Form 10-Q - Quarterly report [Sections 13 or 15(d)]

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

____________________________________________________

FORM 10-Q

____________________________________________________

(Mark One)


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

For the quarterly period ended September 30, 2023


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

For the transition period from to

Commission File Number: 001-39306

____________________________________________________

APPLIED MOLECULAR TRANSPORT INC.

(Exact Name of Registrant as Specified in its Charter)

____________________________________________________


Delaware						81-4481426
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

Address Not Applicable(1)						Zip Code Not Applicable(1)
(Address of principal executive offices)						(Zip Code)

Registrant’s telephone number, including area code: (650) 392-0420

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

____________________________________________________

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

Title of each class

Trading
Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

AMTI

The Nasdaq Stock Market LLC

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

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

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

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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

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

As of November 2, 2023, the registrant had 41,336,563 shares of common stock, $0.0001 par value per share, outstanding.

_____________________________

1 We are a fully-remote company. Accordingly, we do not maintain a headquarters. For purposes of compliance with applicable requirements of the Securities Act of 1933, as amended, or the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, any stockholder communication required to be sent to our principal executive offices may be directed to the agent for service of process at the following address: Applied Molecular Transport Inc., c/o The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, DE 19801, or to the email address: corporate.secretary@appliedmt.com.

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		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Condensed Financial Statements (Unaudited)	2
	Condensed Balance Sheets	2
	Condensed Statements of Operations	3
	Condensed Statements of Stockholders’ Equity	4
	Condensed Statements of Cash Flows	6
	Notes to Condensed Financial Statements (Unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	79
Item 3.	Defaults Upon Senior Securities	79
Item 4.	Mine Safety Disclosures	79
Item 5.	Other Information	80
Item 6.	Exhibits	81
Signatures		82

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Special Note Regarding Forward-Looking Statements

This report contains forward-looking statements that are based on our beliefs and assumptions and on information currently available to us. Forward-looking statements include our expectations regarding the anticipated timing, completion, effects, and potential benefits of the Agreement and Plan of Merger with Cyclo Therapeutics, Inc., a Nevada corporation, and Cameo Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Cyclo, pursuant to which, and subject to the terms and conditions set forth therein, Merger Sub will merge with and into us (the Merger), with us surviving such Merger as a wholly-owned subsidiary of Cyclo, the outcome of any legal proceedings that may be instituted against us related to the Merger, potential de-listing from Nasdaq, our expectations on the timing of clinical study initiation and results and the timing and success of future development of our product candidates, potential regulatory approval of our product candidates, our possible or assumed future results of operations and expenses, our expectations related to our restructuring and operating as a fully-remote company, business strategies and plans, trends, market sizing, competitive position, industry environment, potential growth opportunities, reliance on third parties, financing needs, the sufficiency of the Company’s existing cash and cash equivalents, our ability to protect our intellectual property position, the impact on our business of certain geo-political events, the development of macroeconomic conditions, the impact of the COVID-19 pandemic on our business, and impact of the Affordable Care Act and other legislation and regulation, among other things. Forward-looking statements include all statements that are not historical facts and, in some cases, can be identified by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “seeks,” “should,” “will,” “would” or similar expressions and the negatives of those terms.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including those described in “Risk Factors” and elsewhere in this report. Given these uncertainties, you should not place undue reliance on these forward-looking statements.

Any forward-looking statement made by us in this report speaks only as of the date on which it is made. Except as required by law, we disclaim any obligation to update these forward-looking statements publicly, or to update the reasons. Actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

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PART I—FINANCIAL INFORMATION

Item 1. Condensed Financial Statements (Unaudited)

Applied Molecular Transport Inc.

Condensed Balance Sheets

(Unaudited)

(in thousands, except share and per share data)


	September 30, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	18,103	$	61,145
Prepaid expenses	457		2,688
Other current assets	259		186
Total current assets	18,819		64,019
Property and equipment, net	31		8,183
Operating lease right-of-use assets	1,165		33,222
Finance lease right-of-use assets	—		584
Restricted cash	—		916
Other assets	—		522
Total assets	$	20,015	$	107,446
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	161	$	1,583
Accrued expenses	2,261		8,660
Lease liabilities, operating lease - current	1,353		4,639
Lease liabilities, finance lease - current	—		205
Total current liabilities	3,775		15,087
Lease liabilities, operating lease	—		31,228
Lease liabilities, finance lease	—		49
Other liabilities	—		244
Total liabilities	3,775		46,608
Commitments and contingencies (Note 7)
Stockholders’ equity:
Preferred stock, $0.0001 par value: 50,000,000 shares authorized; none issued and outstanding	—		—
Common stock, $0.0001 par value, 450,000,000 shares authorized; 40,893,507 and 39,181,801 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively	4		4
Additional paid-in capital	434,393		426,804
Accumulated deficit	(418,157)		(365,970)
Total stockholders’ equity	16,240		60,838
Total liabilities and stockholders’ equity	$	20,015	$	107,446

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

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Applied Molecular Transport Inc.

Condensed Statements of Operations

(Unaudited)

(in thousands, except share and per share data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Operating expenses:
Research and development	$	250	$	18,233	$	15,796	$	72,273
General and administrative	7,007		7,281		20,804		28,052
Restructuring, impairment, and related charges	(40)		12		16,832		3,799
Total operating expenses	7,217		25,526		53,432		104,124
Loss from operations	(7,217)		(25,526)		(53,432)		(104,124)
Interest income, net	283		321		1,281		393
Other income (expense), net	(3)		(1)		(36)		5
Net loss	$	(6,937)	$	(25,206)	$	(52,187)	$	(103,726)
Net loss per share, basic and diluted	$	(0.17)	$	(0.65)	$	(1.32)	$	(2.68)
Weighted-average shares of common stock outstanding, basic and diluted	39,751,028		38,914,570		39,426,218		38,769,226

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

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Applied Molecular Transport Inc.

Condensed Statements of Stockholders’ Equity

(Unaudited)

(in thousands, except share data)


	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Total Stockholders’Equity
	Shares	Amount
Balance at December 31, 2022	39,181,801	$	4	$	426,804	$	(365,970)	$	60,838

Issuance of stock under employee stock plans	19,151	—		—		—		—
Stock-based compensation expense	—	—		3,223		—		3,223
Net loss	—	—		—		(27,917)		(27,917)
Balance at March 31, 2023	39,200,952	$	4	$	430,027	$	(393,887)	$	36,144


Issuance of stock under employee stock plans	228,225	—		7		—		7
Stock-based compensation expense	—	—		1,828		—		1,828
Net loss	—	—		—		(17,333)		(17,333)
Balance at June 30, 2023	39,429,177	$	4	$	431,862	$	(411,220)	$	20,646

Issuance of stock under employee stock plans	1,464,330	—		—		—		—
Stock-based compensation expense	—	—		2,531		—		2,531
Net loss	—	—		—		(6,937)		(6,937)
Balance at September 30, 2023	40,893,507	$	4	$	434,393	$	(418,157)	$	16,240

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Applied Molecular Transport Inc.

Condensed Statements of Stockholders’ Equity (Continued)

(Unaudited)

(in thousands, except share data)


	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Total Stockholders’Equity
	Shares	Amount
Balance at December 31, 2021	38,619,957	$	4	$	403,228	$	(239,645)	$	163,587
Issuance of stock under employee stock plans	34,206	—		60		—		60
Stock-based compensation expense	—	—		6,773		—		6,773

Net loss	—	—		—		(42,575)		(42,575)
Balance at March 31, 2022	38,654,163	$	4	$	410,061	$	(282,220)	$	127,845
Issuance of stock under employee stock plans	244,532	—		262		—		262


Stock-based compensation expense	—	—		5,590		—		5,590

Net loss	—	—		—		(35,945)		(35,945)
Balance at June 30, 2022	38,898,695	$	4	$	415,913	$	(318,165)	$	97,752
Issuance of stock under employee stock plans	44,402	—		7		—		7
Stock-based compensation expense	—	—		5,842		—		5,842
Net loss	—	—		—		(25,206)		(25,206)
Balance at September 30, 2022	38,943,097	$	4	$	421,762	$	(343,371)	$	78,395

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

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Applied Molecular Transport Inc.

Condensed Statements of Cash Flows

(Unaudited)

(in thousands)


	Nine Months Ended September 30,
	2023		2022
Operating activities
Net loss	$	(52,187)	$	(103,726)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense	7,582		18,205
Depreciation and amortization	837		2,468
Non-cash operating lease expense	3,537		6,433
Non-cash asset impairment charges	5,392		80
Gain on partial termination of lease	(702)		—
Loss on disposal of property and equipment	295		—
Changes in operating assets and liabilities:
Prepaid expenses	2,231		3,475
Other current assets	(219)		336
Other assets	163		(428)
Accounts payable	(1,428)		(837)
Accrued expenses	(6,636)		(221)
Operating lease liabilities	(4,085)		(4,872)
Other liabilities	—		3
Net cash used in operating activities	(45,220)		(79,084)
Investing activities
Purchases of property and equipment	(446)		(4,146)
Proceeds from disposal of property and equipment	1,955		—
Net cash provided by (used in) investing activities	1,509		(4,146)
Financing activities
Payments for financing and offering costs	—		(806)
Principal payments on finance lease liabilities	(254)		(203)

Proceeds from issuance of stock under employee stock plans	7		329
Net cash used in financing activities	(247)		(680)
Net decrease in cash, cash equivalents and restricted cash	(43,958)		(83,910)
Cash, cash equivalents and restricted cash, beginning of period	62,061		160,846
Cash, cash equivalents and restricted cash, end of period	$	18,103	$	76,936
Supplemental cash flow data:
Cash paid for interest on finance lease liabilities	$	8	$	21
Supplemental disclosure of non-cash investing and financing activities:
Property and equipment included in accounts payable and accrued expenses	$	—	$	23
Deferred financing and offering costs included in accounts payable and accrued expenses	$	—	$	15

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

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Applied Molecular Transport Inc.

Notes to the Condensed Financial Statements

(Unaudited)

1. Description of Business

Applied Molecular Transport Inc. (AMT or the Company) is a clinical-stage biopharmaceutical company that has a proprietary technology platform that enables the design of novel biologic product candidates in patient-friendly oral dosage forms. The Company has decided to discontinue research activities. The Company was incorporated in the state of Delaware in November 2016 and operates under a fully-remote model. Accordingly, the Company does not have a principal executive office.

In March 2023, the Company announced that it had commenced a process to explore strategic alternatives and recently entered into the Merger Agreement (as described below). The Company is actively seeking to sell, assign, license, or otherwise dispose of, in one or more transactions, some or all of the assets that relate to its platform technology at any time prior to, or concurrently with, the closing of the Merger (as defined below).

Proposed Acquisition by Cyclo Therapeutics

On September 21, 2023, AMT entered into an Agreement and Plan of Merger (the Merger Agreement) with Cyclo Therapeutics, Inc., a Nevada corporation (Cyclo) and Cameo Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Cyclo (Merger Sub), pursuant to which, and subject to the terms and conditions set forth therein, Merger Sub will merge with and into AMT (the Merger), with AMT surviving such Merger as a wholly-owned subsidiary of Cyclo.

Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger, each outstanding share of AMT common stock issued and outstanding immediately prior to the effective time of the Merger will automatically be converted into the right to receive shares of Cyclo common stock. As of the date of the execution of the Merger Agreement, the Exchange Ratio was estimated to be 0.174 shares of Cyclo common stock for each share of AMT common stock, but the actual Exchange Ratio will depend on AMT’s net cash and the number of shares of AMT common stock outstanding at the closing of the Merger. Any fractional shares of Cyclo common stock will be rounded up to the nearest whole share. The former AMT stockholders immediately before the Merger are expected to own approximately 25% of the outstanding common stock of the combined company, and the stockholders of Cyclo immediately before the Merger are expected to own approximately 75% of the outstanding common stock of the combined company, subject to certain assumptions (including as to the amount of AMT’s net cash and outstanding shares of AMT common stock at closing).

The boards of directors of each of AMT and Cyclo have approved the Merger Agreement and the transactions contemplated thereby, subject to the satisfaction or waiver of customary conditions, including the requisite approval by AMT’s and Cyclo’s stockholders and the effectiveness of a registration statement to register the shares of Cyclo common stock to be issued in connection with the transaction.

The Merger Agreement also includes termination provisions for both the Company and Cyclo. In connection with a termination of the Merger Agreement under specified circumstances, either party may be required to pay the other party a termination fee ranging between $0.4 million to $0.6 million.

Although the Company has entered into the Merger Agreement and intends to consummate the proposed Merger, there is no assurance that the Company will be able to successfully consummate the proposed Merger on a timely basis, or at all.

Nasdaq Delisting Notification

On August 10, 2023, the Company received a letter from the Listing Qualifications Staff (Nasdaq Staff) of the Nasdaq Stock Market LLC (Nasdaq) indicating that, in accordance with Nasdaq Listing Rule 5100, the Nasdaq Staff believes the Company is a “public shell” and that the continued listing of the Company’s securities is no longer warranted. According to the letter, the Nasdaq Staff believes that the Company “no longer has an operating business” and consequently has decided to use its discretion “to apply more stringent criteria” to the Company’s listing. The Nasdaq Staff’s letter also indicates that the Company was not in compliance with Nasdaq Listing Rule 5450(a)(1), which requires the Company’s common stock to maintain a share price of at least $1.00 per share (the Bid Price Rule) for continued listing on the Nasdaq Global Select Market. This serves as an additional and separate basis for delisting.

The Company filed an appeal to the delisting with the Nasdaq’s Hearings Panel (Nasdaq Panel) on August 17, 2023 and subsequently presented its appeal at a hearing with the Nasdaq Panel on October 19, 2023. On October 23, 2023, the Nasdaq Panel granted the Company’s request for continued listing on Nasdaq, subject to the Company’s completion of the Merger on or before February 6, 2024. The Company’s securities may now continue to trade on Nasdaq until February 6, 2024. There can be

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no assurance that the Company will be able to complete the Merger on or before February 6, 2024. The Company’s failure to complete the Merger on or before February 6, 2024 will result in its securities being delisted from Nasdaq after such date.

Going Concern Considerations

The Company has incurred net losses in each reporting period since inception, including net losses of $52.2 million and $103.7 million for the nine months ended September 30, 2023 and 2022, respectively, and the Company’s accumulated deficit at September 30, 2023 was $418.2 million. The Company’s current operating plan indicates it will continue to incur losses from operations and generate negative cash flows from operating activities, given the Company does not generate any revenue from product sales or otherwise.

As a result of restructuring actions in March 2023 (see Note 5), including discontinuing research activities, exiting substantially all of its operating and finance leases, and significantly reducing its workforce, management believes the Company’s existing cash and cash equivalents of $18.1 million as of September 30, 2023 are adequate to meet its cash needs for at least 12 months from the issuance date of these condensed financial statements.

There can be no assurance that sources of capital will be available to the Company in the necessary time frame, in the amounts that the Company requires, on terms that are acceptable to the Company, or at all. If the Company is unable to consummate a strategic transaction or raise the necessary funds when needed or reduce spending on currently planned activities, the Company may be required to cease operations, which could materially harm its business, financial position and results of operations.

In January 2022, the Company entered into a Sales Agreement with SVB Securities LLC and JMP Securities LLC, as the Company’s sales agents (Agents), pursuant to which the Company may offer and sell from time to time through the Agents up to $150.0 million in shares of the Company’s common stock through an “at-the-market” program (ATM Facility). The shares will be offered and sold pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-263501) and the final prospectus supplement, which was filed on March 11, 2022. For so long as the Company’s non-affiliate public float does not exceed $75 million, the amount of securities that the Company may sell pursuant to registration statements on Form S-3 will be limited to the equivalent of one-third of its public float, which will limit its ability to raise capital. As of September 30, 2023, the Company has not yet sold any shares under the ATM Facility and does not currently intend to do so.

Current Economic Environment

The extent of the ongoing impact of macroeconomic events on the Company’s business and on global economic activity is uncertain and the related financial impact cannot be reasonably estimated with any certainty at this time, although the impacts are expected to continue and may significantly affect its business. The Company expects that the impacts on its business will continue through this period of economic uncertainty as inflation, instability in the banking and financial services sector, a tightening of the credit markets, and other factors continue to develop or emerge. Accordingly, management is carefully evaluating the Company’s liquidity position and continuing to review its near-term operating expenses as the uncertainty related to these factors continues to unfold.

2. Summary of Significant Accounting Policies

Financial Statement Preparation

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) and applicable rules and regulations of the Securities and Exchange Commission (the SEC) for interim reporting. As permitted under those rules and regulations, certain footnotes or other financial information normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. Similarly, the balance sheet as of December 31, 2022 was derived from the Company’s audited financial statements but does not include all disclosures required by GAAP. The condensed financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal, recurring adjustments that are necessary for a fair statement of the results for interim periods. Results of operations for interim periods may not be representative of results to be expected for a full year.

The accompanying condensed financial statements should be read in conjunction with the audited financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Certain reclassifications have been made to the prior period amounts to conform to the current year presentation. In particular, in the condensed statements of operations for the nine months ended September 30, 2022, the Company reclassified $3.1 million and $0.7 million from “Research and development” and “General and administrative,” respectively, to a new line item

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“Restructuring, impairment, and related charges,” primarily related to severance and contract termination costs. These reclassifications did not affect the Company’s financial position, net loss, or cash flows as of and for the periods presented.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company bases its estimates on historical experience and market-specific or other relevant assumptions that it believes are reasonable under the circumstances. Assets and liabilities reported in the Company’s condensed balance sheets and expenses and income reported are affected by estimates and assumptions, which are used for, but are not limited to, recording research and development expenses and related accruals, valuation of long-lived assets, including right-of-use assets and leasehold improvements, restructuring and other charges, and determining the fair value of stock options for stock-based compensation expense. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company. Actual results could differ from such estimates or assumptions.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. The Company maintains bank deposits in federally insured financial institutions and, from time to time, these deposits may exceed federally insured limits. The Company is exposed to credit risk in the event of default by the financial institutions holding its cash and cash equivalents to the extent recorded in the condensed balance sheets. The Company’s cash equivalents consist of money market funds that invests all of its assets in direct obligations of the U.S. Treasury. Although the fund invests in U.S. government obligations, an investment in such funds is neither insured nor guaranteed by the U.S. government. The Company has not experienced any losses on its deposits of cash or holdings of money market funds.

Significant Accounting Policies

The significant accounting policies set forth in Note 2 to the financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 appropriately represent, in all material respects, the current status of our accounting policies, except as described below.

Restructuring Charges

Restructuring charges are recorded in accordance with Accounting Standards Codification (ASC) 712-10, “Nonretirement Postemployment Benefits,” or “ASC 712-10,” and/or ASC 420-10, “Exit or Disposal Cost Obligations,” or “ASC 420-10,” as appropriate. Certain termination costs and obligations of contracts that are not leases are accounted for in accordance with ASC 420-10.

The Company records severance costs provided under an ongoing benefit arrangement once they are both probable and estimable in accordance with the provisions of ASC 712-10.

The Company accounts for one-time termination benefits and contract terminations in accordance with ASC 420-10, which addresses financial accounting and reporting for costs associated with restructuring activities. Under ASC 420-10, the Company establishes a liability for a cost associated with an exit or disposal activity, including severance and other contract termination costs, when the liability is incurred, rather than at the date that the Company commits to an exit plan. The Company reassesses the expected cost to complete the exit or disposal activities at the end of each reporting period and adjusts its remaining estimated liabilities, if necessary.

Impairment of Long-Lived Assets

The Company assesses long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Such events include a significant change in the Company’s strategic business objectives and utilization of the assets. As part of the March 2023 Restructuring Plan (see Note 5), the Company commenced restructuring activities that included the decision to operate as a fully-remote company and discontinue research activities while focusing on completing and closing out clinical trials. In anticipation of exiting its leased facilities, the Company committed to a plan to sell all tangible fixed assets located at its leased facilities, consisting primarily of manufacturing and laboratory equipment. In connection with the classification of such assets as held for sale, the carrying value of the tangible fixed assets to be sold was reduced to their estimated fair value, which was determined based on the estimated

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selling price less costs to sell. In May 2023, the Company modified various operating leases to shorten the accounting lease term. Upon vacating the leased premises in the second quarter of 2023, the Company wrote-off the remaining balances related to right-of-use assets and leasehold improvements.

Refer to Notes 4, 5 and 6 for additional details regarding restructuring and impairment charges related to the March 2023 Restructuring Plan.

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents are held in accounts at financial institutions. As of September 30, 2023, the Company’s cash in deposit accounts were insured by the Federal Deposit Insurance Corporation (FDIC) as the balances were within the FDIC insurance limit of up to $250,000 per depositor at each financial institution.

The Company considers all highly liquid investments purchased with original maturities of 90 days or less from the purchase date to be cash equivalents. Cash equivalents consist of amounts invested in money market funds exclusively composed of U.S. government obligations.

Restricted cash consisted of cash balances held by financial institutions as collateral for letters of credit maintained by the Company for the benefit of lessors related to its leased properties as of September 30, 2022.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed statements of cash flows (in thousands):


	September 30, 2023		September 30, 2022
Cash and cash equivalents	$	18,103	$	76,020
Restricted cash	—		916
Total cash, cash equivalents and restricted cash	$	18,103	$	76,936

Recently Adopted Accounting Pronouncements

Accounting pronouncements that became effective during the nine months ended September 30, 2023 did not have a material impact on the Company’s financial condition, results of operations or cash flows.

Recently Issued Accounting Pronouncements

There were no new accounting pronouncements issued as of September 30, 2023 that are expected to have a material impact on the Company’s financial condition, results of operations or cash flows.

3. Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, or an exit price, in the principal or most advantageous market for that asset or liability in an orderly transaction between market participants on the measurement date. A three-level valuation hierarchy has been established under GAAP for disclosure of fair value measurements. The valuation hierarchy is based on the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:

•Level 1—Quoted prices in active markets for identical assets and liabilities;

•Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

•Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Assets Measured at Fair Value on a Recurring Basis

As of September 30, 2023 and December 31, 2022, money market funds were the only financial instrument measured and recorded at fair value on a recurring basis on the Company’s condensed balance sheets. Money market funds were recorded

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within cash and cash equivalents. The following tables present money market funds at their level within the fair value hierarchy for the periods indicated (in thousands):


		September 30, 2023
	Fair Value Hierarchy Level	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Cash equivalents:
Money market funds invested in U.S. government obligations	Level 1	$	17,853	$	—	$	—	$	17,853
Total		$	17,853	$	—	$	—	$	17,853


		December 31, 2022
	Fair Value Hierarchy Level	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Cash equivalents:
Money market funds invested in U.S. government obligations	Level 1	$	40,729	$	—	$	—	$	40,729
Total		$	40,729	$	—	$	—	$	40,729

Financial Instruments Not Carried at Fair Value

The Company’s financial instruments, including cash, restricted cash, other current assets, accounts payable and accrued expenses are carried at cost which approximates their fair value because of the short-term nature of these financial instruments.

4. Balance Sheet Components

Prepaid Expenses

Prepaid clinical expenses were nominal and $1.2 million as of September 30, 2023 and December 31, 2022, respectively. Other prepaid expenses as of September 30, 2023 and December 31, 2022 included prepaid amounts for insurance and other prepaid services.

Property and Equipment, Net

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


	September 30, 2023		December 31, 2022
Laboratory and manufacturing equipment	$	—	$	11,421
Leasehold improvements	221		5,246
Computer and office equipment	—		491
Construction in progress	—		72
Total property and equipment, gross	221		17,230
Accumulated depreciation	(190)		(9,047)
Total property and equipment, net	$	31	$	8,183

Property and equipment, net decreased significantly for the nine months ended September 30, 2023 as a result of the March 2023 Restructuring Plan (see Note 5). As part of the March 2023 Restructuring Plan, the Company decided to operate under a fully-remote model and committed to a plan to sell all tangible fixed assets located at its leased facilities, consisting primarily of manufacturing and laboratory equipment. In addition, the Company modified its operating leases to shorten their lease term. For the nine months ended September 30, 2023, the Company recognized non-cash impairment charges totaling $5.4 million as a result of classifying all tangible fixed assets as held for sale and to write-off leasehold improvements upon vacating leased premises. During the nine months ended September 30, 2023, all tangible fixed assets were either sold or disposed of.

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Depreciation expense was nominal and $0.6 million for the three months ended September 30, 2023 and 2022, respectively, and $0.8 million and $2.3 million for the nine months ended September 30, 2023 and 2022, respectively.

Accrued Expenses

Accrued expenses consisted of the following (in thousands):


	September 30, 2023		December 31, 2022
Professional services	$	1,100	$	728
Compensation expenses	872		3,985
Research and development expenses	—		3,508
Property and equipment	—		7
Other	289		432
Total accrued expenses	$	2,261	$	8,660

5. Restructuring, Impairment, and Related Charges

A description of the Company’s restructuring initiatives and their related costs is provided below.

March 2023 Restructuring Plan

Employee Termination Benefits

In March 2023, the Company announced the commencement of a process to explore strategic alternatives and implemented reductions in workforce across all functional areas impacting 63 employees representing approximately 82% of its employee base (the March 2023 Restructuring Plan). Impacted employees were eligible to receive severance benefits and Company-funded COBRA premiums, contingent upon an impacted employee’s execution (and non-revocation) of a customary separation agreement, which includes a general release of claims against the Company. For the nine months ended September 30, 2023, the Company recognized $5.6 million of employee termination benefits provided under an ongoing benefit arrangement, which were fully paid as of September 30, 2023. As of September 30, 2023, the Company has 13 full-time employees.

Asset Impairments

As part of the March 2023 Restructuring Plan, the Company decided to operate under a fully-remote model and committed to a plan to sell all tangible fixed assets located at its leased facilities, consisting primarily of manufacturing and laboratory equipment. In addition, the Company modified its operating leases to shorten their lease term. For the nine months ended September 30, 2023, the Company recognized non-cash impairment charges totaling $5.4 million as a result of classifying all tangible fixed assets as held for sale and to write-off leasehold improvements upon vacating leased premises. As of September 30, 2023, all tangible fixed assets were either sold or disposed of.

During the nine months ended September 30, 2023, with the exception of an operating lease that is subject to a sublease in which the rental period is co-terminus with the term of the head lease and expires in August 2024, the Company exited all its operating and finance leases (see Note 6) and recorded impairment charges to write off right-of-use assets and related leasehold improvements upon vacating the leased premises.

Other Related Costs

The Company incurred other related costs of $0.6 million for the nine months ended September 30, 2023 primarily consisting of costs to terminate contracts before the end of their term, costs for professional services incurred in connection with restructuring measures of $1.0 million and a $0.3 million loss on disposal of fixed assets, partially offset by a $0.7 million gain on partial termination of lease.

May 2022 Restructuring Plan

In May 2022, the Company implemented a restructuring plan (May 2022 Restructuring Plan) to preserve capital and focus its resources on advancing its then lead product candidate through key development milestones. The May 2022 Restructuring Plan resulted in a reduction of the Company’s workforce by approximately 40%, or 52 employees. For the nine months ended September 30, 2022, the Company incurred total charges of approximately $3.8 million under the May 2022 Restructuring Plan, primarily consisting of $3.3 million related to severance payments and other employee-related separation costs, $0.8 million related to contract termination and facility exit costs and $0.1 million in write-offs of property and equipment, partially offset by

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a $0.4 million reduction in stock-based compensation expense as a result of applying modification accounting for accelerated vesting of RSUs related to impacted employees.

The following table details “Restructuring, impairment, and related charges” for each of the periods presented (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Employee termination benefits	$	—	$	—	$	5,585	$	3,339
Stock-based compensation	—		—		—		(419)
Asset impairments	—		—		10,642		80
Other related costs	(40)		12		605		799
Total restructuring, impairments, and related charges	$	(40)	$	12	$	16,832	$	3,799

The following table summarizes the charges and spending relating to restructuring program activities for the nine months ended September 30, 2023:


	Employee Termination Benefits		Asset Impairments			Other Related Costs		Total
Liability balance at December 31, 2022	$	—	$	—		$	420	$	420
Expense	5,585		10,642			605		16,832
Payments	(5,585)		(5,250)		(1)	(1,387)		(12,222)
Non-cash activity	—		(5,392)			362		(5,030)
Liability balance at September 30, 2023	$	—	$	—		$	—	$	—

(1) Represents cash payments for early termination fees associated with exiting operating leases, which were recorded as increases to right-of-use assets. Upon vacating the leased premises, any remaining balances related to right-of-use assets were written off.

6. Leases

Operating Leases

In February 2021, the Company entered into an operating lease for its headquarters comprising 84,321 of rentable square feet of office, laboratory and manufacturing space in South San Francisco, California (HQ Lease), which was originally scheduled to expire in October 2029.

As part of the Company’s March 2023 Restructuring Plan, the Company decided to operate under a fully-remote model. In May 2023, the Company entered into a modification of the HQ Lease (Lease Modification), which shortened the accounting lease term to May 2023. In addition, the Company assigned an active sublease for the third floor of the leased building under the HQ Lease to the landlord effective as of the execution date. As the Company’s right of use for the third floor of the leased building ceased contemporaneously with the modification, the Company determined the percentage reduction in leased space and applied the resulting percentage to remeasure the remaining right-of-use asset and lease liability reducing them by $10.0 million and $10.7 million, respectively, which resulted in a gain on partial lease termination of $0.7 million. The gain on partial lease termination was included within the “Restructuring, impairment, and related charges” line in the statement of operations for the nine months ended September 30, 2023. Pursuant to the Lease Modification, the Company incurred an early termination fee of $5.3 million. The early termination fee included the forfeiture of a security deposit of $0.9 million in the form of a letter of credit. Under Accounting Standards Codification 842, Leases, when a lease is terminated early but the tenant continues to control the space under a modified lease agreement for a short period of time, early termination fees associated with exiting operating leases are recorded as prepaid rent for the remaining lease term resulting in an increase to the right-of-use asset. Upon vacating the leased premises in May 2023, the Company wrote-off the remaining balances related to right-of-use assets and leasehold improvements. Refer to Note 5 for additional details.

Also in May 2023, the Company entered into a modification of an operating lease for approximately 20,000 rentable square feet of warehouse space in South San Francisco, California, which shortened the accounting lease term to June 2023. The lease was originally scheduled to expire in July 2029. The Company incurred an early termination fee of $0.8 million. The early termination fee included the forfeiture of a security deposit of $0.3 million, which was recorded as prepaid rent for the remaining lease term resulting in an increase to the right-of-use asset. Upon vacating the leased premises in June 2023, the

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Company wrote-off the remaining balances related to right-of-use assets and leasehold improvements. Refer to Note 5 for additional details.

As of September 30, 2023, the Company has one remaining operating lease for approximately 18,748 rentable square feet of office and laboratory space in South San Francisco, California, which served as the Company’s headquarters through February 2021. The lease expires in August 2024. In November 2021, the Company subleased this facility in which the rental period was co-terminus with the term of the head lease. The subtenant was not provided any renewal or extension options.

Finance Leases

During the nine months ended September 30, 2023, the Company early terminated all its finance lease agreements, which were related to laboratory and manufacturing equipment. The terms of the Company’s finance leases generally ranged from three to five years.

The following table summarizes total lease expense for the three and nine months ended September 30, 2023 and 2022 (in thousands):


	Condensed Statements of Operations Classification	Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022
Operating lease expense	Operating expenses	$	321	$	1,923	$	3,537	$	6,432
Finance lease expense:
Amortization of ROU assets	Operating expenses	—		55		82		161
Interest on lease liabilities	Interest income, net	—		6		8		21
Variable lease expense	Operating expenses	144		657		784		1,789
Short-term lease expense	Operating expenses	—		9		5		76
Sublease income	Operating expenses	(378)		(665)		(1,711)		(1,396)
Total lease expense		$	87	$	1,985	$	2,705	$	7,083

The following table summarizes supplemental cash flow information for the nine months ended September 30, 2023 and 2022 (in thousands):


	Nine Months Ended September 30,
	2023		2022
Cash paid for amounts included in the measurement of liabilities:
Operating cash flows from operating leases	$	4,085	$	4,872
Operating cash flows from finance leases	8		21
Financing cash flows from finance leases	254		203
Right-of-use asset obtained in exchange for new operating lease liability	—		563
Right-of-use asset obtained in exchange for new finance lease liability	114		148

The following table summarizes maturities of lease liabilities and sublease income as of September 30, 2023 (in thousands):


	Operating Leases		Sublease Income Payments		Net Lease Income Payments
2023 (remaining three months)	$	369	$	(388)	$	(19)
2024	1,000		(1,044)		(44)
Total lease payments (undiscounted)	1,369		$	(1,432)	$	(63)
Less interest or imputed interest	16
Total present value of lease liabilities	1,353
Less: Lease liabilities, current	(1,353)
Lease liabilities, non-current	$	—

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As of September 30, 2023, the Company’s only operating lease had a remaining lease term of 0.9 years and the discount rate used to recognize the initial lease liabilities was 2.6%.

7. Commitments and Contingencies

Commitments

In February 2023, the Company entered into an agreement with MTS Health Partners, L.P. to act as the Company’s strategic financial advisor in connection with a potential strategic transaction, including, but not limited to, an acquisition, merger, business combination or other transaction. Upon the consummation of any such transaction, the Company has agreed to pay the advisor the greater of i) a success fee of 3% of the Total Consideration (as defined in the agreement) received by the Company; or ii) $1.5 million. Any success fees payable will be recognized as an expense in the period it is incurred.

Legal Proceedings

From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business. The Company was not subject to any material legal proceedings as of September 30, 2023 and December 31, 2022, and no material legal proceedings are currently pending or threatened.

Indemnification

In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. As permitted under Delaware law and in accordance with its bylaws, the Company indemnifies its officers and directors for certain events or occurrences while the officer or director is or was serving in such capacity. The Company is also party to indemnification agreements with its officers and directors. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments that the Company could be required to make under these provisions is not determinable. The Company also maintains director and officer insurance, which may cover certain liabilities arising from the Company’s obligation to indemnify directors and officers. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification provisions and is not currently aware of any indemnification claims.

8. Common Stock and Stock-Based Compensation

Common Stock

As of September 30, 2023 and December 31, 2022, the Company was authorized to issue 450,000,000 shares of $0.0001 par value common stock. Common stockholders are entitled to dividends if and when declared by the Board of Directors. The holder of each share of common stock is entitled to one vote. The Company has never declared or paid dividends on its common stock.

Common stock reserved for future issuance, on an as converted basis, consisted of the following:


	September 30, 2023	December 31, 2022
Stock options outstanding	3,055,249	5,369,808
RSUs and PSUs outstanding	2,010,450	531,366
Shares available for future grants under equity incentive plans	5,767,781	4,654,922
Shares available for issuance under ESPP	1,234,610	872,792
Total	12,068,090	11,428,888

On January 1, 2023, the shares available for grant under the Company’s 2020 Equity Incentive Plan and the 2020 ESPP were automatically increased by 1,959,090 shares and 391,818 shares, respectively, pursuant to the annual evergreen increase provisions under each respective plan.

Stock-based Compensation

The Company has awards outstanding under various stock-based compensation plans as described in the financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. The Company utilizes stock options, restricted stock units (RSUs) and performance stock units (PSUs) for equity compensation.

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Stock-based compensation expense is measured at fair value on the date of grant and recognized ratably over the requisite service period.

The following table summarizes the components of stock-based compensation expense recognized in the Company’s condensed statements of operations during the three and nine months ended September 30, 2023 and 2022 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Research and development	$	—	$	2,707	$	972	$	9,002
General and administrative	2,531		3,135		6,610		9,622
Restructuring, impairment, and related charges	—		—		—		(419)
Total stock-based compensation expense	$	2,531	$	5,842	$	7,582	$	18,205

Stock Options

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


	Total Options Outstanding	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding as of December 31, 2022	5,369,808	$	17.28	7.6	$	11
Granted	768,000	0.39
Exercised	—	—
Canceled	(3,082,559)	17.18
Outstanding as of September 30, 2023	3,055,249	$	13.14	7.4	$	—
Exercisable as of September 30, 2023	1,904,507	$	13.17	6.8	$	—

As of September 30, 2023, the total unrecognized stock-based compensation expense related to stock options was $7.3 million, which is expected to be recognized over a weighted-average period of approximately 1.8 years.

Restricted Stock Units and Performance Stock Units

The following summarizes RSU and PSU activity:


	RSUs			PSUs
	Number of Shares	Weighted- Average Grant Date Fair Value per Share		Number of Shares	Weighted- Average Grant Date Fair Value per Share
Outstanding as of December 31, 2022	531,366	$	10.12	—	$	—
Granted	—	—		3,461,640	0.30
Vested	(81,045)	9.91		(1,600,661)	0.30
Canceled	(300,850)	11.04		—	—
Outstanding as of September 30, 2023	149,471	$	8.39	1,860,979	$	0.30

In April 2023, the Company granted 2,575,529 PSUs, pursuant to the terms and conditions of the Company’s 2020 Equity Incentive Plan, to employees that contain performance conditions associated with a strategic transaction, if such a transaction occurs. The awards also vest in full if an employee is involuntarily terminated. Also in April 2023, the Company entered into a Consulting Agreement with Tahir Mahmood, a current director of the Company and the Company’s co-founder and former CEO. The Consulting Agreement had an initial term of six-months, but was subsequently amended to expire in December 2023. Under the terms of the Consulting Agreement, Dr. Mahmood will provide consulting services relating to potential strategic transactions. As consideration for the Consulting Agreement, Dr. Mahmood was granted 886,111 PSUs, pursuant to the terms

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and conditions of the Company’s 2020 Equity Incentive Plan, that contain performance conditions associated with a strategic transaction, if such a transaction occurs. The fair value of each PSU is determined on the date of grant based on the Company’s stock price.

Compensation expense for PSUs is recorded over the estimated service period for each tranche of an award when its performance condition is deemed probable of achievement. For PSUs containing performance conditions which were not deemed probable of achievement, no stock compensation expense is recorded. Additionally, at each reporting period, the Company evaluates the probable outcome of the performance conditions and as applicable, recognizes the cumulative effect of the change in estimate in the period of the change. The performance conditions related to the PSUs granted in April 2023 were initially assessed as not probable of achievement and no compensation expense was recorded. During the three months ended September 30, 2023, the performance conditions became probable of being achieved upon the execution of a merger agreement and consequently, the Company recognized a cumulative catch-up expense of $0.9 million for that quarter.

As of September 30, 2023, the total unrecognized stock-based compensation expense related to RSUs and PSUs was $0.1 million, which is expected to be recognized over a weighted-average period of approximately 0.1 years.

9. Net Loss Per Share

Basic net loss per common share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share of common stock is computed by giving effect to all potential dilutive shares of common stock, including options, RSUs and PSUs. Basic and diluted net loss per share were the same for all periods presented as the impact of all potentially dilutive securities outstanding was anti-dilutive.

The following table sets forth the computation of the basic and diluted net loss per share (in thousands except share and per share data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Numerator:
Net loss	$	(6,937)	$	(25,206)	$	(52,187)	$	(103,726)
Denominator:
Weighted-average shares of common stock outstanding used in the calculation of basic and diluted net loss per share	39,751,028		38,914,570		39,426,218		38,769,226
Net loss per share, basic and diluted	$	(0.17)	$	(0.65)	$	(1.32)	$	(2.68)

The Company’s basic net loss per share was the same as its diluted net loss per share for all the periods presented as the inclusion of all common stock equivalents outstanding would have been anti-dilutive. Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:


	September 30,
	2023	2022
Stock options outstanding	3,055,249	6,069,603
RSUs and PSUs outstanding	2,010,450	747,676

10. Subsequent Events

On October 19, 2023, the Company presented its appeal at a hearing with the Nasdaq Panel regarding a delisting notification received on August 10, 2023. On October 23, 2023, the Nasdaq Panel granted the Company’s request for continued listing on Nasdaq, subject to the Company’s completion of the Merger on or before February 6, 2024. See Note 1 for additional information.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our condensed financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022. This discussion contains forward-looking statements that involve risks and uncertainties, including those described in the section titled “Special Note Regarding Forward-Looking Statements.” Our actual results and the timing of selected events could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those set forth under the section titled “Risk Factors” included elsewhere in this report.

Overview

We are a clinical-stage biopharmaceutical company that has a proprietary technology platform that enables the design of novel biologic product candidates in patient-friendly oral dosage forms.

In March 2023, we announced that we had commenced a process to explore strategic alternatives and recently entered into the Merger Agreement (as described below). We are actively seeking to sell, assign, license, or otherwise dispose of, in one or more transactions, some or all of the assets that relate to our platform technology at any time prior to, or concurrently with, the closing of the Merger (as defined below).

Proposed Acquisition by Cyclo Therapeutics

On September 21, 2023, we entered into an Agreement and Plan of Merger (the Merger Agreement) with Cyclo Therapeutics, Inc., a Nevada corporation (Cyclo) and Cameo Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Cyclo (Merger Sub), pursuant to which, and subject to the terms and conditions set forth therein, Merger Sub will merge with and into us (the Merger), with us surviving such Merger as a wholly-owned subsidiary of Cyclo.

Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger, each outstanding share of our common stock issued and outstanding immediately prior to the effective time of the Merger will automatically be converted into the right to receive shares of Cyclo common stock. As of the date of the execution of the Merger Agreement, the Exchange Ratio was estimated to be 0.174 shares of Cyclo common stock for each share of our common stock, but the actual Exchange Ratio will depend on our net cash and the number of shares of our common stock outstanding at the closing of the Merger. Any fractional shares of Cyclo common stock will be rounded up to the nearest whole share. Our former stockholders immediately before the Merger are expected to own approximately 25% of the outstanding common stock of the combined company, and the stockholders of Cyclo immediately before the Merger are expected to own approximately 75% of the outstanding common stock of the combined company, subject to certain assumptions (including as to the amount of our net cash and outstanding shares of our common stock at closing).

Each of our and Cyclo’s boards of directors have approved the Merger Agreement and the transactions contemplated thereby, subject to the satisfaction or waiver of customary conditions, including the requisite approval by our and Cyclo’s stockholders and the effectiveness of a registration statement to register the shares of Cyclo common stock to be issued in connection with the transaction.

The Merger Agreement also includes termination provisions for both us and Cyclo. In connection with a termination of the Merger Agreement under specified circumstances, either party may be required to pay the other party a termination fee ranging between $0.4 million to $0.6 million.

The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which is included as Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC on September 21, 2023.

Although we have entered into the Merger Agreement and intend to consummate the proposed Merger, there is no assurance that we will be able to successfully consummate the proposed Merger on a timely basis, or at all. If, for any reason, the proposed Merger is not completed, and we are unable to identify and complete an alternative strategic transaction like the Merger, or to continue to operate our business due to our inability to raise additional funding, we may be required to dissolve and liquidate our assets. In such case, we would be required to pay all of our contractual obligations, and to set aside certain reserves for potential future claims, and there can be no assurances as to the amount or timing of available cash left to distribute to our stockholders after paying our debts and other obligations and setting aside funds for reserves.

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March 2023 Restructuring Plan

To conserve cash resources pending the outcome of our strategic review, we restructured our business and implemented a series of cost-saving measures (the March 2023 Restructuring Plan). These measures included implementing reductions in workforce across all functional areas impacting 63 employees representing approximately 82% of our employee base. As of the date of this report, we have 13 full-time employees.

In connection with the March 2023 Restructuring Plan, we decided to operate under a fully-remote model and committed to a plan to sell all tangible fixed assets located at our leased facilities, consisting primarily of manufacturing and laboratory equipment. All tangible fixed assets were either sold or disposed of in May 2023. During the nine months ended September 30, 2023, with the exception of an operating lease that is subject to a sublease in which the rental period is co-terminus with the term of the head lease and expires in August 2024, we exited all our operating and finance leases. As of September 30, 2023, the March 2023 Restructuring Plan was complete.

These cost-saving measures significantly reduced our operations and enable us to support the process of exploring strategic alternatives. While we are exploring strategic alternatives, there can be no assurance that this process will result in us pursuing a transaction or that any transaction, if pursued, will be completed on attractive terms, or at all. Similarly, there can be no assurance that sources of capital will be available to us in the necessary time frame, in the amounts that we require, on terms that are acceptable to us, or at all. If we are unable to consummate a strategic transaction or raise the necessary funds when needed or reduce spending on currently planned activities, we may be required to cease operations, which could materially harm our business, financial position and results of operations.

Nasdaq Delisting Notification

On August 10, 2023, we received a letter from the Listing Qualifications Staff (Nasdaq Staff) of the Nasdaq Stock Market LLC (Nasdaq) indicating that, in accordance with Nasdaq Listing Rule 5100, the Nasdaq Staff believes we are a “public shell” and that the continued listing of our securities is no longer warranted. According to the letter, the Nasdaq Staff believes that the Company “no longer has an operating business” and consequently has decided to use its discretion “to apply more stringent criteria” to our listing. The Nasdaq Staff’s letter also indicates that we were not in compliance with Nasdaq Listing Rule 5450(a)(1), which requires our common stock to maintain a share price of at least $1.00 per share (the Bid Price Rule) for continued listing on the Nasdaq Global Select Market. This serves as an additional and separate basis for delisting.

We filed an appeal to the delisting with the Nasdaq’s Hearings Panel (Nasdaq Panel) on August 17, 2023 and subsequently presented our appeal at a hearing with the Nasdaq Panel on October 19, 2023. On October 23, 2023, the Nasdaq Panel granted our request for continued listing on Nasdaq, subject to our completion of the Merger on or before February 6, 2024. Our securities may now continue to trade on Nasdaq until February 6, 2024.

There can be no assurance that we will be able to complete the Merger on or before February 6, 2024. Our failure to complete the Merger on or before February 6, 2024 will result in our securities being delisted from Nasdaq after such date.

Current Economic Conditions

The extent of the ongoing impact of macroeconomic events on our business and on global economic activity is uncertain and the related financial impact cannot be reasonably estimated with any certainty at this time, although the impacts are expected to continue and may significantly affect our business. We expect that the impacts on our business will continue through this period of economic uncertainty as inflation, instability in the banking and financial services sector, a tightening of the credit markets, and other factors continue to develop or emerge. Accordingly, management is carefully evaluating our liquidity position and continuing to review our near-term operating expenses as the uncertainty related to these factors continues to unfold. The risks related to our business, including further discussion of the impact and possible future impacts of the current economic conditions on are, are further described in the section titled “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q.

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Components of Results of Operations

Revenue

We have not generated any revenue from product sales or otherwise and do not expect to generate any revenue for the foreseeable future.

Operating Expenses

Research and Development Expenses

Our research and development expenses consist primarily of external and internal costs incurred in connection with our research activities and development programs. These expenses include, but are not limited to:

External expenses, consisting of:

▪clinical trials—expenses associated with CROs for managing and conducting clinical trials and sample analysis;

▪materials—expenses associated with laboratory supplies and other materials;

▪preclinical studies—expenses associated with preclinical studies performed by vendors;

▪contract manufacturing—expenses associated with manufacturing clinical trial materials including under agreements with contract development and manufacturing organizations (CDMOs) and other vendors; and

▪other research and development—expenses associated with consulting and other external expenses.

Internal expenses, consisting of:

▪personnel—personnel expenses including salaries, bonuses, benefits, and stock-based compensation expense; and

▪equipment, depreciation, and facility—expenses associated with service and repair of equipment, equipment depreciation, and allocated facility costs for research and development occupied space.

Research and development expenses are recognized as they are incurred. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid assets and recognized as expense in the period when the goods are consumed or the services are performed.

General and Administrative Expenses

General and administrative expenses consist primarily of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation expense) for personnel in executive, finance, accounting, corporate development, and other administrative functions. General and administrative expenses also include legal fees, professional fees paid for accounting, auditing, consulting, tax, and investor relations services, insurance costs, and facility costs not otherwise included in research and development expenses, and public company expenses such as costs associated with compliance with the rules and regulations of the SEC and those of Nasdaq.

Restructuring, Impairment, and Related Charges

Restructuring and impairment charges include costs associated with employee severance benefits related to restructuring plans, write-downs of property and equipment held for sale to fair value less costs to sell, impairment of right-of-use assets and leasehold improvements upon vacating leased premises, contract termination and other related costs. Refer to Note 5 to our condensed financial statements in Item 1 of this Quarterly Report on Form 10-Q for additional details.

Interest Income, Net and Other Income (expense), Net

Interest income, net and other income (expense), net primarily consists of interest income earned on our cash, cash equivalents, investments, realized gain and loss on investments, interest expense from finance lease liabilities, and net losses on foreign currency transactions related to third-party contracts with foreign-based vendors.

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Results of Operations

Comparison of Three Months Ended September 30, 2023 and 2022


	Three Months Ended September 30,
	2023		2022		Change
(in thousands)
Operating expenses:
Research and development	$	250	$	18,233	$	(17,983)
General and administrative	7,007		7,281		(274)
Restructuring, impairment, and related charges	(40)		12		(52)
Total operating expenses	7,217		25,526		(18,309)
Loss from operations	(7,217)		(25,526)		18,309
Interest income, net	283		$	321	(38)
Other income (expense), net	(3)		(1)		(2)
Net loss	$	(6,937)	$	(25,206)	$	18,269

Research and Development Expenses

Research and development expenses decreased by approximately $18.0 million from $18.2 million for the three months ended September 30, 2022 to approximately $0.3 million for the three months ended September 30, 2023. The decrease in research and development expenses was attributable to our restructuring of operations and related reductions in workforce implemented in March 2023, which impacted 56 research and development employees as we discontinued research activities following an assessment of our clinical programs and the current business environment while focusing our operations on completing and closing out clinical trials, exploring strategic alternatives, maintaining and prosecuting our extensive intellectual property portfolio, and continuing business development activities.


	Three Months Ended September 30,
	2023		2022		Change

External expenses:
Clinical trials	$	85	$	3,799	$	(3,714)
Materials	15		1,294		(1,279)
Preclinical studies	(1)		609		(610)
Contract manufacturing	40		451		(411)
Other research and development	77		2,927		(2,850)
Internal expenses:
Personnel	—		6,545		(6,545)
Equipment, depreciation, and facilities	34		2,608		(2,574)
Total research and development expenses	$	250	$	18,233	$	(17,983)

General and Administrative Expenses

General and administrative expenses decreased by approximately $0.3 million from $7.3 million for the three months ended September 30, 2022 to $7.0 million for the three months ended September 30, 2023. The decrease in general and administrative expenses was attributable to our March 2023 Restructuring Plan, which reduced general and administrative headcount by seven employees and the initiative to conserve cash resources, partially offset by an increase in stock-based compensation expense related to PSUs granted in April 2023 that contained performance conditions associated with a strategic transaction. The performance conditions were initially assessed as not probable of achievement upon grant and no compensation expense was recorded. During the three months ended September 30, 2023, the performance conditions became probable of being achieved upon the execution of a merger agreement and consequently, we recognized a cumulative catch-up expense of $0.9 million for the quarter.

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Comparison of Nine Months Ended September 30, 2023 and 2022


	Nine Months Ended September 30,
	2023		2022		Change
(in thousands)
Operating expenses:
Research and development	$	15,796	$	72,273	$	(56,477)
General and administrative	20,804		28,052		(7,248)
Restructuring, impairment, and related charges	16,832		3,799		13,033
Total operating expenses	53,432		104,124		(50,692)
Loss from operations	(53,432)		(104,124)		50,692
Interest income, net	1,281		$	393	888
Other income (expense), net	(36)		5		(41)
Net loss	$	(52,187)	$	(103,726)	$	51,539

Research and Development Expenses

Research and development expenses decreased by approximately $56.5 million from $72.3 million for the nine months ended September 30, 2022 to $15.8 million for the nine months ended September 30, 2023. The decrease in research and development expenses was attributable to our restructuring of operations and related reductions in workforce implemented in March 2023, which impacted 56 research and development employees as we discontinued research activities following an assessment of our clinical programs and the current business environment while focusing our operations on completing and closing out clinical trials, exploring strategic alternatives, maintaining and prosecuting our extensive intellectual property portfolio, and continuing business development activities.


	Nine Months Ended September 30,
	2023		2022		Change

External expenses:
Clinical trials	$	6,792	$	16,484	$	(9,692)
Materials	449		7,344		(6,895)
Preclinical studies	203		3,551		(3,348)
Contract manufacturing	231		1,128		(897)
Other research and development	969		7,122		(6,153)
Internal expenses:
Personnel	4,590		25,087		(20,497)
Equipment, depreciation, and facilities	2,562		11,557		(8,995)
Total research and development expenses	$	15,796	$	72,273	$	(56,477)

General and Administrative Expenses

General and administrative expenses decreased by approximately $7.2 million from $28.1 million for the nine months ended September 30, 2022 to $20.8 million for the nine months ended September 30, 2023. The decrease in general and administrative expenses was attributable to our March 2023 Restructuring Plan, which reduced general and administrative headcount by seven employees and the initiative to conserve cash resources.

Restructuring, Impairment, and Related Charges

For the nine months ended September 30, 2023, we recorded $16.8 million of restructuring, impairment, and related charges. We discontinued research activities while focusing on completing and closing out clinical trials and reduced our workforce by approximately 82%. As part of the March 2023 Restructuring Plan, we decided to operate under a fully-remote model and committed to a plan to sell all tangible fixed assets located at our leased facilities, consisting primarily of manufacturing and laboratory equipment. In addition, we modified our operating leases to shorten their lease term. For the nine months ended September 30, 2023, we recognized non-cash impairment charges totaling $5.4 million as a result of classifying all tangible

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fixed assets as held for sale and to write-off leasehold improvements upon vacating leased premises. During the nine months ended September 30, 2023, all tangible fixed assets were either sold or disposed of.

During the nine months ended September 30, 2023, with the exception of an operating lease that is subject to a sublease in which the rental period is co-terminus with the term of the head lease and expires in August 2024, we exited all our operating and finance leases and recorded impairment charges to write off right-of-use assets and related leasehold improvements upon vacating the leased premises. Refer to Note 5 in the Notes of this Quarterly Report on Form 10-Q for additional details.

Interest Income, Net

Interest income, net was $1.3 million for the nine months ended September 30, 2023 compared to $0.4 million for the nine months ended September 30, 2022. The increase was attributable to higher interest income earned on our cash and cash equivalents balances driven by an increase in interest rates.

Liquidity and Capital Resources

We have incurred net losses in each reporting period since inception, including net losses of $52.2 million and $103.7 million for the nine months ended September 30, 2023 and 2022, respectively, and our accumulated deficit at September 30, 2023 was $418.2 million. Our current operating plan indicates we will continue to incur losses from operations and generate negative cash flows from operating activities, given we do not generate any revenue from product sales or otherwise.

As a result of the restructuring actions described above, including discontinuing research activities, exiting our operating and finance leases, and significantly reducing our workforce, management believes our existing cash and cash equivalents of $18.1 million as of September 30, 2023 are adequate to meet our cash needs for at least 12 months from the issuance date of this Quarterly Report on Form 10-Q.

While we are exploring strategic alternatives, including pursuing the Merger, all related transactions contemplated thereby and the possible sale, assignment, license, or other disposal of, in one or more transactions, some or all of the assets that relate to our platform technology at any time prior to, or concurrently with, the closing of the Merger, there can be no assurance that this process will result in us completing the Merger or any other transaction if the Merger is not completed, or that any transaction, if pursued, will be completed on attractive terms, or at all. If we are unable to complete the Merger or any other strategic transaction, then our financial position, access to capital and results of operations may be harmed. Similarly, there can be no assurance that sources of capital will be available to us in the necessary time frame, in the amounts that we require, on terms that are acceptable to us, or at all. If we are unable to consummate a strategic transaction or raise the necessary funds when needed or reduce spending on currently planned activities, we may be required to cease operations, which could materially harm our business, financial position and results of operations.

In January 2022, we entered into a Sales Agreement with SVB Securities LLC and JMP Securities LLC, as our sales agents (Agents), pursuant to which we may offer and sell from time to time through the Agents up to $150.0 million in shares of our common stock through an “at-the-market” program (ATM Facility). The shares will be offered and sold pursuant to our shelf registration statement on Form S-3 (File No. 333-263501) and the final prospectus supplement, which was filed on March 11, 2022. For so long as our non-affiliate public float does not exceed $75 million, the amount of securities that we may sell pursuant to registration statements on Form S-3 will be limited to the equivalent of one-third of our public float, which will limit our ability to raise capital. As of September 30, 2023, we have not yet sold any shares under the ATM Facility and do not currently intend to do so.

In May 2023, we entered into a modification of the lease (Lease Modification) for our headquarters in South San Francisco, California (HQ Lease), which shortened the accounting lease term to May 2023. In addition, we assigned an active sublease for the third floor of the leased building under the HQ Lease to the landlord effective as of the execution date. Pursuant to the Lease Modification, we incurred an early termination fee of $5.3 million. The early termination fee included forfeiture of a security deposit securing the lease of $0.9 million in the form of a letter of credit. Upon vacating the leased premises in May 2023, we wrote-off the remaining balances related to right-of-use assets and leasehold improvements.

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Summary Statement of Cash Flows

The following table sets forth the primary sources and uses of cash, cash equivalents, and restricted cash for the periods presented below (in thousands):


	Nine Months Ended September 30,
	2023		2022
Net cash used in operating activities	$	(45,220)	$	(79,084)
Net cash provided by (used in) investing activities	1,509		(4,146)
Net cash used in financing activities	(247)		(680)
Net decrease in cash, cash equivalents, and restricted cash	$	(43,958)	$	(83,910)

Cash Used in Operating Activities

Net cash used in operating activities during the nine months ended September 30, 2023 was $45.2 million, which consisted of a net loss of $52.2 million, a net change of $10.0 million in our net operating assets and liabilities, partially offset by $16.9 million in non-cash charges. The net change in our operating assets and liabilities used $10.0 million in cash and was primarily driven by a $8.1 million decrease in accounts payable and accrued expenses as we closed out existing preclinical and clinical programs and a $4.1 million decrease in operating lease liabilities due to payments related to our operating lease obligations, partially offset by a $2.2 million decrease in prepaid expenses as we discontinued research activities. The non-cash charges primarily consisted of $7.6 million in stock-based compensation expense, $5.4 million in asset impairment charges for fixed assets as a result of our transition to a fully-remote company and $3.5 million in non-cash operating lease expense.

Net cash used in operating activities during the nine months ended September 30, 2022 was $79.1 million, which consisted of a net loss of $103.7 million, a net decrease of $2.6 million in our net operating assets and liabilities and $27.2 million in non-cash charges. The net decrease in our operating assets and liabilities was primarily due to decreases of $4.9 million in operating lease liabilities, $1.1 million in accounts payable and accrued expenses, and $0.4 million in other assets. These decreases were partially offset by increases of $3.5 million in other prepaid expenses and $0.3 million in other current assets. The non-cash charges primarily consisted of stock-based compensation expense of $18.2 million, non-cash operating lease expense of $6.4 million, depreciation and amortization expenses of $2.5 million and impairment charges of $0.1 million in connection with the May 2022 Restructuring Plan.

Cash Provided by (Used in) Investing Activities

Cash provided by investing activities during the nine months ended September 30, 2023 was $1.5 million and was related to proceeds from disposal of long-lived assets, partially offset by purchases of property and equipment.

Cash used in investing activities during the nine months ended September 30, 2022 was $4.1 million, consisting of purchases of property and equipment.

Cash Used in Financing Activities

Cash used in financing activities during the nine months ended September 30, 2023 was related to principal payments for finance lease liabilities.

Cash used in financing activities during the nine months ended September 30, 2022 was $0.7 million, consisting primarily of payments of issuance costs related to our ATM Facility of $0.8 million and principal payments for finance lease liabilities of $0.2 million, partially offset by proceeds received from shares issued under our employee stock purchase plan of $0.2 million and stock option exercises of $0.1 million.

Critical Accounting Estimates

Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP). The preparation of these financial statements requires us 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 financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. The economic

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uncertainty in the current environment could limit our ability to accurately make and evaluate our estimates and judgments. Actual results may differ from these estimates under different assumptions or conditions.

We described our significant accounting policies in Note 2, Summary of Significant Accounting Policies in the Notes included in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2022. These accounting policies were consistently applied in the preparation of the unaudited interim condensed financial statements contained in this Quarterly Report on Form 10-Q.

We disclosed our critical accounting estimates in Part II, Item 7 Critical Accounting Estimates in the Management’s Discussion and Analysis of our Annual Report on Form 10-K for the year ended December 31, 2022. There were no significant changes in our critical accounting estimates during the nine months ended September 30, 2023.

New Accounting Pronouncements

See Note 2 in the Notes of this Quarterly Report on Form 10-Q for a full description of recent accounting pronouncements, including the expected dates of adoption, which we include herein by reference.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in market risk from the information provided in Part II, Item 7A “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report on Form 10-K for the year ended December 31, 2022.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2023.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 2023 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. We are not currently a party to any material legal proceedings. Regardless of outcome, litigation can have an adverse impact on us due to defense and settlement costs, diversion of management resources, negative publicity, reputational harm and other factors.

Item 1A. Risk Factors

Investing in our common stock involves a high degree of risk. You should carefully consider the risks described below, as well as the other information in this Quarterly Report on Form 10-Q, including our unaudited condensed financial statements and the related notes and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The occurrence of any of the events or developments described below could harm our business, financial condition, results of operations, growth prospects or stock price. In such an event, the market price of our common stock could decline, and you may lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations.

Risk Factors Summary

Investing in shares of our common stock involves a high degree of risk because our business is subject to numerous risks and uncertainties, as fully described below. The principal factors and uncertainties that make investing in shares of our common stock risky include, among others:

•The failure to complete the Merger in a timely manner, or at all, may adversely affect the business and financial results of Cyclo and us and each of our respective stock prices;

•The Exchange Ratio will be determined in accordance with a formula and is not yet knowable. The actual Exchange Ratio could be materially different than currently anticipated;

•Uncertainty about the Merger may adversely affect the respective business and stock price of Cyclo and us, whether or not the Merger is completed;

•Our ability to consummate a strategic transaction of any kind depends on our ability to retain our employees required to explore and consummate a strategic transaction as previously announced;

•If we are unable to successfully complete a strategic transaction, we may be forced to curtail or cease operations altogether;

•Our preclinical studies and clinical trials have failed to demonstrate evidence of the safety and efficacy of our product candidates, which could prevent, delay, or limit the scope of regulatory approval and commercialization;

•There has been substantial doubt as to our ability to continue as a going concern. If we do not maintain sufficient funding, we may have to curtail or cease operations;

•We will need to obtain substantial additional capital to finance our operations;

•Unless we complete the Merger on or before February 6, 2024, we could be delisted from Nasdaq;

•We were early in our development efforts, have a limited operating history, and no products approved for commercial sale;

•We have incurred significant net losses in each period since inception, and we expect to continue to incur net losses for the foreseeable future;

•Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates;

•We may not be successful in our efforts to use and expand our technology platform to build a pipeline of oral biologic product candidates;

•COVID-19 or other future public health crises could adversely impact our business, including any future clinical trials and preclinical studies;

•Research and development related to novel biological therapeutics is inherently risky and our business is heavily dependent on the successful development of our product candidates;

•We may encounter delays in our preclinical studies or clinical trials, or may not be able to conduct or complete our preclinical studies or clinical trials on the timelines we expect;

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•We have conducted clinical trials for AMT-101 and AMT-126 outside of the United States, and geopolitical events such as the conflict between Russia and Ukraine has delayed the completion of certain of our clinical trials and increased costs associated with such clinical trials;

•We may be unable to obtain U.S. or foreign regulatory approval for our product candidates and, as a result, may be unable to commercialize our product candidates;

•Preliminary data from our clinical trials that we announce or publish from time to time may change as additional patient data become available and are subject to verification procedures that could result in material changes in the final data or clinical conclusions;

•Our success depends on our ability to protect our intellectual property as well as operate without infringing on the rights of third parties;

•We are highly dependent on our key personnel and if we are not successful in attracting, motivating, and retaining highly qualified personnel, we may not be able to successfully implement our business strategy or execute a strategic transaction;

•We may in the future engage in strategic transactions, acquisitions, collaborations, or partnerships, which may increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities, require us to relinquish rights to certain of our technologies or products that we would otherwise seek to develop or commercialize ourselves, and subject us to other risks;

•The manufacturing of our product candidates is complex. We and our third-party manufacturers may encounter difficulties in production. If we encounter any such difficulties, our ability to supply our product candidates for clinical trials or, if approved, for commercial sale, could be delayed or halted entirely; and

•The market price of our common stock may be volatile, which could result in substantial losses for investors.

On March 27, 2023, we announced the commencement of a process to explore strategic alternatives and engaged MTS Health Partners, L.P. as our strategic financial advisor. We also decided to discontinue research activities and focus on completing and closing out clinical trials. On September 21, 2023, we entered into the Merger Agreement with Cyclo. Our current operations include ongoing business development activities. As such, certain of the risks listed below may not currently apply to us while our operations are focused on exploring strategic alternatives, maintaining and prosecuting our extensive intellectual property portfolio, and continuing business development activities. However, if we advance development of our programs or assume responsibility for a third party’s preclinical or clinical programs, research and development activities, manufacturing and other operations following a strategic transaction or otherwise, or if we pursue some combination of the foregoing activities, many, if not all, of these risk factors will apply to us.

Risk Factors Related to the Merger

The failure to complete the Merger in a timely manner, or at all, may adversely affect the business and financial results of Cyclo and us and each of our respective stock prices.

Each of Cyclo’s and our obligations to consummate the Merger are subject to the satisfaction or waiver of certain conditions, including, among other things, (1) the adoption of the Merger Agreement by our stockholders, (2) the approval of the share issuance by the Cyclo stockholders, (3) approval for listing on the Nasdaq Capital Market of the shares of Cyclo common stock to be issued in connection with the Merger, (4) the effectiveness of the registration statement with respect to such Cyclo common stock, and (5) the absence of an order or other legal restraint preventing the Merger. Each party’s obligation to consummate the Merger is also subject to other specified customary conditions, including certain representations and warranties of the other party being true and correct as of the closing date of the Merger, generally subject to an overall material adverse effect qualification, and the performance in all material respects by the other party of its obligations under the Merger Agreement required to be performed on or prior to the closing date of the Merger.

The tax treatment of the Merger is complex.

The Merger is intended to be a taxable transaction for federal income tax purposes, in which case U.S. holders of our common stock will generally recognize taxable gain or loss equal to the difference between (i) the fair market value of the shares of Cyclo common stock received by such holder in the Merger and (ii) such holder’s adjusted tax basis in such shares of our common stock, even though only Cyclo common stock is being received pursuant to the Merger. The fair market value of Cyclo common stock may fluctuate through the closing date of the Merger, which may increase the amount of tax a holder may owe or result in a taxable gain. It is also possible that the Internal Revenue Service may assert that the Merger is treated as a tax-free reorganization under Section 368(a) of the United States Internal Revenue Code of 1986, as amended (the Code), which could result in a different tax treatment, including that holders would not be eligible to recognize loss on the exchange of our common stock.

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The Exchange Ratio will be determined in accordance with a formula and is not yet knowable. The actual Exchange Ratio could be materially different than currently anticipated.

At the effective time of the Merger, outstanding shares of our common stock will be converted into shares of Cyclo’s common stock at the Exchange Ratio (as defined in the Merger Agreement). As of the date of the execution of the Merger Agreement, the Exchange Ratio was estimated to be 0.174 shares of Cyclo common stock for each share of our common stock, but the actual Exchange Ratio will depend on our net cash and the number of shares of our common stock outstanding at the closing of the Merger. Accordingly, the Exchange Ratio could be significantly higher or lower than the initial estimated Exchange Ratio. This will impact the value of the deal to the Cyclo stockholders and the number of shares issued to the Cyclo and our stockholders. Based upon the initially estimated Exchange Ratio, following the Merger, (i) Cyclo stockholders immediately before the Merger are expected to own approximately 75% of the aggregate number of outstanding shares of Cyclo common stock following the Merger and (ii) our stockholders immediately before the Merger are expected to own approximately 25% of the aggregate number of outstanding shares of Cyclo common stock following the Merger, subject to certain assumptions (including as to the amount of our net cash at closing and outstanding shares of our common stock at closing, which could be materially different). Assuming the exercise of all Cyclo outstanding warrants, without giving effect to any beneficial ownership limitations applicable thereto, then (i) Cyclo stockholders immediately before the Merger would own approximately 75% of the aggregate number of outstanding shares of Cyclo common stock following the Merger and (ii) our stockholders immediately before the Merger would own approximately 25% of the aggregate number of outstanding shares of Cyclo common stock following the Merger, subject to certain assumptions (including as to the amount of our net cash and outstanding shares at closing, which could be materially different). The foregoing percentages do not give effect to the exercise or conversion of outstanding stock options other than as set forth above.

Uncertainty about the Merger may adversely affect the respective business and stock price of Cyclo and us, whether or not the Merger is completed.

Each of Cyclo and we are subject to risks in connection with the announcement and pendency of the Merger, including the pendency and outcome of any legal proceedings against Cyclo and us, each of our respective directors and others relating to the Merger and the risks from possibly foregoing opportunities Cyclo and we might otherwise pursue absent the proposed Merger. Furthermore, uncertainties about the Merger may cause current and prospective employees of Cyclo and us to experience uncertainty about their future with their respective companies. These uncertainties may impair Cyclo’s and our ability to retain, recruit or motivate key management and other personnel.

In addition, in response to the announcement of the proposed Merger, Cyclo’s and our existing or prospective suppliers or collaboration partners may:

•delay, defer or cease providing goods or services to Cyclo and us;

•delay or defer other decisions concerning Cyclo and us, or refuse to extend credit terms to Cyclo and us;

•cease further joint development activities; or

•otherwise seek to change the terms on which they do business with Cyclo and us.

While Cyclo and we are attempting to address these risks, their respective existing and prospective customers, suppliers or collaboration partners may be reluctant to purchase Cyclo’s and our products, supply Cyclo and us with goods and services or continue collaborations due to the potential uncertainty about the direction of Cyclo and our product offerings and the support and service of Cyclo’s and our products after the completion of the Merger.

While the Merger is pending, we and Cyclo are subject to contractual restrictions that could harm each of our respective businesses, operating results and stock price.

The Merger Agreement includes restrictions on the conduct of us and Cyclo prior to the completion of the Merger, generally requiring us and Cyclo to conduct each of our respective businesses in the ordinary course, consistent with past practice, and restricting each from taking certain specified actions absent prior written consent from the other party. We and Cyclo may each find that these and other obligations in the Merger Agreement may delay or prevent each of us from or limit either of our ability to respond effectively to competitive pressures, industry developments and future business opportunities that may arise during such period, even if the management of us or Cyclo or the Boards of us or Cyclo think they may be advisable. The Merger Agreement also contains restrictions on the conduct of Cyclo’s business prior to the completion of the Merger, prohibiting the ability of Cyclo to acquire another business or restructure, reorganize or completely or partially liquidate absent our prior written consent. These restrictions could adversely impact the business, operating results and stock price and the perceived acquisition value of us and Cyclo, regardless of whether the Merger is completed.

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The Merger Agreement limits our ability to pursue alternative transactions which could deter a third party from proposing an alternative transaction.

The Merger Agreement contains provisions that, subject to certain exceptions, limit, among other things, our ability to solicit, initiate or facilitate or knowingly encourage any inquiries or the making of any proposal, indication of interest or offer that would reasonably be expected to lead to any takeover proposal. It is possible that these or other provisions in the Merger Agreement might discourage a potential competing acquirer that might have an interest in acquiring all or a significant part of the outstanding shares of our common stock from considering or proposing an acquisition or might result in a potential competing acquirer proposing to pay a lower per share price to acquire our common stock than it might otherwise have proposed to pay.

The Merger will involve substantial costs.

Cyclo and we have incurred and expect to continue to incur substantial costs and expenses relating to the Merger and the issuance of Cyclo common stock in connection with the Merger, including, as applicable, fees and expenses payable to financial advisors, other professional fees and expenses, insurance premium costs, SEC filing fees, printing and mailing costs and other transaction-related costs, fees and expenses. Cyclo may also incur significant costs relating to the acquisition of us with any ongoing liabilities of ours that remain in the business after the Merger is completed. Cyclo continues to assess the magnitude of these costs, and additional unanticipated costs may be incurred in connection with the Merger. In addition, if the Merger is not completed, Cyclo and we will have incurred substantial expenses for which no ultimate benefit will have been received by either company.

The fairness opinion obtained by our board of directors from our financial advisor will not be updated to reflect changes in circumstances between signing the Merger Agreement and the completion of the Merger.

Our board of directors has not obtained an updated fairness opinion as of the date of this Quarterly Report on Form 10-Q from MTS Securities, LLC, a wholly owned subsidiary of our financial advisor. Changes in the operations and prospects of Cyclo or us, general market and economic conditions, and other factors that may be beyond the control of Cyclo and us and on which the fairness opinion was based, may alter the value of Cyclo or us or the price of Cyclo common stock or our common stock by the time the Merger is completed.

The fairness opinion does not speak as of the time the Merger will be completed or as of any date other than the date of such opinion. We do not anticipate asking MTS Securities, LLC to update its fairness opinion.

Certain of our directors and executive officers may have interests in the Merger that are or were different from, or in conflict with or in addition to, those of our stockholders generally.

In considering whether to approve the proposals at our special meeting, our stockholders should recognize that our directors and officers have interests in the Merger that may differ from, or that are in addition to, their interests as stockholders of us. For example, in connection with the closing of the Merger, Cyclo has agreed to expand the Cyclo board of directors from eight to nine directors and to appoint Shawn Cross to the Cyclo board of directors. Our board of directors and the Cyclo board of directors were each aware of these interests at the time they approved the Merger Agreement. These interests may cause our directors and officers to view the Merger differently from how you may view it as a stockholder.

Holders of our common stock will not be entitled to appraisal rights in the Merger.

Appraisal rights are statutory rights that, if applicable under law, enable stockholders to dissent from an extraordinary transaction, such as a merger, and to demand that the corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to stockholders in connection with the extraordinary transaction.

Under Section 262(b) of the General Corporation Law of the State of Delaware (DGCL), stockholders do not have appraisal rights if the shares of stock they hold, as of the record date for determination of stockholders entitled to vote at the meeting of stockholders to act upon a merger, are either (i) listed on a national securities exchange or (ii) held of record by more than 2,000 holders, unless the stockholders are required by the terms of the merger agreement to receive in exchange for their shares in the merger anything other than shares of stock of the surviving or resulting corporation (or depositary receipts in respect thereof), or of any other corporation that is publicly listed or held by more than 2,000 holders of record, cash in lieu of fractional shares or fractional depositary receipts described above or any combination of the foregoing. Because our stockholders will receive only shares of Cyclo common stock, which will be listed on the Nasdaq, our stockholders will not have any appraisal rights.

Cyclo or we may waive one or more of the closing conditions to the Merger without re-soliciting approval from our stockholders.

To the extent permitted by law, Cyclo or us may determine to waive, in whole or part, one or more of the conditions to each of our respective obligations to consummate the Merger. We and Cyclo expect to evaluate the materiality of any waiver and its

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effect on our or Cyclo stockholders in light of the facts and circumstances at the time to determine whether any amendment of the joint proxy statement/prospectus that we expect to file or any re-solicitation of proxies is required in light of such waiver. Any determination as to whether to waive any condition to the consummation of the Merger, and as to whether to re-solicit approval from our stockholders as a result of such waiver, will be made by Cyclo and us at the time of such waiver based on the facts and circumstances as they exist at that time.

After the Merger, our stockholders will have a significantly lower ownership and voting interest in Cyclo than they currently have in us and will exercise less influence over management and policies of the combined company.

Upon completion of the Merger and based on the shares of Cyclo common stock and shares of our common stock outstanding as of September 30, 2023, and assuming net cash at closing of approximately $12.4 million, after giving effect to the exchange ratio, it is expected that Cyclo stockholders will own approximately 75% of the outstanding common stock of the combined company and our stockholders will own approximately 25% of the outstanding common stock of the combined company. Consequently, our former stockholders will have less influence over the management and policies of the combined company than they currently have over the management and policies of us.

We and Cyclo may be targets of securities class action and derivative lawsuits which could result in substantial costs and may delay or prevent the Merger from being completed.

Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into merger agreements. Even if the lawsuits are without merit, defending against these claims could result in substantial costs and divert management time and resources. An adverse judgment could result in monetary damages, which could have a negative impact on Cyclo’s and our respective liquidity and financial condition. Additionally, if a plaintiff is successful in obtaining an injunction prohibiting completion of the Merger, then that injunction may delay or prevent the Merger from being completed, or from being completed within the expected timeframe, which may adversely affect Cyclo’s and our respective business, financial position and results of operations.

The following risk factors do not take the Merger into account and assume that we remain a stand-alone company except as otherwise noted.

Risks Related to Strategic Process and Potential Strategic Transaction

We are reviewing strategic alternatives and there can be no assurance that we will be successful in identifying or completing any strategic transactions, that any such strategic transaction will result in additional value for our stockholders or that the process will not have an adverse impact on our business.

We have discontinued research activities and are focused on completing and closing out clinical trials. We have determined that it is in the best interest of stockholders to focus on exploring strategic alternatives. We have engaged an investment bank to conduct a review of strategic alternatives in an effort to maximize stockholder value. We have not set a timetable for completion of this exploratory process and cannot provide any assurances that the process will result in the consummation of a strategic transaction of any kind, including the Merger, or that we will not abandon the process. We do not intend to discuss or disclose further developments during this process unless and until our board of directors has approved a specific action or we otherwise determine that further disclosure is appropriate. The process of reviewing strategic alternatives may be time-consuming and disruptive to our business operations and, if we are unable to effectively manage the process, our business, financial condition and results of operations could be adversely affected. We could incur substantial expenses associated with identifying, evaluating and negotiating potential strategic alternatives. There can be no assurance that any potential transaction, including the Merger, or other strategic alternative, if consummated, will provide greater value to our stockholders than that reflected in the current price of our common stock. Until the review process or Merger is concluded, perceived uncertainties related to our future may result in the loss of potential business opportunities and volatility in the market price of our common stock and may make it more difficult for us to attract and retain qualified personnel and business partners.

In addition, potential counterparties in a strategic transaction involving our Company may place minimal or no value on our assets. Further, the development and any potential commercialization of our product candidates would require substantial additional cash to fund the costs associated with conducting the necessary preclinical and clinical testing and obtaining regulatory approval. Consequently, any potential counterparty in a strategic transaction involving our Company may choose not to spend the additional resources necessary to continue developing our product candidates and may attribute little or no value, in such a transaction, to those product candidates.

Our decision to discontinue our research and development efforts may not result in the anticipated savings and could disrupt our business.

In connection with our decision to pursue strategic alternatives, we decided to discontinue research activities and to focus on completing and closing out clinical trials. We may not realize, in full or in part, the anticipated benefits and savings in operating

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expenses from these decisions due to unforeseen difficulties, delays or unexpected costs. This may include higher than expected costs associated with winding down our clinical trials. If we are unable to realize the expected cost savings, our financial condition would be adversely affected and it may be more difficult to complete a potential strategic transaction. Furthermore, the reductions in our workforce may result in weaknesses in our infrastructure and operations and may increase the risk that we become unable to comply with legal and regulatory requirements.

Our ability to consummate a strategic transaction of any kind depends on our ability to retain our employees required to explore and consummate a strategic transaction as previously announced.

Our ability to consummate a strategic transaction, including the Merger, depends upon our ability to retain our employees required to explore and consummate a strategic transaction, the loss of whose services may adversely impact the exploratory process and the ability to consummate a strategic transaction. In March 2023, we implemented reductions in workforce impacting 63 employees representing approximately 82% of our employee base, and we announced various changes in our leadership.

We have implemented a retention plan for the remaining executive officers and implemented retention plans for the other remaining employees that are designed to retain the employees required to explore and consummate a strategic transaction. All employees, however, may terminate their employment with us at any time. With any change in leadership, there is a risk to retention of employees, as well as the potential for disruption to our exploration and consummation of a strategic alternative as well as business operations, initiatives, plans and strategies.

Risks Related to Our Business, Financial Condition, and Capital Requirements

Our preclinical studies and clinical trials have failed to demonstrate evidence of the safety and efficacy of our product candidates, which could prevent, delay, or limit the scope of regulatory approval and commercialization.

Before obtaining regulatory approvals for the commercial sale of any of our product candidates, we must demonstrate thorough, lengthy, complex, and expensive preclinical studies and clinical trials that our product candidates are both safe and effective for use in each target indication. Each product candidate must demonstrate an adequate risk versus benefit profile in its intended patient population and for its intended use.

Preclinical studies and clinical testing are expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time during the preclinical studies or clinical trial process. The results of preclinical studies of our product candidates may not be predictive of the results of early-stage or later-stage clinical trials, and results of early clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials. The results of clinical trials in one set of patients or disease indications may not be predictive of those obtained in another. In some instances, there can be significant variability in safety or efficacy results between different clinical trials of the same product candidate due to numerous factors, including variability in the purity or potency of different batches of the same product candidate, changes in clinical trial procedures set forth in protocols, differences in the size and type of the patient populations, changes in and adherence to the dosing regimen, and other aspects of the clinical trial protocols and the rate of dropout among clinical trial participants. Open-label extension studies may also extend the timing and cost of a clinical development program substantially. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy profile despite having progressed through preclinical studies and initial clinical trials. For example, our lead product candidate, AMT-101, failed to meet its primary efficacy endpoints in our Phase 2 LOMBARD clinical trial and our Phase 2 MARKET clinical trial. A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or unacceptable safety issues, notwithstanding promising results in earlier clinical trials. Most product candidates that begin clinical trials are never approved by regulatory authorities for commercialization.

We have limited experience in designing and executing clinical trials and may be unable to design and execute a clinical trial to support marketing approval. Additionally, any safety concerns observed in any one of our clinical trials in our targeted indications could limit the prospects for regulatory approval of our product candidates in those and other indications, which could have a material adverse effect on our business, financial condition, and results of operations.

In addition, even if such clinical trials are successfully completed, we cannot guarantee that the FDA or foreign regulatory authorities will interpret the results as we do, and more clinical trials could be required before we submit our product candidates for approval. To the extent that the results of the clinical trials are not satisfactory to the FDA or foreign regulatory authorities to advance a product candidate to the next phase of clinical development or for support of a marketing application, we may be required to expend significant resources, which may not be available to us, to conduct additional clinical trials in support of potential approval of our product candidates. Even if regulatory approval is secured for any of our product candidates, the terms of such approval may limit the scope and use of our product candidates, which may also limit its commercial potential.

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There has been substantial doubt as to our ability to continue as a going concern. If we do not maintain sufficient funding or do not successfully consummate the Merger or any other strategic transaction, we may have to curtail or cease operations.

In our Annual Report on Form 10-K filed on March 9, 2023, we indicated that there was substantial doubt as to our ability to continue as a going concern. Following our recent reductions in workforce and discontinuing of product development activities, and terminating substantially all of our operating leases, we have subsequently determined we will have sufficient cash and cash equivalents to meet our obligations for a period of at least 12 months from the date of filing this Quarterly Report on Form 10-Q, and therefore, we have concluded there is no longer substantial doubt about our ability to continue as a going concern. However, our financial condition could be materially adversely impacted if we are unable to successfully execute a strategic transaction. Depending on the results of our future operations, we may again have substantial doubt as to our ability to continue as a going concern. If we are unable to continue as a going concern, we may have to cease operations and liquidate our assets. We may receive less than the value at which those assets are carried on our condensed financial statements, and it is likely that investors will lose all or a part of their investment.

We will need to obtain substantial additional capital to finance our operations. A failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce, or terminate our research and drug development programs, future commercialization efforts, product development, or other operations.

Developing biologic therapeutics, including conducting preclinical studies and clinical trials, is a very time-consuming, expensive, and uncertain process that takes years to complete. Our operations have required substantial amounts of cash since inception, and we expect to continue to incur expenses in connection with our ongoing activities and operating losses for the foreseeable future. To date, we have financed our operations primarily through the sale of equity securities. Developing our product candidates and conducting clinical trials for the treatment of autoimmune, inflammatory, metabolic, and other diseases will require substantial amounts of capital. We will also require a significant amount of capital to commercialize any approved products. Even if one or more of the product candidates that we develop is approved for commercial sale, we anticipate incurring significant costs associated with sales, marketing, manufacturing and distribution activities. Furthermore, other unanticipated costs may also arise.

On March 11, 2022, we filed a final shelf registration statement on Form S-3 which allows us to undertake various offerings. In addition, on January 27, 2022, we entered into a Sales Agreement with SVB Securities LLC and JMP Securities LLC, as our sales agents (Agents), pursuant to which we may offer and sell from time to time through the Agents up to $150.0 million in shares of our common stock through an “at-the-market” program (ATM Facility). For so long as our non-affiliate public float does not exceed $75 million, the amount of securities that we may sell pursuant to registration statements on Form S-3 will be limited to the equivalent of one-third of our public float, which will limit our ability to raise capital. As of September 30, 2023, we had not yet sold any shares of common stock under the ATM Facility and do not currently intend to do so. We will require additional capital for the further development and, if approved, commercialization of our product candidates. Our future funding requirements will depend on many factors, including but not limited to:

•the initiation, scope, rate of progress, results and cost of our preclinical studies, clinical trials, and other related activities for our product candidates;

•the costs associated with manufacturing our products, including re-establishing our own manufacturing facilities and establishing commercial supplies and sales, marketing, and distribution capabilities which could be impacted by increasing inflation;

•the timing and cost of capital expenditures to support our research, development, and manufacturing efforts;

•the number and characteristics of other product candidates that we pursue;

•the costs, timing, and outcome of seeking and obtaining FDA and non-U.S. regulatory approvals;

•our ability to maintain, expand, and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make in connection with the licensing, filing, defense, and enforcement of any patents or other intellectual property rights;

•the timing, receipt, and amount of sales from our potential products;

•our need and ability to hire additional management, scientific, technical, business, and medical personnel;

•the effect of competing products that may limit market penetration of our products;

•the economic and other terms, timing, and success of any collaboration, licensing, or other arrangements into which we may enter in the future, including any product development or other operation obligations we may have under these agreements and the timing of receipt of any milestone or royalty payments under these agreements;

•the compliance and administrative costs associated with being a public company; and

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•the extent to which we divest, acquire or invest in businesses, products, or technologies, although we currently have no commitments or agreements establishing any of these types of transactions.

To the extent that we raise additional capital through the sale of equity or convertible debt securities or to the extent that we may issue equity securities in connection with a strategic transaction, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder. Debt financing, if available, may involve agreements that include the issuance of warrants or covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If we raise funds through collaborations, strategic alliances, licensing arrangements with strategic partners, or asset sales, we may have to relinquish valuable rights to our technologies, intellectual property, future revenue streams, research programs, product candidates, and infrastructure, or grant licenses on terms that may not be favorable to us. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.

Additional capital may not be available when we need it, on terms acceptable to us or at all and will be dependent on, among other factors, the successful execution of a strategic transaction. We have no committed source of additional capital and recently, capital markets have been particularly volatile and our stock price has declined. If adequate capital is not available to us on a timely basis or on acceptable terms, we may be required to significantly delay, scale back, or discontinue our research and development programs or the commercialization of any product candidates, if approved, or be unable to continue or expand our operations, or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, financial condition, results of operations, and prospects, and cause the price of our common stock to decline.

Unless we complete the Merger on or before February 6, 2024, we will be delisted from Nasdaq, which would seriously harm the liquidity of our stock and our ability to raise capital.

Our common stock is listed on Nasdaq. In order to maintain our listing, we must meet minimum financial and other requirements, including a requirement for continued business operations so that we are not characterized as a “public shell company.”

On August 10, 2023, we received a letter from the Nasdaq Staff indicating that, in accordance with Nasdaq Listing Rule 5100, the Nasdaq Staff believes we are a “public shell” and that the continued listing of our securities is no longer warranted. We appealed the Nasdaq Staff’s determination and, on October 23, 2023, we received written notice from the Nasdaq Panel that it had granted our request for continued listing on Nasdaq, subject to the completion of the Merger on or before February 6, 2024. If we do not complete the Merger on or before February 6, 2024, our securities will be delisted from Nasdaq, which could harm the liquidity of our stock and our ability to raise capital. There can be no assurance that we will complete the Merger on or before February 6, 2024. Our failure to complete the Merger on or before February 6, 2024 will result in our securities being delisted from Nasdaq after such date.

We were early in our development efforts, have a limited operating history and have no products approved for commercial sale, which makes it difficult to evaluate our current business and predict our future success and viability.

We are an early clinical-stage biopharmaceutical company with a limited operating history upon which you can evaluate our business and prospects.

We have no products approved for commercial sale and have not generated any revenue from product sales. We were developing a novel technology platform which is an unproven and highly uncertain undertaking and involves a substantial degree of risk. While we have conducted a number of Phase 2 clinical trials for AMT-101 and have conducted a Phase 1a clinical trial of AMT-126, we have not initiated clinical trials for any of our other product candidates. To date, we have not obtained marketing approval for any product candidates, manufactured a commercial scale product or arranged for a third-party to do so on our behalf, or conducted sales and marketing activities necessary for successful product commercialization. Our limited operating history as a company makes any assessment of our future success and viability subject to significant uncertainty.

We will incur expenses and encounter difficulties, complications, delays, and other known and unknown factors and risks frequently experienced by clinical-stage biopharmaceutical companies in rapidly evolving fields, and we have not yet demonstrated an ability to successfully overcome such risks and difficulties. We also may need to transition from a company with a research and development focus to a company capable of supporting commercial activities. We have not yet demonstrated an ability to successfully overcome such risks and difficulties, or to make such a transition. If we do not adequately address these risks and difficulties or successfully make such a transition, our business will suffer.

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We have incurred significant net losses in each period since inception, and we expect to continue to incur net losses for the foreseeable future.

We have incurred net losses in each reporting period since our inception, including net losses of $126.3 million and $100.3 million for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, we had an accumulated deficit of $366.0 million.

We have invested significant financial resources in research and development activities, including for our preclinical and clinical product candidates. We have not generated any revenue from product sales to date and we do not expect to generate revenue from product sales for several years, if at all. The amount of our future net losses will depend, in part, on the level of our future expenditures and revenue. Moreover, our net losses may fluctuate significantly from quarter to quarter and year to year, such that a period-to-period comparison of our results of operations may not be a good indication of our future performance.

We expect to continue to incur expenses and operating losses for the foreseeable future. We anticipate that we will continue to incur expenses if and as we:

•resume our research and discovery activities;

•resume the development of our proprietary technology platform;

•progress our current and any future product candidates through preclinical and clinical development;

•initiate and conduct additional preclinical studies, clinical trials, or other studies for our product candidates;

•work with our CDMOs to manufacture our product candidates for our clinical trials;

•change or add additional contract manufacturers or suppliers;

•seek regulatory approvals and marketing authorizations for our product candidates;

•establish sales, marketing, and distribution infrastructure to commercialize any products for which we obtain approval;

•take steps to seek protection of our intellectual property and defend our intellectual property against challenges from third parties;

•obtain, expand, maintain, protect, and enforce our intellectual property portfolio;

•pursue any licensing or collaboration opportunities;

•attract, hire, and retain qualified personnel including clinical, scientific, management, and administrative personnel;

•provide additional internal infrastructure to support research and development operations and any planned commercialization efforts in the future;

•experience increased expenses as a result of increasing inflation;

•experience any delays or encounter other issues related to our operations including as a result of the conflicts between Russia and Ukraine or Israel and Hamas;

•implement operations, financial, and management information systems;

•meet the requirements and demands of being a public company, including incurring expenses associated with efforts to raise money in the public financial markets; and

•defend against any product liability claims or other lawsuits related to our products or operations.

Our prior losses and expected future losses have had and will continue to have an adverse effect on our stockholders’ equity, working capital, and our ability to fund our development efforts and achieve and maintain profitability. In any particular period, our operating results could be below the expectations of securities analysts or investors, which could cause our stock price to decline.

Prior to the transactions contemplated under the Merger Agreement, we have historically financed our operations primarily through private placements of our convertible preferred stock and the sale of common stock in public equity issuances, such as our initial public offering (IPO) in June 2020 and our follow-on equity offering in April 2021. In addition, on January 27, 2022, we entered into a Sales Agreement with the Agents, pursuant to which we may offer and sell from time to time through the Agents up to $150.0 million in shares of our common stock through the ATM Facility. For so long as our non-affiliate public float does not exceed $75 million, the amount of securities that we may sell pursuant to registration statements on Form S-3 will

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be limited to the equivalent of one-third of our public float, which will limit our ability to raise capital. As of September 30, 2023, we have not yet sold any shares of common stock under the ATM Facility and do not currently intend to do so. We may seek to raise capital through debt financings, private or public convertible debt financings, private or public equity financings, license agreements, collaborative agreements or other arrangements with other companies, asset sales, or other sources of financing. There can be no assurance that such financing will be available or will be at terms acceptable to us. If adequate funds are not available, we may be required to reduce operating expenses, delay or reduce the scope of our development efforts, obtain funds through arrangements with others that may require us to relinquish rights to certain of our technologies or products that we would otherwise seek to develop or commercialize ourselves, or cease operations.

Developing biologic therapeutics is a highly uncertain undertaking and involves a substantial degree of risk.

We have no products approved for commercial sale. To obtain revenue from the sales of our products that are significant or large enough to achieve profitability, we must succeed, either alone or with third parties, in developing, obtaining regulatory approval for, manufacturing, and marketing approved products with significant commercial success. Our ability to generate revenue and achieve profitability depends on many factors, including:

•initiating, enrolling patients in and completing clinical trials of product candidates on a timely basis;

•completing research and preclinical and clinical development of our product candidates;

•obtaining specialty raw materials for use in production of our product candidates;

•obtaining regulatory approvals and marketing authorizations for product candidates for which we successfully complete clinical development and clinical trials;

•satisfying any post-marketing approval commitments required by applicable regulatory authorities;

•developing sustainable, consistent, time-sensitive, and scalable manufacturing processes for our product candidates, either by ourselves or with third-party manufacturers, and obtaining regulatory approvals for such processes, as well as establishing and maintaining commercially viable supply relationships with third parties that can provide adequate products and services to support clinical activities and commercial demand of our products;

•identifying, assessing, acquiring, and/or developing new product candidates or technologies;

•launching and successfully commercializing products for which we have obtained regulatory and marketing approval by establishing a sales, marketing, and distribution infrastructure;

•obtaining and maintaining an adequate price for our products, both in the United States and in foreign countries where our products are commercialized;

•obtaining coverage and adequate reimbursement for our products from payors and patients’ willingness to pay in the absence of such coverage and adequate reimbursement;

•obtaining market, patient, and medical community acceptance of our products as viable treatment options;

•addressing any competing technological and market developments;

•obtaining additional funding to develop, and potentially manufacture and commercialize our product candidates;

•maintaining, protecting, expanding, and enforcing our portfolio of intellectual property rights, including patents, trade secrets, and know-how;

•attracting, hiring, and retaining qualified personnel; and

•negotiating favorable terms in any collaboration, licensing, or other arrangements which we may pursue.

Because of the numerous risks and uncertainties associated with developing biologic therapeutics, we are unable to predict the timing or amount of our expenses, or when we will be able to generate any meaningful revenue or achieve or maintain profitability, if ever. In addition, our expenses could increase beyond our current expectations if we are required by the FDA or foreign regulatory authorities, to perform studies, or if there are any delays in any of our clinical trials or the development of any of our product candidates. Even if one or more of our product candidates is approved for commercial sale, we anticipate incurring significant costs associated with launching and commercializing any approved product candidate and ongoing compliance efforts.

We may not be successful in our efforts to use and expand our proprietary technology platform to build a pipeline of biologic product candidates.

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A key element of our strategy is to leverage our technology platform to expand our pipeline of biologic product candidates and in order to do so, we must continue to invest in our platform and development capabilities. Although our research and development efforts to date have resulted in a pipeline of oral product candidates, these product candidates may not be safe or effective in the indications that we pursue. For example, we previously announced that certain trials investigating the use of AMT-101 to treat ulcerative colitis failed to achieve their primary endpoint. In addition, although we expect that our platform will allow us to develop a diverse pipeline of product candidates across multiple therapeutic areas and modalities, we may not prove to be successful at doing so. Furthermore, we may also find that the uses of our platform are limited because alternative uses of our biologic therapeutics prove not to be safe or effective. Even if we are successful in continuing to build our pipeline, the potential product candidates that we identify may not be suitable for clinical development, including as a result of being shown to have harmful side effects or other characteristics that indicate that they are unlikely to be products that will receive marketing approval or achieve market acceptance. Even after approval, if we cannot successfully develop or commercialize our products, or if serious adverse events are discovered after commercialization, we will not be able to generate any product revenue, which would adversely affect business.

We have limited resources. As a result, we may fail to capitalize on other indications or product candidates that may ultimately have proven to be more profitable.

We have limited resources and may not be able to simultaneously develop multiple product candidates in multiple therapeutic areas. Due to the significant resources required for the development of our product candidates, we must focus on specific product candidates and decide which product candidates to pursue and advance and the amount of resources to allocate to each. Our decisions concerning the allocation of research, development, collaboration, management, and financial resources toward particular product candidates or indications may not lead to the development of any viable commercial product and may divert resources away from better opportunities. If we make incorrect determinations regarding the viability or market potential of any of our product candidates or misread trends in immunology and inflammation, gastroenterology, and metabolic diseases, or the biopharmaceutical industry as a whole, our business, financial condition and results of operations could be materially adversely affected. As a result, we may fail to maximize profitability on our product candidates, capitalize on viable commercial products or profitable market opportunities, be required to forego or delay pursuit of opportunities with other product candidates or other indications that may later prove to have greater commercial potential than those we choose to pursue, or relinquish valuable rights to such product candidates through collaboration, licensing, or other royalty arrangements in cases in which it would have been advantageous for us to invest additional resources to retain sole development and commercialization rights.

We expect to rely on third parties to conduct our clinical trials and some aspects of our research and preclinical studies, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such clinical trials, research, or testing.

We have relied on third parties, such as contract research organizations (CROs), contract development and manufacturing organizations (CDMOs), medical institutions, academic institutions, and clinical investigators to conduct some aspects of our research and preclinical studies and our clinical trials.

Our reliance on third parties for research and development activities reduces our control over these activities but does not relieve us of our responsibilities. For example, we remain responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational plan and protocols for the clinical trial. Moreover, the FDA requires us to comply with current good clinical practices (cGCP) for conducting, recording, and reporting the results of clinical trials to assure that data and reported results are credible, reproducible, and accurate and that the rights, integrity, and confidentiality of clinical trial participants are protected. We also are required to register ongoing clinical trials and post the results of completed clinical trials on a government-sponsored database within certain timeframes. Failure to do so can result in fines, adverse publicity, and civil and criminal sanctions.

If third parties do not successfully carry out their contractual duties, meet expected deadlines, or conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we may be unable to complete, or may be delayed in completing, our preclinical studies or our clinical trials, and we will not be able to obtain, or may be delayed in obtaining, marketing approvals for any product candidates we may develop and will not be able to, or may be delayed in our efforts to, successfully commercialize our medicines. For example, completion of our Phase 2 MARKET combination clinical trial of oral AMT-101 with anti-TNFα in moderate-to-severe ulcerative colitis patients was delayed because we increased total enrollment from 30 patients to 51 patients due to an imbalance in the clinical trial’s planned 1:1 randomization. In addition, the ongoing conflict between Russia and Ukraine impacted our CROs, CDMOs and clinical investigators’ ability to conduct our LOMBARD clinical trial in Ukraine, Russia and other Eastern European countries, and the continued conflict may also impact future clinical trials. This could negatively impact the completion of our clinical trials and/or analyses of clinical results, which could materially harm our business.

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We also expect to rely on other third parties to store and distribute supplies for our clinical trials. Any performance failure on the part of our distributors, including with the shipment of any supplies for our clinical trials, could delay clinical development or marketing approval of any product candidates we may develop or commercialization of our medicines, producing additional losses and depriving us of potential product revenue.

The manufacturing of our product candidates is complex. We and our third-party manufacturers may encounter difficulties in production. If we encounter any such difficulties, our ability to supply our product candidates for clinical trials or, if approved, for commercial sale, could be delayed or halted entirely.

Manufacturing of biologic therapeutics is a complex process and represents a critical path to creating biologic product candidates and a key component of our long-term success. We have spent significant resources to develop our current manufacturing capabilities, processes and know-how to produce sufficient supply of our product candidates. Although we have successfully manufactured certain preclinical and clinical supply at our previously qualified manufacturing facility, we have now discontinued those operations and may encounter difficulties should we seek to re-establish internal manufacturing capabilities.

We may continue to rely on third-party manufacturers to execute certain steps in the manufacturing of our product candidates. The facilities used by our contract manufactures to manufacture our product candidates are subject to various regulatory requirements and may be subject to the inspection of FDA or other regulatory authorities. We do not control the manufacturing process of, and are dependent on, our contract manufacturing partners for compliance with the regulatory requirements, known as cGMPs. If our contract manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or comparable regulatory authorities in foreign jurisdictions, we may not be able to rely on their manufacturing facilities for the manufacture of our product candidates. In addition, we have limited control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance, and qualified personnel. If the FDA or a comparable foreign regulatory authority finds these facilities inadequate for the manufacture of our product candidates or if such facilities are subject to enforcement action in the future or are otherwise inadequate, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for or market our product candidates.

The process of manufacturing our product candidates is extremely susceptible to product loss due to contamination, equipment failure or improper installation or operation of equipment, vendor or operator error, inconsistency in yields, variability in product characteristics, and difficulties in scaling the production process. We have experienced in the past situations in which a contract manufacturer has failed to successfully complete a scheduled manufacturing run as a result of their manufacturing process errors or deviations from the product specifications. We also have experienced in the past situations in which we failed to successfully complete a schedule manufacturing run at our primary manufacturing site. Even minor deviations from normal manufacturing processes could result in reduced production yields, product defects and other supply disruptions. If microbial, viral, or other contaminants are discovered in our product candidates or in the manufacturing facilities in which our product candidates are made, we may have to quarantine impacted manufacturing lots pending an impact assessment, or such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination.

Any adverse developments affecting manufacturing operations for our product candidates, if any are approved, may result in shipment delays, inventory shortages, lot failures, product withdrawals or recalls, or other interruptions in the supply of our products. We may also have to take inventory write-offs and incur other charges and expenses for products that fail to meet specifications, undertake costly remediation efforts or seek more costly manufacturing alternatives. Furthermore, it is too early to estimate our cost of goods sold. The actual cost to manufacture our product candidates could be greater than we expect because we were early in our development efforts and our platform is based on a novel therapeutic approach. Failure to develop our own manufacturing capacity may hamper our ability to further process improvement, maintain quality control, limit our reliance on contract manufacturers, and protect our trade secrets and other intellectual property.

We have relied on third-party manufacturers to produce our product candidates. Any failure by a third-party manufacturer to produce acceptable product candidates for us pursuant to our specifications and regulatory standards may delay or impair our ability to initiate or complete our clinical trials, obtain and maintain regulatory approvals or commercialize approved products.

We currently have limited internal manufacturing experience and personnel. We do not currently have the infrastructure or internal capability to manufacture our product candidates for commercialization purposes. We expect to continue to rely on third parties for certain manufacturing operations of our product candidates for preclinical studies and clinical trials, in compliance with applicable regulatory and quality standards, including cGMP, and may do so for the commercial manufacture of some or all of our product candidates, if approved. If we are unable to arrange for and maintain third-party manufacturing sources that are capable of meeting regulatory standards, or fail to do so on commercially reasonable terms, we may not be able

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to successfully produce sufficient supply of product candidate or we may be delayed in doing so. If we were to experience an unexpected loss of supply of our product candidates, for any reason, whether as a result of manufacturing, supply, logistics, or storage issues, the COVID-19 pandemic, or otherwise, we could experience delays, disruptions, suspensions, or terminations of, or be required to restart or repeat, any pending or ongoing clinical trials. Such failure or substantial delay or loss of supply could materially harm our business.

Reliance on third-party manufacturers entails risks including:

•the possible failure of the third-party to manufacture our product candidates according to our schedule, or at all, including if our third-party contractors give greater priority to the supply of other products over our product candidates or otherwise do not satisfactorily perform according to the terms of the agreements between us and them;

•reliance on the third-party for regulatory compliance and quality control and assurance and failure of the third-party to comply with regulatory requirements;

•the possibility of breach of the manufacturing agreement by the third-party because of factors beyond our control (including a failure to manufacture our product candidates in accordance with our product specifications);

•the possible mislabeling of clinical supplies, potentially resulting in the wrong dose amounts being supplied or active drug or placebo not being properly identified;

•the possibility of clinical supplies not being delivered to clinical sites on time, leading to clinical trial interruptions, or of product candidate supplies not being distributed to commercial vendors in a timely manner;

•the possible misappropriation of our proprietary information, including our trade secrets and know-how; and

•the possibility of termination or nonrenewal of the agreement by the third-party at a time that is costly or damaging to us.

In addition, the FDA, European Medicines Agency (EMA), and other regulatory authorities require that our product candidates be manufactured according to cGMP and similar foreign standards. Pharmaceutical manufacturers and their subcontractors are required to register their facilities or products manufactured at the time of submission of the marketing application and then annually thereafter with the FDA and certain state and foreign agencies. They are also subject to periodic unannounced inspections by the FDA, state, and other foreign authorities. If the FDA or a comparable foreign regulatory authority does not approve these facilities for the manufacture of our product candidates or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain marketing approval for or market our product candidates, if approved. Any subsequent discovery of problems with a product, or a manufacturing or laboratory facility used by us or our strategic partners, may result in sanctions being imposed on us, including fines, injunctions, civil penalties, restrictions on the product or on the manufacturing or laboratory facility, including license revocation, marketed product recall, suspension of manufacturing, product seizure, voluntary withdrawal of the product from the market, operating restrictions, or criminal prosecutions, any of which could significantly and adversely affect supplies of our product candidates and harm our business and results of operations.

We may have little to no control regarding the occurrence of third-party manufacturer incidents. Any failure by our third-party manufacturers to comply with cGMP or failure to scale up manufacturing processes, including any failure to deliver sufficient quantities of product candidates in a timely manner, would lead to a delay in, or failure to seek or obtain, regulatory approval of any of our product candidates. Furthermore, any change in manufacturer of our product candidates or approved products, if any, would require new regulatory approvals, which could delay completion of clinical trials or disrupt commercial supply of approved products.

Our dependence upon others for the manufacture of our product candidates may adversely affect our future profit margins and our ability to commercialize any product candidates that receive marketing approval on a timely and competitive basis.

In some cases, the technical skills or technology required to manufacture our product candidates may be unique or proprietary to the original manufacturer, we may have difficulty transferring such skills or technology to another third-party and a feasible alternative may not exist. These factors would increase our reliance on such manufacturer or require us to obtain a license from such manufacturer in order to have another third-party manufacture our product candidates. If we are required to change manufacturers for any reason, we will be required to verify that the new manufacturer maintains facilities and procedures that comply with quality standards and with all applicable regulations and guidelines. The delays associated with the verification of a new manufacturer could negatively affect our ability to develop product candidates in a timely manner or within budget.

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We depend on third-party suppliers for key raw materials used in our manufacturing processes, and the loss of these third-party suppliers or their inability to supply us with adequate raw materials could harm our business.

We rely on third-party suppliers for the raw materials required for the production of our product candidates. Our dependence on these third-party suppliers and the challenges we may face in obtaining adequate supplies of raw materials involve several risks, including delays as a result of widespread public health concerns, recent global supply chain disruptions, limited control over pricing, availability, quality and delivery schedules. For example, as a result of Brexit, the movement of goods between the UK and the remaining member states of the EU are subject to additional inspections and documentation checks. As a result, we have experienced delays in our supply chain.

As a small company, our negotiating leverage is limited, and we are likely to get lower priority than our competitors who are larger than we are. We do not have long-term supply agreements, and we purchase our required supplies on a development manufacturing services agreement or purchase order basis. We cannot be certain that our suppliers will continue to provide us with the quantities of these raw materials that we require or satisfy our anticipated specifications and quality requirements. Any supply interruption in limited or sole sourced raw materials could materially harm our ability to manufacture our product candidates until a new source of supply, if any, could be identified and qualified. We may be unable to find a sufficient alternative supply in a reasonable time or on commercially reasonable terms. Any performance failure on the part of our suppliers could delay the development and potential commercialization of our product candidates, including limiting supplies necessary for clinical trials and regulatory approvals, which would have a material adverse effect on our business.

The COVID-19 pandemic, and actions taken to mitigate the spread of the virus, has impacted and could continue to adversely impact our business.

While significant progress has been made to address the COVID-19 pandemic, with multiple vaccines and treatment options now available, the World Health Organization continues to classify COVID-19 as a pandemic and a public health emergency of international concern. The emergence of new variants has resulted in periodic surges in infection rates around the world and a cycle of fluctuating public health restrictions designed to mitigate the spread of the virus. The extent to which the COVID-19 pandemic, or any other widespread public health crisis, impacts our business will depend on future developments, which are highly uncertain and cannot be predicted, such as the spread or emergence of new variants, the duration and severity of surges in outbreaks, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions, and the effectiveness of actions taken in the United States and other countries to contain and treat the disease and to address its impact, including on financial markets or otherwise. As a result of the COVID-19 pandemic, we have experienced and could experience future disruptions that could severely impact our business and any planned clinical trials and preclinical studies, including:

•delays or difficulties in enrolling and retaining participants, particularly subjects who are at a higher risk of severe illness or death from COVID-19, and in recruiting clinical site investigators and clinical site staff;

•challenges related to increased operational expenses related to the COVID-19 pandemic. For example, we have incurred additional expenses by increasing the number of clinical trial sites for certain clinical trials to mitigate the impact of COVID-19 on patient enrollment rates;

•difficulties interpreting data from our clinical trials due to the possible effects of COVID-19 on patients;

•diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of clinical trials;

•interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others or interruption of clinical trial subject visits and clinical trial procedures, which may impact the integrity of subject data and clinical trial endpoints;

•limitations in resources, including our employees and consultants;

•interruptions, difficulties or delays arising in our existing operations and company culture as a result of some of our employees working remotely, including those hired during the COVID-19 pandemic;

•increased cybersecurity risks resulting from all of our employees working remotely;

•delays in receiving approval from regulatory authorities to initiate our clinical trials;

•interruptions in preclinical studies due to restricted or limited operations at CROs conducting such preclinical studies;

•interruptions or delays in the operations of the FDA or other regulatory authorities, or the prioritization by such regulatory authorities of COVID-19 treatments, which may impact our review and approval timelines;

•refusal of the FDA to accept data from clinical trials in affected geographies outside the United States;

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•delays in receiving the supplies, materials and services needed to conduct clinical trials and preclinical studies;

•changes in regulations as part of a response to the COVID-19 pandemic which may require us to change the ways in which our clinical trials are conducted, which may result in unexpected costs or require us to discontinue clinical trials altogether;

•interruptions or delays to our pipeline and research programs, and incurrence of additional costs as a result of any delays or adjustments; and

•delays in necessary interactions with regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or furlough of government or contractor personnel.

Further, as a result of the COVID-19 pandemic, the extent and length of which is uncertain, we have and may continue to develop and implement additional clinical trial policies and procedures designed to help protect trial participants from the COVID-19 virus, which may include using telemedicine visits, remote monitoring of patients and clinical sites, and measures to ensure that data from clinical trials that may be disrupted as a result of the pandemic are collected pursuant to the trial protocol and consistent with cGCP, with any material protocol deviation reviewed and approved by the site Institutional Review Board (IRB). Patients who may miss scheduled appointments, any interruption in trial drug supply, or other consequence that may result in incomplete data being generated during a trial as a result of the pandemic must be adequately documented and justified. Since March 2020, the FDA has issued various COVID-19 related guidance documents for sponsors and manufacturers, including guidance regarding conducting clinical trials during the pandemic, good manufacturing practice considerations, manufacturing, supply chain, and inspections, among others.

While the extent of the impact of the COVID-19 pandemic and current and future regulatory policies and requirements on our business and financial results are uncertain, a continued and prolonged public health crisis such as the COVID-19 pandemic could have a material negative impact on our business, financial condition, and operating results. The administration ended the COVID-19 national and public health emergencies on May 11, 2023. The full impact of the termination of the public health emergencies on FDA and other regulatory policies and operations are unclear.

To the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section.

Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.

As of December 31, 2022, we had federal net operating loss carryforwards of $278.8 million. Of this amount, $13.3 million was generated before January 1, 2018 and will begin to expire in 2036. Federal net operating losses of $265.5 million generated after December 31, 2017 will carryforward indefinitely. As of December 31, 2022, we had state net operating loss carryforwards of $69.5 million, which will begin to expire in 2036. Realization of these NOLs depends on future income, and there is a risk that our existing NOLs could expire unused and be unavailable to offset future income tax liabilities, which could adversely affect our operating results.

Under Sections 382 and 383 of the Code, if a corporation undergoes an “ownership change” (generally defined as a greater than 50-percentage-point cumulative change (by value) in the equity ownership of certain stockholders over a rolling three-year period), the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes to offset its post-change taxable income or taxes may be limited. We completed an analysis under Section 382 through December 31, 2020 and concluded we had experienced an ownership change in the past. However, the ownership change did not result in a limitation that would materially reduce the total amount of net operating loss carryforwards and credits that can be utilized. Net operating loss and tax credit carryforwards generated during the years ended December 31, 2021 and 2022 may be subject to an annual limitation under Section 382. In addition, we expect to experience an “ownership change” in connection with the Merger that would significantly limit the combined company’s ability to use our NOL carryforwards and other tax attributes to offset future taxable income or taxes.

Changes in our effective tax rate or tax liability may have an adverse effect on our operating results.

Our effective tax rate and the amount of our taxable income could be adversely affected by several factors, many of which are outside of our control, including:

•changes in the relative amounts of income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates;

•changes in tax laws, rates, tax treaties, and regulations or the interpretation of them;

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•changes to our assessment about our ability to realize our deferred tax assets that are based on estimates of our future results, the prudence and feasibility of possible tax planning strategies, and the economic and political environments in which we do business;

•changes to the financial accounting rules for income tax;

•the tax effects of acquisitions;

•the outcome of current and future tax audits, examinations, or administrative appeals; and

•limitations or adverse findings regarding our ability to do business in some jurisdictions.

For example, the United States has recently enacted the Inflation Reduction Act, which, among other changes, imposes a 1% excise tax on certain stock buybacks and a 15% alternative minimum tax on adjusted financial statement income. Any of these developments or changes in federal, state, or international tax laws or tax rulings could adversely affect our effective tax rate and our operating results.

We are a fully-remote company, meaning that our team members work remotely which poses a number of risks and challenges that can affect our business, operating results, and financial condition. We are increasingly dependent on technology in our operations and if our technology fails, our business could be adversely affected.

As a fully-remote company, we face a number of unique operational risks. For example, technologies in our team members’ homes may not be robust enough and could cause the networks, information systems, applications, and other tools available to team members and service providers to be limited, unreliable, or unsecure. Additionally, we are increasingly dependent on technology as a fully-remote company and if we experience problems with the operation of our current IT systems or the technology systems of third parties on which we rely, that could adversely affect, or even temporarily disrupt, all or a portion of our operations until resolved. In addition, in a fully-remote company, it may be difficult for us to develop and preserve our corporate culture and our team members may have decreased opportunities to collaborate in meaningful ways. Any impediments to preserving our corporate culture and fostering collaboration could harm our future success, including our ability to retain and recruit personnel, innovate and operate effectively, and execute on our business strategy.

Risks Related to the Discovery, Development, and Commercialization of Our Product Candidates

Research and development related to novel biologic therapeutics is inherently risky. Our business is heavily dependent on the successful development of our product candidates, which is currently discontinued. We cannot give any assurance that any of our product candidates will receive regulatory or marketing approval, which is necessary before they can be commercialized.

Our oral biologic product candidates’ use of active transport to translocate through the intestinal epithelium (IE) and respiratory epithelium (RE) barriers is a novel therapeutic approach. Our active transport approach differs from current biologics and peptides and is unproven. We are at the early stages of development of our product candidates. Our future success is dependent on our ability to successfully develop, obtain regulatory approval for, and then successfully commercialize our product candidates, and we may fail to do so for many reasons, including the following:

•our product candidates may not successfully complete preclinical studies or clinical trials;

•a product candidate may on further study be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria;

•we may not have sufficient resources to complete development of a product candidate;

•our competitors may develop therapeutics that render our product candidates obsolete or less attractive;

•the product candidates that we develop may not be sufficiently covered by intellectual property for which we hold exclusive rights;

•the product candidates that we develop may be covered by third parties’ patents or other intellectual property or exclusive rights;

•the market for a product candidate may change so that the continued development of that product candidate is no longer reasonable or commercially attractive;

•a product candidate may not be capable of being produced in development and commercial quantities at an acceptable cost, or at all;

•the product candidates that we develop may be novel and therefore, not accepted by the medical community;

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•if a product candidate obtains regulatory approval, we may be unable to establish sales and marketing capabilities, or successfully market such approved product candidate, to gain market acceptance; and

•a product candidate may not be accepted as safe and effective by patients, the medical community, or third-party payors, if applicable.

If any of these events occur, we may be forced to abandon our development efforts for one or more product candidates, which would have a material adverse effect on our business and could potentially cause us to cease operations.

We may not be successful in our efforts to further develop our current product candidates. We are not permitted to market or promote any of our product candidates before we receive regulatory approval from the FDA or comparable foreign regulatory authorities, and we may never receive such regulatory approval for any of our product candidates. Each of our product candidates are in the early stages of development and will require significant additional clinical development, management of preclinical, clinical, and manufacturing activities, regulatory approval, adequate manufacturing supply, a commercial organization, and significant marketing efforts before we generate any revenue from product sales, if at all.

We have never completed a clinical development program. In 2022, we released top-line results from the Phase 2 LOMBARD clinical trial and Phase 2 MARKET clinical trial for AMT-101, which failed to meet its primary efficacy endpoints. None of our product candidates have advanced into late-stage development and it may be years before any such clinical trial is initiated, if at all. Further, we cannot be certain that any of our product candidates will be successful in clinical trials. We may in the future advance product candidates into clinical trials and terminate such clinical trials prior to their completion.

If any of our product candidates successfully complete clinical trials, we generally plan to seek regulatory approval to market our product candidates in the United States, the European Union, and in additional foreign countries where we believe there is a viable commercial opportunity. We have never commenced, compiled or applied for regulatory approval to market any product candidate. We may never receive regulatory approval to market any product candidates even if such product candidates successfully complete clinical trials, which would adversely affect our viability. To obtain regulatory approval in countries outside of the United States, we must comply with numerous and varying regulatory requirements of such other countries regarding safety, efficacy, manufacturing and controls, clinical trials, commercial sales, pricing, and distribution of our product candidates. Even if we are successful in obtaining approval in one jurisdiction, we cannot ensure that we will obtain approval in any other jurisdictions. If we are unable to obtain approval for our product candidates in multiple jurisdictions, our business, financial condition, results of operations, and our prospects could be negatively affected.

Even if we receive regulatory approval to market any of our product candidates, we cannot assure you that any such product candidate will be successfully commercialized, widely accepted in the marketplace or more effective than other commercially available alternatives.

Investment in biopharmaceutical product development involves significant risk that any product candidate will fail to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval, and become commercially viable. We cannot provide any assurance that we will be able to successfully advance any of our product candidates through the development process or, if approved, successfully commercialize any of our product candidates.

We may encounter delays in our preclinical studies or clinical trials, or may not be able to conduct or complete our preclinical studies or clinical trials on the timelines we expect, if at all.

Preclinical studies and clinical testing are expensive, time consuming, and subject to uncertainty. We cannot guarantee that any preclinical studies and clinical trials will be conducted as planned or completed on schedule, if at all. We cannot be sure that submission of an Investigational New Drug (IND) application or a Clinical Trial Application (CTA) will result in the FDA, EMA, or other regulatory authority, as applicable, allowing clinical trials to begin in a timely manner, if at all. Moreover, even if these preclinical studies or clinical trials begin, issues may arise that could suspend or terminate such preclinical studies or clinical trials. A failure of one or more preclinical studies or clinical trials can occur at any stage of testing, and our future preclinical studies or clinical trials may not be successful. Events that may prevent successful or timely initiation or completion of preclinical studies or clinical trials include:

•inability to generate sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation or continuation of clinical trials;

•delays in confirming target engagement, biomarkers, patient selection, or other relevant criteria to be utilized in preclinical and clinical product candidate development;

•delays in reaching a consensus with regulatory authorities on clinical trial design;

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•delays in reaching agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites;

•delays in identifying, recruiting, and training suitable clinical investigators;

•delays in obtaining required IRB approval at each clinical trial site;

•imposition of a temporary or permanent clinical hold by regulatory authorities for a number of reasons, including:

◦after review of an IND or amendment, CTA or amendment, or equivalent application or amendment;

◦as a result of a new safety finding that presents unreasonable risk to clinical trial participants;

◦a negative finding from an inspection of our clinical trial operations or trial sites; or

◦the finding that the investigational protocol or plan is clearly deficient to meet its stated objectives;

•delays in identifying, recruiting, and enrolling suitable patients to participate in our clinical trials, and delays caused by patients withdrawing from clinical trials, or failing to return for post-treatment follow-up;

•difficulty collaborating with patient groups and investigators;

•failure by our CROs, other third parties, or us to adhere to clinical trial requirements;

•failure to perform in accordance with the FDA’s or any other regulatory authority’s cGCP requirements, or applicable EMA or other regulatory guidelines in other countries;

•occurrence of adverse events associated with the product candidate that are viewed to outweigh its potential benefits;

•changes in regulatory requirements and guidance that require amending or submitting new clinical protocols;

•changes in the standard of care on which a clinical development plan was based, which may require new or additional clinical trials;

•the cost of clinical trials of our product candidates being greater than we anticipate;

•health epidemics such as the COVID-19 pandemic;

•geopolitical events such as the conflicts between Russia and Ukraine or Israel and Hamas;

•preclinical studies or clinical trials of our product candidates producing negative or inconclusive results, which may result in our deciding, or regulators requiring us, to conduct additional clinical trials or abandon product development programs; and

•delays in manufacturing, testing, releasing, validating, transporting, or importing/exporting sufficient stable quantities of our product candidates for use in preclinical studies or clinical trials or the inability to do any of the foregoing.

Any inability to successfully initiate or complete preclinical studies or clinical trials could result in additional costs to us or impair our ability to generate revenue. In addition, if we make manufacturing or formulation changes to our product candidates, we may be required, or we may elect, to conduct additional preclinical studies to bridge our modified product candidates to earlier versions. Preclinical studies or clinical trial delays could also shorten any periods during which our products have patent protection and may allow our competitors to bring products to market before we do, which could impair our ability to successfully commercialize our product candidates and may harm our business and results of operations.

We have experienced in the past situations in which a contract manufacturer has failed to successfully complete a scheduled manufacturing run as a result of their manufacturing process errors or deviations from the product specifications. We also have experienced in the past situations in which we failed to successfully complete a schedule manufacturing run at our primary manufacturing site. These situations have the potential to cause delays in timelines and increases in development costs.

We could also encounter delays if a preclinical study or clinical trial is suspended or terminated by us, by the data safety monitoring board for such clinical trial or by the FDA, EMA, or any other regulatory authority, or if the IRBs of the institutions in which such clinical trials are being conducted suspend or terminate the participation of their clinical investigators and sites subject to their review. Such authorities may suspend or terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA, EMA, or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product candidate, changes in governmental regulations or administrative actions, or lack of adequate funding to continue the clinical trial.

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We may in the future terminate our clinical trials prior to their completion, which could adversely affect our business.

Delays in the completion of any preclinical study or clinical trial of our product candidates will increase our costs, slow down our product candidate development and approval process, and delay, or potentially jeopardize our ability to commence product sales and generate revenue. In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates.

If we do not achieve our projected development goals in the timeframes we announce and expect, our stock price may decline.

From time to time, we estimate the timing of the anticipated accomplishment of various scientific, clinical, regulatory and other product development goals, which we sometimes refer to as milestones. These milestones may include the commencement or completion of scientific studies and clinical trials, the public release of clinical data, and the submission of regulatory filings. From time to time, we may publicly announce the expected timing of some of these milestones. All of these milestones are and will be based on numerous assumptions. The actual timing of these milestones can vary dramatically compared to our estimates, in some cases for reasons beyond our control. For example, we have previously updated our anticipated timelines for milestones for our clinical trials that were publicly announced. If we do not meet milestones as publicly announced, our stock price may decline.

We may encounter difficulties enrolling patients or healthy volunteers in our clinical trials, and our clinical development activities could thereby be delayed or otherwise adversely affected.

The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of patients who remain in the clinical trial until its conclusion. We have experienced and may experience difficulties in patient enrollment in our clinical trials for a variety of reasons, including:

•the patient eligibility criteria defined in the protocol;

•the size of the clinical trial population required for analysis of the clinical trial’s primary endpoints;

•the proximity of patients to a clinical trial site;

•the design of the clinical trial;

•our ability to recruit clinical trial investigators with the appropriate competencies and experience;

•competing clinical trials, including our own clinical trials, for similar therapies or targeting patient populations meeting our patient eligibility criteria;

•clinicians’ and patients’ perceptions as to the potential advantages and side effects of the product candidate being studied in relation to other available therapies and product candidates;

•our ability to obtain and maintain patient consents;

•health epidemics such as the COVID-19 pandemic. For example, there has been an increase in infections from COVID-19 variants which has impacted patient recruitment at certain of our clinical trial sites and could result in increased costs and delays;

•the risk that patients enrolled in clinical trials will not complete such clinical trials, for any reason; and

•geopolitical events such as the conflicts between Russia and Ukraine or Israel and Hamas.

We face significant competition and if our competitors develop and market technologies or products that are more effective, safer or less expensive than our product candidates, our commercial opportunities will be negatively impacted.

The development and commercialization of biologic therapeutics is highly competitive and subject to rapid and significant technological change. The pharmaceutical and biotechnology industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on intellectual property. Any product candidates that we successfully develop and commercialize will compete with current therapies and new therapies that may become available in the future.

We have competitors both in the United States and internationally, including major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies, universities, academic institutions, government agencies, and other public and private research organizations that conduct research, seek patent protection, and establish collaborative arrangements for the research, development, manufacturing, and commercialization of therapies aimed at treating autoimmune, inflammatory, metabolic, and other diseases. Many of our competitors have significantly greater financial, manufacturing, marketing, technical and human resources and commercial expertise than we do. Large pharmaceutical

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companies, in particular, have extensive experience in clinical testing, obtaining regulatory approvals, recruiting patients and in manufacturing biologic therapeutics. These companies also have significantly greater research and marketing capabilities than we do. Established pharmaceutical companies may also invest heavily to accelerate discovery and development of novel compounds or to in-license novel compounds that could make our product candidates obsolete. As a result of all of these factors, our competitors may succeed in obtaining patent protection or FDA or other regulatory approval or discovering, developing and commercializing products in our field before we do.

In particular, with respect to our most advanced product candidates, AMT-101 and AMT-126, we compete against companies that produce injectable biologic therapeutics such as AbbVie Inc., Amgen Inc., Bristol-Myers Squibb Co., Eli Lilly and Co., Janssen Pharmaceuticals, Inc., Merck Sharp & Dohme Corp., Roche Holding Ltd., Prometheus Biosciences, Inc., Takeda Pharmaceutical Company Ltd., as well as companies that produce oral products such as Abivax SA, Amgen Inc., Bristol-Myers Squibb Co., Dice Therapeutics Inc., Galapagos NV, Gilead Sciences, Inc., Landos Biopharma, Inc., Morphic Holding, Inc., Pfizer Inc., Protagonist Therapeutics, Inc., and Ventyx Biosciences, Inc.

We are not aware of any other company or organization that has developed an FDA-approved oral biologic, other than peptides. However, we are aware of other companies developing oral biologic product candidates using their own technology platform.

Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than the products that we may develop. Our competitors also may obtain FDA or foreign regulatory approval for their products more rapidly than we may obtain approval for our product candidates, which could result in our competitors establishing a strong market position before we are able to enter the market.

Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These competitors also compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, and retaining third-party manufacturing resources, as well as in acquiring technologies complementary to, or necessary for, our product candidates. Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient, or are less expensive than any products that we may develop. Our competitors also may obtain FDA, EMA, or other regulatory approval for their products more rapidly than we may obtain approval for ours and may obtain orphan drug exclusivity from the FDA for indications our product candidates are targeting, which could result in our competitors establishing a strong market position before we are able to enter the market. If we fail to stay at the forefront of technological change, we may be unable to compete effectively. Technological advances or products developed by our competitors may render our technologies or product candidates obsolete, less competitive or not economical.

In addition, we could face litigation or other proceedings with respect to the scope, ownership, validity, and/or enforceability of our patents relating to our competitors’ products and our competitors may allege that our products infringe, misappropriate, or otherwise violate their intellectual property. The availability of our competitors’ products could limit the demand, and the price we are able to charge, for any products that we may develop and commercialize.

Our product candidates may face competition sooner than anticipated.

Even if we are successful in achieving regulatory approval to commercialize a product candidate ahead of our competitors, our product candidates may face competition from biosimilar products or alternative therapies. In the United States, our product candidates are regulated by the FDA as biologic products and we intend to seek approval for these product candidates pursuant to the Biologics License Application (BLA) pathway. The Biologics Price Competition and Innovation Act of 2009 (BPCIA) created an abbreviated pathway for the approval of biosimilar and interchangeable biologic products. The abbreviated regulatory pathway establishes legal authority for the FDA to review and approve biosimilar biologics, including the possible designation of a biosimilar as “interchangeable” based on its similarity to an existing brand product. Under the BPCIA, an application for a biosimilar product cannot be approved by the FDA until 12 years after the original branded product was approved under a BLA. The law is complex and is still being interpreted and implemented by the FDA. As a result, its ultimate impact, implementation, and meaning are subject to uncertainty. While it is uncertain when such processes intended to implement BPCIA may be fully adopted by the FDA, any such processes could have a material adverse effect on the future commercial prospects for our product candidates.

We believe that any of our product candidates approved as a biologic product under a BLA should qualify for the 12-year period of exclusivity. However, there is a risk that this exclusivity could be shortened due to congressional action or otherwise,

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or that the FDA will not consider our product candidates to be reference products for competing products, potentially creating the opportunity for generic competition sooner than anticipated. Moreover, the extent to which a biosimilar product, once approved, will be substituted for any one of our reference products in a way that is similar to traditional generic substitution for non-biologic products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing. In addition, a competitor could decide to forego the biosimilar approval path and submit a full BLA after completing its own preclinical studies and clinical trials. In such cases, any exclusivity to which we may be eligible under the BPCIA would not prevent the competitor from marketing its product as soon as it is approved.

In Europe, the European Commission has granted marketing authorizations for several biosimilar products pursuant to a set of general and product class-specific guidelines for biosimilar approvals issued over the past few years. In Europe, a competitor may reference data supporting approval of an innovative biological product but will not be able to get it on the market until 10 years after the time of approval of the innovative product. This 10-year marketing exclusivity period will be extended to 11 years if, during the first eight of those 10 years, the marketing authorization holder obtains an approval for one or more new therapeutic indications that bring significant clinical benefits compared with existing therapies. In addition, companies may be developing biosimilar products in other countries that could compete with our products, if approved.

If competitors are able to obtain marketing approval for biosimilars referencing our product candidates, if approved, such products may become subject to competition from such biosimilars, with the attendant competitive pressure and potential adverse consequences. Such competitive products may be able to immediately compete with us in each indication for which our product candidates may have received approval.

Even if any product candidates we develop receive marketing approval, our product candidates may not achieve adequate market acceptance by physicians, patients, healthcare payors, and others in the medical community necessary for commercial success.

The commercial success of any of our product candidates will depend upon its degree of market acceptance by physicians, patients, third-party payors, and others in the medical community. Even if any product candidates we may develop receive marketing approval, they may nonetheless fail to gain sufficient market acceptance by physicians, patients, healthcare payors, and others in the medical community. The degree of market acceptance of any product candidates we may develop, if approved for commercial sale, will depend on a number of factors, including:

•the efficacy and safety of such product candidates as demonstrated in clinical trials and published in peer-review journals or presented at medical conferences;

•the potential and perceived advantages compared to alternative treatments;

•the ability to offer our products for sale at competitive prices;

•sufficient third-party coverage or adequate reimbursement and patients’ willingness to pay in the absence of such coverage and adequate reimbursement;

•the ability to offer appropriate patient access programs, such as co-pay assistance;

•the extent to which physicians recommend our products to their patients;

•convenience and ease of dosing and administration compared to alternative treatments;

•the clinical indications for which the product candidate is approved by FDA, EMA, or other regulatory authorities;

•product labeling or product insert requirements of the FDA, EMA, or other comparable foreign regulatory authorities, including any limitations, contraindications, or warnings contained in a product’s approved labeling;

•restrictions on how the product is distributed;

•the timing of market introduction of competitive products;

•publicity concerning our products or competing products and treatments;

•the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;

•the strength and effectiveness of sales and marketing and distribution efforts; and

•the prevalence and severity of any side effects.

If any product candidates we develop do not achieve an adequate level of acceptance, we may not generate or derive sufficient revenue from that product candidate and our financial results could be negatively impacted.

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If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to sell and market any product candidates we may develop, we may not be successful in commercializing those product candidates if and when they are approved.

We do not have a sales or marketing infrastructure and have no experience in the sale, marketing, or distribution of biologic therapeutics. To achieve commercial success for any approved product for which we retain sales and marketing responsibilities, we must either develop a sales and marketing organization or outsource these functions to third parties. In the future, we may choose to build a focused sales, marketing, and commercial support infrastructure to sell, or participate in sales activities for some of our product candidates if and when they are approved.

There are risks involved with both establishing our own commercial capabilities and entering into arrangements with third parties to perform these services. For example, recruiting and training a sales force or reimbursement specialists is expensive and time consuming and could delay any product launch. If the commercial launch of a product for which we recruit a sales force and establish marketing and other commercialization capabilities is delayed or does not occur for any reason, we would have prematurely or unnecessarily incurred these commercialization expenses. This may be costly, and our investment would be lost if we cannot retain or reposition our commercialization personnel.

Factors that may inhibit our efforts to commercialize any approved product on our own include:

•our inability to recruit and retain adequate numbers of effective sales, marketing, reimbursement, customer service, medical affairs, and other support personnel;

•the inability of sales personnel to obtain access to physicians or educate adequate numbers of physicians on the benefits of prescribing any future approved products;

•our inability to obtain coverage and adequate reimbursement for our products from payors;

•the inability to price our products at a sufficient price point to ensure an adequate and attractive level of profitability;

•restricted or closed distribution channels that make it difficult to distribute our products to segments of the patient population; and

•unforeseen costs and expenses associated with creating an independent commercialization organization.

If we enter into arrangements with third parties to perform sales, marketing, commercial support, and distribution services, our product revenue or the profitability of product revenue may be lower than if we were to market and sell any products we may develop ourselves. In addition, we may not be successful in entering into arrangements with third parties to commercialize our product candidates or may be unable to do so on terms that are favorable to us. We may have little control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market our products effectively. If we do not establish commercialization capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing our product candidates, if approved.

If the market opportunities for any product that we develop are smaller than we believe they are, our revenue may be adversely affected and our business may suffer.

Our projections of both the number of people who have the diseases we may be targeting, as well as the subset of people with these health issues who have the potential to benefit from treatment with our technology platform and investigational medicines, and any product candidates, are based on our beliefs and estimates. These estimates have been derived from a variety of sources, including scientific literature, surveys of clinics, patient foundations, or market research, and may prove to be incorrect. Further, new studies may change the estimated incidence or prevalence of these diseases and health issues. The potentially addressable patient population for our investigational medicines may be limited or may not be amenable to treatment with our technology platform or investigational medicines. Even if we obtain significant market share for our products, if approved, if the potential target populations are small, we may never achieve profitability without obtaining regulatory approval for additional indications.

Risks Related to Regulatory Approval and Other Legal Compliance Matters

We may be unable to obtain U.S. or foreign regulatory approval for our product candidates and, as a result, may be unable to commercialize our product candidates.

The time required to obtain approval by the FDA, EMA, and comparable foreign regulatory authorities is unpredictable, typically takes many years following the commencement of clinical trials, and depends upon numerous factors, including the type, complexity, and novelty of the product candidates involved. In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development

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and may vary among jurisdictions, which may cause delays in the approval or the decision not to approve an application. Regulatory authorities have substantial discretion in the approval process and may refuse to accept any application or may decide that our data are insufficient for approval and require additional preclinical studies, clinical trials, or other studies. We have not submitted for, or obtained regulatory approval for any product candidate, and it is possible that none of our existing product candidates or any product candidates we may seek to develop in the future will ever obtain regulatory approval.

Applications for our product candidates could fail to receive regulatory approval in an initial or subsequent indication for many reasons, including but not limited to the following:

•the FDA, EMA, or comparable foreign regulatory authorities may disagree with the design, implementation, or results of our clinical trials;

•the FDA, EMA, or comparable foreign regulatory authorities may determine that our product candidates are not safe and effective, only moderately effective or have undesirable or unintended side effects, toxicities, or other characteristics that preclude our further development of our product candidates or our obtaining marketing approval or prevent or limit commercial use;

•the population studied in the clinical program may not be sufficiently broad or representative to assure efficacy and safety in the full population for which we seek approval;

•we may be unable to demonstrate to the FDA, EMA, or comparable foreign regulatory authorities that a product candidate’s risk-benefit ratio for a proposed indication is acceptable, particularly when compared to the standard of care;

•the FDA, EMA, or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials;

•the data collected from clinical trials of our product candidates may not be sufficient to support the submission of a new drug application (NDA), BLA, or other submission or to obtain regulatory approval in the United States or elsewhere;

•the FDA, EMA, or comparable foreign regulatory authorities may fail to approve our manufacturing processes, test procedures, and specifications, or facilities, and those of third-party manufacturers with which we contract for clinical and commercial supplies; and

•the approval policies or regulations of the FDA, EMA, or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.

This lengthy approval process, as well as the unpredictability of the results of clinical trials, may result in our failing to obtain regulatory approval to market any of our product candidates, which would significantly harm our business, results of operations, and prospects.

The FDA, EMA and comparable foreign regulatory authorities have limited experience with our technology platform and we are not aware of any similar technology platform which has been approved by the FDA, EMA or comparable foreign regulatory authorities, which may increase the complexity, uncertainty and length of the regulatory approval process for our product candidates. For example, since the scientific evidence to support the feasibility of developing our product candidates and discovery programs is both preliminary and limited, the FDA may require us to provide additional data to support our regulatory applications. Moreover, advancing our novel oral biologic product candidates creates other significant challenges for us, including educating medical personnel regarding a novel technology platform and its potential efficacy and safety benefits.

Further, the ability of the FDA or other regulatory agencies to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, disruptions from natural disasters or public health concerns, and statutory, regulatory, and policy changes. Average review times at the agency have fluctuated in recent years as a result. In response to the COVID-19 public health emergency, since March 2020 when foreign and domestic inspections of facilities were largely placed on hold, the FDA has worked to resume normal operations. In 2020 and 2021, a number of companies announced receipt of Complete Response Letters due to the FDA’s inability to complete required inspections for their applications. While the FDA has largely caught up with domestic preapproval inspections, it continues to work through its backlog of foreign inspections.

In addition, government funding of the SEC and other government agencies on which our operations may rely, including those that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable. If a prolonged government shutdown or other disruption occurs, including due to travel restrictions, staffing shortages, or if global health or other concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities in a timely manner, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business. Further, in our operations

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as a public company, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

We may never receive approval to market and commercialize any product candidate. Even if we obtain regulatory approval, the approval may be for targets, disease indications or patient populations that are not as broad as we intended or desired or may require labeling that includes significant use or distribution restrictions or safety warnings. We may be subject to post-marketing testing requirements to maintain regulatory approval. In addition, upon obtaining any marketing approvals, we may have difficulty in establishing the necessary sales and marketing capabilities to gain market acceptance.

If any of our product candidates prove to be ineffective, unsafe or commercially unviable, our entire pipeline could have little, if any, value, and it may prove to be difficult or impossible to finance the further development of our pipeline. Any of these events would have a material and adverse effect on our business, financial condition, results of operations, and prospects.

Our product candidates may cause undesirable side effects or have other properties that could halt their clinical development, prevent their regulatory approval, limit their commercial potential, or result in significant negative consequences.

Adverse events or other undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay, or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA, EMA, or other comparable foreign regulatory authorities. AMT-101 is a gastrointestinal (GI)-selective oral fusion of interleukin (IL)-10, and previous clinical trials conducted by others in the field with systemic IL-10 showed significant toxicities that prevented further development. AMT-126 is a GI-selective oral fusion of IL-22, and in current clinical trials conducted by others in the field with systemic IL-22, toxicities and adverse events have been observed.

Side effects could affect patient recruitment, the ability of enrolled patients to complete the clinical trial, and/or result in potential product liability claims. We are required to maintain product liability insurance pursuant to certain of our development and commercialization agreements. We may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses due to liability. A successful product liability claim or series of claims brought against us could adversely affect our results of operations, business, and reputation. In addition, regardless of merit or eventual outcome, product liability claims may result in impairment of our business reputation, withdrawal of clinical trial participants, costs due to related litigation, distraction of management’s attention from our primary business, initiation of investigations by regulators, substantial monetary awards to patients or other claimants, the inability to commercialize our product candidates, and decreased demand for our product candidates, if approved for commercial sale.

Additionally, if one or more of our product candidates receives marketing approval, and we or others later identify undesirable side effects or adverse events caused by such products, a number of potentially significant negative consequences could result, including but not limited to:

•regulatory authorities may withdraw approvals of such product and cause us to recall our products;

•regulatory authorities may require additional warnings on the label;

•we may be required to change the way the product is administered or conduct additional clinical trials or post-approval studies;

•we may be required to create a risk evaluation and mitigation strategy plan, which could include a medication guide outlining the risks of such side effects for distribution to patients, a communication plan for healthcare providers, and/or other elements, such as boxed warning on the packaging, to assure safe use;

•we could be sued and held liable for harm caused to patients; and

•our reputation may suffer.

Any of these events could prevent us from achieving or maintaining market acceptance of the particular product candidate, if approved, and could significantly harm our business, financial condition, results of operations, and prospects.

If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our products.

We face an inherent risk of product liability as a result of the clinical testing of our product candidates and will face an even greater risk when and if we commercialize any products. For example, we may be sued if our products cause or are perceived to cause injury or are found to be otherwise unsuitable during clinical testing, manufacturing, marketing, or sale post-approval.

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Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability, or a breach of warranties. Claims could also be asserted under state consumer protection laws. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit testing and commercialization of our products. Even successful defense would require significant financial and management resources. Regardless of the merits or eventual outcome, liability claims may result in:

•decreased or interrupted demand for our products;

•injury to our reputation;

•withdrawal of clinical trial participants and inability to continue clinical trials;

•initiation of investigations by regulators;

•costs to defend the related litigation;

•a diversion of management’s time and our resources;

•substantial monetary awards to clinical trial participants or patients;

•product recalls, withdrawals or labeling, marketing, or promotional restrictions;

•loss of revenue;

•exhaustion of any available insurance and our capital resources; and

•the inability to commercialize any products.

Our inability to obtain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of products we develop. Our insurance policies may have various exclusions, and we may be subject to a product liability claim for which we have no coverage. We may have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts. Even if our agreements with any future corporate collaborators entitle us to indemnification against losses, such indemnification may not be available or adequate should any claim arise.

Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our product candidates in other jurisdictions.

If we succeed in developing any products, we intend to market them in the United States as well as the European Union and other foreign jurisdictions. In order to market and sell our products in other jurisdictions, we must obtain separate marketing approvals and comply with numerous and varying regulatory requirements.

Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not guarantee that we will be able to obtain or maintain regulatory approval in any other jurisdiction, but a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others. For example, even if the FDA or EMA grants marketing approval of a product candidate, comparable regulatory authorities in foreign jurisdictions must also approve the manufacturing, marketing, and promotion of the product candidate in those countries. Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from those in the United States, including additional preclinical studies or clinical trials as clinical trials conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions. In many jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to approval.

Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties, and costs for us and could delay or prevent the introduction of our products in certain countries. If we or any partner we work with fail to comply with the regulatory requirements in international markets or fail to receive applicable marketing approvals, our target market will be reduced, and our ability to realize the full market potential of our product candidates will be harmed.

Coverage and reimbursement decisions by third-party payors may have an adverse effect on pricing and market acceptance. If reimbursement is not available or is not sufficient for our products, it is less likely that our products will be widely used.

Even if our product candidates are approved for sale by the appropriate regulatory authorities, market acceptance and sales of these products will depend on coverage and reimbursement policies and may be affected by future healthcare reform measures.

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Third-party payors, such as government healthcare programs, private health insurers and health maintenance organizations, decide what therapies they will cover and establish the level of reimbursement for such therapies. We cannot be certain that coverage and reimbursement will be available or adequate for any products that we develop. If coverage and adequate reimbursement is not available or is available on a limited basis, we may not be able to successfully commercialize any of our product candidates, if approved.

There may be significant delays in obtaining coverage and reimbursement for newly approved therapies, and coverage may be more limited than the purposes for which the therapy is approved by the FDA, EMA or other regulatory authorities. Moreover, eligibility for coverage and reimbursement does not imply that a therapy will be paid for in all cases or at a rate that is commensurate with our product pricing that covers our costs, including research, development, manufacturing, sale and distribution expenses. Interim reimbursement levels for new therapies, if applicable, may also be insufficient to cover our costs and may not be made permanent. Reimbursement rates may vary according to the use of the therapy and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost therapies and may be incorporated into existing payments for other services. Further, no uniform policy for coverage and reimbursement exists in the United States, and coverage and reimbursement can differ significantly from payor to payor. Net prices for therapies may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future change to laws that presently restrict imports of therapies from countries where they may be sold at lower prices than in the United States. Our inability to promptly obtain coverage and adequate reimbursement from third-party payors, including both government-funded and private payors, for any approved products that we develop could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.

We have conducted clinical trials for AMT-101 and AMT-126 outside of the United States, and we may do so for our other product candidates, which exposes us to additional risks. For example, the FDA, EMA, and applicable foreign regulatory authorities may not accept data from such clinical trials, in which case our development plans will be delayed, which could materially harm our business.

We have conducted our Phase 2 clinical trials for AMT-101 and our Phase 1 clinical trial for AMT-126 in countries outside of the United States. We also plan to conduct additional future clinical trials outside the United States. The acceptance of clinical trial data from clinical trials conducted outside the United States by the FDA, EMA, or applicable foreign regulatory authority may be subject to certain conditions. In cases where data from foreign clinical trials are intended to serve as the basis for marketing approval in the United States, the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable to the United States population and United States medical practice; and (ii) the clinical trials were performed by clinical investigators of recognized competence and pursuant to cGCP regulations. Additionally, the FDA’s clinical trial requirements, including sufficient size of patient populations and statistical powering, must be met. Many foreign regulatory bodies have similar approval requirements. In addition, such foreign clinical trials would be subject to the applicable local laws of the foreign jurisdictions where the clinical trials are conducted. There can be no assurance that the FDA, EMA, or any applicable foreign regulatory authority will accept data from clinical trials conducted outside their applicable jurisdiction. If the FDA, EMA, or any applicable foreign regulatory authority does not accept such data, it would result in the need for additional clinical trials, which would be costly and time-consuming and delay aspects of our business plan, and which may result in our product candidates not receiving approval or clearance for commercialization in the applicable jurisdiction.

Conducting clinical trials outside the United States also exposes us to additional risks, including risks associated with:

•additional foreign regulatory requirements;

•foreign exchange fluctuations;

•increased supply chain complexity, including compliance with foreign manufacturing, customs, shipment and storage requirements and regulations;

•regional differences in medical practice and clinical trial research;

•diminished protection of intellectual property in some countries; and

•interruptions or delays in our clinical trials resulting from geopolitical events such as war or terrorism including the conflicts between Russia and Ukraine or Israel and Hamas.

For example, currently there is a conflict between Russia and Ukraine. Our AMT-101 Phase 2 LOMBARD and AMT-101 Phase 2 MARKET clinical trials included clinical trial sites located in Ukraine, Russia, and other Eastern European countries, and this conflict impacted our ability to conduct these clinical trials. We may conduct future clinical trials in Ukraine, Russia and other Eastern European countries, and the conflict may impact our ability to timely and successfully complete such clinical trials. This could negatively impact the completion of our clinical trials and/or analyses of clinical results or result in increased

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costs, all of which could materially impact our ability to obtain regulatory approval for our product candidates and harm our business.

Also, recent and potential global supply chain disruptions and geopolitical events may impact our ability to manufacture and deliver clinical trial drug supply to our clinical trial sites, particularly those outside the United States. If we or our contractors are unable to deliver sufficient quantities of a study product candidate, the completion of our clinical trials may be delayed, which could materially harm our business.

In addition to U.S. regulatory requirements, we are also subject to regulation by foreign regulatory authorities, ethics committees, and other governmental entities with respect to clinical trials we conduct or sponsor outside of the U.S. For example, the EU Clinical Trials Regulation (CTR) became applicable on January 31, 2022, repealing the EU Clinical Trials Directive. The implementation of the CTR also includes the implementation of the Clinical Trials Information System, a new clinical trial portal and database that will be maintained by the EMA in collaboration with the European Commission and the EU Member States. Complying with changes in regulatory requirements can incur additional costs, delay our clinical development plans, or expose us to greater liability if we are slow or unable to adapt to changes in existing requirements or new requirements or policies governing our business operations, including our clinical trials.

Further, Brexit and uncertainty in the regulatory framework as well as future legislation in the UK, European Union, and other jurisdictions can lead to disruption in the execution of international multi-center clinical trials, the monitoring of adverse events through pharmacovigilance programs, the evaluation of the benefit-risk profiles of new medicinal products, and determination of marketing authorization across different jurisdictions. Uncertainty in the regulatory framework could also result in disruption to the supply and distribution as well as the import/export of active pharmaceutical ingredients and finished product candidates. Such a disruption could create supply difficulties for ongoing clinical trials. The cumulative effects of the disruption to the regulatory framework, uncertainty in future regulation, and changes to existing regulations may increase our development lead time to marketing authorization and commercialization of products in the European Union and/or the UK and increase our costs. We cannot predict the impact of such changes and future regulation on our business or the results of our operations.

Preliminary data from our clinical trials that we announce or publish from time to time may change as additional patient data become available and are subject to verification procedures that could result in material changes in the final data or clinical conclusions.

From time to time, we may publicly disclose preliminary data from our clinical trials, which is based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or clinical trial such as data from our clinical trials of AMT-101 and AMT-126. We also make assumptions, estimations, calculations and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data. As a result, the preliminary results that we report may differ from future results of the same preclinical studies, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated. Preliminary data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published.

Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular product candidate, our ability to advance a product candidate to the next phase of clinical development, the approvability or commercialization of the particular product candidate or product, and our company in general. In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive information, and you or others may not agree with what we determine is the material or otherwise appropriate information to include in our disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding a particular drug, product candidate or our business. If the preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, our product candidates may be harmed, which could harm our business, operating results, prospects or financial condition.

Even if we obtain regulatory approval for a product candidate, our products will remain subject to extensive regulatory scrutiny.

If any of our product candidates are approved, they will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping, conduct of post-marketing studies, and submission of safety, efficacy, and other post-market information, including both federal and state requirements in the United States and requirements of comparable foreign regulatory authorities.

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Manufacturers and manufacturers’ facilities are required to comply with extensive requirements imposed by the FDA, EMA, and comparable foreign regulatory authorities, including ensuring that quality control and manufacturing procedures conform to cGMP regulations. As such, we and our contract manufacturers will be subject to continual review and inspections to assess compliance with cGMP and adherence to commitments made in any NDA, BLA, or marketing authorization application (MAA). Accordingly, we and others with whom we work must continue to expend time, money, and effort in all areas of regulatory compliance, including manufacturing, production, and quality control.

Any regulatory approvals that we receive for our product candidates will be subject to limitations on the approved indicated uses for which the product may be marketed and promoted or to the conditions of approval (including the requirement to implement a risk evaluation and mitigation strategy), or contain requirements for potentially costly post-marketing testing. We will be required to report certain adverse reactions and production problems, if any, to the FDA, EMA, and comparable foreign regulatory authorities. The FDA and other agencies, including the Department of Justice, closely regulate and monitor the post-approval marketing and promotion of products to ensure that they are manufactured, marketed, and distributed only for the approved indications and in accordance with the provisions of the approved labeling. We will have to comply with requirements concerning advertising and promotion for our products. Promotional communications with respect to biologic therapeutics are subject to a variety of legal and regulatory restrictions and must be consistent with the information in the product’s approved label. As such, we may not promote our products for indications or uses for which they do not have approval, commonly referred to as “off-label uses.” The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label may be subject to significant liability. However, physicians may, in their independent medical judgment, prescribe legally available products for off-label uses. The FDA does not regulate the behavior of physicians in their choice of treatments, but the FDA does restrict manufacturer communications on the subject of off-label use of their products. The holder of an approved NDA, BLA, or MAA must submit new or supplemental applications and obtain approval for certain changes to the approved product, product labeling, or manufacturing process. We could also be asked to conduct post-marketing clinical trials to verify the safety and efficacy of our products in general or in specific patient subsets. If original marketing approval was obtained via the accelerated approval pathway, we could be required to conduct a successful post-marketing clinical trial to confirm clinical benefit for our products. An unsuccessful post-marketing clinical trial or failure to complete such a clinical trial could result in the withdrawal of marketing approval. In December 2022, the Consolidated Appropriations Act, 2023, including the Food and Drug Omnibus Reform Act (FDORA), was signed into law. FDORA made several changes to the FDA’s authorities and its regulatory framework, including, among other changes, reforms to the accelerated approval pathway, such as requiring the FDA to specify conditions for post-approval study requirements and setting forth procedures for the FDA to withdraw a product on an expedited basis for non-compliance with post-approval requirements.

If a regulatory agency discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, or disagrees with the promotion, marketing or labeling of a product, such regulatory agency may impose restrictions on that product or us, including requiring withdrawal of the product from the market. If we fail to comply with applicable regulatory requirements, a regulatory agency or enforcement authority may, among other things:

•issue warning letters that would result in adverse publicity;

•impose civil or criminal penalties;

•suspend or withdraw regulatory approvals;

•suspend any of our ongoing clinical trials;

•refuse to approve pending applications or supplements to approved applications submitted by us;

•impose restrictions on our operations;

•seize or detain products; or

•require a product recall.

Any government investigation of alleged violations of law could require us to expend significant time and resources in response, and could generate negative publicity. Any failure to comply with ongoing regulatory requirements may significantly and adversely affect our ability to commercialize and generate revenue from our products. If regulatory sanctions are applied or if regulatory approval is withdrawn, the value of our company and our operating results will be adversely affected.

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We have sought and may again seek orphan drug designation for one or more of our product candidates, but we may be unable to obtain such designations or to maintain the benefits associated with orphan drug status, including market exclusivity, which may cause our revenue, if any, to be reduced.

We sought and, in November 2022, received orphan drug designation for AMT-101 in patients with pouchitis. In the future, we may seek orphan drug designations for one or more of our product candidates, but may be unable to obtain an orphan drug designation for any additional product candidates. Under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biologic intended to treat a rare disease or condition, defined as a disease or condition with a patient population of fewer than 200,000 in the United States, or a patient population greater than 200,000 in the United States when there is no reasonable expectation that the cost of developing and making available the drug or biologic in the United States will be recovered from sales in the United States for that drug or biologic. Orphan drug designation must be requested before submitting an NDA or BLA. In the United States, orphan drug designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages, and user-fee waivers. After the FDA grants orphan drug designation, the generic identity of the drug and its potential orphan use are disclosed publicly by the FDA. Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.

If a product that has orphan drug designation subsequently receives the first FDA approval for a particular active ingredient for the disease for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other NDA or BLA applications to market the same drug or biologic for the same indication for seven years, except in limited circumstances such as a showing of clinical superiority to the product with orphan exclusivity or if FDA finds that the holder of the orphan exclusivity has not shown that it can assure the availability of sufficient quantities of the orphan product to meet the needs of patients with the disease or condition for which the drug was designated. Furthermore, the FDA can waive orphan exclusivity if we are unable to manufacture sufficient supply of our product.

In Catalyst Pharms., Inc. v. Becerra, 14 F.4th 1299 (11th Cir. 2021), the court disagreed with the FDA’s longstanding position that the orphan drug exclusivity only applies to the approved use or indication within an eligible disease. This decision created uncertainty in the application of the orphan drug exclusivity. On January 24, 2023, the FDA published a notice in the Federal Register to clarify that while the agency complies with the court’s order in Catalyst, FDA intends to continue to apply its longstanding interpretation of the regulations to matters outside of the scope of the Catalyst order – that is, the agency will continue tying the scope of orphan-drug exclusivity to the uses or indications for which a drug is approved, which permits other sponsors to obtain approval of a drug for new uses or indications within the same orphan designated disease or condition that have not yet been approved. It is unclear how future litigation, legislation, agency decisions, and administrative actions will impact the scope of the orphan drug exclusivity.

A breakthrough therapy designation or Fast Track designation by the FDA for a drug may not lead to a faster development or regulatory review or approval process, and it would not increase the likelihood that the drug will receive marketing approval.

In the future, we may seek a breakthrough therapy designation for one or more of our investigational medicines. A breakthrough therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. For drugs that have been designated as breakthrough therapies, interaction and communication between the FDA and the sponsor of the clinical trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens. Drugs designated as breakthrough therapies by the FDA are also eligible for priority review if supported by clinical data at the time of the submission of the biologics license application.

Designation as a breakthrough therapy is at the discretion of the FDA. Accordingly, even if we believe that one of our investigational medicines meets the criteria for designation as a breakthrough therapy, the FDA may disagree and instead determine not to make such designation. In any event, the receipt of a breakthrough therapy designation for a drug may not result in a faster development process, review, or approval compared to drugs considered for approval under conventional FDA procedures and it would not assure ultimate approval by the FDA. In addition, even if one or more of our investigational medicines qualify as breakthrough therapies, the FDA may later decide that the investigational medicine no longer meets the conditions for qualification, or it may decide that the time period for FDA review or approval will not be shortened.

We may seek Fast Track designation for some of our investigational medicines. If a therapy is intended for the treatment of a serious or life-threatening condition and the therapy demonstrates the potential to address significant unmet medical needs for this condition, the drug sponsor may apply for Fast Track designation. The FDA has broad discretion whether or not to grant this designation, and even if we believe a particular investigational medicine is eligible for this designation, we cannot assure

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you that the FDA would decide to grant it. Even if we do receive Fast Track designation, we may not experience a faster development process, review, or approval compared to conventional FDA procedures. If our clinical development program does not continue to meet the criteria for Fast Track designation, or if our clinical trials are delayed, suspended, or terminated, or put on clinical hold due to unexpected adverse events or issues with clinical supply, we will not receive the benefits associated with the Fast Track program. Furthermore, Fast Track designation and priority review do not change the standards for approval. The FDA may withdraw Fast Track designation if it believes that the designation is no longer supported by data from our clinical development program. Fast Track designation alone does not guarantee qualification for the FDA’s priority review procedures.

Current and future legislation may increase the difficulty and cost for us to commercialize our product candidates, if approved, and affect the prices we may obtain.

Third-party payors, whether domestic or foreign, or governmental or commercial, are developing increasingly sophisticated methods of controlling healthcare costs. In both the United States and certain foreign jurisdictions, there have been, and likely will continue to be, legislative and regulatory proposals at the foreign, federal, and state levels directed at containing or lowering the cost of healthcare. We cannot predict the initiatives that may be adopted in the future. The continuing efforts of the government, insurance companies, managed care organizations, and other payors of healthcare services to contain or reduce costs of healthcare and/or impose price controls may adversely affect:

•the demand for our product candidates, if we obtain regulatory approval;

•our ability to receive or set a price that we believe is fair for our products;

•our ability to generate revenue and achieve or maintain profitability;

•the level of taxes that we are required to pay; and

•the availability of capital.

In March 2010, the Patient Protection and Affordable Care Act (ACA) was enacted, which includes measures that have significantly changed the way healthcare is financed by both governmental and private insurers. The ACA continues to significantly impact the United States’ pharmaceutical industry. Since its enactment, there have been executive, judicial and Congressional challenges to certain aspects of the ACA. In June 2021, the United States Supreme Court held that Texas and other challengers had no legal standing to challenge the ACA, dismissing the case without specifically ruling on the constitutionality of the ACA. Accordingly, the ACA remains in effect in its current form. On January 28, 2021, President Biden issued an executive order instructing certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including, among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA. It is unclear how this Supreme Court decision, future litigation, and healthcare measures promulgated by the current administration will impact the ACA, our business, financial condition and results of operations. Complying with any new legislation or reversing changes implemented under the ACA could be time-intensive and expensive, resulting in a material adverse effect on our business.

In addition, other legislative changes have been proposed and adopted since the ACA was enacted. These changes include aggregate reductions to Medicare payments to providers of up to 2% per fiscal year pursuant to the Budget Control Act of 2011, which began in 2013 and will remain in effect through 2031, with the exception of a temporary suspension implemented under various COVID-19 relief legislation from May 1, 2020 through March 31, 2022, unless additional Congressional action is taken. Under current legislation, the actual reduction in Medicare payments will vary from 1% in 2022 to up to 4% in the final fiscal year of the sequester.

Moreover, there has recently been heightened governmental scrutiny over the manner in which drug manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products.

Under the American Rescue Plan Act of 2021, effective January 1, 2024, the statutory cap on Medicaid Drug Rebate Program rebates that manufacturers pay to state Medicaid programs will be eliminated. Elimination of this cap may require pharmaceutical manufacturers to pay more in rebates than they receive on the sale of products, which could have a material impact on our business. In July 2021, the current administration released an executive order, “Promoting Competition in the American Economy,” with multiple provisions aimed at increasing competition for prescription drugs. In response to this executive order, the U.S. Department of Health and Human Services (HHS) released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and potential legislative policies that Congress could pursue to advance these principles. In August 2022, Congress passed the Inflation Reduction Act of 2022, which includes prescription drug provisions that have significant implications for the pharmaceutical industry and Medicare beneficiaries, including

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allowing the federal government to negotiate a maximum fair price for certain high-priced single source Medicare drugs, imposing penalties and excise tax for manufacturers that fail to comply with the drug price negotiation requirements, requiring inflation rebates for all Medicare Part B and Part D drugs, with limited exceptions, if their drug prices increase faster than inflation, and redesigning Medicare Part D to reduce out-of-pocket prescription drug costs for beneficiaries, among other changes. The impact of these legislative, executive, and administrative actions and any future healthcare measures and agency rules implemented by the current administration on us and the biopharmaceutical industry as a whole is unclear. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our product candidates if approved.

At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. A number of states are considering or have recently enacted state drug price transparency and reporting laws that could substantially increase our compliance burdens and expose us to greater liability under such state laws once we begin commercialization if we obtain regulatory approval for any of our products. We are unable to predict the future course of federal or state healthcare legislation in the United States directed at broadening the availability of healthcare and containing or lowering the cost of healthcare. These and any further changes in the law or regulatory framework that reduce our revenue or increase our costs could also have a material and adverse effect on our business, financial condition and results of operations.

We expect that the ACA, as well as other healthcare reform measures that may be adopted in the future, may result in additional reductions in Medicare and other healthcare funding, more rigorous coverage criteria, lower reimbursement, and new payment methodologies. This could lower the price that we receive for any approved product. Any denial in coverage or reduction in reimbursement from Medicare or other government-funded programs may result in a similar denial or reduction in payments from private payors, which may prevent us from being able to generate sufficient revenue, attain profitability, or commercialize our product candidates, if approved.

In the European Union, similar political, economic and regulatory developments may affect our ability to profitably commercialize our current or any future products. In addition to continuing pressure on prices and cost containment measures, legislative developments at the European Union or member state level may result in significant additional requirements or obstacles that may increase our operating costs. In international markets, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies. Our future products, if any, might not be considered medically reasonable and necessary for a specific indication or cost-effective by third-party payors, an adequate level of reimbursement might not be available for such products and third-party payors’ reimbursement policies might adversely affect our ability to sell any future products profitably.

Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for biologic therapeutics. We cannot be sure whether additional legislative changes will be enacted, or whether the FDA regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals of our product candidates, if any, may be. In addition, increased scrutiny by the U.S. Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post-approval testing and other requirements.

We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, our product candidates may lose any marketing approval that may have been obtained and we may not achieve or sustain profitability, which would adversely affect our business. Further, it is possible that additional governmental action is taken in response to the COVID-19 pandemic.

Our employees, independent contractors, consultants, commercial partners, and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.

We are exposed to the risk of fraud, misconduct, or other illegal activity by our employees, independent contractors, consultants, commercial partners, and vendors. Misconduct by these parties could include intentional, reckless, and negligent conduct that fails to:

•comply with the laws of the FDA, EMA, and other comparable foreign regulatory authorities;

•provide true, complete, and accurate information to the FDA, EMA, and other comparable foreign regulatory authorities;

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•comply with manufacturing standards we have established;

•comply with healthcare fraud and abuse laws in the United States and similar foreign fraudulent misconduct laws; or

•report financial information or data accurately or to disclose unauthorized activities to us.

If we obtain FDA approval of any of our product candidates and begin commercializing those products in the United States, our potential exposure under such laws will increase significantly, and our costs associated with compliance with such laws are also likely to increase. In particular, research, sales, marketing, education, and other business arrangements in the healthcare industry are subject to extensive laws designed to prevent fraud, kickbacks, self-dealing, and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, educating, marketing and promotion, sales and commission, certain customer incentive programs, and other business arrangements generally. Activities subject to these laws also involve the improper use of information obtained in the course of patient recruitment for clinical trials, which could result in regulatory sanctions and cause serious harm to our reputation. We have adopted a code of business conduct and ethics, but it is not always possible to identify and deter misconduct by employees and third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions.

If we fail to comply with healthcare laws, we could face substantial penalties and our business, operations, and financial conditions could be adversely affected.

If we obtain FDA approval for any of our product candidates and begin commercializing those products in the United States, our operations will be subject to various federal and state fraud and abuse laws. The laws that we are currently subject to or which we may become subject to if we obtain FDA approval of any of our product candidates, and which may impact our operations include the following:

•The federal Anti-Kickback Statute which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering, or paying any remuneration (including any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return for, either the referral of an individual, or the purchase, lease, order, or recommendation of any good, facility, item or service for which payment may be made, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act.

•Federal civil and criminal false claims laws, including the False Claims Act, which can be enforced through civil “qui tam” or “whistleblower” actions, and civil monetary penalty laws, impose criminal and civil penalties against individuals or entities from knowingly presenting, or causing to be presented, claims for payment or approval from Medicare, Medicaid, or other third-party payors that are false or fraudulent or knowingly making a false statement to improperly avoid, decrease, or conceal an obligation to pay money to the federal government. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of these statutes or specific intent to violate them in order to have committed a violation.

•The federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing, or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters.

•HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 and their respective implementing regulations, impose requirements on certain covered healthcare providers, health plans, and healthcare clearinghouses and their respective business associates and covered subcontractors that perform services for them that involve the use, or disclosure of, individually identifiable health information, relating to the privacy, security, and transmission of individually identifiable health information.

•The federal Physician Payment Sunshine Act, created under the ACA, and its implementing regulations, require applicable manufacturers of drugs, devices, biologicals, and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to the HHS under the Open Payments Program, information related to certain payments and other transfers of value made in the previous year to covered recipients,

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including physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician healthcare professionals (such as physician assistants and nurse practitioners) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members. The information reported annually is publicly available on a searchable website.

•Analogous state and foreign laws and regulations, such as state and foreign anti-kickback and false claims laws, may apply to pharmaceutical business practices, including but not limited to, research, distribution, sales and marketing arrangements, as well as submitting claims involving healthcare items or services reimbursed by any third-party payor, including commercial insurers.

•State laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines, and the relevant compliance guidance promulgated by the federal government that otherwise restricts payments that may be made to healthcare providers and other potential referral sources.

•State and local laws that require drug manufacturers to file reports with states regarding pricing and marketing information, such as the tracking and reporting of gifts, compensation and other remuneration, and items of value provided to healthcare professionals and entities.

•State and local laws that require the registration of pharmaceutical sales representatives.

•State and foreign laws that govern the privacy and security of personal information (including health information) in certain circumstances. These include, but are not limited to, the EU General Data Protection Regulation, and the California Consumer Privacy Act, as amended and expanded by the California Privacy Rights Act, each of which is discussed below. Many of these laws governing the privacy and security of personal information differ from each other in significant ways and may not have the same effects or obligations, thus complicating compliance efforts.

In addition, we are subject to federal and state consumer protection and unfair competition laws that broadly regulate marketplace activities and activities that potentially harm consumers.

Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our business activities could, despite our efforts to comply, be subject to challenge under one or more of such laws. Efforts to ensure that our business arrangements will comply with applicable healthcare laws may involve substantial costs. It is possible that governmental and enforcement authorities will conclude that our business practices may not comply with current or future statutes, regulations, or case law interpreting applicable fraud and abuse or other healthcare laws and regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal, and administrative penalties, damages, disgorgement, monetary fines, possible exclusion from participation in Medicare, Medicaid, and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations. In addition, the approval and commercialization of any of our product candidates outside the United States will also likely subject us to foreign equivalents of the healthcare laws mentioned above, among other foreign laws.

If we or any contract manufacturers and suppliers we engage fail to comply with environmental, health, and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on our business.

We and any contract manufacturers and suppliers we engage are subject to numerous federal, state, and local environmental, health, and safety laws, regulations, and permitting requirements, including those governing laboratory procedures; the generation, handling, use, storage, treatment, and disposal of hazardous and regulated materials and wastes; the emission and discharge of hazardous materials into the ground, air, and water; and employee health and safety. Our operations involve the use of hazardous and flammable materials, including chemicals and biological and radioactive materials. Our operations also produce hazardous waste. We generally contract with third parties for the disposal of these materials and wastes. We cannot eliminate the risk of contamination or injury from these materials. In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. Under certain environmental laws, we could be held responsible for costs relating to any contamination at our past facilities and at third-party facilities. We also could incur significant costs associated with civil or criminal fines and penalties.

Compliance with applicable environmental laws and regulations may be expensive, and current or future environmental laws and regulations may impair our research, product development, and manufacturing efforts. In addition, we cannot entirely eliminate the risk of accidental injury or contamination from these materials or wastes. Although we maintain workers’ compensation insurance to cover us for costs we may incur due to injuries to our employees resulting from the use of hazardous

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materials, this insurance may not provide adequate coverage against potential liabilities. We do not carry specific biological or hazardous waste insurance coverage, and our property, casualty, and general liability insurance policies only provide limited coverage. Accordingly, in the event of contamination or injury, we could be held liable for damages or be penalized with fines in an amount exceeding our resources, and our clinical trials or regulatory approvals could be suspended, which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

Our business activities may be subject to the Foreign Corrupt Practices Act (FCPA) and similar anti-bribery and anti-corruption laws, as well as U.S. and certain foreign export controls, trade sanctions, and import laws and regulations. We can face criminal liability and other serious consequences for violations, which can harm our business.

Our business activities may be subject to the FCPA and similar anti-bribery or anti-corruption laws, regulations or rules of other countries in which we operate. These laws generally prohibit companies and their employees and third-party business partners, representatives and agents from engaging in corruption and bribery, including offering, promising, giving, or authorizing the provision of anything of value, either directly or indirectly, to a government official or commercial party in order to influence official action, direct business to any person, gain any improper advantage, or obtain or retain business. The FCPA also requires public companies to make and keep books and records that accurately and fairly reflect the transactions of the corporation and to devise and maintain an adequate system of internal accounting controls. Our business is heavily regulated and therefore involves significant interaction with government officials, including officials of non-U.S. governments. Additionally, in many countries, healthcare providers are employed by the government, and the purchasers of biopharmaceuticals are government entities; therefore, our dealings with these providers and purchasers are subject to regulation and such healthcare providers and employees of such purchasers may be considered “foreign officials” as defined in the FCPA. Recently, the SEC and Department of Justice have increased their FCPA enforcement activities with respect to biotechnology companies. In addition to our own employees, we leverage third parties to conduct our business abroad, such as managing our clinical trials and obtaining government licenses and approvals. We and our third-party business partners, representatives and agents may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities and we may be held liable for the corrupt or other illegal activities of our employees, our third-party business partners, representatives and agents, even if we do not explicitly authorize such activities. There is no certainty that our employees or the employees of our third-party business partners, representatives and agents will comply with all applicable laws and regulations, particularly given the high level of complexity of these laws. Violations of these laws and regulations could result in whistleblower complaints, adverse media coverage, investigations, loss of export privileges, debarment from U.S. and other government contracts, substantial diversion of management’s attention, significant legal fees and fines, severe criminal or civil sanctions against us, our officers, or our employees, disgorgement, and other sanctions and remedial measures, and prohibitions on the conduct of our business. Any such violations could include prohibitions on our ability to offer our products in one or more countries and could materially damage our reputation, our brand, our international expansion efforts, our ability to attract and retain employees, and our business, prospects, operating results, financial condition and stock price.

In addition, our products may be subject to U.S. and foreign export controls, trade sanctions and import laws and regulations. Governmental regulation of the import or export of our products, or our failure to obtain any required import or export authorization for our products, when applicable, could harm our business. Furthermore, U.S. export control laws and economic sanctions prohibit the provision of certain products and services to countries, governments, and persons targeted by U.S. sanctions. For example, U.S. sanctions that have been or may be imposed as a result of the conflicts between Russia and Ukraine or Israel and Hamas may impact our ability to continue activities at clinical trial sites within regions covered by such sanctions. If we fail to comply with export and import regulations and such economic sanctions, penalties could be imposed, including fines and/or denial of certain export privileges.

Data collection under European and U.S. laws is governed by restrictive regulations addressing the collection, use, processing and, in the case of Europe, cross-border transfer, of personal information.

We may collect, process, use or transfer personal information from individuals located in the European Union (EU) and UK in connection with our business, including in connection with conducting clinical trials in the EU and UK. Additionally, if any of our product candidates are approved, we may seek to commercialize those products in the EU and UK. The collection and use of personal health data in the EU and UK are governed by laws, regulations, and directives, including the General Data Protection Regulation (EU) 2016/679 (GDPR) and a UK version of the GDPR (combining the GDPR and the UK’s Data Protection Act 2018). This legislation imposes requirements relating to having legal bases for processing personal information relating to identifiable individuals and transferring such information outside of the European Economic Area (EEA), in the case of the GDPR, and the UK, including to the United States, providing details to those individuals regarding the processing of their personal information, keeping personal information secure, having data processing agreements with third parties who process personal information, responding to individuals’ requests to exercise their rights in respect of their personal information, reporting security breaches involving personal data to the competent national data protection authority and affected individuals, appointing data protection officers, conducting data protection impact assessments and record-keeping. This legislation imposes

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significant responsibilities and liabilities in relation to personal data that we process, and we may be required to put in place additional mechanisms ensuring compliance. In particular, with respect to cross-border transfers of personal data, judicial and regulatory developments in the EU have created uncertainty. In a decision issued by the Court of Justice of the European Union (CJEU) on July 16, 2020, the CJEU invalidated one mechanism for cross-border personal data transfer, the EU-U.S. Privacy Shield, and imposed additional obligations on companies, including us, relying on standard contractual clauses (SCCs) issued by the European Commission for cross-border personal data transfers. The European Commission released new SCCs designed to address the CJEU concerns on June 4, 2021. On February 2, 2022, the United Kingdom’s Information Commissioner’s Office issued new standard contractual clauses (UK SCCs) to support personal data transfers out of the UK. We have undertaken certain efforts to conform transfers of personal data from the EEA and UK to the United States to our understanding of current regulatory obligations and guidance of data protection authorities, but the CJEU’s decision, the revised SCCs and UK SCCs, regulatory guidance and opinions, and other developments relating to cross-border data transfer may require us to implement additional contractual and technical safeguards for any personal data transferred out of the EEA and UK, which may increase compliance costs, lead to increased regulatory scrutiny or liability, may require additional contractual negotiations, and may adversely impact our business, financial condition and operating results. Any actual or alleged failure to comply with the requirements of the GDPR or other laws, regulations, and directives of the member states of the EU and UK may result in substantial fines, other administrative penalties and civil claims being brought against us, which could have a material adverse effect on our business, financial condition and results of operations.

In addition, U.S. states are adopting new laws or amending existing laws and regulations, requiring attention to frequently changing regulatory requirements applicable to data related to individuals. For example, California has enacted the California Consumer Privacy Act (CCPA), which took effect on January 1, 2020 and has been dubbed the first “GDPR-like” law in the United States. The CCPA gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing and receive detailed information about how their personal information is used by requiring covered companies to provide new disclosures to California consumers (as that term is broadly defined and which can include any of our current or future employees who may be California residents or any other California residents whose data we collect or process) and provide such residents new ways to opt out of certain sales of personal information. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. As we expand our operations and clinical trials (both preclinical or clinical), the CCPA may increase our compliance costs and potential liability. Some observers have noted that the CCPA could mark the beginning of a trend toward more stringent privacy legislation in the United States.

Additionally, a new privacy law, the California Privacy Rights Act (CPRA), was approved by California voters in the election on November 3, 2020. The CPRA creates obligations relating to consumer data as of January 1, 2022, with enforcement anticipated to begin July 1, 2023. The CPRA modifies the CCPA significantly, potentially resulting in further uncertainty and requiring us to incur additional costs and expenses in an effort to comply. Additionally, other U.S. states continue to propose, and in certain cases adopt, privacy-focused legislation such as Colorado, Connecticut, Delaware, Oregon, Texas, Utah and Virginia. Aspects of these state laws remain unclear, resulting in further uncertainty and potentially requiring us to modify our data practices and policies and to incur substantial additional costs and expenses in an effort to comply. Additionally, the U.S. federal government is contemplating federal privacy legislation.

Laws, regulations, and directives relating to privacy and data security are not consistent across jurisdictions, and they may impose conflicting or uncertain obligations. Compliance with laws, regulations, and directives is a rigorous, costly, and time-intensive process, and we may find it necessary or appropriate to put in place additional mechanisms ensuring compliance with new and changing data protection obligations. Actual or alleged noncompliance with any such laws, regulations, and directives may lead to regulatory investigations, enforcement actions and other proceedings, claims, and litigation, with the potential for significant fines, penalties, and other liabilities in the event of actual or alleged noncompliance. Any of these could adversely affect our business, financial condition and results of operations.

Risks Related to Our Intellectual Property

If we are unable to obtain and maintain patent protection for any product candidates we develop, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize any product candidates we may develop may be adversely affected.

Our success depends in large part on our ability to obtain and maintain patent protection in the United States and other countries with respect to our proprietary product candidates and other technologies we may develop. We seek to protect our proprietary position by filing patent applications in the United States and abroad relating to our core programs and product candidates, as well as other technologies that are important to our business. We have filed or intend to file patent applications on aspects of our technology and core product candidates; however, there can be no assurance that such patent applications will issue as granted patents around the world. The requirements for patentability differ in certain countries, and certain countries have heightened

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requirements for patentability. Furthermore, in some cases, we have only filed provisional patent applications on certain aspects of our technology and product candidates and each of these provisional patent applications is not eligible to become an issued patent until, among other things, we file a non-provisional patent application within 12 months of the filing date of the applicable provisional patent application. Any failure to file a non-provisional patent application within this timeline could cause us to lose the ability to obtain patent protection for the inventions disclosed in the associated provisional patent applications. Furthermore, in some cases, we may not be able to obtain issued claims covering compositions relating to our core programs and product candidates, as well as other technologies that are important to our business, and instead may need to rely on filing patent applications with claims covering a method of use and/or method of manufacture for protection of such core programs, product candidates, and other technologies. Any changes we make to our product candidates to cause them to have what we view as more advantageous properties may not be covered by our existing patents and patent applications, and we may be required to file new applications and/or seek other forms of protection for any such altered product candidates. There can be no assurance that we would be able to secure patent protection that would adequately cover altered product candidates. There can be no assurance that any such patent applications will issue as granted patents, and even if they do issue, such patent claims may be insufficient to prevent third parties, such as our competitors, from utilizing our technology. Any failure to obtain or maintain patent protection with respect to our core programs and product candidates could have a material adverse effect on our business, financial condition, results of operations, and prospects.

If the scope of any patent protection we obtain is not sufficiently broad, or if we lose any of our patent protection, our ability to prevent our competitors from commercializing similar or identical technology and product candidates would be adversely affected.

The patent position of biopharmaceutical companies generally is highly uncertain, involves complex legal and factual questions, and has been the subject of much litigation in recent years. As a result, the issuance, scope, validity, enforceability, and commercial value of our patent rights are highly uncertain. Our pending and future patent applications may not result in patents being issued which protect our product candidates or other technologies or which effectively prevent others from commercializing competitive technologies and product candidates.

Moreover, the coverage claimed in a patent application can be significantly reduced before the patent is issued, and its scope can be reinterpreted after issuance. Patent applications we own currently or that in the future issue as patents may not be issued in a form that will provide us with any meaningful protection, prevent competitors or other third parties from competing with us, or otherwise provide us with any competitive advantage. Any patents to which we have rights may be challenged, narrowed, circumvented, or invalidated by third parties. Consequently, we do not know whether product candidates or other technologies will be protectable or remain protected by valid and enforceable patents. Our competitors or other third parties may be able to circumvent our patents by developing similar or alternative technologies or products in a non-infringing manner which could materially adversely affect our business, financial condition, results of operations, and prospects.

The issuance of a patent is not conclusive as to its inventorship, scope, validity, or enforceability, and our patents may be challenged in the courts or patent offices in the United States and abroad. We may be subject to a third-party pre-issuance submission of prior art to the United States Patent and Trademark Office (USPTO) or post-issuance become involved in opposition, derivation, revocation, reexamination, post-grant and inter partes review, or interference proceedings or other similar proceedings challenging our patent rights. An adverse determination in any such submission, proceeding, or litigation could reduce the scope of, or invalidate or render unenforceable, such patent rights, allow third parties to commercialize our product candidates or other technologies and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights. Moreover, we may have to participate in interference proceedings declared by the USPTO to determine priority of invention or in post-grant challenge proceedings, such as post-grant review at the USPTO or oppositions in a foreign patent office, that challenge our priority of invention or other features of patentability with respect to our patents and patent applications. Such challenges may result in loss of patent rights, loss of exclusivity, or in patent claims being narrowed, invalidated, or held unenforceable, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our product candidates and other technologies. Such proceedings also may result in substantial cost and require significant time from our scientists and management, even if the eventual outcome is favorable to us. If we are unsuccessful in any such proceeding or other priority or inventorship dispute, we may be required to obtain licenses from third parties, including parties involved in any such interference proceedings or other priority or inventorship disputes. Such licenses may not be available on commercially reasonable terms or at all, or may be non-exclusive. If we are unable to obtain and maintain such licenses, we may need to cease the development, manufacture, and commercialization of one or more of the product candidates we may develop. Termination of these licenses or reduction or elimination of our rights under these licenses may result in our having to negotiate new or reinstated agreements with less favorable terms, or cause us to lose our rights under these licenses, including our rights to important intellectual property or technology. The loss of exclusivity or the narrowing of our owned and licensed patent claims could limit our ability to stop others from using or commercializing similar or identical technology and products.

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In addition, given the amount of time required for the development, testing, and regulatory review of new product candidates, patents protecting such product candidates might expire before or shortly after such product candidates are commercialized. As a result, our intellectual property may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.

Some of our patents and patent applications may in the future be co-owned with third parties. In addition, future collaborators or licensors may co-own their patents and patent applications with other third parties with whom we do not have a direct relationship. Our rights to certain of these patents and patent applications may be dependent, in part, on inter-institutional or other operating agreements between the joint owners of such patents and patent applications, who are not parties to our license agreements. If our future collaborators or licensors do not have exclusive control of the grant of licenses under any such third-party co-owners’ interest in such patents or patent applications or we are otherwise unable to secure such exclusive rights, such co-owners may be able to license their rights to other third parties, including our competitors, and our competitors could market competing products and technology to the extent such products and technology are not also covered by our intellectual property. In addition, we may need the cooperation of any such co-owners of our patents in order to enforce such patents against third parties, and such cooperation may not be provided to us. Any of the foregoing could have a material adverse effect on our competitive position, business, financial conditions, results of operations, and prospects.

If we are unable to obtain licenses from third parties on commercially reasonable terms or fail to comply with our obligations under such agreements, our business could be harmed.

It may be necessary for us to use the patented or proprietary technology of third parties to commercialize our products, in which case we would be required to obtain a license from these third parties. If we are unable to license such technology, or if we are forced to license such technology, on unfavorable terms, our business could be materially harmed. If we are unable to obtain a necessary license, we may be unable to develop or commercialize the affected product candidates, which could materially harm our business, and the third parties owning such intellectual property rights could seek either an injunction prohibiting our sales, or, with respect to our sales, an obligation on our part to pay royalties and/or other forms of compensation. Even if we are able to obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us.

If we fail to comply with our obligations under our license agreements, our counterparties may have the right to terminate these agreements, in which event we might not be able to develop, manufacture or market, or may be forced to cease developing, manufacturing or marketing, any product that is covered by these agreements or may face other penalties under such agreements. Such an occurrence could materially adversely affect the value of the product candidate being developed under any such agreement. Termination of these agreements or reduction or elimination of our rights under these agreements may result in our having to negotiate new or reinstated agreements with less favorable terms, cause us to lose our rights under these agreements, including our rights to important intellectual property or technology, or impede, delay or prohibit the further development or commercialization of one or more product candidates that rely on such agreements.

Our rights to develop and commercialize our product candidates may be subject, in part, to the terms and conditions of agreements with others.

Agreements we may enter into in the future may not provide exclusive rights to use certain intellectual property and technology retained by the collaborator in all relevant fields of use and in all territories in which we may wish to develop or commercialize our technology and products in the future. As a result, we may not be able to prevent competitors or other third parties from developing and commercializing competitive products that utilize technology retained by such collaborators to the extent such products are not also covered by our intellectual property.

In addition, subject to the terms of any such agreements, we may not have the right to control the preparation, filing, prosecution, and maintenance, and we may not have the right to control the enforcement and defense of certain patents and patent applications retained by the collaborator and provided to us under a limited license. We cannot be certain that patents and patent applications that are controlled by future collaborators will be prepared, filed, prosecuted, maintained, enforced, and defended in a manner consistent with the best interests of our business. If our collaborators fail to prosecute, maintain, enforce, and defend such patents, or lose rights to those patents or patent applications, the limited rights we have licensed may be reduced or eliminated, our right to develop and commercialize any of our product candidates that are subject of such licensed rights could be adversely affected, and we may have a reduced ability to prevent competitors from making, using, and selling competing products. In addition, even where we have the right to control patent prosecution of patents and patent applications we have licensed to and from future collaborators, we may still be adversely affected or prejudiced by actions or inactions of future collaborators that took place prior to the date upon which we assumed control over patent prosecution.

We may enter into agreements with future collaborators to option or license certain intellectual property and may need to obtain additional intellectual property rights from others to advance our research or allow commercialization of product candidates we

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may develop. We may be unable to obtain additional intellectual property rights at a reasonable cost or on reasonable terms, if at all. In that event, we may be required to expend significant time and resources to redesign our technology, product candidates, or the methods for manufacturing them or to develop or license replacement technology, all of which may not be feasible on a technical or commercial basis. If we are unable to do so, we may be unable to develop or commercialize the affected product candidates, which could harm our business, financial condition, results of operations, and prospects significantly. We cannot provide any assurances that third-party patents do not exist which might be enforced against our current technology, manufacturing methods, product candidates, or future methods or products resulting in either an injunction prohibiting our manufacture or future sales, or, with respect to our future sales, an obligation on our part to pay royalties and/or other forms of compensation to third parties, which could be significant.

Furthermore, our or our future collaborators’ patents may be subject to a reservation of rights by one or more third parties. The U.S. government may have certain rights to resulting intellectual property. When new technologies are developed with U.S. government funding, the U.S. government generally obtains certain rights in any resulting patents, including a non-exclusive license authorizing the U.S. government to use the invention or to have others use the invention on its behalf. The U.S. government’s rights may also permit it to disclose the funded inventions and technology to third parties and to exercise march-in rights to use or allow third parties to use the technology developed using U.S. government funding. The U.S. government may exercise its march-in rights if it determines that action is necessary because we fail to achieve the practical application of the government funded technology, or because action is necessary to alleviate health or safety needs, to meet requirements of federal regulations, or to give preference to U.S. industry. In addition, our rights in such inventions may be subject to certain requirements to manufacture products embodying such inventions in facilities in the United States in certain circumstances and if this requirement is not waived. Any exercise by the U.S. government of such rights or by any third-party of its reserved rights could have a material adverse effect on our competitive position, business, financial condition, results of operations, and prospects.

If we fail to comply with our obligations in agreements under which we option or license intellectual property rights from future collaborators or licensors or otherwise experience disruptions to our business relationships with future collaborators or licensors, we could lose intellectual property rights that are important to our business.

We may enter into agreements with future collaborators that impose various economic, development, diligence, commercialization, and other obligations on us. Such collaboration agreements may also require us to meet development timelines, or to exercise commercially reasonable efforts to develop and commercialize licensed products. Our future collaborators might conclude that we have materially breached our obligations under such agreements and might therefore terminate or seek damages under the agreements, thereby removing or limiting our ability to develop and commercialize products and technology covered by these agreements. Termination of these agreements could cause us to lose the rights to certain patents or other intellectual property, or the underlying patents could fail to provide the intended exclusivity, and competitors or other third parties may have the freedom to seek regulatory approval of, and to market, products similar to or identical to ours and we may be required to cease our development and commercialization of certain of our product candidates. Any of the foregoing could have a material adverse effect on our competitive position, business, financial conditions, results of operations, and prospects.

Moreover, disputes may arise regarding intellectual property subject to a collaboration agreement, including:

•the scope of the option or license rights granted under the agreement and other interpretation-related issues;

•the extent to which our technology and processes infringe on intellectual property of the collaborator that is not subject to the option or license rights granted under the agreement;

•the sublicensing of patent and other rights under our collaborative development relationships;

•our diligence obligations under the agreement and what activities satisfy those diligence obligations;

•the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our collaborators and us and our other partners; and

•the priority of invention of patented technology.

We may enter into agreements to option or license intellectual property or technology from third parties that are complex, and certain provisions in such agreements may be susceptible to multiple interpretations. The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase what we believe to be our financial or other obligations under the relevant agreement, either of which could have a material adverse effect on our business, financial condition, results of operations, and prospects. Moreover, if disputes over intellectual property that we have optioned or licensed prevent or impair our ability to maintain such

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arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates, which could have a material adverse effect on our business, financial conditions, results of operations, and prospects.

We may not be able to protect our intellectual property and proprietary rights throughout the world.

Filing, prosecuting, and defending patents on our product candidates and other technologies in all countries throughout the world would be prohibitively expensive, and the laws of foreign countries may not protect our rights to the same extent as the laws of the United States.

Consequently, we may not be able to prevent third parties from using our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products, and, further, may export otherwise infringing products to territories where we have patent protection but enforcement is not as strong as that in the United States. These products may compete with our products, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets, and other intellectual property protection, particularly those relating to biopharmaceutical products, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our intellectual property and proprietary rights generally. Proceedings to enforce our intellectual property and proprietary rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly, could put our patent applications at risk of not issuing, and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property and proprietary rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

Many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent. If we or any of our future collaborators or licensors is forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position may be impaired, and our business, financial condition, results of operations, and prospects may be adversely affected.

Issued patents covering our product candidates and other technologies could be found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad.

If we initiated legal proceedings against a third party to enforce a patent covering our product candidates or other technologies, the defendant could counterclaim that such patent is invalid or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, or non-enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution. Third parties may raise claims challenging the validity or enforceability of our patents before administrative bodies in the United States or abroad, even outside the context of litigation. Such mechanisms include re-examination, post-grant review, inter partes review, interference proceedings, derivation proceedings, and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings). Such proceedings could result in the revocation of, cancellation of, or amendment to our patents in such a way that they no longer cover our product candidates or other technologies or may result in a change in inventorship which could impact our exclusive ownership of a patent. The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution. If a third party were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our product candidates or other technologies. Such a loss of patent protection would have a material adverse impact on our business, financial condition, results of operations, and prospects.

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Third-party claims of intellectual property infringement, misappropriation, or other violation against us may prevent or delay the development and commercialization of our product candidates and other technologies.

The fields of designing and developing treatments for immunology, inflammation, and metabolic diseases are highly competitive and dynamic. In addition, while research and development that is taking place by several companies, including us and our competitors in oral biologic therapeutics, the technology used in our product candidates is still in development and no products utilizing similar technology have yet reached the market. As such, it is difficult to conclusively assess our freedom to operate without infringing on third-party rights. This could lead to significant intellectual property related litigation and proceedings relating to our, and other third party, intellectual property and proprietary rights in the future.

Our commercial success depends in part on our ability to develop, manufacture, market, and sell any product candidates that we develop and to use our proprietary technologies without infringing, misappropriating, and otherwise violating the patents and other intellectual property rights of third parties. There is a substantial amount of complex litigation involving patents and other intellectual property rights in the biotechnology and pharmaceutical industries, as well as administrative proceedings for challenging patents, including interference, post-grant review, inter partes review, derivation proceedings, and reexamination proceedings before the USPTO or oppositions and other comparable proceedings in foreign jurisdictions. We may become party to, or threatened with, such actions in the future, regardless of their merit.

Numerous U.S. and foreign issued patents and pending patent applications owned by third parties exist in the fields in which we were developing our product candidates. We cannot assure you that our product candidates and other technologies that we have developed or may develop in the future will not infringe existing or future patents owned by third parties. We may not be aware of patents that have already been issued and that a third party, for example, a competitor in the fields in which we were developing product candidates, and other technologies might assert are infringed by our current or future product candidates or other technologies, including claims to compositions, formulations, methods of manufacture or methods of use or treatment that cover our product candidates or other technologies. It is also possible that patents owned by third parties of which we are aware, but which we do not believe are relevant to our product candidates or other technologies, could be found to be infringed by our product candidates or other technologies. In addition, because patent applications can take many years to issue, there may be currently pending patent applications that may later result in issued patents that our product candidates or other technologies may infringe.

Third parties may have patents or obtain patents in the future and claim that the manufacture, use, or sale of our product candidates or other technologies infringes upon these patents. In the event that any third-party claims that we infringe their patents or that we are otherwise employing their proprietary technology without authorization and initiates litigation against us, even if we believe such claims are without merit, a court of competent jurisdiction could hold that such patents are valid, enforceable and infringed by our product candidates or other technologies. In this case, the holders of such patents may be able to block our ability to commercialize the applicable product candidate or technology unless we obtain a license under the applicable patents, or until such patents expire or are finally determined to be held invalid or unenforceable. Such a license may not be available on commercially reasonable terms or at all. Even if we are able to obtain a license, the license would likely obligate us to pay license fees or royalties or both, and the rights granted to us might be nonexclusive, which could result in our competitors gaining access to the same intellectual property. If we are unable to obtain a necessary license to a third-party patent on commercially reasonable terms, we may be unable to commercialize our product candidates or other technologies, or such commercialization efforts may be significantly delayed, which could in turn significantly harm our business.

Defense of infringement claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of management and other employee resources from our business, and may impact our reputation. In the event of a successful claim of infringement against us, we may be enjoined from further developing or commercializing our infringing product candidates or other technologies. In addition, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses from third parties, pay royalties, and/or redesign our infringing product candidates or technologies, which may be impossible or require substantial time and monetary expenditure. In that event, we would be unable to further develop and commercialize our product candidates or other technologies, which could harm our business significantly.

Engaging in litigation to defend against third parties alleging that we have infringed, misappropriated, or otherwise violated their patents or other intellectual property rights is very expensive, particularly for a company of our size, and time-consuming. Some of our competitors may be able to sustain the costs of litigation or administrative proceedings more effectively than we can because of greater financial resources. Patent litigation and other proceedings may also absorb significant management time. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings against us could impair our ability to compete in the marketplace. The occurrence of any of the foregoing could have a material adverse effect on our business, financial condition, results of operations, and prospects.

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We may become involved in lawsuits to protect or enforce our patents and other intellectual property rights, which could be expensive, time consuming, and unsuccessful.

Competitors may infringe our patents or we may be required to defend against claims of infringement. In addition, our patents may become involved in inventorship, priority, or validity disputes. To counter or defend against such claims can be expensive and time consuming. In an infringement proceeding, a court may decide that a patent in which we have an interest is invalid or unenforceable, the other party’s use of our patented technology falls under the safe harbor to patent infringement under 35 U.S.C. §271(e)(1), or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question. An adverse result in any litigation proceeding could put one or more of our patents at risk of being invalidated or interpreted narrowly. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.

Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract our personnel from their normal responsibilities. In addition, there could be public announcements of the results of hearings, motions, or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing, or distribution activities. We may not have sufficient financial or other resources to conduct such litigation or proceedings adequately. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources and more mature and developed intellectual property portfolios. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace.

Patent terms may be inadequate to protect our competitive position on our products and services for an adequate amount of time.

Patents have a limited lifespan. In the United States and abroad, if all maintenance fees/annuity fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest non-provisional filing date. The protection a patent affords is limited. Even if patents covering our products are obtained, once the patent life has expired, we may be open to competition from competitive products. Given the amount of time required for the development, testing, and regulatory review of new products, patents protecting such products might expire before or shortly after such products are commercialized. As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.

We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.

We may be subject to claims that former employees or other third parties have an interest in our patents, trade secrets, or other intellectual property as an inventor or co-inventor. For example, our Co-Founder, Dr. Randall Mrsny, was an employee of both our company and the University of Bath and currently remains an employee of the University of Bath, and as such, we must ensure that we own our intellectual property that was conceived or developed by Dr. Mrsny while he was our employee and that he is under obligation to assign to our company. We may have inventorship or ownership disputes arise from conflicting obligations of our founders, employees, consultants, or others who are involved in developing our product candidates or other technologies, such as with the University of Bath. Litigation may be necessary to defend against any claims challenging inventorship or ownership of our patents, trade secrets, or other intellectual property. If the defense of any such claims fails, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, intellectual property that is important to our product candidates and other technologies. Even if we are successful in defending against any such claims, litigation could result in substantial costs and be a distraction to management and other employees. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations, and prospects.

If we do not obtain patent term extension and data exclusivity for any product candidates we may develop, our business may be materially harmed.

Depending upon the timing, duration, and specifics of any FDA marketing approval of any product candidates we may develop, one or more of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984 (Hatch-Waxman Act). The Hatch-Waxman Act permits a patent term extension of up to five years as compensation for patent term lost during the FDA regulatory review process. A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent may be extended and only those claims covering the approved drug, a method for using it, or a method for manufacturing it may be extended. Similar extensions as compensation for patent term lost during regulatory review processes are also available in certain foreign

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countries and territories, such as in Europe under a Supplementary Patent Certificate. However, we may not be granted an extension in the United States and/or foreign countries and territories because of, for example, failing to exercise due diligence during the testing phase or regulatory review process, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents, or otherwise failing to satisfy applicable requirements. Moreover, the applicable time period or the scope of patent protection afforded could be less than we request. If we are unable to obtain patent term extension or the term of any such extension is shorter than what we request, our competitors may obtain approval of competing products following our patent expiration, and our business, financial condition, results of operations, and prospects could be materially harmed.

If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.

In addition to seeking patents for our product candidates and other technologies, we also rely on trade secrets and confidentiality agreements to protect our unpatented know-how, technology, and other proprietary information and to maintain our competitive position. We consider trade secrets and know-how to be one of our primary sources of intellectual property. Trade secrets and know-how can be difficult to protect. We expect our trade secrets and know-how to over time be disseminated within the industry through independent development, the publication of journal articles describing the methodology, and the movement of personnel from academic to industry scientific positions.

While we seek to protect these trade secrets and other proprietary technology, we cannot guarantee that we have entered into non-disclosure, confidentiality, invention, or patent assignment agreements with each party that may have or have had access to our trade secrets or proprietary technology and processes. Despite our efforts, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. Over the last 18 months, we have terminated a significant portion of our workforce, many of whom held technical positions. As a result, there may be an increased risk that our proprietary information, including our trade secrets, may be inadvertently or intentionally disclosed to a third party. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive, and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor or other third party, we would have no right to prevent them from using that technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by a competitor or other third party, our competitive position would be materially and adversely harmed.

If any of our patent applications do not issue as patents in any jurisdiction, we may not be able to compete effectively.

Changes in either the patent laws or their interpretation in the United States and other countries may diminish our ability to protect our inventions, obtain, maintain, and enforce our intellectual property rights and, more generally, could affect the value of our intellectual property or narrow the scope of our patents with respect to our product candidates. With respect to our intellectual property related to our product candidates, we cannot predict whether the patent applications we are currently pursuing will issue as patents in any particular jurisdiction or whether the claims of any issued patents will provide sufficient protection from competitors or other third parties.

The patent prosecution process is expensive, time-consuming, and complex, and we may not be able to file, prosecute, maintain, enforce, or license all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and development output in time to obtain patent protection. We may not have the right to control the preparation, filing and prosecution of patent applications, or to maintain the rights to patents licensed to third parties. Therefore, these patents and applications may not be prosecuted and enforced in a manner consistent with the best interests of our business. Any parties who enter into nondisclosure and confidentiality agreements with us who have access to confidential or patentable aspects of our research and development output, such as our employees, CROs, CDMOs, consultants, advisors, and other third parties, may breach the agreements and disclose such output before a patent application is filed, thereby jeopardizing our ability to seek patent protection. In addition, our ability to obtain and maintain valid and enforceable patents depends on whether the differences between our inventions and the prior art allow our inventions to be patentable over the prior art. Furthermore, publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. Therefore, we cannot be certain that we were the first to make the inventions claimed in any of our patents or pending patent applications, or that we were the first to file for patent protection of such inventions.

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Intellectual property rights do not necessarily address all potential threats.

The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations and may not adequately protect our business or permit us to maintain our competitive advantage. For example:

•others may be able to make products that are similar to our product candidates or utilize similar technology but that are not covered by the claims of the patents that we license or may own;

•others may be able to develop a platform that is similar to, or better than, ours in a way that is not covered by the claims of our patents;

•we, or our future licensors or collaborators, might not have been the first to make the inventions covered by the issued patent or pending patent application that we license or own now or in the future;

•we, or our future licensors or collaborators, might not have been the first to file patent applications covering certain of our or their inventions;

•others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our owned or licensed intellectual property rights;

•it is possible that our current or future pending owned or licensed patent applications will not lead to issued patents;

•issued patents that we hold rights to may be held invalid or unenforceable, including as a result of legal challenges by our competitors or other third parties;

•our competitors or other third parties might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets;

•we may not develop additional proprietary technologies that are patentable;

•the patents of others may harm our business; and

•we may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third-party may subsequently file a patent covering such intellectual property.

Should any of these events occur, it or they could have a material adverse effect on our business, financial condition, results of operations, and prospects.

Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by government patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

Periodic maintenance fees, renewal fees, annuity fees, and various other government fees on patents and applications will be due to be paid to the USPTO and various government patent agencies outside of the United States over the lifetime of our owned or licensed patents and applications. The USPTO and various non-U.S. government agencies require compliance with several procedural, documentary, fee payment, and other similar provisions during the patent application process. There are situations, however, in which non-compliance can result in abandonment or lapse of the patent or patent application, resulting in a partial or complete loss of patent rights in the relevant jurisdiction. In such an event, potential competitors might be able to enter the market with similar or identical products or technology, which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

Changes in patent law in the United States and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products.

Changes in either the patent laws or interpretation of the patent laws in the United States or other jurisdictions could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents. Assuming that other requirements for patentability are met, prior to March 16, 2013, in the United States, the first to invent the claimed invention was entitled to the patent, while outside the United States, the first to file a patent application was entitled to the patent. On or after March 16, 2013, under the Leahy-Smith America Invents Act (America Invents Act) enacted on September 16, 2011, the United States transitioned to a first inventor to file system in which, assuming that other requirements for patentability are met, the first inventor to file a patent application will be entitled to the patent on an invention regardless of whether a third party was the first to invent the claimed invention. A third-party that files a patent application in the USPTO on or after March 16, 2013, but before us could therefore be awarded a patent covering an invention of ours even if we had made the invention before it was made by such third party. This will require us to be cognizant going forward of the time from invention to filing of a patent application. Since patent applications in the United States and most other countries are

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confidential for a period of time after filing or until issuance, we cannot be certain that we were the first to either (i) file any patent application related to our product candidates or other technologies or (ii) invent any of the inventions claimed in our patents or patent applications.

The America Invents Act also includes a number of significant changes that affect the way patent applications will be prosecuted and also may affect patent litigation. These include allowing third-party submission of prior art to the USPTO during patent prosecution and additional procedures to attack the validity of a patent by USPTO administered post-grant proceedings, including post-grant review, inter partes review, and derivation proceedings. Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in United States federal courts necessary to invalidate a patent claim, a third-party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action. Accordingly, a third-party may attempt to use the USPTO procedures to invalidate our patent claims that would not have been invalidated if first challenged by the third-party as a defendant in a district court action. Therefore, the America Invents Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

In addition, the patent positions of companies in the development and commercialization of biopharmaceuticals are particularly uncertain. Recent U.S. Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. This combination of events has created uncertainty with respect to the validity and enforceability of patents, once obtained. Depending on future actions by the U.S. Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that could have a material adverse effect on our existing patent portfolio and our ability to protect and enforce our intellectual property in the future.

U.S. government sanctions on Russia and Russian government decrees in response thereto, may prevent us from obtaining, maintaining and/or enforcing our intellectual property rights in Russia.

The U.S. government has enacted a myriad of new sanctions through executive orders that prohibit U.S. companies from engaging in a wide range of activities with numerous government-related and private entities and individuals in Russia. Although the U.S. government has now authorized certain intellectual property-related transactions in Russia, including the filing and prosecution of any application to obtain a patent, trademark, or copyright, as well as the payment of renewal and maintenance fees, the sanctions on Russia may still impede our ability to file, prosecute, and maintain patents or other intellectual property rights in Russia. For example, the sanctions may make it difficult or impossible to pay for third-party intermediaries who facilitate and/or advise us regarding obtaining, maintaining and/or enforcing our intellectual property rights in Russia, which could result in a loss or lapse of patent rights. In addition, the Russian government has decreed that owners of Russian patents from designated “unfriendly” countries, which includes the U.S., will not be entitled to any compensation for use of their patents. This may prevent us from enforcing our Russian patents against Russian entities or individuals who are infringing our patents in Russia. Thus, even if a Russian patent can be maintained, it may not be possible to enforce the patent until the decree and/or sanctions are lifted.

We may be subject to claims that our employees, consultants, or advisors have wrongfully used or disclosed alleged trade secrets of their current or former employers or claims asserting ownership of what we regard as our own intellectual property.

Many of our employees, consultants, and advisors are currently or were previously employed at universities or other biotechnology or pharmaceutical companies, including our competitors and potential competitors. Although we try to ensure that our employees, consultants, and advisors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or these individuals have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such individual’s current or former employer. Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management.

In addition, while it is our policy to require our employees and contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who, in fact, conceives or develops intellectual property that we regard as our own. The assignment of intellectual property rights may not be self-executing, or the assignment agreements may be breached, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the

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ownership of what we regard as our intellectual property. Such claims could have a material adverse effect on our business, financial condition, results of operations, and prospects.

If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.

Our registered or unregistered trademarks or trade names may be challenged, infringed, circumvented, or declared generic or determined to be infringing on other marks. We may not be able to protect our rights to these trademarks and trade names, which we need to build name recognition among potential partners or customers in our markets of interest. At times, competitors or other third parties may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. In addition, there could be potential trade name or trademark infringement claims brought by owners of other registered trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names. Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively and our business may be adversely affected. Our efforts to enforce or protect our proprietary rights related to trademarks, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversion of resources and could adversely affect our business, financial condition, results of operations, and prospects. In addition, opposition or cancellation proceedings may be filed against our trademark applications and registrations, and our trademarks may not survive such proceedings. In certain countries outside of the United States, trademark registration is required to enforce trademark rights. If we do not secure registrations for our trademarks, we may encounter more difficulty in enforcing them against third parties than we otherwise would.

Risks Related to Our Operations

We are highly dependent on our key personnel, and if we are not successful in attracting, motivating, and retaining highly qualified personnel, we may not be able to successfully implement our business strategy or execute a strategic transaction.

Our ability to compete in the highly competitive biotechnology and pharmaceutical industries depends upon our ability to attract, motivate, and retain highly qualified managerial, scientific, and clinical development personnel. We are highly dependent on our management. We have had to reduce our workforce in the past and we may need to reduce our workforce again. The loss of the services provided by any of our executive officers, other key employees, and our inability to find suitable replacements, could result in delays in the development of our product candidates and harm our business.

To succeed, we must recruit, retain, manage and motivate qualified clinical, scientific, manufacturing, and sales and marketing personnel, and we face significant competition for experienced personnel. In addition, we will need to expand and effectively manage our managerial, operational, financial, development and other resources in order to successfully pursue our research, development and commercialization efforts for our existing and future product candidates. Furthermore, replacing executive officers and key employees may be difficult and may take an extended period of time because of the limited talent pool in our industry due to the breadth of skills and experience required to successfully develop, gain regulatory approval of and commercialize products. Competition for skilled personnel is intense and the turnover rate can be high, which may limit our ability to hire and retain highly qualified personnel on acceptable terms or at all. We expect that we may need to recruit talent from outside of our region, and doing so may be costly and difficult.

Many of the other biotechnology companies that we compete against for qualified personnel have greater financial and other resources, different risk profiles and a longer history in the industry than we do. They also may provide more diverse opportunities and better prospects for career advancement. Some of these characteristics may be more appealing to high-quality candidates than what we can offer. We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions. We could in the future have difficulty attracting experienced personnel to our company and may be required to expend significant financial resources in our employee recruitment and retention efforts. To induce valuable employees to remain at our company, in addition to salary and cash incentives, we have provided equity grants that vest over time. The value to employees of these equity grants that vest over time have been and may continue to be significantly affected by movements in our stock price that are beyond our control, and may at any time be insufficient to counteract more lucrative offers from other companies or require us to pay additional compensation to employees to incentivize them to join or stay with us. Although we have employment agreements with our key employees, these employment agreements provide for at-will employment, which means that any of our employees could leave our employment at any time, with or without notice. If we are unable to attract and incentivize quality personnel on acceptable terms, or at all, it may cause our business and operating results to suffer.

We may in the future engage in strategic transactions, acquisitions, collaborations, or partnerships, which may increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities, require us to relinquish

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rights to certain of our technologies or product candidates that we would otherwise seek to develop or commercialize ourselves, and subject us to other risks.

We may engage in various strategic transactions, acquisitions, collaborations, and partnerships in the future, including licensing, acquiring or selling complementary products, intellectual property rights, technologies, or businesses. Any strategic transaction, acquisition, collaboration, or partnership may entail numerous risks, including:

•increased operating expenses and cash requirements;

•volatility with respect to the financial reporting related to such arrangements;

•assumption of indebtedness or contingent liabilities;

•issuance of our equity securities which would result in dilution to our stockholders;

•assimilation of operations, intellectual property, products, and product candidates of an acquired company, including difficulties associated with integrating new personnel;

•relinquishment of rights to certain of our technologies or product candidates as a result of transaction structures that we would otherwise seek to develop or commercialize ourselves;

•diversion of our management’s attention from our existing product programs and initiatives in pursuing such an acquisition or strategic partnership;

•retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;

•risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and regulatory approvals;

•our inability to generate revenue from acquired intellectual property, technology, and/or products sufficient to meet our objectives or even to offset the associated transaction and maintenance costs; and

•because our product candidates are all based on the same proprietary technology platform, decisions made by a strategic partner, such as decisions regarding regulatory strategy or reimbursements, could negatively impact our other products or product candidates that are outside the scope of the strategic partnership.

In addition, if we undertake such a transaction, we may issue dilutive securities, assume or incur debt obligations, incur large one-time expenses, and acquire intangible assets that could result in significant future amortization expense.

Future strategic transactions, partnerships and collaborations may be important to us. We will face significant competition in seeking new strategic partners.

We had limited capabilities for manufacturing and do not yet have any capability for sales, marketing or distribution. For some of our product candidates, we may in the future determine to collaborate with strategic partners for the development and potential commercialization of therapeutic products. The competition for strategic partners is intense. Our ability to reach a definitive agreement will depend, among other things, upon our assessment of the strategic partner’s resources and expertise, the terms and conditions of the proposed transaction, partnership or collaboration and the proposed strategic partner’s evaluation of a number of factors. These factors may include the design or results of clinical trials, the likelihood of approval by the FDA or comparable foreign regulatory authorities, the potential market for the subject product candidate, the costs and complexities of manufacturing and delivering such product candidate to patients, the potential of competing products, the existence of uncertainty with respect to our ownership of technology, which can exist if there is a challenge to such ownership without regard to the merits of the challenge, and industry and market conditions generally. The strategic partner may also consider alternative product candidates or technologies for similar indications that may be available for collaboration and whether such collaboration could be more attractive than the one with us for our product candidate.

Strategic transactions are complex and time-consuming to negotiate and document. In addition, there have been a significant number of recent business combinations among large pharmaceutical companies that have resulted in a reduced number of potential future strategic partners. Even if we are successful in entering into a strategic transaction, the terms and conditions of that transaction may restrict us from entering into future agreements with other potential collaborators.

If we are unable to reach agreements with suitable strategic partners on a timely basis, on acceptable terms, or at all, we may have to curtail the development of a product candidate or reduce or delay one or more of our other development programs. If we elect to fund and undertake development or commercialization activities on our own, we may need to obtain additional expertise and additional capital, which may not be available to us on acceptable terms or at all. If we fail to enter into strategic transactions, partnerships or collaborations, and we do not have sufficient funds or expertise to undertake the necessary

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development and commercialization activities, we may not be able to further develop our product candidates or bring them to market or continue to develop our technology platform and our business may be materially and adversely affected. Any transaction may be on terms that are not optimal for us, and we may not be able to maintain any new transaction if, for example, development or approval of a product candidate is delayed, sales of an approved product candidate do not meet expectations or the partner terminates the collaboration. Any such collaboration, or other strategic transaction, may require us to incur non-recurring or other charges, and increase our near- and long-term expenditures and pose significant integration or implementation challenges or disrupt our management or business. Accordingly, although there can be no assurance that we will undertake or successfully complete any transactions of the nature described above, any transactions that we do complete may be subject to the foregoing or other risks and have a material and adverse effect on our business, financial condition, results of operations, and prospects. Conversely, any failure to enter any collaboration or other strategic transaction that would be beneficial to us could delay the development and potential commercialization of our product candidates and have a negative impact on the competitiveness of any product candidate that reaches the market.

If we are unable to maintain future strategic partnerships or enter into strategic transactions or collaborations, our business could be adversely affected.

Any future strategic partnerships we enter into may pose a number of risks, including the following:

•we may not be able to enter into critical strategic partnerships or enter them on favorable terms;

•strategic partners have significant discretion in determining the effort and resources that they will apply to such a partnership, and they may not perform their obligations as agreed or expected;

•strategic partners may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the partners’ strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities;

•strategic partners may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing;

•strategic partners could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates if the strategic partners believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than our product candidates;

•product candidates discovered in collaboration with us may be viewed by our strategic partners as competitive with their own product candidates or products, which may cause strategic partners to cease to devote resources to the commercialization of our product candidates;

•a strategic partner with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product candidates;

•disagreements with strategic partners, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or termination of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive;

•strategic partners may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation;

•strategic partners may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; and

•strategic partnerships may be terminated for the convenience of the partner and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.

Any legal proceedings or claims against us could be costly and time-consuming to defend and could harm our reputation regardless of the outcome.

We may in the future become subject to legal proceedings and claims that arise in the ordinary course of business, including intellectual property, product liability, employment, class action, whistleblower and other litigation claims, and governmental and other regulatory investigations and proceedings. In March 2023, we implemented reductions in workforce and the attendant layoffs increased the risk of claims being made by or on behalf of affected employees. Such matters can be time-consuming,

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divert management’s attention and resources, cause us to incur significant expenses or liability, or require us to change our business practices. In addition, the expense of litigation and the timing of this expense from period to period are difficult to estimate, subject to change, and could adversely affect our financial condition and results of operations. Because of the potential risks, expenses, and uncertainties of litigation, we may, from time to time, settle disputes, even where we have meritorious claims or defenses, by agreeing to settlement agreements. Any of the foregoing could adversely affect our business, financial condition, and results of operations.

Our business is subject to economic, political, regulatory, and other risks associated with international operations.

Our business is subject to risks associated with conducting business internationally. Some of our CDMOs have been located outside the United States. Accordingly, our future results could be harmed by a variety of factors, including:

•economic weakness, including inflation, or political instability in certain non-U.S. economies and markets. For example, inflationary pressures have increased and could increase costs for our clinical trials;

•differing and changing regulatory requirements in non-U.S. countries, including drug pricing and reimbursement requirements;

•challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States;

•difficulties in compliance with non-U.S. laws and regulations;

•changes in non-U.S. regulations and customs, tariffs, and trade barriers;

•changes in non-U.S. currency exchange rates and currency controls;

•changes in a specific country’s or region’s political or economic environment;

•trade protection measures, import or export licensing requirements, or other restrictive actions by U.S. or non-U.S. governments;

•negative consequences from changes in tax laws;

•compliance with tax, employment, immigration, and labor laws for employees living or traveling abroad;

•workforce uncertainty in countries where labor unrest is more common than in the United States;

•difficulties associated with staffing and managing international operations, including differing labor relations;

•potential liability under the FCPA, U.K. Bribery Act, or comparable foreign laws; and

•business interruptions resulting from geopolitical actions, including war and terrorism, natural disasters including earthquakes, typhoons, floods, and fires, or outbreaks of health epidemics such as the COVID-19 pandemic.

These and other risks associated with our planned international operations may materially adversely affect our ability to attain profitable operations.

Inflation in the global economy could negatively impact our business and results of operations.

General inflation in the United States, Europe and other geographies has risen to levels not experienced in recent decades. General inflation, including rising prices for our clinical trial drug supply, CROs, CDMOs and rising salaries negatively impact our business by increasing our operating expenses. To the extent general inflation results in rising interest rates and has other adverse effects on the market, it may adversely affect our business, financial condition and results of operations.

Our internal computer systems, or those used by our CROs or other contractors or consultants, may fail or suffer other breakdowns, cyberattacks, or information security breaches or incidents that could compromise the confidentiality, integrity, and availability of such systems and data, and affect our reputation.

Despite the implementation of security measures, our internal computer systems and those of our future CROs and other contractors may be vulnerable to damage, compromise, disruption and unauthorized access owing to a variety of causes, including system malfunction, natural disasters, terrorism, war and telecommunication and electrical failure, and inadvertent or intentional actions by our employees, CROs and other contractors, and/or other third parties, or cyber-attacks by malicious third parties. As the cyber-threat landscape evolves, such cyberattacks are growing in frequency, sophistication, and intensity, and are becoming increasingly difficult to detect. Such attacks could include the use of key loggers or other harmful and virulent malware, including ransomware or other denials of service, and can be deployed through malicious websites, the use of social engineering, and/or other means. These risks may increase as a result of COVID-19, owing to an increase in our and our CROs’

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and other contractors’ personnel working remotely or utilizing personal devices. Additionally, cybersecurity researchers have observed increased cyberattack activity, and warned of heightened risks of cyberattacks, in connection with the conflicts between Russia and Ukraine or Israel and Hamas. If a breakdown, disruption, cyberattack, or other information security breach or security incident were to occur and cause interruptions in our operations or loss, corruption, or unavailability of data, or if any of the foregoing were perceived to have occurred, it could subject us to claims, proceedings, or other liabilities and may result in a material disruption of our development programs and our business operations, which could lead to significant delays or setbacks in our research and other further development and commercialization of our product candidates. For example, the loss of clinical trial data from completed, ongoing, or future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. Furthermore, disruptions of, or security breaches or other incidents of, our information technology systems or those of our future CROs and other contractors and consultants could result in the loss, misappropriation, and/or unauthorized access, use, or disclosure or dissemination of, or the prevention of access to, data (including trade secrets or other confidential information, intellectual property, proprietary business information, and personal information), which could result in financial, legal, business, and reputational harm to us. For example, any such event that leads to loss, damage, or unavailability of, or unauthorized access to, or use, alteration, or disclosure or dissemination of, personal information or other data we or our contractors or consultants process or maintain, including personal information regarding clinical trial subjects or employees, could harm our reputation directly, compel us to comply with federal and/or state breach notification laws and foreign law equivalents, subject us to mandatory corrective action, and otherwise subject us to liability under laws and regulations that protect the privacy and security of personal information, which could result in significant legal and financial exposure and reputational damages that could potentially have an adverse effect on our business.

We also rely on third parties to manufacture our product candidates, and similar events relating to their information technology systems could also have a material adverse effect on our business. There can be no assurance that we, our CROs or other contractors, or our business counterparts will be successful in efforts to detect, prevent, or fully recover systems or data, including data or information that we process or maintain or that is processed or maintained by our CROs, other contractors, or business counterparts, from all breakdowns, service interruptions, or attacks on, or breaches or incidents of systems that could adversely affect our business and operations and/or result in the loss, corruption, or unavailability of data or other information, or inappropriate disclosure or dissemination of any such information, or events or circumstances leading to the perception that any of these have occurred, which could result in financial, legal, business, or reputational harm to us, including claims, litigation, governmental investigations and proceedings, and fines, penalties, and other liabilities. Further, notification and follow-up actions related to a security incident could impact our reputation and cause us to incur significant costs, including legal expenses and remediation costs. We expect to incur significant costs in an effort to detect and prevent security breaches and incidents, and we may face increased costs and requirements to expend substantial resources in the event of an actual or perceived security breach or other security incident.

The insurance we maintain may not be adequate to compensate us for the potential losses arising from any such disruption in or, failure or security breach or incident of or impacting, our systems or third-party systems where information important to our business operations or commercial development is stored. In addition, such insurance may not be available to us in the future on economically reasonable terms, or at all. Further, our insurance may not cover all claims made against us and could have high deductibles in any event, and defending a suit, regardless of its merit, could be costly and divert management attention.

Risks Related to Ownership of Our Common Stock

The market price of our common stock has been volatile, which could result in substantial losses for investors.

The trading price of our common stock has been and may continue to be highly volatile and subject to wide fluctuation in response to various factors, some of which are beyond our control. Some of the factors that may cause the market price of our common stock to fluctuate include:

•our ability to consummate a strategic transaction;

•our ability to successfully raise capital and continue as a going concern;

•our ability to meet the minimum standards required for remaining listed on Nasdaq;

•the degree of trading liquidity in our common shares;

•future sales of our common stock by us, our insiders, or other stockholders;

•the success of existing or new competitive products or technologies;

•the timing and results of preclinical studies and clinical trials for our current product candidates and any future product candidates that we may develop;

•failure or discontinuation of any of our product development and research programs;

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•results of preclinical studies, clinical trials, or regulatory approvals of product candidates of our competitors, or announcements about new research programs or product candidates of our competitors;

•regulatory or legal developments in the United States and other countries;

•developments or disputes concerning patent applications, issued patents, or other proprietary rights;

•the recruitment or departure of key personnel;

•the level of expenses related to any of our research programs, clinical development programs, or product candidates that we may develop;

•the results of our efforts to develop additional product candidates or products;

•actual or anticipated changes in estimates as to financial results, development timelines, or recommendations by securities analysts;

•announcement or expectation of additional financing efforts;

•variations in our financial results or those of companies that are perceived to be similar to us;

•changes in estimates or recommendations by securities analysts, if any, that cover our stock;

•changes in the structure of healthcare payment systems;

•market conditions in the pharmaceutical and biotechnology sectors;

•general economic, industry, political, and market conditions, including the impact of the COVID-19 pandemic; and

•the other factors described in this “Risk Factors” section.

On August 10, 2023, we received a letter from the Nasdaq Staff indicating that, in accordance with Nasdaq Listing Rule 5100, the Nasdaq Staff believes we are a “public shell” and that the continued listing of our securities is no longer warranted. We appealed the Nasdaq Staff’s determination and, on October 23, 2023, we received written notice from the Nasdaq Panel that it had granted our request for continued listing on Nasdaq, subject to the completion of the Merger on or before February 6, 2024. There can be no assurance that we will be able to complete the Merger on or before February 6, 2024. Our failure to complete the Merger on or before February 6, 2024 will result in our securities being delisted from Nasdaq after such date. Any such delisting from Nasdaq that causes our shares of common stock to trade on the over-the-counter market could also cause the market price of our common stock to fluctuate further.

In addition, in recent years, the stock market in general, and the market for pharmaceutical and biotechnology companies in particular, has experienced significant price and volume fluctuations that have often been unrelated or disproportionate to changes in the operating performance of the companies whose stock is experiencing those price and volume fluctuations. Broad market and industry factors may seriously affect the market price of our common stock, regardless of our actual operating performance. Following periods of such volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. Because of the potential volatility of our stock price, we may become the target of securities litigation in the future. Securities litigation could result in substantial costs and divert management’s attention and resources from our business, which could seriously harm our business.

An active trading market of our common stock may not be sustained.

Prior to the closing of our IPO in June 2020, there was no public trading market for our common stock. Although our common stock is listed on Nasdaq, the market for our shares has demonstrated varying levels of trading activity and high levels of price volatility. We cannot predict the prices at which our common stock will trade. It is possible that in one or more future periods our results of operations and progression of our product pipeline may not meet the expectations of public market analysts and investors, and, as a result of these and other factors, the price of our common stock may fall. For example, as discussed under the heading “Risk Factors – If we fail to meet all applicable Nasdaq requirements, we could be delisted from Nasdaq, which would seriously harm the liquidity of our stock and our ability to raise capital.” we received written communications from Nasdaq regarding compliance with Nasdaq’s continued listing standards.

If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our stock, the price of our stock could decline.

The trading market for our common stock relies in part on the research and reports that industry or financial analysts publish about us or our business. If one or more of the analysts covering our business downgrade their evaluations of our stock or if we fail to meet their operating results estimates for us, the price of our stock could decline. If one or more of these analysts cease to cover our stock, we could lose visibility in the market for our stock, which in turn could cause our stock price to decline.

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Sales of a substantial number of shares of our common stock in the public market could cause our stock price to fall.

Sales of a substantial number of shares of our common stock in the public market could occur at any time. On March 11, 2022, we filed a final shelf registration statement on Form S-3 which allows us to undertake various offerings. In addition, on January 27, 2022, we entered into a Sales Agreement with the Agents pursuant to which we may offer and sell from time to time through the Agents up to $150.0 million in shares of our common stock through the ATM Facility. As of September 30, 2023, we had not yet sold any shares of common stock under the ATM Facility and do not currently intend to do so. If we or our stockholders sell, or the market perceives that our stockholders intend to sell, substantial amount of our common stock in the public market, the market price of our common stock could decline significantly.

Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.

We have in the past and may in the future seek additional capital through a combination of public and private equity offerings, debt financings, strategic partnerships and alliances, and licensing arrangements. For example, on April 6, 2021, we completed a follow-on offering and issued 2,875,000 shares of our common stock at a price of $42.00 per share. In addition, on March 11, 2022, we filed a final shelf registration statement on Form S-3 which allows us to undertake various offerings. In addition, on January 27, 2022, we entered into a Sales Agreement with the Agents pursuant to which we may offer and sell from time to time through the Agents up to $150.0 million in shares of our common stock through the ATM Facility. As of September 30, 2023, we have not yet sold any shares of common stock under the ATM Facility and do not currently intend to do so. We, and indirectly, our stockholders, will bear the cost of issuing and servicing such securities. Because our decision to issue debt or equity securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing, or nature of any future offerings. To the extent that we raise additional capital through the sale of equity or debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a stockholder. The incurrence of indebtedness would result in increased fixed payment obligations and could involve restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell, or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. Additionally, any future collaborations we enter into with third parties may provide capital in the near term but limit our potential cash flow and revenue in the future. If we raise additional funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or product candidates, or grant licenses on terms unfavorable to us.

Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.

As of September 30, 2023, our executive officers, directors, holders of 5% or more of our capital stock and their respective affiliates beneficially owned approximately 52% of our voting stock. As a result, this group of stockholders, if they act together, will have the ability to control us through this ownership position. These stockholders may be able to determine all matters requiring stockholder approval. For example, these stockholders may be able to control elections of directors, amendments of our organizational documents or approval of any merger, sale of assets or other major corporate transaction. This may prevent or discourage unsolicited acquisition proposals or offers for our common stock that you may feel are in your best interest as one of our stockholders. The interests of this group of stockholders may not always coincide with your interests or the interests of other stockholders and they may act in a manner that advances their best interests and not necessarily those of other stockholders, including seeking a premium value for their common stock, which might affect the prevailing market price for our common stock.

We have incurred and will continue to incur increased costs and management resources as a result of operating as a public company.

We have incurred and will continue to incur significant increased costs and management resources as a result of operating as a public company. We have incurred and will continue to incur significant legal, accounting, compliance and other expenses as a public company. Our management and other personnel need to devote a substantial amount of time and incur significant expense in connection with compliance initiatives. For example, as a public company, we must adopt additional internal controls and disclosure controls and procedures and have retained a transfer agent and adopted an insider trading policy. As a public company, we bear all of the internal and external costs of preparing and distributing periodic public reports in compliance with our obligations under the securities laws.

In addition, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act (SOX), and the related rules and regulations implemented by the SEC and Nasdaq have and will continue to increase legal and financial compliance costs and make some compliance activities more challenging and time-consuming.

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We have invested and will continue to invest additional resources to comply with evolving laws, regulations and standards, and this investment will result in increased general and administrative expenses and may divert management’s time and attention from our other business activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, regulatory authorities may initiate legal proceedings against us, and our business may be harmed. In connection with our IPO, we increased our directors’ and officers’ insurance coverage, which substantially increased our insurance cost. In addition, there may be additional directors’ and officers’ insurance coverage costs if we successfully consummate a strategic transaction. In the future, it may be more expensive or more difficult for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

If we are unable to maintain effective internal controls, our business, financial position, and results of operations could be adversely affected.

As a public company, we are subject to reporting and other obligations under the Exchange Act, including the requirements of SOX Section 404, which require annual management assessments of the effectiveness of our internal control over financial reporting.

The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation to meet the detailed standards under the rules. During the course of its testing, our management may identify material weaknesses or deficiencies which may not be remedied in time to meet the deadline imposed by SOX. These reporting and other obligations place significant demands on our management and administrative and operational resources, including accounting resources.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. However, we have in the past and may in the future identify material weaknesses or significant deficiencies in internal control over financial reporting. Under standards established by the Public Company Accounting Oversight Board (PCAOB), a deficiency in internal control over financial reporting exists when the design or operation of a control does not allow management or personnel, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected and corrected on a timely basis. We cannot assure you that there will not be additional material weaknesses or significant deficiencies that our independent registered public accounting firm or we will identify.

The reductions in our workforce may result in weaknesses in our infrastructure and operations and may increase the risk that we become unable to comply with legal and regulatory requirements. If we are unable to successfully maintain internal control over financial reporting, or identify any additional material weaknesses, the accuracy and timing of our financial reporting may be adversely affected. In addition, if we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, when required, investors may lose confidence in the accuracy and completeness of our financial reports, we may face restricted access to the capital markets, and our stock price may be materially adversely affected. Moreover, we could become subject to investigations by regulatory authorities, which could require additional financial and management resources.

Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.

As a public company, we are subject to the periodic reporting requirements of the Exchange Act. We designed our disclosure controls and procedures to reasonably assure that information we must disclose in reports we file or submit under the Exchange Act is accumulated and communicated to management, and recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. These inherent limitations include the fact that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements due to error or fraud may occur and not be detected.

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Delaware law and provisions in our amended and restated certificate of incorporation and bylaws might discourage, delay, or prevent a change in control of our company or changes in our management and, therefore, depress the trading price of our common stock.

Provisions in our amended and restated certificate of incorporation and bylaws may discourage, delay, or prevent a merger, acquisition, or other change in control that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares of our common stock. These provisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. Therefore, these provisions could adversely affect the price of our common stock. Among other things, our charter documents:

•establish that our board of directors is divided into three classes, Class I, Class II, and Class III, with each class serving staggered three-year terms;

•provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum;

•provide that our directors may only be removed for cause;

•eliminate cumulative voting in the election of directors;

•authorize our board of directors to issues shares of preferred stock and determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval;

•provide our board of directors with the exclusive right to elect a director to fill a vacancy or newly created directorship;

•permit stockholders to only take actions at a duly called annual or special meeting and not by written consent;

•prohibit stockholders from calling a special meeting of stockholders;

•require that stockholders give advance notice to nominate directors or submit proposals for consideration at stockholder meetings;

•authorize our board of directors, by a majority vote, to amend the bylaws; and

•require the affirmative vote of at least 66 2/3% or more of the outstanding shares of common stock to amend many of the provisions described above.

In addition, Section 203 of the DGCL, prohibits a publicly-held Delaware corporation from engaging in a business combination with an interested stockholder, generally a person which together with its affiliates owns, or within the last three years has owned, 15% of our voting stock, for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner.

Any provision of our amended and restated certificate of incorporation, amended and restated bylaws, or Delaware law that has the effect of delaying or preventing a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our capital stock and could also affect the price that some investors are willing to pay for our common stock.

Our amended and restated bylaws provide that the Court of Chancery of the State of Delaware is the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

Our amended and restated bylaws provide that, unless we consent to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the exclusive forum for (i) any derivative action or proceeding brought on behalf of us, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, or other employees to us or our stockholders, (iii) any action arising pursuant to any provision of the DGCL or our certificate of incorporation or bylaws (as either may be amended from time to time), or (iv) any action asserting a claim governed by the internal affairs doctrine, except, in each case, (A) any claim as to which such court determines that there is an indispensable party not subject to the jurisdiction of such court (and the indispensable party does not consent to the personal jurisdiction of such court within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than such court, or (C) for which such court does not have subject matter jurisdiction.

These exclusive-forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, employees, control persons, underwriters, or agents, which may discourage lawsuits against us and our directors, employees, control persons, underwriters, or agents. Additionally, a court could determine that the exclusive forum provision is unenforceable, and our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder. If a court were to find these provisions of our amended and restated

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bylaws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition, or results of operations.

General Risk Factors

Changes in interpretation or application of generally accepted accounting principles may adversely affect our operating results.

We prepare our financial statements to conform to GAAP. These principles are subject to interpretation by the Financial Accounting Standards Board, American Institute of Certified Public Accountants, the PCAOB, the SEC and various other regulatory or accounting bodies. A change in interpretations of, or our application of, these principles can have a significant effect on our reported results and may even affect our reporting of transactions completed before a change is announced. Additionally, as we are required to adopt new accounting standards, our methods of accounting for certain items may change, which could cause our results of operations to fluctuate from period to period.

Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses.

Our operations, and those of our CROs, CDMOs, suppliers, and other contractors and consultants, could be subject to earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, medical or health epidemics, and other natural or man-made disasters or business interruptions, for which we are partly uninsured. The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses. We rely on third-party manufacturers to produce and process our product candidates. Our ability to obtain clinical supplies of our product candidates could be disrupted if the operations of these suppliers are affected by a man-made or natural disaster or other business interruption.

We do not expect to pay any dividends for the foreseeable future. Investors may never obtain a return on their investment.

You should not rely on an investment in our common stock to provide dividend income. We do not anticipate that we will pay any dividends to holders of our common stock in the foreseeable future. Instead, we plan to retain any earnings to maintain and expand our existing operations. In addition, any future credit facility may contain terms prohibiting or limiting the amount of dividends that may be declared or paid on our common stock. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any return on their investment. As a result, investors seeking cash dividends should not purchase our common stock.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

None.

Use of Proceeds from Follow-On Offering

On April 6, 2021, the Company completed a follow-on offering and issued 2,875,000 shares of its common stock, including 375,000 shares of common stock issued in connection with the full exercise by the underwriters of their options to purchase additional shares of common stock at a price of $42.00 per share. The aggregate gross proceeds from the follow-on offering were $120.8 million. After deducting underwriting discounts and commissions of $7.2 million and deferred offering costs of $0.8 million, the net proceeds from the follow-on offering were approximately $112.8 million.

There has been no material change in the planned use of proceeds in our follow-on offering as described in our final prospectus filed with the SEC on April 1, 2021 pursuant to Rule 424(b)(4). We invested the funds received in interest-bearing investment-grade securities.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

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Item 5. Other Information

None.

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Item 6. Exhibits

Incorporated by Reference

Exhibit
Number

Exhibit Description

Form

File No.

Exhibit

Filing Date

2.1+

Agreement and Plan of Merger, dated as of September 21, 2023, by and among Cyclo Therapeutics, Inc., Cameo Merger Sub, Inc. and Applied Molecular Transport Inc.

8-K

001-39306

2.1

September 21, 2023

10.1

Form of Voting Agreement

8-K

001-39306

10.1

September 21, 2023

10.2*

Senior Executive Change in Control and Severance Policy, as amended, and forms of agreement thereunder.

8-K

001-39306

10.1

July 24, 2023

31.1

Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Filed herewith

31.2

Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Filed herewith

32.1†

Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Furnished herewith

32.2†

Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Furnished herewith

101.INS

Inline XBRL Instance Document

Filed herewith

101.SCH

Inline XBRL Taxonomy Extension Schema Document

Filed herewith

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Filed herewith

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

Filed herewith

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

Filed herewith

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Filed herewith

104

The cover page for the Company’s Quarterly Report on Form 10-Q has been formatted in Inline XBRL and contained in Exhibit 101

+ Exhibits and/or schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. We hereby undertake to furnish supplementally copies of any of the omitted exhibits and schedules upon request by the U.S. Securities and Exchange Commission; provided, however, that we may request confidential treatment pursuant to Rule 24b-2of the Exchange Act of 1934, as amended, for any exhibits or schedules so furnished.

*Indicates management contract or compensatory plan.

†The certifications attached as Exhibits 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are deemed furnished and not filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	Applied Molecular Transport Inc.

Date: November 9, 2023	By:	/s/ Shawn Cross
		Shawn Cross
		Chief Executive Officer and Chair of the Board of Directors

Date: November 9, 2023	By:	/s/ Brandon Hants
		Brandon Hants
		Chief Financial Officer

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Shawn Cross, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Applied Molecular Transport Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: November 9, 2023	By:	/s/ Shawn Cross
		Shawn Cross
		Chief Executive Officer and Chair of the Board of Directors (Principal Executive Officer)

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Brandon Hants, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Applied Molecular Transport Inc.;

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: November 9, 2023	By:	/s/ Brandon Hants
		Brandon Hants
		Chief Financial Officer (Principal Financial Officer)

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Applied Molecular Transport Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Shawn Cross, hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: November 9, 2023	By:	/s/ Shawn Cross
		Shawn Cross
		Chief Executive Officer and Chair of the Board of Directors (Principal Executive Officer)

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Applied Molecular Transport Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Brandon Hants, hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: November 9, 2023	By:	/s/ Brandon Hants
		Brandon Hants
		Chief Financial Officer (Principal Financial Officer)

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2023	Nov. 02, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	001-39306
Entity Registrant Name	APPLIED MOLECULAR TRANSPORT INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	81-4481426
City Area Code	650
Local Phone Number	392-0420
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	AMTI
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	false
Entity Shell Company	false
Entity Common Stock Shares Outstanding		41,336,563
Entity Address, Address Line One	1209 Orange Street
Entity Address, City or Town	Wilmington
Entity Address, State or Province	DE
Entity Address, Postal Zip Code	19801
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Central Index Key	0001801777
Amendment Flag	false
Fiscal Year Focus	2023

Condensed Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 18,103	$ 61,145
Prepaid expenses	457	2,688
Other current assets	259	186
Total current assets	18,819	64,019
Property and equipment, net	31	8,183
Operating lease right-of-use assets	1,165	33,222
Finance lease right-of-use assets	0	584
Restricted cash	0	916
Other assets	0	522
Total assets	20,015	107,446
Current liabilities:
Accounts payable	161	1,583
Accrued expenses	2,261	8,660
Lease liabilities, operating lease - current	1,353	4,639
Lease liabilities, finance lease - current	0	205
Total current liabilities	3,775	15,087
Lease liabilities, operating lease	0	31,228
Lease liabilities, finance lease	0	49
Other liabilities	0	244
Total liabilities	3,775	46,608
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value: 50,000,000 shares authorized; none issued and outstanding	0	0
Common stock, $0.0001 par value, 450,000,000 shares authorized; 40,893,507 and 39,181,801 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively	4	4
Additional paid-in capital	434,393	426,804
Accumulated deficit	(418,157)	(365,970)
Total stockholders’ equity	16,240	60,838
Total liabilities and stockholders’ equity	$ 20,015	$ 107,446

Condensed Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	450,000,000	450,000,000
Common stock, shares issued	40,893,507	39,181,801
Common stock, shares outstanding	40,893,507	39,181,801

Condensed Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Operating expenses:
Research and development	$ 250	$ 18,233	$ 15,796	$ 72,273
General and administrative	7,007	7,281	20,804	28,052
Restructuring, impairment, and related charges	(40)	12	16,832	3,799
Total operating expenses	7,217	25,526	53,432	104,124
Loss from operations	(7,217)	(25,526)	(53,432)	(104,124)
Interest income, net	283	321	1,281	393
Other income (expense), net	(3)	(1)	(36)	5
Net loss	$ (6,937)	$ (25,206)	$ (52,187)	$ (103,726)
Net loss per share, basic (in dollars per share)	$ (0.17)	$ (0.65)	$ (1.32)	$ (2.68)
Net loss per share, diluted (in dollars per share)	$ (0.17)	$ (0.65)	$ (1.32)	$ (2.68)
Weighted-average shares of common stock outstanding, basic (in shares)	39,751,028	38,914,570	39,426,218	38,769,226
Weighted-average shares of common stock outstanding, diluted (in shares)	39,751,028	38,914,570	39,426,218	38,769,226

Condensed Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2021		38,619,957
Beginning balance at Dec. 31, 2021	$ 163,587	$ 4	$ 403,228	$ (239,645)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of stock under employee stock plans (in shares)		34,206
Issuance of stock under employee stock plans	60		60
Stock-based compensation expense	6,773		6,773
Net loss	(42,575)			(42,575)
Ending balance (in shares) at Mar. 31, 2022		38,654,163
Ending balance at Mar. 31, 2022	127,845	$ 4	410,061	(282,220)
Beginning balance (in shares) at Dec. 31, 2021		38,619,957
Beginning balance at Dec. 31, 2021	163,587	$ 4	403,228	(239,645)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(103,726)
Ending balance (in shares) at Sep. 30, 2022		38,943,097
Ending balance at Sep. 30, 2022	78,395	$ 4	421,762	(343,371)
Beginning balance (in shares) at Mar. 31, 2022		38,654,163
Beginning balance at Mar. 31, 2022	127,845	$ 4	410,061	(282,220)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of stock under employee stock plans (in shares)		244,532
Issuance of stock under employee stock plans	262		262
Stock-based compensation expense	5,590		5,590
Net loss	(35,945)			(35,945)
Ending balance (in shares) at Jun. 30, 2022		38,898,695
Ending balance at Jun. 30, 2022	97,752	$ 4	415,913	(318,165)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of stock under employee stock plans (in shares)		44,402
Issuance of stock under employee stock plans	7		7
Stock-based compensation expense	5,842		5,842
Net loss	(25,206)			(25,206)
Ending balance (in shares) at Sep. 30, 2022		38,943,097
Ending balance at Sep. 30, 2022	$ 78,395	$ 4	421,762	(343,371)
Beginning balance (in shares) at Dec. 31, 2022	39,181,801	39,181,801
Beginning balance at Dec. 31, 2022	$ 60,838	$ 4	426,804	(365,970)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of stock under employee stock plans (in shares)		19,151
Stock-based compensation expense	3,223		3,223
Net loss	(27,917)			(27,917)
Ending balance (in shares) at Mar. 31, 2023		39,200,952
Ending balance at Mar. 31, 2023	$ 36,144	$ 4	430,027	(393,887)
Beginning balance (in shares) at Dec. 31, 2022	39,181,801	39,181,801
Beginning balance at Dec. 31, 2022	$ 60,838	$ 4	426,804	(365,970)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	$ (52,187)
Ending balance (in shares) at Sep. 30, 2023	40,893,507	40,893,507
Ending balance at Sep. 30, 2023	$ 16,240	$ 4	434,393	(418,157)
Beginning balance (in shares) at Mar. 31, 2023		39,200,952
Beginning balance at Mar. 31, 2023	36,144	$ 4	430,027	(393,887)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of stock under employee stock plans (in shares)		228,225
Issuance of stock under employee stock plans	7		7
Stock-based compensation expense	1,828		1,828
Net loss	(17,333)			(17,333)
Ending balance (in shares) at Jun. 30, 2023		39,429,177
Ending balance at Jun. 30, 2023	20,646	$ 4	431,862	(411,220)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of stock under employee stock plans (in shares)		1,464,330
Stock-based compensation expense	2,531		2,531
Net loss	$ (6,937)			(6,937)
Ending balance (in shares) at Sep. 30, 2023	40,893,507	40,893,507
Ending balance at Sep. 30, 2023	$ 16,240	$ 4	$ 434,393	$ (418,157)

Condensed Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Operating activities
Net loss	$ (52,187)	$ (103,726)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense	7,582	18,205
Depreciation and amortization	837	2,468
Non-cash operating lease expense	3,537	6,433
Non-cash asset impairment charges	5,392	80
Gain on partial termination of lease	(702)	0
Loss on disposal of property and equipment	295	0
Changes in operating assets and liabilities:
Prepaid expenses	2,231	3,475
Other current assets	(219)	336
Other assets	163	(428)
Accounts payable	(1,428)	(837)
Accrued expenses	(6,636)	(221)
Operating lease liabilities	(4,085)	(4,872)
Other liabilities	0	3
Net cash used in operating activities	(45,220)	(79,084)
Investing activities
Purchases of property and equipment	(446)	(4,146)
Proceeds from disposal of property and equipment	1,955	0
Net cash provided by (used in) investing activities	1,509	(4,146)
Financing activities
Payments for financing and offering costs	0	(806)
Principal payments on finance lease liabilities	(254)	(203)
Proceeds from issuance of stock under employee stock plans	7	329
Net cash used in financing activities	(247)	(680)
Net decrease in cash, cash equivalents and restricted cash	(43,958)	(83,910)
Cash, cash equivalents and restricted cash, beginning of period	62,061	160,846
Cash, cash equivalents and restricted cash, end of period	18,103	76,936
Supplemental cash flow data:
Cash paid for interest on finance lease liabilities	8	21
Supplemental disclosure of non-cash investing and financing activities:
Property and equipment included in accounts payable and accrued expenses	0	23
Deferred financing and offering costs included in accounts payable and accrued expenses	$ 0	$ 15

Description of Business	9 Months Ended
Description of Business	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of Business	Description of Business Applied Molecular Transport Inc. (AMT or the Company) is a clinical-stage biopharmaceutical company that has a proprietary technology platform that enables the design of novel biologic product candidates in patient-friendly oral dosage forms. The Company has decided to discontinue research activities. The Company was incorporated in the state of Delaware in November 2016 and operates under a fully-remote model. Accordingly, the Company does not have a principal executive office. In March 2023, the Company announced that it had commenced a process to explore strategic alternatives and recently entered into the Merger Agreement (as described below). The Company is actively seeking to sell, assign, license, or otherwise dispose of, in one or more transactions, some or all of the assets that relate to its platform technology at any time prior to, or concurrently with, the closing of the Merger (as defined below). Proposed Acquisition by Cyclo Therapeutics On September 21, 2023, AMT entered into an Agreement and Plan of Merger (the Merger Agreement) with Cyclo Therapeutics, Inc., a Nevada corporation (Cyclo) and Cameo Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Cyclo (Merger Sub), pursuant to which, and subject to the terms and conditions set forth therein, Merger Sub will merge with and into AMT (the Merger), with AMT surviving such Merger as a wholly-owned subsidiary of Cyclo. Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger, each outstanding share of AMT common stock issued and outstanding immediately prior to the effective time of the Merger will automatically be converted into the right to receive shares of Cyclo common stock. As of the date of the execution of the Merger Agreement, the Exchange Ratio was estimated to be 0.174 shares of Cyclo common stock for each share of AMT common stock, but the actual Exchange Ratio will depend on AMT’s net cash and the number of shares of AMT common stock outstanding at the closing of the Merger. Any fractional shares of Cyclo common stock will be rounded up to the nearest whole share. The former AMT stockholders immediately before the Merger are expected to own approximately 25% of the outstanding common stock of the combined company, and the stockholders of Cyclo immediately before the Merger are expected to own approximately 75% of the outstanding common stock of the combined company, subject to certain assumptions (including as to the amount of AMT’s net cash and outstanding shares of AMT common stock at closing). The boards of directors of each of AMT and Cyclo have approved the Merger Agreement and the transactions contemplated thereby, subject to the satisfaction or waiver of customary conditions, including the requisite approval by AMT’s and Cyclo’s stockholders and the effectiveness of a registration statement to register the shares of Cyclo common stock to be issued in connection with the transaction. The Merger Agreement also includes termination provisions for both the Company and Cyclo. In connection with a termination of the Merger Agreement under specified circumstances, either party may be required to pay the other party a termination fee ranging between $0.4 million to $0.6 million. Although the Company has entered into the Merger Agreement and intends to consummate the proposed Merger, there is no assurance that the Company will be able to successfully consummate the proposed Merger on a timely basis, or at all. Nasdaq Delisting Notification On August 10, 2023, the Company received a letter from the Listing Qualifications Staff (Nasdaq Staff) of the Nasdaq Stock Market LLC (Nasdaq) indicating that, in accordance with Nasdaq Listing Rule 5100, the Nasdaq Staff believes the Company is a “public shell” and that the continued listing of the Company’s securities is no longer warranted. According to the letter, the Nasdaq Staff believes that the Company “no longer has an operating business” and consequently has decided to use its discretion “to apply more stringent criteria” to the Company’s listing. The Nasdaq Staff’s letter also indicates that the Company was not in compliance with Nasdaq Listing Rule 5450(a)(1), which requires the Company’s common stock to maintain a share price of at least $1.00 per share (the Bid Price Rule) for continued listing on the Nasdaq Global Select Market. This serves as an additional and separate basis for delisting. The Company filed an appeal to the delisting with the Nasdaq’s Hearings Panel (Nasdaq Panel) on August 17, 2023 and subsequently presented its appeal at a hearing with the Nasdaq Panel on October 19, 2023. On October 23, 2023, the Nasdaq Panel granted the Company’s request for continued listing on Nasdaq, subject to the Company’s completion of the Merger on or before February 6, 2024. The Company’s securities may now continue to trade on Nasdaq until February 6, 2024. There can be no assurance that the Company will be able to complete the Merger on or before February 6, 2024. The Company’s failure to complete the Merger on or before February 6, 2024 will result in its securities being delisted from Nasdaq after such date. Going Concern Considerations The Company has incurred net losses in each reporting period since inception, including net losses of $52.2 million and $103.7 million for the nine months ended September 30, 2023 and 2022, respectively, and the Company’s accumulated deficit at September 30, 2023 was $418.2 million. The Company’s current operating plan indicates it will continue to incur losses from operations and generate negative cash flows from operating activities, given the Company does not generate any revenue from product sales or otherwise. As a result of restructuring actions in March 2023 (see Note 5), including discontinuing research activities, exiting substantially all of its operating and finance leases, and significantly reducing its workforce, management believes the Company’s existing cash and cash equivalents of $18.1 million as of September 30, 2023 are adequate to meet its cash needs for at least 12 months from the issuance date of these condensed financial statements. There can be no assurance that sources of capital will be available to the Company in the necessary time frame, in the amounts that the Company requires, on terms that are acceptable to the Company, or at all. If the Company is unable to consummate a strategic transaction or raise the necessary funds when needed or reduce spending on currently planned activities, the Company may be required to cease operations, which could materially harm its business, financial position and results of operations. In January 2022, the Company entered into a Sales Agreement with SVB Securities LLC and JMP Securities LLC, as the Company’s sales agents (Agents), pursuant to which the Company may offer and sell from time to time through the Agents up to $150.0 million in shares of the Company’s common stock through an “at-the-market” program (ATM Facility). The shares will be offered and sold pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-263501) and the final prospectus supplement, which was filed on March 11, 2022. For so long as the Company’s non-affiliate public float does not exceed $75 million, the amount of securities that the Company may sell pursuant to registration statements on Form S-3 will be limited to the equivalent of one-third of its public float, which will limit its ability to raise capital. As of September 30, 2023, the Company has not yet sold any shares under the ATM Facility and does not currently intend to do so. Current Economic Environment The extent of the ongoing impact of macroeconomic events on the Company’s business and on global economic activity is uncertain and the related financial impact cannot be reasonably estimated with any certainty at this time, although the impacts are expected to continue and may significantly affect its business. The Company expects that the impacts on its business will continue through this period of economic uncertainty as inflation, instability in the banking and financial services sector, a tightening of the credit markets, and other factors continue to develop or emerge. Accordingly, management is carefully evaluating the Company’s liquidity position and continuing to review its near-term operating expenses as the uncertainty related to these factors continues to unfold.

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Financial Statement Preparation

Use of Estimates

Concentration of Credit Risk

Significant Accounting Policies

Restructuring Charges

The Company records severance costs provided under an ongoing benefit arrangement once they are both probable and estimable in accordance with the provisions of ASC 712-10.

Impairment of Long-Lived Assets

Refer to Notes 4, 5 and 6 for additional details regarding restructuring and impairment charges related to the March 2023 Restructuring Plan.

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed statements of cash flows (in thousands):


	September 30, 2023		September 30, 2022
Cash and cash equivalents	$	18,103	$	76,020
Restricted cash	—		916
Total cash, cash equivalents and restricted cash	$	18,103	$	76,936

Recently Adopted Accounting Pronouncements

Recently Issued Accounting Pronouncements

There were no new accounting pronouncements issued as of September 30, 2023 that are expected to have a material impact on the Company’s financial condition, results of operations or cash flows.

Fair Value Measurements

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

•Level 1—Quoted prices in active markets for identical assets and liabilities;

•Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Assets Measured at Fair Value on a Recurring Basis

within cash and cash equivalents. The following tables present money market funds at their level within the fair value hierarchy for the periods indicated (in thousands):


		September 30, 2023
	Fair Value Hierarchy Level	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Cash equivalents:
Money market funds invested in U.S. government obligations	Level 1	$	17,853	$	—	$	—	$	17,853
Total		$	17,853	$	—	$	—	$	17,853


		December 31, 2022
	Fair Value Hierarchy Level	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Cash equivalents:
Money market funds invested in U.S. government obligations	Level 1	$	40,729	$	—	$	—	$	40,729
Total		$	40,729	$	—	$	—	$	40,729

Financial Instruments Not Carried at Fair Value

Balance Sheet Components

9 Months Ended

Sep. 30, 2023

Balance Sheet Related Disclosures [Abstract]

Balance Sheet Components

Prepaid Expenses

Property and Equipment, Net

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


	September 30, 2023		December 31, 2022
Laboratory and manufacturing equipment	$	—	$	11,421
Leasehold improvements	221		5,246
Computer and office equipment	—		491
Construction in progress	—		72
Total property and equipment, gross	221		17,230
Accumulated depreciation	(190)		(9,047)
Total property and equipment, net	$	31	$	8,183

Accrued Expenses

Accrued expenses consisted of the following (in thousands):


	September 30, 2023		December 31, 2022
Professional services	$	1,100	$	728
Compensation expenses	872		3,985
Research and development expenses	—		3,508
Property and equipment	—		7
Other	289		432
Total accrued expenses	$	2,261	$	8,660

Restructuring, Impairment, and Related Charges

9 Months Ended

Sep. 30, 2023

Restructuring and Related Activities [Abstract]

Restructuring, Impairment, and Related Charges

A description of the Company’s restructuring initiatives and their related costs is provided below.

March 2023 Restructuring Plan

Employee Termination Benefits

Asset Impairments

Other Related Costs

May 2022 Restructuring Plan

a $0.4 million reduction in stock-based compensation expense as a result of applying modification accounting for accelerated vesting of RSUs related to impacted employees.

The following table details “Restructuring, impairment, and related charges” for each of the periods presented (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Employee termination benefits	$	—	$	—	$	5,585	$	3,339
Stock-based compensation	—		—		—		(419)
Asset impairments	—		—		10,642		80
Other related costs	(40)		12		605		799
Total restructuring, impairments, and related charges	$	(40)	$	12	$	16,832	$	3,799

The following table summarizes the charges and spending relating to restructuring program activities for the nine months ended September 30, 2023:


	Employee Termination Benefits		Asset Impairments			Other Related Costs		Total
Liability balance at December 31, 2022	$	—	$	—		$	420	$	420
Expense	5,585		10,642			605		16,832
Payments	(5,585)		(5,250)		(1)	(1,387)		(12,222)
Non-cash activity	—		(5,392)			362		(5,030)
Liability balance at September 30, 2023	$	—	$	—		$	—	$	—

Leases

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Leases

Operating Leases

Company wrote-off the remaining balances related to right-of-use assets and leasehold improvements. Refer to Note 5 for additional details.

Finance Leases

The following table summarizes total lease expense for the three and nine months ended September 30, 2023 and 2022 (in thousands):


	Condensed Statements of Operations Classification	Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022
Operating lease expense	Operating expenses	$	321	$	1,923	$	3,537	$	6,432
Finance lease expense:
Amortization of ROU assets	Operating expenses	—		55		82		161
Interest on lease liabilities	Interest income, net	—		6		8		21
Variable lease expense	Operating expenses	144		657		784		1,789
Short-term lease expense	Operating expenses	—		9		5		76
Sublease income	Operating expenses	(378)		(665)		(1,711)		(1,396)
Total lease expense		$	87	$	1,985	$	2,705	$	7,083

The following table summarizes supplemental cash flow information for the nine months ended September 30, 2023 and 2022 (in thousands):


	Nine Months Ended September 30,
	2023		2022
Cash paid for amounts included in the measurement of liabilities:
Operating cash flows from operating leases	$	4,085	$	4,872
Operating cash flows from finance leases	8		21
Financing cash flows from finance leases	254		203
Right-of-use asset obtained in exchange for new operating lease liability	—		563
Right-of-use asset obtained in exchange for new finance lease liability	114		148

The following table summarizes maturities of lease liabilities and sublease income as of September 30, 2023 (in thousands):


	Operating Leases		Sublease Income Payments		Net Lease Income Payments
2023 (remaining three months)	$	369	$	(388)	$	(19)
2024	1,000		(1,044)		(44)
Total lease payments (undiscounted)	1,369		$	(1,432)	$	(63)
Less interest or imputed interest	16
Total present value of lease liabilities	1,353
Less: Lease liabilities, current	(1,353)
Lease liabilities, non-current	$	—

As of September 30, 2023, the Company’s only operating lease had a remaining lease term of 0.9 years and the discount rate used to recognize the initial lease liabilities was 2.6%.

Leases

Operating Leases

Company wrote-off the remaining balances related to right-of-use assets and leasehold improvements. Refer to Note 5 for additional details.

Finance Leases

The following table summarizes total lease expense for the three and nine months ended September 30, 2023 and 2022 (in thousands):


	Condensed Statements of Operations Classification	Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022
Operating lease expense	Operating expenses	$	321	$	1,923	$	3,537	$	6,432
Finance lease expense:
Amortization of ROU assets	Operating expenses	—		55		82		161
Interest on lease liabilities	Interest income, net	—		6		8		21
Variable lease expense	Operating expenses	144		657		784		1,789
Short-term lease expense	Operating expenses	—		9		5		76
Sublease income	Operating expenses	(378)		(665)		(1,711)		(1,396)
Total lease expense		$	87	$	1,985	$	2,705	$	7,083

The following table summarizes supplemental cash flow information for the nine months ended September 30, 2023 and 2022 (in thousands):


	Nine Months Ended September 30,
	2023		2022
Cash paid for amounts included in the measurement of liabilities:
Operating cash flows from operating leases	$	4,085	$	4,872
Operating cash flows from finance leases	8		21
Financing cash flows from finance leases	254		203
Right-of-use asset obtained in exchange for new operating lease liability	—		563
Right-of-use asset obtained in exchange for new finance lease liability	114		148

The following table summarizes maturities of lease liabilities and sublease income as of September 30, 2023 (in thousands):


	Operating Leases		Sublease Income Payments		Net Lease Income Payments
2023 (remaining three months)	$	369	$	(388)	$	(19)
2024	1,000		(1,044)		(44)
Total lease payments (undiscounted)	1,369		$	(1,432)	$	(63)
Less interest or imputed interest	16
Total present value of lease liabilities	1,353
Less: Lease liabilities, current	(1,353)
Lease liabilities, non-current	$	—

As of September 30, 2023, the Company’s only operating lease had a remaining lease term of 0.9 years and the discount rate used to recognize the initial lease liabilities was 2.6%.

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Commitments In February 2023, the Company entered into an agreement with MTS Health Partners, L.P. to act as the Company’s strategic financial advisor in connection with a potential strategic transaction, including, but not limited to, an acquisition, merger, business combination or other transaction. Upon the consummation of any such transaction, the Company has agreed to pay the advisor the greater of i) a success fee of 3% of the Total Consideration (as defined in the agreement) received by the Company; or ii) $1.5 million. Any success fees payable will be recognized as an expense in the period it is incurred. Legal Proceedings From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business. The Company was not subject to any material legal proceedings as of September 30, 2023 and December 31, 2022, and no material legal proceedings are currently pending or threatened. Indemnification In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. As permitted under Delaware law and in accordance with its bylaws, the Company indemnifies its officers and directors for certain events or occurrences while the officer or director is or was serving in such capacity. The Company is also party to indemnification agreements with its officers and directors. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments that the Company could be required to make under these provisions is not determinable. The Company also maintains director and officer insurance, which may cover certain liabilities arising from the Company’s obligation to indemnify directors and officers. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification provisions and is not currently aware of any indemnification claims.

Common Stock and Stock-Based Compensation

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Common Stock and Stock-Based Compensation

Common Stock

Common stock reserved for future issuance, on an as converted basis, consisted of the following:


	September 30, 2023	December 31, 2022
Stock options outstanding	3,055,249	5,369,808
RSUs and PSUs outstanding	2,010,450	531,366
Shares available for future grants under equity incentive plans	5,767,781	4,654,922
Shares available for issuance under ESPP	1,234,610	872,792
Total	12,068,090	11,428,888

Stock-based Compensation

Stock-based compensation expense is measured at fair value on the date of grant and recognized ratably over the requisite service period.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Research and development	$	—	$	2,707	$	972	$	9,002
General and administrative	2,531		3,135		6,610		9,622
Restructuring, impairment, and related charges	—		—		—		(419)
Total stock-based compensation expense	$	2,531	$	5,842	$	7,582	$	18,205

Stock Options

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


	Total Options Outstanding	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding as of December 31, 2022	5,369,808	$	17.28	7.6	$	11
Granted	768,000	0.39
Exercised	—	—
Canceled	(3,082,559)	17.18
Outstanding as of September 30, 2023	3,055,249	$	13.14	7.4	$	—
Exercisable as of September 30, 2023	1,904,507	$	13.17	6.8	$	—

Restricted Stock Units and Performance Stock Units

The following summarizes RSU and PSU activity:


	RSUs			PSUs
	Number of Shares	Weighted- Average Grant Date Fair Value per Share		Number of Shares	Weighted- Average Grant Date Fair Value per Share
Outstanding as of December 31, 2022	531,366	$	10.12	—	$	—
Granted	—	—		3,461,640	0.30
Vested	(81,045)	9.91		(1,600,661)	0.30
Canceled	(300,850)	11.04		—	—
Outstanding as of September 30, 2023	149,471	$	8.39	1,860,979	$	0.30

Net Loss Per Share

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Net Loss Per Share

The following table sets forth the computation of the basic and diluted net loss per share (in thousands except share and per share data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Numerator:
Net loss	$	(6,937)	$	(25,206)	$	(52,187)	$	(103,726)
Denominator:
Weighted-average shares of common stock outstanding used in the calculation of basic and diluted net loss per share	39,751,028		38,914,570		39,426,218		38,769,226
Net loss per share, basic and diluted	$	(0.17)	$	(0.65)	$	(1.32)	$	(2.68)


	September 30,
	2023	2022
Stock options outstanding	3,055,249	6,069,603
RSUs and PSUs outstanding	2,010,450	747,676

Subsequent Events	9 Months Ended
Subsequent Events	Sep. 30, 2023
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events On October 19, 2023, the Company presented its appeal at a hearing with the Nasdaq Panel regarding a delisting notification received on August 10, 2023. On October 23, 2023, the Nasdaq Panel granted the Company’s request for continued listing on Nasdaq, subject to the Company’s completion of the Merger on or before February 6, 2024. See Note 1 for additional information.

Summary of Significant Accounting Policies (Policies)	9 Months Ended
Summary of Significant Accounting Policies (Policies)	Sep. 30, 2023
Accounting Policies [Abstract]
Financial Statement Preparation	Financial Statement Preparation The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) and applicable rules and regulations of the Securities and Exchange Commission (the SEC) for interim reporting. As permitted under those rules and regulations, certain footnotes or other financial information normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. Similarly, the balance sheet as of December 31, 2022 was derived from the Company’s audited financial statements but does not include all disclosures required by GAAP. The condensed financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal, recurring adjustments that are necessary for a fair statement of the results for interim periods. Results of operations for interim periods may not be representative of results to be expected for a full year. The accompanying condensed financial statements should be read in conjunction with the audited financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Certain reclassifications have been made to the prior period amounts to conform to the current year presentation. In particular, in the condensed statements of operations for the nine months ended September 30, 2022, the Company reclassified $3.1 million and $0.7 million from “Research and development” and “General and administrative,” respectively, to a new line item “Restructuring, impairment, and related charges,” primarily related to severance and contract termination costs. These reclassifications did not affect the Company’s financial position, net loss, or cash flows as of and for the periods presented.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company bases its estimates on historical experience and market-specific or other relevant assumptions that it believes are reasonable under the circumstances. Assets and liabilities reported in the Company’s condensed balance sheets and expenses and income reported are affected by estimates and assumptions, which are used for, but are not limited to, recording research and development expenses and related accruals, valuation of long-lived assets, including right-of-use assets and leasehold improvements, restructuring and other charges, and determining the fair value of stock options for stock-based compensation expense. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company. Actual results could differ from such estimates or assumptions.
Concentration of Credit Risk	Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. The Company maintains bank deposits in federally insured financial institutions and, from time to time, these deposits may exceed federally insured limits. The Company is exposed to credit risk in the event of default by the financial institutions holding its cash and cash equivalents to the extent recorded in the condensed balance sheets. The Company’s cash equivalents consist of money market funds that invests all of its assets in direct obligations of the U.S. Treasury. Although the fund invests in U.S. government obligations, an investment in such funds is neither insured nor guaranteed by the U.S. government. The Company has not experienced any losses on its deposits of cash or holdings of money market funds.
Restructuring Charges	Restructuring Charges Restructuring charges are recorded in accordance with Accounting Standards Codification (ASC) 712-10, “Nonretirement Postemployment Benefits,” or “ASC 712-10,” and/or ASC 420-10, “Exit or Disposal Cost Obligations,” or “ASC 420-10,” as appropriate. Certain termination costs and obligations of contracts that are not leases are accounted for in accordance with ASC 420-10. The Company records severance costs provided under an ongoing benefit arrangement once they are both probable and estimable in accordance with the provisions of ASC 712-10. The Company accounts for one-time termination benefits and contract terminations in accordance with ASC 420-10, which addresses financial accounting and reporting for costs associated with restructuring activities. Under ASC 420-10, the Company establishes a liability for a cost associated with an exit or disposal activity, including severance and other contract termination costs, when the liability is incurred, rather than at the date that the Company commits to an exit plan. The Company reassesses the expected cost to complete the exit or disposal activities at the end of each reporting period and adjusts its remaining estimated liabilities, if necessary.
Impairment of Long-Lived Assets	Impairment of Long-Lived Assets The Company assesses long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Such events include a significant change in the Company’s strategic business objectives and utilization of the assets. As part of the March 2023 Restructuring Plan (see Note 5), the Company commenced restructuring activities that included the decision to operate as a fully-remote company and discontinue research activities while focusing on completing and closing out clinical trials. In anticipation of exiting its leased facilities, the Company committed to a plan to sell all tangible fixed assets located at its leased facilities, consisting primarily of manufacturing and laboratory equipment. In connection with the classification of such assets as held for sale, the carrying value of the tangible fixed assets to be sold was reduced to their estimated fair value, which was determined based on the estimated selling price less costs to sell. In May 2023, the Company modified various operating leases to shorten the accounting lease term. Upon vacating the leased premises in the second quarter of 2023, the Company wrote-off the remaining balances related to right-of-use assets and leasehold improvements.
Cash, Cash Equivalents and Restricted Cash	Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents are held in accounts at financial institutions. As of September 30, 2023, the Company’s cash in deposit accounts were insured by the Federal Deposit Insurance Corporation (FDIC) as the balances were within the FDIC insurance limit of up to $250,000 per depositor at each financial institution. The Company considers all highly liquid investments purchased with original maturities of 90 days or less from the purchase date to be cash equivalents. Cash equivalents consist of amounts invested in money market funds exclusively composed of U.S. government obligations. Restricted cash consisted of cash balances held by financial institutions as collateral for letters of credit maintained by the Company for the benefit of lessors related to its leased properties as of September 30, 2022.
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements	Recently Adopted Accounting Pronouncements Accounting pronouncements that became effective during the nine months ended September 30, 2023 did not have a material impact on the Company’s financial condition, results of operations or cash flows. Recently Issued Accounting Pronouncements There were no new accounting pronouncements issued as of September 30, 2023 that are expected to have a material impact on the Company’s financial condition, results of operations or cash flows.

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Schedule of Reconciliation of Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed statements of cash flows (in thousands):


	September 30, 2023		September 30, 2022
Cash and cash equivalents	$	18,103	$	76,020
Restricted cash	—		916
Total cash, cash equivalents and restricted cash	$	18,103	$	76,936

Schedule of Reconciliation of Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed statements of cash flows (in thousands):


	September 30, 2023		September 30, 2022
Cash and cash equivalents	$	18,103	$	76,020
Restricted cash	—		916
Total cash, cash equivalents and restricted cash	$	18,103	$	76,936

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Summary of Financial Assets Measured at Fair Value on Recurring Basis

The following tables present money market funds at their level within the fair value hierarchy for the periods indicated (in thousands):


		September 30, 2023
	Fair Value Hierarchy Level	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Cash equivalents:
Money market funds invested in U.S. government obligations	Level 1	$	17,853	$	—	$	—	$	17,853
Total		$	17,853	$	—	$	—	$	17,853


		December 31, 2022
	Fair Value Hierarchy Level	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Cash equivalents:
Money market funds invested in U.S. government obligations	Level 1	$	40,729	$	—	$	—	$	40,729
Total		$	40,729	$	—	$	—	$	40,729

Balance Sheet Components (Tables)

9 Months Ended

Sep. 30, 2023

Balance Sheet Related Disclosures [Abstract]

Schedule of Property, Plant and Equipment, Net

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


	September 30, 2023		December 31, 2022
Laboratory and manufacturing equipment	$	—	$	11,421
Leasehold improvements	221		5,246
Computer and office equipment	—		491
Construction in progress	—		72
Total property and equipment, gross	221		17,230
Accumulated depreciation	(190)		(9,047)
Total property and equipment, net	$	31	$	8,183

Schedule of Accrued Liabilities

Accrued expenses consisted of the following (in thousands):


	September 30, 2023		December 31, 2022
Professional services	$	1,100	$	728
Compensation expenses	872		3,985
Research and development expenses	—		3,508
Property and equipment	—		7
Other	289		432
Total accrued expenses	$	2,261	$	8,660

Restructuring, Impairment, and Related Charges (Tables)

9 Months Ended

Sep. 30, 2023

Restructuring and Related Activities [Abstract]

Schedule of Restructuring, Impairment, and Related Charges

The following table details “Restructuring, impairment, and related charges” for each of the periods presented (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Employee termination benefits	$	—	$	—	$	5,585	$	3,339
Stock-based compensation	—		—		—		(419)
Asset impairments	—		—		10,642		80
Other related costs	(40)		12		605		799
Total restructuring, impairments, and related charges	$	(40)	$	12	$	16,832	$	3,799

The following table summarizes the charges and spending relating to restructuring program activities for the nine months ended September 30, 2023:


	Employee Termination Benefits		Asset Impairments			Other Related Costs		Total
Liability balance at December 31, 2022	$	—	$	—		$	420	$	420
Expense	5,585		10,642			605		16,832
Payments	(5,585)		(5,250)		(1)	(1,387)		(12,222)
Non-cash activity	—		(5,392)			362		(5,030)
Liability balance at September 30, 2023	$	—	$	—		$	—	$	—

Leases (Tables)

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Schedule of Lease Expense

The following table summarizes total lease expense for the three and nine months ended September 30, 2023 and 2022 (in thousands):


	Condensed Statements of Operations Classification	Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022
Operating lease expense	Operating expenses	$	321	$	1,923	$	3,537	$	6,432
Finance lease expense:
Amortization of ROU assets	Operating expenses	—		55		82		161
Interest on lease liabilities	Interest income, net	—		6		8		21
Variable lease expense	Operating expenses	144		657		784		1,789
Short-term lease expense	Operating expenses	—		9		5		76
Sublease income	Operating expenses	(378)		(665)		(1,711)		(1,396)
Total lease expense		$	87	$	1,985	$	2,705	$	7,083

Schedule of Supplemental Cash Flow Information

The following table summarizes supplemental cash flow information for the nine months ended September 30, 2023 and 2022 (in thousands):


	Nine Months Ended September 30,
	2023		2022
Cash paid for amounts included in the measurement of liabilities:
Operating cash flows from operating leases	$	4,085	$	4,872
Operating cash flows from finance leases	8		21
Financing cash flows from finance leases	254		203
Right-of-use asset obtained in exchange for new operating lease liability	—		563
Right-of-use asset obtained in exchange for new finance lease liability	114		148

Schedule of Future Minimum Payments and Sublease Income under Noncancelable Leases

The following table summarizes maturities of lease liabilities and sublease income as of September 30, 2023 (in thousands):


	Operating Leases		Sublease Income Payments		Net Lease Income Payments
2023 (remaining three months)	$	369	$	(388)	$	(19)
2024	1,000		(1,044)		(44)
Total lease payments (undiscounted)	1,369		$	(1,432)	$	(63)
Less interest or imputed interest	16
Total present value of lease liabilities	1,353
Less: Lease liabilities, current	(1,353)
Lease liabilities, non-current	$	—

Common Stock and Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Common Stock Reserved for Future Issuance

Common stock reserved for future issuance, on an as converted basis, consisted of the following:


	September 30, 2023	December 31, 2022
Stock options outstanding	3,055,249	5,369,808
RSUs and PSUs outstanding	2,010,450	531,366
Shares available for future grants under equity incentive plans	5,767,781	4,654,922
Shares available for issuance under ESPP	1,234,610	872,792
Total	12,068,090	11,428,888

Schedule of Components of Stock-Based Compensation Expense


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Research and development	$	—	$	2,707	$	972	$	9,002
General and administrative	2,531		3,135		6,610		9,622
Restructuring, impairment, and related charges	—		—		—		(419)
Total stock-based compensation expense	$	2,531	$	5,842	$	7,582	$	18,205

Schedule of Stock Option Activity

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


	Total Options Outstanding	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding as of December 31, 2022	5,369,808	$	17.28	7.6	$	11
Granted	768,000	0.39
Exercised	—	—
Canceled	(3,082,559)	17.18
Outstanding as of September 30, 2023	3,055,249	$	13.14	7.4	$	—
Exercisable as of September 30, 2023	1,904,507	$	13.17	6.8	$	—

Schedule of Restricted Stock Unit Activity

The following summarizes RSU and PSU activity:


	RSUs			PSUs
	Number of Shares	Weighted- Average Grant Date Fair Value per Share		Number of Shares	Weighted- Average Grant Date Fair Value per Share
Outstanding as of December 31, 2022	531,366	$	10.12	—	$	—
Granted	—	—		3,461,640	0.30
Vested	(81,045)	9.91		(1,600,661)	0.30
Canceled	(300,850)	11.04		—	—
Outstanding as of September 30, 2023	149,471	$	8.39	1,860,979	$	0.30

Net Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Schedule of Computation of Basic and Diluted Net Loss Per Share

The following table sets forth the computation of the basic and diluted net loss per share (in thousands except share and per share data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Numerator:
Net loss	$	(6,937)	$	(25,206)	$	(52,187)	$	(103,726)
Denominator:
Weighted-average shares of common stock outstanding used in the calculation of basic and diluted net loss per share	39,751,028		38,914,570		39,426,218		38,769,226
Net loss per share, basic and diluted	$	(0.17)	$	(0.65)	$	(1.32)	$	(2.68)

Schedule of Weighted Average Potential Shares Excluded from Computation of Diluted Net Loss Per Common Share

Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:


	September 30,
	2023	2022
Stock options outstanding	3,055,249	6,069,603
RSUs and PSUs outstanding	2,010,450	747,676

Description of Business (Details) - USD ($) $ in Thousands		1 Months Ended	3 Months Ended						9 Months Ended
Description of Business (Details) - USD ($) $ in Thousands	Sep. 21, 2023	Jan. 31, 2022	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022	Sep. 20, 2023	Dec. 31, 2022
Restructuring Cost and Reserve [Line Items]
Net loss			$ (6,937)	$ (17,333)	$ (27,917)	$ (25,206)	$ (35,945)	$ (42,575)	$ (52,187)	$ (103,726)
Accumulated deficit			(418,157)						(418,157)			$ (365,970)
Cash and cash equivalents			$ 18,103			$ 76,020			18,103	$ 76,020		$ 61,145
At The Market \| Sales Agreement \| Agents
Restructuring Cost and Reserve [Line Items]
Shares reserved for issuance of common stock upon initial public offering, net of underwriter's' commission and issuance costs (in shares)		150,000,000
Maximum public float limit to raise capital									$ 75,000
Issuance of common stock upon initial public offering, net of underwriters’ commission and issuance costs (in shares)									0
Merger Agreement Member \| Minimum
Restructuring Cost and Reserve [Line Items]
Termination Fee	$ 400
Merger Agreement Member \| Maximum
Restructuring Cost and Reserve [Line Items]
Termination Fee	$ 600
Cyclo Therapeutics \| AMT
Restructuring Cost and Reserve [Line Items]
Common stock exchange rate (in shares)	0.174
AMT Share Holders \| AMT
Restructuring Cost and Reserve [Line Items]
Ownership percentage											25.00%
Cyclo Stockholders \| AMT
Restructuring Cost and Reserve [Line Items]
Ownership percentage	75.00%

Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Reclassification [Line Items]
Restructuring, impairment, and related charges	$ (40)	$ 12	$ 16,832	$ 3,799
Research and development	250	18,233	15,796	72,273
General and administrative	$ 7,007	$ 7,281	$ 20,804	28,052
Revision of Prior Period, Reclassification, Adjustment \| Research and Development Expense Reclassification to Restructuring, Impairment and Related Charges
Reclassification [Line Items]
Restructuring, impairment, and related charges				3,100
Research and development				(3,100)
Revision of Prior Period, Reclassification, Adjustment \| General and Administrative Expense Reclassification to Restructuring, Impairment and Related Charges
Reclassification [Line Items]
Restructuring, impairment, and related charges				700
General and administrative				$ (700)

Summary of Significant Accounting Policies - Schedule of Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022
Accounting Policies [Abstract]
Cash and cash equivalents	$ 18,103	$ 61,145	$ 76,020
Restricted cash	0	$ 916	916
Total cash, cash equivalents and restricted cash	$ 18,103		$ 76,936

Fair Value Measurements (Details) - Fair Value, Recurring - Level 1 - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Amortized Cost	$ 17,853	$ 40,729
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	17,853	40,729
Money market funds invested in U.S. government obligations
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Amortized Cost	17,853	40,729
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	$ 17,853	$ 40,729

Balance Sheet Components - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Property Plant And Equipment [Line Items]
Prepaid clinical expenses	$ 0		$ 0		$ 1,200
Asset impairments			5,392	$ 80
Depreciation expense	$ 0	$ 600	800	$ 2,300
March 2023 Restructuring Plan
Property Plant And Equipment [Line Items]
Asset impairments			$ 5,400

Balance Sheet Components - Schedule of Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Property Plant And Equipment [Line Items]
Total property and equipment, gross	$ 221	$ 17,230
Accumulated depreciation	(190)	(9,047)
Total property and equipment, net	31	8,183
Laboratory and manufacturing equipment
Property Plant And Equipment [Line Items]
Total property and equipment, gross	0	11,421
Leasehold improvements
Property Plant And Equipment [Line Items]
Total property and equipment, gross	221	5,246
Computer and office equipment
Property Plant And Equipment [Line Items]
Total property and equipment, gross	0	491
Construction in progress
Property Plant And Equipment [Line Items]
Total property and equipment, gross	$ 0	$ 72

Balance Sheet Components - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Balance Sheet Related Disclosures [Abstract]
Professional services	$ 1,100	$ 728
Compensation expenses	872	3,985
Research and development expenses	0	3,508
Property and equipment	0	7
Other	289	432
Total accrued expenses	$ 2,261	$ 8,660

Restructuring, Impairment, and Related Charges - Narrative (Details) $ in Thousands	1 Months Ended		3 Months Ended		9 Months Ended
	Mar. 31, 2023 employee	May 31, 2022 employee	Sep. 30, 2023 USD ($) employee	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) employee	Sep. 30, 2022 USD ($)
Restructuring Cost and Reserve [Line Items]
Employee termination benefits			$ 0	$ 0	$ 5,585	$ 3,339
Number of employees \| employee			13		13
Non-cash asset impairment charges					$ 5,392	80
Other related costs			$ (40)	12	605	799
Loss on disposal of property and equipment					295	0
Gain on partial termination of lease					702	0
Restructuring, impairment, and related charges			(40)	12	16,832	3,799
Reduction in stock-based compensation expense			$ 0	$ 0	0	419
March 2023 Restructuring Plan
Restructuring Cost and Reserve [Line Items]
Employee termination benefits					5,600
Non-cash asset impairment charges					5,400
Other related costs					600
Loss on disposal of property and equipment					300
Gain on partial termination of lease					700
May 2022 Restructuring Plan
Restructuring Cost and Reserve [Line Items]
Employee termination benefits						3,300
Non-cash asset impairment charges						100
Other related costs						800
Restructuring, impairment, and related charges						3,800
Reduction in stock-based compensation expense						$ 400
Severance Payments and Other Employee-Related Separation Costs \| March 2023 Restructuring Plan
Restructuring Cost and Reserve [Line Items]
Reduction in number of employees \| employee	63
Percentage of reduction in workforce	82.00%
Severance Payments and Other Employee-Related Separation Costs \| May 2022 Restructuring Plan
Restructuring Cost and Reserve [Line Items]
Reduction in number of employees \| employee		52
Percentage of reduction in workforce		40.00%
Contract Termination Fees \| March 2023 Restructuring Plan
Restructuring Cost and Reserve [Line Items]
Other related costs					$ 1,000

Restructuring, Impairment, and Related Charges - Restructuring and Related Charges (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Restructuring and Related Activities [Abstract]
Employee termination benefits	$ 0	$ 0	$ 5,585	$ 3,339
Stock-based compensation	0	0	0	(419)
Asset impairments	0	0	10,642	80
Other related costs	(40)	12	605	799
Total restructuring, impairments, and related charges	$ (40)	$ 12	$ 16,832	$ 3,799

Restructuring, Impairment, and Related Charges - Asset Impairment Charges (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($)
Restructuring Reserve [Roll Forward]
Liability balance at beginning of period	$ 420
Expense	16,832
Payments	(12,222)
Non-cash activity	(5,030)
Liability balance at end of period	0
Employee Termination Benefits
Restructuring Reserve [Roll Forward]
Liability balance at beginning of period	0
Expense	5,585
Payments	(5,585)
Non-cash activity	0
Liability balance at end of period	0
Asset Impairments
Restructuring Reserve [Roll Forward]
Liability balance at beginning of period	0
Expense	10,642
Payments	(5,250)
Non-cash activity	(5,392)
Liability balance at end of period	0
Other Related Costs
Restructuring Reserve [Roll Forward]
Liability balance at beginning of period	420
Expense	605
Payments	(1,387)
Non-cash activity	362
Liability balance at end of period	$ 0

Leases - Narrative (Details) $ in Thousands	1 Months Ended	9 Months Ended
Leases - Narrative (Details) $ in Thousands	May 31, 2023 USD ($) ft²	Sep. 30, 2023 USD ($) ft²	Sep. 30, 2022 USD ($)	Feb. 28, 2021 ft²
Lessee Lease Description [Line Items]
Gain on partial termination of lease		$ 702	$ 0
Weighted average remaining lease term		10 months 24 days
Weighted average discount rate		2.60%
Minimum
Lessee Lease Description [Line Items]
Finance lease term		3 years
Maximum
Lessee Lease Description [Line Items]
Finance lease term		5 years
Office and Laboratory Space
Lessee Lease Description [Line Items]
Rentable area \| ft²		18,748		84,321
Right-of-use asset reduction	$ 10,000
Lease liability reduction	10,700
Gain on partial termination of lease	700
Payment for lease modification	5,300
Security deposit	$ 900
Warehouse Space
Lessee Lease Description [Line Items]
Rentable area \| ft²	20,000
Payment for lease modification	$ 800
Security deposit	$ 300

Leases - Schedule of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
Operating lease expense	$ 321	$ 1,923	$ 3,537	$ 6,432
Finance lease expense:
Amortization of ROU assets	0	55	82	161
Interest on lease liabilities	0	6	8	21
Variable lease expense	144	657	784	1,789
Short-term lease expense	0	9	5	76
Sublease income	(378)	(665)	(1,711)	(1,396)
Total lease expense	$ 87	$ 1,985	$ 2,705	$ 7,083

Leases - Schedule of Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash paid for amounts included in the measurement of liabilities:
Operating cash flows from operating leases	$ 4,085	$ 4,872
Operating cash flows from finance leases	8	21
Financing cash flows from finance leases	254	203
Right-of-use asset obtained in exchange for new operating lease liability	0	563
Right-of-use asset obtained in exchange for new finance lease liability	$ 114	$ 148

Leases - Schedule of Maturities of Lease Liabilities and Sublease Income (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Operating Leases
2023 (remaining three months)	$ 369
2024	1,000
Total lease payments (undiscounted)	1,369
Less interest or imputed interest	16
Total present value of lease liabilities	1,353
Less: Lease liabilities, current	(1,353)	$ (4,639)
Lease liabilities, non-current	0	$ 31,228
Sublease Income Payments
2023 (remaining three months)	(388)
2024	(1,044)
Total lease payments (undiscounted)	(1,432)
Net Lease Income Payments
2023 (remaining three months)	(19)
2024	(44)
Total lease payments (undiscounted)	$ (63)

Commitments and Contingencies (Details) $ in Millions	Feb. 28, 2023 USD ($)
Other Commitments [Line Items]
Success fee percentage upon consummation of transaction	3.00%
Minimum
Other Commitments [Line Items]
Success fee payable upon consummation of transaction	$ 1.5

Common Stock and Stock-Based Compensation - Narrative (Details) $ / shares in Units, $ in Thousands		1 Months Ended	3 Months Ended		9 Months Ended
	Jan. 01, 2023 shares	Apr. 30, 2023 shares	Sep. 30, 2023 USD ($) vote $ / shares shares	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) vote $ / shares shares	Sep. 30, 2022 USD ($)	Dec. 31, 2022 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock, shares authorized			450,000,000		450,000,000		450,000,000
Common stock, par value (in dollars per share) \| $ / shares			$ 0.0001		$ 0.0001		$ 0.0001
Number of voting rights for each common stock held \| vote			1		1
Total unrecognized stock-based compensation expense related to stock options granted \| $			$ 7,300		$ 7,300
Total unrecognized stock-based compensation expense related to nonvested awards weighted average period of recognition					1 year 9 months 18 days
Consulting agreement term		6 months
Stock-based compensation \| $			2,531	$ 5,842	$ 7,582	$ 18,205
ESPP
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Increase in shares available for grant (in shares)	391,818
PSUs
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Granted (in shares)					3,461,640
Stock-based compensation \| $			900
PSUs \| Director
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Granted (in shares)		886,111
RSUs
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Granted (in shares)					0
RSUs and PSUs outstanding
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total unrecognized stock-based compensation expense related to nonvested awards weighted average period of recognition					1 month 6 days
Total stock-based compensation expense related to unvested restricted stock units and awards \| $			$ 100		$ 100
2020 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Increase in shares available for grant (in shares)	1,959,090
2020 Plan \| PSUs
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Granted (in shares)		2,575,529

Common Stock and Stock-Based Compensation - Schedule of Common Stock Reserved for Future Issuance (Details) - shares	Sep. 30, 2023	Dec. 31, 2022
Class Of Stock [Line Items]
Common stock reserved for future issuance (in shares)	12,068,090	11,428,888
Stock options outstanding
Class Of Stock [Line Items]
Common stock reserved for future issuance (in shares)	3,055,249	5,369,808
RSUs and PSUs outstanding
Class Of Stock [Line Items]
Common stock reserved for future issuance (in shares)	2,010,450	531,366
Shares available for future grants under equity incentive plans
Class Of Stock [Line Items]
Common stock reserved for future issuance (in shares)	5,767,781	4,654,922
Shares available for issuance under ESPP
Class Of Stock [Line Items]
Common stock reserved for future issuance (in shares)	1,234,610	872,792

Common Stock and Stock-Based Compensation - Schedule of Components of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 2,531	$ 5,842	$ 7,582	$ 18,205
Research and development
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	0	2,707	972	9,002
General and administrative
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	2,531	3,135	6,610	9,622
Restructuring, impairment, and related charges
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 0	$ 0	$ 0	$ (419)

Common Stock and Stock-Based Compensation - Schedule of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Total Options Outstanding
Beginning balance (in shares)	5,369,808
Granted (in shares)	768,000
Exercised (in shares)	0
Canceled (in shares)	(3,082,559)
Ending balance (in shares)	3,055,249	5,369,808
Options exercisable (in shares)	1,904,507
Weighted- Average Exercise Price
Beginning balance (in dollars per share)	$ 17.28
Granted (in dollars per share)	0.39
Exercised (in dollars per share)	0
Canceled (in dollars per share)	17.18
Ending balance (in dollars per share)	13.14	$ 17.28
Options exercisable, weighted-average exercise price (in dollars per share)	$ 13.17
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Additional Disclosures [Abstract]
Options outstanding, weighted-average remaining contractual life	7 years 4 months 24 days	7 years 7 months 6 days
Options exercisable, weighted-average remaining contractual life	6 years 9 months 18 days
Options outstanding, aggregate intrinsic value	$ 0	$ 11
Options exercisable, aggregate intrinsic value	$ 0

Common Stock and Stock-Based Compensation - Schedule of RSU and PSU Activity (Details)	9 Months Ended
	Sep. 30, 2023 $ / shares shares
RSUs
Number of Shares
Outstanding (in shares) \| shares	531,366
Granted (in shares) \| shares	0
Vested (in shares) \| shares	(81,045)
Canceled (in shares) \| shares	(300,850)
Outstanding (in shares) \| shares	149,471
Weighted- Average Grant Date Fair Value per Share
Outstanding (in dollars per share) \| $ / shares	$ 10.12
Granted (in dollars per share) \| $ / shares	0
Vested (in dollars per share) \| $ / shares	9.91
Canceled (in dollars per share) \| $ / shares	11.04
Outstanding (in dollars per share) \| $ / shares	$ 8.39
PSUs
Number of Shares
Outstanding (in shares) \| shares	0
Granted (in shares) \| shares	3,461,640
Vested (in shares) \| shares	(1,600,661)
Canceled (in shares) \| shares	0
Outstanding (in shares) \| shares	1,860,979
Weighted- Average Grant Date Fair Value per Share
Outstanding (in dollars per share) \| $ / shares	$ 0
Granted (in dollars per share) \| $ / shares	0.30
Vested (in dollars per share) \| $ / shares	0.30
Canceled (in dollars per share) \| $ / shares	0
Outstanding (in dollars per share) \| $ / shares	$ 0.30

Net Loss Per Share - Schedule of Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022
Numerator:
Net loss	$ (6,937)	$ (17,333)	$ (27,917)	$ (25,206)	$ (35,945)	$ (42,575)	$ (52,187)	$ (103,726)
Denominator:
Weighted-average shares of common stock outstanding used in the calculation of basic net loss per share (in shares)	39,751,028			38,914,570			39,426,218	38,769,226
Weighted-average shares of common stock outstanding used in the calculation of diluted net loss per share (in shares)	39,751,028			38,914,570			39,426,218	38,769,226
Net loss per share, basic (in dollars per share)	$ (0.17)			$ (0.65)			$ (1.32)	$ (2.68)
Net loss per share, diluted (in dollars per share)	$ (0.17)			$ (0.65)			$ (1.32)	$ (2.68)

Net Loss Per Share - Schedule of Weighted Average Potential Shares Excluded from Computation of Diluted Net Loss Per Common Share (Details) - shares	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Stock options outstanding
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total stock options outstanding	3,055,249	6,069,603
RSUs and PSUs outstanding
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total stock options outstanding	2,010,450	747,676

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