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Organization and Description of Business
12 Months Ended
Dec. 31, 2021
Accounting Policies [Abstract]  
Organization and Description of Business

1. Organization and Description of Business

Description of Business

Design Therapeutics, Inc. (the “Company”) was incorporated in Delaware in December 2017 and is based in Carlsbad, California. The Company is a preclinical-stage biopharmaceutical company pioneering GeneTACTM molecules, which are a novel class of small-molecule gene targeted chimera therapeutics that are designed to be disease-modifying and target the underlying cause of inherited nucleotide repeat expansion diseases. The Company’s lead product candidate is in Friedreich ataxia (“FA”), its second GeneTAC™ program is in myotonic dystrophy type-1 (“DM1”), and it is also advancing its GeneTACTM portfolio to address other serious nucleotide repeat-driven monogenic diseases.

Stock Splits

In February 2020, the Company effected a 5-for-1 forward stock split of its issued and outstanding common stock. Further, in March 2021, the Company effected a 1-for-1.63 reverse stock split of its issued and outstanding common stock. The par value and the authorized shares of the common stock were not adjusted as a result of these stock splits. The reverse stock split in March 2021 resulted in an adjustment to the convertible preferred stock conversion prices to reflect a proportional decrease in the number of shares of common stock to be issued upon conversion. The accompanying financial statements and notes to the financial statements give retroactive effect to the stock splits for all periods presented.

Initial Public Offering

In March 2021, the Company completed its IPO selling 13,800,000 shares its common stock at $20.00 per share. Proceeds from the Company’s IPO, net of underwriting discounts and commissions and other offering costs, were $254.3 million. In connection with the IPO, all 41,096,478 shares of convertible preferred stock outstanding at the time of the IPO converted into 25,212,548 shares of the Company’s common stock.

Liquidity and Capital Resources

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred net operating losses since inception and had an accumulated deficit of $47.5 million as of December 31, 2021. The Company had cash, cash equivalents and investment securities of $384.1 million as of December 31, 2021, and has not generated positive cash flows from operations.

Management expects to incur net losses for the foreseeable future. There can be no assurance that the Company will ever earn revenues or achieve profitability, or if achieved, that they will be sustained on a continuing basis. In addition, the preclinical manufacturing, and clinical development activities as well as the commercialization of the Company’s products, if approved, will require significant additional financing. The Company may be unable to secure such financing when needed, or if available, such financings may be under terms that are unfavorable to the Company or the current stockholders. If the Company is unable to raise additional funds when needed, it may be required to delay, reduce the scope of, or eliminate development programs, which may adversely affect its business and operations. The Company’s currently available cash and cash equivalents as of December 31, 2021 are sufficient to meet its anticipated cash requirements for more than the 12 months following the date the financial statements are issued.