749
	49,659,422	7,495,011

(1) Shown as common stock equivalents

Schedule of reconciliation of cash, cash equivalents and restricted cash


	June 30,
	2021		2020
Cash and cash equivalents	$	139,520	$	51,885
Restricted cash (1)		121		235
Total	$	139,641	$	52,120

(1) Included in prepaid expenses and other current assets and other assets.

Acquisition of Quellis (Tables)

6 Months Ended

Jun. 30, 2021

Acquisition of Quellis

Schedule of net assets acquired

The following table summarizes the net assets acquired based on their estimated fair values as of January 28, 2021 (in thousands):


Acquired IPR&D	$	164,612
Cash and cash equivalents		8,307
Prepaid expenses and other assets		136
Accounts payable		(1,974)
Accrued liabilities		(400)
Net acquired tangible assets	$	170,681

Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2021

Financial Instruments

Schedule of assets and liabilities measured fair value on recurring basis

Below is a summary of assets and liabilities measured at fair value on a recurring basis (in thousands):


	As of June 30, 2021
	Quoted Prices		Significant		Significant
	in Active		Observable		Unobservable
	Markets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Cash and cash equivalents:
Money market funds	$	1,841	$	—	$	—	$	1,841
Reverse repurchase agreements		—		39,000		—		39,000
Total assets	$	1,841	$	39,000	$	—	$	40,841


	As of December 31, 2020
	Quoted Prices		Significant		Significant
	in Active		Observable		Unobservable
	Markets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Cash and cash equivalents:
Money market funds	$	22,999	$	—	$	—	$	22,999
Short-term investments:
Reverse repurchase agreements		—		20,000		—		20,000
Total assets	$	22,999	$	20,000	$	—	$	42,999

Summary of warrant liability was valued based on significant inputs not observable in the market, which represents a Level 3

The Company estimated the fair value of the warrant liability using Black-Scholes option-pricing models and assumptions that are based on the individual characteristics of the warrants on the valuation date, as well as assumptions including the fair value per share of the underlying security, the remaining contractual term of the warrant, risk-free interest rate, expected dividend yield and expected volatility of the price of the underlying security (in thousands).


	June 30, 2021
Balance at beginning of year	$	—
Issuance of warrants		4,332
(Decrease) increase in the fair value of the warrants	$	(864)
Reclassification of warrant liability to additional paid-in capital		(3,468)
Ending balance	$	—

Short-Term Investments (Tables)

6 Months Ended

Jun. 30, 2021

Short-Term Investments

Schedule of short term investments

The Company did not hold any short-term investments at June 30, 2021. The following table summarizes the short-term investments held at December 31, 2020 (in thousands):


			Gross Unrealized		Gross Unrealized
	Amortized Cost		Gains		Losses		Fair Value
December 31, 2020
Reverse repurchase agreements	$	20,000	$	—	$	—	$	20,000
Total	$	20,000	$	—	$	—	$	20,000

Accrued Expenses (Tables)

6 Months Ended

Jun. 30, 2021

Accrued Expenses

Schedule of accrued expenses

Accrued expenses consisted of the following (in thousands):


	June 30,		December 31,
	2021		2020
Accrued compensation	$	1,018	$	1,719
Accrued contracted research costs		790		1,726
Accrued professional fees		663		356
Accrued other		180		—
Accrued severance		63		396
Total	$	2,714	$	4,197

Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2021

Stockholders' Equity

Summary of Series X preferred stock or warrants to purchase

The following table presents information about warrants that are issued and outstanding at June 30, 2021:


Year Issued	Equity Instrument	Warrants Outstanding	Exercise Price		Date of Expiration
2014	Common Stock	1,227	$	122.12	8/26/2021
2015	Common Stock	1,227	$	122.12	3/30/2022
2018	Common Stock	4,199,995	$	12.00	6/21/2023
2019	Common Stock	1,991,300	$	6.25	2/7/2024
2021	Common Stock	2,990,136	$	0.35	12/14/2030
Total		9,183,885
Weighted average exercise price			$	6.99
Weighted average life in years					4.55

Reserved For Future Issuance (Tables)

6 Months Ended

Jun. 30, 2021

Reserved for Future Issuance

Schedule of common stock reserved for future issuance


	June 30,	December 31,
	2021	2020
Warrants for the purchase of common stock	9,183,885	6,193,749
Options outstanding to purchase common stock	7,930,334	1,367,667
Options available for future issuance to purchase common stock	1,697,308	1,936,173
Shares reserved for the employee stock purchase plan	185,421	148,951
Total	18,996,948	9,646,540

- Definition

Tabular disclosure of an entity's stock, including par or stated value per share, number and dollar amount of share subscriptions, shares authorized, shares issued, shares outstanding, number and dollar amount of shares held in an employee trust, dividend per share, total dividends, share conversion features, par value plus additional paid in capital, the value of treasury stock and other information necessary to a fair presentation, and EPS information. Stock by class includes common, convertible, and preferred stocks which are not redeemable or redeemable solely at the option of the issuer. Includes preferred stock with redemption features that are solely within the control of the issuer and mandatorily redeemable stock if redemption is required to occur only upon liquidation or termination of the reporting entity. If more than one issue is outstanding, state the title of each issue and the corresponding dollar amount; dollar amount of any shares subscribed but unissued and the deduction of subscriptions receivable there from; number of shares authorized, issued, and outstanding.

+ References

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+ Details

Stock Incentive Plans (Tables)

6 Months Ended

Jun. 30, 2021

Stock Incentive Plans

Summary of stock option activity


				Weighted
				Average
		Weighted-		Remaining	Aggregate
		Average Exercise		Contractual	Intrinsic Value
	Shares	Price		Term (years)	(in thousands)
Outstanding at December 31, 2020	1,367,667	$	11.38	8.13	$	—
Granted	6,447,000	$	2.74
Assumed in Quellis Acquisition	332,494	$	0.29
Cancelled or forfeited	(208,152)	$	8.71
Expired	(8,675)	$	16.70
Outstanding at June 30, 2021	7,930,334	$	3.96	9.44	$	662
Vested and exercisable at June 30, 2021	770,141	$	14.07	7.31	$	207

Organization and Operations - Agreement and Plan of Merger (Details) - USD ($) $ / shares in Units, $ in Millions		6 Months Ended
	Jan. 28, 2021	Jun. 30, 2021	Jun. 02, 2021	Dec. 31, 2020
Agreement and Plan of Merger
Common stock, par value (in dollars per share)		$ 0.001		$ 0.001
Series X redeemable convertible preferred stock
Agreement and Plan of Merger
Issuance of preferred stock upon acquisition of Quellis (in shares)		50,504
Common Stock
Agreement and Plan of Merger
Shares issued on acquisition (in shares)		3,332,669
Common Stock \| Series X redeemable convertible preferred stock
Agreement and Plan of Merger
Warrants to purchase number of shares			2,805,000
Exercise Price (in dollars per share)			$ 0.35
Quellis Biosciences, Inc \| Series X redeemable convertible preferred stock
Agreement and Plan of Merger
Issuance of preferred stock upon acquisition of Quellis (in shares)	50,504
Conversion value on closing date	$ 122.7
Warrants to purchase number of shares	2,805
Exercise Price (in dollars per share)	$ 341.70
Quellis Biosciences, Inc \| Common Stock
Agreement and Plan of Merger
Shares issued on acquisition (in shares)	3,332,669
Common stock, par value (in dollars per share)	$ 0.001
Number of options assumed in Quellis Acquisition	332,494
Warrants to purchase number of shares	185,136
Exercise Price (in dollars per share)	$ 0.35

Organization and Operations - Stock Purchase Agreement and Series X Preferred Stock (Details) - USD ($) $ in Thousands				6 Months Ended
	Jun. 30, 2021	Jun. 02, 2021	Jan. 28, 2021	Jun. 30, 2021	Feb. 28, 2021	Dec. 31, 2020
Stock Purchase Agreement and Series X Preferred Stock
Net proceeds from issuance of private placement				$ 104,261
Series X Preferred Stock at Transaction Date					88,882
Common Stock Issuable Upon Conversion at Transaction Date					88,882,000
Percentage of beneficial ownership initially, after conversion	9.99%			9.99%
Minimum
Stock Purchase Agreement and Series X Preferred Stock
Percentage of beneficial ownership thereafter, after conversion	4.99%			4.99%
Maximum
Stock Purchase Agreement and Series X Preferred Stock
Percentage of beneficial ownership thereafter, after conversion	19.99%			19.99%
Quellis Biosciences, Inc \| Stock Purchase Agreement
Stock Purchase Agreement and Series X Preferred Stock
Beneficial conversion feature				$ 19,600
Series X redeemable convertible preferred stock
Stock Purchase Agreement and Series X Preferred Stock
Issuance of preferred stock in a private offering of public equity, net of issuance costs (in shares)				35,573
Number of shares of common stock into which each share of Series X Preferred Stock may be converted		1,000		1,000
Conversion of preferred stock into common stock (in shares)	53,532
Issuance of common stock upon the conversion of preferred stock (in shares)	53,531,797
Preferred stock, outstanding (in shares)	32,545			32,545		0
Series X redeemable convertible preferred stock \| Quellis Biosciences, Inc
Stock Purchase Agreement and Series X Preferred Stock
Number of shares of common stock into which each share of Series X Preferred Stock may be converted			1,000
Series X redeemable convertible preferred stock \| Quellis Biosciences, Inc \| Stock Purchase Agreement
Stock Purchase Agreement and Series X Preferred Stock
Issuance of preferred stock in a private offering of public equity, net of issuance costs (in shares)				35,573
Gross proceeds from issuance of preferred stock in a private offering				$ 110,000
Net proceeds from issuance of private placement				104,300
Issuance costs				$ 5,700
Outstanding shares issued in merger
Stock Purchase Agreement and Series X Preferred Stock
Series X Preferred Stock at Transaction Date					50,504
Common Stock Issuable Upon Conversion at Transaction Date					50,504,000
Outstanding shares issued in February 2021 Financing
Stock Purchase Agreement and Series X Preferred Stock
Series X Preferred Stock at Transaction Date					35,573
Common Stock Issuable Upon Conversion at Transaction Date					35,573,000
Warrants assumed in merger
Stock Purchase Agreement and Series X Preferred Stock
Series X Preferred Stock at Transaction Date					2,805
Common Stock Issuable Upon Conversion at Transaction Date					2,805,000

Organization and Operations - January 2020 Financing (Details) - January 2020 Financing $ / shares in Units, $ in Millions	1 Months Ended
	Jan. 31, 2020 USD ($) $ / shares shares
January 2020 Financing
Gross proceeds from sale of stock in public offering \| $	$ 26.5
Proceeds from public offering, net of issuance costs \| $	$ 24.6
Common Stock
January 2020 Financing
Number of shares issued \| shares	5,290,000
Share price (in dollars per share) \| $ / shares	$ 5.00
Oppenheimer & Co. Inc
January 2020 Financing
Number of shares issued \| shares	690,000

Organization and Operations - Liquidity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Common Stock
Accumulated deficit		$ (438,447)		$ (260,897)
Cash and cash equivalents	$ 51,885	$ 139,520	$ 51,885	$ 24,930
Cowen
Common Stock
Percentage of commission paid to underwriter based on proceeds from common stock		3.00%
Jefferies
Common Stock
Remaining available under sales agreement		$ 25,000
Jefferies \| ATM
Common Stock
Maximum aggregate value of common shares which can be issued under the agreement		25,000
Common Stock
Common Stock
Issuance of common stock for at-the-market offerings (in shares)	926,429		1,100,001
Common Stock \| ATM
Common Stock
Issuance of common stock for at-the-market offerings (in shares)			1,100,001
Share price (in dollars per share)	$ 6.87		$ 6.87
Proceeds from public offering, net of issuance costs		$ 7,300

Summary of Significant Accounting Policies - Net Loss Per Share (Details) - shares	3 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Antidilutive common stock equivalents excluded from computation of diluted net loss per share
Anti-dilutive securities excluded from the calculation of diluted net loss per share (in shares)	49,659,422	7,495,011
Series X Preferred Stock
Antidilutive common stock equivalents excluded from computation of diluted net loss per share
Anti-dilutive securities excluded from the calculation of diluted net loss per share (in shares)	32,545,203
Stock options
Antidilutive common stock equivalents excluded from computation of diluted net loss per share
Anti-dilutive securities excluded from the calculation of diluted net loss per share (in shares)	7,930,334	1,301,262
Warrants for the purchase of common stock
Antidilutive common stock equivalents excluded from computation of diluted net loss per share
Anti-dilutive securities excluded from the calculation of diluted net loss per share (in shares)	9,183,885	6,193,749

Summary of Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020	Jun. 30, 2020	Dec. 31, 2019
Summary of Significant Accounting Policies
Cash and cash equivalents	$ 139,520	$ 24,930	$ 51,885
Restricted cash	121		235
Total	$ 139,641	$ 25,051	$ 52,120	$ 10,376

Summary of Significant Accounting Policies - Preferred Stock Discount (Details) - Private Placement - Series X redeemable convertible preferred stock $ in Millions	6 Months Ended
	Jun. 30, 2021 USD ($)
Antidilutive Common Stock Equivalents Excluded from Computation of Diluted Net Loss Per Share
Beneficial conversion feature	$ 19.6
Issuance costs	5.7
Non cash return	$ 24.4

Acquisition of Quellis (Details) - USD ($) $ in Thousands			6 Months Ended
Acquisition of Quellis (Details) - USD ($) $ in Thousands	Jun. 02, 2021	Jan. 28, 2021	Jun. 30, 2021
Common Stock
Acquisition of Quellis
Issuance of common stock upon acquisition of Quellis (in shares)			3,332,669
Quellis Biosciences, Inc
Acquisition of Quellis
Cost to acquire the assets		$ 170,681
Acquisition costs		$ 1,800
Quellis Biosciences, Inc \| Common Stock
Acquisition of Quellis
Issuance of common stock upon acquisition of Quellis (in shares)		3,332,669
Series X redeemable convertible preferred stock
Acquisition of Quellis
Issuance of preferred stock upon acquisition of Quellis (in shares)			50,504
Number of shares of common stock into which each share of Series X Preferred Stock may be converted	1,000		1,000
Series X redeemable convertible preferred stock \| Quellis Biosciences, Inc
Acquisition of Quellis
Issuance of preferred stock upon acquisition of Quellis (in shares)		50,504
Number of shares of common stock into which each share of Series X Preferred Stock may be converted		1,000

Acquisition of Quellis - Net assets acquired based on their estimated fair values (Details) - Quellis Biosciences, Inc $ in Thousands	Jan. 28, 2021 USD ($)
Acquisition of Quellis
Acquired IPR&D	$ 164,612
Cash and cash equivalents	8,307
Prepaid expenses and other assets	136
Accounts payable	(1,974)
Accrued liabilities	(400)
Net acquired tangible assets	$ 170,681

Financial Instruments - Fair value hierarchy (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Dec. 31, 2020	Jun. 30, 2020
Financial Instruments
Fair value assets, transfers from Level 1 to Level 2	$ 0		$ 0
Fair value assets, transfers from Level 2 to Level 1	0		0
Fair value liabilities, transfers from Level 1 to Level 2	0		0
Fair value liabilities, transfers from Level 2 to Level 1	$ 0		$ 0
Reverse repurchase agreements \| Government Securities and Obligations \| Minimum
Financial Instruments
Percentage of investment amount to collateralized deposits value	102.00%
Recurring
Assets:
Total assets	$ 40,841	$ 42,999
Recurring \| Level 1
Assets:
Total assets	1,841	22,999
Recurring \| Level 2
Assets:
Total assets	39,000	20,000
Recurring \| Money market fund
Assets:
Cash and cash equivalents	1,841	22,999
Recurring \| Money market fund \| Level 1
Assets:
Cash and cash equivalents	1,841	22,999
Recurring \| Reverse repurchase agreements
Assets:
Cash and cash equivalents	39,000
Short-term investments		20,000
Recurring \| Reverse repurchase agreements \| Level 2
Assets:
Cash and cash equivalents	$ 39,000
Short-term investments		$ 20,000

Financial Instruments - Warrant liability (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2021 USD ($)
Derivative warrant liability was valued based on significant inputs not observable in the market, which represents a Level 3
Beginning balance	$ 0
Issuance of warrants	4,332
(Decrease) increase in the fair value of the warrants	(864)
Reclassification of warrant liability to additional paid-in capital	(3,468)
Ending balance	$ 0

Short-Term Investments (Details) $ in Thousands	12 Months Ended
Short-Term Investments (Details) $ in Thousands	Dec. 31, 2020 USD ($) instrument
Short-Term Investments
Amortized Cost	$ 20,000
Fair Value	$ 20,000
Number of short term investments in unrealized loss position \| instrument	0
Reverse repurchase agreements
Short-Term Investments
Amortized Cost	$ 20,000
Fair Value	$ 20,000

Accrued Expenses (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Accrued Expenses
Accrued compensation	$ 1,018	$ 1,719
Accrued contracted research costs	790	1,726
Accrued professional fees	663	356
Accrued other	180
Accrued severance	63	396
Total	$ 2,714	$ 4,197

Stockholders' Equity - Preferred Stock (Details) - $ / shares	Jun. 30, 2021	Dec. 31, 2020
Preferred Stock
Preferred stock, authorized (in shares)	5,000,000
Preferred stock, par value (in dollars per share)	$ 0.001
Series X redeemable convertible preferred stock
Preferred Stock
Preferred stock, authorized (in shares)	37,848
Preferred stock, par value (in dollars per share)	$ 0.001
Preferred stock, outstanding (in shares)	32,545	0

Stockholders' Equity - Common Stock Warrants (Details) - Warrants for the purchase of common stock	6 Months Ended
	Jun. 30, 2021 $ / shares shares
Common Stock Warrants
Warrants Outstanding (in shares) \| shares	9,183,885
Weighted Average
Common Stock Warrants
Exercise Price (in dollars per share) \| $ / shares	$ 6.99
Weighted average life (in years)	4 years 6 months 18 days
Warrants Issued in 2014
Common Stock Warrants
Warrants Outstanding (in shares) \| shares	1,227
Exercise Price (in dollars per share) \| $ / shares	$ 122.12
Warrants Issued in 2015
Common Stock Warrants
Warrants Outstanding (in shares) \| shares	1,227
Exercise Price (in dollars per share) \| $ / shares	$ 122.12
Warrants Issued in 2018
Common Stock Warrants
Warrants Outstanding (in shares) \| shares	4,199,995
Exercise Price (in dollars per share) \| $ / shares	$ 12.00
Warrants Issued in 2019
Common Stock Warrants
Warrants Outstanding (in shares) \| shares	1,991,300
Exercise Price (in dollars per share) \| $ / shares	$ 6.25
Warrants Issued In 2021
Common Stock Warrants
Warrants Outstanding (in shares) \| shares	2,990,136
Exercise Price (in dollars per share) \| $ / shares	$ 0.35

Reserved for Future Issuance (Details) - shares		6 Months Ended
Reserved for Future Issuance (Details) - shares	Jun. 02, 2021	Jun. 30, 2021	Dec. 31, 2020
Common Stock
Number of shares reserved for future issuance		18,996,948	9,646,540
Warrants for the purchase of common stock
Common Stock
Number of shares reserved for future issuance		9,183,885	6,193,749
Options outstanding to purchase Common Stock
Common Stock
Number of shares reserved for future issuance		7,930,334	1,367,667
Options available for future issuance to purchase Common Stock
Common Stock
Number of shares reserved for future issuance		1,697,308	1,936,173
Shares reserved for the employee stock purchase plan
Common Stock
Number of shares reserved for future issuance		185,421	148,951
Series X redeemable convertible preferred stock
Common Stock
Preferred stock, outstanding (in shares)		32,545	0
Number of shares of common stock into which each share of Series X Preferred Stock may be converted	1,000	1,000

Stock Incentive Plans (Details) - Stock options - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Shares
Outstanding, beginning of period (in shares)			1,367,667
Granted (in shares)			6,447,000
Assumed in Quellis Acquisition (in shares)			332,494
Cancelled or forfeited (in shares)			(208,152)
Expired (in shares)			(8,675)
Outstanding, end of period (in shares)	7,930,334		7,930,334		1,367,667
Vested and exercisable (in shares)	770,141		770,141
Weighted-Average Exercise Price
Outstanding, beginning of period (in dollars per share)			$ 11.38
Granted (in dollars per share)			2.74
Assumed in Quellis Acquisition (in dollars per share)			0.29
Cancelled or forfeited (in dollars per share)			8.71
Expired (in dollars per share)			16.70
Outstanding at end of year (in dollars per share)	$ 3.96		3.96		$ 11.38
Vested and Exercisable (in dollars per share)	$ 14.07		$ 14.07
Weighted Average Remaining Contractual Term (years)
Outstanding			9 years 5 months 8 days		8 years 1 month 17 days
Vested and Exercisable			7 years 3 months 21 days
Aggregate Intrinsic Value
Outstanding	$ 662,000		$ 662,000
Vested and Exercisable	$ 207,000		$ 207,000
Stock Incentive Plans
Exercised (in shares)	0	0	0	0
Aggregate fair value of options vested	$ 400,000	$ 0.3	$ 1,000,000.0	$ 800,000
Weighted average grant date fair value of options granted (in dollars per share)	$ 1.73	$ 4.00	$ 1.73	$ 3.64
Unrecognized compensation expense related to unvested stock option awards	$ 12,700,000		$ 12,700,000
Weighted-average amortization period over which cost is expected to be recognized			3 years 3 months 18 days

Subsequent Events (Details)	Aug. 04, 2021
Subsequent Events.
Subsequent Events
Reverse stock split ratio	0.167