0000950170-24-125457 | 10-Q | XBRL Viewer

Lease

9 Months Ended

Sep. 30, 2024

6. Lease

In November 2022, the Company entered into an amendment to the lease agreement for its corporate headquarters in South San Francisco, California, which expanded the leased premises in the same building as its corporate headquarters and extended the lease term of the original premises to be coterminous with the expansion premises to July 31, 2026. The transaction was treated as a lease modification as of the effective date and resulted in the recognition of approximately $8.0 million in new lease liabilities and ROU assets.

In December 2023, the Company committed to a plan to sublease Suite 400 of its corporate headquarters in connection with a workforce reduction (see Note 14) and evaluated the recoverability of ROU asset by comparing the carrying amount of the asset to future net undiscounted cash flows associated with the asset. The ROU asset is considered to be impaired if the carrying amount of the assets exceeds the fair value of the assets. Consequently, the Company recognized a $2.7 million impairment charge in 2023. In June 2024, the Company recognized an additional $1.5 million impairment charge in relation to Suite 400 to write off the net book value of the ROU asset as the estimated future cash flow from sublease income is zero due to current market conditions.

Information related to the Company’s lease liabilities were as follows (in thousands):


	Three months ended September 30, 2024		Nine months ended September 30, 2024
Cash paid for operating lease liabilities	$	762	$	2,215
Operating lease costs		457		1,778
Variable lease costs		466		1,382

Maturities of lease liabilities as of September 30, 2024 were as follows:
Less than 12 months			$	3,991
13 - 24 months				3,437
Total undiscounted lease payments				7,428
Less: imputed interest				(778	)
Total lease liabilities			$	6,650

Operating lease liabilities, current			$	3,391
Operating lease liabilities, noncurrent				3,259
Total operating lease liabilities			$	6,650

Subsequent Events	9 Months Ended
Sep. 30, 2024
Subsequent Events [Abstract]
Subsequent Events	15. Subsequent Events Adoption of a Stockholder Rights Plan On October 17, 2024, the Company’s board of directors adopted a limited duration stockholder rights plan (the “Rights Plan”), effective immediately, and declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of the Company’s common stock as of the close of business on October 28, 2024, the record date. The Rights are exercisable only if a person or group (an “Acquiring Person”) acquires or launches a tender or exchange offer to acquire beneficial ownership (which includes certain synthetic equity interests) of 10% or more of the Company’s outstanding common stock (15% in the case of a passive institutional investor as described in the Rights Plan). Once the Rights become exercisable, each Right will entitle its holder (other than any Acquiring Person, whose Rights will become void) to purchase, for $71.60, one one-hundredth of a share of the Company’s newly designated Series A Junior Participating Preferred Stock, par value $0.001 per share (each, a “Preferred Share” and collectively, the “Preferred Shares”) (with such exercise price and Preferred Share amounts adjusted to account for the Reverse Stock Split). The description and terms of the Rights Plan are set forth in the Rights Agreement, dated as of October 17, 2024 (the “Rights Agreement”), between the Company and Computershare Trust Company, N.A. The terms of the Preferred Shares are set forth in a Certificate of Designation filed with the Secretary of State of Delaware on October 17, 2024. The Rights will expire on October 17, 2025, unless the Rights are earlier redeemed or exchanged by the Company. One-for-Ten Reverse Stock Split On October 29, 2024, the Company completed the Reverse Stock Split of the Company’s common stock at a ratio of one-for-ten. There were no changes in the total number of shares of common stock authorized for issuance by the Company, nor a change in par value per share. No fractional shares were issued as a result of the Reverse Stock Split. Instead, stockholders of record who would otherwise have been entitled to receive a fractional share were entitled to have the fractional share rounded up to the nearest whole share. All share and share-related information presented in these condensed consolidated financial statements has been retroactively adjusted for all periods presented to reflect the decreased number of shares resulting from the Reverse Stock Split.

Subsequent Events

9 Months Ended

Sep. 30, 2024

Subsequent Events [Abstract]

Subsequent Events

15. Subsequent Events

Adoption of a Stockholder Rights Plan

On October 17, 2024, the Company’s board of directors adopted a limited duration stockholder rights plan (the “Rights Plan”), effective immediately, and declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of the Company’s common stock as of the close of business on October 28, 2024, the record date. The Rights are exercisable only if a person or group (an “Acquiring Person”) acquires or launches a tender or exchange offer to acquire beneficial ownership (which includes certain synthetic equity interests) of 10% or more of the Company’s outstanding common stock (15% in the case of a passive institutional investor as described in the Rights Plan). Once the Rights become exercisable, each Right will entitle its holder (other than any Acquiring Person, whose Rights will become void) to purchase, for $71.60, one one-hundredth of a share of the Company’s newly designated Series A Junior Participating Preferred Stock, par value $0.001 per share (each, a “Preferred Share” and collectively, the “Preferred Shares”) (with such exercise price and Preferred Share amounts adjusted to account for the Reverse Stock Split). The description and terms of the Rights Plan are set forth in the Rights Agreement, dated as of October 17, 2024 (the “Rights Agreement”), between the Company and Computershare Trust Company, N.A. The terms of the Preferred Shares are set forth in a Certificate of Designation filed with the Secretary of State of Delaware on October 17, 2024. The Rights will expire on October 17, 2025, unless the Rights are earlier redeemed or exchanged by the Company.

One-for-Ten Reverse Stock Split

On October 29, 2024, the Company completed the Reverse Stock Split of the Company’s common stock at a ratio of one-for-ten. There were no changes in the total number of shares of common stock authorized for issuance by the Company, nor a change in par value per share. No fractional shares were issued as a result of the Reverse Stock Split. Instead, stockholders of record who would

otherwise have been entitled to receive a fractional share were entitled to have the fractional share rounded up to the nearest whole share. All share and share-related information presented in these condensed consolidated financial statements has been retroactively adjusted for all periods presented to reflect the decreased number of shares resulting from the Reverse Stock Split.

Stock-Based Compensation - Summary of RSU Activity (Details)	9 Months Ended
	Sep. 30, 2024 $ / shares shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Weighted average exercise price, Outstanding, Beginning balance	$ 25.95
Weighted average exercise price, Options cancelled/forfeited	31.43
Weighted average exercise price, Outstanding, Ending balance	$ 19.32
RSU Member \| 2018 Equity Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares outstanding, beginning balance \| shares	21,945
Number of shares, vested \| shares	(9,702)
Number of shares, forfeited \| shares	(1,189)
Number of shares outstanding, ending balance \| shares	11,054
Weighted average exercise price, Outstanding, Beginning balance	$ 92
Weighted average exercise price, vested	93.64
Weighted average exercise price, Options cancelled/forfeited	92.57
Weighted average exercise price, Outstanding, Ending balance	$ 90.48

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

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+ Details

Net Loss Per Share - Anti-dilutive Outstanding Shares of Common Stock Equivalents Excluded from Computation of Diluted Net Loss Per Share (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of diluted net loss per share	1,726,681	1,363,468	1,726,681	1,363,468
Stock options to purchase common stock [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of diluted net loss per share	1,715,627	1,333,045	1,715,627	1,333,045
Restricted Stock Units Subject to Future Vesting [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of diluted net loss per share	11,054	30,423	11,054	30,423

Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive (Loss) Income	Accumulated Deficit
Balance at Dec. 31, 2022	$ 269,872	$ 7	$ 519,681	$ (923)	$ (248,893)
Balance, shares at Dec. 31, 2022		6,849,343
Cashless exercise of pre-funded warrants, shares		223,624
Cashless exercise of pre-funded warrants		$ 0	0
Issuance of common stock under equity incentive plans	154		154
Issuance of common stock under equity incentive plans, shares		8,633
Stock-based compensation expense	4,263		4,263
Other comprehensive income (loss)	400			400
Net Income (Loss)	(22,199)				(22,199)
Balance at Mar. 31, 2023	252,490	$ 7	524,098	(523)	(271,092)
Balance, shares at Mar. 31, 2023		7,081,600
Balance at Dec. 31, 2022	269,872	$ 7	519,681	(923)	(248,893)
Balance, shares at Dec. 31, 2022		6,849,343
Other comprehensive income (loss)	236
Net Income (Loss)	(69,610)
Balance at Sep. 30, 2023	215,994	$ 7	535,177	(687)	(318,503)
Balance, shares at Sep. 30, 2023		7,269,297
Balance at Mar. 31, 2023	252,490	$ 7	524,098	(523)	(271,092)
Balance, shares at Mar. 31, 2023		7,081,600
Cashless exercise of pre-funded warrants, shares		155,665
Cashless exercise of pre-funded warrants		$ 0	0
Issuance of common stock under equity incentive plans	382		382
Issuance of common stock under equity incentive plans, shares		16,017
Stock-based compensation expense	4,020		4,020
Other comprehensive income (loss)	(307)			(307)
Net Income (Loss)	(24,308)				(24,308)
Balance at Jun. 30, 2023	232,277	$ 7	528,500	(830)	(295,400)
Balance, shares at Jun. 30, 2023		7,253,282
Issuance of common stock under equity incentive plans	43		43
Issuance of common stock under equity incentive plans, shares		16,015
Stock-based compensation expense	6,634		6,634
Other comprehensive income (loss)	143			143
Net Income (Loss)	(23,103)				(23,103)
Balance at Sep. 30, 2023	215,994	$ 7	535,177	(687)	(318,503)
Balance, shares at Sep. 30, 2023		7,269,297
Balance at Dec. 31, 2023	187,570	$ 7	538,456	(130)	(350,763)
Balance, shares at Dec. 31, 2023		7,277,908
Issuance of common stock under equity incentive plans	0		0
Issuance of common stock under equity incentive plans, shares		2,228
Stock-based compensation expense	3,434		3,434
Other comprehensive income (loss)	(225)			(225)
Net Income (Loss)	(21,658)				(21,658)
Balance at Mar. 31, 2024	169,121	$ 7	541,890	(355)	(372,421)
Balance, shares at Mar. 31, 2024		7,280,136
Balance at Dec. 31, 2023	187,570	$ 7	538,456	(130)	(350,763)
Balance, shares at Dec. 31, 2023		7,277,908
Other comprehensive income (loss)	237
Net Income (Loss)	(63,518)
Balance at Sep. 30, 2024	134,049	$ 7	548,216	107	(414,281)
Balance, shares at Sep. 30, 2024		7,296,222
Balance at Mar. 31, 2024	169,121	$ 7	541,890	(355)	(372,421)
Balance, shares at Mar. 31, 2024		7,280,136
Issuance of common stock under equity incentive plans	56		56
Issuance of common stock under equity incentive plans, shares		8,618
Stock-based compensation expense	3,085		3,085
Other comprehensive income (loss)	(30)			(30)
Net Income (Loss)	(21,547)				(21,547)
Balance at Jun. 30, 2024	150,685	$ 7	545,031	(385)	(393,968)
Balance, shares at Jun. 30, 2024		7,288,754
Issuance of common stock under equity incentive plans, shares		7,468
Stock-based compensation expense	3,185		3,185
Other comprehensive income (loss)	492			492
Net Income (Loss)	(20,313)				(20,313)
Balance at Sep. 30, 2024	$ 134,049	$ 7	$ 548,216	$ 107	$ (414,281)
Balance, shares at Sep. 30, 2024		7,296,222

- 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

- Definition

Amount of equity (deficit) attributable to parent. Excludes temporary equity and equity attributable to noncontrolling interest.

+ References

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+ Details

Net Loss Per Share

9 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

Net Loss Per Share

12. Net Loss Per Share

Net Loss Per Share

The following table sets forth the calculation of basic and diluted net loss per share during the periods presented (in thousands, except share and per share data):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Numerator:
Net loss	$	(20,313	)	$	(23,103	)	$	(63,518	)	$	(69,610	)
Denominator:
Weighted-average shares of common stock outstanding		7,296,222			7,268,165			7,286,967			7,249,188
Net loss per share, basic and diluted	$	(2.78	)	$	(3.18	)	$	(8.72	)	$	(9.60	)

Basic net loss per common share is calculated by dividing net loss by the weighted-average number of shares of common stock and pre-funded warrants outstanding during the period, without consideration of common share equivalents. Diluted net loss per common share is computed by dividing net loss by the weighted-average number of shares of common stock, pre-funded warrants and common share equivalents outstanding for the period. The pre-funded warrants were included in the computation of basic and diluted net loss per common share as the exercise price was negligible and the pre-funded warrants were fully vested and exercisable. Common share equivalents are only included in the calculation of diluted net loss per common share when their effect is dilutive.

Potential dilutive securities, which include, vested and unvested options to purchase common stock and RSUs subject to future vesting have been excluded from the computation of diluted net loss per share as the effect is antidilutive. Therefore, the denominator used to calculate both basic and diluted net loss per common share is the same in all periods presented.

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


	Three and Nine Months Ended September 30,
	2024		2023
Stock options to purchase common stock		1,715,627		1,333,045
Restricted stock units subject to future vesting		11,054		30,423
Total		1,726,681		1,363,468

Stock-Based Compensation - Stock-Based Compensation Expense Recognized (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 3,185	$ 6,634	$ 9,704	$ 14,917
Research and Development Expense
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	991	3,140	2,962	7,421
General and Administrative Expense
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 2,194	$ 3,494	$ 6,742	$ 7,496

Organization and Description of the Business - Additional Information (Details) $ / shares in Units, $ in Thousands		1 Months Ended	9 Months Ended	25 Months Ended
	Oct. 29, 2024	Dec. 31, 2021 USD ($)	Sep. 30, 2024 USD ($) Segment shares	Dec. 31, 2023 USD ($) $ / shares shares
Organization And Description Of Business [Line Items]
Number of operating segments \| Segment			1
Accumulated deficit			$ 414,281	$ 350,763
Subsequent Event
Organization And Description Of Business [Line Items]
Stockholders equity, reverse stock split ratio	0.1
ATM Agreement
Organization And Description Of Business [Line Items]
Issuance of common stock \| shares			0
ATM Agreement \| Cowen and Company LLC
Organization And Description Of Business [Line Items]
Percentage of commission on gross sales proceeds of issuance of common stock		3.00%
Weighted average purchase price, per share \| $ / shares				$ 109.84
Remaining amount with sales agreement			$ 68,300
Issuance of common stock \| shares				1,198,601
Net proceeds from the public offering				$ 131,700
Minimum
Organization And Description Of Business [Line Items]
Sufficient cash and cash equivalents available period term			12 months
Maximum \| ATM Agreement \| Cowen and Company LLC
Organization And Description Of Business [Line Items]
Common stock aggregate offering price		$ 200,000

Subsequent Events - Additional Information (Details)	Oct. 29, 2024	Oct. 17, 2024 USD ($) $ / shares	Sep. 30, 2024 $ / shares	Dec. 31, 2023 $ / shares
Subsequent Event [Line Items]
Preferred stock, par value			$ 0.001	$ 0.001
Subsequent Event
Subsequent Event [Line Items]
Stockholders equity, reverse stock split ratio	0.1
Subsequent Event \| Stockholder Rights Plan
Subsequent Event [Line Items]
Beneficial ownership acquired, passive institutional investor, percentage		15.00%
Preferred stock, par value		$ 0.001
Rights plan expiration date		Oct. 17, 2025
Subsequent Event \| Stockholder Rights Plan \| Series A Junior Participating Preferred Stock
Subsequent Event [Line Items]
Purchase price \| $		$ 71.6
Subsequent Event \| Minimum \| Stockholder Rights Plan
Subsequent Event [Line Items]
Beneficial ownership acquired		10.00%

Stock-Based Compensation

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

9. Stock-Based Compensation

Stock Incentive Plans

2022 Inducement Plan

In April 2022, the Company adopted the Kezar Life Sciences, Inc. 2022 Inducement Plan (the “Inducement Plan”), which is a non-stockholder approved stock plan adopted pursuant to the “inducement exception” provided under Nasdaq Listing Rule 5635(c)(4), for the award of nonstatutory stock options (“NSOs”), restricted stock units (“RSUs”) and other equity awards as permitted by the Inducement Plan (collectively, “Inducement Awards”) to persons not previously an employee or director of the Company, or following a bona fide period of non-employment, as an inducement material to such persons entering into employment with the Company (“Eligible Recipients”). Under the Inducement Plan, the Company may grant up to 300,000 shares of Common Stock in the form of Inducement Awards to Eligible Recipients in compliance with the requirements of Nasdaq Listing Rule 5635(c)(4). Awards must be approved by either a majority of the Company’s independent directors or the Company’s independent compensation committee. Consultants and directors are not eligible to received grants under the Inducement Plan.

As of September 30, 2024, options to purchase 119,637 shares of common stock were outstanding and 180,363 shares were available for future issuance under the Inducement Plan.

2018 Equity Incentive Plan

In June 2018, the Company’s board of directors adopted and the stockholders approved the 2018 Equity Incentive Plan (the “2018 Plan”), which became effective as of June 20, 2018, at which point no further grants could be made under the 2015 Equity Incentive Plan (the “2015 Plan”) described below. Under the 2018 Plan, the Company may grant incentive stock options (“ISOs”), NSOs, stock appreciation rights, restricted stock awards, RSUs and other stock-based awards. As of September 30, 2024, options to purchase 1,459,665 shares of common stock and 11,054 RSUs were outstanding, and 89,315 shares were available for future issuance under the 2018 Plan.

Initially, subject to adjustment as provided in the 2018 Plan, the aggregate number of shares of the Company’s common stock authorized for issuance pursuant to stock awards under the 2018 Plan was 400,000 shares, which is the sum of (i) 160,069 shares plus (ii) the number of shares reserved and available for issuance under the 2015 Plan at the time the 2018 Plan became effective and (iii) the number of shares subject to stock options or other stock awards granted under the 2015 Plan that expire, terminate are forfeited or otherwise not issued, or are withheld to satisfy a tax withholding obligation in connection with an award or to satisfy a purchase or exercise price of an award (such as upon the expiration or termination of a stock award prior to vesting). The number of shares of the Company’s common stock reserved for issuance under the 2018 Plan automatically increases on January 1 of each year, beginning on January 1, 2019 and continuing through and including January 1, 2028, by 5% of the total number of shares of capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by the Company’s board of directors prior to such increase.

The maximum number of shares that may be issued upon the exercise of ISOs under the 2018 Plan is 1,250,000 shares.

2015 Equity Incentive Plan

The 2015 Plan provided for the granting of ISOs and NSOs to employees, directors and consultants at the discretion of the Company’s board of directors. The 2015 Plan was terminated as to future awards in June 2018, although it continues to govern the terms of options that remain outstanding under the 2015 Plan.

No additional stock awards will be granted under the 2015 Plan, and all outstanding stock awards granted under the 2015 Plan that are repurchased, forfeited, expire or are cancelled will become available for grant under the 2018 Plan in accordance with its terms.

Options granted under the 2015 Plan expire no later than 10 years from the date of grant. Options granted under the 2015 Plan vest over periods determined by the Company’s board of directors, generally over four years. The 2015 Plan allows for early exercise of certain options prior to vesting. Upon termination of employment, the unvested shares are subject to repurchase at the original exercise price. As of September 30, 2024, options to purchase 136,325 shares of common stock were outstanding under the 2015 Plan.

2018 Employee Stock Purchase Plan

In June 2018, the Company’s board of directors adopted and the stockholders approved the 2018 Employee Stock Purchase Plan (the “ESPP”), which became effective as of June 20, 2018. The ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the U.S. Internal Revenue Code of 1986, as amended. The number of shares of common stock initially reserved for issuance under the ESPP was 20,000 shares. The ESPP provides for an annual increase on January 1 of each year, beginning on January 1, 2019 and continuing through and including January 1, 2028, equal to the lesser of (i) 1% of the shares of common stock outstanding on the last day of the prior fiscal year or (ii) 37,500 shares, or a lesser number of shares determined by the Company’s board of directors prior to such increase. In December 2023, the Company’s board of directors acted such that there was no increase of the number of shares of common stock reserved for issuance under the ESPP as of January 1, 2024. As of September 30, 2024, 67,501 shares of common stock had been issued under the ESPP and 65,709 shares remained available for future issuance under the ESPP.

The price per share of common stock to be paid by an ESPP participant on the applicable purchase date of an offering period shall be equal to 85% of the lesser of the fair market value of a share of common stock on (i) the applicable offering date or (ii) the applicable purchase date. The Company’s board of directors authorized an initial six-month offering period beginning on November 16, 2018 and ending on May 15, 2019. The Company’s board of directors has subsequently authorized additional six-month offering periods, with the most recent offering period beginning on May 16, 2024.

Option Repricing

In July 2023, the Compensation Committee of the Company’s board of directors approved a stock option repricing (the “Option Repricing”) in which the exercise price of certain outstanding options to purchase shares of the Company’s common stock under the 2018 Plan was reduced to $22.80 per share, the closing price of the Common Stock on July 24, 2023. Outstanding options that were granted under the 2015 Plan and the Inducement Plan were not included in the Option Repricing. The Option Repricing included options granted pursuant to the 2018 Plan that were held by, among others, members of the Company’s board of the directors (other than options granted in June 2023) and the Company’s named executive officers and principal financial officer.

As a result of the Option Repricing, 990,367 shares of vested and unvested stock options outstanding as of July 24, 2023, with original exercise prices ranging from $24.40 to $228.50 per share, were repriced to $22.80 per share. The total incremental fair value to be recognized as a result of the repricing was approximately $4.7 million on the date of Option Repricing, of which $3.2 million related to the vested option shares had been recognized as stock-based compensation expense and $0.6 million related to the unvested option shares subsequently cancelled due to termination as of September 30, 2024. As of September 30, 2024, there was $0.9 million remaining related to the unvested option shares which will be amortized over the remaining requisite service periods through the end of 2026.

Stock Option Activity

The following table summarizes activity under the Company’s stock option plans and related information (in thousands, except share and per share amounts):


	Number of Options Outstanding			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding as of December 31, 2023		1,310,651		$	25.95		7.1	$	118
Options granted		578,797		$	7.93
Options cancelled/forfeited		(173,821	)	$	31.43
Outstanding as of September 30, 2024		1,715,627		$	19.32		7.4	$	367
Vested and exercisable as of September 30, 2024		884,010		$	24.62		5.9	$	3

The weighted average grant date fair value of options granted during the three and nine months ended September 30, 2024 was $4.61 and $5.92 per share, respectively. There were no options exercised during the nine months ended September 30, 2024. The aggregate intrinsic value is calculated as the difference between the exercise price and the estimated fair value of the Company’s common stock at the date of exercise.

Performance Option Grants Activities

On July 11, 2024, the Compensation Committee of the Company’s board of directors approved performance-based stock option grants to all employees, except the Chief Executive Officer, under the 2018 Plan. Performance-based stock options will vest upon the achievements of specified clinical trial milestones. The grant-date fair value of these performance-based stock options is calculated using the Black-Scholes option-pricing model. Performance-based stock options are included in the outstanding stock options table above. Stock-based compensation cost related to performance-based stock options is recognized over the period from the date the performance condition is determined to be probable of occurring through the date the applicable condition is expected to be met. If the performance condition is not considered probable of being achieved, no stock-based compensation is recognized until such time as the performance condition is considered probable of being achieved and related compensation cost would be recognized through a cumulative catch-up adjustment in the period of change. Stock-based compensation expenses of $0.1 million related to performance-based stock options were recognized for the three and nine months ended September 30, 2024.

Restricted Stock Units Activity

There were no RSUs granted during the nine months ended September 30, 2024. One-third of each RSU granted vests annually following the vesting commencement dates, over a vesting period of three years. RSUs are awards that entitle the holder to receive freely tradable shares of the Company's common stock upon vesting and are not forfeitable once fully vested. The valuations for these

RSUs were based on the closing prices of the Company's common stock on the grant dates and recognized as stock-based compensation expenses over the respective vesting terms.


	Number of RSUs Outstanding			Weighted Average Grant-Date Fair Price
Outstanding as of December 31, 2023		21,945		$	92.00
RSUs vested		(9,702	)	$	93.64
RSUs forfeited		(1,189	)	$	92.57
Outstanding as of September 30, 2024		11,054		$	90.48

Stock-Based Compensation Expense

Total stock-based compensation expense recognized by function was as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Research and development	$	991	$	3,140	$	2,962	$	7,421
General and administrative		2,194		3,494		6,742		7,496
Total stock-based compensation expense	$	3,185	$	6,634	$	9,704	$	14,917

As of September 30, 2024, the unrecognized stock-based compensation cost related to outstanding unvested stock options and RSUs that are expected to vest was $17.7 million with an estimated weighted average amortization period of 2.3 years.

The fair value of the stock options granted is calculated using the Black-Scholes option-pricing model with the following range of assumptions:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Expected term (years)	5.5 - 6.1		6.1		5.5 - 6.1		5.5 - 6.1
Expected volatility	86.2 - 87.3	%	87.6 - 88.0	%	86.2 - 87.9	%	87.6 - 88.3	%
Risk-free interest rate	3.6 - 4.2	%	4.1 - 4.2	%	3.6 - 4.6	%	3.5 - 4.3	%
Expected dividend yield	—		—		—		—

The expected term of options granted represents the period of time that options granted are expected to be outstanding and was determined by calculating the midpoint between the date of vesting and the contractual life of each option. The expected term of the ESPP rights is equal to the six-month look-back period. Since inception until March 2024, the volatility of the Company’s stock price was based on the weighted average of the historical volatility of the Company's stock price and that of a peer group of public companies over the expected term due to the Company's limited public trading history of its common stock. The peer group was selected on the basis of operational and economic similarity with the Company’s principal business operations. Effective as of the quarter-ended June 30, 2024, the expected volatility is based on the daily historical volatility of the Company’s common stock covering the estimated expected term. The risk-free interest rate for the expected term of the options is based on the U.S. Treasury yield curve with a maturity equal to the expected term in effect at the time of grant. The Company has not paid, and does not anticipate paying, cash dividends on its shares of common stock; therefore, the expected dividend yield is zero.

Balance Sheet Components - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Prepaid Expense, Current [Abstract]
Receivable from Everest, current (Note 10)	$ 500	$ 1,596
Advance for clinical-related costs, current	5,268	1,818
Licenses, dues and subscriptions	597	506
Insurance	847	712
Interest receivable	589	695
Other	190	251
Total prepaid expenses and other current assets	$ 7,991	$ 5,578

Balance Sheet Components

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Balance Sheet Components

5. Balance Sheet Components

Prepaid Expenses and Other Current Assets

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


	September 30, 2024		December 31, 2023
Receivable from Everest, current (Note 10)	$	500	$	1,596
Advance for clinical-related costs, current		5,268		1,818
Licenses, dues and subscriptions		597		506
Insurance		847		712
Interest receivable		589		695
Other		190		251
Total prepaid expenses and other current assets	$	7,991	$	5,578

Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):


	September 30, 2024			December 31, 2023
Leasehold improvements	$	3,488		$	3,488
Furniture, laboratory and office equipment		5,577			5,559
Computer equipment		285			285
Total property and equipment		9,350			9,332
Less: accumulated depreciation and amortization		(6,201	)		(5,420	)
Property and equipment, net	$	3,149		$	3,912

Depreciation expense was $0.3 million and $0.8 million for each of the three and nine months ended September 30, 2024, respectively, compared to $0.3 million and $0.8 million for the three and nine months ended September 30, 2023, respectively.

Other Assets

Other assets consisted of the following (in thousands):


	September 30, 2024		December 31, 2023
Advance for clinical related costs, noncurrent	$	—	$	4,787
Unbilled receivable from Everest, noncurrent (Note 10)		1,741		—
Deposits for operating lease		674		674
Other		—		134
Total other assets	$	2,415	$	5,595

Accrued and Other Current Liabilities

Accrued liabilities consisted of the following (in thousands):


	September 30, 2024		December 31, 2023
Accrued clinical costs	$	6,070	$	1,801
Accrued employee-related costs		2,120		3,708
Accrued preclinical and research costs		1,311		756
Accrued professional services		121		110
Other		42		106
Total accrued liabilities	$	9,664	$	6,481

Stock-Based Compensation - Summary of Activity under Stock Option Plans and Related Information (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]
Number of options outstanding, Outstanding, Beginning balance	1,310,651
Number of options outstanding, Options granted	578,797
Number of options outstanding, Options cancelled/forfeited	(173,821)
Number of options outstanding, Outstanding, Ending balance	1,715,627	1,310,651
Number of options outstanding, options vested and exercisable	884,010
Weighted average exercise price, Outstanding, Beginning balance	$ 25.95
Weighted average exercise price, Options granted	7.93
Weighted average exercise price, Options cancelled/forfeited	31.43
Weighted average exercise price, Outstanding, Ending balance	19.32	$ 25.95
Weighted average exercise price, options vested and exercisable	$ 24.62
Weighted average remaining contractual term, (Years) Outstanding balance	7 years 4 months 24 days	7 years 1 month 6 days
Weighted average remaining contractual term, (Years) options vested and exercisable	5 years 10 months 24 days
Aggregate intrinsic value, Outstanding, Beginning balance	$ 118
Aggregate intrinsic value, Outstanding, Ending balance	367	$ 118
Aggregate intrinsic value, options vested and exercisable	$ 3

Debt (Tables)

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Schedule of Long-term Debt Balance

The components of the long-term debt balance are as follows:


	September 30, 2024			December 31, 2023
Principal loan balance	$	10,000		$	10,000
Unamortized debt discount and issuance costs		(163	)		(243	)
Cumulative accretion of final fee		425			312
	$	10,262		$	10,069

Debt, current	$	3,913		$	—
Debt, noncurrent		6,349			10,069
Debt, net	$	10,262		$	10,069

Schedule of Estimated Future Principal Payments

As of September 30, 2024, the estimated future principal payments due were as follows:


Years Ending December 31,
2024	$	—
2025		5,217
2026		4,783
Total	$	10,000

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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-Paragraph 1
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+ Details

Available-for-Sale Securities (Tables)

9 Months Ended

Sep. 30, 2024

Investments, Debt and Equity Securities [Abstract]

Summary of Available-For-Sale Securities Recorded in Cash and Cash Equivalents or Marketable Securities

The following table is a summary of available-for-sale securities recorded in cash and cash equivalents or marketable securities in the Company’s condensed consolidated balance sheets (in thousands):


	September 30, 2024
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Cash equivalents:
U.S. Treasury money market funds	$	34,180	$	—	$	—		$	34,180
Certificate of deposit		555		—		—			555
Marketable securities:
U.S. Treasury securities		47,780		123		—			47,903
Commercial paper		42,380		137		(3	)		42,514
Corporate debt securities		11,065		54		—			11,119
U.S. government agency bonds		11,964		30		—			11,994
Total	$	147,924	$	344	$	(3	)	$	148,265
Cash									123
Total cash, cash equivalent and marketable securities								$	148,388


	December 31, 2023
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Cash equivalents:
U.S. Treasury money market funds	$	35,349	$	—	$	—		$	35,349
Marketable securities:
Certificate of deposit		544		—		—			544
U.S. Treasury securities		54,066		151		(42	)		54,175
Commercial paper		65,038		41		(9	)		65,070
U.S. government agency bonds		46,115		27		(52	)		46,090
Total	$	201,112	$	219	$	(103	)	$	201,228
Cash									144
Total cash, cash equivalent and marketable securities								$	201,372

Summary of Gross Unrealized Losses and Fair Value by Major Security Type for Available-For-Sale Securities in Unrealized Loss Position

The following tables display additional information regarding gross unrealized losses and fair value by major security type for available-for-sale securities in an unrealized loss position as of September 30, 2024 and December 31, 2023 (in thousands):


	September 30, 2024
	Less than 12 consecutive months
	Fair Value		Unrealized Losses
Commercial paper	$	959	$	(3	)
Total	$	959	$	(3	)


	December 31, 2023
	Less than 12 consecutive months
	Fair Value		Unrealized Losses
U.S. Treasury securities	$	16,261	$	(42	)
Commercial paper		20,789		(9	)
U.S. government agency bonds		39,052		(52	)
Total	$	76,102	$	(103	)

Summary of Amortized Cost and Estimated Fair Value of Available-for-sale Securities by Contractual Maturity

As of September 30, 2024, the amortized cost and estimated fair value of the Company’s available-for-sale securities by contractual maturity are shown below (in thousands):


	Amortized		Estimated
Available-for-sale securities maturing in:	Cost		Fair Value
One year or less	$	147,924	$	148,265
Total available-for-sale securities	$	147,924	$	148,265

- 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).

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
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-Paragraph 9
-Subparagraph (a)
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+ Details

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 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
Rule 10b5-1 Arrangement Modified	false
Non Rule 10b5-1 Arrangement Modified	false

Balance Sheet Components - Other Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Other Assets [Abstract]
Advance for clinical related costs, noncurrent	$ 0	$ 4,787
Unbilled receivable from Everest, noncurrent (Note 10)	1,741	0
Deposits for operating lease	674	674
Other	0	134
Total other assets	$ 2,415	$ 5,595

Related Party Transactions - Additional Information (Details) - Chief Executive Officer [Member] - USD ($)		3 Months Ended	9 Months Ended
	Nov. 07, 2023	Sep. 30, 2024	Sep. 30, 2024
Related Party Transaction [Line Items]
Consulting agreement, effective date	Nov. 07, 2023
Consultant fee per month			$ 5,000
Compensation expense		$ 15,000	$ 45,000

Fair Value Measurements - Summary of Financial Assets Measured at Fair Value on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets	$ 148,265	$ 201,228
Level 1
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets	82,083	89,524
Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets	66,182	111,704
Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets	0	0
U.S. Treasury Money Market Funds
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets	34,180	35,349
U.S. Treasury Money Market Funds \| Level 1
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets	34,180	35,349
U.S. Treasury Money Market Funds \| Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets	0	0
U.S. Treasury Money Market Funds \| Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets	0	0
Certificates Of Deposit
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets	555	544
Certificates Of Deposit \| Level 1
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets	0	0
Certificates Of Deposit \| Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets	555	544
Certificates Of Deposit \| Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets	0	0
U.S. Treasury Securities
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets	47,903	54,175
U.S. Treasury Securities \| Level 1
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets	47,903	54,175
U.S. Treasury Securities \| Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets	0	0
U.S. Treasury Securities \| Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets	0	0
Commercial paper
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets	42,514	65,070
Commercial paper \| Level 1
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets	0	0
Commercial paper \| Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets	42,514	65,070
Commercial paper \| Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets	0	0
Corporate debt securities
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets	11,119
Corporate debt securities \| Level 1
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets	0
Corporate debt securities \| Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets	11,119
Corporate debt securities \| Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets	0
U.S. government agency bonds
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets	11,994	46,090
U.S. government agency bonds \| Level 1
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets	0	0
U.S. government agency bonds \| Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets	11,994	46,090
U.S. government agency bonds \| Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets	$ 0	$ 0

Balance Sheet Components - Property and Equipment, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Property Plant And Equipment [Line Items]
Total property and equipment	$ 9,350	$ 9,332
Less accumulated depreciation and amortization	(6,201)	(5,420)
Property and equipment, net	3,149	3,912
Leasehold Improvements
Property Plant And Equipment [Line Items]
Total property and equipment	3,488	3,488
Furniture, Laboratory and Office Equipment
Property Plant And Equipment [Line Items]
Total property and equipment	5,577	5,559
Computer Equipment
Property Plant And Equipment [Line Items]
Total property and equipment	$ 285	$ 285

Balance Sheet Components (Tables)

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Prepaid Expenses and Other Current Assets

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


	September 30, 2024		December 31, 2023
Receivable from Everest, current (Note 10)	$	500	$	1,596
Advance for clinical-related costs, current		5,268		1,818
Licenses, dues and subscriptions		597		506
Insurance		847		712
Interest receivable		589		695
Other		190		251
Total prepaid expenses and other current assets	$	7,991	$	5,578

Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):


	September 30, 2024			December 31, 2023
Leasehold improvements	$	3,488		$	3,488
Furniture, laboratory and office equipment		5,577			5,559
Computer equipment		285			285
Total property and equipment		9,350			9,332
Less: accumulated depreciation and amortization		(6,201	)		(5,420	)
Property and equipment, net	$	3,149		$	3,912

Other Assets

Other assets consisted of the following (in thousands):


	September 30, 2024		December 31, 2023
Advance for clinical related costs, noncurrent	$	—	$	4,787
Unbilled receivable from Everest, noncurrent (Note 10)		1,741		—
Deposits for operating lease		674		674
Other		—		134
Total other assets	$	2,415	$	5,595

Accrued and Other Current Liabilities

Accrued liabilities consisted of the following (in thousands):


	September 30, 2024		December 31, 2023
Accrued clinical costs	$	6,070	$	1,801
Accrued employee-related costs		2,120		3,708
Accrued preclinical and research costs		1,311		756
Accrued professional services		121		110
Other		42		106
Total accrued liabilities	$	9,664	$	6,481

Fair Value Measurements

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

3. Fair Value Measurements

Financial assets and liabilities are recorded at fair value. The carrying amount of certain financial instruments, including cash equivalents, other current assets, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities. Assets and liabilities recorded at fair value on a recurring basis in the condensed consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. 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.

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 applies fair value accounting for all financial assets and liabilities and nonfinancial assets and liabilities that are required to be recognized or disclosed at fair value in the financial statements. The Company determines the fair value of Level 1 assets using quoted prices in active markets for identical assets. The Company reviews trading activity and pricing for Level 2 investments as of each measurement date. Level 2 inputs, which are obtained from various third-party data providers, represent quoted prices for similar assets in active markets and were derived from observable market data, or, if not directly observable, were derived from or corroborated by other observable market data.

In certain cases, where there is limited activity or less transparency around inputs to valuation, securities are classified as Level 3 within the valuation hierarchy. The Company did not have any financial assets or liabilities measured using Level 3 inputs as of September 30, 2024 or December 31, 2023.

The following table summarizes the Company’s financial assets measured at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy as described above (in thousands):


	September 30, 2024
	Total		Level 1		Level 2		Level 3
Financial Assets:
Cash equivalents:
U.S. Treasury money market funds	$	34,180	$	34,180	$	—	$	—
Certificate of deposit		555		—		555		—
Marketable securities:
U.S. Treasury securities		47,903		47,903		—		—
Commercial paper		42,514		—		42,514		—
Corporate debt securities		11,119		—		11,119		—
U.S. government agency bonds		11,994		—		11,994		—
Total	$	148,265	$	82,083	$	66,182	$	—


	December 31, 2023
	Total		Level 1		Level 2		Level 3
Financial Assets:
Cash equivalents:
U.S. Treasury money market funds	$	35,349	$	35,349	$	—	$	—
Marketable securities:
Certificate of deposit		544		—		544		—
U.S. Treasury securities		54,175		54,175		—		—
Commercial paper		65,070		—		65,070		—
U.S. government agency bonds		46,090		—		46,090		—
Total	$	201,228	$	89,524	$	111,704	$	—

Nonrecurring Fair Value Measurements

The right-of-use (“ROU”) asset associated with Suite 400 of the Company's headquarters in South San Francisco, California, is a separate asset group measured at fair value on a nonrecurring basis as of December 31, 2023 due to an impairment recognized on the ROU asset at that date (see Note 6). The fair value of this asset group calculated as the present value of the estimated future cash flows of sublease income attributable to the ROU asset associated with Suite 400, was classified in Level 3 of the fair value hierarchy. When calculating the present value of the estimated future cash flows, sublease income was estimated to increase at a rate of 3.5% per year, and the cash flows were discounted using a rate of 13.3%. In June 2024, the Company recognized an additional $1.5 million impairment charge in relation to Suite 400 to write off the net book value of the ROU asset as the estimated future cash flow from sublease income is zero due to current market conditions.

- 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.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 107
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482078/820-10-55-107

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478119/940-820-50-1

+ Details

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Summary of Activity under Stock Option Plans and Related Information

The following table summarizes activity under the Company’s stock option plans and related information (in thousands, except share and per share amounts):


	Number of Options Outstanding			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding as of December 31, 2023		1,310,651		$	25.95		7.1	$	118
Options granted		578,797		$	7.93
Options cancelled/forfeited		(173,821	)	$	31.43
Outstanding as of September 30, 2024		1,715,627		$	19.32		7.4	$	367
Vested and exercisable as of September 30, 2024		884,010		$	24.62		5.9	$	3

Summary of RSU Activity


	Number of RSUs Outstanding			Weighted Average Grant-Date Fair Price
Outstanding as of December 31, 2023		21,945		$	92.00
RSUs vested		(9,702	)	$	93.64
RSUs forfeited		(1,189	)	$	92.57
Outstanding as of September 30, 2024		11,054		$	90.48

Stock-Based Compensation Expense Recognized

Total stock-based compensation expense recognized by function was as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Research and development	$	991	$	3,140	$	2,962	$	7,421
General and administrative		2,194		3,494		6,742		7,496
Total stock-based compensation expense	$	3,185	$	6,634	$	9,704	$	14,917

Fair Value of Employee Stock Options Granted is Calculated Using Black Scholes Option Pricing Model with Range of Assumptions

The fair value of the stock options granted is calculated using the Black-Scholes option-pricing model with the following range of assumptions:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Expected term (years)	5.5 - 6.1		6.1		5.5 - 6.1		5.5 - 6.1
Expected volatility	86.2 - 87.3	%	87.6 - 88.0	%	86.2 - 87.9	%	87.6 - 88.3	%
Risk-free interest rate	3.6 - 4.2	%	4.1 - 4.2	%	3.6 - 4.6	%	3.5 - 4.3	%
Expected dividend yield	—		—		—		—

Debt - Additional Information (Details) - Oxford Finance LLC $ in Millions	1 Months Ended	3 Months Ended		9 Months Ended
	Nov. 30, 2021 USD ($) Tranche	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)
SOFR
Debt Instrument [Line Items]
Line of credit facility, additional interest rate				0.10%
Loan and Security Agreement
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 50.0
Number of tranches \| Tranche	5
Line of credit facility, Maturity period	Nov. 01, 2026
Line of credit facility frequency of payments				monthly interest-only payments
Line of credit facility, extension period	1 year
Final payment fee percentage	6.50%
Interest expense		$ 0.4	$ 0.4	$ 1.2	$ 1.2
Effective interest rate percentage	11.00%
Loan and Security Agreement \| Minimum
Debt Instrument [Line Items]
Prepayment fee percentage	1.00%
Loan and Security Agreement \| Maximum
Debt Instrument [Line Items]
Prepayment fee percentage	2.00%
Loan and Security Agreement \| Tranche One
Debt Instrument [Line Items]
Current borrowing capacity	$ 10.0
Loan and Security Agreement \| Equal To Sum Of A \| Floor Rate
Debt Instrument [Line Items]
Line of credit facility, additional interest rate	0.08%
Loan and Security Agreement \| Equal To Sum Of B
Debt Instrument [Line Items]
Line of credit facility, interest rate	7.87%

Net Loss Per Share - Calculation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Sep. 30, 2023
Numerator:
Net Income (Loss)	$ (20,313)	$ (21,547)	$ (21,658)	$ (23,103)	$ (24,308)	$ (22,199)	$ (63,518)	$ (69,610)
Denominator:
Weighted-average shares of common stock outstanding	7,296,222			7,268,165			7,286,967	7,249,188
Net loss per common share, Basic	$ (2.78)			$ (3.18)			$ (8.72)	$ (9.6)
Net loss per common share, Diluted	$ (2.78)			$ (3.18)			$ (8.72)	$ (9.6)

- 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

+ Details

Related Party Transactions

9 Months Ended

Sep. 30, 2024

Related Party Transactions

13. Related Party Transactions

In connection with the resignation of John Fowler from his role as Chief Executive Officer, the Company and Mr. Fowler entered into a Separation and Consulting Agreement, effective as of November 7, 2023 (the “Fowler Agreement”), pursuant to which Mr. Fowler provides consulting services to the Company at a rate of $5,000 per month for one year ending November 7, 2024. Pursuant to the Fowler Agreement, the Company recognized $15,000 and $45,000 of compensation expense within general and administrative

expenses in the Condensed Consolidated Statement of Operations during the three and nine months ended September 30, 2024, respectively.

- 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
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147480990/946-20-50-6

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 2
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-URI https://asc.fasb.org/1943274/2147477968/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477968/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
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-Section 50
-Paragraph 1
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483326/850-10-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Name Accounting Standards Codification
-Section S99
-Paragraph 1
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147479134/946-220-S99-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147483326/850-10-50-1

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

+ Details

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	7,296,222	7,277,908
Common stock, shares outstanding	7,296,222	7,277,908
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0

Pre-Funded Warrants - Additional Information (Details) - $ / shares	Sep. 30, 2024	Dec. 31, 2023	Apr. 30, 2023	Dec. 31, 2022
Class Of Warrant Or Right [Line Items]
Pre funded warrants exercise price		$ 0.01	$ 0.01
Pre-funded warrants, term			20 years
Pre-funded warrants outstanding	0
Underwritten Public Offering
Class Of Warrant Or Right [Line Items]
Pre funded warrants to purchase shares of common stock				379,371

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Income Statement [Abstract]
Collaboration revenue	$ 0	$ 7,000	$ 0	$ 7,000
Operating expenses:
Research and development	16,242	23,738	49,712	63,055
General and administrative	5,706	8,789	17,848	20,780
Restructuring and impairment charges	0	0	1,482	0
Total operating expenses	21,948	32,527	69,042	83,835
Loss from operations	(21,948)	(25,527)	(69,042)	(76,835)
Interest income	2,038	2,820	6,728	8,376
Interest expense	(403)	(396)	(1,204)	(1,151)
Net loss	$ (20,313)	$ (23,103)	$ (63,518)	$ (69,610)
Net loss per common share, Basic	$ (2.78)	$ (3.18)	$ (8.72)	$ (9.6)
Net loss per common share, Diluted	$ (2.78)	$ (3.18)	$ (8.72)	$ (9.6)
Weighted-average shares used to compute net loss per common share, Basic	7,296,222	7,268,165	7,286,967	7,249,188
Weighted-average shares used to compute net loss per common share, Diluted	7,296,222	7,268,165	7,286,967	7,249,188

Lease - Details of Right-of-Use Assets and Lease Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2024	Dec. 31, 2023
Lessee Disclosure [Abstract]
Cash paid for operating lease liabilities	$ 762	$ 2,215
Operating lease costs	457	1,778
Variable lease costs	466	1,382
Less than 12 months	3,991	3,991
13 - 24 months	3,437	3,437
Total undiscounted lease payments	7,428	7,428
Less: imputed interest	(778)	(778)
Total lease liabilities	6,650	6,650
Operating lease liabilities, current	3,391	3,391	$ 3,012
Operating lease liabilities, noncurrent	3,259	3,259	$ 5,852
Total operating lease liabilities	$ 6,650	$ 6,650

Net Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

Calculation of Basic and Diluted Net Loss Per Share

The following table sets forth the calculation of basic and diluted net loss per share during the periods presented (in thousands, except share and per share data):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Numerator:
Net loss	$	(20,313	)	$	(23,103	)	$	(63,518	)	$	(69,610	)
Denominator:
Weighted-average shares of common stock outstanding		7,296,222			7,268,165			7,286,967			7,249,188
Net loss per share, basic and diluted	$	(2.78	)	$	(3.18	)	$	(8.72	)	$	(9.60	)

Anti-dilutive Outstanding Shares of Common Stock Equivalents Excluded from Computation of Diluted Net Loss Per Share


	Three and Nine Months Ended September 30,
	2024		2023
Stock options to purchase common stock		1,715,627		1,333,045
Restricted stock units subject to future vesting		11,054		30,423
Total		1,726,681		1,363,468

Restructuring and Impairment Charges - Schedule of Accrual Activity and Payments Relating to Restructuring and Impairment Charge (Details) - USD ($) $ in Thousands	3 Months Ended			12 Months Ended
	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Dec. 31, 2023
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve, Beginning Balance	$ 235	$ 646	$ 1,421	$ 0
Restructuring Charges		1,482		6,187
Cash payments made	(205)	(344)	(775)	(1,858)
Non-cash charges		(1,549)		(2,908)
Restructuring Reserve, Ending Balance	30	235	646	1,421
Severance and Related Benefit Costs
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve, Beginning Balance	235	646	1,421	0
Restructuring Charges		(67)		3,279
Cash payments made	(205)	(344)	(775)	(1,858)
Non-cash charges		0		0
Restructuring Reserve, Ending Balance	30	235	646	1,421
Asset Impairments
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve, Beginning Balance	0	0	0	0
Restructuring Charges		1,549		2,908
Cash payments made	0	0	0	0
Non-cash charges		(1,549)		(2,908)
Restructuring Reserve, Ending Balance	$ 0	$ 0	$ 0	$ 0

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

Available-for-Sale Securities - Summary of Available-For-Sale Securities Recorded in Cash and Cash Equivalents or Marketable Securities (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total available-for-sale securities, Amortized Cost	$ 147,924
Fair Value	148,265
Fair Value, Measurements, Recurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total available-for-sale securities, Amortized Cost	147,924	$ 201,112
Unrealized Gains	344	219
Unrealized Losses	(3)	(103)
Fair Value	148,265	201,228
Cash	123	144
Total cash, cash equivalent and marketable securities	148,388	201,372
Fair Value, Measurements, Recurring \| U.S. Treasury Money Market Funds
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total available-for-sale securities, Amortized Cost	34,180	35,349
Unrealized Gains	0	0
Unrealized Losses	0	0
Fair Value	34,180	35,349
Fair Value, Measurements, Recurring \| Certificates Of Deposit
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total available-for-sale securities, Amortized Cost	555	544
Unrealized Gains	0	0
Unrealized Losses	0	0
Fair Value	555	544
Fair Value, Measurements, Recurring \| U.S. Treasury Securities
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total available-for-sale securities, Amortized Cost	47,780	54,066
Unrealized Gains	123	151
Unrealized Losses	0	(42)
Fair Value	47,903	54,175
Fair Value, Measurements, Recurring \| Commercial paper
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total available-for-sale securities, Amortized Cost	42,380	65,038
Unrealized Gains	137	41
Unrealized Losses	(3)	(9)
Fair Value	42,514	65,070
Fair Value, Measurements, Recurring \| Corporate debt securities
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total available-for-sale securities, Amortized Cost	11,065
Unrealized Gains	54
Unrealized Losses	0
Fair Value	11,119
Fair Value, Measurements, Recurring \| U.S. government agency bonds
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total available-for-sale securities, Amortized Cost	11,964	46,115
Unrealized Gains	30	27
Unrealized Losses	0	(52)
Fair Value	$ 11,994	$ 46,090

Debt - Schedule of Estimated Future Principal Payments (Details) $ in Thousands	Sep. 30, 2024 USD ($)
Debt Disclosure [Abstract]
2024	$ 0
2025	5,217
2026	4,783
Total	$ 10,000

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2024	Nov. 08, 2024
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2024
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Entity Registrant Name	Kezar Life Sciences, Inc.
Entity Central Index Key	0001645666
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		7,296,222
Entity Interactive Data Current	Yes
Entity Current Reporting Status	Yes
Entity File Number	001-38542
Entity Tax Identification Number	47-3366145
Entity Address, Address Line One	4000 Shoreline Court
Entity Address, Address Line Two	Suite 300
Entity Address, City or Town	South San Francisco
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94080
City Area Code	650
Local Phone Number	822-5600
Document Quarterly Report	true
Document Transition Report	false
Entity Incorporation, State or Country Code	DE
Common Stock
Document Information [Line Items]
Trading Symbol	KZR
Title of 12(b) Security	Common Stock, $0.001 par value
Security Exchange Name	NASDAQ
Preferred Share Purchase Rights
Document Information [Line Items]
No Trading Symbol Flag	true
Title of 12(b) Security	Preferred Share Purchase Rights
Security Exchange Name	NASDAQ

Income Taxes

9 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

11. Income Taxes

No provision for income taxes was recorded for the three and nine months ended September 30, 2024 and 2023, respectively. Deferred tax assets generated from the Company’s net operating losses have been fully reserved, as the Company believes it is not more likely than not that the benefit will be realized.

Effective January 1, 2022, under the Tax Cuts and Jobs Act, for tax purposes the Company is required to capitalize and subsequently amortize all R&D expenditures over five years for research activities conducted in the U.S. and over fifteen years for research activities conducted outside of the U.S. Given the significant loss and credit carryforwards in the U.S., the Company does not anticipate having a change in valuation allowance assertion.

In March 2020, the Coronavirus Aid, Relief and Economic Security (“CARES”) Act was signed into law. The CARES Act included several tax changes as part of its economic package. These changes principally related to expanded net operating loss carryback periods, increases to interest deductibility limitations, and accelerated alternative minimum tax refunds. The CARES Act enacted the Employee Retention Credit (“ERC”) to incentivize companies to retain employees, which was subsequently modified by extension of the CARES Act. Under the provisions of the CARES Act and its subsequent extension, the Company was eligible for ERCs, subject to certain criteria. During the nine months ended September 30, 2023, the Company received refunds of approximately $1.4 million related to ERCs that offset the related payroll expenses in the respective operating costs and expenses line item in the condensed consolidated statements of operations. During the nine months ended September 30, 2024, no refund related to ERCs was received by the Company.

- Definition

The entire disclosure for income tax.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12

Reference 2: http://www.xbrl.org/2003/role/exampleRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147477891/740-270-50-1

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-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482603/740-30-50-2

+ Details

Debt

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Debt

7. Debt

In November 2021, the Company entered into a loan agreement (the “Loan Agreement”) with Oxford Finance, LLC (“Oxford Finance”), which provided the Company up to $50.0 million in borrowing capacity across five potential tranches (each a “Term Loan,” and collectively “Term Loans”). The initial tranche of $10.0 million was funded at the closing of the Loan Agreement. The remaining tranches were dependent on achieving certain clinical trial milestones, and the Company declined these remaining tranches in borrowing capacity available to it under the Loan Agreement. The loan facility is secured by all assets except intellectual property, which is subject to a negative pledge, and will mature on November 1, 2026 (the “Maturity Date”). There are no warrants or financial covenants associated with the Loan Agreement.

Until June 30, 2023, the Term Loans bore interest at a floating per annum rate (based on the actual number of days elapsed divided by a year of 360 days) equal to the sum of (a) the greater of (i) 30-day U.S. LIBOR rate reported in the Wall Street Journal on the last business day of the month that immediately precedes the month in which the interest will accrue and (ii) 0.08%, plus (b) 7.87%. A LIBOR transition event occurred effective July 1, 2023 and Oxford Finance subsequently replaced the LIBOR rate with the 1-month CME term SOFR plus 0.1%. The rate change did not require contract remeasurement at the effective date of the change or a reassessment of any previous accounting determinations pertaining to the facility. The rate change did not have a material impact on the Company’s financial statements. The Company is required to make monthly interest-only payments prior to the amortization date of January 1, 2025, subject to a potential one-year extension upon satisfaction of certain conditions.

All unpaid principal and accrued and unpaid interest with respect to each Term Loan is due and payable in full on the Maturity Date. The Company has the option to prepay the outstanding balance prior to maturity, subject to a prepayment fee of 1.0% to 2.0% depending upon when the prepayment occurs. Upon repayment of the Term Loans, the Company is required to make a final payment fee to the lenders equal to 6.5% of the original principal amount of the Term Loans funded which will be accrued by charges to interest expense over the term of the loans using the effective interest method.

The Loan Agreement also includes subjective acceleration clauses that permit the lenders to accelerate the Maturity Date under certain circumstances, including, but not limited to, material adverse effects on a Company’s financial status or otherwise. As of September 30, 2024, the Company is in compliance with all covenants in the Loan Agreement.

Interest expense was $0.4 million and $1.2 million for the three and nine months ended September 30, 2024, respectively, compared to $0.4 million and $1.2 million for the three and nine months ended September 30, 2023, respectively. The initial effective interest rate

on the Term Loans, including the amortization of the debt discount and issuance costs, and accretion of the final payment, was 11%. The components of the long-term debt balance are as follows:


	September 30, 2024			December 31, 2023
Principal loan balance	$	10,000		$	10,000
Unamortized debt discount and issuance costs		(163	)		(243	)
Cumulative accretion of final fee		425			312
	$	10,262		$	10,069

Debt, current	$	3,913		$	—
Debt, noncurrent		6,349			10,069
Debt, net	$	10,262		$	10,069

As of September 30, 2024, the estimated future principal payments due were as follows:


Years Ending December 31,
2024	$	—
2025		5,217
2026		4,783
Total	$	10,000

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Section 50
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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-URI https://asc.fasb.org/470/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
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-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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Reference 16: http://www.xbrl.org/2003/role/disclosureRef
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Restructuring and Impairment Charges

9 Months Ended

Sep. 30, 2024

Restructuring and Related Activities [Abstract]

Restructuring and Impairment Charges

14. 2023 Restructuring and Impairment Charges

In October 2023, the Company announced a strategic restructuring and workforce reduction to prioritize its clinical-stage assets, extend its cash runway and reduce its total workforce. All employees affected by the workforce reduction separated from the company by December 31, 2023. In connection with the workforce reduction, the Company committed to a plan to sublease Suite 400 of its corporate headquarters which resulted in an impairment to the ROU asset and certain property and equipment was no longer utilized under then-current or expected future operations.

The Company recognized cumulative restructuring charges of $6.2 million, comprised primarily of one-time employee termination benefits and long-lived assets impairment costs during the year ended December 31, 2023. In June 2024, the Company recognized an additional $1.5 million impairment charge in relation to Suite 400 to write off the net book value of the ROU asset. The unpaid severance and related benefit costs included in accrued liabilities in the condensed consolidated balance sheets were $30 thousand and $1.4 million as of September 30, 2024 and December 31, 2023, respectively. The Company expects that substantially all of the remaining accrued restructuring liabilities will be paid in cash over next three months.

The following table illustrates the accrual activities and payments relating to restructuring and impairment charges (in thousands):


	Severance and related benefit costs			Asset impairments			Total
Balance as of January 1, 2023	$	—		$	—		$	—
Restructuring charges		3,279			2,908			6,187
Cash payments made		(1,858	)		—			(1,858	)
Non-cash charges		—			(2,908	)		(2,908	)
Balance as of December 31, 2023	$	1,421		$	—		$	1,421
Cash payments made		(775	)		—			(775	)
Balance as of March 31, 2024	$	646		$	—		$	646
Restructuring charges		(67	)		1,549			1,482
Cash payments made		(344	)		—			(344	)
Non-cash charges		—			(1,549	)		(1,549	)
Balance as of June 30, 2024	$	235		$	—		$	235
Cash payments made		(205	)		—			(205	)
Balance as of September 30, 2024	$	30		$	—		$	30

Stock-Based Compensation - Fair Value of Stock Options Granted is Calculated Using Black Scholes Option Pricing Model with Range of Assumptions (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected term (years)		6 years 1 month 6 days
Expected volatility, Minimum	86.20%	87.60%	86.20%	87.60%
Expected volatility, Maximum	87.30%	88.00%	87.90%	88.30%
Risk-free interest rate, Minimum	3.60%	4.10%	3.60%	3.50%
Risk-free interest rate, Maximum	4.20%	4.20%	4.60%	4.30%
Expected dividend yield	0.00%	0.00%	0.00%	0.00%
Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected term (years)	5 years 6 months		5 years 6 months	5 years 6 months
Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected term (years)	6 years 1 month 6 days		6 years 1 month 6 days	6 years 1 month 6 days

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Cash flows from operating activities:
Net loss	$ (63,518)	$ (69,610)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	781	786
Stock-based compensation	9,704	14,917
Amortization of premiums and discounts on marketable securities	(4,128)	(5,298)
Amortization of debt discount and issuance costs and other non-cash interest	193	176
Impairment loss of right-of-use asset	1,549	0	$ 2,700
Loss on disposition of fixed assets	0	3
Changes in operating assets and liabilities
Accounts receivable	0	(7,000)
Prepaid expenses and other current assets	(2,413)	3,850
Other assets	3,180	(5,661)
Accounts payable, accrued and other current liabilities	(1,607)	5,388
Operating lease asset and liabilities	(1,128)	(216)
Net cash used in operating activities	(57,387)	(62,665)
Cash flows from investing activities:
Purchases of property and equipment	(18)	(1,809)
Proceeds from sale of equipment	0	5
Purchases of marketable securities	(72,102)	(130,528)
Maturities of marketable securities	128,804	180,500
Net cash provided by investing activities	56,684	48,168
Cash flows from financing activities:
Proceeds from issuance of common stock under employee stock incentive plans	56	579
Net cash provided by financing activities	56	579
Effect of exchange rate changes on cash and cash equivalents	12	(40)
Net decrease in cash and cash equivalents	(635)	(13,958)
Cash and cash equivalents at the beginning of period	35,493	40,456	40,456
Cash and cash equivalents at the end of period	34,858	26,498	$ 35,493
Supplemental disclosures of noncash investing and financing information:
Purchases of property and equipment in accounts payable	0	4
Par value of common stock upon cashless exercise of prefunded warrants	0	4
Supplemental disclosures
Cash paid for interest	$ 1,011	$ 975

Debt - Schedule of Long-term Debt Balance (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Debt Disclosure [Abstract]
Principal loan balance	$ 10,000	$ 10,000
Unamortized debt discount and issuance costs	(163)	(243)
Cumulative accretion of final fee	425	312
Debt, current	3,913	0
Debt, noncurrent	6,349	10,069
Total	$ 10,262	$ 10,069

- Definition

Amount of unamortized debt discount (premium) and debt issuance costs.

+ References + Details

- Definition

Amount, after deduction of unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

Everest Collaboration - Additional Information (Details) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended		9 Months Ended
	Oct. 31, 2023	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Dec. 31, 2023
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Reimbursement receivable from collaboration			$ 500		$ 500	$ 1,596
Everest License Agreement
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Collaborative arrangement right description		In September 2023, the Company entered into a Collaboration and License Agreement (the “Everest License Agreement”) with Everest pursuant to which, among other things, the Company granted to Everest an exclusive license to develop and commercialize one or more products containing the Company’s proprietary compound, zetomipzomib (the “Products”), in the licensed field in the Greater China region (Mainland China, Taiwan, Hong Kong and Macau), South Korea, Singapore, Malaysia, Thailand, Indonesia, Vietnam and the Philippines (the “Territory”).
Collaborative agreement upfront payments collected	$ 7,000
Additional milestone payments on achievement	$ 125,500
Reimbursement receivable from collaboration			500		500
Noncurrent unbilled receivable from collaboration			1,700		1,700
Contra research and development expense			$ 1,100		3,600
Collaboration Revenue \| Everest License Agreement
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Collaboration revenue				$ 7,000
Royalty \| Everest License Agreement
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Collaboration revenue					0
Development, Regulatory and Commercial Milestones \| Everest License Agreement
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Collaboration revenue					$ 0

Balance Sheet Components - Accrued and Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accrued clinical costs	$ 6,070	$ 1,801
Accrued employee-related costs	2,120	3,708
Accrued preclinical and research costs	1,311	756
Accrued professional services	121	110
Other	42	106
Total accrued liabilities	$ 9,664	$ 6,481

Fair Value Measurement - Additional Information (Details) - USD ($) $ in Thousands	1 Months Ended	9 Months Ended		12 Months Ended
	Jun. 30, 2024	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Fair Value Disclosures [Abstract]
Interest rate of sublease income per year				3.50%
Discount rate of cash flow				13.30%
Impairment charge	$ 1,500	$ 1,549	$ 0	$ 2,700
Sublease income	$ 0

Restructuring and Impairment Charges (Tables)

9 Months Ended

Sep. 30, 2024

Restructuring and Related Activities [Abstract]

Schedule of Accrual Activity and Payments Relating to Restructuring and Impairment Charge

The following table illustrates the accrual activities and payments relating to restructuring and impairment charges (in thousands):


	Severance and related benefit costs			Asset impairments			Total
Balance as of January 1, 2023	$	—		$	—		$	—
Restructuring charges		3,279			2,908			6,187
Cash payments made		(1,858	)		—			(1,858	)
Non-cash charges		—			(2,908	)		(2,908	)
Balance as of December 31, 2023	$	1,421		$	—		$	1,421
Cash payments made		(775	)		—			(775	)
Balance as of March 31, 2024	$	646		$	—		$	646
Restructuring charges		(67	)		1,549			1,482
Cash payments made		(344	)		—			(344	)
Non-cash charges		—			(1,549	)		(1,549	)
Balance as of June 30, 2024	$	235		$	—		$	235
Cash payments made		(205	)		—			(205	)
Balance as of September 30, 2024	$	30		$	—		$	30

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 34,858	$ 35,493
Marketable securities	113,530	165,879
Prepaid expenses and other current assets	7,991	5,578
Total current assets	156,379	206,950
Property and equipment, net	3,149	3,912
Operating lease right-of-use asset	2,143	4,778
Other assets	2,415	5,595
Total assets	164,086	221,235
Current liabilities:
Accounts payable	3,461	8,251
Accrued and other current liabilities	9,664	6,481
Operating lease liabilities, current	3,391	3,012
Debt, current	3,913	0
Total current liabilities	20,429	17,744
Operating lease liabilities, noncurrent	3,259	5,852
Debt, noncurrent	6,349	10,069
Total liabilities	30,037	33,665
Stockholders' equity:
Common stock, $0.001 par value, 250,000,000 and 250,000,000 shares authorized as of September 30, 2024 (unaudited) and December 31, 2023, respectively; 7,296,222 and 7,277,908 shares issued and outstanding as of September 30, 2024 (unaudited) and December 31, 2023, respectively	7	7
Preferred stock, $0.001 par value, 10,000,000 shares authorized; zero shares issued and outstanding as of September 30, 2024 (unaudited) and December 31, 2023	0	0
Additional paid-in capital	548,216	538,456
Accumulated other comprehensive income (loss)	107	(130)
Accumulated deficit	(414,281)	(350,763)
Total stockholders' equity	134,049	187,570
Total liabilities and stockholders' equity	$ 164,086	$ 221,235

Balance Sheet Components - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Depreciation expense	$ 0.3	$ 0.3	$ 0.8	$ 0.8

Available-for-Sale Securities - Additional Information (Details) - USD ($)	9 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Investments, Debt and Equity Securities [Abstract]
Allowance for credit losses on securities in unrealized loss position	$ 0	$ 0
Credit-related losses related to marketable securities	0
Sale of available-for-sale securities	$ 0

Lease - Additional Information (Details) - USD ($) $ in Thousands	1 Months Ended	9 Months Ended		12 Months Ended
	Jun. 30, 2024	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023	Nov. 01, 2022
Operating lease liability		$ 6,650
Impairment charge	$ 1,500	$ 1,549	$ 0	$ 2,700
Sublease income	$ 0
South San Francisco, California [Member]
Operating lease, option to extend		July 31, 2026
Operating lease liability					$ 8,000

Available-for-Sale Securities

9 Months Ended

Sep. 30, 2024

Investments, Debt and Equity Securities [Abstract]

Available-for-Sale Securities

4. Available-for-Sale Securities


	September 30, 2024
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Cash equivalents:
U.S. Treasury money market funds	$	34,180	$	—	$	—		$	34,180
Certificate of deposit		555		—		—			555
Marketable securities:
U.S. Treasury securities		47,780		123		—			47,903
Commercial paper		42,380		137		(3	)		42,514
Corporate debt securities		11,065		54		—			11,119
U.S. government agency bonds		11,964		30		—			11,994
Total	$	147,924	$	344	$	(3	)	$	148,265
Cash									123
Total cash, cash equivalent and marketable securities								$	148,388


	December 31, 2023
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Cash equivalents:
U.S. Treasury money market funds	$	35,349	$	—	$	—		$	35,349
Marketable securities:
Certificate of deposit		544		—		—			544
U.S. Treasury securities		54,066		151		(42	)		54,175
Commercial paper		65,038		41		(9	)		65,070
U.S. government agency bonds		46,115		27		(52	)		46,090
Total	$	201,112	$	219	$	(103	)	$	201,228
Cash									144
Total cash, cash equivalent and marketable securities								$	201,372

The Company has not recognized an allowance for credit losses on any securities in an unrealized loss position as of September 30, 2024 and December 31, 2023.


	September 30, 2024
	Less than 12 consecutive months
	Fair Value		Unrealized Losses
Commercial paper	$	959	$	(3	)
Total	$	959	$	(3	)


	December 31, 2023
	Less than 12 consecutive months
	Fair Value		Unrealized Losses
U.S. Treasury securities	$	16,261	$	(42	)
Commercial paper		20,789		(9	)
U.S. government agency bonds		39,052		(52	)
Total	$	76,102	$	(103	)

The Company believes that the individual unrealized losses represent temporary declines primarily resulting from interest rate changes and intends to hold these marketable securities to their maturities.

The Company currently does not intend to sell these securities prior to maturity, and it is not more likely than not that the Company will be required to sell these securities before recovery of their amortized cost basis, which may be at maturity. The Company evaluated securities with unrealized losses to determine whether such losses, if any, were due to credit-related factors and determined that there were no credit-related losses to be recognized as of September 30, 2024. There were no sales of available-for-sale securities in any of the periods presented.

As of September 30, 2024, the amortized cost and estimated fair value of the Company’s available-for-sale securities by contractual maturity are shown below (in thousands):


	Amortized		Estimated
Available-for-sale securities maturing in:	Cost		Fair Value
One year or less	$	147,924	$	148,265
Total available-for-sale securities	$	147,924	$	148,265

Stock-Based Compensation - Additional Information (Details) - USD ($)		3 Months Ended		9 Months Ended		14 Months Ended
	Jul. 24, 2023	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Jan. 01, 2024	Dec. 31, 2023	Jun. 30, 2018
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options shares outstanding		1,715,627		1,715,627		1,715,627		1,310,651
Common stock, shares issued		7,296,222		7,296,222		7,296,222		7,277,908
Number of options outstanding, Options exercised				0
Expected term			6 years 1 month 6 days
Payments of dividends of common stock				$ 0
Expected dividend yield		0.00%	0.00%	0.00%	0.00%
Compensation expense related to the unvested option		$ 900,000		$ 900,000		$ 900,000
Unvested option shares cancelled due to termination						600,000
Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected term		6 years 1 month 6 days		6 years 1 month 6 days	6 years 1 month 6 days
Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected term		5 years 6 months		5 years 6 months	5 years 6 months
ESPP
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected term				6 months
Employee Stock Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized stock-based compensation cost		$ 17,700,000		$ 17,700,000		$ 17,700,000
Estimated weighted average amortization period				2 years 3 months 18 days
RSU Member
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares, granted				0
Performance-Based Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense		$ 100,000		$ 100,000
2022 Stock Inducement Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options shares outstanding		119,637		119,637		119,637
Shares granted		300,000		300,000		300,000
Shares available for future issuance		180,363		180,363		180,363
2018 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of stock options exercise price modified	990,367
Modified exercise price	$ 22.8
Exercise prices, lower range	24.4
Exercise prices, upper range	$ 228.5
Stock - based compensation expense						$ 3,200,000
Incremental fair value	$ 4,700,000
2018 Equity Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options shares outstanding		1,459,665		1,459,665		1,459,665
Shares available for future issuance		89,315		89,315		89,315
Number of shares will increase automatically through every year on specified date				--01-01
Number of shares increase automatically continuing through maximum period				beginning on January 1, 2019 and continuing through and including January 1, 2028
Weighted average grant date fair value of options granted		$ 4.61		$ 5.92
2018 Equity Incentive Plan \| Common Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Maximum number of shares authorized available for issuance		160,069		160,069		160,069
Increase in number of shares reserved for issuance as percentage of total number of shares of capital stock outstanding on last date of preceding calendar year				5.00%
2018 Equity Incentive Plan \| Maximum \| Common Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Maximum number of shares authorized available for issuance		400,000		400,000		400,000
2018 Equity Incentive Plan \| Incentive Stock Options \| Maximum \| Common Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Maximum number of shares issued upon exercise of incentive stock options		1,250,000		1,250,000		1,250,000
2018 Equity Incentive Plan \| RSU Member
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options shares outstanding		11,054		11,054		11,054
Option grant vesting period				3 years
2015 Equity Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Option grant vesting period				4 years
Options to purchase of common stock outstanding		136,325		136,325		136,325
2015 Equity Incentive Plan \| Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Options granted expiry period				10 years
2018 Employee Stock Purchase Plan \| Common Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares available for future issuance		65,709		65,709		65,709			20,000
Additional shares available for future issuance							0
Common stock, shares issued		67,501		67,501		67,501
Authorized an offering beginning period				Nov. 16, 2018
Authorized an offering ending period				May 15, 2019
Authorized an additional offering beginning period				May 16, 2024
2018 Employee Stock Purchase Plan \| Maximum \| Common Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage of annual increase in number of common stock shares				1.00%
Annual increase in number of common stock shares				37,500
Option price per share of common stock at fair market value				85.00%

Income Taxes - Additional Information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Operating Loss Carryforwards [Line Items]
Provision for income taxes	$ 0	$ 0	$ 0	$ 0
Income tax refunds received			$ 0	$ 1,400,000
U S [Member]
Operating Loss Carryforwards [Line Items]
Research and development activities amortize period			5 years
Non - U S [Member]
Operating Loss Carryforwards [Line Items]
Research and development activities amortize period			15 years

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 270
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
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-Publisher FASB
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
-Paragraph 32
-Subparagraph (ee)
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
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-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12

Reference 4: http://www.xbrl.org/2003/role/exampleRef
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-URI https://asc.fasb.org/1943274/2147482663/740-10-55-231

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483443/250-10-50-9

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Section S99
-Paragraph 1
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
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-Subparagraph (a)
-SubTopic 20
-Topic 740
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h))
-SubTopic 10
-Topic 235
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1

+ Details

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Summary of Financial Assets Measured at Fair Value on a Recurring Basis


	September 30, 2024
	Total		Level 1		Level 2		Level 3
Financial Assets:
Cash equivalents:
U.S. Treasury money market funds	$	34,180	$	34,180	$	—	$	—
Certificate of deposit		555		—		555		—
Marketable securities:
U.S. Treasury securities		47,903		47,903		—		—
Commercial paper		42,514		—		42,514		—
Corporate debt securities		11,119		—		11,119		—
U.S. government agency bonds		11,994		—		11,994		—
Total	$	148,265	$	82,083	$	66,182	$	—


	December 31, 2023
	Total		Level 1		Level 2		Level 3
Financial Assets:
Cash equivalents:
U.S. Treasury money market funds	$	35,349	$	35,349	$	—	$	—
Marketable securities:
Certificate of deposit		544		—		544		—
U.S. Treasury securities		54,175		54,175		—		—
Commercial paper		65,070		—		65,070		—
U.S. government agency bonds		46,090		—		46,090		—
Total	$	201,228	$	89,524	$	111,704	$	—

Available-for-Sale Securities - Summary of Gross Unrealized Losses and Fair Value by Major Security Type for Available-For-Sale Securities in Unrealized Loss Position (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair Value, Less than 12 months	$ 959	$ 76,102
Unrealized Losses, Less than 12 months	(3)	(103)
U.S. Treasury Securities
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair Value, Less than 12 months		16,261
Unrealized Losses, Less than 12 months		(42)
Commercial paper
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair Value, Less than 12 months	959	20,789
Unrealized Losses, Less than 12 months	$ (3)	(9)
U.S. government agency bonds
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair Value, Less than 12 months		39,052
Unrealized Losses, Less than 12 months		$ (52)

Available-for-Sale Securities - Summary of Amortized Cost and Estimated Fair Value of Available-for-sale Securities by Contractual Maturity (Details) $ in Thousands	Sep. 30, 2024 USD ($)
Available-for-sale securities maturing, Amortized Cost:
In one year or less, Amortized Cost	$ 147,924
Total available-for-sale securities, Amortized Cost	147,924
Available-for-sale securities maturing, Estimated Fair Value:
In one year or less, Estimated Fair Value	148,265
Total available-for-sale securities, Estimated Fair Value	$ 148,265

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 103
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Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
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-Section 50
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
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+ Details

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ (20,313)	$ (21,547)	$ (21,658)	$ (23,103)	$ (24,308)	$ (22,199)	$ (63,518)	$ (69,610)

- Definition

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

+ References

+ Details

Restructuring and Impairment Charges - Additional Information (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Jun. 30, 2024	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023	Mar. 31, 2024	Dec. 31, 2022
Restructuring and Related Activities [Abstract]
Restructuring and impairment charges		$ 0	$ 0	$ 1,482	$ 0	$ 6,200
Severance and related benefit costs	$ 235	$ 30		30		1,421	$ 646	$ 0
Impairment charge	$ 1,500			$ 1,549	$ 0	$ 2,700

Summary of Significant Accounting Policies (Policies)	9 Months Ended
Summary of Significant Accounting Policies (Policies)	Sep. 30, 2024
Accounting Policies [Abstract]
Basis of Presentation and Consolidation	Basis of Presentation and Consolidation The condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and include the Company’s accounts and those of its wholly owned Australian subsidiary, Kezar Life Sciences Australia Pty Ltd., which is a proprietary company limited by shares. All intercompany balances and transactions have been eliminated upon consolidation. The condensed consolidated balance sheet as of December 31, 2023 has been derived from the audited consolidated financial statements at that date but does not include all information and footnotes required by GAAP for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements included in the Annual Report.
Unaudited Condensed Consolidated Financial Statements	Unaudited Condensed Consolidated Financial Statements The accompanying financial information as of September 30, 2024 is unaudited. The condensed consolidated financial statements included in this report reflect all adjustments (consisting only of normal recurring adjustments) that our management considers necessary for the fair statement of the results of operations for the interim periods covered and of our financial condition at the date of the interim balance sheet. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The results for interim periods are not necessarily indicative of the results for the entire year or any other interim period. The accompanying condensed consolidated financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto included in our Annual Report.
Use of Estimates	Use of Estimates 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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant items subject to such judgments, estimates and assumptions include the valuation of marketable securities, impairment of long-lived assets, determining the fair-value of stock-based compensation, and evaluating the progress to completion of external research and development costs. Management bases its estimates on historical experience and on various other market-specific relevant assumptions that management believes to be reasonable under the circumstances. Actual results may differ from those estimates. Estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require the exercise of judgment. As of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its judgments, estimates and assumptions or revise the carrying value of its assets or liabilities. These estimates may change as new events occur and additional information is obtained and are recognized in the consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to the Company’s condensed consolidated financial statements.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2023-09 Income Taxes (Topic 740) – Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires entities to disclose specific categories in the income tax rate reconciliation annually and provide additional information for reconciling items that meet a qualitative threshold. ASU 2023-09 also requires that entities disclose annually additional information about income taxes paid and disaggregated information for certain items. ASU 2023-09 is effective for the Company beginning on January 1, 2025. The Company is currently evaluating the impact of the adoption of ASU 2023-09 on its financial position, results of operations and cash flows. In November 2023, the FASB issued Accounting Standards Update No. 2023-07 Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires entities to disclose incremental segment information on an annual and interim basis. ASU 2023-07 requires entities with a single reportable segment to provide all the disclosures required by the amendments in ASU 2023-07 and all existing segment disclosures in Segment Reporting (Topic 280). ASU 2023-07 is effective for the Company beginning with the Annual Report on Form 10-K for the year ending December 31, 2024. The Company is currently evaluating the effect of adopting the update on its related disclosures. There have been no other recent accounting pronouncements, changes in accounting pronouncements or recently adopted accounting guidance that are expected to have a material impact on the Company’s condensed consolidated financial statements upon adoption.
Fair Value Measurements	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. 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 applies fair value accounting for all financial assets and liabilities and nonfinancial assets and liabilities that are required to be recognized or disclosed at fair value in the financial statements. The Company determines the fair value of Level 1 assets using quoted prices in active markets for identical assets. The Company reviews trading activity and pricing for Level 2 investments as of each measurement date. Level 2 inputs, which are obtained from various third-party data providers, represent quoted prices for similar assets in active markets and were derived from observable market data, or, if not directly observable, were derived from or corroborated by other observable market data.

Everest Collaboration

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Everest Collaboration

10. Everest Collaboration

In September 2023, the Company entered into a Collaboration and License Agreement (the “Everest License Agreement”) with Everest pursuant to which, among other things, the Company granted to Everest an exclusive license to develop and commercialize one or more products containing the Company’s proprietary compound, zetomipzomib (the “Products”), in the licensed field in the Greater China region (Mainland China, Taiwan, Hong Kong and Macau), South Korea, Singapore, Malaysia, Thailand, Indonesia, Vietnam and the Philippines (the “Territory”). The licensed field includes all uses other than the diagnosis or treatment in humans of cancerous or pre-cancerous diseases or conditions. During the PALIZADE trial, Everest contributed their local regulatory and clinical trial expertise and were responsible for study costs in the Territory. Everest Medicines Limited is also a party to the Everest License Agreement solely for limited purposes, including to guarantee the performance by Everest of its obligations under the Everest License Agreement.

Under the terms of the Everest License Agreement, the Company received a one-time, irrecoverable, non-refundable and non-creditable upfront payment of $7.0 million in October 2023 and is entitled to receive certain variable payments for manufacturing

supply services and milestone payments upon achievement of certain development, regulatory and commercial milestone events, for total potential milestone payments of up to $125.5 million. In addition, Everest will pay to the Company tiered royalties on the net sales of the Products in the Territory during the term of the Everest License Agreement ranging from the single digit to the low-teens, subject to certain reductions for patent expiration, generic competition and payments for licenses to third-party patents.

The term of the Everest License Agreement will continue on a market-by-market basis until expiration of the relevant royalty term of the Products, unless terminated earlier. Everest has the right to terminate the Everest License Agreement for convenience at any time following the October 2024 termination of the PALIZADE clinical trial. The Company may terminate the Everest License Agreement if Everest challenges the Company’s patents or fails to perform any development or commercialization activities for a continuous period of more than twelve (12) months, subject to certain exceptions. In addition, either party may terminate the Everest License Agreement for the other party’s uncured breach or insolvency, and the Everest License Agreement will automatically terminate in the event of termination of the Company’s exclusive license agreement with Onyx Therapeutics, Inc.

Under the terms of the Everest License Agreement, at the election of Everest, the Company may manufacture and provide clinical supply to Everest to use in development and commercialization in the Territory at the fully burdened manufacturing cost plus specified margins, as defined within the Everest License Agreement. Certain of these provisions were determined to be options to acquire additional goods or services at a price that approximates the stand-alone selling price for that good or service and therefore do not represent material rights, or separate performance obligations, within the context of the Everest License Agreement. The Company evaluated the Everest License Agreement and determined it was within the scope of ASC 606. The transaction price was determined to consist of the upfront payment of $7.0 million.

License of Intellectual Property. The license to the Company’s intellectual property and associated know-how represents a distinct performance obligation. The license and associated know-how was transferred to Everest in the third quarter of 2023 to satisfy this performance obligation. The Company allocated the full transaction price to the license of the Company’s intellectual property and accordingly recognized collaboration revenue of $7.0 million in 2023.

Milestone Payments. The potential development, regulatory and commercial milestone payments are paid upon achievement of certain milestones as defined in the Everest License Agreement. It was determined that their achievement is highly dependent on factors outside of the Company’s control. These payments have been fully constrained until the Company concludes that achievement of the milestone is probable and that recognition of revenue related to the milestone will not result in a significant reversal in amounts recognized in future periods and, as such, have been excluded from the transaction price. At the end of each subsequent reporting period, the Company will re-evaluate the probability of achievement of each milestone and any related constraint and, if necessary, adjust its estimate of the overall transaction price. As of September 30, 2024, the Company has not recognized any revenue associated with development, regulatory and commercial milestones.

Royalties. Any consideration related to royalties will be recognized if and when the related sales occur, as they were determined to relate predominantly to the license granted to Everest and, therefore, have also been excluded from the transaction price. No royalty revenue was recognized as of September 30, 2024.

In July 2024, the Company amended the Everest License Agreement to modify a development milestone and adjust certain payment terms relating to Everest’s responsibility for PALIZADE study costs in the Territory. As of September 30, 2024, the Company had a receivable of $0.5 million, representing the billed amounts related to Everest’s share of the Territory-specific direct costs and pro rata portion of indirect costs incurred to conduct the PALIZADE study under the Everest License Agreement, and a noncurrent unbilled receivable of $1.7 million representing reimbursement for payments made by the Company that is yet to be billed or due. The receivable amount was included in prepaid expenses and other current assets and the unbilled receivable was included in other assets in the Company’s condensed consolidated balance sheet. In connection with the cost-sharing arrangement with Everest, $1.1 million and $3.6 million was recognized as contra research and development expense for each of the three and nine months ended September 30, 2024, respectively.

In October 2024, the Company made the strategic decision to terminate the PALIZADE study and focus clinical development efforts of zetomipzomib in autoimmune hepatitis, or AIH. The termination does not change Everest’s payment obligation under the Everest License Agreement.

Lease (Tables)

9 Months Ended

Sep. 30, 2024

Leases [Abstract]

Details of Right-of-Use Assets and Lease Liabilities

Information related to the Company’s lease liabilities were as follows (in thousands):


	Three months ended September 30, 2024		Nine months ended September 30, 2024
Cash paid for operating lease liabilities	$	762	$	2,215
Operating lease costs		457		1,778
Variable lease costs		466		1,382

Maturities of lease liabilities as of September 30, 2024 were as follows:
Less than 12 months			$	3,991
13 - 24 months				3,437
Total undiscounted lease payments				7,428
Less: imputed interest				(778	)
Total lease liabilities			$	6,650

Operating lease liabilities, current			$	3,391
Operating lease liabilities, noncurrent				3,259
Total operating lease liabilities			$	6,650

Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Statement of Comprehensive Income [Abstract]
Net Income (Loss)	$ (20,313)	$ (23,103)	$ (63,518)	$ (69,610)
Other comprehensive income:
Foreign currency translation adjustments	27	(23)	12	(40)
Unrealized gain on marketable securities	465	166	225	276
Total other comprehensive income, net of tax	492	143	237	236
Comprehensive loss	$ (19,821)	$ (22,960)	$ (63,281)	$ (69,374)

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income, attributable to parent entity. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

- Definition

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

+ References

+ Details

Organization and Description of the Business

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Description of the Business

1. Organization and Description of the Business

Description of Business

Kezar Life Sciences, Inc. (the “Company,” “we,” “us,” or “our”) was incorporated in the state of Delaware in February 2015 and commenced operations in June 2015. The Company is a clinical-stage biotechnology company developing novel small molecule therapeutics to treat unmet needs in immune-mediated diseases. The Company’s principal operations are in South San Francisco, California, and it operates in one segment.

Reverse Stock Split

On October 29, 2024, the Company effected a reverse stock split of its common stock at a ratio of one-for-ten (the “Reverse Stock Split”), as authorized at the Company’s 2024 annual meeting of stockholders held on June 18, 2024 and approved by the Company’s board of directors on September 23, 2024. No fractional shares were issued in connection with the Reverse Stock Split. Stockholders of record who otherwise were entitled to a fractional share of common stock as a result of the Reverse Stock Split were entitled to receive one full share of common stock in lieu of such fractional share.

The number of shares of common stock subject to outstanding options, restricted stock unit awards and other equity awards issued by the Company, and the number of shares reserved for future issuance and all other share limits were reduced by the same ratio as the reduction in the outstanding shares, in each case rounded down to the nearest whole share. As a result of the Reverse Stock Split, proportionate adjustments were made to the number of shares issuable under the Company’s equity incentive plans and other existing agreements, as well as to the exercise or conversion prices, as applicable. There were no changes to the total number of authorized shares or the par value per share.

The Company has retroactively restated the shares and per share amounts in the condensed consolidated financial statements in this Quarterly Report on Form 10-Q. The impact due to the issuance of full shares in lieu of fractional shares of common stock as a result of the Reverse Stock Split will be reflected in the period of issuance, which will be our fourth quarter. Proportionate adjustments were made to the per share exercise price and number of shares of common stock issuable under all outstanding stock options. In addition, proportionate adjustments have been made to the number of shares of common stock reserved for the Company’s equity incentive plans. The condensed consolidated statements of stockholders’ equity and balance sheets reflect the impact of the Reverse Stock Split by reclassifying from “common stock” to “additional paid-in capital” an amount equal to the par value of the decreased shares resulting from the Reverse Stock Split.

Liquidity

Since commencing operations in mid-2015, substantially all of the Company’s efforts have been focused on research, development, and the advancement of the Company’s product candidates. The Company’s ultimate success depends on the outcome of these ongoing research and development activities. The Company has not yet generated product sales and as a result has experienced operating losses since inception and had an accumulated deficit of $414.3 million as of September 30, 2024. The Company expects to incur additional losses in the future to conduct research and development and will need to raise additional capital to fully implement management’s business plan. The Company intends to raise such capital through the issuance of additional equity, including through at-the-market (“ATM”) offerings, and potentially through borrowings, strategic alliances with partner companies and other licensing transactions, such as our collaboration with Everest Medicines II (HK) Limited (“Everest”). However, if financing is not available at adequate levels, the Company may need to reevaluate its operating plans. Management believes that its existing cash, cash equivalents and marketable securities will be sufficient to fund the Company’s cash requirements for at least 12 months following the issuance of these financial statements.

In December 2021, the Company entered into a Sales Agreement (the “ATM Agreement”) with Cowen and Company, LLC (“Cowen”), pursuant to which the Company can offer and sell, from time to time at its sole discretion through Cowen, as its sales agent, shares of its common stock having an aggregate offering price of up to $200.0 million. Any shares of its common stock sold will be issued pursuant to the Company’s shelf registration statement on Form S-3ASR (File No. 333-261774). The Company will pay Cowen a commission up to 3.0% of the gross sales proceeds of any shares of its common stock sold through Cowen under the ATM Agreement and also has provided Cowen with indemnification and contribution rights. As of December 31, 2023, the Company had sold an aggregate of 1,198,601 shares of its common stock for gross proceeds of approximately $131.7 million at a weighted average purchase price of $109.84 per share pursuant to the ATM Agreement. No shares were sold under the ATM Agreement during the nine months ended September 30, 2024. As of September 30, 2024, approximately $68.3 million remains available under the ATM Agreement.

Pre-Funded Warrants

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

Pre-Funded Warrants

8. Pre-Funded Warrants

In connection with the Company’s previous underwritten public offerings, the Company issued pre-funded warrants to purchase an aggregate of 379,371 shares of the Company’s common stock. Each pre-funded warrant entitled the holder to purchase shares of common stock at an exercise price of $0.01 per share and expired 20 years from the date of issuance. These warrants were recorded as a component of stockholders’ equity within additional paid-in capital. The warrant holders exercised all the shares of outstanding pre-funded warrants in 2023 at an exercise price of $0.01 per share. As of September 30, 2024, there were no pre-funded warrants outstanding.

- Definition

The entire disclosure for equity.

+ References

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+ Details

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Significant Accounting Policies

The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2023 and the notes thereto, which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the U.S. Securities and Exchange Commission (“SEC”) on March 14, 2024 (the “Annual Report”), and there have been no material changes to such policies during the nine months ended September 30, 2024.

Basis of Presentation and Consolidation

The condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and include the Company’s accounts and those of its wholly owned Australian subsidiary, Kezar Life Sciences Australia Pty Ltd., which is a proprietary company limited by shares. All intercompany balances and transactions have been eliminated upon consolidation.

The condensed consolidated balance sheet as of December 31, 2023 has been derived from the audited consolidated financial statements at that date but does not include all information and footnotes required by GAAP for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements included in the Annual Report.

Unaudited Condensed Consolidated Financial Statements

The accompanying financial information as of September 30, 2024 is unaudited. The condensed consolidated financial statements included in this report reflect all adjustments (consisting only of normal recurring adjustments) that our management considers necessary for the fair statement of the results of operations for the interim periods covered and of our financial condition at the date of the interim balance sheet. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The results for interim periods are not necessarily indicative of the results for the entire year or any other interim period. The accompanying condensed consolidated financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto included in our Annual Report.

Use of Estimates

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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant items subject to such judgments, estimates and assumptions include the valuation of marketable securities, impairment of long-lived assets, determining the fair-value of stock-based compensation, and evaluating the progress to completion of external research and development costs. Management bases its estimates on historical experience and on various other market-specific relevant assumptions that management believes to be reasonable under the circumstances. Actual results may differ from those estimates.

Estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require the exercise of judgment. As of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its judgments, estimates and assumptions or revise the carrying value of its assets or liabilities. These estimates may change as new events occur and additional information is obtained and are recognized in the consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to the Company’s condensed consolidated financial statements.

Recently Issued Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2023-09 Income Taxes (Topic 740) – Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires entities to disclose specific categories in the income tax rate reconciliation annually and provide additional information for reconciling items that meet a qualitative threshold. ASU 2023-09 also requires that entities disclose annually additional information about income taxes paid and disaggregated information for certain items. ASU 2023-09 is effective for the Company beginning on January 1, 2025. The Company is currently evaluating the impact of the adoption of ASU 2023-09 on its financial position, results of operations and cash flows.

In November 2023, the FASB issued Accounting Standards Update No. 2023-07 Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires entities to disclose incremental segment information on an annual and interim basis. ASU 2023-07 requires entities with a single reportable segment to provide all the disclosures required by the

amendments in ASU 2023-07 and all existing segment disclosures in Segment Reporting (Topic 280). ASU 2023-07 is effective for the Company beginning with the Annual Report on Form 10-K for the year ending December 31, 2024. The Company is currently evaluating the effect of adopting the update on its related disclosures.

There have been no other recent accounting pronouncements, changes in accounting pronouncements or recently adopted accounting guidance that are expected to have a material impact on the Company’s condensed consolidated financial statements upon adoption.