0000950170-23-021186 | 10-Q | XBRL Viewer

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Certain Balance Sheet Accounts - Summary of Other Long-Term Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Balance Sheet Related Disclosures [Abstract]
Recoverable research and development tax credits	$ 1,071	$ 0
Other Assets	178	128
Total other long-term assets	$ 1,249	$ 128

Condensed Consolidated Statements of Operations and Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Statement [Abstract]
Income tax	$ 0	$ 0

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Restructuring Plan - Schedule of restructuring liability (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Restructuring and Related Activities [Abstract]
Restructuring Liability, Beginning Balance	$ 0
Restructuring costs incurred during the period	6,779
Restructuring costs paid during the period	(5,492)
Restructuring Liability, Ending Balance	$ 1,287

Restructuring Plan (Tables)

3 Months Ended

Mar. 31, 2023

Restructuring and Related Activities [Abstract]

Summary of restructuring costs

A summary of the restructuring costs recorded in the statement of operations and comprehensive loss for the three months ended March 31, 2023 is as follows (in thousands):


	Severance and Benefits Costs		Stock-based Compensation		Total Restructuring Cost Recorded
General and administrative expense	$	5,437	$	8,520	$	13,957
Research and development expense		1,342		488		1,830
Total restructuring costs	$	6,779	$	9,008	$	15,787

Schedule of restructuring liability

The activity in the restructuring liability was as follows for the three months ended March 31, 2023 (in thousands):


	Restructuring Liability 2023
Restructuring liability as of December 31, 2022	$	—
Restructuring costs incurred during the period		6,779
Restructuring costs paid during the period		(5,492	)
Restructuring liability as of March 31, 2023	$	1,287

Description of Organization and Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($) Segments	Feb. 07, 2023	Dec. 31, 2022 USD ($)
Subsidiary Sale Of Stock [Line Items]
Entity incorporation date	Oct. 18, 2018
Workforce reduction, percentage		55.00%
Accumulated deficit	$ (143,150)		$ (120,860)
Cash, cash equivalents and marketable securities	$ 109,400
Number of operating segments \| Segments	1
Fair Value Inputs Level 1, 2 and 3 [Member]
Subsidiary Sale Of Stock [Line Items]
Fair value transfer amount	$ 0

Redeemable Convertible Preferred Stock - Additional Information (Details) - shares	Mar. 31, 2023	Dec. 31, 2022
Temporary Equity [Line Items]
Common stock	26,973,875	26,567,681

Stock-Based Compensation - Summary of Stock Option Activities (Details) - USD ($)
$ / shares in Units, $ in Thousands

3 Months Ended

12 Months Ended

Mar. 31, 2023

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

Number of options outstanding, beginning of period

5,988,271

Number of options, cancelled and forfeited

(115,139)

Number of options exercised

(406,194)

Number of options outstanding, ending of period

5,466,938

5,988,271

Number of options, vested and expected to vest

^[1]

5,421,938

Number of options exercisable, end of period

4,051,844

Weighted average exercise price outstanding, beginning of period

$ 4.70

Weighted average exercise price, options cancelled and forfeited

7.79

Weighted average exercise price, options exercised

0.002

Weighted average exercise price outstanding, end of period

4.99

$ 4.70

Weighted average exercise price, options vested and expected to vest

^[1]

4.96

Weighted average exercise price, options exercisable

$ 4.80

Weighted average remaining contracted terms (in years) outstanding

3 years 10 months 28 days

8 years 9 months 29 days

Weighted average remaining contracted terms (in years), vested and expected to vest

^[1]

3 years 10 months 13 days

Weighted average remaining contracted terms (in years), exercisable at end of period

2 years 1 month 24 days

Aggregate intrinsic value outstanding, beginning of period

$ 5,699

Aggregate intrinsic value options exercised

1,222

Aggregate intrinsic value outstanding, end of period

2,438

$ 5,699

Aggregate intrinsic value options vested and expected to vest

^[1]

2,438

Aggregate intrinsic value options exercisable

$ 1,990

[1]	Excludes 45,000 stock options awards outstanding for the period ended March 31, 2023, subject to only performance conditions that have been assessed and deemed not probable.

Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Employees Including Executive Officers Earning Contribution	15.00%
Percentage of fair market value, common stock	85.00%
Share-based payment award, option vesting period	3 years
Incremental Share Based Compensation Expense	$ 9.0
Restricted Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based payment award, award vesting rights, percentage	25.00%
Number of shares, Granted	113,333
Unrecognized compensation cost	$ 1.5
Unrecognized compensation, weighted average amortization period	2 years 2 months 1 day
Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based payment award, award vesting rights, percentage	25.00%
Share-based payment award, option vesting period	4 years
Options grants in period, weighted average grant date fair value		$ 5.56
Unrecognized compensation cost	$ 4.4
Unrecognized compensation, weighted average amortization period	2 years 6 months 21 days
Research and Development Expense
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Incremental Share Based Compensation Expense	$ 0.5
General and Administrative Expense
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Incremental Share Based Compensation Expense	$ 8.5
2019 Equity Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based payment award, description	Under the terms of the 2019 Plan, options are granted at an exercise price no less than fair value of the Company’s common stock on the grant date, except in certain cases related to employees outside of the U.S. Option awards granted typically have 10-year terms measured from the option grant date. While no shares are available for future issuance under the 2019 Plan, it continues to govern outstanding equity awards granted thereunder.
Share-based payment award, expiration period	10 years
2021 Equity Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based payment award, description	The compensation committee of the Company's board of directors adopted and the Company's stockholders approved the 2021 Equity Incentive Plan (the 2021 Plan) and the 2021 Employee Stock Purchase Plan (the ESPP), which became effective immediately prior to the effectiveness of the Company's initial public offering (IPO). The 2021 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units, stock appreciation rights and other stock-based awards. The Company's employees, officers, directors and consultants are eligible to receive awards under the 2021 Plan. Under the terms of the 2021 Plan, options are granted at an exercise price no less than fair value of the Company’s common stock on the grant date, except in certain cases related to significant corporate transactions. Option awards granted typically have 10-year terms measured from the option grant date. In addition, the number of shares of common stock reserved for issuance under the 2021 Plan will automatically increase on January 1 of each year, beginning on January 1, 2022, and continuing through and including January 1, 2031, by 5% of the total number of shares of common stock outstanding on December 31 of the immediately preceding calendar year, or a lesser number of shares determined by the Company's board of directors prior to the applicable January 1st.
Share-based payment award, expiration period	10 years
Share-based payment award, number of shares authorized	5,215,558
Number of Shares of Common Stock Outstanding Percentage	5.00%
ESPP
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based payment award, description	The ESPP allows employees, including executive officers, to contribute up to 15% of their earnings, subject to certain limitations, for the purchase of the Company's common stock at a price per share equal to the lower of (a) 85% of the fair market value of a share of common stock on the first day of the offering period, or (b) 85% of the fair market value of a share of common stock on the last day of the offering period. As of March 31, 2023, there were 787,231 shares of common stock reserved for future issuance under the ESPP. The number of shares of common stock reserved for issuance under the ESPP will automatically increase on January 1 of each calendar year, beginning on January 1, 2022 and continuing through and including January 1, 2031, by the lesser of (1) 1% of the total number of shares of the Company's common stock outstanding on December 31 of the preceding calendar year or (2) a number of shares determined by the Company's board of directors. Shares subject to purchase rights granted under the ESPP that terminate without having been exercised in full will not reduce the number of shares available for issuance under the ESPP.
Number of Shares of Common Stock Outstanding Percentage	1.00%
Common stock reserved for future issuance	787,231
Number of shares, Granted	0

Investments - Investments in a continual unrealized loss position (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Debt Securities, Available-for-Sale [Line Items]
Continuous unrealized loss position, less than 12 months	$ 20,756	$ 28,483
Continuous unrealized loss position, 12 months or longer	15,712	18,594
US Treasury Securities [Member]
Debt Securities, Available-for-Sale [Line Items]
Continuous unrealized loss position, less than 12 months	18,761	26,506
Continuous unrealized loss position, 12 months or longer	3,986	3,945
Corporate Bonds [Member]
Debt Securities, Available-for-Sale [Line Items]
Continuous unrealized loss position, less than 12 months	1,995	1,977
Continuous unrealized loss position, 12 months or longer	$ 11,726	$ 14,649

Certain Balance Sheet Accounts - Summary of Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Balance Sheet Related Disclosures [Abstract]
Restructuring liability	$ 1,200	$ 0
Accrued research and development expenses	1,052	1,902
Accrued payroll	888	2,900
Other accrued expenses	447	245
Total accrued expenses	$ 3,587	$ 5,047

Restructuring Plan (Additional Information) (Details) $ in Millions	3 Months Ended
	Mar. 31, 2023 USD ($)
Restructuring and Related Activities [Abstract]
Termination charges	$ 15.8
Payment related to continuation of health care	0.1
Restructuring expected aggregate cost	$ 16.6

Stock-Based Compensation - Summary of Restricted Stock Awards (Details) - Restricted Stock [Member]	3 Months Ended
	Mar. 31, 2023 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares, Unvested \| shares	177,495
Number of shares, Granted \| shares	113,333
Number of shares, Vested \| shares	(19,608)
Number of shares, Forfeited \| shares	0
Number of shares, Unvested \| shares	271,220
Unvested, weighted average grant date fair value per share, beginning balance \| $ / shares	$ 8.32
Granted, weighted average grant date fair value \| $ / shares	3.64
Vested, weighted average grant date fair value per share \| $ / shares	8.13
Forfeited, weighted average grant date fair value per share \| $ / shares	0
Unvested, weighted average grant date fair value per share, ending balance \| $ / shares	$ 6.38

Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Future Minimum Lease Payments Under Non-Cancelable Operating Leases

As of March 31, 2023, the annual future minimum lease payments due under the Company’s non-cancelable operating leases are as follows:


	Amount
	(In thousands)
2023 (remaining 9 months)	$	371
2024		338
2025		15
Total undiscounted lease payments	$	724
Present value adjustment		(37	)
Total operating lease liabilities	$	687

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 34,437	$ 43,585
Short-term marketable securities	74,935	79,981
Prepaid expenses and other current assets	10,802	10,827
Total current assets	120,174	134,393
Operating lease right-of-use assets	662	471
Other long-term assets	1,249	128
Total assets	122,085	134,992
Current liabilities:
Accounts payable	864	750
Accrued expenses	3,587	5,047
Operating lease liabilities	464	300
Total current liabilities	4,915	6,097
Operating lease liabilities, net of current portion	223	180
Other long-term liabilities	87	0
Total liabilities	5,225	6,277
Commitments and contingencies (Note 4)
Stockholders' equity
Common stock, $0.0001 par value per share, 250,000,000 shares authorized; 26,973,875 and 26,567,681 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively	3	3
Additional paid-in capital	260,102	249,930
Accumulated other comprehensive loss	(95)	(358)
Accumulated deficit	(143,150)	(120,860)
Total stockholders' equity	116,860	128,715
Total liabilities and stockholders' equity	$ 122,085	$ 134,992

Certain Balance Sheet Accounts - Summary of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Balance Sheet Related Disclosures [Abstract]
Recoverable research and development tax credits	$ 6,587	$ 6,492
Prepaid research and development expenses	2,667	2,549
Prepaid expenses	927	1,330
Other assets	621	456
Total prepaid expenses and other current assets	$ 10,802	$ 10,827

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholder's Deficit (Unaudited) - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Other Comprehensive Loss [Member]	Accumulated Deficit [Member]
Beginning balance at Dec. 31, 2021	$ 167,203	$ 3	$ 242,939	$ (123)	$ (75,616)
Beginning balance, shares at Dec. 31, 2021		26,235,317
Vesting Of Restricted Stock Awards Shares		9,451
Stock-based compensation	1,541		1,541
Other comprehensive loss	(398)			(398)
Net loss	(13,204)				(13,204)
Ending balance at Mar. 31, 2022	155,142	$ 3	244,480	(521)	(88,820)
Ending balance, shares at Mar. 31, 2022		26,244,768
Beginning balance at Dec. 31, 2022	128,715	$ 3	249,930	(358)	(120,860)
Beginning balance, shares at Dec. 31, 2022		26,390,186
Vesting Of Restricted Stock Awards Shares		19,608
Exercise of stock options	$ 1		1
Exercise of stock options , shares	406,194	406,194
Stock-based compensation	$ 10,171		10,171
Other comprehensive loss	263			263
Net loss	(22,290)				(22,290)
Ending balance at Mar. 31, 2023	$ 116,860	$ 3	$ 260,102	$ (95)	$ (143,150)
Ending balance, shares at Mar. 31, 2023		26,815,988

- Definition

Amount after tax and reclassification adjustments of other comprehensive income (loss).

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The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

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+ Details

- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

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+ Details

Certain Balance Sheet Accounts

3 Months Ended

Mar. 31, 2023

Balance Sheet Related Disclosures [Abstract]

Certain Balance Sheet Accounts

3. Certain Balance Sheet Accounts

Prepaid Expenses and Other Current Assets

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


	March 31, 2023		December 31, 2022
Recoverable research and development tax credits	$	6,587	$	6,492
Prepaid research and development expenses		2,667		2,549
Prepaid expenses		927		1,330
Other current assets		621		456
Total prepaid expenses and other current assets	$	10,802	$	10,827

Other Long-Term Assets

Other long-term assets consist of the following (in thousands):


	March 31, 2023		December 31, 2022
Recoverable research and development tax credits	$	1,071	$	—
Other long-term assets		178		128
Total other long-term assets	$	1,249	$	128

Accrued Expenses

Accrued expenses consist of the following (in thousands):


	March 31, 2023		December 31, 2022
Restructuring liability	$	1,200	$	—
Accrued research and development expenses		1,052		1,902
Accrued payroll		888		2,900
Other accrued expenses		447		245
Total accrued expenses	$	3,587	$	5,047

Stock-Based Compensation - Summary of Share-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation expense	$ 10,171	$ 1,541
Research and Development Expense
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation expense	1,032	547
General and Administrative Expense
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation expense	$ 9,139	$ 994

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2023	May 09, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Entity Registrant Name	ELIEM THERAPEUTICS, INC.
Entity Central Index Key	0001768446
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Shell Company	false
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity File Number	001-40708
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	83-2273741
Entity Address, Address Line One	23515 NE Novelty Hill Road
Entity Address, Address Line Two	Suite B221 #125
Entity Address, City or Town	Redmond
Entity Address, State or Province	WA
Entity Address, Postal Zip Code	98053
City Area Code	1-877
Local Phone Number	354-3689
Document Transition Report	false
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	ELYM
Security Exchange Name	NASDAQ
Document Quarterly Report	true
Entity Common Stock, Shares Outstanding		26,993,401

Description of Organization and Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Schedule of Fair Value Measurements

The Company’s fair value measurements as of March 31, 2023 and December 31, 2022 was as follows (in thousands):


	March 31, 2023
	Level 1		Level 2		Level 3		Balance
Assets:
Cash equivalents:
Money market funds	$	25,581	$	—	$	—	$	25,581
Marketable securities:
U.S. Treasury securities		33,034		—		—		33,034
Commercial paper		—		22,623		—		22,623
Corporate bonds		—		13,721		—		13,721
U.S. government agency debt securities		—		5,557		—		5,557
Total marketable securities		33,034		41,901		—		74,935
Total assets	$	58,615	$	41,901	$	—	$	100,516


	December 31, 2022
	Level 1		Level 2		Level 3		Balance
Assets:
Cash equivalents:
Money market funds	$	27,472	$	—	$	—	$	27,472
Marketable securities:
U.S. Treasury securities		30,451		—		—		30,451
Commercial paper		—		29,543		—		29,543
Corporate bonds		—		16,626		—		16,626
U.S. government agency debt securities		—		3,361		—		3,361
Total marketable securities		30,451		49,530		—		79,981
Total assets	$	57,923	$	49,530	$	—	$	107,453

Investments (Tables)

3 Months Ended

Mar. 31, 2023

Investments [Abstract]

Investments consists of available-for-sale securities

Investments consists of available-for-sale securities as follows (in thousands):


	March 31, 2023
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
Short-term marketable securities:
U.S. Treasury securities	$	33,081	$	—	$	(47	)	$	33,034
Commercial paper		22,623		—		—			22,623
Corporate bonds		13,785		—		(64	)		13,721
U.S. government agency debt securities		5,541		16		—			5,557
Total short-term marketable securities	$	75,030	$	16	$	(111	)	$	74,935


	December 31, 2022
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
Short-term marketable securities:
U.S. Treasury securities	$	30,628	$	—	$	(177	)	$	30,451
Commercial paper		29,543		—		—			29,543
Corporate bonds		16,815		—		(189	)		16,626
U.S. government agency debt securities		3,353		8		—			3,361
Total short-term marketable securities	$	80,339	$	8	$	(366	)	$	79,981

Investments in a continual unrealized loss position

Investments in a continual unrealized loss position for less than 12 months consist of the following (in thousands):


	March 31, 2023		December 31, 2022
	Fair Value		Fair Value
U.S. Treasury securities	$	18,761	$	26,506
Corporate bonds		1,995		1,977
Total available-for-sale securities	$	20,756	$	28,483

Investments in a continual unrealized loss position for greater than 12 months consist of the following (in thousands):


	March 31, 2023		December 31, 2022
	Fair Value		Fair Value
Corporate bonds	$	11,726	$	14,649
U.S. Treasury securities		3,986		3,945
Total available-for-sale securities	$	15,712	$	18,594

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	26,973,875	26,567,681
Common stock, shares outstanding	26,973,875	26,567,681

Stock-Based Compensation

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

5. Stock-Based Compensation

2019 Plan

In 2019, the Company adopted the 2019 Equity Incentive Plan (the 2019 Plan). The 2019 Plan provides for the Company to grant qualified stock options, non-qualified stock options, and restricted stock awards to employees, non-employee directors and consultants of the Company under terms and provisions established by the Company's board of directors. Under the terms of the 2019 Plan, options are granted at an exercise price no less than fair value of the Company’s common stock on the grant date, except in certain cases related to employees outside of the U.S. Option awards granted typically have 10-year terms measured from the option grant date. While no shares are available for future issuance under the 2019 Plan, it continues to govern outstanding equity awards granted thereunder.

2021 Plan and ESPP

The compensation committee of the Company's board of directors adopted and the Company's stockholders approved the 2021 Equity Incentive Plan (the 2021 Plan) and the 2021 Employee Stock Purchase Plan (the ESPP), which became effective immediately prior to the effectiveness of the Company's initial public offering (IPO). The 2021 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units, stock appreciation rights and other stock-based awards. The Company's employees, officers, directors and consultants are eligible to receive awards under the 2021 Plan. Under the terms of the 2021 Plan, options are granted at an exercise price no less than fair value of the Company’s common stock on the grant date, except in certain cases related to significant corporate transactions. Option awards granted typically have 10-year terms measured from the option grant date. In addition, the number of shares of common stock reserved for issuance under the 2021 Plan will automatically increase on January 1 of each year, beginning on January 1, 2022, and continuing through and including January 1, 2031, by 5% of the total number of shares of common stock outstanding on December 31 of the immediately preceding calendar year, or a lesser number of shares determined by the Company's board of directors prior to the applicable January 1st. As of March 31, 2023, the total number of shares authorized for issuance under the 2021 Plan was 5,215,558.

The ESPP allows employees, including executive officers, to contribute up to 15% of their earnings, subject to certain limitations, for the purchase of the Company's common stock at a price per share equal to the lower of (a) 85% of the fair market value of a share of common stock on the first day of the offering period, or (b) 85% of the fair market value of a share of common stock on the last day of the offering period. As of March 31, 2023, there were 787,231 shares of common stock reserved for future issuance under the ESPP. The number of shares of common stock reserved for issuance under the ESPP will automatically increase on January 1 of each calendar year, beginning on January 1, 2022 and continuing through and including January 1, 2031, by the lesser of (1) 1% of the total number of shares of the Company's common stock outstanding on December 31 of the preceding calendar year or (2) a number of shares determined by the Company's board of directors. Shares subject to purchase rights granted under the ESPP that terminate without having been exercised in full will not reduce the number of shares available for issuance under the ESPP.

As of March 31, 2023, no shares have been granted or purchased under the ESPP.

Stock Options

Awards with vesting conditions under both plans typically include either: (i) vesting 25% on the first anniversary of the grant date with the remainder vesting monthly over the following three years or (ii) monthly vesting over four years.

No stock option awards were granted during the three months ended March 31, 2023.

The activity for stock options is as follows:


	Options Outstanding			Weighted Average Exercise Price		Weighted Average Remaining Contract Terms (in years)		Aggregate Intrinsic Values (in thousands)
Balance as of December 31, 2022		5,988,271		$	4.70		8.83	$	5,699
Options cancelled and forfeited		(115,139	)		7.79
Options exercised		(406,194	)		0.002				1,222
Balance as of March 31, 2023		5,466,938		$	4.99		3.91	$	2,438
Vested and expected to vest, March 31, 2023(1)		5,421,938		$	4.96		3.87	$	2,438
Options exercisable as of March 31, 2023		4,051,844		$	4.80		2.15	$	1,990

(1) Excludes 45,000 stock options awards outstanding for the period ended March 31, 2023, subject to only performance conditions that have been assessed and deemed not probable.

The aggregate intrinsic value disclosed in the above table is based on the difference between the exercise price of the stock option and the fair value of the Company’s common stock as of the respective period-end dates. The weighted-average grant date fair value of stock options granted during the three months ended March 31, 2022, was $5.56 per share.

The Black-Scholes option pricing model for employee and nonemployee stock options incorporates the following assumptions:

•

Fair Value of Common Stock — The fair value of each share of common stock is based on the closing price of the Company's common stock on the date of grant as reported on the Nasdaq Global Market.

•

Volatility — The expected stock price volatilities are estimated based on the historical and implied volatilities of comparable publicly traded companies as the Company does not have sufficient history of trading its common stock.

•

Risk-free Interest Rate — The risk-free interest rates are based on US Treasury yields in effect at the grant date for notes with comparable terms as the awards.

•

Expected Term — The expected term represents the period that the Company’s stock options are expected to be outstanding and is determined using the simplified method (based on the mid-point between the vesting date and the end of the contractual term).

•

Dividend Yield — The expected dividend yield assumption is based on the Company’s current expectations about its anticipated dividend policy.

The fair value of the Company’s stock option awards was estimated at the date of grant using a Black-Scholes option pricing model with the following assumptions for the three months ended March 31, 2022:


Expected term (in years)		5.50 - 6.50
Expected volatility		77.33% - 79.04%
Risk-free interest rate		1.69% - 1.75%
Expected dividend yield		0.00%

Restricted Stock

The Company has: (i) restricted stock awards with service conditions that vest 25% on the first anniversary of the grant date and the remainder vesting monthly over the following three years and (ii) restricted stock units that vest quarterly over a two and a half year period. The restricted stock awards are subject to repurchase by the Company at the original purchase price in the event that the award recipient’s employment or relationship is terminated prior to the shares vesting.

The activity for restricted stock awards and units is as follows:


	Number of Shares			Weighted-Average Grant Date Fair Value
Unvested at December 31, 2022		177,495		$	8.32
Granted		113,333			3.64
Vested		(19,608	)		8.13
Forfeited		—			—
Unvested at March 31, 2023		271,220		$	6.38

Modifications & Accelerations

Certain equity awards are subject to provisions in which the vesting of these awards is automatically accelerated upon the occurrence of events such as an involuntary termination in connection with a reduction in force. Further, in connection with the Restructuring Plan, the Company modified the terms of certain equity awards for impacted employees including partial or full acceleration of vesting of stock options and restricted stock awards upon separation and extension of exercise periods for stock options post-separation.

As a result of: (i) the contractual acceleration and (ii) the discretionary modification of equity awards in connection with the Restructuring Plan, the Company recorded incremental stock-based compensation expense of $9.0 million for three months ended March 31, 2023, of which $0.5 million and $8.5 million is included in research and development expense and general and administrative expense, respectively.

Stock-Based Compensation

The following table sets forth stock-based compensation for stock options, restricted stock awards, and restricted stock units included in the Company’s condensed consolidated statements of operations and comprehensive loss (in thousands):


	Three Months Ended March 31,
	2023		2022
Research and development expense	$	1,032	$	547
General and administrative expense		9,139		994
Total stock-based compensation expense	$	10,171	$	1,541

As of March 31, 2023, there was $4.4 million of total unrecognized compensation cost related to unvested stock options and $1.5 million of unrecognized compensation cost related to unvested restricted stock awards and units, which is expected to be recognized over a weighted average period of 2.56 years and 2.17 years, respectively.

Description of Organization and Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Organization

Eliem Therapeutics, Inc. (the Company) is a biotechnology company focused on developing novel therapies for neuronal excitability disorders to address unmet needs in psychiatry, epilepsy, chronic pain, and other disorders of the peripheral and central nervous systems. Headquartered in Redmond, Washington, the Company was incorporated on October 18, 2018 as a Delaware corporation.

On February 7, 2023, the Company’s board of directors approved a restructuring plan (the Restructuring Plan) to conserve financial resources and better align the Company’s workforce with current business needs, as a result of the decision to pause development of ETX-155 and focus on the Company’s preclinical Kv7.2/3 program. As part of the Restructuring Plan, the Company's workforce was reduced by approximately 55%, with substantially all of the reduction in personnel expected to be completed in the first half of 2023.

Basis of Presentation and Principles of Consolidation

The accompanying interim condensed consolidated financial statements of the Company and its wholly owned subsidiary have been prepared in conformity with accounting principles generally accepted in the United States (U.S. GAAP). All intercompany transactions and balances have been eliminated in consolidation.

The accompanying condensed consolidated balance sheet as of March 31, 2023, and condensed consolidated statements of operations and comprehensive loss, condensed consolidated statements of cash flows, and condensed consolidated statements of stockholders’ equity for the three months ended March 31, 2023 and 2022, are unaudited. The consolidated balance sheet as of December 31, 2022 was derived from the audited financial statements as of and for the year ended December 31, 2022, but does not include all disclosures required by U.S. GAAP. The unaudited interim condensed financial statements have been prepared on a basis consistent with the audited annual financial statements as of and for the year ended December 31, 2022, and, in the opinion of management, reflect all adjustments, consisting solely of normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of March 31, 2023, the condensed results of its operations as of the three months ended March 31, 2023 and 2022, and its cash flows for the three months ended March 31, 2023 and 2022. The financial data and other information disclosed in these notes related to the three months ended March 31, 2023 and 2022 are also unaudited. The condensed results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the full year ending December 31, 2023 or any other period. These interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 6, 2023.

Liquidity

Since inception, the Company has experienced recurring losses from operations and generated negative cash flows from operations. The Company has an accumulated deficit of $143.2 million as of March 31, 2023 and expects to incur additional losses from operations in the future. The Company estimates the available cash, cash equivalents, and marketable securities of $109.4 million as of March 31, 2023 will be sufficient to meet its projected operating requirements for at least the next twelve months from the filing date of these unaudited condensed consolidated financial statements.

The Company will need to obtain substantial additional funding to develop and commercialize the Company's clinical programs as currently contemplated. The Company expects to finance future cash needs through equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing and distribution arrangements. In addition, the Company expects to continue to rely on capital markets, and to a lesser extent, United Kingdom (U.K.) research and development tax credits and incentives for funding. There are no assurances that the Company will be able to raise sufficient amounts of funding in the future on acceptable terms, or at all.

Use of Estimates

The preparation of the interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Key management estimates include those related to the accrual of research and development expenses, recoverable research and development tax credits, and the valuation of stock-based awards. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ from those estimates.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, and marketable securities. The Company’s cash is held by two financial institutions in the United States (U.S.) and two financial institutions in the U.K. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. The Company’s deposits held in the U.S. and U.K. may exceed the Federal Depository Insurance Corporation and Financial Services Compensation Scheme, respectively, insured limits. The Company has diversified investments in money market funds, U.S. Treasury and government agency debt securities, commercial paper, and corporate bonds with high-quality accredited financial institutions, which are held in a segregated account at a third-party custodian.

Risks and Uncertainties

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, protection of proprietary technology, dependence on key personnel, reliance on single-source vendors and collaborators, availability of raw materials, patentability of the Company’s products and processes and clinical efficacy and safety of the Company’s products under development, compliance with government regulations and the need to obtain additional financing to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical studies, clinical trials, and regulatory approval, prior to commercialization. These efforts will require significant amounts of additional capital, adequate personnel infrastructure and extensive compliance and reporting.

There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained or maintained, that any products developed will obtain necessary government regulatory approval or that any approved products will be commercially viable. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate revenue from product sales. The Company operates in an environment of rapid technological change and substantial competition from other pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees, consultants and other third parties

Segments

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker (the CODM). The Company’s CODM is its executive chairman who reviews financial information together with certain operating metrics principally to make decisions about how to allocate resources and to measure the Company’s performance. Management has determined that the Company operates as a single operating and reportable segment. The Company’s CODM evaluates financial information on a consolidated basis. As the Company operates as one operating segment, all required segment financial information is found in the interim condensed consolidated financial statements.

Fair Value Measurement

Assets and liabilities recorded at fair value on a recurring basis in the balance sheet are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The Company measures fair value based on a three-tier hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows:

Level 1—Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the assets or liabilities. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

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.

In determining fair value, the Company utilizes quoted market prices, or valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value.

There were no transfers into or out of Level 3 for any of the periods presented.

The Company’s fair value measurements as of March 31, 2023 and December 31, 2022 was as follows (in thousands):


	March 31, 2023
	Level 1		Level 2		Level 3		Balance
Assets:
Cash equivalents:
Money market funds	$	25,581	$	—	$	—	$	25,581
Marketable securities:
U.S. Treasury securities		33,034		—		—		33,034
Commercial paper		—		22,623		—		22,623
Corporate bonds		—		13,721		—		13,721
U.S. government agency debt securities		—		5,557		—		5,557
Total marketable securities		33,034		41,901		—		74,935
Total assets	$	58,615	$	41,901	$	—	$	100,516


	December 31, 2022
	Level 1		Level 2		Level 3		Balance
Assets:
Cash equivalents:
Money market funds	$	27,472	$	—	$	—	$	27,472
Marketable securities:
U.S. Treasury securities		30,451		—		—		30,451
Commercial paper		—		29,543		—		29,543
Corporate bonds		—		16,626		—		16,626
U.S. government agency debt securities		—		3,361		—		3,361
Total marketable securities		30,451		49,530		—		79,981
Total assets	$	57,923	$	49,530	$	—	$	107,453

Summary of Significant Accounting Policies

There have been no material revisions in the Company's significant accounting policies described in Note 2 to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The standard changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The effective date of this update for non-public companies is for fiscal years beginning after December 15, 2022 and interim periods therein. The Company adopted ASU 2016-13 on January 1, 2023, which did not have a material impact on its condensed consolidated financial statements.

Recently Accounting Pronouncements Not Yet Adopted

In August 2020, the FASB issued ASU 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. The standard simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The standard also simplifies the diluted net income per share calculation in certain areas. The effective date of this update for non-public companies is for fiscal years beginning after December 15, 2023, including interim periods therein. Early adoption is permitted for fiscal years beginning after December 15, 2020 and interim periods therein. The Company estimates that adoption will not have a material impact on its consolidated financial statements.

There were no other significant updates to the recently issued accounting standards other than as disclosed herewith for the three months ended March 31, 2023. Although there are several other new accounting pronouncements issued or proposed by the FASB, the Company does not believe any of those accounting pronouncements have had or will have a material impact on its financial position or operating results.

Stock-Based Compensation - Summary of Assumptions Used in Black-Scholes Model (Details)	3 Months Ended
	Mar. 31, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected volatility, Minimum	77.33%
Expected volatility, Maximum	79.04%
Risk-free interest rate, Minimum	1.69%
Risk-free interest rate, Maximum	1.75%
Dividend yield	0.00%
Minimum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected term (in years)	5 years 6 months
Maximum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected term (in years)	6 years 6 months

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities:
Net loss	$ (22,290)	$ (13,204)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	10,171	1,541
Non-cash operating lease expense	122	108
Accretion of discounts and amortization of premiums on investments, net	(491)	193
Foreign currency loss (gain) from remeasurement	(231)	177
Changes in operating assets and liabilities:
Prepaid expenses and other assets	25	2,430
Long-term assets	(1,119)	(2,348)
Accounts payable	114	(556)
Accrued liabilities	(1,459)	969
Operating lease liabilities	(107)	(89)
Long-term liabilities	88	0
Net cash used in operating activities	(15,177)	(10,779)
Cash flow from investing activities:
Purchase of marketable securities	(17,452)	(25,581)
Proceeds from maturities of marketable securities	23,249	21,546
Net cash provided by (used in) investing activities	5,797	(4,035)
Cash flows from financing activities
Proceeds from the exercise of stock options	1	0
Net cash provided by financing activities	1	0
Effect of exchange rate changes on cash and cash equivalents	231	(177)
Net change in cash and cash equivalents	(9,148)	(14,991)
Cash and cash equivalents at beginning of period	43,585	46,922
Cash and cash equivalents at end of period	34,437	31,931
Supplemental disclosure of cash operating activities:
Cash paid for leases included in operating cash outflows	121	109
Supplemental disclosure of non-cash investing and financing activities:
Right-of-use assets obtained in exchange for lease liabilities	$ 313	$ 915

Net Loss Per Share - Schedule of Antidilutive Securities Excluded from Computation of Net Loss Per Share Attributable to Common Stockholders (Details) - shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Redeemable convertible preferred stock	5,738,158	4,600,460
Common Stock Options [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Redeemable convertible preferred stock	5,466,938	4,277,547
Unvested Restricted Stock Awards [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Redeemable convertible preferred stock	271,220	322,913

Restructuring Plan

3 Months Ended

Mar. 31, 2023

Restructuring and Related Activities [Abstract]

Restructuring Plan

7. Restructuring Plan

During the three months ended March 31, 2023, the Company incurred $15.8 million of termination costs associated with the Restructuring Plan. These costs primarily related to severance payments, healthcare benefits and stock-based compensation.

A summary of the restructuring costs recorded in the statement of operations and comprehensive loss for the three months ended March 31, 2023 is as follows (in thousands):


	Severance and Benefits Costs		Stock-based Compensation		Total Restructuring Cost Recorded
General and administrative expense	$	5,437	$	8,520	$	13,957
Research and development expense		1,342		488		1,830
Total restructuring costs	$	6,779	$	9,008	$	15,787

Employees affected by the reduction in workforce under Restructuring Plan obtained involuntary termination benefits that are provided pursuant to a one-time benefit arrangement. For employees who were notified of their termination in February 2023 and have no requirement to provide future service beyond a minimum retention period, the Company recognized the liability for the full termination benefits at fair value in the current period. For employees who are required to provide services beyond a minimum retention period to receive their termination benefits, the Company recognizes the termination benefits ratably over their future service periods. The service periods began in February 2023 and are expected to end at various dates through the third quarter of 2023.

The activity in the restructuring liability was as follows for the three months ended March 31, 2023 (in thousands):


	Restructuring Liability 2023
Restructuring liability as of December 31, 2022	$	—
Restructuring costs incurred during the period		6,779
Restructuring costs paid during the period		(5,492	)
Restructuring liability as of March 31, 2023	$	1,287

The restructuring liability balance as of March 31, 2023 includes approximately $0.1 million of estimated payments related to the continuation of healthcare coverage for periods greater than twelve months, which is included in other long-term liabilities on the balance sheet.

The Company expects to incur aggregate costs of approximately $16.6 million in connection with the Restructuring Plan. The remaining accrued restructuring liability is subject to assumptions, and actual amounts may differ. The Company may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the Restructuring Plan. The actions associated with the Restructuring Plan are expected to be substantially complete by the third quarter of 2023.

Investments - Additional Information (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Prepaid Expenses and Other Current Assets [Member]
Summary of Investment Holdings [Line Items]
Accrued interest receivable	$ 0.2	$ 0.1

Net Loss Per Share - Schedule of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Earnings Per Share [Abstract]
Net loss	$ (22,290)	$ (13,204)
Weighted Average Number of Shares Outstanding, Basic	26,492,438	26,238,950
Weighted-average number of shares outstanding, Diluted	26,492,438	26,238,950
Earnings Per Share, Basic	$ (0.84)	$ (0.50)
Earnings Per Share, Diluted	$ (0.84)	$ (0.50)

- Definition

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

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+ Details

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Operating expenses:
Research and development	$ 5,720	$ 8,260
General and administrative	17,718	4,872
Total operating expenses	23,438	13,132
Loss from operations	(23,438)	(13,132)
Other income (expense):
Foreign currency gain (loss)	248	(157)
Interest income, net	900	85
Total other income (expense)	1,148	(72)
Net loss	$ (22,290)	$ (13,204)
Net loss per share, basic	$ (0.84)	$ (0.50)
Net loss per share, diluted	$ (0.84)	$ (0.50)
Weighted-average number of shares outstanding used to compute net loss per share, basic	26,492,438	26,238,950
Weighted-average number of shares outstanding used to compute net loss per share, diluted	26,492,438	26,238,950
Comprehensive loss:
Net loss	$ (22,290)	$ (13,204)
Other comprehensive loss
Unrealized gain (loss) on investments, net of tax of $0	263	(398)
Comprehensive loss	$ (22,027)	$ (13,602)

Description of Organization and Summary of Significant Accounting Policies - Schedule of Fair Value Measurements (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Assets:
Assets, Fair Value Disclosure	$ 100,516	$ 107,453
Money Market Funds [Member]
Assets:
Assets, Fair Value Disclosure	25,581	27,472
US Government Debt Securities [Member]
Assets:
Assets, Fair Value Disclosure	33,034	30,451
Commercial Paper [Member]
Assets:
Assets, Fair Value Disclosure	22,623	29,543
Corporate Bonds [Member]
Assets:
Assets, Fair Value Disclosure	13,721	16,626
US Government Agencies Debt Securities [Member]
Assets:
Assets, Fair Value Disclosure	5,557	3,361
Total Marketable Securities [Member]
Assets:
Assets, Fair Value Disclosure	74,935	79,981
Level 1 [Member]
Assets:
Assets, Fair Value Disclosure	58,615	57,923
Level 1 [Member] \| Money Market Funds [Member]
Assets:
Assets, Fair Value Disclosure	25,581	27,472
Level 1 [Member] \| US Government Debt Securities [Member]
Assets:
Assets, Fair Value Disclosure	33,034	30,451
Level 1 [Member] \| Commercial Paper [Member]
Assets:
Assets, Fair Value Disclosure	0	0
Level 1 [Member] \| Corporate Bonds [Member]
Assets:
Assets, Fair Value Disclosure	0
Level 1 [Member] \| US Government Agencies Debt Securities [Member]
Assets:
Assets, Fair Value Disclosure	0	0
Level 1 [Member] \| Total Marketable Securities [Member]
Assets:
Assets, Fair Value Disclosure	33,034	30,451
Level 2 [Member]
Assets:
Assets, Fair Value Disclosure	41,901	49,530
Level 2 [Member] \| Money Market Funds [Member]
Assets:
Assets, Fair Value Disclosure	0	0
Level 2 [Member] \| US Government Debt Securities [Member]
Assets:
Assets, Fair Value Disclosure	0	0
Level 2 [Member] \| Commercial Paper [Member]
Assets:
Assets, Fair Value Disclosure	22,623	29,543
Level 2 [Member] \| Corporate Bonds [Member]
Assets:
Assets, Fair Value Disclosure	13,721	16,626
Level 2 [Member] \| US Government Agencies Debt Securities [Member]
Assets:
Assets, Fair Value Disclosure	5,557	3,361
Level 2 [Member] \| Total Marketable Securities [Member]
Assets:
Assets, Fair Value Disclosure	41,901	49,530
Level 3 [Member]
Assets:
Assets, Fair Value Disclosure	0	0
Level 3 [Member] \| Money Market Funds [Member]
Assets:
Assets, Fair Value Disclosure	0	0
Level 3 [Member] \| US Government Debt Securities [Member]
Assets:
Assets, Fair Value Disclosure	0	0
Level 3 [Member] \| Commercial Paper [Member]
Assets:
Assets, Fair Value Disclosure	0	0
Level 3 [Member] \| Corporate Bonds [Member]
Assets:
Assets, Fair Value Disclosure	0	0
Level 3 [Member] \| US Government Agencies Debt Securities [Member]
Assets:
Assets, Fair Value Disclosure	0	0
Level 3 [Member] \| Total Marketable Securities [Member]
Assets:
Assets, Fair Value Disclosure	$ 0	$ 0

Commitments and Contingencies

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

4. Commitments and Contingencies

Facility Leases

The Company leases office space in the U.S. and U.K. under non-cancelable operating leases.

In May 2021, the Company entered into an agreement for office space in Cambridge, U.K. The term of this lease is for a period of 24 months, which commenced on July 1, 2021. In March 2023, the Company entered into an agreement to extend this lease until June 30, 2024. This extension was accounted for as a lease modification under ASC 842 - Leases and the right-of-use asset and lease liability were remeasured at the modification date. The re-measurement of the lease resulted in an increase in both the operating right-of-use asset and the operating lease liability of approximately $0.3 million.

In November 2021, the Company entered into an agreement to lease approximately 5,000 square feet of office space in Bellevue, Washington. The term of this lease is for a period of 39 months, which commenced on November 1, 2021. The lease contains rent escalation clauses and an option to extend the term of the lease for an additional 3-year period at a market rate determined according to the lease. At the inception of the lease and as of March 31, 2023, the Company was not reasonably certain that it will exercise its option to extend the lease, therefore, the period covered by this option is not included within the lease term.

As of March 31, 2023, the remaining weighted-average lease term was 1.5 years and the weighted-average incremental borrowing rate used to determine the operating lease liability was 7.5%.

For each of the three months ended March 31, 2023 and 2022, the Company incurred $0.1 million in rent expense.

As of March 31, 2023, the annual future minimum lease payments due under the Company’s non-cancelable operating leases are as follows:


	Amount
	(In thousands)
2023 (remaining 9 months)	$	371
2024		338
2025		15
Total undiscounted lease payments	$	724
Present value adjustment		(37	)
Total operating lease liabilities	$	687

Legal Proceedings

From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made and that such expenditures can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount. As of the date of these condensed consolidated financial statements, the Company is not party to any material legal matters or claims.

Indemnification

In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless, and defend an indemnified party for losses suffered or incurred by the indemnified party. Some of the provisions will limit losses to those arising from third-party actions. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. The Company has never incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. The Company intends to enter into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by Delaware corporate law. The Company currently has directors’ and officers’ insurance coverage that reduces its exposure and enables the Company to recover a portion of any future amounts paid. The Company believes the estimated fair value of these indemnification agreements in excess of applicable insurance coverage is immaterial.

Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Summary of Stock Option Activities

The activity for stock options is as follows:


	Options Outstanding			Weighted Average Exercise Price		Weighted Average Remaining Contract Terms (in years)		Aggregate Intrinsic Values (in thousands)
Balance as of December 31, 2022		5,988,271		$	4.70		8.83	$	5,699
Options cancelled and forfeited		(115,139	)		7.79
Options exercised		(406,194	)		0.002				1,222
Balance as of March 31, 2023		5,466,938		$	4.99		3.91	$	2,438
Vested and expected to vest, March 31, 2023(1)		5,421,938		$	4.96		3.87	$	2,438
Options exercisable as of March 31, 2023		4,051,844		$	4.80		2.15	$	1,990

(1) Excludes 45,000 stock options awards outstanding for the period ended March 31, 2023, subject to only performance conditions that have been assessed and deemed not probable.

Summary of Stock Options Valuation Assumptions


Expected term (in years)		5.50 - 6.50
Expected volatility		77.33% - 79.04%
Risk-free interest rate		1.69% - 1.75%
Expected dividend yield		0.00%

Summary of Restricted Stock Awards

The activity for restricted stock awards and units is as follows:


	Number of Shares			Weighted-Average Grant Date Fair Value
Unvested at December 31, 2022		177,495		$	8.32
Granted		113,333			3.64
Vested		(19,608	)		8.13
Forfeited		—			—
Unvested at March 31, 2023		271,220		$	6.38

Summary of Share-based Compensation Expense


	Three Months Ended March 31,
	2023		2022
Research and development expense	$	1,032	$	547
General and administrative expense		9,139		994
Total stock-based compensation expense	$	10,171	$	1,541

Net Loss Per Share

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Net Loss Per Share

6. Net Loss Per Share

The following table shows the computation of basic and diluted net loss per share (in thousands, except share and per share data):


	Three Months Ended March 31,
	2023			2022
Net loss	$	(22,290	)	$	(13,204	)
Weighted-average number of shares outstanding used to compute net loss per share, basic and diluted		26,492,438			26,238,950
Net loss per share, basic and diluted	$	(0.84	)	$	(0.50	)

The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share for the periods presented because their effect would have been anti-dilutive:


	Three Months Ended March 31,
	2023		2022
Common stock options		5,466,938		4,277,547
Unvested restricted stock awards and units		271,220		322,913
Total potentially dilutive shares		5,738,158		4,600,460

Commitments and Contingencies - Additional Information (Details)		1 Months Ended	3 Months Ended
	Nov. 30, 2021 SquareFeet	Mar. 31, 2023 USD ($)	Mar. 31, 2023 USD ($)	Mar. 31, 2022 USD ($)	May 31, 2021
Commitments and Contingencies Disclosure [Abstract]
Operating lease, term of contract	39 months				24 months
Lease expiration date		Jun. 30, 2024
Increase in operating lease liability		$ 300	$ 300
Increase in operating lease right-of-use asset		$ 300	$ 300
Operating lease, total space of the office \| SquareFeet	5,000
Additional operating lease, term of contract	3 years
Weighted-average lease term		1 year 6 months	1 year 6 months
Weighted-average incremental borrowing rate		7.50%	7.50%
Rent expense			$ 100,000	$ 100,000

Description of Organization and Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Description of Organization and Summary of Significant Accounting Policies

1. Description of Organization and Summary of Significant Accounting Policies

Organization

Basis of Presentation and Principles of Consolidation

Liquidity

Use of Estimates

Concentration of Credit Risk

Risks and Uncertainties

Segments

Fair Value Measurement

Level 1—Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

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.

There were no transfers into or out of Level 3 for any of the periods presented.

The Company’s fair value measurements as of March 31, 2023 and December 31, 2022 was as follows (in thousands):


	March 31, 2023
	Level 1		Level 2		Level 3		Balance
Assets:
Cash equivalents:
Money market funds	$	25,581	$	—	$	—	$	25,581
Marketable securities:
U.S. Treasury securities		33,034		—		—		33,034
Commercial paper		—		22,623		—		22,623
Corporate bonds		—		13,721		—		13,721
U.S. government agency debt securities		—		5,557		—		5,557
Total marketable securities		33,034		41,901		—		74,935
Total assets	$	58,615	$	41,901	$	—	$	100,516


	December 31, 2022
	Level 1		Level 2		Level 3		Balance
Assets:
Cash equivalents:
Money market funds	$	27,472	$	—	$	—	$	27,472
Marketable securities:
U.S. Treasury securities		30,451		—		—		30,451
Commercial paper		—		29,543		—		29,543
Corporate bonds		—		16,626		—		16,626
U.S. government agency debt securities		—		3,361		—		3,361
Total marketable securities		30,451		49,530		—		79,981
Total assets	$	57,923	$	49,530	$	—	$	107,453

Summary of Significant Accounting Policies

Recently Adopted Accounting Pronouncements

Recently Accounting Pronouncements Not Yet Adopted

Commitments and Contingencies - Future Minimum Lease Payment (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Leases [Abstract]
2023 (remaining 9 months)	$ 371
2024	338
2025	15
Total undiscounted lease payments	724
Present value adjustment	(37)
Total operating lease liabilities	$ 687

Net Loss Per Share (Tables)

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Net Loss Per Share

The following table shows the computation of basic and diluted net loss per share (in thousands, except share and per share data):


	Three Months Ended March 31,
	2023			2022
Net loss	$	(22,290	)	$	(13,204	)
Weighted-average number of shares outstanding used to compute net loss per share, basic and diluted		26,492,438			26,238,950
Net loss per share, basic and diluted	$	(0.84	)	$	(0.50	)

Schedule of Antidilutive Securities Excluded from Computation of Net Loss Per Share Attributable to Common Stockholders


	Three Months Ended March 31,
	2023		2022
Common stock options		5,466,938		4,277,547
Unvested restricted stock awards and units		271,220		322,913
Total potentially dilutive shares		5,738,158		4,600,460

Investments

3 Months Ended

Mar. 31, 2023

Investments [Abstract]

Investments

2. Investments

Investments consists of available-for-sale securities as follows (in thousands):


	March 31, 2023
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
Short-term marketable securities:
U.S. Treasury securities	$	33,081	$	—	$	(47	)	$	33,034
Commercial paper		22,623		—		—			22,623
Corporate bonds		13,785		—		(64	)		13,721
U.S. government agency debt securities		5,541		16		—			5,557
Total short-term marketable securities	$	75,030	$	16	$	(111	)	$	74,935


	December 31, 2022
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
Short-term marketable securities:
U.S. Treasury securities	$	30,628	$	—	$	(177	)	$	30,451
Commercial paper		29,543		—		—			29,543
Corporate bonds		16,815		—		(189	)		16,626
U.S. government agency debt securities		3,353		8		—			3,361
Total short-term marketable securities	$	80,339	$	8	$	(366	)	$	79,981

All the U.S. Treasury securities, commercial paper, corporate bonds, and U.S. government agency debt securities designated as short-term marketable securities have a contractual maturity date that is equal to or less than one year from the respective balance sheet date.

Prior to 2023, the Company followed the guidance in ASC 320 Investments—Debt and Equity Securities in determining whether unrealized losses were other than temporary. The Company adopted Topic 326 on January 1, 2023, and now considers whether unrealized losses have resulted from a credit loss or other factors. The unrealized losses on the Company’s available-for-sale securities as of March 31, 2023 and December 31, 2022 were caused by fluctuations in market value and interest rates as a result of the economic environment. The Company concluded that an allowance for credit losses was unnecessary as of March 31, 2023 and that there were no impairments as of December 31, 2022 considered as other-than-temporary because the decline in the market value was attributable to changes in market conditions and not credit quality, and that it is neither management’s intention to sell nor is it more likely than not that the Company will be required to sell these investments prior to recovery of their cost basis or recovery of fair value. There was no material realized gain or loss on available-for-sale securities in the periods presented.

The Company elected the practical expedient to exclude accrued interest from both the fair value and the amortized cost basis of the available-for-sale debt securities for the purposes of identifying and measuring an impairment and to not measure an allowance for expected credit losses for accrued interest receivables. Accrued interest receivable is written off through net realized investment gains (losses) at the time the issuer of the bond defaults or is expected to default on payment. The Company made an accounting policy election to present the accrued interest receivable balance as part of prepaid expenses and other current assets in the balance sheets. Accrued interest receivable related to marketable securities was $0.2 million and $0.1 million as of March 31, 2023 and December 31, 2022, respectively.

Investments in a continual unrealized loss position for less than 12 months consist of the following (in thousands):


	March 31, 2023		December 31, 2022
	Fair Value		Fair Value
U.S. Treasury securities	$	18,761	$	26,506
Corporate bonds		1,995		1,977
Total available-for-sale securities	$	20,756	$	28,483

Investments in a continual unrealized loss position for greater than 12 months consist of the following (in thousands):


	March 31, 2023		December 31, 2022
	Fair Value		Fair Value
Corporate bonds	$	11,726	$	14,649
U.S. Treasury securities		3,986		3,945
Total available-for-sale securities	$	15,712	$	18,594

Certain Balance Sheet Accounts (Tables)

3 Months Ended

Mar. 31, 2023

Balance Sheet Related Disclosures [Abstract]

Summary of Prepaid Expenses and Other Current Assets

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


	March 31, 2023		December 31, 2022
Recoverable research and development tax credits	$	6,587	$	6,492
Prepaid research and development expenses		2,667		2,549
Prepaid expenses		927		1,330
Other current assets		621		456
Total prepaid expenses and other current assets	$	10,802	$	10,827

Summary of Other Long-Term Assets

Other long-term assets consist of the following (in thousands):


	March 31, 2023		December 31, 2022
Recoverable research and development tax credits	$	1,071	$	—
Other long-term assets		178		128
Total other long-term assets	$	1,249	$	128

Summary of Accrued Expenses

Accrued expenses consist of the following (in thousands):


	March 31, 2023		December 31, 2022
Restructuring liability	$	1,200	$	—
Accrued research and development expenses		1,052		1,902
Accrued payroll		888		2,900
Other accrued expenses		447		245
Total accrued expenses	$	3,587	$	5,047

Stock-Based Compensation - Summary of Stock Option Activities (Parenthetical) (Details)	3 Months Ended
	Mar. 31, 2023 shares
Performance Shares [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock Option Award Outstanding	45,000

Investments - Investments consists of available-for-sale securities (Details) - Short Term Marketable Securities [Member] - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost	$ 75,030	$ 80,339
Unrealized Gain	16	8
Unrealized Loss	(111)	(366)
Estimated Fair Value	74,935	79,981
US Treasury Securities [Member]
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost	33,081	30,628
Unrealized Gain	0	0
Unrealized Loss	(47)	(177)
Estimated Fair Value	33,034	30,451
Commercial paper
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost	22,623	29,543
Unrealized Gain	0	0
Unrealized Loss	0	0
Estimated Fair Value	22,623	29,543
Corporate Bonds [Member]
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost	13,785	16,815
Unrealized Gain	0	0
Unrealized Loss	(64)	(189)
Estimated Fair Value	13,721	16,626
US Government Debt Securities [Member]
Debt Securities, Available-for-Sale [Line Items]
Amortized Cost	5,541	3,353
Unrealized Gain	16	8
Unrealized Loss	0	0
Estimated Fair Value	$ 5,557	$ 3,361

Restructuring Plan - Summary of restructuring costs in statement of operations (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Restructuring Cost and Reserve [Line Items]
General and Administrative Expense	$ 17,718	$ 4,872
Research and Development Expense	5,720	$ 8,260
Severance and Benefits Costs Member
Restructuring Cost and Reserve [Line Items]
General and Administrative Expense	5,437
Research and Development Expense	1,342
Total Restructuring Costs	6,779
Stock-based Compensation Member
Restructuring Cost and Reserve [Line Items]
General and Administrative Expense	8,520
Research and Development Expense	488
Total Restructuring Costs	9,008
Total Restructuring Cost Recorded [Member]
Restructuring Cost and Reserve [Line Items]
General and Administrative Expense	13,957
Research and Development Expense	1,830
Total Restructuring Costs	$ 15,787