0001798749-24-000059 | 10-Q | XBRL Viewer | Aerovate Therapeutics INC

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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)	$ (16,237)	$ (24,775)	$ (23,186)	$ (19,563)	$ (19,025)	$ (16,520)	$ (64,198)	$ (55,108)

- 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

ORGANIZATION AND NATURE OF OPERATIONS (Details) - USD ($) $ in Thousands			9 Months Ended
	Oct. 30, 2024	Apr. 05, 2023	Sep. 30, 2024	Sep. 30, 2023
Sale of Stock
Proceeds from issuance of common stock			$ 23,635	$ 44,888
Cash and cash equivalents and short-term investments			$ 88,700
Subsequent Event
Sale of Stock
Cash dividend	$ 65,000
BofA Securities, Inc.
Sale of Stock
Aggregate amount of shares		$ 75,000
Shares sold			3,462,721
Proceeds from issuance of common stock			$ 67,900
Value of remaining common stock available for sale under ATM Program			$ 6,000

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Cash flow from operating activities:
Net loss	$ (64,198)	$ (55,108)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense	10,068	8,655
Depreciation and amortization expense	274	68
Accretion of discounts and amortization of premiums on investments, net	(1,912)	(2,118)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	(82)	(128)
Other long-term assets	789	(70)
Accounts payable	(1,488)	880
Accrued and other liabilities	(4,152)	5,948
Operating lease assets and liabilities, net	220	9
Other liabilities	332	(114)
Net cash used in operating activities	(60,149)	(41,978)
Cash flow from investing activities:
Purchases of short-term investments	(19,683)	(96,194)
Maturities of short-term investments	62,583	102,500
Purchases of property and equipment		(78)
Net cash provided by investing activities	42,900	6,228
Cash flow from financing activities:
Proceeds from sale of common stock in connection with ATM, net	23,635	44,888
Payments for offering costs	(307)	(234)
Proceeds from issuance of common stock under ESPP	308	228
Proceeds from issuance of common stock upon exercise of stock options	1,237	651
Net cash provided by financing activities	24,873	45,533
Net increase in cash and cash equivalents	7,624	9,783
Cash and cash equivalents at the beginning of the year	23,491	22,397
Cash and cash equivalents at the end of the period	31,115	32,180
Supplemental disclosure of noncash investing and financing activities:
Right-of-use asset obtained in exchange for operating lease liability	$ 206
Purchases of property and equipment in accounts payable and accrued liabilities		$ 64

COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Sep. 30, 2024

COMMITMENTS AND CONTINGENCIES

SCHEDULE OF FUTURE MINIMUM ANNUAL LEASE PAYMENTS FOR OPERATING LEASES

As of September 30, 2024, the future minimum annual lease payments under the operating leases were as follows (in thousands):


	Total Minimum
	Lease Payments
2024		$	316
2025			242
Total operating lease payments			558
Less: Amount representing interest			(18)
Present value of net minimum lease payments		$	540

SCHEDULE OF SUPPLEMENTAL CASH FLOW

As the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the lease commencement date. The components of operating leases as of September 30, 2024 and as of December 31, 2023 were as follows (in thousands except lease term and discount rate):


	September 30,			December 31,
Operating lease liabilities:	2024			2023
Current		459			420
Non-current		81			255
Total lease liabilities	$	540		$	675
Weighted-average remaining lease term (in years)		1.1			1.5
Weighted-average incremental borrowing rate		6.4	%		6.0	%

Supplemental cash flow information related to cash paid for amounts included in the measurement of operating lease liabilities was as follows (in thousands):


	Nine months ended September 30,
	2024		2023
Cash paid included in operating cash flows	$	380	$	323

SCHEDULE OF OPERATING LEASE EXPENSE

Rent expense was as follows (in thousands):


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Operating lease	$	115	$	111	$	343	$	332
Short-term lease		—		—		165		—
Total rent expense	$	115	$	111	$	508	$	332

COMMITMENTS AND CONTINGENCIES - SCHEDULE OF FUTURE MINIMUM ANNUAL LEASE PAYMENTS FOR OPERATING LEASES (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
COMMITMENTS AND CONTINGENCIES
2024	$ 316
2025	242
Total operating lease payments	558
Less: Amount representing interest	(18)
Present value of net minimum lease payments	540	$ 675
Operating lease liabilities:
Current	459	420
Non-current	81	255
Present value of net minimum lease payments	$ 540	$ 675
Weighted-average remaining lease term (in years)	1 year 1 month 6 days	1 year 6 months
Weighted-average incremental borrowing rate	6.40%	6.00%

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2024

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

SCHEDULE OF NET LOSS PER SHARE

The following table summarizes the Company’s net loss per share (in thousands, except share and per share amounts):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Numerator:
Net loss	$	(16,237)	$	(19,563)	$	(64,198)	$	(55,108)
Net loss attributable to common stockholders	$	(16,237)	$	(19,563)	$	(64,198)	$	(55,108)

Denominator:
Weighted-average common stock outstanding, basic and diluted		28,863,327		27,640,542		28,572,338		25,872,118
Net loss per share, basic and diluted	$	(0.56)	$	(0.71)	$	(2.25)	$	(2.13)

SCHEDULE OF POTENTIALLY DILUTIVE SECURITIES NOT INCLUDED IN THE CALCULATION OF DILUTED NET LOSS PER SHARE

Potentially dilutive securities not included in the calculation of diluted net loss per share attributable to common stockholders because to do so would have had an anti-dilutive effect are as follows (in common stock equivalent shares):


	As of September 30,
	2024	2023
Options to purchase common stock	3,714,104	5,236,832
Unvested restricted stock units	—	25,754
	3,714,104	5,262,586

SHARE-BASED COMPENSATION - SCHEDULE OF UNVESTED RESTRICTED STOCK UNIT ACTIVITY (Details) - Unvested restricted stock units	9 Months Ended
	Sep. 30, 2024 $ / shares shares
Share-Based Compensation Arrangement by Share-Based Payment Award
Number of units, beginning \| shares	21,968
Weighted Average Grant date fair value, beginning \| $ / shares	$ 22.26
Number of units, Vested \| shares	(5,492)
Weighted Average Grant date fair value, Vested \| $ / shares	$ 21.30
Number of units, forfeited \| shares	(16,476)
Weighted Average Grant date fair value, Forfeited \| $ / shares	$ 22.58

- 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.

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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(2)(iii)(02)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(2)(iii)(03)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (d)(1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (d)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 22: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (e)(1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 23: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (e)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 24: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 25: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(ii)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 26: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(iii)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 27: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(iv)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 28: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(v)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

+ Details

SUBSEQUENT EVENT

9 Months Ended

Sep. 30, 2024

SUBSEQUENT EVENT

SUBSEQUENT EVENT

(8) SUBSEQUENT EVENT

On October 30, 2024, the Company formed wholly-owned subsidiaries, Merger Sub I, a Delaware shell corporation, and Merger Sub II, a Delaware limited liability company, each formed solely for the purpose of merging with Jade in connection with the proposed Merger.

In June 2024, the Company announced a corporate restructuring, and in July 2024, announced that it initiated a process to evaluate strategic alternatives. After a comprehensive review of strategic alternatives, including identifying and reviewing potential candidates for a strategic transaction, on October 30, 2024, the Company entered into the Merger Agreement, by and among the Company, Merger Sub I, Merger Sub II, and Jade, pursuant to which, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, among other things, Merger Sub I will merge with and into Jade, with Jade surviving the first merger as the surviving corporation, and as part of the same overall transaction, Jade will merge with and into Merger Sub II, with Merger Sub II continuing as a wholly owned subsidiary of the Company and the surviving corporation of the second merger. In addition, in connection with the Closing, the Company expects to declare the Cash Dividend to its pre-Merger stockholders of approximately $65.0 million in the aggregate, provided such amount is subject to adjustment as set forth in the Merger Agreement. The Merger was approved by the Board, and the Board resolved to recommend approval of the Merger Agreement to the Company’s stockholders.

The Merger is expected to close in the first half of 2025. The Closing is subject to approval by the stockholders of the Company and Jade as well as other customary closing conditions, including the effectiveness of a registration statement filed with the SEC in connection with the Merger and the approval of The Nasdaq Stock Market LLC

of the listing of shares of the Company’s common stock to be issued in connection with the Merger and (4) an executed Purchase Agreement for the Concurrent Investment (each as defined below) in full force and effect evidencing cash proceeds of not less than $80.0 million to be received by the combined company immediately prior to or following the Closing. If the Company is unable to satisfy certain closing conditions or if other mutual closing conditions are not satisfied, Jade will not be obligated to complete the Merger. The Merger Agreement contains certain termination rights of each of the Company and Jade. Upon termination of the Merger Agreement under specified circumstances, the Company may be required to pay Jade a termination fee of $2,340,000, and in certain other circumstances, Jade may be required to pay the Company a termination fee of $5,250,000. If the Merger is completed, the business of Jade will continue as the business of the combined company.

Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), (a) each then-outstanding share of Jade’s common stock, par value $0.0001 per share, will be converted into the right to receive a number of shares of the Company’s common stock, based on a ratio calculated in accordance with the Merger Agreement (the “Exchange Ratio”), provided that any unvested restricted shares of Jade common stock will be subject to the same terms and conditions (including, without limitation, vesting and repurchase provisions) that are otherwise applicable to such unvested shares as of immediately prior to the Effective Time, (b) each then-outstanding share of Jade’s preferred stock, par value $0.0001 per share, will be converted into the right to receive a number of shares of the Company’s newly authorized convertible preferred stock, par value $0.0001 per share, equal to (x) the Exchange Ratio divided by (y) 1,000, (c) each then-outstanding option to purchase Jade common stock will be assumed by the Company, subject to adjustment as set forth in the Merger Agreement and (d) each then-outstanding warrant to purchase shares of Jade common stock or Jade preferred stock will be assumed by the Company, subject to adjust as set forth in the Merger Agreement.

On October 30, 2024, Jade entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain existing Jade stockholders and new investors (the “Investors”). Pursuant to the Purchase Agreement, and subject to the terms and conditions thereof, Jade agreed to sell, and the Investors agreed to purchase, immediately prior to the consummation of the Merger, shares of Jade common stock and pre-funded warrants (together, the “Securities”) for an aggregate purchase price of approximately $300.0 million (collectively, the “Concurrent Investment”), which reflects the conversion of the previously issued $95 million of convertible notes. The consummation of the transactions contemplated by such agreements is conditioned on the satisfaction or waiver of the conditions set forth in the Merger Agreement and in the Purchase Agreement. Shares of Jade Common Stock and pre-funded warrants issued pursuant to this financing transaction will be converted into shares of common stock of the Company and pre-funded warrants to acquire shares of common stock of the Company, in accordance with the Exchange Ratio and the Merger Agreement.

The Company’s future operations are highly dependent on the success of the Merger and there can be no assurances that the Merger will be successfully consummated. In the event that the Company does not complete the transaction with Jade, the Company may explore strategic alternatives, including, without limitation, another strategic transaction and/or pursue a dissolution and liquidation of the Company.

BALANCE SHEET COMPONENTS - SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
BALANCE SHEET COMPONENTS
Prepaid expenses	$ 993	$ 1,168
Other current assets	882	250
Prepaid research and development		375
Total prepaid expenses and other current assets	$ 1,875	$ 1,793

FAIR VALUE OF FINANCIAL INSTRUMENTS - SCHEDULE OF FAIR VALUE INSTRUMENTS (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total short-term investments	$ 57,615	$ 98,948
Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total cash equivalents	28,265	19,787
Total short-term investments	57,615	98,948
Total fair value of assets	85,880	118,735
Fair Value, Recurring \| Fair Value, Inputs, Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total cash equivalents	28,265	19,787
Total short-term investments	9,078	10,362
Total fair value of assets	37,343	30,149
Fair Value, Recurring \| Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total cash equivalents
Total short-term investments	48,537	88,586
Total fair value of assets	48,537	88,586
Fair Value, Recurring \| Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total cash equivalents
Total short-term investments
Total fair value of assets
Money market funds \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total cash equivalents	28,265	19,787
Money market funds \| Fair Value, Recurring \| Fair Value, Inputs, Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total cash equivalents	28,265	19,787
Money market funds \| Fair Value, Recurring \| Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total cash equivalents
Money market funds \| Fair Value, Recurring \| Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total cash equivalents
Agency bond \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total short-term investments	27,168	42,255
Agency bond \| Fair Value, Recurring \| Fair Value, Inputs, Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total short-term investments
Agency bond \| Fair Value, Recurring \| Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total short-term investments	27,168	42,255
Agency bond \| Fair Value, Recurring \| Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total short-term investments
Corporate debt securities \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total short-term investments	11,926	7,945
Corporate debt securities \| Fair Value, Recurring \| Fair Value, Inputs, Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total short-term investments
Corporate debt securities \| Fair Value, Recurring \| Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total short-term investments	11,926	7,945
Corporate debt securities \| Fair Value, Recurring \| Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total short-term investments
Commercial paper \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total short-term investments	9,443	38,386
Commercial paper \| Fair Value, Recurring \| Fair Value, Inputs, Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total short-term investments
Commercial paper \| Fair Value, Recurring \| Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total short-term investments	9,443	38,386
Commercial paper \| Fair Value, Recurring \| Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total short-term investments
U.S. Treasury bills \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total short-term investments	9,078	10,362
U.S. Treasury bills \| Fair Value, Recurring \| Fair Value, Inputs, Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total short-term investments	$ 9,078	10,362
U.S. Treasury bills \| Fair Value, Recurring \| Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total short-term investments
U.S. Treasury bills \| Fair Value, Recurring \| Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total short-term investments

FAIR VALUE OF FINANCIAL INSTRUMENTS

9 Months Ended

Sep. 30, 2024

FAIR VALUE OF FINANCIAL INSTRUMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS

(3) FAIR VALUE OF FINANCIAL INSTRUMENTS

The following tables summarize the Company’s financial assets measured at fair value on a recurring basis and their respective input levels based on the fair value hierarchy (in thousands):


			Fair Value Measurements Using
			Quoted Prices in
			Active Markets		Significant Other		Significant
			for Identical		Observable		Unobservable
	September 30,		Assets		Inputs		Inputs
	2024		(Level 1)		(Level 2)		(level 3)
Assets:
Cash equivalents
Money market funds	$	28,265	$	28,265	$	—	$	—
Total cash equivalents		28,265		28,265		—		—

Short-term investments
Agency bonds		27,168		—		27,168		—
Corporate debt securities		11,926		—		11,926		—
Commercial paper		9,443		—		9,443		—
U.S. Treasury bills		9,078		9,078		—		—
Total short-term investments		57,615		9,078		48,537		—

Total fair value of assets	$	85,880	$	37,343	$	48,537	$	—


			Fair Value Measurements Using
			Quoted Prices in
			Active Markets		Significant Other		Significant
			for Identical		Observable		Unobservable
	December 31,		Assets		Inputs		Inputs
	2023		(Level 1)		(Level 2)		(level 3)
Assets:
Cash equivalents
Money market funds	$	19,787	$	19,787	$	—	$	—
Total cash equivalents		19,787		19,787		—		—

Short-term investments
Agency bonds		42,255		—		42,255		—
Commercial paper		38,386		—		38,386		—
U.S. Treasury bills		10,362		10,362		—		—
Corporate debt securities		7,945		—		7,945		—
Total short-term investments		98,948		10,362		88,586		—

Total fair value of assets	$	118,735	$	30,149	$	88,586	$	—

Cash Equivalents and Short-Term Investments

Financial assets measured at fair value on a recurring basis consist of the Company’s cash equivalents and short-term investments. Cash equivalents consisted of money market funds and commercial paper, and short-term investments consisted of U.S. Treasury bills, agency bonds, corporate debt securities, and commercial paper. The Company obtains pricing information from its investment manager and generally determines the fair value of investment securities using standard observable inputs, including reported trades, broker/dealer quotes, and bids and/or offers.

The following tables summarize the Company’s short-term investments (in thousands):


		As of September 30, 2024
				Gross		Gross
		Amortized		unrealized		unrealized		Estimated fair
	Maturity	cost		gains		losses		value
Agency bonds	1 year or less		27,029		139		—		27,168
Corporate debt securities	1 year or less		11,866		60		—		11,926
Commercial paper	1 year or less		9,438		5		—		9,443
U.S. Treasury bills	1 year or less		9,058		20		—		9,078
		$	57,391	$	224	$	—	$	57,615


		As of December 31, 2023
				Gross		Gross
		Amortized		unrealized		unrealized		Estimated fair
	Maturity	cost		gains		losses		value
Agency bonds	2 years or less	$	42,090		179		(14)	$	42,255
Commercial paper	2 years or less		38,362		29		(5)		38,386
U.S. Treasury bills	2 years or less		10,334		31		(3)		10,362
Corporate debt securities	2 years or less		7,925		21		(1)		7,945
		$	98,711	$	260	$	(23)	$	98,948

The following tables summarize the Company’s short-term investments with unrealized losses for less than 12 months and 12 months or greater (in thousands):


		As of December 31, 2023
		Less than 12 months			12 months or Greater
			Unrealized				Unrealized		Total		Total Unrealized
		Fair Value	Losses		Fair Value		Losses		Fair Value		Losses
Commercial paper	$	6,042	$	(5)	$	—	$	—	$	6,042	$	(5)
Agency bonds		3,760		(6)		6,579		(8)		10,339		(14)
U.S. Treasury bills		488		(2)		1,007		(1)		1,495		(3)
Corporate debt securities		3,110		(1)		—		—		3,110		(1)
	$	13,400	$	(14)	$	7,586	$	(9)	$	20,986	$	(23)

The Company did not hold any short-term investments in a loss position as of September 30, 2024. The Company considers whether unrealized losses have resulted from a credit loss or other factors. The unrealized losses on the Company’s short-term investments as of December 31, 2023, were caused by fluctuations in market value and interest rates as a result of the economic environment and not credit risk. As of September 30, 2024 and December 31, 2023, no allowance for credit losses was recorded. During the nine months ended September 30, 2024, the Company did not recognize any impairment losses related to its short-term investments. It is neither management’s intention to sell nor is it more likely than not that the Company will be required to sell these investments prior to recovery of their cost basis or recovery of fair value. Unrealized gains and losses are included in accumulated other comprehensive gain (loss).

Accrued interest receivable is written off through net realized investment gains (losses) at the time the issuer of the bond defaults or is expected to default on payment. Accrued interest receivable related to short-term investments was $0.3 million as of September 30, 2024 and $0.6 million as of December 31, 2023.

- 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

SUBSEQUENT EVENT (Details) - USD ($)	Oct. 30, 2024	Sep. 30, 2024	Dec. 31, 2023	Jul. 02, 2021
SUBSEQUENT EVENT
Common stock, par value		$ 0.0001	$ 0.0001	$ 0.0001
Preferred stock, par value		$ 0.0001	$ 0.0001	$ 0.0001
Subsequent Event
SUBSEQUENT EVENT
Cash dividend	$ 65,000,000.0
Cash proceeds to be received upon closing of merger	80,000,000.0
Termination fees payable	2,340,000
Termination fees receivable	$ 5,250,000
Preferred stock, par value	$ 0.0001
Shares to be issued in denominator for calculation	1,000
Subsequent Event \| Jade
SUBSEQUENT EVENT
Common stock, par value	$ 0.0001
Preferred stock, par value	$ 0.0001
Aggregate purchase price under merger agreement	$ 300,000,000.0
Convertible notes	$ 95,000,000

COMMITMENTS AND CONTINGENCIES - SCHEDULE OF SUPPLEMENTAL CASH FLOW (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
COMMITMENTS AND CONTINGENCIES
Cash paid included in operating cash flows	$ 380	$ 323

SHARE-BASED COMPENSATION - SCHEDULE OF STOCK-BASED COMPENSATION EXPENSE (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Share-Based Payment Arrangement, Expensed and Capitalized, Amount
Stock-based compensation expense	$ 2,003	$ 3,237	$ 10,068	$ 8,655
Research and Development Expense
Share-Based Payment Arrangement, Expensed and Capitalized, Amount
Stock-based compensation expense	458	1,817	4,987	4,798
General and Administrative Expense
Share-Based Payment Arrangement, Expensed and Capitalized, Amount
Stock-based compensation expense	$ 1,545	$ 1,420	$ 5,081	$ 3,857

FAIR VALUE OF FINANCIAL INSTRUMENTS - SCHEDULE OF SHORT TERM INVESTMENT (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Fair Value, off-Balance-Sheet Risks, Disclosure Information
Amortized cost	$ 57,391	$ 98,711
Gross unrealized gains	224	260
Gross unrealized losses		(23)
Estimated fair value	57,615	98,948
Allowance for credit loss	0	0
Accrued interest receivable	$ 300	$ 600
Debt Securities, Available-for-Sale, Accrued Interest, after Allowance for Credit Loss, Current, Statement of Financial Position [Extensible Enumeration]	Short-term investments	Short-term investments
Agency bond
Fair Value, off-Balance-Sheet Risks, Disclosure Information
Amortized cost	$ 27,029	$ 42,090
Gross unrealized gains	139	179
Gross unrealized losses		(14)
Estimated fair value	27,168	42,255
Commercial paper
Fair Value, off-Balance-Sheet Risks, Disclosure Information
Amortized cost	9,438	38,362
Gross unrealized gains	5	29
Gross unrealized losses		(5)
Estimated fair value	9,443	38,386
U.S. Treasury bills
Fair Value, off-Balance-Sheet Risks, Disclosure Information
Amortized cost	9,058	10,334
Gross unrealized gains	20	31
Gross unrealized losses		(3)
Estimated fair value	9,078	10,362
Corporate debt securities
Fair Value, off-Balance-Sheet Risks, Disclosure Information
Amortized cost	11,866	7,925
Gross unrealized gains	60	21
Gross unrealized losses		(1)
Estimated fair value	$ 11,926	$ 7,945
Maximum \| Agency bond
Fair Value, off-Balance-Sheet Risks, Disclosure Information
Maturity term	1 year	2 years
Maximum \| Commercial paper
Fair Value, off-Balance-Sheet Risks, Disclosure Information
Maturity term	1 year	2 years
Maximum \| U.S. Treasury bills
Fair Value, off-Balance-Sheet Risks, Disclosure Information
Maturity term	1 year	2 years
Maximum \| Corporate debt securities
Fair Value, off-Balance-Sheet Risks, Disclosure Information
Maturity term	1 year	2 years

STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2024

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY

(6) STOCKHOLDERS’ EQUITY

On July 2, 2021, the Company’s certificate of amendment to its certificate of incorporation became effective, which provided 150,000,000 authorized shares of common stock with a par value of $0.0001 per share and 10,000,000 authorized shares of undesignated preferred stock with a par value of $0.0001 per share.

The holders of the common stock are entitled to one vote for each share of common stock held at all meetings of stockholders.

As of September 30, 2024, the Company had reserved the following shares of common stock for future issuance:


		September 30, 2024
Common stock options granted and outstanding		3,714,104
Shares reserved for issuance under the 2021 Plan		2,982,105
Reserved for future ESPP issuances		401,218
Total		7,097,427

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-14

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

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+ Details

BALANCE SHEET COMPONENTS - SCHEDULE OF ACCRUED AND OTHER CURRENT LIABILITIES - (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
BALANCE SHEET COMPONENTS
Accrued research and development	$ 4,704	$ 9,363
Accrued payroll and other employee benefits	3,952	4,368
Other	292	1,090
Total accrued and other current liabilities	$ 8,948	$ 14,821

STOCKHOLDERS' EQUITY (Tables)

9 Months Ended

Sep. 30, 2024

STOCKHOLDERS' EQUITY

SCHEDULE OF COMMON STOCK SHARES RESERVED FOR ON AND AS-CONVERTED BASIS, FOR FUTURE ISSUANCE

As of September 30, 2024, the Company had reserved the following shares of common stock for future issuance:


		September 30, 2024
Common stock options granted and outstanding		3,714,104
Shares reserved for issuance under the 2021 Plan		2,982,105
Reserved for future ESPP issuances		401,218
Total		7,097,427

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2024	Dec. 31, 2023
Condensed Consolidated Balance Sheets (Unaudited)
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	28,867,711	27,762,703
Common stock, shares outstanding	28,867,711	27,762,703

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Operating expenses:
Research and development	$ 10,328	$ 16,884	$ 51,656	$ 46,406
General and administrative	7,082	4,484	16,537	12,937
Total operating expenses	17,410	21,368	68,193	59,343
Loss from operations	(17,410)	(21,368)	(68,193)	(59,343)
Other income (expense):
Interest income	1,183	1,804	4,014	4,236
Other expense:	(10)	1	(19)	(1)
Total other income	1,173	1,805	3,995	4,235
Net loss	(16,237)	(19,563)	(64,198)	(55,108)
Comprehensive loss:
Net loss	(16,237)	(19,563)	(64,198)	(55,108)
Other comprehensive loss:
Unrealized (loss) gain on securities	307	(22)	(13)	243
Comprehensive loss	$ (15,930)	$ (19,585)	$ (64,211)	$ (54,865)
Net loss per share, basic	$ (0.56)	$ (0.71)	$ (2.25)	$ (2.13)
Net loss per share, diluted	$ (0.56)	$ (0.71)	$ (2.25)	$ (2.13)
Weighted-average shares of common stock outstanding, basic	28,863,327	27,640,542	28,572,338	25,872,118
Weighted-average shares of common stock outstanding, diluted	28,863,327	27,640,542	28,572,338	25,872,118

BALANCE SHEET COMPONENTS - WORKFORCE REDUCTION PLAN (Details) $ in Millions	9 Months Ended
	Sep. 30, 2024 USD ($) individual
BALANCE SHEET COMPONENTS
Number of individuals terminated or notified of their upcoming termination \| individual	46
Percentage of number of individuals terminated or notified of their upcoming termination	90.00%
Incurred costs	$ 6.4
Severance benefits	2.4
Liabilities associated with the Workforce Reduction Plan	$ 4.0

STOCKHOLDERS' EQUITY (Details)	Sep. 30, 2024 Vote $ / shares shares	Dec. 31, 2023 $ / shares shares	Jul. 02, 2021 $ / shares shares
STOCKHOLDERS' EQUITY
Common stock, shares authorized \| shares	150,000,000	150,000,000	150,000,000
Common stock, par value \| $ / shares	$ 0.0001	$ 0.0001	$ 0.0001
Preferred stock, shares authorized \| shares	10,000,000	10,000,000	10,000,000
Preferred stock, par value \| $ / shares	$ 0.0001	$ 0.0001	$ 0.0001
Number of votes for each share of common stock \| Vote	1

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2024	Nov. 08, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2024
Document Transition Report	false
Entity File Number	001-40544
Entity Registrant Name	AEROVATE THERAPEUTICS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	83-1377888
Entity Address, Address Line One	930 Winter Street
Entity Address, Address Line Two	Suite M-500
Entity Address, City or Town	Waltham
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02451
City Area Code	617
Local Phone Number	443-2400
Title of 12(b) Security	Common stock, par value $0.0001 per share
Trading Symbol	AVTE
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		28,874,513
Entity Central Index Key	0001798749
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Amendment Flag	false

BALANCE SHEET COMPONENTS (Tables)

9 Months Ended

Sep. 30, 2024

BALANCE SHEET COMPONENTS

SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS

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


	September 30,		December 31,
	2024		2023
Prepaid expenses	$	993	$	1,168
Other current assets		882		250
Prepaid research and development		—		375
Total prepaid expenses and other current assets	$	1,875	$	1,793

SCHEDULE OF ACCRUED AND OTHER CURRENT LIABILITIES

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


	September 30,		December 31,
	2024		2023
Accrued research and development	$	4,704	$	9,363
Accrued payroll and other employee benefits		3,952		4,368
Other		292		1,090
Total accrued and other current liabilities	$	8,948	$	14,821

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2024 shares
Ben Dake
Trading Arrangements, by Individual
Material Terms of Trading Arrangement	On July 8, 2024, Ben Dake, our former President, terminated a trading arrangement that was intended to satisfy the affirmative defense of Rule 10b5-1(c) (the “Dake 10b5-1 Plan”). The Dake 10b5-1 Plan was entered into on November 16, 2023, and commenced on March 18, 2024, with a termination date of the earlier of December 31, 2024, or the date all shares under the plan were sold. The aggregate number of securities sold under the Dake 10b5-1 Plan was 72,696.
Name	Ben Dake
Title	President
Rule 10b5-1 Arrangement Terminated	true
Termination Date	July 8, 2024
Aggregate Available	72,696
Hunter Gillies
Trading Arrangements, by Individual
Material Terms of Trading Arrangement	On July 10, 2024, Hunter Gillies, our former Chief Medical Officer, terminated a trading arrangement that was intended to satisfy the affirmative defense of Rule 10b5-1(c) (the “Gillies 10b5-1 Plan”). The Gillies 10b5-1 Plan was entered into on January 19, 2023, and commenced on April 19, 2023, with a termination date of the earlier of July 17, 2024, or the date all shares under the plan were sold. The aggregate number of securities sold under the Gillies 10b5-1 Plan was 68,255.
Name	Hunter Gillies
Title	Chief Medical Officer
Rule 10b5-1 Arrangement Terminated	true
Termination Date	July 10, 2024
Aggregate Available	68,255
George Eldridge
Trading Arrangements, by Individual
Material Terms of Trading Arrangement	On September 30, 2024, George Eldridge, our Chief Financial Officer, terminated a trading arrangement that was intended to satisfy the affirmative defense of Rule 10b5-1(c) (the “Eldridge 10b5-1 Plan”). The Eldridge 10b5-1 Plan was entered into on March 17, 2023, and commenced on October 10, 2023, with a termination date of the earlier of September 30, 2024, or the date all shares under the plan were sold. The aggregate number of securities sold under the Eldridge 10b5-1 Plan was 64,995.
Name	George Eldridge
Title	Chief Financial Officer
Rule 10b5-1 Arrangement Terminated	true
Termination Date	September 30, 2024
Aggregate Available	64,995

SHARE-BASED COMPENSATION (Tables)

9 Months Ended

Sep. 30, 2024

SHARE-BASED COMPENSATION

SCHEDULE OF OPTION ACTIVITY UNDER 2021 PLAN AND 2018 PLAN


				Weighted-
				Average
				Remaining	Aggregate
		Weighted-Average		Contractual Term	Intrinsic Value
	Options	Exercise Price		(in years)	(in thousands)
Outstanding at December 31, 2023	5,230,344	$	13.66	8.16	$	49,728
Granted	1,489,191		19.70
Exercised	(265,482)		4.67
Cancelled/Forfeited	(2,739,949)		18.84
Outstanding at September 30, 2024	3,714,104	$	12.91	4.98	$	12
Vested and exercisable at September 30, 2024	2,791,181		12.06	3.95		12

SCHEDULE OF UNVESTED RESTRICTED STOCK UNIT ACTIVITY


		Weighted-
		Average Grant
		Date Fair Value
	Units	Per Unit
Unvested restricted stock units as of December 31, 2023	21,968	$	22.26
Granted	—		—
Vested	(5,492)		21.30
Forfeited	(16,476)		22.58
Unvested restricted stock units as of September 30, 2024	—	$	—

SCHEDULE OF STOCK-BASED COMPENSATION EXPENSE

Stock-based compensation expense recognized for all equity awards has been reported in the statements of operations and comprehensive loss as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Research and development	$	458	$	1,817	$	4,987	$	4,798
General and administrative		1,545		1,420		5,081		3,857
Total	$	2,003	$	3,237	$	10,068	$	8,655

Stock-based compensation expense by type of award included within the consolidated statements of operations and comprehensive income (loss) was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Stock options	$	2,014	$	3,140	$	9,890	$	8,369
Restricted stock awards and units		—		52		116		151
Employee stock purchase plan awards		(11)		45		62		135
Total	$	2,003	$	3,237	$	10,068	$	8,655

ORGANIZATION AND NATURE OF OPERATIONS

9 Months Ended

Sep. 30, 2024

ORGANIZATION AND NATURE OF OPERATIONS

ORGANIZATION AND NATURE OF OPERATIONS

(1) ORGANIZATION AND NATURE OF OPERATIONS

(a) Organization and Nature of Operations

Aerovate Therapeutics Inc. (“Aerovate” or the “Company”) was incorporated in the state of Delaware in July 2018, and is headquartered in Waltham, Massachusetts. The Company has a wholly owned subsidiary, Aerovate Securities Corporation. The Company is a biopharmaceutical company. The Company’s initial focus was on advancing AV-101, the Company’s dry powder inhaled formulation of imatinib for the treatment of pulmonary arterial hypertension (“PAH”). However, in June 2024, the Company announced negative results from the Phase 2b portion of its global Phase 2b/Phase 3 trial of AV-101 in adults with PAH, and, as a result, the Company decided to halt enrollment and shut down the Phase 3 portion of the Phase 2b/Phase 3 trial as well as the long-term extension study. In June 2024, the Company announced a corporate restructuring and in July 2024, the Company engaged Wedbush PacGrow as the Company’s exclusive strategic financial advisor to assist in the process of exploring strategic alternatives, including but not limited to an acquisition, merger, reverse merger, business combination, liquidation or other transaction.

On October 30, 2024, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, Caribbean Merger Sub I, Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“Merger Sub I”), Caribbean Merger Sub II, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company (“Merger Sub II” and together with Merger Sub I, the “Merger Subs”), and Jade Biosciences, Inc., a Delaware corporation (“Jade”), pursuant to which, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, among other things, Merger Sub I will merge with and into Jade, with Jade surviving the merger as the surviving corporation (the “First Merger”), and as part of the same overall transaction, Jade will merge with and into Merger Sub II, with Merger Sub II continuing as a wholly owned subsidiary of the Company and the surviving corporation of the merger (the “Second Merger” and together with the First Merger, the “Merger”). In addition, in connection with the closing of the Merger (the “Closing”), the Company expects to declare a cash dividend to its pre-Merger stockholders of approximately $65.0 million in the aggregate (the “Cash Dividend”), provided such amount is subject to adjustment as set forth in the Merger Agreement. The Merger was approved by the Company’s board of directors (the “Board”), and the Board resolved to recommend approval of the Merger Agreement to the Company’s stockholders. The Closing is subject to approval by the stockholders of the Company and Jade as well as other customary closing conditions, including the effectiveness of a registration statement filed with the U.S. Securities and Exchange Commission (“SEC”) in connection with the transaction. If the Merger is completed, the business of Jade will continue as the business of the combined company.

(b) At-the-Market Offering

On April 5, 2023, the Company entered into an ATM Equity Offering^SM Sales Agreement (the “Sales Agreement”) with BofA Securities, Inc., or the Agent, pursuant to which the Company can sell, from time to time, at its option, up to an aggregate of $75.0 million of shares of its common stock, through the Agent, as its sales agent. As of September 30, 2024, 3,462,721 shares have been sold under the Sales Agreement, generating $67.9 million of net proceeds after deducting commissions to the Agent and other offering costs. As of the date of this Quarterly Report on Form 10-Q, up to $6.0 million of shares of the Company’s common stock remain available for sale from time to time under the Sales Agreement.

Since inception, the Company has devoted substantially all of its resources to research and development activities, business planning, establishing and maintaining its intellectual property portfolio, hiring personnel, raising capital, and providing general and administrative support for these operations and has not realized revenues from its planned principal operations. The Company has incurred losses and negative cash flows from operations since

inception. As of September 30, 2024, the Company had cash and cash equivalents and short-term investments of $88.7 million.

Management believes that the Company’s current cash and cash equivalents and short-term investments will provide sufficient funds to enable the Company to meet its obligations for at least twelve months from the filing date of this report while it explores strategic alternatives.

COMMITMENTS AND CONTINGENCIES - SCHEDULE OF RENT EXPENSES (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
COMMITMENTS AND CONTINGENCIES
Operating lease	$ 115	$ 111	$ 343	$ 332
Short-term lease			165
Total rent expense	$ 115	$ 111	$ 508	$ 332

COMMITMENTS AND CONTINGENCIES (Details)	1 Months Ended			3 Months Ended
COMMITMENTS AND CONTINGENCIES (Details)	Jan. 31, 2024 USD ($)	Apr. 30, 2022 USD ($) ft²	Aug. 31, 2021 USD ($) ft²	Sep. 30, 2024 USD ($)
Waltham Lease
Lessee, Lease, Description
Area of land \| ft²			5,000
Operating lease term			39 months
Lease, option to extend	false		true
Renewal term	3 years		3 years
Increase of rental value for square foot	$ 1.00
Payment for rent			$ 18,000
Lease rent percentage			2.00%
Foster City Lease
Lessee, Lease, Description
Area of land \| ft²		3,500
Operating lease term		39 months
Renewal term		1 year
Payment for rent		$ 22,600
Lease rent percentage		3.00%
Impairment of right-of-use asset				$ 300,000

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 31,115	$ 23,491
Short-term investments	57,615	98,948
Prepaid expenses and other current assets	1,875	1,793
Total current assets	90,605	124,232
Property and equipment, net	14	288
Operating lease right-of-use assets	259	614
Other long-term assets	81	2,284
Total assets	90,959	127,418
Current liabilities:
Accounts payable	908	2,396
Accrued and other current liabilities	8,948	14,821
Operating lease liabilities	459	420
Total current liabilities	10,315	17,637
Operating lease liabilities, net of current portion	81	255
Other liabilities	70	70
Total liabilities	10,466	17,962
Commitments and contingencies (Note 5)
Stockholders' equity:
Preferred stock, $0.0001 par value; 10,000,000 shares authorized as of September 30, 2024 and December 31, 2023, respectively; no shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively
Common stock, $0.0001 par value; 150,000,000 shares authorized at September 30, 2024 and December 31, 2023, respectively; 28,867,711 and 27,762,703 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively	3	3
Additional paid-in capital	307,888	272,640
Accumulated other comprehensive gain	224	237
Accumulated deficit	(227,622)	(163,424)
Total stockholders' equity	80,493	109,456
Total liabilities and stockholders' equity	$ 90,959	$ 127,418

SHARE-BASED COMPENSATION - SCHEDULE OF STOCK-BASED COMPENSATION EXPENSE BY TYPE OF AWARDS (Details) - USD ($) $ in Thousands	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
Stock-based compensation expense	$ 2,003	$ 3,237	$ 10,068	$ 8,655
Employee Stock Option
Share-Based Compensation Arrangement by Share-Based Payment Award
Stock-based compensation expense	2,014	3,140	9,890	8,369
Employee stock purchase plan awards
Share-Based Compensation Arrangement by Share-Based Payment Award
Stock-based compensation expense	$ (11)	45	62	135
Restricted stock awards and units
Share-Based Compensation Arrangement by Share-Based Payment Award
Stock-based compensation expense		$ 52	$ 116	$ 151

- 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

STOCKHOLDERS' EQUITY - SCHEDULE OF COMMON STOCK SHARES RESERVED FOR ON AND AS-CONVERTED BASIS, FOR FUTURE ISSUANCE (Details)	Sep. 30, 2024 shares
Sale of Stock
Common stock reserved for future issuance	7,097,427
Common Stock
Sale of Stock
Common stock reserved for future issuance	3,714,104
Employee Stock Option
Sale of Stock
Common stock reserved for future issuance	2,982,105
Employee stock purchase plan awards
Sale of Stock
Common stock reserved for future issuance	401,218

SHARE-BASED COMPENSATION

9 Months Ended

Sep. 30, 2024

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

(7) STOCK-BASED COMPENSATION

(a) Stock Option Plan

The Company’s 2021 Stock Option and Incentive Plan (the “2021 Plan”) was adopted by the Company’s board of directors and approved by the Company’s stockholders in June 2021 and became effective as of June 29, 2021. Upon the effectiveness of the 2021 Plan, the Company’s 2018 Equity Incentive Plan (the “2018 Plan”) was terminated and no further grants may be made thereunder. The Company’s 2021 Plan allows for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, stock bonuses, restricted stock, stock units and other forms of awards including cash awards to its officers, directors, employees, consultants and advisors.

As of September 30, 2024, a total of 5,675,841 shares of the Company’s common stock were authorized for issuance with respect to awards granted under the 2021 Plan, of which 2,982,105 shares remain available for issuance. The share limit will automatically increase on the first trading day in January of each year (commencing with 2022) by an amount equal to the lesser of (1) 4% of the total number of outstanding shares of the Company’s common stock on the last trading day in December in the prior year, or (2) such lesser number as determined by the Company’s board of directors. Since adoption, the number of shares available under the 2021 Plan pursuant to the annual increases totaled 3,075,841 shares through January 1, 2024.

Any shares subject to awards granted under the 2021 Plan or the 2018 Plan that are not paid, delivered or exercised before they expire or are canceled or terminated, or otherwise fail to vest, as well as shares used to pay the purchase or exercise price of such awards or related tax withholding obligations, will become available for new award grants under the 2021 Plan.

As of September 30, 2024, 2,753,788 and 960,316 options had been granted under the 2021 Plan and 2018 Plan, respectively.

The options that are granted under the 2021 Plan and the 2018 Plan are exercisable at various dates as determined upon grant and terminate within 10 years of the date of grant. The vesting period generally occurs over three to four years.

The following table summarizes the option activity under the 2021 Plan and 2018 Plan for the nine months ended September 30, 2024:


				Weighted-
				Average
				Remaining	Aggregate
		Weighted-Average		Contractual Term	Intrinsic Value
	Options	Exercise Price		(in years)	(in thousands)
Outstanding at December 31, 2023	5,230,344	$	13.66	8.16	$	49,728
Granted	1,489,191		19.70
Exercised	(265,482)		4.67
Cancelled/Forfeited	(2,739,949)		18.84
Outstanding at September 30, 2024	3,714,104	$	12.91	4.98	$	12
Vested and exercisable at September 30, 2024	2,791,181		12.06	3.95		12

The weighted-average grant date fair value of stock option grants was $14.92 per share for the nine months ended September 30, 2024.

As of September 30, 2024, there was approximately $9.4 million of total unrecognized stock-based compensation expense related to unvested stock options granted under the 2021 Plan and 2018 Plan, which is expected to be recognized over a weighted-average period of approximately 1.9 years.

(b) Employee Stock Purchase Plan

The Company’s Employee Stock Purchase Plan (the “ESPP”) was adopted by the Company’s board of directors and stockholders in June 2021 and became effective upon the consummation of the IPO. A total of 230,000 shares of the Company’s common stock was initially available for issuance under the ESPP. The share limit will automatically increase on the first trading day in January of each year (commencing with 2022) by an amount equal to the lesser of (1) 1% of the total number of outstanding shares of the Company’s common stock on the last trading day in December in the prior year, or (2) such lesser number as determined by the Company’s board of directors. The number of shares available under the 2021 Plan increased by 247,229 shares effective January 1, 2023 as determined by the Company’s board of directors. The ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 15% of their eligible compensation, subject to any plan limitations. The ESPP provides for six-month offering periods, and at the end of each offering period, employees are able to purchase shares at 85% of the lower of the fair market value of the Company’s common stock on the first trading day of the offering period or on the last trading day of the offering period. As of September 30, 2024, 76,011 shares had been issued under the ESPP, and 401,218 shares authorized under the ESPP Plan were available for issuance.

As of September 30, 2024, 31,881 restricted stock units had been awarded under the 2021 Plan. A summary of the status of and changes in unvested restricted stock unit activity under the Company’s equity award plans for the nine months ended September 30, 2024 was as follows:


		Weighted-
		Average Grant
		Date Fair Value
	Units	Per Unit
Unvested restricted stock units as of December 31, 2023	21,968	$	22.26
Granted	—		—
Vested	(5,492)		21.30
Forfeited	(16,476)		22.58
Unvested restricted stock units as of September 30, 2024	—	$	—

Stock-based compensation of restricted stock units is based on the fair value of the Company’s common stock on the date of grant and recognized over the vesting period. The vesting period generally occurs over three to four years.

As of September 30, 2024, the Company had no unrecognized stock-based compensation expense related to its unvested restricted stock units.

(d) Stock-Based Compensation Expense

Stock-based compensation expense recognized for all equity awards has been reported in the statements of operations and comprehensive loss as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Research and development	$	458	$	1,817	$	4,987	$	4,798
General and administrative		1,545		1,420		5,081		3,857
Total	$	2,003	$	3,237	$	10,068	$	8,655

Stock-based compensation expense by type of award included within the consolidated statements of operations and comprehensive income (loss) was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Stock options	$	2,014	$	3,140	$	9,890	$	8,369
Restricted stock awards and units		—		52		116		151
Employee stock purchase plan awards		(11)		45		62		135
Total	$	2,003	$	3,237	$	10,068	$	8,655

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - SCHEDULE OF POTENTIALLY DILUTIVE SECURITIES NOT INCLUDED IN THE CALCULATION OF DILUTED NET LOSS PER SHARE (Details) - shares	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Antidilutive Securities
Antidilutive Securities	3,714,104	5,262,586
Options to purchase common stock
Antidilutive Securities
Antidilutive Securities	3,714,104	5,236,832
Unvested restricted stock units
Antidilutive Securities
Antidilutive Securities		25,754

SHARE-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Thousands		1 Months Ended	9 Months Ended
	Jan. 01, 2023	Jun. 30, 2021	Sep. 30, 2024	Jan. 01, 2024
Share-Based Compensation Arrangement by Share-Based Payment Award
Stock option grants per share			$ 14.92
2021 Stock Option and Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award
Common stock available for issuance			2,982,105
Percentage on total number of shares outstanding			4.00%
Number of shares authorized			5,675,841	3,075,841
Employee Stock Option \| 2021 Stock Option and Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award
Common stock available for issuance, awards granted			2,753,788
Employee Stock Option \| 2018 Plan
Share-Based Compensation Arrangement by Share-Based Payment Award
Common stock available for issuance, awards granted			960,316
Employee Stock Option \| 2021 Plan and 2018 Plan
Share-Based Compensation Arrangement by Share-Based Payment Award
Expiration period			10 years
Unrecognized stock based compensation			$ 9,400
Unrecognized stock-based compensation weighted-average period			1 year 10 months 24 days
Employee Stock Option \| Minimum \| 2021 Plan and 2018 Plan
Share-Based Compensation Arrangement by Share-Based Payment Award
Vested term			3 years
Employee Stock Option \| Maximum \| 2021 Plan and 2018 Plan
Share-Based Compensation Arrangement by Share-Based Payment Award
Vested term			4 years
Unvested restricted stock units
Share-Based Compensation Arrangement by Share-Based Payment Award
Unrecognized stock based compensation			$ 0
Unvested restricted stock units \| 2021 Stock Option and Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award
Restricted stock units award			31,881
Unvested restricted stock units \| Minimum
Share-Based Compensation Arrangement by Share-Based Payment Award
Vested term			3 years
Unvested restricted stock units \| Maximum
Share-Based Compensation Arrangement by Share-Based Payment Award
Vested term			4 years
Employee stock purchase plan awards
Share-Based Compensation Arrangement by Share-Based Payment Award
Percentage on total number of shares outstanding		1.00%
Number of shares authorized		230,000	401,218
Number of additional shares authorized	247,229
Percentage of common stock purchase price		15.00%
Offering period		6 months
Discount percentage on marker price		85.00%
Shares issued			76,011

SHARE-BASED COMPENSATION - SCHEDULE OF OPTION ACTIVITY UNDER 2021 PLAN AND 2018 PLAN (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
SHARE-BASED COMPENSATION
Options Outstanding, beginning balance	5,230,344
Weighted-Average Exercise Price Outstanding, beginning balance	$ 13.66
Weighted- Average Remaining Contractual Term, Outstanding	4 years 11 months 23 days	8 years 1 month 28 days
Aggregate Intrinsic Value Outstanding, beginning balance	$ 49,728
Options Granted	1,489,191
Weighted-Average Exercise Price, Granted	$ 19.70
Options Exercised	(265,482)
Weighted-Average Exercise Price, Exercised	$ 4.67
Options, Cancelled/Forfeited	(2,739,949)
Weighted-Average Exercise Price, Cancelled/Forfeited	$ 18.84
Options Outstanding, ending balance	3,714,104	5,230,344
Weighted-Average Exercise Price Outstanding, ending balance	$ 12.91	$ 13.66
Aggregate Intrinsic Value Outstanding, ending balance	$ 12	$ 49,728
Options, Vested and exercisable	2,791,181
Weighted-Average Exercise Price, Vested and exercisable	$ 12.06
Weighted- Average Remaining Contractual Term, Vested and exercisable	3 years 11 months 12 days
Aggregate Intrinsic Value, Vested and exercisable	$ 12

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2024

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

(2) BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Presentation

The accompanying unaudited condensed consolidated financial statements as of September 30, 2024 and for the three and nine months ended September 30, 2024 and 2023 have been prepared in conformity with generally accepted accounting principles (“GAAP”) in the United States of America for interim financial information and pursuant to Article 10 of Regulation S-X of the Securities Act of 1933, as amended (the Securities Act). Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. These unaudited condensed consolidated financial statements include only normal and recurring adjustments that the Company believes are necessary to fairly state the Company’s financial position and the results of its operations and cash flows.

The results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results expected for the full fiscal year or any subsequent interim period. The condensed consolidated balance sheet as of December 31, 2023 has been derived from the audited financial statements at that date but does not include all disclosures required by GAAP for complete financial statements. Because all of the disclosures required by GAAP for complete financial statements are not included herein, these unaudited condensed consolidated financial statements and the notes accompanying them should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2023. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).

(b) Use of Estimates

The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. Reported amounts and note disclosures reflect the overall economic conditions that are most likely to occur and anticipated measures management intends to take. Actual results could differ materially from those estimates. Accounting estimates and management judgements reflected in the consolidated financial statements include: normal recurring accruals, including the accrual for research and development expenses, stock-based compensation, fair value of investments, and operating lease right-of-use assets and lease liabilities. Estimates and assumptions are reviewed quarterly. Any revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Basic net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period, without consideration of potential dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the sum of the weighted average number of common shares plus the potential dilutive effects of potential dilutive securities outstanding during the period. Potential dilutive securities are excluded from diluted earnings or loss per share if the effect of such inclusion is antidilutive. The Company’s potentially dilutive securities have been excluded from the computation of diluted net loss per share as they would be anti-dilutive to the net loss per

share. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position.

The following table summarizes the Company’s net loss per share (in thousands, except share and per share amounts):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Numerator:
Net loss	$	(16,237)	$	(19,563)	$	(64,198)	$	(55,108)
Net loss attributable to common stockholders	$	(16,237)	$	(19,563)	$	(64,198)	$	(55,108)

Denominator:
Weighted-average common stock outstanding, basic and diluted		28,863,327		27,640,542		28,572,338		25,872,118
Net loss per share, basic and diluted	$	(0.56)	$	(0.71)	$	(2.25)	$	(2.13)


	As of September 30,
	2024	2023
Options to purchase common stock	3,714,104	5,236,832
Unvested restricted stock units	—	25,754
	3,714,104	5,262,586

(d) Recently Issued and Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities to disclose information about their reportable segments’ significant expenses on an interim and annual basis. The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Entities must adopt the changes to the segment reporting guidance on a retrospective basis, and early adoption is permitted. The Company does not anticipate this ASU to materially impact our consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid both in the U.S. and foreign jurisdictions. The standard is effective for fiscal years beginning after December 15, 2024, and interim periods in fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact the adoption of this standard may have on its consolidated financial statements and related disclosures, and does not anticipate this ASU to materially impact our consolidated financial statements and related disclosures.

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - SCHEDULE OF 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
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Net loss	$ (16,237)	$ (24,775)	$ (23,186)	$ (19,563)	$ (19,025)	$ (16,520)	$ (64,198)	$ (55,108)
Net loss attributable to common stockholders	$ (16,237)			$ (19,563)			$ (64,198)	$ (55,108)
Weighted-average common stock outstanding, basic	28,863,327			27,640,542			28,572,338	25,872,118
Weighted-average common stock outstanding, diluted	28,863,327			27,640,542			28,572,338	25,872,118
Net loss per share, basic	$ (0.56)			$ (0.71)			$ (2.25)	$ (2.13)
Net loss per share, diluted	$ (0.56)			$ (0.71)			$ (2.25)	$ (2.13)

- Definition

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

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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482689/260-10-45-10

Reference 11: http://www.xbrl.org/2003/role/exampleRef
-Topic 280
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-Name Accounting Standards Codification
-Section 50
-Paragraph 31
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 11
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482689/260-10-45-11

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 60B
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482689/260-10-45-60B

+ Details

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2024

FAIR VALUE OF FINANCIAL INSTRUMENTS

SCHEDULE OF FAIR VALUE INSTRUMENTS

The following tables summarize the Company’s financial assets measured at fair value on a recurring basis and their respective input levels based on the fair value hierarchy (in thousands):


			Fair Value Measurements Using
			Quoted Prices in
			Active Markets		Significant Other		Significant
			for Identical		Observable		Unobservable
	September 30,		Assets		Inputs		Inputs
	2024		(Level 1)		(Level 2)		(level 3)
Assets:
Cash equivalents
Money market funds	$	28,265	$	28,265	$	—	$	—
Total cash equivalents		28,265		28,265		—		—

Short-term investments
Agency bonds		27,168		—		27,168		—
Corporate debt securities		11,926		—		11,926		—
Commercial paper		9,443		—		9,443		—
U.S. Treasury bills		9,078		9,078		—		—
Total short-term investments		57,615		9,078		48,537		—

Total fair value of assets	$	85,880	$	37,343	$	48,537	$	—


			Fair Value Measurements Using
			Quoted Prices in
			Active Markets		Significant Other		Significant
			for Identical		Observable		Unobservable
	December 31,		Assets		Inputs		Inputs
	2023		(Level 1)		(Level 2)		(level 3)
Assets:
Cash equivalents
Money market funds	$	19,787	$	19,787	$	—	$	—
Total cash equivalents		19,787		19,787		—		—

Short-term investments
Agency bonds		42,255		—		42,255		—
Commercial paper		38,386		—		38,386		—
U.S. Treasury bills		10,362		10,362		—		—
Corporate debt securities		7,945		—		7,945		—
Total short-term investments		98,948		10,362		88,586		—

Total fair value of assets	$	118,735	$	30,149	$	88,586	$	—

SCHEDULE OF SHORT TERM INVESTMENTS

The following tables summarize the Company’s short-term investments (in thousands):


		As of September 30, 2024
				Gross		Gross
		Amortized		unrealized		unrealized		Estimated fair
	Maturity	cost		gains		losses		value
Agency bonds	1 year or less		27,029		139		—		27,168
Corporate debt securities	1 year or less		11,866		60		—		11,926
Commercial paper	1 year or less		9,438		5		—		9,443
U.S. Treasury bills	1 year or less		9,058		20		—		9,078
		$	57,391	$	224	$	—	$	57,615


		As of December 31, 2023
				Gross		Gross
		Amortized		unrealized		unrealized		Estimated fair
	Maturity	cost		gains		losses		value
Agency bonds	2 years or less	$	42,090		179		(14)	$	42,255
Commercial paper	2 years or less		38,362		29		(5)		38,386
U.S. Treasury bills	2 years or less		10,334		31		(3)		10,362
Corporate debt securities	2 years or less		7,925		21		(1)		7,945
		$	98,711	$	260	$	(23)	$	98,948

SCHEDULE OF SHORT-TERM INVESTMENTS WITH UNREALIZED LOSSES

The following tables summarize the Company’s short-term investments with unrealized losses for less than 12 months and 12 months or greater (in thousands):


		As of December 31, 2023
		Less than 12 months			12 months or Greater
			Unrealized				Unrealized		Total		Total Unrealized
		Fair Value	Losses		Fair Value		Losses		Fair Value		Losses
Commercial paper	$	6,042	$	(5)	$	—	$	—	$	6,042	$	(5)
Agency bonds		3,760		(6)		6,579		(8)		10,339		(14)
U.S. Treasury bills		488		(2)		1,007		(1)		1,495		(3)
Corporate debt securities		3,110		(1)		—		—		3,110		(1)
	$	13,400	$	(14)	$	7,586	$	(9)	$	20,986	$	(23)

- 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
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-9

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (aa)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (aaa)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 11: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

+ Details

FAIR VALUE OF FINANCIAL INSTRUMENTS - SCHEDULE OF SHORT-TERM INVESTMENTS WITH UNREALIZED LOSSES (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Debt Securities, Available-for-Sale, Unrealized Loss Position
Short-term investments, Less than 12 months, Fair Value	$ 13,400
Short-term investments, Less than 12 months, Unrealized Losses	(14)
Short-term investments, 12 months or Greater, Fair Value	7,586
Short-term investments, 12 months or Greater, Unrealized Losses	(9)
Short-term investments, Total Fair Value	20,986
Short-term investments, Total Unrealized Losses	(23)
Commercial paper
Debt Securities, Available-for-Sale, Unrealized Loss Position
Short-term investments, Less than 12 months, Fair Value	6,042
Short-term investments, Less than 12 months, Unrealized Losses	(5)
Short-term investments, Total Fair Value	6,042
Short-term investments, Total Unrealized Losses	(5)
Agency bond
Debt Securities, Available-for-Sale, Unrealized Loss Position
Short-term investments, Less than 12 months, Fair Value	3,760
Short-term investments, Less than 12 months, Unrealized Losses	(6)
Short-term investments, 12 months or Greater, Fair Value	6,579
Short-term investments, 12 months or Greater, Unrealized Losses	(8)
Short-term investments, Total Fair Value	10,339
Short-term investments, Total Unrealized Losses	(14)
U.S. Treasury bills
Debt Securities, Available-for-Sale, Unrealized Loss Position
Short-term investments, Less than 12 months, Fair Value	488
Short-term investments, Less than 12 months, Unrealized Losses	(2)
Short-term investments, 12 months or Greater, Fair Value	1,007
Short-term investments, 12 months or Greater, Unrealized Losses	(1)
Short-term investments, Total Fair Value	1,495
Short-term investments, Total Unrealized Losses	(3)
Corporate debt securities
Debt Securities, Available-for-Sale, Unrealized Loss Position
Short-term investments, Less than 12 months, Fair Value	3,110
Short-term investments, Less than 12 months, Unrealized Losses	(1)
Short-term investments, Total Fair Value	3,110
Short-term investments, Total Unrealized Losses	$ (1)

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Gain/(Loss)	Accumulated Deficit	Total
Beginning balance, shares at Dec. 31, 2022	24,722,974
Beginning balance, value at Dec. 31, 2022	$ 2	$ 215,110	$ (466)	$ (87,903)	$ 126,743
Unrealized gain on investments			265		265
Issuance of common stock upon exercise of stock options		223			223
Issuance of common stock upon exercise of stock options (in shares)	93,966
Stock based compensation		2,384			2,384
Net loss				(16,520)	(16,520)
Ending balance, shares at Mar. 31, 2023	24,816,940
Ending balance, value at Mar. 31, 2023	$ 2	217,717	(201)	(104,423)	113,095
Beginning balance, shares at Dec. 31, 2022	24,722,974
Beginning balance, value at Dec. 31, 2022	$ 2	215,110	(466)	(87,903)	126,743
Net loss					(55,108)
Ending balance, shares at Sep. 30, 2023	27,653,187
Ending balance, value at Sep. 30, 2023	$ 3	268,926	(195)	(143,011)	125,723
Beginning balance, shares at Mar. 31, 2023	24,816,940
Beginning balance, value at Mar. 31, 2023	$ 2	217,717	(201)	(104,423)	113,095
Unrealized loss on investments			22		22
Issuance of common stock in connection with ATM, net	$ 1	44,282			44,283
Issuance of common stock in connection with ATM, net, shares	2,662,721
Issuance of common stock upon exercise of stock options		333			333
Issuance of common stock upon exercise of stock options (in shares)	106,756
Issuance of common stock under ESPP		228			228
Issuance of common stock under ESPP, shares	13,866
Vesting of restricted stock units, shares	815
Stock based compensation		3,034			3,034
Net loss				(19,025)	(19,025)
Ending balance, shares at Jun. 30, 2023	27,601,098
Ending balance, value at Jun. 30, 2023	$ 3	265,594	(223)	(123,448)	141,926
Unrealized gain on investments			28		28
Issuance of common stock upon exercise of stock options		95			95
Issuance of common stock upon exercise of stock options (in shares)	46,777
Vesting of restricted stock units, shares	5,312
Stock based compensation		3,237			3,237
Net loss				(19,563)	(19,563)
Ending balance, shares at Sep. 30, 2023	27,653,187
Ending balance, value at Sep. 30, 2023	$ 3	268,926	(195)	(143,011)	125,723
Beginning balance, shares at Dec. 31, 2023	27,762,703
Beginning balance, value at Dec. 31, 2023	$ 3	272,640	237	(163,424)	109,456
Unrealized loss on investments			270		270
Issuance of common stock upon exercise of stock options		704			704
Issuance of common stock upon exercise of stock options (in shares)	133,282
Vesting of restricted stock units, shares	2,776
Stock based compensation		4,200			4,200
Net loss				(23,186)	(23,186)
Ending balance, shares at Mar. 31, 2024	27,898,761
Ending balance, value at Mar. 31, 2024	$ 3	277,544	(33)	(186,610)	90,904
Beginning balance, shares at Dec. 31, 2023	27,762,703
Beginning balance, value at Dec. 31, 2023	$ 3	272,640	237	(163,424)	$ 109,456
Issuance of common stock upon exercise of stock options (in shares)					265,482
Net loss					$ (64,198)
Ending balance, shares at Sep. 30, 2024	28,867,711
Ending balance, value at Sep. 30, 2024	$ 3	307,888	224	(227,622)	80,493
Beginning balance, shares at Mar. 31, 2024	27,898,761
Beginning balance, value at Mar. 31, 2024	$ 3	277,544	(33)	(186,610)	90,904
Unrealized loss on investments			50		50
Issuance of common stock in connection with ATM, net		23,635			23,635
Issuance of common stock in connection with ATM, net, shares	800,000
Issuance of common stock upon exercise of stock options		511			511
Issuance of common stock upon exercise of stock options (in shares)	119,239
Issuance of common stock under ESPP		308			308
Issuance of common stock under ESPP, shares	34,034
Vesting of restricted stock units, shares	2,716
Stock based compensation		3,865			3,865
Net loss				(24,775)	(24,775)
Ending balance, shares at Jun. 30, 2024	28,854,750
Ending balance, value at Jun. 30, 2024	$ 3	305,863	(83)	(211,385)	94,398
Unrealized gain on investments			307		307
Issuance of common stock upon exercise of stock options		22			22
Issuance of common stock upon exercise of stock options (in shares)	12,961
Stock based compensation		2,003			2,003
Net loss				(16,237)	(16,237)
Ending balance, shares at Sep. 30, 2024	28,867,711
Ending balance, value at Sep. 30, 2024	$ 3	$ 307,888	$ 224	$ (227,622)	$ 80,493

BALANCE SHEET COMPONENTS

9 Months Ended

Sep. 30, 2024

BALANCE SHEET COMPONENTS

BALANCE SHEET COMPONENTS

(4) BALANCE SHEET COMPONENTS

Prepaid Expenses and Other Current Assets

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


	September 30,		December 31,
	2024		2023
Prepaid expenses	$	993	$	1,168
Other current assets		882		250
Prepaid research and development		—		375
Total prepaid expenses and other current assets	$	1,875	$	1,793

Accrued and Other Current Liabilities

In June 2024, following the Company’s decision to halt further development of AV-101, the Company announced its plan to terminate nearly all of its workforce in the coming months (the “Workforce Reduction Plan”). As of September 30, 2024, 46 individuals, or approximately 90% of the Company’s workforce, have been terminated. The affected individuals have been and will be provided severance benefits, including cash severance payments. Each affected individual’s eligibility for severance benefits is contingent upon entering into a separation agreement, which includes a general release of claims against the Company. In connection with the Workforce Reduction Plan, the Company incurred costs (in consideration of releases) of approximately $6.4 million, which are primarily one-time severance benefits, during the nine months ended September 30, 2024. The Company has paid approximately $2.4 million of severance benefits, and liabilities associated with the Workforce Reduction Plan were approximately $4.0 million as of September 30, 2024. The Company estimates that the remaining liabilities will be paid in the fourth quarter of 2024 and first quarter of 2025.

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


	September 30,		December 31,
	2024		2023
Accrued research and development	$	4,704	$	9,363
Accrued payroll and other employee benefits		3,952		4,368
Other		292		1,090
Total accrued and other current liabilities	$	8,948	$	14,821

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2024

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

(a) Basis of Presentation

Use of Estimates

(b) Use of Estimates

Net Loss Per Share

share. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position.

The following table summarizes the Company’s net loss per share (in thousands, except share and per share amounts):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Numerator:
Net loss	$	(16,237)	$	(19,563)	$	(64,198)	$	(55,108)
Net loss attributable to common stockholders	$	(16,237)	$	(19,563)	$	(64,198)	$	(55,108)

Denominator:
Weighted-average common stock outstanding, basic and diluted		28,863,327		27,640,542		28,572,338		25,872,118
Net loss per share, basic and diluted	$	(0.56)	$	(0.71)	$	(2.25)	$	(2.13)


	As of September 30,
	2024	2023
Options to purchase common stock	3,714,104	5,236,832
Unvested restricted stock units	—	25,754
	3,714,104	5,262,586

Recently Issued and Recently Adopted Accounting Pronouncements

(d) Recently Issued and Recently Adopted Accounting Pronouncements

COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2024

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

(5) COMMITMENTS AND CONTINGENCIES

In August 2021, the Company entered into a lease agreement (the “Waltham Lease”) for approximately 5,000 square feet of office space in Waltham, Massachusetts for the Company’s corporate headquarters. The Waltham Lease has a term of thirty-nine months (“Lease Term”), unless extended or earlier terminated. The Company had the option to extend the Waltham Lease for one additional period of three years. The Lease Term has an initial abatement period, and the initial base rent payable is approximately $18,000 per month following the abatement period. The initial base rent payable will increase by approximately 2% per year over the Lease Term. The Waltham Lease commencement date was September 1, 2021. In January 2024, the Company entered into the First Amendment to the Waltham Lease resulting in the lease expiring on December 31, 2025, and an increase of $1.00 per rentable square foot during the additional lease term. In obtaining this lease extension, the Company no longer has the option to extend the Waltham Lease for one additional period of three years.

In April 2022, the Company entered into a lease agreement (the “Foster City Lease”) for approximately 3,500 square feet of office space in Foster City, California. The Foster City Lease has a term of thirty-nine months, unless extended or earlier terminated. The Company has the option to extend the Foster City Lease for an additional period of one year. The base rent payable under the Foster City Lease is $22,600 per month and will

be subject to annual increase of 3% on each anniversary. Following the Company’s Workforce Reduction Plan, the Company terminated all employees in the Foster City office and vacated the premises in September 2024. As a result, the Company impaired the related right-of-use asset of approximately $0.3 million, and recognized a loss on impairment in its general and administrative operating expenses during the three months ended September 30, 2024.

As of September 30, 2024, the future minimum annual lease payments under the operating leases were as follows (in thousands):


	Total Minimum
	Lease Payments
2024		$	316
2025			242
Total operating lease payments			558
Less: Amount representing interest			(18)
Present value of net minimum lease payments		$	540


	September 30,			December 31,
Operating lease liabilities:	2024			2023
Current		459			420
Non-current		81			255
Total lease liabilities	$	540		$	675
Weighted-average remaining lease term (in years)		1.1			1.5
Weighted-average incremental borrowing rate		6.4	%		6.0	%

Supplemental cash flow information related to cash paid for amounts included in the measurement of operating lease liabilities was as follows (in thousands):


	Nine months ended September 30,
	2024		2023
Cash paid included in operating cash flows	$	380	$	323

Rent expense was as follows (in thousands):


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Operating lease	$	115	$	111	$	343	$	332
Short-term lease		—		—		165		—
Total rent expense	$	115	$	111	$	508	$	332