0001558370-24-012136 | 10-Q | XBRL Viewer

Summary of significant accounting policies

6 Months Ended

Jun. 30, 2024

Summary of significant accounting policies

Summary of significant accounting policies

2.	Significant accounting policies

The Company’s significant accounting policies are disclosed in the audited consolidated financial statements and the notes thereto, which are included in the in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 25, 2024. Since the date of those audited consolidated financial statements, there have been no material changes to the Company’s significant accounting policies.

Reverse stock split

A one-for-79.4784 reverse stock split of the Company’s issued and outstanding common stock was effected on July 7, 2023. Stockholders entitled to fractional shares as a result of the reverse stock split received a cash payment in lieu of receiving fractional shares. Accordingly, all share and per share amounts for all periods presented in the accompanying unaudited condensed financial statements and notes thereto have been retroactively adjusted, where applicable, to reflect the effects of the reverse stock split. Shares of common stock underlying outstanding stock options and common stock warrants were proportionately reduced and the respective exercise prices, if applicable, were proportionately increased in accordance with the terms of the agreements governing such securities. Shares of common stock reserved for issuance upon the conversion of the Company’s preferred stock were proportionately reduced and the respective conversion prices were proportionately increased.

Net loss per share and reclassification of common stock

Basic and diluted net loss per share is computed using the two-class method required for multiple classes of common stock and participating securities. The Company’s participating securities do not have a contractual obligation to share in the Company’s losses. As such, the net loss was attributed entirely to common stockholders for all periods presented. Basic net loss per common share attributable to common stockholders is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period, without consideration of potentially dilutive securities. Diluted net loss per share attributable to common stockholders is computed by dividing the net loss by the weighted-average number of common shares and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share attributable to common stockholders calculation, the redeemable

convertible preferred stock, common stock options, restricted stock units and common and redeemable convertible preferred stock warrants are considered to be potentially dilutive securities. As the Company has reported a net loss for the periods presented, basic and diluted net loss per share attributable to common stockholders is the same.

On July 18, 2023, each share of the Company’s common stock issued and outstanding became reclassified as one share of Series A common stock. Any stock certificate that immediately prior to July 18, 2023 represented shares of the Company’s common stock was deemed to represent shares of Series A common stock, without the need for surrender or exchange thereof. Additionally, in connection with the IPO, the Company’s outstanding redeemable convertible preferred stock automatically converted into 15,117,912 shares of Series A common stock and 1,520,490 shares of Series B common stock. The rights of the holders of Series A common stock and Series B common stock are substantially identical, except with respect to voting and conversion. Each share of Series A common stock is entitled to one vote and shares of Series B common stock are non-voting, except as may be required by law. Each share of Series B common stock may be converted at any time into one share of Series A common stock at the option of its holder, subject to certain ownership limitations. As such, basic and diluted net loss per share attributable to common stockholders is presented on a combined basis as undistributed earnings, when allocated to each series of common stock, result in the same net loss per share for all periods presented.

The following table presents the calculation of basic and diluted net loss per share for the three and six months ended June 30, 2024 and 2023 (in thousands, except share and per share data):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Numerator:
Net loss attributable to common stockholders	$	(8,118)	$	(6,785)	$	(14,747)	$	(13,372)
Denominator:
Weighted-average shares outstanding, basic and diluted		31,913,887		189,520		30,476,657		187,314
Net loss per share, basic and diluted	$	(0.25)	$	(35.80)	$	(0.48)	$	(71.39)

The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share attributable to common, Series A and Series B common stockholders for the periods presented because including them would have been antidilutive:


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
Options to purchase Series A common stock	4,464,067	—	4,464,067	—
Warrant to purchase Series A common stock	1,000	—	1,000	—
Redeemable convertible preferred stock on an as converted basis	—	16,638,476	—	16,638,476
Options to purchase common stock	—	3,776,369	—	3,776,369
Warrants to purchase common stock	—	13,458	—	13,458
Warrant to purchase redeemable convertible preferred stock	—	79,545	—	79,545
Restricted stock units	1,125,840	—	1,125,840	—
Total	5,590,907	20,507,848	5,590,907	20,507,848

Recently adopted accounting pronouncements

In August 2020, the FASB issued ASU No. 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, which address issues identified as a result of the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity. This amendment is effective for fiscal years beginning after December 15, 2023, including interim periods within. The adoption of this standard had no impact on the Company’s financial statements.

New accounting pronouncements not yet adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280)—Improvements to Reportable Segment Disclosures. ASU 2023-07 requires disclosure of incremental segment information on an interim and annual basis and provides new segment disclosure requirements for entities with a single reportable segment. ASU 2023-07 is effective for all public companies for fiscal years beginning after December 15, 2023, and interim periods within fiscal periods beginning after December 15, 2024, and requires retrospective application to all prior periods presented in the financial statements. The Company is assessing the impact of the adoption of this standard on its disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740)—Improvements to Income Tax Disclosures, a final standard on improvements to income tax disclosures. The standard requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions and applies to all entities subject to income taxes. The new standard is effective for annual periods beginning after December 15, 2024. The Company is assessing the impact of the adoption of this standard on its disclosures.

Summary of significant accounting policies (Policies)

6 Months Ended

Jun. 30, 2024

Summary of significant accounting policies

Reverse stock split

Reverse stock split

Net loss per share and reclassification of common stock

Net loss per share and reclassification of common stock

The following table presents the calculation of basic and diluted net loss per share for the three and six months ended June 30, 2024 and 2023 (in thousands, except share and per share data):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Numerator:
Net loss attributable to common stockholders	$	(8,118)	$	(6,785)	$	(14,747)	$	(13,372)
Denominator:
Weighted-average shares outstanding, basic and diluted		31,913,887		189,520		30,476,657		187,314
Net loss per share, basic and diluted	$	(0.25)	$	(35.80)	$	(0.48)	$	(71.39)


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
Options to purchase Series A common stock	4,464,067	—	4,464,067	—
Warrant to purchase Series A common stock	1,000	—	1,000	—
Redeemable convertible preferred stock on an as converted basis	—	16,638,476	—	16,638,476
Options to purchase common stock	—	3,776,369	—	3,776,369
Warrants to purchase common stock	—	13,458	—	13,458
Warrant to purchase redeemable convertible preferred stock	—	79,545	—	79,545
Restricted stock units	1,125,840	—	1,125,840	—
Total	5,590,907	20,507,848	5,590,907	20,507,848

New accounting pronouncements not yet adopted

Recently adopted accounting pronouncements

New accounting pronouncements not yet adopted

CONDENSED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 95,959	$ 75,139
Short-term marketable securities	70,414	19,758
Prepaid expenses and other current assets	378	1,749
Total current assets	166,751	96,646
Long-term marketable securities	22,118
Operating lease right-of-use assets	151	73
Total assets	189,020	96,719
Current liabilities:
Accounts payable	1,994	186
Accrued expenses and other current liabilities (includes $96 and $31 payable to related parties as of March 31, 2024 and December 31, 2023, respectively)	3,581	5,403
Operating lease liabilities	153	65
Total liabilities	5,728	5,654
Commitments and contingencies (Note 7)
Stockholders' equity, $0.0001 par value:
Undesignated preferred stock, $0.0001 per share: 10,000,000 shares authorized; No shares issued and outstanding
Additional paid-in capital	447,803	340,777
Accumulated deficit	(264,491)	(249,744)
Accumulated other comprehensive income (loss)	(23)	30
Total stockholders' equity	183,292	91,065
Total liabilities and stockholders' equity	189,020	96,719
Series A Common Stock
Stockholders' equity, $0.0001 par value:
Common stock	3	2
Series B Common Stock
Stockholders' equity, $0.0001 par value:
Common stock

Fair value measurements and fair value of financial instruments (Tables)

6 Months Ended

Jun. 30, 2024

Fair value measurements and fair value of financial instruments

Schedule of marketable securities, available-for-sale

Cash equivalents and marketable securities consisted of the following (in thousands):


		June 30, 2024
	Valuation	Amortized		Unrealized		Unrealized		Estimated
	Hierarchy	cost		Gains		Losses		Fair Value
Assets:
Cash equivalents:
Money market funds	Level 1	$	93,512	$	—	$	—	$	93,512
Corporate debt securities	Level 2		1,009		—		—		1,009
Total cash equivalents		$	94,521	$	—	$	—	$	94,521
Short-term marketable securities:
Commercial paper	Level 2		25,464		1		(24)		25,441
Corporate debt securities	Level 2		9,315		—		(6)		9,309
U.S. Treasury securities	Level 2		25,776		—		(13)		25,763
Agency securities	Level 2		7,454		—		(9)		7,445
Asset-backed securities	Level 2		2,458		—		(2)		2,456
Total short-term marketable securities		$	70,467	$	1	$	(54)	$	70,414
Long-term marketable securities:
U.S. Treasury securities	Level 2		19,597		19		—		19,616
Asset-backed securities	Level 2		2,492		10		—		2,502
Total long-term marketable securities		$	22,089	$	29	$	—	$	22,118
Total assets		$	187,077	$	30	$	(54)	$	187,053


		December 31, 2023
	Valuation	Amortized		Unrealized		Unrealized		Estimated
	Hierarchy	cost		Gains		Losses		Fair Value
Assets:
Cash equivalents:
Money market funds	Level 1	$	69,516	$	—	$	—	$	69,516
Corporate debt securities	Level 2		4,622		—		—		4,622
Total cash equivalents		$	74,138	$	—	$	—	$	74,138
Marketable securities:
Commercial paper	Level 2		9,879		19		—		9,898
Corporate debt securities	Level 2		2,945		4		—		2,949
U.S. Treasury securities	Level 2		6,904		7		—		6,911
Total marketable securities		$	19,728	$	30	$	—	$	19,758
Total assets		$	93,866	$	30	$	—	$	93,896

- Definition

Tabular disclosure of investment in debt security measured at fair value with change in fair value recognized in other comprehensive income (available-for-sale).

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+ Details

Fair value measurements and fair value of financial instruments

6 Months Ended

Jun. 30, 2024

Fair value measurements and fair value of financial instruments

Fair value measurements and fair value of financial instruments

3.	Fair value measurements and fair value of financial instruments

The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows:

Level 1—Quoted prices in active markets for identical assets or liabilities.

Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

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.

As of June 30, 2024 and December 31, 2023, financial assets measured at fair value on a recurring basis consist of cash equivalents and marketable securities. Cash equivalents consist of money market funds and other investments that are readily convertible into cash and have maturities of three months or less at the time of acquisition. The carrying amount of cash equivalents was $94.5 million and $74.1 million as of June 30, 2024 and December 31, 2023, respectively, which approximates the fair value and was determined based upon Level 1 and Level 2 inputs. Marketable securities are classified as available-for-sale securities and have maturities of (i) for short-term marketable securities, more than three months and less than one year and (ii) for long-term marketable securities, more than one year at the time of acquisition. The fair value of marketable securities, which are Level 2 financial instruments, is based upon market prices quoted on the last day of the fiscal period or other observable market inputs. The Company obtains pricing information from its investment manager and generally determines the fair value of investment securities using standard observable inputs, including reported trades, broker/dealer quotes, bids and/or offers.

The carrying values of the Company’s accounts payable and accrued expenses and other current liabilities approximate their fair values due to the short-term nature of these liabilities.

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability.

The Company’s Level 3 liabilities that are measured at fair value on a recurring basis consist of the Series A common stock warrant liability related to the warrant to purchase 1,000 shares of Series A common stock with an exercise price of $69.64 per share and an expiration date of July 18, 2026, the third anniversary date of the closing of the Company’s IPO. The fair value of Series A common stock warrant liability was immaterial as of June 30, 2024 and December 31, 2023, as well as the change in fair value during the three and six months ended June 30, 2024 and 2023. There were no transfers within the hierarchy during the periods presented.

Cash equivalents and marketable securities consisted of the following (in thousands):


		June 30, 2024
	Valuation	Amortized		Unrealized		Unrealized		Estimated
	Hierarchy	cost		Gains		Losses		Fair Value
Assets:
Cash equivalents:
Money market funds	Level 1	$	93,512	$	—	$	—	$	93,512
Corporate debt securities	Level 2		1,009		—		—		1,009
Total cash equivalents		$	94,521	$	—	$	—	$	94,521
Short-term marketable securities:
Commercial paper	Level 2		25,464		1		(24)		25,441
Corporate debt securities	Level 2		9,315		—		(6)		9,309
U.S. Treasury securities	Level 2		25,776		—		(13)		25,763
Agency securities	Level 2		7,454		—		(9)		7,445
Asset-backed securities	Level 2		2,458		—		(2)		2,456
Total short-term marketable securities		$	70,467	$	1	$	(54)	$	70,414
Long-term marketable securities:
U.S. Treasury securities	Level 2		19,597		19		—		19,616
Asset-backed securities	Level 2		2,492		10		—		2,502
Total long-term marketable securities		$	22,089	$	29	$	—	$	22,118
Total assets		$	187,077	$	30	$	(54)	$	187,053


		December 31, 2023
	Valuation	Amortized		Unrealized		Unrealized		Estimated
	Hierarchy	cost		Gains		Losses		Fair Value
Assets:
Cash equivalents:
Money market funds	Level 1	$	69,516	$	—	$	—	$	69,516
Corporate debt securities	Level 2		4,622		—		—		4,622
Total cash equivalents		$	74,138	$	—	$	—	$	74,138
Marketable securities:
Commercial paper	Level 2		9,879		19		—		9,898
Corporate debt securities	Level 2		2,945		4		—		2,949
U.S. Treasury securities	Level 2		6,904		7		—		6,911
Total marketable securities		$	19,728	$	30	$	—	$	19,758
Total assets		$	93,866	$	30	$	—	$	93,896

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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+ Details

Accrued expenses and other current liabilities (Tables)

6 Months Ended

Jun. 30, 2024

Accrued expenses and other current liabilities

Schedule of accrued expenses and other current liabilities

Accrued expenses and other current liabilities consist of the following (in thousands):


	As of
	June 30,		December 31,
	2024		2023
Accrued clinical costs	$	2,054	$	2,668
Accrued payroll-related costs		657		1,105
Accrued research and development costs		458		632
Accrued outside services		402		442
Accrued offering costs		—		323
Other		10		233
Total	$	3,581	$	5,403

CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	Jun. 30, 2024	Jun. 30, 2023
Cash flows from operating activities:
Net loss	$ (14,747)	$ (13,372)
Adjustments to reconcile net loss to net cash used in operating activities:
Accretion of discount on marketable securities, net	(670)	(39)
Non-cash lease expense	71	68
Stock-based compensation expense	2,208	1,824
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	1,048	375
Accounts payable and accrued liabilities	309	(1,589)
Operating lease liabilities	(61)	(71)
Net cash used in operating activities	(11,842)	(12,804)
Cash flows from investing activities:
Purchases of marketable securities	(82,952)
Sales of marketable securities	10,795	32,200
Net cash provided by (used in) investing activities	(72,157)	32,200
Cash flows from financing activities:
Proceeds from sale of Series A common stock, net of underwriter commissions and discounts	105,750
Proceeds from exercise of stock options	114	0
Payment of financing costs	(1,045)	(1,046)
Net cash provided by (used in) financing activities	104,819	(1,046)
Net increase in cash and cash equivalents	20,820	18,350
Cash and cash equivalents at beginning of period	95,959	18,508
Cash and cash equivalents at end of period	75,139	158
Supplemental non-cash investing and financing activities:
Deferred financing costs included in accounts payable and accrued expenses		$ 1,591
Right-of-use assets obtained in exchange for operating lease obligations	$ 149

Accrued expenses and other current liabilities

6 Months Ended

Jun. 30, 2024

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities

5.	Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consist of the following (in thousands):


	As of
	June 30,		December 31,
	2024		2023
Accrued clinical costs	$	2,054	$	2,668
Accrued payroll-related costs		657		1,105
Accrued research and development costs		458		632
Accrued outside services		402		442
Accrued offering costs		—		323
Other		10		233
Total	$	3,581	$	5,403

Commitments and contingencies

6 Months Ended

Jun. 30, 2024

Commitments and contingencies

Commitments and contingencies

7.	Commitments and contingencies

Contract research

During the second quarter of 2024, the Company contracted with a global Contract Research Organization (CRO) to perform certain research and related services in connection with certain of the Company’s clinical trials and research studies. The terms of the contract require the Company to pay direct fees, investigator grants and other pass-through costs, a portion of which is paid as an upfront payment. As of June 30, 2024, the Company committed an aggregate $13.4 million of upfront payments pursuant to the contract. All research and development costs are expensed as incurred, except when the Company is accounting for nonrefundable advance payments for goods or services to be used in future research and development activities. These payments are capitalized at the time of payment and expensed in the period in which the research and development activity is performed.

Facility lease agreement

In April 2024, the Company amended its San Mateo, California office lease, whereby the lease was amended to (i) extend the lease through June 30, 2025 and (ii) increase the monthly lease payment to approximately $13,000 beginning on the commencement date of July 1, 2024, which resulted in an increase in the Company’s operating lease right-of-use asset and corresponding operating lease liability of $0.1 million on the amendment date.

Operating lease cost was $37,000 for each of the three months ended June 30, 2024 and 2023, respectively, and $74,000 for each of the six months ended June 30, 2024 and 2023, respectively.

Guarantees and indemnifications

In the normal course of business, the Company enters into agreements that contain a variety of representations and provide for general indemnification. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future. In addition, the Company has entered into indemnification agreements with members of its board of

directors and its executive officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. As of June 30, 2024, the Company does not have any material indemnification claims that were probable or reasonably possible and consequently has not recorded related liabilities.

Legal

From time to time, the Company may become involved in various legal proceedings that arise in the ordinary course of its business. The Company is not party to any material legal proceedings as of June 30, 2024.

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2024	Aug. 09, 2024
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2024
Document Transition Report	false
Entity File Number	001-41742
Entity Registrant Name	Sagimet Biosciences Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-5991472
Entity Address, Address Line One	155 Bovet Road, Suite 303
Entity Address, City or Town	San Mateo
Entity Address State Or Province	CA
Entity Address, Postal Zip Code	94402
City Area Code	650
Local Phone Number	561-8600
Title of 12(b) Security	Series A Common Stock,$0.0001 par value per share
Trading Symbol	SGMT
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		30,674,855
Entity Central Index Key	0001400118
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2
Amendment Flag	false

CONDENSED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)) - USD ($) $ in Thousands	Common stock Series A Common Stock	Common stock Series B Common Stock	Common stock	Additional paid-in capital	Accumulated deficit	Accumulated Other Comprehensive (Loss) Income	Series A Common Stock	Series B Common Stock	Total
Beginning balance at Dec. 31, 2022			$ 1	$ 35,001	$ (221,868)	$ (84)			$ (186,950)
Beginning balance (in shares) at Dec. 31, 2022			185,084
Increase (Decrease) In Stockholders' Deficit
Stock-based compensation expense				767					767
Unrealized gain (loss) on investments in marketable securities						71			71
Net loss					(6,587)				(6,587)
Ending balance at Mar. 31, 2023			$ 1	35,768	(228,455)	(13)			(192,699)
Ending balance (in shares) at Mar. 31, 2023			185,084
Beginning balance at Dec. 31, 2022			$ 1	35,001	(221,868)	(84)			(186,950)
Beginning balance (in shares) at Dec. 31, 2022			185,084
Increase (Decrease) In Stockholders' Deficit
Unrealized gain (loss) on investments in marketable securities									84
Net loss									(13,372)
Ending balance at Jun. 30, 2023			$ 1	36,825	(235,240)				(198,414)
Ending balance (in shares) at Jun. 30, 2023			210,315
Beginning balance at Mar. 31, 2023			$ 1	35,768	(228,455)	(13)			(192,699)
Beginning balance (in shares) at Mar. 31, 2023			185,084
Increase (Decrease) In Stockholders' Deficit
Exercise of common stock warrants (in shares)			25,231
Stock-based compensation expense				1,057					1,057
Unrealized gain (loss) on investments in marketable securities						13			13
Net loss					(6,785)				(6,785)
Ending balance at Jun. 30, 2023			$ 1	36,825	(235,240)				(198,414)
Ending balance (in shares) at Jun. 30, 2023			210,315
Beginning balance at Dec. 31, 2023	$ 2			340,777	(249,744)	30			91,065
Beginning balance (in shares) at Dec. 31, 2023	21,375,402	1,520,490					21,375,402	1,520,490
Increase (Decrease) In Stockholders' Deficit
Sale of Series A common stock, net of issuance costs	$ 1			104,731					104,732
Sale of Series A common stock, net of issuance costs (in shares)	9,000,000
Issuance of Series A Common Stock upon exercise of stock options				114					114
Issuance of Series A Common Stock upon exercise of stock options (in shares)	17,995
Stock-based compensation expense				759					759
Unrealized gain (loss) on investments in marketable securities						(23)			(23)
Net loss					(6,629)				(6,629)
Ending balance at Mar. 31, 2024	$ 3			446,381	(256,373)	7			190,018
Ending balance (in shares) at Mar. 31, 2024	30,393,397	1,520,490
Beginning balance at Dec. 31, 2023	$ 2			340,777	(249,744)	30			$ 91,065
Beginning balance (in shares) at Dec. 31, 2023	21,375,402	1,520,490					21,375,402	1,520,490
Increase (Decrease) In Stockholders' Deficit
Issuance of Series A Common Stock upon exercise of stock options (in shares)									17,995
Unrealized gain (loss) on investments in marketable securities									$ (53)
Net loss									(14,747)
Ending balance at Jun. 30, 2024	$ 3			447,803	(264,491)	(23)			183,292
Ending balance (in shares) at Jun. 30, 2024	30,393,397	1,520,490					30,393,397	1,520,490
Beginning balance at Mar. 31, 2024	$ 3			446,381	(256,373)	7			190,018
Beginning balance (in shares) at Mar. 31, 2024	30,393,397	1,520,490
Increase (Decrease) In Stockholders' Deficit
Issuance costs related to sale of Series A common stock				(27)					(27)
Stock-based compensation expense				1,449					1,449
Unrealized gain (loss) on investments in marketable securities						(30)			(30)
Net loss					(8,118)				(8,118)
Ending balance at Jun. 30, 2024	$ 3			$ 447,803	$ (264,491)	$ (23)			$ 183,292
Ending balance (in shares) at Jun. 30, 2024	30,393,397	1,520,490					30,393,397	1,520,490

Summary of significant accounting policies - EPS (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023
Numerator:
Net Income (Loss)	$ (8,118)	$ (6,629)	$ (6,785)	$ (6,587)	$ (14,747)	$ (13,372)
Denominator:
Weighted-average shares outstanding, basic (in shares)	31,913,887		189,520		30,476,657	187,314
Weighted-average shares outstanding, diluted (in shares)	31,913,887		189,520		30,476,657	187,314
Net loss per share, basic (in dollars per share)	$ (0.25)		$ (35.80)		$ (0.48)	$ (71.39)
Net loss per share, diluted (in dollars per share)	$ (0.25)		$ (35.80)		$ (0.48)	$ (71.39)

- Definition

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

+ References

+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References

+ Details

- Definition

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

+ References

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+ Details

Summary of significant accounting policies (Tables)

6 Months Ended

Jun. 30, 2024

Summary of significant accounting policies

Schedule of basic and diluted loss per share


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Numerator:
Net loss attributable to common stockholders	$	(8,118)	$	(6,785)	$	(14,747)	$	(13,372)
Denominator:
Weighted-average shares outstanding, basic and diluted		31,913,887		189,520		30,476,657		187,314
Net loss per share, basic and diluted	$	(0.25)	$	(35.80)	$	(0.48)	$	(71.39)

Schedule of potentially dilutive securities


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
Options to purchase Series A common stock	4,464,067	—	4,464,067	—
Warrant to purchase Series A common stock	1,000	—	1,000	—
Redeemable convertible preferred stock on an as converted basis	—	16,638,476	—	16,638,476
Options to purchase common stock	—	3,776,369	—	3,776,369
Warrants to purchase common stock	—	13,458	—	13,458
Warrant to purchase redeemable convertible preferred stock	—	79,545	—	79,545
Restricted stock units	1,125,840	—	1,125,840	—
Total	5,590,907	20,507,848	5,590,907	20,507,848

Prepaid expenses and other current assets (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Prepaid expenses and other current assets
Prepaid insurance	$ 57	$ 585
Prepaid clinical expenses	191	767
Deferred financing costs		323
Other	130	74
Total	$ 378	$ 1,749

Summary of significant accounting policies - Dilutive (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Antidilutive securities
Potentially dilutive securities (in shares)	5,590,907	20,507,848	5,590,907	20,507,848
Stock options \| Series A Common Stock
Antidilutive securities
Potentially dilutive securities (in shares)	4,464,067		4,464,067
Stock options \| Common stock
Antidilutive securities
Potentially dilutive securities (in shares)		3,776,369		3,776,369
Warrants \| Series A Common Stock
Antidilutive securities
Potentially dilutive securities (in shares)	1,000		1,000
Warrants \| Redeemable convertible preferred stock
Antidilutive securities
Potentially dilutive securities (in shares)		79,545		79,545
Warrants \| Common stock
Antidilutive securities
Potentially dilutive securities (in shares)		13,458		13,458
Redeemable convertible preferred stock
Antidilutive securities
Potentially dilutive securities (in shares)		16,638,476		16,638,476
Restricted stock units
Antidilutive securities
Potentially dilutive securities (in shares)	1,125,840		1,125,840

Stock-based compensation - Fair value input (Details) - Employee Stock Option	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Stock-based compensation
Expected volatility, minimum	92.00%	89.00%
Expected volatility, maximum	96.00%	91.00%
Risk-free interest rate		3.60%
Risk-free interest rate, Minimum	4.10%
Risk-free interest rate, Maximum	4.50%
Dividend yield	0.00%	0.00%
Minimum
Stock-based compensation
Expected term	5 years 3 months 18 days	5 years
Maximum
Stock-based compensation
Expected term	6 years 1 month 6 days	7 years

Related parties (Details) - USD ($)	3 Months Ended		6 Months Ended
Related parties (Details) - USD ($)	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Related parties
Accrued expenses and other current liabilities	$ 3,581,000		$ 3,581,000		$ 5,403,000
Research and development	6,313,000	$ 4,676,000	11,575,000	$ 9,163,000
Related party
Related parties
Accrued expenses and other current liabilities	23,000		23,000		31,000
Related party \| Ascletis
Related parties
Accrued expenses and other current liabilities	$ 23,000		23,000		$ 31,000
Research and development			100,000	0
License agreement payments			$ 31,000	$ 0

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ (8,118)	$ (6,629)	$ (6,785)	$ (6,587)	$ (14,747)	$ (13,372)

- Definition

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

+ References

+ Details

Stock-based compensation (Tables)

6 Months Ended

Jun. 30, 2024

Stock-based compensation

Schedule of stock-based compensation expense

The Company has recorded aggregate stock-based compensation expense related to the issuance of stock option awards to employees and non-employees in the unaudited condensed statements of operations and comprehensive loss as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Stock options	$	1,138	$	1,057	$	1,587	$	1,824
Restricted stock units		311		—		621		—
Total stock-based compensation expense	$	1,449	$	1,057	$	2,208	$	1,824
Included in:
General and administrative expense	$	1,181	$	856	$	1,694	$	1,454
Research and development expense		268		201		514		370
Total stock-based compensation expense	$	1,449	$	1,057	$	2,208	$	1,824

Schedule of option activity transactions

The following table summarizes stock option activity (in thousands, except share and per share data):


				Weighted-
	Number of			Average
	Shares	Weighted-		Remaining
	Underlying	Average		Contractual	Aggregate
	Outstanding	Exercise		Term	Intrinsic
	Options	Price		(in Years)	Value
Outstanding, January 1, 2024	3,753,507	$	7.99	7.1	$	8
Options granted	1,147,506		4.62
Options exercised	(17,995)		6.36
Options forfeited/expired	(418,951)		10.20
Outstanding, June 30, 2024 (a)	4,464,067	$	6.92	7.2	$	—
Vested and exercisable as of June 30, 2024	2,462,232	$	7.19	5.7	$	—

____________

(a)

Includes 619,742 performance-based options with a weighted-average exercise price of $6.38, almost all of which were fully vested and exercisable.

Schedule of restricted stock unit activity


		Weighted-Average
	Restricted	Grant Date
	Stock Units	Fair Value
Outstanding, January 1, 2024	1,132,410	$	2.96
Granted	49,330		5.23
Forfeited/expired	(55,900)		4.96
Outstanding, June 30, 2024	1,125,840	$	2.96

Schedule of fair value assumptions


	Six Months Ended June 30,		Six Months Ended June 30,
	2024		2023
Expected volatility	92 - 96	%	89 - 91	%
Risk-free interest rate	4.1 - 4.5	%	3.6	%
Dividend yield	—		—
Expected term (in years)	5.3 - 6.1		5.0 - 7.0

Organization and description of business (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	2 Months Ended
	Jan. 31, 2024	Aug. 31, 2023	Jun. 30, 2024	Dec. 31, 2023
Organization and description of business
Accumulated deficit			$ (264,491)	$ (249,744)
Cash and cash equivalents and marketable securities			$ 188,500
Series A Common Stock
Organization and description of business
Shares issued (in shares)	9,000,000	6,026,772
Share price (in dollars per share)	$ 12.50	$ 16.00
Net proceeds	$ 104,700	$ 86,200
Issuance costs	$ 7,800

- Definition

Amount of accumulated undistributed earnings (deficit).

+ References + Details

Related parties

6 Months Ended

Jun. 30, 2024

Related parties

Related parties

6.	Related parties

In January 2019, the Company entered into a license agreement that became effective in February 2019 with Ascletis, a subsidiary of Ascletis Pharma, a biotechnology company incorporated in the Cayman Islands and headquartered in Hangzhou, China, and a Company investor. Pursuant to the license agreement, Ascletis is solely responsible for all development activities in connection with obtaining and maintaining regulatory approvals for denifanstat in Greater China. During the six months ended June 30, 2024 and 2023, the Company recognized $0.1 million and nil of expenses, respectively, related to its portion of expenses owed under a sponsored research agreement that is co-sponsored by Ascletis, which are recorded in research and development in the unaudited condensed statements of operations and comprehensive loss. As of June 30, 2024 and December 31, 2023, the Company recognized $23,000 and $31,000, respectively, of accruals related to this agreement. During the six months ended June 30, 2024 and 2023, the Company paid Ascletis $31,000 and nil, respectively, under the manufacturing arrangement.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480990/946-20-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480990/946-20-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480990/946-20-50-6

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477968/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477968/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483326/850-10-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(g)(3))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479134/946-220-S99-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(c))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479134/946-220-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(e))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479134/946-220-S99-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/850/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483326/850-10-50-6

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483326/850-10-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483326/850-10-50-1

+ Details

Stock-based compensation - Stock options (Details) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Number of Shares
Balance at the beginning	3,753,507
Options granted	1,147,506
Options exercised	(17,995)
Options forfeited/expired	(418,951)
Balance at the end	4,464,067		3,753,507
Shares vested and exercisable at the end	2,462,232
Weighted-Average Exercise Price
Balance at the beginning (in dollars per share)	$ 7.99
Options granted (in dollars per share)	4.62
Options exercised (in dollars per share)	6.36
Options forfeited/expired (in dollars per share)	10.20
Balance at the end (in dollars per share)	6.92		$ 7.99
Vested and Exercisable at the end (in dollars per share)	$ 7.19
Term and Intrinsic Value
Weighted- Average Remaining Contractual Term, Outstanding	7 years 2 months 12 days		7 years 1 month 6 days
Weighted- Average Remaining Contractual Term, Exercisable	5 years 8 months 12 days
Aggregate Intrinsic Value, Outstanding			$ 8
Weighted average grant date fair value	$ 3.58	$ 10.28
Intrinsic value options exercised	$ 100	$ 0
Proceeds from exercise of stock options	$ 114	$ 0
Time-based options
Term and Intrinsic Value
Vesting period	4 years
Total unrecognized compensation cost	$ 10,300
Remaining weighted-average period for unrecognized compensation cost	2 years 7 months 6 days
Performance-based options
Number of Shares
Balance at the end	619,742
Weighted-Average Exercise Price
Balance at the end (in dollars per share)	$ 6.38

Stock-based compensation (Details) - USD ($) $ / shares in Units, $ in Millions			6 Months Ended
	Jan. 01, 2024	Jul. 13, 2023	Jun. 30, 2024	Jul. 13, 2024
Stock-based compensation
Options granted			1,147,506
Restricted Stock Units
Stock-based compensation
Vesting period			4 years
Total unrecognized compensation cost			$ 2.6
Weighted average period of years			3 years
Balance at the beginning (in shares)	1,132,410		1,132,410
Granted (in shares)			49,330
Forfeited/expired (in shares)			(55,900)
Balance at the end (in shares)			1,125,840
Balance at the beginning (in dollars per shares)	$ 2.96		$ 2.96
Share-Based Compensation Arrangement By Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period (in dollars per shares)			5.23
Forfeited/expired (in dollars per shares)			4.96
Balance at the end (in dollars per shares)			$ 2.96
2023 Equity incentive plan
Stock-based compensation
Common stock reserved for future issuance (in shares)			3,440,984	2,585,968
Annual increase in reserved shares (as a percent)		4.00%
Increase in future issuance (in shares)	855,016
Available for grant (in shares)			1,957,700
2024 Inducement Grants
Stock-based compensation
Common stock reserved for future issuance (in shares)			1,000,000.0
2024 Inducement Grants \| Share-based payment arrangement, Employee
Stock-based compensation
Options granted			643,548
Employee Stock Purchase Plan
Stock-based compensation
Common stock reserved for future issuance (in shares)		215,497
Annual increase in reserved shares (as a percent)		1.00%
Employee Stock Purchase Plan \| Series A Common Stock
Stock-based compensation
Common stock reserved for future issuance (in shares)		215,497
Increase in future issuance (in shares)	213,754
Available for grant (in shares)	429,251

CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Accrued expenses and other current liabilities	$ 3,581	$ 5,403
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Related party
Accrued expenses and other current liabilities	$ 23	$ 31
Series A Common Stock
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	30,393,397	21,375,402
Common stock, shares outstanding	30,393,397	21,375,402
Series B Common Stock
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	15,000,000	15,000,000
Common stock, shares issued	1,520,490	1,520,490
Common stock, shares outstanding	1,520,490	1,520,490

CONDENSED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) - Temporary $ in Thousands	Redeemable convertible preferred stock USD ($) shares
Beginning balance, Temporary equity at Dec. 31, 2022	$ 214,620
Beginning balance, Temporary equity (in shares) at Dec. 31, 2022 \| shares	1,373,730,625
Increase (Decrease) in Temporary Equity
Net loss	$ 0
Ending balance, Temporary equity at Mar. 31, 2023	$ 214,620
Ending balance, Temporary equity (in shares) at Mar. 31, 2023 \| shares	1,373,730,625
Increase (Decrease) in Temporary Equity
Net loss	$ 0
Ending balance, Temporary equity at Jun. 30, 2023	$ 214,620
Ending balance, Temporary equity (in shares) at Jun. 30, 2023 \| shares	1,373,730,625

- Definition

Carrying amount, attributable to parent, of an entity's issued and outstanding stock which is not included within permanent equity. Temporary equity is a security with redemption features that are outside the control of the issuer, is not classified as an asset or liability in conformity with GAAP, and is not mandatorily redeemable. Includes any type of security that is redeemable at a fixed or determinable price or on a fixed or determinable date or dates, is redeemable at the option of the holder, or has conditions for redemption which are not solely within the control of the issuer. Includes stock with a put option held by an ESOP and stock redeemable by a holder only in the event of a change in control of the issuer.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 210
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-03(a)(23)(a)(1))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478777/944-210-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 14.E.Q2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479830/718-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(i))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480097/470-10-S99-1A

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iv))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480097/470-10-S99-1A

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(5))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480097/470-10-S99-1A

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(i))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480097/470-10-S99-1B

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iv))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480097/470-10-S99-1B

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(5))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480097/470-10-S99-1B

+ Details

Prepaid expenses and other current assets

6 Months Ended

Jun. 30, 2024

Prepaid expenses and other current assets

Prepaid expenses and other current assets

4.	Prepaid expenses and other current assets

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


	As of
	June 30,		December 31,
	2024		2023
Prepaid insurance	$	57	$	585
Prepaid clinical expenses		191		767
Deferred financing costs		—		323
Other		130		74
Total	$	378	$	1,749

Summary of significant accounting policies (Details)	Jul. 18, 2023 shares	Jul. 07, 2023
Summary of significant accounting policies
Reverse stock split		0.012582
Common Class A
Summary of significant accounting policies
Shares issued upon conversion (in shares)	15,117,912
Series B Common Stock
Summary of significant accounting policies
Shares issued upon conversion (in shares)	1,520,490

Commitments and contingencies (Details) - USD ($)	1 Months Ended	3 Months Ended		6 Months Ended
Commitments and contingencies (Details) - USD ($)	Apr. 30, 2024	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Leases
Committed amount		$ 13,400,000		$ 13,400,000
Monthly lease payments	$ 13,000
Change in operating lease liability	$ 100,000			149,000
Operating lease cost		$ 37,000	$ 37,000	$ 74,000	$ 74,000

Stock-based compensation

6 Months Ended

Jun. 30, 2024

Stock-based compensation

Stock-based compensation

8.	Stock-based compensation

The 2023 Stock Option and Incentive Plan (2023 Plan), was adopted by the board of directors, approved by the Company’s stockholders on July 4, 2023, and became effective on July 13, 2023, replacing a prior share-based incentive plan. The number of shares initially reserved for issuance under the 2023 Plan was initially 2,585,968, which automatically increased by 855,016 shares on January 1, 2024 and will increase each January 1 thereafter, by (i) 4% of the outstanding number of shares of our Series A common stock on the immediately preceding December 31 or (ii) a lesser number of shares as determined by the compensation committee of the board of directors. As such, as of June 30, 2024, the maximum number of shares with respect to which awards may be issued under the 2023 Plan was 3,440,984, and 1,957,700 shares were available for future grant thereunder.

The Company also established a pool of 1.0 million shares of Series A common stock from which grants of stock-based compensation awards may be issued as inducement for new employees to accept employment offers from the Company from time to time. Inducement grants are granted outside of the 2023 Plan and do not require approval from the Company’s stockholders pursuant to the Nasdaq inducement grant exception in accordance with Nasdaq Listing Rule 5635(c)(4). During the six months ended June 30, 2024, the Company granted 643,548 option awards from this pool.


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Stock options	$	1,138	$	1,057	$	1,587	$	1,824
Restricted stock units		311		—		621		—
Total stock-based compensation expense	$	1,449	$	1,057	$	2,208	$	1,824
Included in:
General and administrative expense	$	1,181	$	856	$	1,694	$	1,454
Research and development expense		268		201		514		370
Total stock-based compensation expense	$	1,449	$	1,057	$	2,208	$	1,824

Stock options

The Company’s stock options consist of (i) time-based options, which vest and become exercisable, subject to the participant’s continued employment or service through the applicable vesting date and (ii) performance-based options, which vest based on performance measures against predetermined objectives that could include successful completion of qualified equity offerings or

announced topline results for clinical trials and positive clinical results over a specified performance period. The Company’s time-based options granted have various vesting schedules that may range from vesting immediately to vesting over four years.

The following table summarizes stock option activity (in thousands, except share and per share data):


				Weighted-
	Number of			Average
	Shares	Weighted-		Remaining
	Underlying	Average		Contractual	Aggregate
	Outstanding	Exercise		Term	Intrinsic
	Options	Price		(in Years)	Value
Outstanding, January 1, 2024	3,753,507	$	7.99	7.1	$	8
Options granted	1,147,506		4.62
Options exercised	(17,995)		6.36
Options forfeited/expired	(418,951)		10.20
Outstanding, June 30, 2024 (a)	4,464,067	$	6.92	7.2	$	—
Vested and exercisable as of June 30, 2024	2,462,232	$	7.19	5.7	$	—

____________

(a)

Includes 619,742 performance-based options with a weighted-average exercise price of $6.38, almost all of which were fully vested and exercisable.

During the six months ended June 30, 2024 and 2023, the weighted average grant-date fair value per share of stock options granted was $3.58 and $10.28, respectively, and the total intrinsic value of stock options exercised was $0.1 million and nil, respectively. Additionally, during the six months ended June 30, 2024 and 2023, cash received from the exercise of options was $0.1 million and nil, respectively.

As of June 30, 2024, there was $10.3 million of total unrecognized compensation cost related to stock options, which is expected to be recognized over a remaining weighted-average period of 2.6 years.

Restricted stock units

The Company’s restricted stock units generally vest over a four-year period in equal amounts on an annual basis, provided the employee remains continuously employed with the Company. The fair value of the restricted stock units is equal to the closing price of the Company’s Series A common stock on the grant date.

The following table summarizes restricted stock unit activity:


		Weighted-Average
	Restricted	Grant Date
	Stock Units	Fair Value
Outstanding, January 1, 2024	1,132,410	$	2.96
Granted	49,330		5.23
Forfeited/expired	(55,900)		4.96
Outstanding, June 30, 2024	1,125,840	$	2.96

As of June 30, 2024 the total unrecognized compensation expense related to unvested restricted stock units was $2.6 million, which is expected to be recognized over a remaining weighted-average period of 3.0 years.

Valuation assumptions

The fair value of each stock option granted was estimated on the date of grant using the Black-Scholes option pricing model using the following assumptions:


	Six Months Ended June 30,		Six Months Ended June 30,
	2024		2023
Expected volatility	92 - 96	%	89 - 91	%
Risk-free interest rate	4.1 - 4.5	%	3.6	%
Dividend yield	—		—
Expected term (in years)	5.3 - 6.1		5.0 - 7.0

The expected term of the stock options represents the average of the contractual term of the options and the weighted-average expected vesting period. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected volatility rate was based on the historical volatilities of comparable companies in the Company’s industry. The Company has never declared or paid any cash dividends and does not presently plan to pay cash dividends in the foreseeable future. Consequently, the Company used an expected dividend yield of zero.

Employee stock purchase plan

The 2023 Employee Stock Purchase Plan (the ESPP), was adopted by the board of directors with an initial total of 215,497 shares of Series A common stock reserved for issuance under this plan, which automatically increased on January 1, 2024 and will increase each January 1 thereafter through January 1, 2033, by the least of (i) 215,497 shares of Series A common stock, (ii) 1% of the outstanding number of shares of the Company’s Series A common stock on the immediately preceding December 31 or (iii) such lesser number of shares of Series A common stock as determined by the administrator of the ESPP. On January 1, 2024 and in accordance with the ESPP, the authorized shares were increased by 213,754 shares for a total of 429,251 shares of Series A common stock available under the ESPP. No shares of Series A common stock have been issued under the ESPP to date; the first offering period under the ESPP is expected to commence in the third quarter of 2024.

Prepaid expenses and other current assets (Tables)

6 Months Ended

Jun. 30, 2024

Prepaid expenses and other current assets

Schedule of prepaid expenses and other current assets

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


	As of
	June 30,		December 31,
	2024		2023
Prepaid insurance	$	57	$	585
Prepaid clinical expenses		191		767
Deferred financing costs		—		323
Other		130		74
Total	$	378	$	1,749

Accrued expenses and other current liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Accrued expenses and other current liabilities
Accrued clinical costs	$ 2,054	$ 2,668
Accrued payroll-related costs	657	1,105
Accrued research and development costs	458	632
Accrued outside services	402	442
Accrued deferred offering costs		323
Other	10	233
Total	$ 3,581	$ 5,403

Fair value measurements and fair value of financial instruments - Fair value (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Fair value on a recurring basis
Cash equivalents fair value	$ 94,500	$ 74,100
Unrealized Gains	30
Unrealized Losses	(54)
Amortized cost
Fair value on a recurring basis
Cash equivalents fair value	94,521
Total assets fair value	187,077
Amortized cost \| Level 1 \| Money market funds
Fair value on a recurring basis
Cash equivalents fair value	93,512	69,516
Amortized cost \| Level 2 \| Corporate debt securities
Fair value on a recurring basis
Cash equivalents fair value	1,009	4,622
Short-term marketable securities [Member]
Fair value on a recurring basis
Unrealized Gains	1
Unrealized Losses	(54)
Short-term marketable securities [Member] \| Level 2 \| Commercial paper
Fair value on a recurring basis
Unrealized Gains	1	19
Unrealized Losses	(24)
Short-term marketable securities [Member] \| Level 2 \| Corporate debt securities
Fair value on a recurring basis
Unrealized Gains		4
Unrealized Losses	(6)
Short-term marketable securities [Member] \| Level 2 \| U.S. Treasury securities
Fair value on a recurring basis
Unrealized Gains		7
Unrealized Losses	(13)
Short-term marketable securities [Member] \| Level 2 \| Agency securities
Fair value on a recurring basis
Unrealized Losses	(9)
Short-term marketable securities [Member] \| Level 2 \| Asset-backed securities
Fair value on a recurring basis
Unrealized Losses	(2)
Short-term marketable securities [Member] \| Amortized cost
Fair value on a recurring basis
Marketable securities	70,467
Short-term marketable securities [Member] \| Amortized cost \| Level 2 \| Commercial paper
Fair value on a recurring basis
Marketable securities	25,464	9,879
Short-term marketable securities [Member] \| Amortized cost \| Level 2 \| Corporate debt securities
Fair value on a recurring basis
Marketable securities	9,315	2,945
Short-term marketable securities [Member] \| Amortized cost \| Level 2 \| U.S. Treasury securities
Fair value on a recurring basis
Marketable securities	25,776	6,904
Short-term marketable securities [Member] \| Amortized cost \| Level 2 \| Agency securities
Fair value on a recurring basis
Marketable securities	7,454
Short-term marketable securities [Member] \| Amortized cost \| Level 2 \| Asset-backed securities
Fair value on a recurring basis
Marketable securities	2,458
Long-term marketable securities [Member]
Fair value on a recurring basis
Unrealized Gains	29
Long-term marketable securities [Member] \| Level 2 \| U.S. Treasury securities
Fair value on a recurring basis
Unrealized Gains	19
Long-term marketable securities [Member] \| Level 2 \| Asset-backed securities
Fair value on a recurring basis
Unrealized Gains	10
Long-term marketable securities [Member] \| Amortized cost
Fair value on a recurring basis
Marketable securities	22,089
Long-term marketable securities [Member] \| Amortized cost \| Level 2 \| U.S. Treasury securities
Fair value on a recurring basis
Marketable securities	19,597
Long-term marketable securities [Member] \| Amortized cost \| Level 2 \| Asset-backed securities
Fair value on a recurring basis
Marketable securities	2,492
Recurring
Fair value on a recurring basis
Unrealized Gains		30
Recurring \| Amortized cost
Fair value on a recurring basis
Cash equivalents fair value		74,138
Total assets fair value		93,866
Recurring \| Estimated Fair Value
Fair value on a recurring basis
Cash equivalents fair value	94,521	74,138
Total assets fair value	187,053	93,896
Recurring \| Estimated Fair Value \| Level 1 \| Money market funds
Fair value on a recurring basis
Cash equivalents fair value	93,512	69,516
Recurring \| Estimated Fair Value \| Level 2 \| Corporate debt securities
Fair value on a recurring basis
Cash equivalents fair value	1,009	4,622
Recurring \| Short-term marketable securities [Member]
Fair value on a recurring basis
Unrealized Gains		30
Recurring \| Short-term marketable securities [Member] \| Amortized cost
Fair value on a recurring basis
Marketable securities		19,728
Recurring \| Short-term marketable securities [Member] \| Estimated Fair Value
Fair value on a recurring basis
Marketable securities	70,414	19,758
Recurring \| Short-term marketable securities [Member] \| Estimated Fair Value \| Level 2 \| Commercial paper
Fair value on a recurring basis
Marketable securities	25,441	9,898
Recurring \| Short-term marketable securities [Member] \| Estimated Fair Value \| Level 2 \| Corporate debt securities
Fair value on a recurring basis
Marketable securities	9,309	2,949
Recurring \| Short-term marketable securities [Member] \| Estimated Fair Value \| Level 2 \| U.S. Treasury securities
Fair value on a recurring basis
Marketable securities	25,763	$ 6,911
Recurring \| Short-term marketable securities [Member] \| Estimated Fair Value \| Level 2 \| Agency securities
Fair value on a recurring basis
Marketable securities	7,445
Recurring \| Short-term marketable securities [Member] \| Estimated Fair Value \| Level 2 \| Asset-backed securities
Fair value on a recurring basis
Marketable securities	2,456
Recurring \| Long-term marketable securities [Member] \| Estimated Fair Value
Fair value on a recurring basis
Marketable securities	22,118
Recurring \| Long-term marketable securities [Member] \| Estimated Fair Value \| Level 2 \| U.S. Treasury securities
Fair value on a recurring basis
Marketable securities	19,616
Recurring \| Long-term marketable securities [Member] \| Estimated Fair Value \| Level 2 \| Asset-backed securities
Fair value on a recurring basis
Marketable securities	$ 2,502

Organization and description of business

6 Months Ended

Jun. 30, 2024

Organization and description of business

Organization and description of business

SAGIMET BIOSCIENCES INC.

NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS

1.	Organization and description of business

Sagimet Biosciences Inc. (the Company), a Delaware corporation headquartered in San Mateo, California, is a clinical-stage biopharmaceutical company developing novel therapeutics called fatty acid synthase (FASN) inhibitors that target dysfunctional metabolic pathways in diseases resulting from the overproduction of the fatty acid, palmitate. The Company’s lead drug candidate, denifanstat, is an oral, once-daily pill and selective FASN inhibitor for the treatment of metabolic dysfunction-associated steatohepatitis (MASH), formerly known as nonalcoholic steatohepatitis (NASH). In January 2024, the Company announced positive topline results from the Phase 2b FASCINATE-2 clinical trial, evaluating denifanstat in biopsy-confirmed MASH patients with stage F2 or F3 fibrosis compared to placebo at week 52. In June 2024, the Company presented additional 52-week intention to treat (ITT) and F3 subgroup efficacy data from the Phase 2b FASCINATE-2 clinical trial.

In addition to MASH, the Company is exploring the use of its FASN inhibitors in acne and in select forms of cancer, diseases in which dysregulation of fatty acid metabolism also play a key role. Denifanstat is currently being tested in China by the Company’s license partner, Ascletis BioScience Co. Ltd. (Ascletis), a subsidiary of Ascletis Pharma Inc. (Ascletis Pharma), in a Phase 3 clinical trial for moderate to severe acne vulgaris, and a Phase 3 trial in recurrent glioblastoma multiforme (GBM) in combination with bevacizumab. The Company has completed Investigational New Drug (IND) -enabling studies for a second clinical candidate FASN inhibitor, TVB-3567.

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted (GAAP) in the United States. Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Updates (ASU) promulgated by the Financial Accounting Standards Board (FASB). Certain prior year amounts have been reclassified to conform to the current year presentation.

These unaudited interim financial statements and accompanying notes should be read in conjunction with the Company’s annual financial statements and the notes thereto included in the Company’s Form 10-K filed with the Securities and Exchange Commission (SEC) on March 25, 2024. The accompanying interim financial statements as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023 are unaudited but include all adjustments that management believes to be necessary for a fair presentation of the periods presented. Interim results are not necessarily indicative of results for a full year. Balance sheet amounts as of December 31, 2023 have been derived from the audited financial statements as of that date.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Such estimates include accruals of research and development expenses, accrued costs for services rendered in connection with third-party contractor clinical trial activities, preferred stock and common stock valuations prior to the Company’s initial public offering of Series A common stock (IPO) and stock option valuations and stock-based compensation. On an ongoing basis, the Company evaluates its estimates and judgments, which are based on historical and anticipated results and trends and on various other assumptions that management believes to be reasonable under the circumstances. Actual results could differ from those estimates.

Emerging growth company status

The Company is an emerging growth company (EGC) as defined in the Jumpstart Our Business Startups Acts of 2012, as amended (the JOBS Act), and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not EGCs. The Company may take advantage of these exemptions until it is no longer an EGC under Section 107 of the JOBS Act and has elected to use the extended transition period for complying with new or revised accounting standards. As a result of this election, the Company’s financial statements may not be comparable to companies that comply with public company FASB standards’ effective dates.

Risks and liquidity

The Company is subject to certain risks and uncertainties, including, but not limited to changes in any of the following areas that the Company believes could have a material adverse effect on future financial position or results of operations: the availability of future financing; the ability to obtain regulatory approval and market acceptance of, and reimbursement for, the Company’s drug candidates if approved; the performance of third-party clinical research organizations and manufacturers; protection of the intellectual property; litigation or claims against the Company based on intellectual property, patent, product, regulatory or other factors; and the Company’s ability to attract and retain employees necessary to support commercial success. In addition, significant changes in the biotechnology industry or the approval of competitive products or therapies could adversely affect the Company’s development and operating results.

The Company will require substantial additional capital to fund its research and development and ongoing operating expenses. As of June 30, 2024, the Company has relied on public and private equity and debt financings and proceeds from licensing arrangements, to fund its operations. The Company has incurred net losses and negative cash flows from operations since inception, and, as of June 30, 2024, had an accumulated deficit of $264.5 million and cash, cash equivalents and marketable securities of $188.5 million. The Company expects to incur additional losses and negative cash flows from operations for the next twelve months.

In July and August 2023, the Company completed its IPO and its underwriters exercised their overallotment option, respectively, whereby the Company sold an aggregate of 6,026,772 shares of Series A common stock at a public offering price of $16.00 per share and received $86.2 million in net proceeds. In January 2024, the Company completed a follow-on offering whereby it sold 9,000,000 shares of its Series A common stock at price of $12.50 per share and received $104.7 million in proceeds, net of issuance costs of $7.8 million. The Company expects that its cash, cash equivalents and marketable securities as of June 30, 2024 will be sufficient to fund its operating expenses and capital expenditure requirements through at least 12 months from the issuance of these unaudited condensed financial statements. In the future, the Company may need to raise additional funds until it is able to generate sufficient revenues to fund its development activities. The Company’s future operating activities, coupled with its plans to raise capital or issue debt financing, may provide additional liquidity in the future, however these actions are not solely within the control of the Company and the Company is unable to predict the outcome of these actions to generate the liquidity ultimately required.

Stock-based compensation - Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Stock-based compensation
Total stock-based compensation	$ 1,449	$ 1,057	$ 2,208	$ 1,824
Stock options
Stock-based compensation
Total stock-based compensation	1,138	1,057	1,587	1,824
Restricted Stock Units
Stock-based compensation
Total stock-based compensation	311		621
General and administrative
Stock-based compensation
Total stock-based compensation	1,181	856	1,694	1,454
Research and development
Stock-based compensation
Total stock-based compensation	$ 268	$ 201	$ 514	$ 370

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Jun. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Fair value measurements and fair value of financial instruments - Warrants (Details) - Series A common stock warrant liability	Jun. 30, 2024 $ / shares shares
Redeemable Convertible Preferred Stock Warrant Liability
Warrants issued (in shares) \| shares	1,000
Exercise price of warrant (in dollars per share) \| $ / shares	$ 69.64

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Operating expenses:
Research and development	$ 6,313	$ 4,676	$ 11,575	$ 9,163
General and administrative	4,276	2,381	7,782	4,659
Total operating expenses	10,589	7,057	19,357	13,822
Loss from operations	(10,589)	(7,057)	(19,357)	(13,822)
Other income, net:
Interest income and other	2,471	272	4,610	450
Net loss	(8,118)	(6,785)	(14,747)	(13,372)
Other comprehensive income (loss):
Net unrealized income (loss) on marketable securities	(30)	13	(53)	84
Comprehensive loss	$ (8,148)	$ (6,772)	$ (14,800)	$ (13,288)
Net loss per share, basic (in dollars per share)	$ (0.25)	$ (35.80)	$ (0.48)	$ (71.39)
Net loss per share, diluted (in dollars per share)	$ (0.25)	$ (35.80)	$ (0.48)	$ (71.39)
Weighted-average shares outstanding, basic (in shares)	31,913,887	189,520	30,476,657	187,314
Weighted-average shares outstanding, diluted (in shares)	31,913,887	189,520	30,476,657	187,314