10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________________ to ___________________

Commission File Number: 001-39335

 

Repare Therapeutics Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Québec

Not applicable

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

7210 Frederick-Banting, Suite 100

St-Laurent, Québec, Canada

H4S 2A1

(Address of principal executive offices)

(Zip Code)

 

Registrant’s telephone number, including area code: (857) 412-7018

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common shares, no par value

 

RPTX

 

The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

 

 

 

 

 

Emerging growth company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

As of May 1, 2023, there were 42,088,446 of the registrant’s common shares, no par value per share, outstanding.

 

 


 

Table of Contents

 

Page

SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

1

PART I.

FINANCIAL INFORMATION

3

Item 1.

Financial Statements (Unaudited)

3

Condensed Consolidated Balance Sheets

3

Condensed Consolidated Statements of Operations and Comprehensive Loss

4

 

Condensed Consolidated Statements of Shareholders’ Equity

5

Condensed Consolidated Statements of Cash Flows

6

Notes to Unaudited Condensed Consolidated Financial Statements

7

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

17

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

28

Item 4.

Controls and Procedures

28

PART II.

OTHER INFORMATION

30

Item 1.

Legal Proceedings

30

Item 1A.

Risk Factors

30

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

31

Item 3.

Defaults Upon Senior Securities

31

Item 4.

Mine Safety Disclosures

31

Item 5.

Other Information

31

Item 6.

Exhibits

32

Signatures

 

 

i


 

SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future financial condition, future operations, research and development costs, plans and objectives of management, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “design,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “predict,” “positioned,” “potential,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report on Form 10-Q, we caution you that these statements are based on a combination of facts and factors currently known by us and our expectations of the future, about which we cannot be certain.

The forward-looking statements in this Quarterly Report on Form 10-Q include, among other things, statements about:

the initiation, timing, progress and results of our current and future preclinical studies and clinical trials and related preparatory work and the period during which the results of the trials will become available, as well as our research and development programs;
our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;
our ability to obtain regulatory approval of RP-6306 and any of our other current and future product candidates that we develop;
our ability to identify and develop additional product candidates using our SNIPRx platform;
business disruptions affecting the initiation, patient enrollment, development and operation of our clinical trials, including a public health emergency or pandemic, such as the coronavirus disease, or COVID-19 pandemic;
the evolving impact of macroeconomic events, including the COVID-19 pandemic, rising inflation, the U.S. Federal Reserve raising interest rates, recent disruptions in access to bank deposits or lending commitments due to bank failures and the Russia-Ukraine war, on our operations, supply chains, general economic conditions, our ability to raise additional capital, and the continuity of our business, including our preclinical studies and clinical trials;
our ability to enroll patients in clinical trials, to timely and successfully complete those trials and to receive necessary regulatory approvals;
the timing of completion of enrollment and availability of data from our current preclinical studies and clinical trials, including our Phase 1 clinical trials of RP-6306;
the expected timing of filings with regulatory authorities for any product candidates that we develop;
our expectations regarding the potential market size and the rate and degree of market acceptance for any current or future product candidates that we develop;
our ability to receive any milestone or royalty payments under our collaboration and license agreements;
the effects of competition with respect to RP-6306, camonsertib, or any of our other current or future product candidates, as well as innovations by current and future competitors in our industry;
our ability to fund our working capital requirements;
our intellectual property position, including the scope of protection we are able to establish, maintain and enforce for intellectual property rights covering our product candidates;
our financial performance and our ability to effectively manage our anticipated growth;
our ability to obtain additional funding for our operations; and
other risks and uncertainties, including those listed under the section titled “Risk Factors” in this Quarterly Report and elsewhere in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2023.

 

Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth, and involve known and unknown risks, uncertainties and other factors including, without limitation, risks, uncertainties and assumptions regarding the impact of the macroeconomic events, including the COVID-19 pandemic, on our business, operations, strategy, goals and anticipated timelines, our ongoing and planned preclinical activities, our ability to initiate, enroll, conduct or complete ongoing and planned clinical trials, our timelines for regulatory submissions and our financial position that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity,

 


 

performance or achievements expressed or implied by these forward-looking statements. You are urged to carefully review the disclosures we make concerning these risks and other factors that may affect our business and operating results in this Quarterly Report on Form 10-Q. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document. Except as required by law, we do not intend, and undertake no obligation, to update any forward-looking information to reflect events or circumstances.

2


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Repare Therapeutics Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(Amounts in thousands of U.S. dollars, except share data)

 

 

 

As of
March 31,

 

 

As of
December 31,

 

 

 

2023

 

 

2022

 

ASSETS

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

Cash and cash equivalents

 

$

121,461

 

 

$

159,521

 

Marketable securities

 

 

192,663

 

 

 

184,420

 

Research and development tax credits receivable

 

 

1,659

 

 

 

1,280

 

Collaboration revenue receivable

 

 

3,996

 

 

 

1,525

 

Other receivables

 

 

1,358

 

 

 

1,518

 

Prepaid expenses

 

 

4,389

 

 

 

5,715

 

Total current assets

 

 

325,526

 

 

 

353,979

 

Property and equipment, net

 

 

5,396

 

 

 

4,228

 

Operating lease right-of-use assets

 

 

4,976

 

 

 

5,371

 

Other assets

 

 

408

 

 

 

497

 

TOTAL ASSETS

 

$

336,306

 

 

$

364,075

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

Accounts payable

 

$

3,620

 

 

$

461

 

Accrued expenses and other current liabilities

 

 

17,442

 

 

 

21,645

 

Operating lease liability, current portion

 

 

2,257

 

 

 

2,171

 

Deferred revenue, current portion

 

 

52,760

 

 

 

53,102

 

Income tax payable

 

 

4,856

 

 

 

1,240

 

Total current liabilities

 

 

80,935

 

 

 

78,619

 

Operating lease liability, net of current portion

 

 

2,780

 

 

 

3,257

 

Deferred revenue, net of current portion

 

 

1,347

 

 

 

2,682

 

TOTAL LIABILITIES

 

 

85,062

 

 

 

84,558

 

SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

Preferred shares, no par value per share; unlimited shares authorized
   as of March 31, 2023 and December 31, 2022, respectively;
0 shares issued
   and outstanding as of March 31, 2023, and December 31, 2022, respectively

 

 

 

 

 

 

Common shares, no par value per share; unlimited shares authorized as of
   March 31, 2023 and December 31, 2022;
42,079,896 and 42,036,193 shares
   issued and outstanding as of March 31, 2023 and December 31, 2022, respectively

 

 

482,677

 

 

 

482,032

 

Additional paid-in capital

 

 

43,056

 

 

 

37,226

 

Accumulated other comprehensive loss

 

 

(235

)

 

 

(428

)

Accumulated deficit

 

 

(274,254

)

 

 

(239,313

)

Total shareholders’ equity

 

 

251,244

 

 

 

279,517

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

 

$

336,306

 

 

$

364,075

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

3


 

Repare Therapeutics Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(Amounts in thousands of U.S. dollars, except share and per share data)

 

 

 

Three Months Ended
March 31,

 

 

 

2023

 

 

2022

 

Revenue:

 

 

 

 

 

 

Collaboration agreements

 

$

5,678

 

 

$

408

 

Operating expenses:

 

 

 

 

 

 

Research and development, net of tax credits

 

 

31,830

 

 

 

26,458

 

General and administrative

 

 

8,529

 

 

 

8,779

 

Total operating expenses

 

 

40,359

 

 

 

35,237

 

Loss from operations

 

 

(34,681

)

 

 

(34,829

)

Other income (expense), net

 

 

 

 

 

 

Realized and unrealized loss on foreign exchange

 

 

(56

)

 

 

(17

)

Interest income

 

 

3,427

 

 

 

129

 

Other expense

 

 

(15

)

 

 

(8

)

Total other income, net

 

 

3,356

 

 

 

104

 

Loss before income taxes

 

 

(31,325

)

 

 

(34,725

)

Income tax expense

 

 

(3,616

)

 

 

(32

)

Net loss

 

$

(34,941

)

 

$

(34,757

)

Other comprehensive gain:

 

 

 

 

 

 

Unrealized gain on available-for-sale marketable securities

 

$

193

 

 

$

 

Total other comprehensive gain

 

 

193

 

 

 

 

Comprehensive loss

 

$

(34,748

)

 

$

(34,757

)

Net loss per share attributable to common shareholders - basic and diluted

 

$

(0.83

)

 

$

(0.83

)

Weighted-average common shares outstanding - basic and diluted

 

 

42,040,674

 

 

 

41,861,613

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

4


 

Repare Therapeutics Inc.

Condensed Consolidated Statements of Shareholders’ Equity

(Unaudited)

(Amounts in thousands of U.S. dollars, except share data)

 

 

 

Common Shares

 

 

Additional
Paid-in

 

 

Accumulated
Other Comprehensive

 

 

Accumulated

 

 

Total
Shareholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balance, December 31, 2021

 

 

41,850,162

 

 

$

480,699

 

 

$

17,988

 

 

$

 

 

$

(210,266

)

 

$

288,421

 

Exercise of stock options

 

 

12,235

 

 

 

46

 

 

 

(18

)

 

 

 

 

 

 

 

 

28

 

Share-based compensation expense

 

 

 

 

 

 

 

 

4,755

 

 

 

 

 

 

 

 

 

4,755

 

Issuance of common shares under the
   2020 Employee Share Purchase Plan

 

 

16,807

 

 

 

303

 

 

 

(90

)

 

 

 

 

 

 

 

 

213

 

Net loss and comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(34,757

)

 

 

(34,757

)

Balance, March 31, 2022

 

 

41,879,204

 

 

$

481,048

 

 

$

22,635

 

 

$

 

 

$

(245,023

)

 

$

258,660

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2022

 

 

42,036,193

 

 

$

482,032

 

 

$

37,226

 

 

$

(428

)

 

$

(239,313

)

 

$

279,517

 

Exercise of stock options

 

 

2,000

 

 

 

7

 

 

 

(3

)

 

 

 

 

 

 

 

 

4

 

Share-based compensation expense

 

 

 

 

 

 

 

 

6,062

 

 

 

 

 

 

 

 

 

6,062

 

Issuance of common shares under the
   2020 Employee Share Purchase Plan

 

 

41,703

 

 

 

638

 

 

 

(229

)

 

 

 

 

 

 

 

 

409

 

Other comprehensive gain

 

 

 

 

 

 

 

 

 

 

 

193

 

 

 

 

 

 

193

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(34,941

)

 

 

(34,941

)

Balance, March 31, 2023

 

 

42,079,896

 

 

$

482,677

 

 

$

43,056

 

 

$

(235

)

 

$

(274,254

)

 

$

251,244

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

5


 

Repare Therapeutics Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Amounts in thousands of U.S. dollars)

 

 

 

Three Months Ended
March 31,

 

 

 

2023

 

 

2022

 

Cash Flows From Operating Activities:

 

 

 

 

 

 

Net loss for the period

 

$

(34,941

)

 

$

(34,757

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Share-based compensation expense

 

 

6,062

 

 

 

4,755

 

Depreciation expense

 

 

441

 

 

 

516

 

Non-cash lease expense

 

 

541

 

 

 

544

 

Foreign exchange (gain) loss

 

 

66

 

 

 

(40

)

Net (accretion)/amortization of marketable securities

 

 

(1,839

)

 

 

21

 

Deferred tax

 

 

 

 

 

(1,315

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses

 

 

1,330

 

 

 

2,399

 

Research and development tax credits receivable

 

 

(379

)

 

 

(399

)

Collaboration revenue receivable

 

 

(2,528

)

 

 

 

Other receivables

 

 

166

 

 

 

(5

)

Other non-current assets

 

 

89

 

 

 

 

Accounts payable

 

 

2,016

 

 

 

(772

)

Accrued expenses and other current liabilities

 

 

(4,203

)

 

 

(1,487

)

Operating lease liability, current portion

 

 

35

 

 

 

153

 

Income taxes payable

 

 

3,616

 

 

 

1,347

 

Operating lease liability, net of current portion

 

 

(581

)

 

 

(558

)

Deferred revenue

 

 

(1,677

)

 

 

(408

)

Net cash used in operating activities

 

 

(31,786

)

 

 

(30,006

)

Cash Flows From Investing Activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(475

)

 

 

(487

)

Proceeds from maturities of marketable securities

 

 

92,500

 

 

 

2,650

 

Purchase of marketable securities

 

 

(98,711

)

 

 

(1,760

)

Net cash (used in) provided by investing activities

 

 

(6,686

)

 

 

403

 

Cash Flows From Financing Activities:

 

 

 

 

 

 

Proceeds from exercise of stock options

 

 

4

 

 

 

28

 

Proceeds from issuance of common stock under the 2020 Employee Share Purchase Plan

 

 

409

 

 

 

213

 

Net cash provided by financing activities

 

 

413

 

 

 

241

 

Effect of exchange rate fluctuations on cash held

 

 

(1

)

 

 

71

 

Net Decrease In Cash And Cash Equivalents

 

 

(38,060

)

 

 

(29,291

)

Cash and cash equivalents at beginning of period

 

 

159,521

 

 

 

334,427

 

Cash and cash equivalents at end of period

 

$

121,461

 

 

$

305,136

 

 

 

 

 

 

 

Supplemental Disclosure Of Cash Flow Information:

 

 

 

 

 

 

Property and equipment purchases incurred but not yet paid

 

$

1,134

 

 

$

1,541

 

Right-of-use asset obtained in exchange for new operating lease liability

 

$

146

 

 

$

56

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

6


 

REPARE THERAPEUTICS INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in U.S. dollars, unless otherwise specified)

1. Organization and Nature of Business

Repare Therapeutics Inc. (“Repare” or the “Company”) is a precision medicine oncology company focused on the development of synthetic lethality-based therapies for patients with cancer. The Company was incorporated under the Canada Business Corporations Act on September 6, 2016. On June 23, 2020, immediately prior to the completion of its initial public offering (the “IPO”), the Company was continued as a corporation under the Business Corporations Act (Québec). The Company’s common shares are listed on the Nasdaq Global Select Market under the ticker symbol “RPTX”.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and as amended by Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).

The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements as of and for the year ended December 31, 2022, and, in the opinion of management, reflect all adjustments, consisting of normal recurring adjustments, necessary for the fair presentation of the Company’s consolidated financial position as of March 31, 2023, the consolidated results of its operations for the three months ended March 31, 2023 and 2022, its statements of shareholders’ equity for the three months ended March 31, 2023 and 2022 and its consolidated cash flows for the three months ended March 31, 2023 and 2022.

These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the accompanying notes for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2023 (the “Annual Report”). The condensed consolidated balance sheet data as of December 31, 2022 presented for comparative purposes was derived from the Company’s audited consolidated financial statements but does not include all disclosures required by U.S. GAAP. The results for the three months ended March 31, 2023 are not necessarily indicative of the operating results to be expected for the full year or for any other subsequent interim period.

The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2022 included in the Annual Report. There have been no changes to the Company's significant accounting policies since the date of the audited consolidated financial statements for the year ended December 31, 2022 included in the Annual Report.

Principles of Consolidation

These unaudited condensed consolidated financial statements of the Company include the accounts of the Company and its wholly-owned subsidiary, Repare Therapeutics USA Inc. (“Repare USA”), which was incorporated under the laws of Delaware on June 1, 2017. The financial statements of Repare USA are prepared for the same reporting period as the parent company, using consistent accounting policies. All intra-group transactions, balances, income, and expenses are eliminated in full upon consolidation.

Smaller Reporting Company

The Company qualifies as a “smaller reporting company” under the Exchange Act as of March 31, 2023 because the market value of its common shares held by non-affiliates was less than $560 million as of June 30, 2022 and its revenue for the year ended December 31, 2021 was less than $100 million. As a smaller reporting company, the Company may rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. For so long as the Company remains a smaller reporting company, it is permitted and the Company intends to rely on such exemptions from certain disclosure and other requirements that are applicable to other public companies that are not smaller reporting companies.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in consolidated financial statements and accompanying notes. Significant estimates and

7


 

assumptions reflected in these unaudited condensed consolidated financial statements include, but are not limited to, estimates related to revenue recognition, accrued research and development expenses, share-based compensation, right-of-use assets and lease liabilities and income taxes. The Company bases its estimates on historical experience and other market specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results could differ from those estimates. Changes in estimates are recorded in the period in which they become known.

3. Cash and Cash Equivalents and Marketable Securities

As of March 31, 2023 and December 31, 2022, cash and cash equivalents and marketable securities were comprised of the following:

 

 

Amortized Cost

 

 

Unrealized Gains

 

 

Unrealized Losses

 

 

Fair Value

 

 

 

(in thousands)

 

As of March 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 Cash and cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 Cash

 

$

84,013

 

 

$

 

 

$

 

 

$

84,013

 

 Money market funds

 

 

33,362

 

 

 

 

 

 

 

 

 

33,362

 

 Commercial paper

 

 

4,086

 

 

 

 

 

 

 

 

 

4,086

 

 Total cash and cash equivalents:

 

$

121,461

 

 

$

 

 

$

 

 

$

121,461

 

 Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

 U.S. Treasury and government-sponsored enterprises

 

$

131,393

 

 

$

21

 

 

$

(192

)

 

$

131,222

 

 Commercial paper

 

 

61,506

 

 

 

 

 

 

(65

)

 

 

61,441

 

 Total marketable securities

 

$

192,899

 

 

$

21

 

 

$

(257

)

 

$

192,663

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 Cash and cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 Cash

 

$

116,526

 

 

$

 

 

$

 

 

$

116,526

 

 Money market funds

 

 

42,995

 

 

 

 

 

 

 

 

 

42,995

 

 Total cash and cash equivalents:

 

$

159,521

 

 

$

 

 

$

 

 

$

159,521

 

 Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

 U.S. Treasury and government-sponsored enterprises

 

$

184,848

 

 

$

5

 

 

$

(433

)

 

$

184,420

 

 Total marketable securities

 

$

184,848

 

 

$

5

 

 

$

(433

)

 

$

184,420

 

Interest receivable was $0.2 million and $0.4 million as of March 31, 2023 and December 31, 2022, respectively, and is included in other receivables.

The Company held available-for-sale marketable securities with an aggregate fair value of $118.2 million and $157.9 million that were in an unrealized loss position as of March 31, 2023 and December 31, 2022, respectively. These marketable securities have been in an unrealized loss position for less than twelve months. The unrealized losses as of March 31, 2023 and December 31, 2022, were not attributed to credit risk but were primarily associated with changes in interest rates and market liquidity. The Company does not intend to sell these securities and it is more likely than not that it will hold these investments for a period of time sufficient to recover the amortized cost. As a result, the Company did not record an allowance for credit losses or other impairment charges for its marketable securities for the three months ended March 31, 2023 and 2022.

8


 

The Company recognized $0.2 million and nil in net unrealized gain in other comprehensive loss in the three months ended March 31, 2023 and 2022.

The maturities of the Company’s marketable securities as of March 31, 2023 and December 31, 2022 are less than one year.

4. Fair Value Measurements

Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

Level 1 – Quoted prices in active markets for identical assets or liabilities.
Level 2 – Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.
Level 3 – Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The following table presents information about the Company’s financial assets measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values as of March 31, 2023 and December 31, 2022:

Description

 

Financial Assets

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

(in thousands)

 

As of March 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 Assets

 

 

 

 

 

 

 

 

 

 

 

 

 Investments included in cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 Money market funds

 

$

33,362

 

 

$

33,362

 

 

$

 

 

$

 

 Commercial paper

 

 

4,086