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Convertible Preferred Stock and Stockholders' Equity
 6 Months Ended
Jun. 30, 2025
Convertible Preferred Stock And Stockholders Deficit Disclosure [Abstract]  
Convertible Preferred Stock and Stockholders’ Equity

8. Convertible Preferred Stock and Stockholders’ Equity

Convertible Preferred Stock

In November 2016, the Company completed a private placement of stock in which investors, including investors affiliated with the directors and officers of the Company, purchased convertible preferred stock and common stock of the Company (the November 2016 Placement). The Company issued 2,819,549 shares of Class A Convertible Preferred Stock, $0.001 par value per share (the Class A Preferred), at $13.30 per share, each of which is convertible into five shares of common stock upon certain conditions defined in the Certificate of Designation of Preferences, Rights and Limitations of the Class A Preferred filed with the Delaware Secretary of State on November 22, 2016 (the CoD). The Class A Preferred were purchased exclusively by entities affiliated with Redmile Group, LLC (collectively, Redmile). The terms of the CoD prohibited Redmile from converting the Class A Preferred into shares of the Company’s common stock if, as a result of conversion, Redmile, together with its affiliates, would own more than 9.99% of the Company’s common stock then issued and outstanding (the Redmile Percentage Limitation), which percentage could change at Redmile’s election upon 61 days’ notice to the Company to (i) any other number less than or equal to 19.99% or (ii) subject to approval of the Company’s stockholders to the extent required in accordance with the Nasdaq Global Market rules, any number in excess of 19.99%. On May 2, 2017, the Company’s stockholders approved the issuance of up to an aggregate of 14,097,745 shares of common stock upon the conversion of the outstanding shares of Class A Preferred. As a result, Redmile has the right to increase the Redmile Percentage Limitation to any percentage in excess of 19.99% at its election. The Company also issued 7,236,837 shares of common stock at $2.66 per share as part of the November 2016 Placement. In April 2023, the Company filed with the office of the Secretary of State of the State of Delaware a Certificate of Amendment to Certificate of Designation of Preferences, Rights and Limitations of Class A Convertible Preferred Stock which amends the definition of Beneficial Ownership Limitation to be 14.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock pursuant to a Notice of Conversion. In April 2023, 33,441 shares of Class A Preferred were converted into 167,205 shares of the Company’s common stock. In December 2024, 6,022 shares of the Class A Preferred were converted into 30,110 shares of the Company’s common stock.

The Class A Preferred are non-voting shares and are convertible into five shares of the Company’s common stock at a conversion price of $2.66 per share, which was the fair value of the Company’s common stock on the date of issuance. Holders of the Class A Preferred have the same dividend rights as holders of the Company’s common stock. Additionally, the liquidation preferences of the Class A Preferred are pari passu among holders of the Company’s common stock and holders of the Class A Preferred, pro rata based on the number of shares held by each such holder (treated for this purpose as if the Class A Preferred had been converted to common stock).

Pre-Funded Warrants

In January 2021, in conjunction with a public offering, the Company issued pre-funded warrants, in lieu of common stock to certain investors, to purchase 257,310 shares of the Company’s common stock (the 2021 Pre-Funded Warrants). The purchase price for the 2021 Pre-Funded Warrants was $85.499 per pre-funded warrant, which equals the per share public offering price for the shares of common stock less the $0.001 exercise price for each such pre-funded warrant. Given that the 2021 Pre-Funded Warrants are indexed to the Company’s own shares of common stock (and otherwise meet the requirements to be classified in equity), the Company recorded the consideration received from the issuance of the warrants as additional paid-in capital on the Company’s consolidated balance sheets.

In March 2024, in conjunction with a public offering, the Company issued in a private placement, in lieu of common stock to certain investors, pre-funded warrants to purchase 3,636,364 shares of the Company’s common stock (2024 Pre-Funded Warrants, and collectively with the 2021 Pre-Funded Warrants, the Pre-Funded Warrants). The purchase price for the 2024 Pre-Funded Warrants was $5.499 per pre-funded warrant, which equals the per share public offering price for the shares of common stock issued in the March 2024 public offering, less the $0.001 exercise price for each such pre-funded warrant. Given that the 2024 Pre-Funded Warrants are indexed to the Company’s own shares of common stock (and otherwise meet the requirements to be classified in equity), the Company recorded the consideration received from the issuance of the warrants as additional paid-in capital on the Company’s unaudited condensed consolidated balance sheets.

The Pre-Funded Warrants are exercisable at any time after the date of issuance. A holder of Pre-Funded Warrants may not exercise the Pre-Funded Warrant if the holder, together with its affiliates, would beneficially own more than 9.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to such exercise. A holder of Pre-Funded Warrants may increase or decrease this percentage not in excess of 19.99% by providing at least 61 days’ prior notice to the Company.

As of June 30, 2025, there were 3,893,674 Pre-Funded Warrants outstanding.

Stock Options and Restricted Stock Unit Awards

The following table summarizes stock option activity and related information under all equity plans for the period ended June 30, 2025:

 

 

 

Number of
Options

 

 

Weighted-
Average Price

 

Balance at December 31, 2024

 

 

10,722,674

 

 

$

10.99

 

Granted

 

 

3,555,400

 

 

 

1.30

 

Exercised

 

 

(832

)

 

 

1.32

 

Cancelled

 

 

(1,582,686

)

 

 

7.83

 

Balance at June 30, 2025

 

 

12,694,556

 

 

$

8.67

 

 

Restricted stock unit activity under all equity and stock option plans is summarized as follows:

 

 

 

Number of
Restricted Stock Units

 

 

Weighted-
Average Grant Date Fair Value per Share

 

Balance at December 31, 2024

 

 

6,214,064

 

 

$

15.50

 

Granted

 

 

2,298,070

 

 

 

1.31

 

Vested

 

 

(725,956

)

 

 

23.34

 

Cancelled

 

 

(738,210

)

 

 

9.22

 

Balance at June 30, 2025

 

 

7,047,968

 

 

$

10.72

 

The allocation of stock-based compensation for all stock awards is as follows (in thousands):

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

Research and development

 

$

3,821

 

 

$

5,237

 

 

$

7,698

 

 

$

10,953

 

General and administrative

 

 

3,333

 

 

 

4,393

 

 

 

6,837

 

 

 

9,658

 

Total

 

$

7,154

 

 

$

9,630

 

 

$

14,535

 

 

$

20,611

 

 

As of June 30, 2025, the unrecognized compensation cost related to outstanding options was $8.6 million and is expected to be recognized as expense over a weighted-average period of approximately 1.6 years.

As of June 30, 2025, the unrecognized compensation cost related to restricted stock units was $21.8 million which is expected to be recognized as expense over a weighted-average period of approximately 1.6 years.

The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the employee and nonemployee stock option grants were as follows:

 

 

Six Months Ended
June 30,

 

 

 

2025

 

 

2024

 

Risk-free interest rate

 

 

4.4

%

 

 

3.9

%

Expected volatility

 

 

90.2

%

 

 

87.1

%

Expected term (in years)

 

 

6.2

 

 

 

6.4

 

Expected dividend yield

 

 

0.0

%

 

 

0.0

%

Reconciliation of Consolidated Stockholders’ Equity Accounts

The following table summarizes the Company’s changes in stockholders’ equity accounts for the three and six months ended June 30, 2025 (in thousands, except share data):

 

 

Convertible
Preferred Stock

 

 

Common
Stock

 

 

Additional
Paid-in

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total Stockholders'

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Gain (Loss)

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2024

 

2,755,086

 

 

$

3

 

 

 

113,928,279

 

 

$

114

 

 

$

1,716,335

 

 

$

268

 

 

$

(1,397,994

)

 

$

318,726

 

Issuance of common stock upon vesting of restricted stock units

 

—

 

 

 

—

 

 

 

675,631

 

 

 

1

 

 

 

(1

)

 

 

—

 

 

 

—

 

 

 

—

 

Stock-based compensation

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

7,381

 

 

 

—

 

 

 

—

 

 

 

7,381

 

Unrealized loss on investments

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(77

)

 

 

—

 

 

 

(77

)

Net loss

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(37,621

)

 

 

(37,621

)

Balance at March 31, 2025

 

2,755,086

 

 

$

3

 

 

 

114,603,910

 

 

$

115

 

 

$

1,723,715

 

 

$

191

 

 

$

(1,435,615

)

 

$

288,409

 

Exercise of stock options, net of issuance costs

 

—

 

 

 

—

 

 

 

832

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

832

 

Issuance of common stock upon vesting of restricted stock units

 

—

 

 

 

—

 

 

 

50,325

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

50,325

 

Stock-based compensation

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

7,154

 

 

 

—

 

 

 

—

 

 

 

7,154

 

Unrealized loss on investments

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(129

)

 

 

—

 

 

 

(129

)

Net loss

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(34,070

)

 

 

(34,070

)

Balance at June 30, 2025

 

2,755,086

 

 

$

3

 

 

 

114,655,067

 

 

$

115

 

 

$

1,730,869

 

 

$

62

 

 

$

(1,469,685

)

 

$

261,364

 

 

The following table summarizes the Company’s changes in stockholders’ equity accounts for the three and six months ended June 30, 2024 (in thousands, except share data):

 

 

Convertible
Preferred Stock

 

 

Common
Stock

 

 

Additional
Paid-in

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total Stockholders'

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Gain (Loss)

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2023

 

2,761,108

 

 

$

3

 

 

 

98,627,076

 

 

$

99

 

 

$

1,580,032

 

 

$

15

 

 

$

(1,211,732

)

 

$

368,417

 

Exercise of stock options, net of issuance costs

 

—

 

 

 

—

 

 

 

45,438

 

 

 

—

 

 

 

299

 

 

 

—

 

 

 

—

 

 

 

299

 

Issuance of common stock upon vesting of restricted stock units

 

—

 

 

 

—

 

 

 

580,974

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Stock-based compensation

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

10,981

 

 

 

—

 

 

 

—

 

 

 

10,981

 

Public offering of common stock, net of issuance costs

 

—

 

 

 

—

 

 

 

14,545,454

 

 

 

15

 

 

 

74,620

 

 

 

—

 

 

 

—

 

 

 

74,635

 

Private placement of pre-funded warrants, net of issuance costs

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

19,996

 

 

 

—

 

 

 

—

 

 

 

19,996

 

Unrealized loss on investments

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(209

)

 

 

—

 

 

 

(209

)

Net loss

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(48,004

)

 

 

(48,004

)

Balance at March 31, 2024

 

2,761,108

 

 

$

3

 

 

 

113,798,942

 

 

$

114

 

 

$

1,685,928

 

 

$

(194

)

 

$

(1,259,736

)

 

$

426,115

 

Exercise of stock options, net of issuance costs

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(4

)

 

 

—

 

 

 

—

 

 

 

(4

)

Issuance of common stock upon vesting of restricted stock units

 

—

 

 

 

—

 

 

 

50,615

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Conversion of preferred shares to common stock

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Stock-based compensation

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

9,630

 

 

 

—

 

 

 

—

 

 

 

9,630

 

Public offering of common stock, net of issuance costs

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(104

)

 

 

—

 

 

 

—

 

 

 

(104

)

Unrealized loss on investments

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(228

)

 

 

—

 

 

 

(228

)

Net loss

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(38,427

)

 

 

(38,427

)

Balance at June 30, 2024

 

2,761,108

 

 

$

3

 

 

 

113,849,557

 

 

$

114

 

 

$

1,695,450

 

 

$

(422

)

 

$

(1,298,163

)

 

$

396,982