0001193125-20-292303 | 10-Q | XBRL Viewer | Checkmate Pharmaceuticals INC

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Cover Page - shares	9 Months Ended
Cover Page - shares	Sep. 30, 2020	Nov. 12, 2020
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes
Entity Registrant Name	Checkmate Pharmaceuticals, Inc.
Entity Central Index Key	0001651431
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Incorporation, State or Country Code	DE
Entity Address, State or Province	DE
Entity Address, Country	MA
Title of 12(b) Security	Common Stock
Trading Symbol	CMPI
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding		21,550,547

Condensed Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Current Assets:
Cash and cash equivalents	$ 137,340	$ 4,185
Restricted cash	20	20
Prepaid expenses and other current assets	6,705	921
Total current assets	144,065	5,126
Total assets	144,065	5,126
Current Liabilities:
Accounts payable	3,706	2,234
Accrued expenses	5,154	3,100
Series B preferred stock tranche right liability		300
Total current liabilities	8,860	5,634
Total liabilities	8,860	5,634
Commitments and Contingencies (Note 11)
Redeemable Noncontrolling Interest, Equity, Preferred, Carrying Amount		96,928
Stockholders' Deficit:
Preferred stock, $0.0001 par value, 10,000,000 and 0 shares authorized as of September 30, 2020 and December 31, 2019, respectively; no shares outstanding as of September 30, 2020 and December 31, 2019	0	0
Common stock, $0.0001 par value; 300,000,000 and 76,000,000 shares authorized as of September 30, 2020 and December 31, 2019, respectively; 21,550,547 and 1,488,489 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively	2	1
Additional paid-in capital	264,344
Accumulated deficit	(129,141)	(97,437)
Total stockholders' equity (deficit)	135,205	(97,436)
Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit)	144,065	5,126
Series A Redeemable Convertible Preferred Stock [Member]
Current Liabilities:
Redeemable Noncontrolling Interest, Equity, Preferred, Carrying Amount	0	32,482
Series B Redeemable Convertible Preferred Stock [Member]
Current Liabilities:
Series B preferred stock tranche right liability	300
Redeemable Noncontrolling Interest, Equity, Preferred, Carrying Amount	$ 0	$ 64,446

Condensed Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2020	Dec. 31, 2019
Temporary equity number of shares issued		51,283,386
Temporary equity number of shares outstanding		51,283,386
Common stock par value per share	$ 0.0001	$ 0.0001
Common stock number of shares authorised	300,000,000	76,000,000
Common stock number of shares issued	21,550,547	1,488,489
Common stock number of shares outstanding	21,550,547	1,488,489
Preferred stock par value per share	$ 0.0001	$ 0.0001
Preferred stock number of shares authorised	10,000,000	0
Preferred stock number of shares outstanding	0	0
Series A Redeemable Convertible Preferred Stock [Member]
Temporary equity par value per share	$ 0.0001	$ 0.0001
Temporary equity number of shares authorised	0	25,000,000
Temporary equity number of shares issued	0	25,000,000
Temporary equity number of shares outstanding	0	25,000,000
Series B Redeemable Convertible Preferred Stock [Member]
Temporary equity par value per share	$ 0.0001	$ 0.0001
Temporary equity number of shares authorised	0	29,972,284
Temporary equity number of shares issued	0	26,283,386
Temporary equity number of shares outstanding	0	26,283,386

Condensed Statements of Operations And Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Operating expenses:
Research and development	$ 6,673	$ 5,076	$ 19,462	$ 17,126
General and administrative	3,160	1,208	6,465	3,365
Total operating expenses	9,833	6,284	25,927	20,491
Loss from operations	(9,833)	(6,284)	(25,927)	(20,491)
Other income (expense), net:
Interest income	4	43	32	160
Change in fair value of convertible loan notes			(83)
Total other income (expense), net	4	43	(51)	160
Net loss and comprehensive loss	(9,829)	(6,241)	(25,978)	(20,331)
Net loss	(9,829)	(6,241)	(25,978)	(20,331)
Accretion of Series B preferred stock tranche right liability		(700)	0	(700)
Accretion of issuance costs on redeemable convertible preferred stock	(5)	(34)	(461)	(85)
Accrued dividends on redeemable convertible preferred stock	(1,579)	(1,573)	(5,536)	(4,301)
Net loss attributable to common stockholders	$ (11,413)	$ (8,548)	$ (31,975)	$ (25,417)
Weighted-average common shares outstanding—basic and diluted	13,580,105	1,486,131	5,519,028	1,438,001
Net loss per share attributable to common stockholders—basic and diluted	$ (0.84)	$ (5.75)	$ (5.79)	$ (17.68)

Condensed Statements of Redeemable Convertible Preferred Stock And Stockholders' Deficit - USD ($) $ in Thousands	Total	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Series A Redeemable Convertible Preferred Stock [Member]	Series A Redeemable Convertible Preferred Stock [Member] Preferred Stock [Member]	Series B Redeemable Convertible Preferred Stock [Member]	Series B Redeemable Convertible Preferred Stock [Member] Preferred Stock [Member]	Series C Redeemable Convertible Preferred Stock [Member]	Series C Redeemable Convertible Preferred Stock [Member] Preferred Stock [Member]
Beginning balance at Dec. 31, 2018							$ 30,482		$ 41,491
Beginning balance, shares at Dec. 31, 2018							25,000,000		17,522,259
Beginning balance at Dec. 31, 2018	$ (62,801)		$ 1		$ (62,802)
Beginning balance, shares at Dec. 31, 2018			1,394,961
Issuance of series redeemable convertible preferred, shares									8,761,127
Issuance of series redeemable convertible preferred									$ 18,215
Accretion of issuance costs related to redeemable convertible preferred stock	(85)				(85)				85
Accretion of Series B preferred stock tranche right liability	(700)				(700)			$ 700
Exercise of stock options	74			$ 74
Exercise of stock options, shares			77,876
Exercise of series B preferred stock tranche right	0
Vesting of restricted stock awards, shares			14,189
Stock-based compensation expense	236			236
Accrued dividends on redeemable convertible preferred stock	(4,301)			(310)	(3,991)		$ 1,496		2,805
Net loss	(20,331)				(20,331)
Ending balance at Sep. 30, 2019							$ 31,978		$ 63,296		$ 0
Ending balance, shares at Sep. 30, 2019		0					25,000,000		26,283,386
Ending balance at Sep. 30, 2019	(87,908)		$ 1		(87,909)
Ending balance, shares at Sep. 30, 2019			1,487,026
Beginning balance at Jun. 30, 2019							$ 31,474		$ 54,227
Beginning balance, shares at Jun. 30, 2019							25,000,000		22,594,491
Beginning balance at Jun. 30, 2019	(79,439)		$ 1		(79,440)
Beginning balance, shares at Jun. 30, 2019			1,483,113
Issuance of series redeemable convertible preferred, shares									3,688,895
Issuance of series redeemable convertible preferred									$ 7,266
Accretion of issuance costs related to redeemable convertible preferred stock	(34)				(34)				34		0
Accretion of Series B preferred stock tranche right liability	(700)				(700)			700
Vesting of restricted stock awards, shares			3,913
Stock-based compensation expense	79			79
Accrued dividends on redeemable convertible preferred stock	(1,573)			(79)	(1,494)		$ 504		1,069		0
Net loss	(6,241)				(6,241)
Ending balance at Sep. 30, 2019							$ 31,978		$ 63,296		$ 0
Ending balance, shares at Sep. 30, 2019		0					25,000,000		26,283,386
Ending balance at Sep. 30, 2019	(87,908)		$ 1		(87,909)
Ending balance, shares at Sep. 30, 2019			1,487,026
Beginning balance at Dec. 31, 2019	$ 96,928					$ 32,482	$ 32,482	$ 64,446	$ 64,446
Beginning balance, shares at Dec. 31, 2019	51,283,386					25,000,000	25,000,000	26,283,386	26,283,386
Beginning balance at Dec. 31, 2019	$ (97,436)		$ 1		(97,437)
Beginning balance, shares at Dec. 31, 2019			1,488,489
Issuance of series redeemable convertible preferred, shares									3,688,898		46,828,167
Issuance of series redeemable convertible preferred									$ 7,973		$ 74,566
Conversion of convertible loan notes into redeemable preferred stock	195,847		$ 1	195,846		$ (33,704)		$ (75,898)		$ (86,245)	$ 10,083
Conversion of convertible loan notes into redeemable preferred stock, shares			14,948,241			(25,000,000)		(29,972,284)		(53,123,923)	6,295,756
Accretion of issuance costs related to redeemable convertible preferred stock	(461)				(461)				27		$ 434
Accretion of Series B preferred stock tranche right liability	0
Exercise of stock options	$ 4			4
Exercise of stock options, shares	3,956		3,956
Exercise of series B preferred stock tranche right	$ 300								300
Stock-based compensation expense	1,053			1,053
Accrued dividends on redeemable convertible preferred stock	(5,536)			(271)	(5,265)		$ 1,222		3,152		1,162
Issuance of common shares upon initial public offering net of underwriting discounts, commissions and offering costs,shares			5,109,861
Issuance of common shares upon initial public offering net of underwriting discounts, commissions and offering costs,value	67,712			67,712
Net loss	(25,978)				(25,978)
Ending balance at Sep. 30, 2020						$ 0	$ 0	$ 0	$ 0		$ 0
Ending balance, shares at Sep. 30, 2020						0	0	0	0		0
Ending balance at Sep. 30, 2020	135,205		$ 2	264,344	(129,141)
Ending balance, shares at Sep. 30, 2020			21,550,547
Beginning balance at Jun. 30, 2020							$ 33,479		$ 75,314		$ 85,475
Beginning balance, shares at Jun. 30, 2020							25,000,000		29,972,284		53,123,923
Beginning balance at Jun. 30, 2020	(117,797)		$ 1		(117,798)
Beginning balance, shares at Jun. 30, 2020			1,488,489
Issuance of series redeemable convertible preferred, shares											0
Issuance of series redeemable convertible preferred											$ (5)
Conversion of convertible loan notes into redeemable preferred stock	195,847		$ 1	195,846			$ (33,704)		$ (75,898)		$ (86,245)
Conversion of convertible loan notes into redeemable preferred stock, shares			14,948,241				(25,000,000)		(29,972,284)		(53,123,923)
Accretion of issuance costs related to redeemable convertible preferred stock	(5)				(5)						$ 5
Exercise of stock options	4			4
Exercise of stock options, shares			3,956
Stock-based compensation expense	852			852
Accrued dividends on redeemable convertible preferred stock	(1,579)			(70)	(1,509)		$ 225		$ 584		770
Issuance of common shares upon initial public offering net of underwriting discounts, commissions and offering costs,shares			5,109,861
Issuance of common shares upon initial public offering net of underwriting discounts, commissions and offering costs,value	67,712
Net loss	(9,829)				(9,829)
Ending balance at Sep. 30, 2020						$ 0	$ 0	$ 0	$ 0		$ 0
Ending balance, shares at Sep. 30, 2020						0	0	0	0		0
Ending balance at Sep. 30, 2020	$ 135,205		$ 2	$ 264,344	$ (129,141)
Ending balance, shares at Sep. 30, 2020			21,550,547

Condensed Statements of Redeemable Convertible Preferred Stock And Stockholders' Deficit (Parenthetical) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019 USD ($) $ / shares	Sep. 30, 2020 USD ($) $ / shares	Sep. 30, 2019 USD ($) $ / shares
Series B Redeemable Convertible Preferred Stock [Member]
Shares Issued, Price Per Share \| $ / shares	$ 2.1687	$ 2.1687	$ 2.1687
Cash paid for redeemable convertible preferred stock issuance \| $	$ 34	$ 27	$ 85
Series C Redeemable Convertible Preferred Stock [Member]
Shares Issued, Price Per Share \| $ / shares		$ 1.6016
Cash paid for redeemable convertible preferred stock issuance \| $		$ 435

Condensed Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
Condensed Statements of Cash Flows - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities
Net loss	$ (25,978)	$ (20,331)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock based compensation	1,053	236
Change in fair value of notes payable	83	0
Change in operating assets and liabilities:
Prepaid expenses and other current assets	(5,784)	(451)
Accounts payable	1,473	781
Accrued expenses	1,735	(499)
Net cash used in operating activities	(27,418)	(20,264)
Cash flows from financing activities
Cash received from stock option exercise	4	74
Proceeds from issuance of convertible preferred stock, net of issuance costs	82,539	18,915
Proceeds from initial public offering of common stock, net of underwriting discounts, commissions and issuance costs	68,030	0
Proceeds from issuance of convertible loan notes	10,000	0
Net cash provided by financing activities	160,573	18,989
Net increase (decrease) in cash, cash equivalents and restricted cash	133,155	(1,275)
Cash, cash equivalents and restricted cash at beginning of period	4,205	12,079
Cash, cash equivalents and restricted cash at end of period	137,360	10,804
Supplemental disclosure of non-cash financing activities:
Accretion of issuance costs to redeemable convertible preferred stock	461	85
Accretion of Series B preferred stock tranche right liability	0	700
Exercise of Series B preferred stock tranche right	300	0
Accrued dividends on redeemable convertible preferred stock	5,536	4,301
Issuance of common stock upon conversion of redeemable convertible preferred stock	195,847	0
Initial public offering issuance costs included in accrued expenses	318	0
Series C Redeemable Convertible Preferred Stock [Member]
Supplemental disclosure of non-cash financing activities:
Conversion of convertible loan notes into series C preferred stock	$ 10,083	$ 0

Nature of Business And Basics of Presentation

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Business And Basics of Presentation

1 – NATURE OF BUSINESS AND BASIS OF PRESENTATION

Nature of Business

Checkmate Pharmaceuticals, Inc. (“Checkmate” or the “Company”), headquartered in Cambridge, Massachusetts, is a clinical stage biotechnology company incorporated under the laws of the State of Delaware in July 2015 that is focused on developing and commercializing its proprietary technology to harness the power of the immune system to combat cancer. Since its inception, the Company has devoted substantially all of its efforts to the research and development activities, including recruiting management and technical staff, raising capital, producing materials for

non-clinical

and clinical studies and building infrastructure to support such activities, and has not yet generated any revenue. Expenses have primarily been for research and development and related administrative costs. The Company has financed its operations through the sale of common stock, convertible debt and redeemable convertible preferred stock.

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), and include the accounts of the Company. Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). The Company’s significant accounting policies are disclosed in the audited financial statements for the year ended December 31, 2019, included in the Company’s registration statement on Form

S-1

relating to its initial public offering(the “IPO”) (File

No. 333-239932)

dated and filed on July 17, 2020 with the U.S. Securities and Exchange Commission, or the SEC, as amended (the “Registration Statement”), which became effective on August 6, 2020. Since the date of those financial statements, there have been no changes to the Company’s significant accounting policies other than those disclosed in Note 2 below.

Initial Public Offering

On August 11, 2020, the Company closed the IPO, at which time the Company issued and sold 5,000,000 shares of its common stock, at a price to the public of $15.00 per share. On September 3, 2020, the underwriters of the IPO exercised a portion of their overallotment option by purchasing an additional 109,861 shares from the Company at the IPO price. The Company received approximately $67.7 million in net proceeds, inclusive of the over-allotment exercise and after deducting underwriting discounts and commissions and other offering expenses payable by the Company.

In connection with the closing of the IPO, all outstanding shares of the Company’s preferred stock were converted into 14,948,241 shares of common stock.

On July 31, 2020, the Company effected a

one-for-7.4771

reverse stock split of its common stock. Upon the effectiveness of the reverse stock split, (i) all shares of outstanding common stock were adjusted; (ii) the number of shares of common stock for which each outstanding option to purchase common stock is exercisable were adjusted; and (iii) the exercise price of each outstanding option to purchase common stock was adjusted. All of the outstanding common stock share numbers (including shares of common stock subject to the Company’s options and as converted for the outstanding convertible preferred stock shares), share prices, exercise prices and per share amounts contained in the interim unaudited condensed financial statements have been retroactively adjusted in the interim condensed financial statements to reflect this reverse stock split for all periods presented. The par value per share and the authorized number of shares of common stock were not adjusted as a result of the reverse stock split. The reverse stock split resulted in an adjustment to the redeemable convertible preferred stock conversion prices to reflect a proportional decrease in the number of shares of common stock to be issued upon conversion.

Risks and Uncertainties

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, the outcome of clinical trials, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, ability to secure additional capital to fund operations, and risks associated with the

COVID-19

global pandemic, including potential delays associated with its ongoing and anticipated trials and the Company’s ability to raise additional capital to finance its operations. There can be no assurance that the Company will be able to successfully complete the development of, or receive regulatory approval for, any products developed, and if approved, that any products will be commercially viable. Any products resulting from the Company’s current research and development efforts will require significant additional research and development, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts will require significant amounts of additional capital, adequate personnel, infrastructure and extensive compliance reporting capabilities. The Company has not generated any revenues from the sale of any products to date. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

As of May 13, 2020, the issuance date of the Company’s audited financial statements for the year ended December 31, 2019, the Company concluded that there was substantial doubt about its ability to continue as a going concern for one year after the date that those financial statements were issued. Subsequent to the issuance of those financial statements, the Company received net proceeds of $67.7 million from the IPO and $75.0 million from the issuance of Series C redeemable convertible preferred stock (“Series C preferred stock”) in June 2020. Accordingly, as of the issuance date of these unaudited condensed financial statements, the Company expects its cash and cash equivalents of $137.3 million as of September 30, 2020 will be sufficient to fund its operating expenses and capital expenditure requirements for at least 12 months beyond the date of issuance of these unaudited condensed financial statements.

The future viability of the Company beyond that point is dependent on its ability to raise additional capital to finance its operations.

The Company may seek additional funding through private or public equity financings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing agreements. If the Company is unable to obtain additional funding, the Company will be forced to delay, reduce or eliminate some or all of its research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect its business prospects, or the Company may be unable to continue operations. Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient funding on terms acceptable to the Company to fund continuing operations, if at all.

Unaudited interim financial information

The accompanying interim unaudited condensed financial statements and related disclosures are unaudited and have been prepared in accordance with GAAP for interim financial information and the instructions to Form

10-Q

and Article 10 of Regulation

S-X

of the Exchange Act. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company’s financial statements and related footnotes as of and for the year ended December 31, 2019, included in the Company’s Registration Statement. The Company’s financial information as of September 30, 2020, and for the three and nine months ended September 30, 2020 and 2019 is unaudited, but in the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation of the financial position, results of operations and cash flows at the dates and for the periods presented of the results of these interim periods have been included. The balance sheet data as of December 31, 2019 was derived from audited financial statements. The results of the Company’s operations for any interim period are not necessarily indicative of the results that may be expected for any other interim period or for a full fiscal year.

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company’s significant accounting policies are described in Note 3,

Summary of Significant Accounting Policies

, to the financial statements for the year ended December 31, 2019 in the Registration Statement. There have been no material changes to the significant accounting policies during the nine-month period ended September 30, 2020 except as described below.

Deferred offering costs

The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with

in-process

equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs are recorded in the condensed statements of stockholders’ equity as a reduction of additional

paid-in

capital. During the three months ended September 30, 2020, in connection with the IPO, the Company reclassified deferred offering costs in the amount of $1.6 million to additional

paid-in-capital

as an offset to the IPO.

During the three months ended September 30, 2020, in connection with the IPO, the Company incurred $1.9 million of additional offering related costs. These costs were recorded as a reduction in additional

paid-in-capital

in the accompanying condensed balance sheets.

Fair Value Option

As permitted under ASC 825, Financial Instruments (“ASC 825”), the Company has elected the fair value option to account for its convertible loan notes. In accordance with ASC 825, the Company recorded these convertible loan notes at fair value with changes in fair value recorded as a component of other income (expense), net in the condensed statements of operations and comprehensive loss. As a result of applying the fair value option, direct costs and fees related to the convertible loan notes were expensed as incurred and were not deferred. The Company concluded that it was appropriate to apply the fair value option to the convertible loan notes because there are no

non-contingent

beneficial conversion options related to the convertible loan notes.

Recently adopted accounting pronouncements

In December 2019, the FASB issued ASU

No. 2019-12,

Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes

(“ASU

2019-12”).

ASU

2019-12

includes several provisions to simplify the accounting for income taxes and removes certain exceptions for recognizing deferred taxes for investments, performing intra period allocation and calculating income taxes in interim periods. For public entities, the guidance is effective for annual reporting periods beginning after December 15, 2020 and for interim periods within those fiscal years. For nonpublic entities and emerging growth companies that choose to take advantage of the extended transition period, the guidance is effective for annual reporting periods beginning after December 15, 2021 and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted for all entities. The Company early adopted ASU

2019-12

prospectively effective January 1, 2020 and the adoption did not have any impact on the Company’s unaudited condensed financial statements.

In November 2018, the FASB issued ASU

No. 2018-18,

Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606

(“ASU

2018-18”).

This update clarifies the interaction between Topic 808, Collaborative Arrangements, and Topic 606, Revenue from Contracts with Customers. The guidance is required to be applied retrospectively to the date of initial application of Topic 606 and entities should recognize the cumulative effect of initially applying the amendments as an adjustment to the opening balance of retained earnings of the later of the earliest annual period presented and the annual period that includes the date of the entity’s initial application of Topic 606. The Company early adopted ASU

2018-18

effective January 1, 2020 and the adoption did not have any impact on the Company’s unaudited condensed financial statements and related disclosures.

In August 2018, the FASB issued ASU

No. 2018-13,

Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement

(“ASU

2018-13”)

The ASU modifies, and in certain cases eliminates, the disclosure requirements on fair value measurements in Topic 820. The amendments in ASU

2018-13

are effective for the Company on January 1, 2020. An entity is permitted to early adopt any removed or modified disclosures upon issuance of ASU

2018-13

and delay adoption of the additional disclosures until their effective date. The Company adopted ASU

2018-13

effective January 1, 2020 and the adoption did not have any impact on the Company’s unaudited condensed financial statements and related disclosures.

In July 2017, the FASB issued ASU

No. 2017-11,

Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815) I. Accounting for Certain Financial Instruments with Down Round Features II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception

(“ASU

2017-11”)

Part I applies to entities that issue financial instruments such as warrants, convertible debt or convertible preferred stock that contain down-round features. Part II replaces the indefinite deferral for certain mandatorily redeemable noncontrolling interests and mandatorily redeemable financial instruments of nonpublic entities contained within Topic 480 with a scope exception and does not impact the accounting for these mandatorily redeemable instruments. ASU

2017-11

is required to be adopted for annual periods beginning after December 15, 2019. The Company adopted ASU

2017-11

during the three months ended March 31, 2020 and the adoption did not have any impact on the Company’s unaudited condensed financial statements and related disclosures.

Fair Value Measurement

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value Measurement

3 – FAIR VALUE MEASUREMENT

The following tables set forth the fair value of the Company’s financial assets and liabilities by level within the fair value hierarchy that are measured at fair value on a recurring basis:


	September 30, 2020
	Level 1		Level 2		Level 3		Total
	(in thousands)
Assets:
Money market funds	$	137,100	$	—	$	—	$	137,100

Total assets	$	137,100	$	—	$	—	$	137,100


	December 31, 2019
	Level 1		Level 2		Level 3		Total
	(in thousands)
Assets:
Money market funds	$	4,003	$	—	$	—	$	4,003

Total assets	$	4,003	$	—	$	—	$	4,003

Liabilities:
Series B preferred stock tranche right liability	$	—	$	—	$	300	$	300

Total liabilities	$	—	$	—	$	300	$	300

VALUATION OF SERIES B PREFERRED STOCK TRANCHE RIGHT LIABILITY

The Series B preferred stock tranche right liability at December 31, 2019 is composed of the fair value of rights to purchase Series B redeemable convertible preferred stock (“Series B preferred stock”). The fair value of the Series B preferred stock tranche right liability was determined based on significant inputs not observable in the market, which represent a Level 3 measurement within the fair value hierarchy. The fair value of the preferred stock tranche right liability was determined using a binomial model, which considered as inputs the value of the Series B preferred stock, the expected return of the underlying Series B preferred stock during the period between the valuation date and the expected event date, the probability and timing of achieving the specified milestones as of each valuation date and a discount rate. The most significant assumption in the binomial model impacting the fair value of the Series B preferred stock tranche right liability is the fair value of the Company’s Series B as of each measurement date. The Company determines the fair value per share of the underlying Series B preferred stock by taking into consideration the most recent sales of its Series B preferred stock, results obtained from third-party valuations and additional factors the Company deems relevant. At December 31, 2019, the fair value of each share of Series B preferred stock was $2.20 per share. The series B preferred stock tranche right was exercised on January 14, 2020. The change in fair value of the series B preferred stock tranche right liability from December 31, 2019 to January 14, 2020 was not material.

The following table provides a roll-forward of the aggregate fair value of the Company’s series B preferred stock tranche right liability, for which fair value is determined using Level 3 inputs:


	Series B Preferred Stock Tranche Right Liability
	(in thousands)
Balance as of December 31, 2019	$	300
Exercise of Series B preferred stock tranche right		(300	)

Balance as of September 30, 2020	$	—

VALUATION OF CONVERTIBLE LOAN NOTES

The Company elected the fair value option to account for its convertible loan notes issued during April 2020. The fair value of the convertible loan notes was determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy.

The fair value of the initial closing of the Company’s convertible loan notes in April 2020 was determined to be equal to the proceeds of $10.0 million on issuance. The fair value of the convertible loan notes at the time of conversion into the Series C preferred stock in June 2020 was determined to be equal to $1.6016 per share, the value of the Company’s Series C preferred stock into which the convertible loan notes were converted. The change in fair value of the convertible notes prior to close of the Series C preferred stock financing of $0.1 million primarily related to the accrued interest earned on the convertible loan notes prior to such financing. The following table presents a roll-forward of the aggregate fair values of the Company’s convertible loan notes (Note 5) for which fair value is determined by Level 3 inputs:


	Convertible Loan Notes
	(in thousands)
Balance as of December 31, 2019
Initial fair value	$	10,000
Change in fair value plus accrued interest		83
Settlement of convertible loan notes		(10,083	)

Balance as of September 30, 2020	$	—

- 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 + Details

Accrued Expenses

9 Months Ended

Sep. 30, 2020

Payables and Accruals [Abstract]

Accrued Expenses

4 – ACCRUED EXPENSES

Accrued expenses consist of the following:


	September 30,		December 31,
	2020		2019
	(in thousands)
Payroll and employee related expenses	$	1,600	$	1,051
External research and development		3,377		1,969
Other accrued expenses		177		80

Total accrued expenses	$	5,154	$	3,100

Convertible Loan Notes

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Convertible Loan Notes

5 – CONVERTIBLE LOAN NOTES

On April 21, 2020, the Company entered into a note purchase agreement (the “note purchase agreement”), pursuant to which the Company issued unsecured convertible loan notes to investors for a total of $10.0 million in principal. The Company will pay simple interest on the outstanding principal amount to the extent not converted at the rate of 8% per annum. No repayment of principal or interest was due until maturity, which occurs 12 months after issuance of the convertible loan notes. Under the note purchase agreement, the convertible loan notes outstanding principal and unpaid accrued interest automatically convert upon a “Qualified Financing” (as defined in the note purchase agreement). If the Qualified Financing is consummated within (i) three months after the date of the agreement, the conversion price shall be equal to 90% of the per share price paid by the investors; (ii) if consummated more than three months after the date of the note purchase agreement, but within six months, the conversion price shall be equal to 80% of the per share price paid by the investors; and (iii) is consummated more than six months after the date of the note purchase agreement, the conversion price shall be equal to 70% of the price per share paid by the investors.

On June 2, 2020, upon the Series C preferred stock financing (Note 6), the outstanding principal and unpaid accrued interest of the convertible notes of $10.1 million converted into 6,295,756 shares of Series C preferred stock. Upon execution of the Series C preferred stock, the noteholder investors waived their right to the 90% conversion price and converted the notes at 100% of the per share price paid by the investors in the Qualified Financing.

The Company elected the fair value option to account for the convertible loan notes. The Company recorded the convertible loan notes at fair value and subsequently remeasured them to fair value upon settlement of the convertible loan notes. Changes in fair value were recognized as a component of other income (expense), net in the condensed statements of operations and comprehensive loss. The Company recognized a loss in the condensed statements of operations and comprehensive loss of $0.1 million as change in fair value of the convertible notes during the nine months ended September 30, 2020.

Redeemable Convertible Preferred Stock

9 Months Ended

Sep. 30, 2020

Temporary Equity Disclosure [Abstract]

Redeemable Convertible Preferred Stock

6 – REDEEMABLE CONVERTIBLE PREFERRED STOCK

On August 11, 2020, in connection with the closing of the IPO, all outstanding shares of the Company’s preferred stock were converted into 14,948,241 shares of common stock. As a result of the conversion, the Company reclassified the carrying value of its preferred stock, which included all cumulative but unpaid dividends, to common stock and additional

paid-in-capital

in the amount of $1,000 and $195.8 million, respectively. Following the closing of the IPO, 10,000,000 shares of undesignated preferred stock were authorized and no shares were outstanding,

As of December 31, 2019, the preferred stock consisted of the following:


	Issued and Outstanding		Carrying Value		Liquidation Preference		Common Stock Issuable Upon Conversion
	(dollars in thousands)
Series A redeemable convertible preferred stock		25,000,000	$	32,482	$	32,482		3,343,542
Series B redeemable convertible preferred stock		26,283,386		64,446		64,446		3,946,001

		51,283,386	$	96,928	$	96,928		7,289,543

Preferred stock was classified outside of stockholders’ deficit because the shares contain redemption features that are not solely within the control of the Company.

Series C Preferred Stock Financing

In June 2020, the Company entered into the Series C Preferred Stock Purchase Agreement, pursuant to which the Company was authorized to issue 62,489,557 shares of Series C preferred stock, at a price of $1.6016 per share. As part of the closing, the Company issued 46,828,167 shares of Series C preferred stock at $1.6016 per share resulting in net proceeds received $74.6 million and an additional 6,295,756 shares of Series C preferred stock in satisfaction of the conversion of $10.0 million convertible loan notes and $0.1 million of accrued interest. The aggregate purchase price of the Series C preferred stock was $85.1 million and the Company incurred issuance costs of $0.4 million, which was recorded as a reduction to the Series C preferred stock carrying value.

Series B Preferred Stock Financing

In January 2020, the Company issued 3,688,898 of Series B preferred stock at a price of $2.16867 per share, resulting in net proceeds received of $8.0 million. The rights and preferences of the Series B preferred stock issued in January 2020 are identical to Series B preferred stock issued in prior periods. As a result of the issuance, the fair value of the associated outstanding series B tranche right liability of $0.3 million was reclassified to Series B preferred stock. In connection with the Series C preferred stock financing, the conversion price of the Series B preferred stock was decreased from $16.21536 to $14.4451 such that the rate at which shares of Series B preferred stock may be converted into shares of common stock was adjusted from 1:1 to 0.15013:1.

Dividends

Preferred stock accrued dividends on a cumulative basis at $0.08 per share per annum for Series A redeemable convertible preferred stock (the “Series A preferred stock”) $0.17349 per share per annum for Series B preferred stock and $0.128128

per share per annum for Series C preferred stock, calculated daily and payable when and if declared by the Company’s board of directors. No dividends may be paid to common stockholders until all dividends to preferred stockholders are paid in full, except stock dividends paid to common stockholders. At August 10, 2020, immediately prior to the closing of the IPO, cumulative dividends for Series A preferred stock, Series B preferred stock and Series C preferred stock

were $8.7 million, $10.6 million and $1.2 million, respectively.

Through September 30, 2020, no dividends have been declared or paid by the Company.

Common Stock

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Common Stock

7 – COMMON STOCK

The voting, dividend and liquidation rights of the common stockholders are subject to and qualified by the rights, powers and preferences of the preferred stock. The holders of the common stock are entitled to one vote for each share of common stock held at all meetings of stockholders. Common stockholders are entitled to receive dividends declared out of funds legally available, subject to the payment in full of all preferential dividends to which the holders of preferred stock are entitled. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, after the payment or provision for payment of all debts and liabilities of the Company and all preferential amounts to which the holders of preferred stock are entitled, if any, the common stockholders and preferred stockholders (on an

as-converted

basis) are entitled to share ratably in the remaining assets of the Company available for distribution.

The Company’s common stock available for future issuance as of September 30, 2020 is summarized as follows:


Common stock authorized			300,000,000
Common stock authorized, issued and outstanding			21,550,547
Common stock authorized and reserved for future issuance:
Common stock reserved for future exercises of stock option awards			2,491,336
Common stock reserved for future share-based awards			2,512,757

Common stock reserved for issuance under the 2020 ESPP Plan			267,119
Total common stock authorized and reserved for future issuance			26,821,759

Unreserved common stock available for future issuance			273,178,241

Stock based compensation

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Stock based compensation

8 – STOCK-BASED COMPENSATION

Stock Options

In August 2015, the Company’s board of directors approved the Checkmate Pharmaceuticals, Inc. 2015 Stock Option and Grant Plan (the “2015 Plan”), to encourage and enable the officers, employees, directors, consultants and other key persons to acquire a proprietary interest in the Company. The 2015 Plan provided for the granting of incentive stock options,

non-statutory

stock options and restricted stock awards as determined by the board of directors.

In August 2020, the Company’s board of directors and stockholders adopted and approved the Checkmate Pharmaceuticals, Inc. 2020 Stock Option and Incentive Plan (the “2020 Plan”). The 2020 Plan allows for the issuance of stock awards in the form of options, stock appreciation rights, restricted stock awards, restricted stock units, unrestricted stock awards and cash based awards to its officers, employees,

non-employee

directors and consultants of the Company. The maximum number of stock awards to be issued under the 2020 Plan is 3,935,005 shares, which is comprised of the initial limit of 3,205,430 shares plus 729,575 shares that were remaining available for issuance under the Company’s 2015 Plan. Each January 1, beginning on January 1, 2021, the number of shares of stock reserved and available for issuance under the 2020 Plan shall be cumulatively increased by 4% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, or such lesser number of shares as approved by the 2020 Plan administrator. Upon the creation of the 2020 Plan, no new stock awards will be issued from the 2015 Plan. Any awards granted from the 2015 Plan that are forfeited, canceled or held back will be added back to shares issuable under the 2020 Plan. As of September 30, 2020, an aggregate of 2,512,757 shares of common stock were available for future grant.

The Company estimates the fair value of stock option awards on the grant date using the Black-Scholes option valuation model with the following weighted-average assumptions:


	Three and Nine Months Ended September 30,
	2020			2019
Risk-free interest rate		0.31	%		1.30	%
Expected term (in years)		6.05			5.75
Expected volatility		78.3	%		70.0	%
Dividend yield		—			—

The per share weighted average grant date fair value of stock options granted during the three and nine months ended September 30, 2020 and 2019 was $14.76 and 1.61 respectively. As of September 30, 2020, total unrecognized compensation expense related to stock options totaled $14.1 million, which is expected to be recognized over a weighted average period of 3.8 years.

The following table summarizes the activity under the Company’s stock option plan during the nine months ended September 30, 2020:


	Number of Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2019		1,073,044		$	2.45		8.7	$	902
Granted		1,422,248		$	14.76
Forfeited		—		$	—
Exercised		(3,956	)	$	0.95

Outstanding at September 30, 2020		2,491,336		$	9.48		9.1	$	9,681

Vested and expected to vest at September 30, 2020		2,491,336		$	9.48		9.1	$	9,681
Exercisable at September 30, 2020		484,458		$	2.61		7.4	$	4,357

The aggregate intrinsic value of options is calculated as the difference between the exercise price of the options and the fair value of the Company’s common stock for those options that had exercise prices lower than the fair value of the Company’s common stock. The intrinsic value of options exercised during the three and nine months ended September 30, 2020 was $0.1 million.

Restricted Stock

The Company did not grant restricted stock during the nine months ended September 30, 2020. All previously granted restricted stock was fully vested as of December 31, 2019.

Stock-based Compensation Expense

Total stock-based compensation expense was classified in the accompanying condensed statements of operations and comprehensive loss as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in thousands)				(in thousands)
Research and development	$	509	$	53	$	588	$	75
General and administrative		343		26		465		161

Total stock-based compensation expense	$	852	$	79	$	1,053	$	236

Employee Stock Purchase Plan

In July 2020, the Company’s board of directors and stockholders adopted and approved the Checkmate Pharmaceuticals, Inc. 2020 Employee Stock Purchase Plan (the “2020 ESPP”) which became effective immediately before the closing of the IPO. The 2020 ESPP was created to provide eligible employees of the Company and other qualified participants to purchase the Company’s common stock

at 85% of the fair market value of the common stock on the offering date or the exercise date, whichever is lower, for up to 15% of such employee’s compensation for each pay period. The Company reserved 267,119 shares of common stock for the 2020 ESPP. The 2020 ESPP provides for an annual increase in the number of shares of common stock to be reserved for future issuance under the 2020 ESPP. Each January 1, beginning on January 1, 2022, the number of shares of stock reserved and available for issuance under the 2020 ESPP shall be cumulatively increased by the lesser of (i) 267,119 shares of common stock, (ii) 1% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, or (iii) such lesser number of shares of common stock as determined by the 2020 ESPP administrator.

Income taxes

9 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Income taxes

9 – INCOME TAXES

The Company incurred federal and state net operating losses and recorded a full valuation allowance against net deferred tax assets for all periods presented. Accordingly, the Company has not recorded a provision for federal or state income taxes.

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), signed into United States law on March 27, 2020 modifies certain provisions of the Tax Cuts and Jobs Act (the “TCJA”) with respect to net operating losses. Under the CARES Act, the limitation on the deduction of net operating losses to 80% of annual taxable income is suspended for taxable years beginning before January 1, 2021. The CARES Act did not have a material impact on the unaudited condensed financial statements.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Net Loss Per Share

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Net Loss Per Share

10 – NET LOSS PER SHARE

Net Loss Per Share Attributable To Common Stockholders

Because the Company reports a net loss attributable to common stockholders, basic and diluted net loss per share attributable to common stockholders are the same for both years presented. All preferred stock, unvested restricted stock, and stock options have been excluded from the computation of diluted weighted-average shares outstanding because such securities would have an antidilutive impact. Basic and diluted net loss per share attributable to common stockholders was calculated as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019

Numerator
Net loss	$	(9,829	)	$	(6,241	)	$	(25,978	)	$	(20,331	)
Accretion of issuance costs on redeemable convertible preferred stock		(5	)		(34	)		(461	)		(85	)
Accretion of Series B preferred stock tranche right liability		—			(700	)		—			(700	)
Accrued dividends on redeemable convertible preferred stock		(1,579	)		(1,573	)		(5,536	)		(4,301	)

Net loss attributable to common stockholders	$	(11,413	)	$	(8,548	)	$	(31,975	)	$	(25,417	)

Denominator:
Weighted-average common shares outstanding—basic and diluted		13,580,105			1,486,131			5,519,028			1,438,001

Net loss per share attributable to common stockholders—basic and diluted	$	(0.84	)	$	(5.75	)	$	(5.79	)	$	(17.68	)

The following common stock equivalents outstanding at September 30, 2020 and 2019 have been excluded from the calculation of diluted net loss per share because their inclusion would have been antidilutive:


	September 30,
	2020		2019
Options to purchase common stock		2,491,336		946,822
Unvested restricted common stock		—		1,463
Redeemable convertible preferred stock		—		6,858,727

Commitments And Contingencies

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments And Contingencies

11 – COMMITMENTS AND CONTINGENCIES

Operating Lease

The Company has a

month-to-month

lease agreement for its corporate space in Cambridge, Massachusetts. Rent expense is recognized as incurred. Rent expense for the three months ended September 30, 2020 and 2019 was $0.1 million and $0.1 million, respectively. Rent expense for the nine months ended September 30, 2020 and 2019 was $0.4 million and $0.3 million, respectively.

Clinical Trial Collaboration and Supply Agreement

On August 22, 2018, the Company entered into the Clinical Trial Collaboration and Supply Agreement (the “CTCSA”) with an affiliate of Merck KgaA (“Merck”) and Pfizer Inc. (“Pfizer” and, together with Merck, the “Alliance”). Pursuant to the CTCSA, the Company and the Alliance will each provide compound drug products that will be dosed concurrently or in combination in a clinical trial sponsored by Pfizer. This agreement was amended on March 4, 2019. In addition to providing a compound drug product to be used in the clinical trial, the Company will reimburse Pfizer for each patient dosed in the study using the Company’s compound at a specified rate outlined in the CTCSA. In no event will the amount of costs due by the Company to Pfizer exceed $4.0 million over the term of the CTCSA.

The costs of services performed and material used in connection with the research and development activities of the CTCSA, including reimbursements due to Pfizer, are included in research and development costs and expensed as incurred. The Company incurred $0.3 million and $0.8 million of expense during the three and nine months ended September 30, 2020, respectively, and no expense relating to the Pfizer reimbursement during the three and nine months ended September 30, 2019.

License Agreement

In June 2015, the Company entered into an exclusive license agreement with Cytos Biotechnology LTD (now Kuros Biosciences AG or “Kuros”) as amended in August 2017 and as further amended in January 2018 (the “Kuros License Agreement”). Pursuant to the Kuros License Agreement, in return for payments made, the Company was granted an exclusive, royalty-bearing, sublicensable, worldwide license, under all of Kuros’ intellectual property rights, including any intellectual property rights arising during the term of the Kuros License Agreement, to commercially develop, manufacture, use, distribute, and sell certain therapeutic products, including

CMP-001,

(the “Licensed Product”) for the diagnosis, treatment and prevention of all indications in humans and animals. Under the terms of the Kuros License Agreement, the Company is required to use commercially reasonable efforts to develop at least one Licensed Product. Under the Kuros License Agreement, the Company agreed to make milestone payments to Kuros for each product that achieved certain development and regulatory milestones, including milestone payments of up to $56.0 million for the Company’s current oncology programs. Included in this total are potential milestones of $2.0 million at the initiation of a Phase 2 trial for

CMP-001

and $4.0 million at the initiation of a Phase 3 trial for

CMP-001.

Development and regulatory milestones are expensed to operations when they are deemed probable of being achieved. The Company is also required to pay royalties on sales of future products, if any.

As of September 30, 2020, the Company has incurred and paid license fees and milestone payments totaling $2.3 million pursuant to the Kuros License Agreement. These payments are comprised of a license fee of $1.0 million which was recognized in research and development expense in 2015, a $1.0 million milestone payment in connection with the dosing of the first patient in the first Phase 1 clinical trial which was recognized in research and development expense in 2016 and a $0.3 million license amendment fee in connection with the signing of the second amendment to the license agreement which was recognized in research and development expense in 2018. As of September 30, 2020, no other milestones were deemed probable of being achieved and, accordingly, no additional expense has been recognized.

Other Contingencies

During the ordinary course of its operations, the Company may become a party to contractual disputes, litigation, and potential claims. The Company does not believe that the resolution of any of these matters, if any, will have a material adverse effect on its financial position or results of operations.

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Nature of Business

non-clinical

Basis of Presentation

S-1

relating to its initial public offering(the “IPO”) (File

No. 333-239932)

Initial Public Offering

In connection with the closing of the IPO, all outstanding shares of the Company’s preferred stock were converted into 14,948,241 shares of common stock.

On July 31, 2020, the Company effected a

one-for-7.4771

Risks and Uncertainties

COVID-19

The future viability of the Company beyond that point is dependent on its ability to raise additional capital to finance its operations.

Unaudited interim financial information

10-Q

and Article 10 of Regulation

S-X

Deferred offering costs

The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with

in-process

paid-in

capital. During the three months ended September 30, 2020, in connection with the IPO, the Company reclassified deferred offering costs in the amount of $1.6 million to additional

paid-in-capital

as an offset to the IPO.

paid-in-capital

in the accompanying condensed balance sheets.

Fair Value Option

non-contingent

beneficial conversion options related to the convertible loan notes.

Recently adopted accounting pronouncements

In December 2019, the FASB issued ASU

No. 2019-12,

Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes

(“ASU

2019-12”).

ASU

2019-12

prospectively effective January 1, 2020 and the adoption did not have any impact on the Company’s unaudited condensed financial statements.

In November 2018, the FASB issued ASU

No. 2018-18,

Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606

(“ASU

2018-18”).

2018-18

effective January 1, 2020 and the adoption did not have any impact on the Company’s unaudited condensed financial statements and related disclosures.

In August 2018, the FASB issued ASU

No. 2018-13,

Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement

(“ASU

2018-13”)

The ASU modifies, and in certain cases eliminates, the disclosure requirements on fair value measurements in Topic 820. The amendments in ASU

2018-13

are effective for the Company on January 1, 2020. An entity is permitted to early adopt any removed or modified disclosures upon issuance of ASU

2018-13

and delay adoption of the additional disclosures until their effective date. The Company adopted ASU

2018-13

effective January 1, 2020 and the adoption did not have any impact on the Company’s unaudited condensed financial statements and related disclosures.

In July 2017, the FASB issued ASU

No. 2017-11,

(“ASU

2017-11”)

2017-11

is required to be adopted for annual periods beginning after December 15, 2019. The Company adopted ASU

2017-11

during the three months ended March 31, 2020 and the adoption did not have any impact on the Company’s unaudited condensed financial statements and related disclosures.

Fair Value Measurement (Tables)

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Schedule of Fair Value Assets And Liabilities Measured On Recurring Basis


	September 30, 2020
	Level 1		Level 2		Level 3		Total
	(in thousands)
Assets:
Money market funds	$	137,100	$	—	$	—	$	137,100

Total assets	$	137,100	$	—	$	—	$	137,100


	December 31, 2019
	Level 1		Level 2		Level 3		Total
	(in thousands)
Assets:
Money market funds	$	4,003	$	—	$	—	$	4,003

Total assets	$	4,003	$	—	$	—	$	4,003

Liabilities:
Series B preferred stock tranche right liability	$	—	$	—	$	300	$	300

Total liabilities	$	—	$	—	$	300	$	300

Schedule of Aggregate Fair Value of The Company's Series B Preferred Stock Tranche Right Liability

The following table provides a roll-forward of the aggregate fair value of the Company’s series B preferred stock tranche right liability, for which fair value is determined using Level 3 inputs:


	Series B Preferred Stock Tranche Right Liability
	(in thousands)
Balance as of December 31, 2019	$	300
Exercise of Series B preferred stock tranche right		(300	)

Balance as of September 30, 2020	$	—

Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

The following table presents a roll-forward of the aggregate fair values of the Company’s convertible loan notes (Note 5) for which fair value is determined by Level 3 inputs:


	Convertible Loan Notes
	(in thousands)
Balance as of December 31, 2019
Initial fair value	$	10,000
Change in fair value plus accrued interest		83
Settlement of convertible loan notes		(10,083	)

Balance as of September 30, 2020	$	—

Accrued Expenses (Tables)

9 Months Ended

Sep. 30, 2020

Payables and Accruals [Abstract]

Accrued Expenses

Accrued expenses consist of the following:


	September 30,		December 31,
	2020		2019
	(in thousands)
Payroll and employee related expenses	$	1,600	$	1,051
External research and development		3,377		1,969
Other accrued expenses		177		80

Total accrued expenses	$	5,154	$	3,100

Redeemable Convertible Preferred Stock (Tables)

9 Months Ended

Sep. 30, 2020

Temporary Equity Disclosure [Abstract]

Schedule of Redeemable Convertible Preferred Stock

As of December 31, 2019, the preferred stock consisted of the following:


	Issued and Outstanding		Carrying Value		Liquidation Preference		Common Stock Issuable Upon Conversion
	(dollars in thousands)
Series A redeemable convertible preferred stock		25,000,000	$	32,482	$	32,482		3,343,542
Series B redeemable convertible preferred stock		26,283,386		64,446		64,446		3,946,001

		51,283,386	$	96,928	$	96,928		7,289,543

Common Stock (Tables)

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Summary of Common Stock Available for Future Issuance

The Company’s common stock available for future issuance as of September 30, 2020 is summarized as follows:


Common stock authorized			300,000,000
Common stock authorized, issued and outstanding			21,550,547
Common stock authorized and reserved for future issuance:
Common stock reserved for future exercises of stock option awards			2,491,336
Common stock reserved for future share-based awards			2,512,757

Common stock reserved for issuance under the 2020 ESPP Plan			267,119
Total common stock authorized and reserved for future issuance			26,821,759

Unreserved common stock available for future issuance			273,178,241

Stock based compensation - (Tables)

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Schedule of fair value of stock option awards on the grant date using the black-scholes option valuation model

The Company estimates the fair value of stock option awards on the grant date using the Black-Scholes option valuation model with the following weighted-average assumptions:


	Three and Nine Months Ended September 30,
	2020			2019
Risk-free interest rate		0.31	%		1.30	%
Expected term (in years)		6.05			5.75
Expected volatility		78.3	%		70.0	%
Dividend yield		—			—

Summary of activity under the company's stock option plan

The following table summarizes the activity under the Company’s stock option plan during the nine months ended September 30, 2020:


	Number of Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2019		1,073,044		$	2.45		8.7	$	902
Granted		1,422,248		$	14.76
Forfeited		—		$	—
Exercised		(3,956	)	$	0.95

Outstanding at September 30, 2020		2,491,336		$	9.48		9.1	$	9,681

Vested and expected to vest at September 30, 2020		2,491,336		$	9.48		9.1	$	9,681
Exercisable at September 30, 2020		484,458		$	2.61		7.4	$	4,357

Summary of total stock-based compensation expense

Total stock-based compensation expense was classified in the accompanying condensed statements of operations and comprehensive loss as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in thousands)				(in thousands)
Research and development	$	509	$	53	$	588	$	75
General and administrative		343		26		465		161

Total stock-based compensation expense	$	852	$	79	$	1,053	$	236

Net Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Summary of Basic And Diluted Net Loss Per Share Attributable To Common Stockholders

Basic and diluted net loss per share attributable to common stockholders was calculated as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019

Numerator
Net loss	$	(9,829	)	$	(6,241	)	$	(25,978	)	$	(20,331	)
Accretion of issuance costs on redeemable convertible preferred stock		(5	)		(34	)		(461	)		(85	)
Accretion of Series B preferred stock tranche right liability		—			(700	)		—			(700	)
Accrued dividends on redeemable convertible preferred stock		(1,579	)		(1,573	)		(5,536	)		(4,301	)

Net loss attributable to common stockholders	$	(11,413	)	$	(8,548	)	$	(31,975	)	$	(25,417	)

Denominator:
Weighted-average common shares outstanding—basic and diluted		13,580,105			1,486,131			5,519,028			1,438,001

Net loss per share attributable to common stockholders—basic and diluted	$	(0.84	)	$	(5.75	)	$	(5.79	)	$	(17.68	)

Summary of Potentially Dilutive Shares Excluded From The Calculation of Diluted Net Loss


	September 30,
	2020		2019
Options to purchase common stock		2,491,336		946,822
Unvested restricted common stock		—		1,463
Redeemable convertible preferred stock		—		6,858,727

Nature of Business And Basics of Presentation - Additional Information (Detail) $ / shares in Units, $ in Thousands					3 Months Ended	9 Months Ended
	Sep. 03, 2020 shares	Aug. 31, 2020 USD ($)	Aug. 11, 2020 USD ($) $ / shares shares	Jul. 31, 2020	Sep. 30, 2020 USD ($) $ / shares shares	Sep. 30, 2020 USD ($) $ / shares shares	Sep. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)
Subsidiary, Sale of Stock [Line Items]
Proceeds from initial public offering of common stock, net of underwriting discounts, commissions and issuance costs			$ 67,700			$ 68,030	$ 0
Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs						195,847	$ 0
Cash and cash equivalents					$ 137,340	$ 137,340		$ 4,185
Series C Redeemable Convertible Preferred Stock [Member]
Subsidiary, Sale of Stock [Line Items]
Shares Issued, Price Per Share \| $ / shares					$ 1.6016	$ 1.6016
Proceeds from initial public offering gross						$ 75,000
Common Stock [Member]
Subsidiary, Sale of Stock [Line Items]
Shares Issued During Period \| shares					5,109,861	5,109,861
Reverse stock split, conversion ratio				7.4771
Description of the reverse stock split arrangement				On July 31, 2020, the Company effected a one-for-7.4771 reverse stock split of its common stock. Upon the effectiveness of the reverse stock split, (i) all shares of outstanding common stock were adjusted; (ii) the number of shares of common stock for which each outstanding option to purchase common stock is exercisable were adjusted; and (iii) the exercise price of each outstanding option to purchase common stock was adjusted. All of the outstanding common stock share numbers (including shares of common stock subject to the Company’s options and as converted for the outstanding convertible preferred stock shares), share prices, exercise prices and per share amounts contained in the interim unaudited condensed financial statements have been retroactively adjusted in the interim condensed financial statements to reflect this reverse stock split for all periods presented. The par value per share and the authorized number of shares of common stock were not adjusted as a result of the reverse stock split. The reverse stock split resulted in an adjustment to the redeemable convertible preferred stock conversion prices to reflect a proportional decrease in the number of shares of common stock to be issued upon conversion.
Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs		$ 67,700
Convertible Preferred Stock, Shares Issued upon Conversion \| shares			14,948,241
IPO [Member] \| Common Stock [Member]
Subsidiary, Sale of Stock [Line Items]
Shares Issued During Period \| shares			5,000,000
Shares Issued, Price Per Share \| $ / shares			$ 15.00
Over-Allotment Option [Member] \| Common Stock [Member]
Subsidiary, Sale of Stock [Line Items]
Shares Issued During Period \| shares	109,861

Summary of Significant Accounting Policies -Additional Information (Detail) $ in Millions	3 Months Ended
	Sep. 30, 2020 USD ($)
Accounting Policies [Abstract]
Deferred offering costs reclassified to additional paid-in-capita	$ 1.6
Payments Of Stock Issuance Costs	$ 1.9

Fair Value Measurement - Schedule of Fair Value Assets And Liabilities Measured On Recurring Basis (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Assets:
Assets, Fair Value Disclosure	$ 137,100	$ 4,003
Liabilities:
Financial Liabilities Fair Value Disclosure		300
Money Market Funds [Member]
Assets:
Assets, Fair Value Disclosure	137,100	4,003
Series B Preferred Stock Tranche Right Liability [Member]
Liabilities:
Financial Liabilities Fair Value Disclosure		300
Fair Value, Inputs, Level 1 [Member]
Assets:
Assets, Fair Value Disclosure	137,100	4,003
Fair Value, Inputs, Level 1 [Member] \| Money Market Funds [Member]
Assets:
Assets, Fair Value Disclosure	$ 137,100	4,003
Fair Value, Inputs, Level 3 [Member]
Liabilities:
Financial Liabilities Fair Value Disclosure		300
Fair Value, Inputs, Level 3 [Member] \| Series B Preferred Stock Tranche Right Liability [Member]
Liabilities:
Financial Liabilities Fair Value Disclosure		$ 300

Fair Value Measurement - Schedule of Aggregate Fair Value of The Company's Series B Preferred Stock Tranche Right Liability (Detail) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Schedule Of Aggregate fair value of the Companys series B preferred stock tranche right liability [Line Items]
Balance as of December 31, 2019	$ 300
Exercise of series B preferred stock tranche right	300	$ 0
Series B Redeemable Convertible Preferred Stock [Member]
Schedule Of Aggregate fair value of the Companys series B preferred stock tranche right liability [Line Items]
Balance as of June 30, 2020	300
Series B Redeemable Convertible Preferred Stock [Member] \| Fair Value, Inputs, Level 3 [Member]
Schedule Of Aggregate fair value of the Companys series B preferred stock tranche right liability [Line Items]
Balance as of December 31, 2019	300
Exercise of series B preferred stock tranche right	(300)
Balance as of June 30, 2020	$ 0

Fair Value Measurement - Schedule of Fair Value, Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation (Detail) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Initial fair value	$ 10,000	$ 0
Convertible Notes Payable [Member] \| Fair Value, Inputs, Level 3 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Initial fair value	10,000
Change in fair value plus accrued interest	83
Settlement of convertible loan notes	(10,083)
Ending balance	$ 0

Fair Value Measurement - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands		1 Months Ended	9 Months Ended
	Dec. 31, 2019	Apr. 30, 2020	Sep. 30, 2020	Sep. 30, 2019	Apr. 01, 2020
Fair Value Disclosures [Line Items]
Proceeds from convertible loan notes			$ 10,000	$ 0
Fair Value, Recurring [Member] \| Fair Value, Inputs, Level 3 [Member]
Fair Value Disclosures [Line Items]
Proceeds from convertible loan notes		$ 10,000
Series B Redeemable Convertible Preferred Stock [Member]
Fair Value Disclosures [Line Items]
Fair value per share			$ 2.20
Exercise date of preferred stock tranche right	Jan. 14, 2020
Series C Redeemable Convertible Preferred Stock [Member]
Fair Value Disclosures [Line Items]
Debt instrument conversion price					$ 1.6016
Series C Redeemable Convertible Preferred Stock [Member] \| Fair Value, Inputs, Level 3 [Member]
Fair Value Disclosures [Line Items]
Change in fair value of convertible notes			$ 100

Accrued Expenses - Schedule of Accrued Expenses (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Payables and Accruals [Abstract]
Payroll and employee related expenses	$ 1,600	$ 1,051
External research and development	3,377	1,969
Other accrued expenses	177	80
Total accrued expenses	$ 5,154	$ 3,100