0000950170-22-002536 | 10-K | XBRL Viewer | Phathom Pharmaceuticals INC

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Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
Statements of Cash Flows - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Cash flows from operating activities
Net loss	$ (143,883)	$ (129,068)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	521	323
Stock-based compensation	16,812	5,840
Issuance of PIK interest debt	990
Amortization of debt discount	3,595	1,273
Change in fair value of warrant liabilities		(95)
Other	823	322
Changes in operating assets and liabilities:
Prepaid expenses and other current assets (includes related party amounts of $82 and $(82), respectively)	605	7,963
Accounts payable and accrued expenses (includes related party amounts of $2,766 and $399, respectively)	(9,791)	24,009
Accrued clinical trial expenses	(18,595)	19,997
Accrued interest	165	156
Operating right-of-use asset and lease liabilities	98	(205)
Other long-term assets	43	(203)
Net cash used in operating activities	(148,617)	(69,688)
Cash flows from investing activities
Cash paid for property, plant and equipment	(328)	(1,040)
Net cash used in investing activities	(328)	(1,040)
Cash flows from financing activities
Proceeds from underwritten public offering, net		88,830
Proceeds from issuance of common stock from exercise of stock options	1,944	629
Repayment of long-term debt	(54,125)
Net proceeds from issuance of long-term debt	96,889	25,000
Net cash provided by financing activities	44,708	114,459
Net increase (decrease) in cash and cash equivalents	(104,237)	43,731
Cash and cash equivalents – beginning of period	287,496	243,765
Cash and cash equivalents – end of period	183,259	287,496
Supplemental disclosure of cash flow information
Interest paid	4,069	3,464
Supplemental disclosure of noncash investing and financing activities
Issuance of common stock warrants in connection with long-term debt	1,290
Property and equipment purchases included in accounts payable and accrued expenses	2	145
Final interest payment fee	7,500	2,063
Settlement of ESPP liability in common stock	819
Settlement of 401(k) liability in common stock	$ 903
Operating lease liabilities arising from obtaining right-of-use assets		1,396
Conversion of Lender Warrants into Equity		318
Underwritten public offering costs included in accounts payable and accrued expenses		$ 234

Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Underwritten Public Offering	Common Stock	Common Stock Underwritten Public Offering	Additional Paid-in Capital	Additional Paid-in Capital Underwritten Public Offering	Accumulated Deficit
Beginning balance at Dec. 31, 2019	$ 227,955		$ 2		$ 484,372		$ (256,419)
Beginning balance, shares at Dec. 31, 2019			24,728,258
Issuance of common stock		$ 88,596				$ 88,596
Issuance of common stock, shares				2,250,000
Conversion of warrant liability into equity	318				318
Issuance of common stock from exercise of stock options	629				629
Issuance of common stock from exercise of stock options, shares			48,263
Vesting of restricted shares	1		$ 1
Vesting of restricted shares, shares			1,489,489
Stock-based compensation	5,840				5,840
Net loss	(129,068)						(129,068)
Ending balance at Dec. 31, 2020	$ 194,271		$ 3		579,755		(385,487)
Ending balance, shares at Dec. 31, 2020	28,516,010		28,516,010
Issuance of common stock from exercise of stock options	$ 1,944				1,944
Issuance of common stock from exercise of stock options, shares			107,583
Issuance of common stock from exercise of warrants, shares			228,696
401(k) matching contribution	903				903
401(k) matching contribution, shares			26,750
Vesting of restricted shares, shares			1,601,950
Stock-based compensation	16,812				16,812
ESPP shares issued	819				819
ESPP shares issued, shares			30,237
Issuance of warrants	1,290				1,290
Net loss	(143,883)						(143,883)
Ending balance at Dec. 31, 2021	$ 72,156		$ 3		$ 601,523		$ (529,370)
Ending balance, shares at Dec. 31, 2021	30,511,226		30,511,226

Organization, Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Details)			1 Months Ended		4 Months Ended	12 Months Ended
	Dec. 16, 2020 shares	Oct. 29, 2019 USD ($) shares	Dec. 31, 2020 USD ($) shares	May 31, 2019 shares	May 06, 2019 USD ($) shares	Dec. 31, 2021 USD ($) Segment shares	Dec. 31, 2020 USD ($) shares	May 07, 2019 shares
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Fair value liabilities, level 1 to level 2 transfers, amount			$ 0			$ 0	$ 0
Fair value liabilities, level 2 to level 1 transfers, amount			$ 0			0	0
Fair value liability, transfers into level 3						0	0
Fair value liability, transfers out of level 3						0	0
Conversion of lender warrants into equity							$ 318,000
Impairment losses						$ 0
Number of operating segment \| Segment						1
Accounting Standards Update 2019-12
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Change in accounting principle, Accounting Standards Update, adopted [true false]						true
Change in accounting principle, Accounting Standards Update, Adoption date						Jan. 01, 2021
Change in accounting principle, Accounting Standards Update, Immaterial effect [true false]						true
Unvested Shares
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Weighted-average unvested shares \| shares						1,939,252	3,424,676
Furniture and Fixtures
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Property and equipment, useful life						3 years
Minimum \| Computer Equipment and Related Software
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Property and equipment, useful life						2 years
Maximum \| Computer Equipment and Related Software
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Property and equipment, useful life						3 years
Lender Warrants
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Expected cash dividend yield						0.00%
Takeda Warrant \| Takeda License \| Takeda
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Shares of common stock included in calculation of basic weighted-average common shares \| shares						7,588,000
Fair Value, Recurring
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Financial assets fair value disclosure						$ 0
Fair Value, Nonrecurring
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Non-financial assets fair value disclosure						0
Non-financial liabilities fair value disclosure						$ 0
Common Stock
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Common stock shares issued \| shares					2,524,852
Net proceeds from issuance of common stock					$ 1,000
Warrants exercised to purchase shares \| shares						228,696
Common Stock \| Takeda License
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Common stock shares issued \| shares				1,084,000
Common Stock \| Takeda License \| Takeda
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Warrants exercised to purchase shares \| shares						228,696
Warrants issued to purchase shares \| shares								7,588,000
Warrants issued to common stock remains exercisable \| shares						7,359,304
Additional Paid-in Capital
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Conversion of lender warrants into equity							$ 318,000
Additional Paid-in Capital \| Lender Warrants
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Conversion of lender warrants into equity							$ 300,000
IPO \| Common Stock
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Common stock shares issued \| shares		10,997,630
Proceeds from Initial Public Offering (IPO)		$ 191,500,000
Follow-on Public Offering \| Common Stock
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Common stock shares issued \| shares			2,250,000
Net proceeds from issuance of common stock			$ 88,600,000
Underwritten Public Offering
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Common stock shares issued \| shares	2,250,000
Underwritten Public Offering \| Common Stock
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Common stock shares issued \| shares		1,434,473					2,250,000

401(k) Plan - Additional Information (Details) - USD ($) $ in Millions		1 Months Ended		12 Months Ended
	Jan. 31, 2021	Jan. 31, 2022	Aug. 31, 2021	Dec. 31, 2021	Dec. 31, 2020
Defined Contribution Plan Disclosure [Line Items]
Defined contribution plan employer contribution expense				$ 0.8	$ 0.3
Defined contribution plan, employer matching contribution, percentage				75.00%	75.00%
Employer discretionary match number of shares settled	8,356	16,756	18,394

Balance Sheet Details - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Balance Sheet Related Disclosures [Abstract]
Depreciation and amortization expense	$ 500,000	$ 300,000
Disposal of property, plant or equipment	$ 0	$ 0

Stockholders' Equity - Summary of Unvested Shares (Details)	12 Months Ended
	Dec. 31, 2021 shares
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Balance at December 31, 2020	2,746,759
Share vesting	(1,601,950)
Balance at December 31, 2021	1,144,809

Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2021

Summary of Unvested Shares

A summary of the Company’s unvested shares is as follows:


Balance at December 31, 2020	2,746,759
Share vesting	(1,601,950	)
Balance at December 31, 2021	1,144,809

Summary of Common Stock Reserved for Future Issuance

Common stock reserved for future issuance consists of the following:


	December 31, 2021
Common stock warrants		7,450,532
Stock options and performance-based awards outstanding		4,581,029
Shares available for issuance under the 2019 Incentive Plan		1,772,744
Shares available for issuance under the ESPP Plan		842,036
Balance at December 31, 2021		14,646,341

Summary of PSU Activity Under the 2019 Incentive Award Plan

The following table summarizes PSU activity under the 2019 Incentive Award Plan during the year ended December 31, 2021.


	Number of Stock Units			Weighted- Average Grant Date Fair Value Per Share
Unvested balance at December 31, 2020		220,000		$	32.48
Granted		190,050			31.80
Vested		—			—
Forfeited		(15,750	)		30.63
Unvested balance at December 31, 2021		394,300		$	32.23

Summary of Weighted-Average Assumptions Used to Estimate Fair Value of ESPP Awards

The weighted-average assumptions used to estimate the fair value of ESPP awards using the Black-Scholes option valuation model were as follows:


	Years Ended December 31,
	2021			2020
Assumptions:
Expected term (in years)		0.69			1.00
Expected volatility		76.25	%		76.25	%
Risk free interest rate		0.09	%		0.15	%
Dividend yield		—			—

Summary of Stock Option Activity

A summary of the Company’s stock option activity and related information is as follows:


	Options Outstanding			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value (in thousands)
Balance at December 31, 2020		2,728,742		$	21.36		9.10	$	34,432
Options granted		1,725,250			37.14
Options exercised and shares vested		(107,583	)		18.07
Options cancelled		(159,680	)		32.26
Balance at December 31, 2021		4,186,729		$	27.53		8.43	$	13,973
Options exercisable as of December 31, 2021		1,127,877			19.75		7.91		6,880
Options vested and expected to vest as of December 31, 2021		4,186,729			27.53		8.43		13,973

Summary of Weighted-Average Assumptions Used to Estimate Fair Value of Stock Options

The weighted-average assumptions used to estimate the fair value of stock options using the Black-Scholes option valuation model were as follows:


	Years Ended December 31,
	2021			2020
Assumptions:
Expected term (in years)		5.93			6.06
Expected volatility		67.46	%		65.07	%
Risk free interest rate		0.68	%		0.51	%
Dividend yield		—			—

Summary of Stock-Based Compensation Expense

Stock-based compensation expense recognized for all equity awards, including founder stock, has been reported in the statements of operations as follows (in thousands):


	Years Ended December 31,
	2021		2020
Research and development expense	$	3,838	$	1,450
General and administrative expense		12,974		4,390
Total	$	16,812	$	5,840

Debt - Schedule of Future Minimum Principal and Interest Payments Under Term Loans (Details) $ in Thousands	Dec. 31, 2021 USD ($)
Debt Disclosure [Abstract]
2022	$ 5,704
2023	5,900
2024	17,308
2025	50,912
2026	66,948
Total principal and interest payments	146,772
Less interest and final payment fee	(46,772)
Total term loan borrowings	$ 100,000

Lease Commitments - Summary of Future Annual Minimum Lease Payments Under Operating Leases (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Leases [Abstract]
2022	$ 503
2023	516
2024	529
2025	342
Total minimum lease payments	1,890
Less: amount representing interest	(220)
Total operating lease liabilities	1,670	$ 2,031
Less: operating lease liabilities, current	(487)	(474)
Operating lease liabilities	$ 1,183	$ 1,557
Weighted-average remaining lease term (in years)	3 years 6 months 21 days
Weighted-average incremental borrowing rate	7.25%

Balance Sheet Details

12 Months Ended

Dec. 31, 2021

Balance Sheet Related Disclosures [Abstract]

Balance Sheet Details

2. Balance Sheet Details

Property, Plant and Equipment, net

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


	Years Ended December 31,
	2021			2020
Computer equipment and software	$	646		$	516
Furniture and fixtures		780			747
Leasehold improvements		76			54
		1,502			1,317
Less: accumulated depreciation		(852	)		(331	)
Total property, plant and equipment, net	$	650		$	986

Depreciation and amortization expense for the years ended December 31, 2021 and 2020 was approximately $0.5 million and $0.3 million, respectively. No property, plant or equipment was disposed of during the years ended December 31, 2021 and 2020.

Accrued Expenses

Accrued expenses consist of the following (in thousands):


	Years Ended December 31,
	2021		2020
Accrued research and development expenses	$	3,165	$	4,864
Accrued compensation expenses		6,344		4,587
Accrued professional & consulting expenses		1,855		1,123
Accrued other		41		32
Total accrued expenses	$	11,405	$	10,606

Income Taxes - Reconciliation Between Provision for Income Taxes and Income Taxes Computed Using U.S. Federal Statutory Corporate Tax Rate (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Income Tax Disclosure [Abstract]
Income taxes computed at the statutory rate	$ (30,216,000)	$ (27,105,000)
Permanent items	1,387,000	291,000
Change in fair value of warrants and convertible debt	0	(20,000)
Research and development credit	(2,950,000)	(3,047,000)
Change in valuation allowance	31,783,000	29,949,000
Other	(4,000)	(68,000)
Provision (benefit) for income taxes	$ 0	$ 0

- Definition

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

+ References + Details

Statements of Operations and Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Income Statement [Abstract]
Research and development expenses, related party	$ 4,933	$ 2,812
General and administrative expenses, related party	$ 18	$ 157

Lease Commitments - Summary of Supplemental Balance Sheet Information Related to the Operating Leases (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Assets:
Operating lease right-of-use assets	$ 1,914	$ 2,373
Liabilities:
Operating lease liabilities, current	487	474
Operating lease liabilities, non-current	1,183	1,557
Total operating lease liabilities	$ 1,670	$ 2,031

Organization, Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Reconciliation of Liabilities Measured at Fair Value (Details) - Warrant Liabilities - Significant Unobservable Inputs (Level 3) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Beginning Balance	$ 413
Change in fair value	(95)
Reclassification of Lender Warrants into equity (Note 6)	$ (318)

Debt (Tables)

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Schedule of Total Debt

Total debt consists of the following (in thousands):


	December 31, 2021
Long-term debt, current portion	$	—
Long-term debt, non-current portion		100,990
Unamortized debt discount		(11,319	)
Total debt, net of debt discount	$	89,671

Schedule of Future Minimum Principal and Interest Payments Under Term Loans

Future minimum principal and interest payments under the Term Loan, including the final payment fee, as of December 31, 2021 are as follows (in thousands):


Year ending December 31:
2022	$	5,704
2023		5,900
2024		17,308
2025		50,912
2026		66,948
Total principal and interest payments		146,772
Less interest and final payment fee		(46,772	)
Total term loan borrowings	$	100,000

- Definition

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

+ References

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+ Details

Stockholders' Equity - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Options Outstanding, Beginning Balance	2,728,742
Options Outstanding, Options granted	1,725,250
Options Outstanding, Options exercised and shares vested	(107,583)
Options Outstanding, Options cancelled	(159,680)
Options Outstanding, Ending Balance	4,186,729	2,728,742
Options Outstanding, Options exercisable as of December 31, 2021	1,127,877
Options Outstanding, Options vested and expected to vest	4,186,729
Weighted-Average Exercise Price, Beginning Balance	$ 21.36
Weighted-Average Exercise Price, Options granted	37.14
Weighted-Average Exercise Price, Options exercised and shares vested	18.07
Weighted-Average Exercise Price, Options cancelled	32.26
Weighted-Average Exercise Price, Ending Balance	27.53	$ 21.36
Weighted-Average Exercise Price, Options exercisable as of December 31, 2021	19.75
Weighted-Average Exercise Price, Options vested and expected to vest	$ 27.53
Weighted-Average Remaining Contractual Term	8 years 5 months 4 days	9 years 1 month 6 days
Weighted-Average Remaining Contractual Term, Options exercisable as of December 31, 2021	7 years 10 months 28 days
Weighted-Average Remaining Contractual Term, Options vested and expected to vest	8 years 5 months 4 days
Aggregate Intrinsic Value, Balance	$ 13,973	$ 34,432
Aggregate Intrinsic Value, Options exercisable as of December 31, 2021	6,880
Aggregate Intrinsic Value, Options vested and expected to vest	$ 13,973

Debt - Additional Information (Details) - USD ($)			10 Months Ended	12 Months Ended
Debt - Additional Information (Details) - USD ($)	Sep. 17, 2021	May 14, 2019	Mar. 16, 2020	Dec. 31, 2021	Dec. 31, 2020	Mar. 11, 2020
Debt Instrument [Line Items]
Term loans aggregate principal amount				$ 100,000,000
Adjustments to additional paid-in-capital, warrants issued				1,290,000
Term Loan
Debt Instrument [Line Items]
Debt instrument borrowed amount						$ 25,000,000.0
Debt instrument, additional borrowing capacity amount			$ 25,000,000.0
Term Loan First Advance
Debt Instrument [Line Items]
Final payment of debt				54,300,000
SVB Term Loan
Debt Instrument [Line Items]
Debt instrument, maturity date		May 01, 2024
Debt instrument, final payment fee percentage		8.25%
Debt instrument, final payment fee or end of term charge				$ 4,100,000
Fair value of warrant liabilities		$ 400,000
Debt issuance costs		$ 200,000
Debt instrument, interest rate percentage				7.25%
Debt instrument, description				Under the original SVB Term Loan, the monthly payments consisted of interest-only through May 31, 2021. On March 11, 2020, the Company entered into the first amendment and on March 11, 2021, the Company entered into the second amendment, or together the Amendments, to the SVB Term Loan. Pursuant to the Amendments, the interest-only payment period was initially extended through July 31, 2021, and was further extended until December 31, 2021, after the Company received positive data from its Phase 3 clinical trial in H. pylori infection sufficient to file an NDA with the FDA. The interest-only payment period could have been further extended until November 30, 2022, if the Company would receive positive data from its Phase 3 clinical trial in erosive esophagitis for vonoprazan sufficient to file an NDA with the FDA.
Debt instrument penalty fee percentage		4.00%
Warrants expire term		10 years
Warrants exercisable shares of common stock		16,446
Aggregate repurchase price of warrants		$ 500,000
Adjustments to additional paid-in-capital, warrants issued				$ 300,000
SVB Term Loan \| Maximum
Debt Instrument [Line Items]
Debt instrument, prepayment fee percentage of outstanding principal amount		2.00%
SVB Term Loan \| Prime Rate
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		1.75%
Loan Agreement
Debt Instrument [Line Items]
Debt instrument, final payment fee or end of term charge	$ 7,500,000
Percentage of qualified cash prior to Third performance milestone	60.00%
Minimum percentage of qualified cash following third performance milestone	35.00%
Minimum market capitalization amount	$ 900,000,000.0
Percentage of debt funded to be issued as warrants to purchase common stock	2.50%
Warrants exercise price	$ 33.43
Warrants expire term	7 years
Warrants expiration date	Sep. 17, 2028
Fair value of warrant liabilities	$ 1,300,000
Debt issuance costs	$ 3,100,000
Loan Agreement \| Common Stock
Debt Instrument [Line Items]
Warrants issued to purchase shares	74,782
Loan Agreement \| Term Loan
Debt Instrument [Line Items]
Term loans aggregate principal amount	$ 200,000,000.0
Payment for facility charge	$ 1,250,000
Debt instrument, facility charge percentage	0.50%
Debt instrument, maturity date	Oct. 01, 2026
Loan Agreement \| Term Loan \| Floor Rate
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	5.50%
Loan Agreement \| Term Loan \| Prime Rate
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	2.25%
Loan Agreement \| Term Loan \| Payment In Kind PIK Interest Rate
Debt Instrument [Line Items]
Debt instrument, interest rate	3.35%
Loan Agreement \| Term Loans, Aggregate Principal Amount Tranches One
Debt Instrument [Line Items]
Term loans aggregate principal amount	$ 100,000,000.0
Loan Agreement \| Term Loans, Aggregate Principal Amount Tranches Two
Debt Instrument [Line Items]
Term loans aggregate principal amount	50,000,000.0
Loan Agreement \| Term Loans, Aggregate Principal Amount Tranches Three
Debt Instrument [Line Items]
Term loans aggregate principal amount	25,000,000.0
Loan Agreement \| Term Loans, Aggregate Principal Amount Tranches Four
Debt Instrument [Line Items]
Term loans aggregate principal amount	$ 25,000,000.0
Loan Agreement \| Term Loan Advance
Debt Instrument [Line Items]
Debt instrument, final payment fee percentage	7.50%
Debt instrument, final payment fee or end of term charge				7,500,000
Loan Agreement \| Term Loan Advance \| Maximum
Debt Instrument [Line Items]
Debt instrument, prepayment fee percentage of outstanding principal amount	1.25%
Hercules and SVB Term Loan
Debt Instrument [Line Items]
Term loans aggregate principal amount				101,000,000.0
Interest expense				6,800,000	$ 4,600,000
Accrued interest				$ 500,000

Organization, Basis of Presentation and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Organization and Basis of Presentation

Phathom Pharmaceuticals, Inc., or the Company or Phathom, was incorporated in the state of Delaware in January 2018. The Company is a late clinical-stage biopharmaceutical company focused on developing and commercializing novel treatments for gastrointestinal diseases. The Company’s financial statements are prepared in accordance with U.S. generally accepted accounting principles, or GAAP.

Liquidity and Capital Resources

From inception to December 31, 2021, the Company has devoted substantially all of its efforts to organizing and staffing the Company, business planning, raising capital, in-licensing its initial product candidate, vonoprazan, meeting with regulatory authorities, managing the Phase 3 clinical trials of vonoprazan, and providing other general and administrative support for these operations. The Company has a limited operating history, has never generated any revenue, and the sales and income potential of its business is unproven. The Company has incurred net losses and negative cash flows from operating activities since its inception and expects to continue to incur net losses into the foreseeable future as it continues the development and preparation for commercialization of vonoprazan. From inception to December 31, 2021, the Company has funded its operations through the issuance of convertible promissory notes, commercial bank debt, the sale of 10,997,630 shares of common stock for net proceeds of approximately $191.5 million in its 2019 IPO and the sale of 2,250,000 shares of common stock for net proceeds of approximately $88.6 million in its December 2020 follow-on public offering.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classification of liabilities. Management is required to perform a two-step analysis over the Company’s ability to continue as a going concern. Management must first evaluate whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern (Step 1). If management concludes that substantial doubt is raised, management is also required to consider whether its plans alleviate that doubt (Step 2).

Management believes that it has sufficient working capital on hand to fund operations through at least the next twelve months from the date these financial statements were available to be issued. There can be no assurance that the Company will be successful in acquiring additional funding, if needed, that the Company’s projections of its future working capital needs will prove accurate, or that any additional funding would be sufficient to continue operations in future years.

Use of Estimates

The preparation of the Company’s financial statements requires it to make estimates and assumptions that impact the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in the Company’s financial statements and accompanying notes. The most significant estimates in the Company’s financial statements relate to accruals for research and development expenses, and the valuation of warrant liabilities and various other equity instruments. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results could differ materially from those estimates and assumptions.

Fair Value Measurements

The accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or non-recurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Observable inputs such as quoted prices in active markets.

Level 2: Inputs, other than the quoted prices in active markets that are observable either directly or indirectly.

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, are classified within the Level 1 designation discussed above, while prepaid and other current assets, accounts payable, and accrued liabilities, approximate fair value due to their short maturities. Warrant liabilities are recorded at fair value on a recurring basis.

The Company has no financial assets measured at fair value on a recurring basis. None of the Company’s non-financial assets or liabilities are recorded at fair value on a non-recurring basis. No transfers between levels have occurred during the periods presented.

The warrant liabilities consist of warrants, or the Lender Warrants, issued in connection with a loan and security agreement, or the SVB Loan Agreement, for commercial bank debt (see Note 6). The Lender Warrants were accounted for as liabilities as they contained a holder put right under which the lenders could have required the Company to pay cash in exchange for the Lender Warrants. The fair value of the Lender Warrants was estimated on the date of grant using the Black-Scholes option-pricing model with an expected term equal to the remaining contractual term of the warrants. The Company estimates its expected stock volatility based on the historical volatility of a set of peer companies, which are publicly traded, and expects to continue to do so until it has adequate historical data regarding the volatility of its own publicly-traded stock price. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. The Company uses an expected dividend yield of zero based on the fact that the Company has never paid cash dividends and does not expect to pay cash dividends in the foreseeable future. When the Company drew down the Term Loan B under the SVB Loan Agreement in March 2020 (see Note 6), the Lenders’ put right expired, and the Company recorded a final fair value adjustment and reclassified the Lender Warrants balance of $0.3 million to additional paid-in-capital.

The following table provides a reconciliation of all liabilities measured at fair value using Level 3 significant unobservable inputs (in thousands):


	Warrant Liabilities
Balance at December 31, 2019	$	413
Change in fair value		(95	)
Reclassification of Lender Warrants into equity (Note 6)		(318	)
Balance at December 31, 2020	$	—

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. Cash and cash equivalents include cash in readily available checking accounts and money market funds.

Concentrations 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 deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held.

Property, Plant, and Equipment, Net

Property, plant and equipment are recorded at cost, less accumulated depreciation. Depreciation expense is recognized using the straight-line method over the useful life of the asset. Computer equipment and related software are depreciated over two to three years. Furniture and fixtures are depreciated over three years. Leasehold improvements are amortized over the lesser of the lease term or the estimated useful lives of the related assets. Expenditures for repairs and maintenance of assets are charged to expense as incurred. Upon retirement or sale, the cost and related accumulated depreciation of assets disposed of are removed from the accounts and any resulting gain or loss is included in loss from operations.

Impairment of Long-Lived Assets

The Company reviews long-lived assets, including property, plant and equipment, for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than the carrying amount. The impairment loss, if recognized, would be based on the excess of the carrying value of the impaired asset over its respective fair value. No impairment losses have been recorded through December 31, 2021.

Leases

At the inception of a contractual arrangement, the Company determines whether the contract contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. If both criteria are met, the Company records the associated lease liability and corresponding right-of-use asset upon commencement of the lease using the implicit rate or a discount rate based on a credit-adjusted secured borrowing rate commensurate with the term of the lease. The Company additionally evaluates leases at their inception to determine if they are to be accounted for as an operating lease or a finance lease. A lease is accounted for as a finance lease if it meets one of the following five criteria: the lease has a purchase option that is reasonably certain of being exercised, the present value of the future cash flows is substantially all of the fair market value of the underlying asset, the lease term is for a significant portion of the remaining economic life of the underlying asset, the title to the underlying asset transfers at the end of the lease term, or if the underlying asset is of such a specialized nature that it is expected to have no alternative uses to the lessor at the end of the term. Leases that do not meet the finance lease criteria are accounted for as an operating lease. Operating lease assets represent a right to use an underlying asset for the lease term and operating lease liabilities represent an obligation to make lease payments arising from the lease. Operating lease liabilities with a term greater than one year and their corresponding right-of-use assets are recognized on the balance sheet at the commencement date of the lease based on the present value of lease payments over the expected lease term. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. As the Company’s leases do not typically provide an implicit rate, the Company utilizes the appropriate incremental borrowing rate, determined as the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and in a similar economic environment. Lease cost is recognized on a straight-line basis over the lease term and variable lease payments are recognized as operating expenses in the period in which the obligation for those payments is incurred. Variable lease payments primarily include common area maintenance, utilities, real estate taxes, insurance, and other operating costs that are passed on from the lessor in proportion to the space leased by the Company. The Company has elected the practical expedient to not separate between lease and non-lease components.

Research and Development Expenses and Accruals

All research and development costs are expensed in the period incurred and consist primarily of salaries, payroll taxes, employee benefits, stock-based compensation charges for those individuals involved in research and development efforts, external research and development costs incurred under agreements with contract research organizations and consultants to conduct and support the Company’s ongoing clinical trials of vonoprazan, and costs related to manufacturing vonoprazan for clinical trials.

The Company has entered into various research and development contracts with clinical research organizations, clinical manufacturing organizations and other companies. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and payments made in advance of or after performance are reflected in the accompanying balance sheets as prepaid expenses or accrued liabilities, respectively. The Company records accruals for estimated costs incurred for ongoing research and development activities. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the services, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates may be made in determining the prepaid or accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates.

In-Process Research and Development

The Company evaluates whether acquired intangible assets are a business under applicable accounting standards. Additionally, the Company evaluates whether the acquired assets have a future alternative use. Intangible assets that do not have future alternative use are considered acquired in-process research and development. When the acquired in-process research and development assets are not part of a business combination, the value of the consideration paid is expensed on the acquisition date. Future costs to develop these assets are recorded to research and development expense as they are incurred.

General and Administrative Expenses

General and administrative expenses consist of salaries, stock-based compensation, facilities and third-party expenses. General and administrative expenses are associated with the activities of the executive, finance, accounting, information technology, legal, medical affairs and human resource functions.

Stock-Based Compensation

Stock-based compensation expense represents the cost of the grant date fair value of equity awards recognized over the requisite service period of the awards (generally the vesting period) on a straight-line basis with forfeitures recognized as they occur.

The Company also maintains an employee stock purchase program, or ESPP, under which it may issue shares. The Company estimates the fair value of stock options and shares that will be issued under the ESPP using the Black-Scholes valuation model, which requires the use of estimates. The Company recognizes stock-based compensation cost for shares that it will issue under the ESPP on a straight-line basis over the requisite service period of the award.

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the statement of operations in the period that includes the enactment date.

The Company recognizes net deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their net recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

The Company records uncertain tax positions on the basis of a two-step process whereby (i) management determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Any accrued interest and penalties are included within the related tax liability.

Comprehensive Loss

Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources. The Company’s comprehensive loss was the same as its reported net loss for all periods presented.

Segment Reporting

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker in making decisions on how to allocate resources and assess performance. The Company views its operations and manages its business as one operating segment.

Net Loss Per Share

Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding for the period, without consideration for potentially dilutive securities. The Company included 7,588,000 shares of common stock under its warrant, or the Takeda Warrant, issued to Takeda Pharmaceutical Company Limited, or Takeda, in connection with a May 2019 license agreement (see Note 4) in the calculation of basic weighted-average common shares outstanding from the time it became exercisable at the Company’s IPO because the Takeda Warrant is exercisable for little consideration. During the year ended December 31, 2021, Takeda Warrants were exercised to purchase 228,696 shares of common stock. As of December 31, 2021, Takeda Warrants to purchase 7,359,304 shares of common stock remains exercisable. For the years ended December 31, 2021 and 2020, the Company has excluded weighted-average unvested shares of 1,939,252 and 3,424,676, respectively, from the weighted-average number of common shares outstanding. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and dilutive common stock equivalents outstanding for the period determined using the treasury-stock and if-converted methods. Dilutive common stock equivalents are comprised of unvested common stock, options and warrants. For the periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding as inclusion of the potentially dilutive securities (warrants, stock options, and common shares subject to repurchase) would be antidilutive.

Recently Adopted and Issued Accounting Pronouncements

Recently Adopted Accounting Standards

In December 2019, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, or ASU 2019-12, which simplifies the accounting for income taxes. ASU 2019-12 is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2020 on a prospective basis, and early adoption is permitted. The Company adopted this guidance effective January 1, 2021, and the adoption did not have a material impact on the Company's financial statements.

Recently Issued Accounting Pronouncements

The Company assesses the adoption impacts of recently issued accounting standards by the Financial Accounting Standards Board or other standard setting bodies on the Company's financial statements as well as material updates to previous assessments. There were no new material accounting standards issued or adopted in year of 2021 that impacted the Company.

Organization, Basis of Presentation and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Organization, Basis of Presentation and Summary of Significant Accounting Policies

1. Organization, Basis of Presentation and Summary of Significant Accounting Policies

Organization and Basis of Presentation

Liquidity and Capital Resources

Use of Estimates

Fair Value Measurements

Level 1: Observable inputs such as quoted prices in active markets.

Level 2: Inputs, other than the quoted prices in active markets that are observable either directly or indirectly.

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The following table provides a reconciliation of all liabilities measured at fair value using Level 3 significant unobservable inputs (in thousands):


	Warrant Liabilities
Balance at December 31, 2019	$	413
Change in fair value		(95	)
Reclassification of Lender Warrants into equity (Note 6)		(318	)
Balance at December 31, 2020	$	—

Cash and Cash Equivalents

Concentrations of Credit Risk

Property, Plant, and Equipment, Net

Impairment of Long-Lived Assets

Leases

Research and Development Expenses and Accruals

In-Process Research and Development

General and Administrative Expenses

Stock-Based Compensation

Income Taxes

Comprehensive Loss

Segment Reporting

Net Loss Per Share

Recently Adopted Accounting Standards

Recently Issued Accounting Pronouncements

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Reconciliation Between Provision for Income Taxes and Income Taxes Computed Using U.S. Federal Statutory Corporate Tax Rate

A reconciliation between the provision for income taxes and income taxes computed using the U.S. federal statutory corporate tax rate is as follows (in thousands):


	Years Ended December 31,
	2021			2020
Income taxes computed at the statutory rate	$	(30,216	)	$	(27,105	)
Permanent items		1,387			291
Change in fair value of warrants and convertible debt		—			(20	)
Research and development credit		(2,950	)		(3,047	)
Change in valuation allowance		31,783			29,949
Other		(4	)		(68	)
Provision (benefit) for income taxes	$	—		$	—

Components of Deferred Tax Assets

Significant components of the Company’s net deferred tax assets are as follows (in thousands):


	Years Ended December 31,
	2021			2020
Deferred tax assets:
Net operating loss carryforwards	$	60,936		$	33,162
Research credits		6,694			3,744
Intangible assets		13,809			14,929
Other		3,996			1,914
Gross deferred tax assets		85,435			53,749
Less valuation allowance		(85,033	)		(53,250	)
Deferred tax assets, net of valuation allowance		402			499
Deferred tax liabilities:
Other		(402	)		(499	)
Net deferred tax assets	$	—		$	—

Summary of Activity Related to Gross Unrecognized Benefits

The following table summarizes the activity related to the Company's gross unrecognized tax benefits:


	Years Ended December 31,
	2021		2020
Beginning balance	$	938	$	176
Increases related to prior year tax positions		64		-
Increases related to current year tax positions		702		762
Ending balance	$	1,704	$	938

Related Party Transactions - Additional Information (Details) - USD ($)		12 Months Ended
	May 05, 2020	Dec. 31, 2021	Dec. 31, 2020
Commercial Supply Agreement
Related Party Transaction [Line Items]
Agreement extends period for termination	2 years
Minimum purchase obligation		$ 400,000
Frazier
Related Party Transaction [Line Items]
Outstanding accounts payable and accrued expenses		0	$ 35,000
Shared operating expenses		18,000	200,000
PCI Pharma Services \| Clinical Manufacturing Services
Related Party Transaction [Line Items]
Outstanding accounts payable and accrued expenses		1,700,000	400,000
Expense related to services		3,200,000	2,300,000
Takeda \| Takeda License
Related Party Transaction [Line Items]
Outstanding accounts payable and accrued expenses		22,000	22,000
Expense related to services		0	0
Takeda \| Temporary Services Agreement
Related Party Transaction [Line Items]
Outstanding accounts payable and accrued expenses		200,000	200,000
Expense related to services		0	200,000
Takeda \| Drug Product or Substance \| Commercial Supply Agreement
Related Party Transaction [Line Items]
Outstanding accounts payable and accrued expenses		700,000	200,000
Expense related to services		$ 1,800,000	$ 300,000

Income Taxes - Summary of Activity Related to Gross Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Income Tax Disclosure [Abstract]
Beginning balance	$ 938	$ 176
Increases related to prior year tax positions	64	0
Increases related to current year tax positions	702	762
Ending balance	$ 1,704	$ 938

Debt

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Debt

6. Debt

Total debt consists of the following (in thousands):


	December 31, 2021
Long-term debt, current portion	$	—
Long-term debt, non-current portion		100,990
Unamortized debt discount		(11,319	)
Total debt, net of debt discount	$	89,671

On September 17, 2021, or the Closing Date, the Company entered into a Loan and Security Agreement, or, the Loan Agreement, with Hercules Capital, Inc., in its capacity as administrative agent and collateral agent and as a lender, or, in such capacity, the Agent or Hercules, and the other financial institutions that from time to time become parties to the Loan Agreement as lenders, or, collectively, the Lenders.

The Loan Agreement provides for term loans in an aggregate principal amount of up to $200.0 million, or the Term Loan, under multiple tranches. The tranches consist of (i) a first tranche consisting of term loans in an aggregate principal amount of $100.0 million, all of which was funded to the Company on the Closing Date, or First Advance, (ii) a second tranche consisting of up to an additional $50.0 million, which became available to the Company upon achievement of the protocol-specified primary efficacy endpoints in the Company’s Phase 3 trial studying vonoprazan for the healing and maintenance of healing of erosive esophagitis with acceptable safety data, such that the results support the submission of a New Drug Application, or NDA, or supplemental NDA without the need to conduct another Phase 3 study and will be available, if specified conditions are met, through December 15, 2022, (iii) a third tranche consisting of an additional $25.0 million, which will become available to the Company upon the achievement of (a) FDA approval of the Company’s NDA for vonoprazan and amoxicillin, or its New Drug Application for vonoprazan, amoxicillin and clarithromycin, in each case for an indication relating to the treatment of H. pylori with an approved indication on the claim that is generally consistent with that sought in the Company’s NDA submission; and (b) filing of the Company’s NDA or supplemental NDA for vonoprazan for indications relating to the healing and maintenance of healing of erosive esophagitis, or, milestones (a) and (b), together, the Second Performance Milestone, and will be available, if specified conditions are met, through September 30, 2023, and (iv) a fourth tranche consisting of up to an additional $25.0 million, which will be available, if specified conditions are met, through March 31, 2024, upon achievement of the Second Performance Milestone.

The Company paid a $1.25 million facility charge in connection with closing of the Loan Agreement and would need to pay 0.5% of any advances made under the third and fourth tranches.

The Term Loan will mature on October 1, 2026, or the Maturity Date. The Term Loan bears (i) cash interest at a variable annual rate equal to the greater of (a) 5.50% and (b) the Prime Rate (as reported in the Wall Street Journal) plus 2.25%, or the “Interest Rate”, and (ii) payment-in-kind interest at a per annum rate of interest equal to 3.35%. Phathom may make payments of interest only through October 1, 2024, which may be extended to October 1, 2025, upon the achievement of the Second Performance Milestone on or prior to September 30, 2024 and the condition that no default or event of default exists, and which is further extendable to October 1, 2026, subject to FDA approval of the Company’s NDA (or supplemental NDA) for vonoprazan for an indication relating to the healing and maintenance of healing of erosive esophagitis with an approved indication on the label that is generally consistent with that sought in the Company’s NDA submission (or supplemental NDA submission), or the Third Performance Milestone, on or prior to September 30, 2025 and no default or event of default exists (the “interest only period”). After the interest-only period, the principal balance and related interest will be required to be repaid in equal monthly installments and continuing until the Maturity Date.

In addition, the Company is obligated to pay a final payment fee of 7.50% of the original principal amount of amounts actually advanced under the Term Loan, or, each a Term Loan Advance and together, the Term Loan Advances. As of December 31, 2021, the aggregate final payment fee for the first Term Loan Advance of $7.5 million has been recorded as an other long-term liability.

The Company may elect to prepay all or a portion of the Term Loan Advances prior to maturity, subject to a prepayment fee of up to 1.25% of the then outstanding principal balance of the Term Loan Advances being prepaid. After repayment, no Term Loan amounts may be borrowed again.

As collateral for the obligations, the Company has granted to Hercules a senior security interest in all of Company’s right, title, and interest in, to and under substantially all of Company’s property, inclusive of intellectual property.

The Loan Agreement contains customary closing fees, prepayment fees and provisions, events of default, and representations, warranties and covenants, including a financial covenant requiring Phathom to maintain certain levels of cash subject to a control agreement in favor of the Agent (minus accounts payable not paid within 120 days of invoice), or Qualified Cash, and commencing on May 15, 2023, trailing three-month net product revenue from the sale of vonoprazan and products containing vonoprazan. The revenue covenant will be waived at any time in which the Company maintains Qualified Cash equal to at least 60.0% (prior to the Third Performance Milestone), and 35% (following the Third Performance Milestone) of the total outstanding Term Loan principal amount, or the Company’s market capitalization is at least $900.0 million. Upon the occurrence of an event of default, subject to any specified cure periods, all amounts owed by the Company may be declared immediately due and payable by Hercules, as collateral agent. As of December 31, 2021, the Company was in compliance with all applicable covenants under the Loan Agreement.

In connection with the entry into the Loan Agreement, the Company issued to Hercules a warrant, or, the Warrant, to purchase a number of shares of the Company’s common stock equal to 2.5% of the aggregate amount of the Term Loan advances funded, and will issue to Hercules additional warrants when future Term Loan advances are funded. On the Closing Date, the Company issued a Warrant for 74,782 shares of common stock. The Warrant will be exercisable for a period of seven years from the date of issuance at a per-share exercise price equal to $33.43, which was the closing price of the Company’s common stock on September 16, 2021. The Warrant is exercisable any time until September 17, 2028 and had an initial fair value of approximately $1.3 million.

The initial $1.3 million fair value of the Warrant, the $7.5 million final interest payment fee and $3.1 million of debt issuance costs have been recorded as debt discount and are being amortized to interest expense using the effective interest method over the term of the Term Loan.

Future minimum principal and interest payments under the Term Loan, including the final payment fee, as of December 31, 2021 are as follows (in thousands):


Year ending December 31:
2022	$	5,704
2023		5,900
2024		17,308
2025		50,912
2026		66,948
Total principal and interest payments		146,772
Less interest and final payment fee		(46,772	)
Total term loan borrowings	$	100,000

Prior to the Loan Agreement with Hercules, the Company had a loan with SVB and approximately $54.3 million of the proceeds from the First Advance was used to satisfy in full and retire the Company’s indebtedness under the SVB Term Loan with SVB, including accrued interest through the payoff date.

The SVB Term Loan originated on May 14, 2019, when the Company entered into a loan and security agreement with SVB, as administrative and collateral agent, and lenders including SVB and WestRiver Innovation Lending Fund VIII, L.P. The Company borrowed $25.0 million, or Term Loan A, at the inception of the Loan Agreement and an additional $25.0 million, or Term Loan B, on March 16, 2020.

The SVB Term Loan bore interest at a floating rate of the higher of the Wall Street Journal Prime rate plus 1.75% or 7.25%. Under the original SVB Term Loan, the monthly payments consisted of interest-only through May 31, 2021. On March 11, 2020, the Company entered into the first amendment and on March 11, 2021, the Company entered into the second amendment, or together the Amendments, to the SVB Term Loan. Pursuant to the Amendments, the interest-only payment period was initially extended through July 31, 2021, and was further extended until December 31, 2021, after the Company received positive data from its Phase 3 clinical trial in H. pylori infection sufficient to file an NDA with the FDA. The interest-only payment period could have been further extended until November 30, 2022, if the Company would receive positive data from its Phase 3 clinical trial in erosive esophagitis for vonoprazan sufficient to file an NDA with the FDA. Subsequent to the interest-only period, the SVB Term Loan would have been payable in equal monthly installments of principal, plus accrued and unpaid interest through the maturity date of May 1, 2024.

In addition, the Company was obligated to pay a final payment fee of 8.25% of the original principal amount of the SVB Term Loan. The aggregate final payment fee for the Term Loan of $4.1 million was recorded as an other long-term liability.

The Company could have elected to prepay all or a portion of the SVB Term Loan prior to maturity, subject to a prepayment fee of up to 2.0% of the then outstanding principal balance and payment of a pro rata portion of the final payment fee. After repayment, no Term Loan amounts could have been borrowed again.

The borrowings under the SVB Term Loan were collateralized by substantially all of the Company’s assets. The SVB Term Loan included affirmative and negative covenants. The affirmative covenants included, among others, covenants requiring the Company to maintain its legal existence and governmental approvals, deliver certain financial reports, maintain insurance coverage and satisfy certain requirements regarding its operating accounts. The negative covenants included, among others, limitations on the Company’s ability to incur additional indebtedness and liens, merge with other companies or consummate certain changes of control, acquire other companies, engage in new lines of business, make certain investments, pay dividends, transfer or dispose of assets, amend certain material agreements or enter into various specified transactions. The SVB Term Loan also contained customary events of default, including bankruptcy, the failure to make payments when due, and a material adverse change. Upon the occurrence of an event of default, subject to any specified cure periods, all amounts owed by the Company would have begun to bear interest at a rate that is 4.00% above the rate effective immediately before the event of default and could have been declared immediately due and payable by SVB, as collateral agent.

In connection with the SVB Term Loan, the Company issued Lender Warrants to purchase stock of the Company, which expire ten years from the date of issuance. Upon completion of the IPO in 2019, the Lender Warrants became exercisable for 16,446 shares of common stock. The Lender Warrants included a put option pursuant to which, in the event that the Company did not draw down Term Loan B on or before March 31, 2020, the warrant holders could have required that the Company repurchase the warrants for a total aggregate repurchase price of $0.5 million. Upon the Term Loan B draw in March 2020, the Lender Warrants became exercisable and the put option related to the Lender Warrants expired. Accordingly, the Company recorded a final fair value adjustment and reclassified the Lender Warrants balance of $0.3 million to additional paid-in-capital.

The initial $0.4 million fair value of the Lender Warrants, the $4.1 million final payment fee and $0.2 million of debt issuance costs were recorded as debt discount and amortized to interest expense using the effective interest method over the term of the Term Loans prior to the retirement of the debt. Upon retirement of the debt any remaining unamortized amounts were recorded as an expense to Other income (expense).

During the years ended December 31, 2021 and 2020, the Company recognized $6.8 million and $4.6 million, respectively, of interest expense, including amortization of the debt discount, in connection with the Hercules Loan Agreement and SVB Term Loan. As of December 31, 2021, the Company had outstanding loan balance of $101.0 million and accrued interest of $0.5 million.

- Definition

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

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI http://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (g)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1E
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (i)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

401(k) Plan

12 Months Ended

Dec. 31, 2021

Compensation And Retirement Disclosure [Abstract]

401(k) Plan

9. 401(k) Plan

The Company established a 401(k) savings plan during the year ended December 31, 2020. The Company’s contributions to the plan are discretionary. During the years ended December 31, 2021 and 2020, the Company incurred $0.8 million and $0.3 million, respectively, of expense related to employer contributions, which was based on a 75% match of employees' annual contributions. In January 2021, the Board of Directors approved the annual discretionary match for 2020, which was settled by contributing 8,356 shares. In August 2021, the Board of Directors approved a semi-annual discretionary match for 2021, which was settled by contributing 18,394 shares. In January 2022, the Board of Directors approved a second semi-annual discretionary match for 2021, which was settled by contributing 16,756 shares.

Balance Sheet Details - Schedule of Property, Plant and Equipment, net (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross	$ 1,502	$ 1,317
Less: accumulated depreciation	(852)	(331)
Total property, plant and equipment, net	650	986
Computer Equipment
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross	646	516
Furniture and Fixtures
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross	780	747
Leasehold Improvements
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross	$ 76	$ 54

Commitments and Contingencies

12 Months Ended

Dec. 31, 2021

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

4. Commitments and Contingencies

License Agreement

On May 7, 2019, the Company entered into a license agreement with Takeda pursuant to which it was granted an exclusive license to commercialize vonoprazan fumarate in the United States, Canada and Europe, or, the Takeda License. The Company also has the right to sublicense its rights under the agreement, subject to certain conditions. The agreement will remain in effect, on a country-by-country and product-by-product basis, until the later of (i) the expiration of the last to expire valid patent claim covering vonoprazan fumarate alone or in combination with at least one other therapeutically active ingredient, (ii) the expiration of the applicable regulatory exclusivity and (iii) 15 years from the date of first commercial sale, unless earlier terminated. The Company may terminate the Takeda License upon six months’ written notice. The Company and Takeda may terminate the Takeda License in the case of the other party’s insolvency or material uncured breach. Takeda may terminate the Takeda License if the Company challenges, or assists in challenging, licensed patents.

In consideration of the Takeda License, the Company (i) paid Takeda $25.0 million in cash, (ii) issued Takeda 1,084,000 shares of its common stock at a fair value of $5.9 million, (iii) issued the Takeda Warrant to purchase 7,588,000 shares of its common stock at an exercise price of $0.00004613 per share at an initial fair value of $47.9 million, and (iv) issued a right to receive an additional common stock warrant, or, the Takeda Warrant Right, should Takeda’s fully-diluted ownership of the Company represent less than a certain specified percentage of the fully-diluted capitalization, including shares issuable upon conversion of then outstanding convertible promissory notes, calculated immediately before the closing of the Company’s IPO, with a nominal initial fair value due to the low probability of issuance. The Takeda Warrant Right expired without effect since no fair value had been allocated to it upon completion of the IPO, and no additional warrant was issued. In addition, the Company is obligated to pay Takeda up to an aggregate of $250.0 million in sales milestones upon the achievement of specified levels of product sales, and a low double-digit royalty rate on aggregate net sales of licensed products, subject to certain adjustments. The Company incurred $0.1 million of transaction costs in connection with the Takeda License. The Takeda Warrant has an exercise price of $0.00004613 per share, expires on May 7, 2029 and became exercisable upon the consummation of the IPO. During the year ended December 31, 2021, Takeda Warrants were exercised to purchase 228,696 shares of common stock. As of December 31, 2021, Takeda Warrants to purchase 7,359,304 shares of common stock remains exercisable. Following the October 11, 2019 increase in the Company’s authorized shares of common stock to 50,000,000, the Company recorded a non-cash charge related to the final fair value adjustment of the Takeda Warrants and reclassified the full balance of $144.2 million from warrant liabilities to additional paid-in capital.

Purchase Commitments

In December 2020, the Company entered into a supply agreement with Sandoz pursuant to which Sandoz will supply commercial quantities of amoxicillin capsules and clarithromycin tablets, package these antibiotics with vonoprazan, and provide in finished convenience packs. The supply agreement commits the Company to a minimum purchase obligation of approximately $3.8 million in the first 24-month period following the launch of the final product. The Company has not incurred any expenses under the agreement during the years ended December 31, 2021 and 2020.

Contingencies

In the event the Company becomes subject to claims or suits arising in the ordinary course of business, the Company would accrue a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated.

Lease Commitments

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Lease Commitments

5. Lease Commitments

As of December 31, 2021, the Company had operating leases for office space in both Buffalo Grove, Illinois and Florham Park, New Jersey, with weighted average remaining lease terms of 3.3 years and 3.7 years, respectively. Both operating leases contain an option to extend the term for one additional five-year period, which was not considered in the determination of the right-of-use asset or lease liability as the Company did not consider it reasonably certain that it would exercise such options.

The total rent expense for the years ended December 31, 2021 and 2020 was approximately $0.7 million and $0.5 million, respectively.

The following table summarizes supplemental balance sheet information related to the operating leases as of December 31, 2021:


	As of December 31,
	2021		2020
Assets:
Operating lease right-of-use assets	$	1,914	$	2,373
Total right-of-use assets		1,914		2,373

Liabilities:
Operating lease liabilities, current		487		474
Operating lease liabilities, non-current		1,183		1,557
Total operating lease liabilities	$	1,670	$	2,031

As of December 31, 2021, the future minimum annual lease payments under the operating leases were as follows (in thousands):


2022		503
2023		516
2024		529
2025		342
Total minimum lease payments		1,890
Less: amount representing interest		(220	)
Present value of operating lease liabilities		1,670
Less: operating lease liabilities, current		(487	)
Operating lease liabilities	$	1,183

Weighted-average remaining lease term (in years)		3.56
Weighted-average incremental borrowing rate		7.25	%

Operating cash flows for the years ended December 31, 2021 included $0.7 million in cash payments for operating leases, $0.1 million of which were prepaid lease payments. Operating cash flows for the years ended December 31, 2020 included $0.9 million in cash payments for operating leases, $0.6 million of which were prepaid lease payments.

Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 183,259	$ 287,496
Prepaid expenses and other current assets (including related party amounts of $0 and $82, respectively)	3,267	3,872
Total current assets	186,526	291,368
Property, plant and equipment, net	650	986
Operating lease right-of-use assets	1,914	2,373
Other long-term assets	341	384
Total assets	189,431	295,111
Current liabilities:
Accounts payable (including related party amounts of $1,343 and $173, respectively)	5,150	16,782
Accrued clinical trial expenses	1,402	19,997
Accrued expenses (including related party amounts of $2,330 and $734, respectively)	11,405	10,606
Accrued interest	477	312
Current portion of long-term debt		7,353
Operating lease liabilities, current	487	474
Total current liabilities	18,921	55,524
Long-term debt, net of discount	89,671	39,634
Operating lease liabilities	1,183	1,557
Other long-term liabilities	7,500	4,125
Total liabilities	117,275	100,840
Commitments and contingencies (Note 4)
Stockholders’ equity:
Preferred stock, $0.0001 par value; authorized shares - 40,000,000 at December 31, 2021 and 2020; no shares issued and outstanding at December 31, 2021 and 2020
Common stock, $0.0001 par value; authorized shares-400,000,000 at December 31, 2021 and 2020; issued shares-31,656,035 and 31,262,769 at December 31, 2021 and 2020, respectively; outstanding shares- 30,511,226 and 28,516,010 at December 31, 2021 and 2020, respectively	3	3
Additional paid-in capital	601,523	579,755
Accumulated deficit	(529,370)	(385,487)
Total stockholders’ equity	72,156	194,271
Total liabilities and stockholders’ equity	$ 189,431	$ 295,111

Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Statement Of Financial Position [Abstract]
Prepaid expenses and other current assets, related parties	$ 0	$ 82
Accounts payable, related parties	1,343	173
Accrued expenses, related parties	$ 2,330	$ 734
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, authorized shares	40,000,000	40,000,000
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, authorized shares	400,000,000	400,000,000
Common stock, issued shares	31,656,035	31,262,769
Common stock, outstanding shares	30,511,226	28,516,010

Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Operating expenses:
Research and development (includes related party amounts of $4,933 and $2,812, respectively)	$ 72,338	$ 98,148
General and administrative (includes related party amounts of $18 and $157, respectively)	62,742	27,517
Total operating expenses	135,080	125,665
Loss from operations	(135,080)	(125,665)
Other income (expense):
Interest income	41	1,091
Interest expense	(6,788)	(4,581)
Change in fair value of warrant liabilities		95
Other (expense)	(2,056)	(8)
Total other income (expense)	(8,803)	(3,403)
Net loss and comprehensive loss	$ (143,883)	$ (129,068)
Net loss per share, basic and diluted	$ (3.89)	$ (3.88)
Weighted-average shares of common stock outstanding, basic and diluted	37,002,959	33,228,158

Subsequent Events

12 Months Ended

Dec. 31, 2021

Subsequent Events [Abstract]

Subsequent Events

10. Subsequent Events

In February 2022, the Company entered into an operating lease for 6,250 rentable square feet of office space in Florham Park, New Jersey. The lease liability and the corresponding right-of-use asset associated with this lease obligation will be recorded upon the commencement of the lease, or the date in which the underlying asset is made available for use to the Company, which is expected to occur later in 2022.

Stockholders' Equity - Summary of PSU Activity Under the 2019 Incentive Award Plan (Details) - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Balance at December 31, 2020	2,746,759
Balance at December 31, 2021	1,144,809	2,746,759
2019 Incentive Award Plan \| Performance-Based Stock Units (PSU)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Balance at December 31, 2020	220,000
Stock awards, granted	190,050	220,000
Number of Stock Units, Forfeited	(15,750)
Balance at December 31, 2021	394,300	220,000
Weighted Average Grant Date Fair Value Per Share, Unvested Beginning Balance	$ 32.48
Weighted Average Grant Date Fair Value Per Share, Granted	31.80
Weighted Average Grant Date Fair Value Per Share, Forfeited	30.63
Weighted Average Grant Date Fair Value Per Share, Unvested Ending Balance	$ 32.23	$ 32.48

Organization, Basis of Presentation and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Schedule of Reconciliation of Liabilities Measured at Fair Value

The following table provides a reconciliation of all liabilities measured at fair value using Level 3 significant unobservable inputs (in thousands):


	Warrant Liabilities
Balance at December 31, 2019	$	413
Change in fair value		(95	)
Reclassification of Lender Warrants into equity (Note 6)		(318	)
Balance at December 31, 2020	$	—

Lease Commitments - Additional Information (Details) $ in Millions	12 Months Ended
	Dec. 31, 2021 USD ($) Option	Dec. 31, 2020 USD ($)
Lessee Lease Description [Line Items]
Operating leases, rent expense	$ 0.7	$ 0.5
Cash payments for operating lease costs	0.7	0.9
Prepaid Lease Payments
Lessee Lease Description [Line Items]
Cash payments for operating lease costs	$ 0.1	$ 0.6
Buffalo Grove, Illinois
Lessee Lease Description [Line Items]
Operating leases, remaining lease terms	3 years 3 months 18 days
Operating lease number of option to extend \| Option	1
Operating lease, option to extend description	Both operating leases contain an option to extend the term for one additional five-year period
Operating lease, renewal term	5 years
Florham Park, New Jersey
Lessee Lease Description [Line Items]
Operating leases, remaining lease terms	3 years 8 months 12 days
Operating lease number of option to extend \| Option	1
Operating lease, option to extend description	Both operating leases contain an option to extend the term for one additional five-year period
Operating lease, renewal term	5 years

Stockholders' Equity - Additional Information (Details)			1 Months Ended					4 Months Ended	12 Months Ended
Stockholders' Equity - Additional Information (Details)	Dec. 16, 2020 USD ($) $ / shares shares	Oct. 29, 2019 USD ($) $ / shares shares	Nov. 30, 2020 USD ($)	Nov. 30, 2019 $ / shares shares	Oct. 31, 2019 shares	May 31, 2019 shares	Mar. 31, 2019 shares	May 06, 2019 USD ($) shares	Dec. 31, 2021 USD ($) $ / shares shares	Dec. 31, 2020 USD ($) $ / shares shares	Dec. 31, 2019 shares	Jan. 01, 2022 shares	Jan. 01, 2021 shares	Jan. 01, 2020 shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Preferred stock, shares authorized									40,000,000	40,000,000
Preferred stock, shares issued									0	0
Preferred stock, shares outstanding									0	0
Stock options, granted									1,725,250
Stock-based compensation cost \| $									$ 16,812,000	$ 5,840,000
Common stock initially reserved for issuance									14,646,341
Unrecognized stock-based compensation expense \| $									$ 46,600,000
Unrecognized stock-based compensation expense, weighted-average period for recognition									2 years 7 months 6 days
Dividend yield									0.00%
Closing market price of common stock \| $ / shares									$ 19.67	$ 33.22
Aggregate intrinsic value of stock options exercised \| $									$ 1,700,000	$ 1,500,000
Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Dividend yield									0.00%
2019 Equity Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock, shares authorized for issuance											2,231,739
Number of shares available for issuance					0
Stock options, granted											1,400,528
2019 Equity Incentive Plan \| Restricted Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock awards, granted											16,260
2019 Incentive Award Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock, shares authorized for issuance										1,158,580
Annual increase to shares available for issuance percentage of outstanding common stock					5.00%
Equity plan, description									The number of shares initially available for issuance will be increased by (i) the number of shares subject to stock options or similar awards granted under the Existing Incentive Plan that expire or otherwise terminate without having been exercised in full after the effective date of the 2019 Plan and unvested shares issued pursuant to awards granted under the Existing Incentive Plan that are forfeited to or repurchased by the Company after the effective date of the 2019 Plan, with the maximum number of shares to be added to the 2019 Plan pursuant to clause (i) above equal to 1,416,788 shares, and (ii) an annual increase on January 1 of each calendar year beginning in 2020 and ending in 2029, equal to the lesser of (a) 5% of the shares of common stock outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares as determined by the board of directors. As of December 31, 2021, 1,772,744 shares remain available for issuance, which reflects 1,915,300 stock options and performance-based units ("PSU") granted, and 175,430 cancelled or forfeited, during the year ended December 31, 2021 as well as annual increases of 1,250,511 and 1,158,580 shares that were authorized on January 1, 2021 and 2020. An additional 1,582,802 shares were authorized on January 1, 2022.
Number of shares remain available for issuance, annual increase													1,250,511
Common stock initially reserved for issuance									1,772,744
2019 Incentive Award Plan \| Subsequent Event
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock, shares authorized for issuance												1,582,802
2019 Incentive Award Plan \| Performance-Based Stock Units (PSU)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock awards, granted									190,050	220,000
Stock-based compensation cost \| $									$ 0
Unrecognized stock-based compensation expense \| $									$ 12,700,000
2019 Incentive Award Plan \| Stock Options and Performance-based Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares, granted									1,915,300
Number of shares, cancelled or forfeited									175,430
Employee Stock Purchase Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares available for issuance									842,036
Annual increase to shares available for issuance percentage of outstanding common stock					1.00%
Equity plan, description									In addition, the number of shares available for issuance under the ESPP will be annually increased on January 1 of each calendar year beginning in 2020 and ending in 2029, by an amount equal to the lesser of: (i) 1% of the shares outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as is determined by the board of directors. As of December 31, 2021, 842,036 shares of common stock remain available for issuance, which reflects 30,237 shares sold to employees during the year ended December 31, 2021 as well as the annual increases of 312,628 and 289,645 shares that were authorized on January 1, 2021 and 2020. No additional shares were authorized in January 2022.
Number of shares remain available for issuance, annual increase													312,628	289,645
Stock-based compensation cost \| $									$ 400,000	$ 300,000
Common stock initially reserved for issuance					270,000				842,036
Number of shares issued									30,237
Estimated weighted-average fair value \| $ / shares									$ 14.66	$ 13.66
Unrecognized stock-based compensation expense \| $									$ 12,000
Unrecognized stock-based compensation expense, weighted-average period for recognition									6 months
Dividend yield									0.00%
Employee Stock Purchase Plan \| Subsequent Event
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares remain available for issuance, annual increase												0
Underwritten Public Offering
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares issued	2,250,000
Common stock, price per share \| $ / shares	$ 42.00
Proceeds from issuance initial public offering gross \| $	$ 94,500,000
Purchase price per share after deducting underwriting discounts and commissions \| $ / shares	$ 39.48
Net proceeds after deducting underwriters commission \| $	$ 88,800,000
Purchase of additional offering expenses \| $	$ 200,000
At-the-Market Offering Program
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares issued									0
Employee and Nonemployee Director
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Estimated weighted-average fair value \| $ / shares									$ 22.20
Open Market Sale Agreement with Jefferies LLC \| At-the-Market Offering Program
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Sales commission payable as a percentage of sale of gross sales price per share			3.00%
Open Market Sale Agreement with Jefferies LLC \| At-the-Market Offering Program \| Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Aggregate offering price through equity financing \| $			$ 125,000,000.0
Common Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares issued								2,524,852
Number of shares authorized to repurchase							3,373,408
Stock repurchase program, number of shares right lapse							843,352
Remaining number of shares to be repurchased							2,530,056
Stock repurchase program, period in force							48 months
Stock repurchase program expiration period							2023-03
Proceeds from issuance of shares \| $								$ 1,000
Repurchase right lapse each month after first anniversary, shares								0.000208
Repurchases of shares				17,560
Shares aggregate repurchase price \| $ / shares				$ 5.20
Common Stock \| 2019 Incentive Award Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Additional number of shares available for issuance					1,416,788
Common Stock \| Employee Stock Purchase Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Maximum percentage of eligible compensation contributed by participants					20.00%
Common Stock \| IPO
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares issued		10,997,630
Common stock, price per share \| $ / shares		$ 19.00
Proceeds from Initial Public Offering (IPO) \| $		$ 191,500,000
Common Stock \| Underwritten Public Offering
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares issued		1,434,473								2,250,000
Common Stock \| Employees
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Remaining number of shares to be repurchased									749,488
Common Stock \| First Anniversary
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Repurchase right lapse rate								25.00%
Common Stock \| Takeda License
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares issued						1,084,000
Common Stock \| Founders
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Remaining number of shares to be repurchased									395,321
Common Stock \| Frazier
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares issued							1,491,072

Stockholders' Equity - Summary of Weighted-Average Assumptions Used to Estimate Fair Value of Stock Options Granted and ESPP Awards (Details)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Assumptions:
Expected term (in years)	5 years 11 months 4 days	6 years 21 days
Expected volatility	67.46%	65.07%
Risk free interest rate	0.68%	0.51%
Dividend yield	0.00%
Employee Stock Purchase Plan
Assumptions:
Expected term (in years)	8 months 8 days	1 year
Expected volatility	76.25%	76.25%
Risk free interest rate	0.09%	0.15%
Dividend yield	0.00%

Income Taxes - Components of Deferred Tax Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Deferred tax assets:
Net operating loss carryforwards	$ 60,936	$ 33,162
Research credits	6,694	3,744
Intangible assets	13,809	14,929
Other	3,996	1,914
Gross deferred tax assets	85,435	53,749
Less valuation allowance	(85,033)	(53,250)
Deferred tax assets, net of valuation allowance	402	499
Deferred tax liabilities:
Other	(402)	(499)
Net deferred tax assets	$ 0	$ 0

Balance Sheet Details (Tables)

12 Months Ended

Dec. 31, 2021

Balance Sheet Related Disclosures [Abstract]

Schedule of Property, Plant and Equipment, Net

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


	Years Ended December 31,
	2021			2020
Computer equipment and software	$	646		$	516
Furniture and fixtures		780			747
Leasehold improvements		76			54
		1,502			1,317
Less: accumulated depreciation		(852	)		(331	)
Total property, plant and equipment, net	$	650		$	986

Schedule of Accrued Expenses

Accrued expenses consist of the following (in thousands):


	Years Ended December 31,
	2021		2020
Accrued research and development expenses	$	3,165	$	4,864
Accrued compensation expenses		6,344		4,587
Accrued professional & consulting expenses		1,855		1,123
Accrued other		41		32
Total accrued expenses	$	11,405	$	10,606

Lease Commitments (Tables)

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Summary of Supplemental Balance Sheet Information Related to the Operating Leases

The following table summarizes supplemental balance sheet information related to the operating leases as of December 31, 2021:


	As of December 31,
	2021		2020
Assets:
Operating lease right-of-use assets	$	1,914	$	2,373
Total right-of-use assets		1,914		2,373

Liabilities:
Operating lease liabilities, current		487		474
Operating lease liabilities, non-current		1,183		1,557
Total operating lease liabilities	$	1,670	$	2,031

Summary of Future Minimum Lease Payments Under Operating Leases

As of December 31, 2021, the future minimum annual lease payments under the operating leases were as follows (in thousands):


2022		503
2023		516
2024		529
2025		342
Total minimum lease payments		1,890
Less: amount representing interest		(220	)
Present value of operating lease liabilities		1,670
Less: operating lease liabilities, current		(487	)
Operating lease liabilities	$	1,183

Weighted-average remaining lease term (in years)		3.56
Weighted-average incremental borrowing rate		7.25	%

Stockholders' Equity - Summary of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 16,812	$ 5,840
Research and Development Expense
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation expense	3,838	1,450
General and Administrative Expense
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 12,974	$ 4,390

Stockholders' Equity

12 Months Ended

Dec. 31, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stockholders' Equity

7. Stockholders’ Equity

Common Stock

In March 2019, subsequent to the Merger, the Company sold 1,491,072 shares of the Company’s common stock to Frazier.

In March 2019, the founders granted the Company a repurchase right for the 3,373,408 shares of common stock originally purchased in 2018. The Company has the right, but not the obligation, to repurchase unvested shares in the event the founder’s relationship with the Company is terminated, subject to certain limitations, at the original purchase price of the stock. The repurchase right lapsed for 843,352 shares in March 2019 and the repurchase right for the remaining 2,530,056 shares lapses in equal monthly amounts over the following 48-month period ending in March 2023. The fair value of the founder shares at the date the repurchase right was granted is being recognized as stock-based compensation expense on a straight-line basis over the vesting period. As of December 31, 2021, 395,321 shares of common stock were subject to repurchase by the Company and the associated repurchase liability was not significant. The amount of recognized and unrecognized stock-based compensation related to the founder stock was immaterial for all periods presented.

In May 2019, the Company issued Takeda 1,084,000 shares of common stock in connection with the Takeda License.

For the period from January 1, 2019 to May 6, 2019, the Company issued 2,524,852 shares of common stock to various employees and consultants of the Company for aggregate proceeds of approximately $1,000. Upon issuance, these shares were subject to a repurchase option by the Company at the original purchase price of the shares. The repurchase rights generally lapse as to 25% of the shares on the first anniversary of the vesting commencement date, and the repurchase right lapses as to 1/48th of the shares each one-month period thereafter, subject to the purchaser remaining continuously an employee, consultant or director of the Company. In November 2019, the Company repurchased 17,560 shares at the original purchase price for an aggregate purchase price of $5.20. As of December 31, 2021, 749,488 shares remain available for repurchase by the Company and the associated repurchase liability was not significant.

On October 29, 2019, upon completion of the IPO, the Company sold 10,997,630 shares of common stock, which included the exercise in full by the underwriters of their option to purchase 1,434,473 additional shares at a public offering price of $19.00 per share. The net proceeds were approximately $191.5 million, after deducting underwriting discounts, commissions and offering costs.

In November 2020, the Company entered into an Open Market Sale Agreement, or, the Sales Agreement, with Jefferies LLC, or, the Sales Agent, under which it may, from time to time, sell shares of its common stock having an aggregate offering price of up to $125.0 million through the Sales Agent, or, the ATM Offering. Pursuant to the Sales Agreement, the Company will pay the Sales Agent a commission for its services in acting as an agent in the sale of common stock in an amount equal to 3% of the gross sales price per share sold. No shares were sold under the ATM Offering as of December 31, 2021.

On December 16, 2020, the Company completed an underwritten public offering, in which it sold 2,250,000 shares of its common stock at a price of $42.00 per share for total gross proceeds of $94.5 million. The net purchase price after deducting underwriting discounts and commissions was $39.48 per share, which generated net proceeds of $88.8 million. The Company incurred an additional $0.2 million of offering expenses in connection with this public offering.

A summary of the Company’s unvested shares is as follows:


Balance at December 31, 2020	2,746,759
Share vesting	(1,601,950	)
Balance at December 31, 2021	1,144,809

For accounting purposes, unvested shares of common stock are considered issued, but not outstanding until they vest.

Common stock reserved for future issuance consists of the following:


	December 31, 2021
Common stock warrants		7,450,532
Stock options and performance-based awards outstanding		4,581,029
Shares available for issuance under the 2019 Incentive Plan		1,772,744
Shares available for issuance under the ESPP Plan		842,036
Balance at December 31, 2021		14,646,341

Preferred Stock

The Company is authorized to issue up to 40 million shares of preferred stock. As of December 31, 2021, and December 31, 2020, there were no shares of preferred stock issued or outstanding.

Equity Incentive Plan

The Company’s 2019 Equity Incentive Plan, or the Existing Incentive Plan, provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, and other stock awards to eligible recipients, including employees, directors or consultants of the Company. The Company had 2,231,739 shares of common stock authorized for issuance under the Existing Incentive Plan, of which, 1,400,528 stock options and 16,260 restricted stock awards were granted in 2019. As a result of the adoption of the 2019 Incentive Award Plan, or the 2019 Plan, in October 2019, no further shares are available for issuance under the Existing Incentive Plan.

2019 Incentive Award Plan

In October 2019, the board of directors adopted, and the Company’s stockholders approved, the 2019 Plan, which became effective in connection with the IPO. Under the 2019 Plan, the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units and other awards to individuals who are then employees, officers, non-employee directors or consultants of the Company or its subsidiaries. The number of shares initially available for issuance will be increased by (i) the number of shares subject to stock options or similar awards granted under the Existing Incentive Plan that expire or otherwise terminate without having been exercised in full after the effective date of the 2019 Plan and unvested shares issued pursuant to awards granted under the Existing Incentive Plan that are forfeited to or repurchased by the Company after the effective date of the 2019 Plan, with the maximum number of shares to be added to the 2019 Plan pursuant to clause (i) above equal to 1,416,788 shares, and (ii) an annual increase on January 1 of each calendar year beginning in 2020 and ending in 2029, equal to the lesser of (a) 5% of the shares of common stock outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares as determined by the board of directors. As of December 31, 2021, 1,772,744 shares remain available for issuance, which reflects 1,915,300 stock options and performance-based units ("PSU") granted, and 175,430 cancelled or forfeited, during the year ended December 31, 2021 as well as annual increases of 1,250,511 and 1,158,580 shares that were authorized on January 1, 2021 and 2020. An additional 1,582,802 shares were authorized on January 1, 2022.

Performance-based Units

During 2020, the Company granted 220,000 PSUs whereby vesting depends upon the approval by the U.S. Food and Drug Administration, or FDA, of vonoprazan for H. pylori and then, or concurrent with, erosive esophagitis. In 2021, the Company granted an additional 190,050 PSUs to employees. As of December 31, 2021, the PSU milestones had not been achieved. As of December 31, 2021, no related compensation cost had been recognized. The following table summarizes PSU activity under the 2019 Incentive Award Plan during the year ended December 31, 2021.


	Number of Stock Units			Weighted- Average Grant Date Fair Value Per Share
Unvested balance at December 31, 2020		220,000		$	32.48
Granted		190,050			31.80
Vested		—			—
Forfeited		(15,750	)		30.63
Unvested balance at December 31, 2021		394,300		$	32.23

As of December 31, 2021 there was approximately $12.7 million of related unrecognized compensation cost, which will be recognized upon vesting.

Employee Stock Purchase Plan

In October 2019, the board of directors adopted, and the Company’s stockholders approved, the Employee Stock Purchase Plan, or the ESPP, which became effective in connection with the IPO. The ESPP permits participants to purchase common stock through payroll deductions of up to 20% of their eligible compensation, which includes a participant’s gross base compensation for services to the Company, including overtime payments and excluding sales commissions, incentive compensation, bonuses, expense reimbursements, fringe benefits and other special payments. A total of 270,000 shares of common stock was initially reserved for issuance under the ESPP. In addition, the number of shares available for issuance under the ESPP will be annually increased on January 1 of each calendar year beginning in 2020 and ending in 2029, by an amount equal to the lesser of: (i) 1% of the shares outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as is determined by the board of directors. As of December 31, 2021, 842,036 shares of common stock remain available for issuance, which reflects 30,237 shares sold to employees during the year ended December 31, 2021 as well as the annual increases of 312,628 and 289,645 shares that were authorized on January 1, 2021 and 2020. No additional shares were authorized in January 2022.

The ESPP is considered a compensatory plan, and the Company recorded related stock-based compensation of $0.4 million and 0.3 million for the year ended December 31, 2021 and 2020, respectively. The weighted-average assumptions used to estimate the fair value of ESPP awards using the Black-Scholes option valuation model were as follows:


	Years Ended December 31,
	2021			2020
Assumptions:
Expected term (in years)		0.69			1.00
Expected volatility		76.25	%		76.25	%
Risk free interest rate		0.09	%		0.15	%
Dividend yield		—			—

The estimated weighted-average fair value of ESPP awards during 2021 and 2020 was $14.66 and $13.66, respectively. As of December 31, 2021, the total unrecognized compensation expense related to the ESPP was $12,000, which is expected to be recognized over a weighted-average period of approximately 0.5 months.

Stock Options

The fair value of each employee and non-employee stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The Company, prior to the IPO on October 29, 2019, was a private company and lacked company-specific historical and implied volatility information. Therefore, it estimated its expected volatility based on the historical volatility of a publicly-traded set of peer companies. Due to the lack of historical exercise history, the expected term of the Company’s stock options for employees was determined utilizing the “simplified” method for awards. The expected term of stock options granted to non-employees was equal to the contractual term of the option award. The risk-free interest rate was determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield was zero based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

A summary of the Company’s stock option activity and related information is as follows:


	Options Outstanding			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value (in thousands)
Balance at December 31, 2020		2,728,742		$	21.36		9.10	$	34,432
Options granted		1,725,250			37.14
Options exercised and shares vested		(107,583	)		18.07
Options cancelled		(159,680	)		32.26
Balance at December 31, 2021		4,186,729		$	27.53		8.43	$	13,973
Options exercisable as of December 31, 2021		1,127,877			19.75		7.91		6,880
Options vested and expected to vest as of December 31, 2021		4,186,729			27.53		8.43		13,973

The aggregate intrinsic value of options exercisable as of December 31, 2021 and 2020 were calculated as the difference between the exercise price of the underlying options and the closing market price of the Company’s common stock on that date, which were $19.67 and $33.22 per share on December 31, 2021 and 2020, respectively. The aggregate intrinsic value of options exercised during the years ended December 31, 2021 and 2020 were approximately $1.7 million and $1.5 million, respectively.

The estimated weighted-average fair value of employee and nonemployee director stock options granted during 2021 was $22.20. As of December 31, 2021, the Company had $46.6 million of unrecognized stock-based compensation expense, which is expected to be recognized over a weighted-average period of 2.6 years.

The weighted-average assumptions used to estimate the fair value of stock options using the Black-Scholes option valuation model were as follows:


	Years Ended December 31,
	2021			2020
Assumptions:
Expected term (in years)		5.93			6.06
Expected volatility		67.46	%		65.07	%
Risk free interest rate		0.68	%		0.51	%
Dividend yield		—			—

Stock-Based Compensation Expense

Stock-based compensation expense recognized for all equity awards, including founder stock, has been reported in the statements of operations as follows (in thousands):


	Years Ended December 31,
	2021		2020
Research and development expense	$	3,838	$	1,450
General and administrative expense		12,974		4,390
Total	$	16,812	$	5,840

Stockholders' Equity - Summary of Common Stock Reserved for Future Issuance (Details) - shares	Dec. 31, 2021	Oct. 31, 2019
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Common stock reserved for future issuance (in shares)	14,646,341
Common stock warrants
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Common stock reserved for future issuance (in shares)	7,450,532
Stock Options and Performance-Based Awards Outstanding
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Common stock reserved for future issuance (in shares)	4,581,029
2019 Incentive Award Plan
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Common stock reserved for future issuance (in shares)	1,772,744
ESPP Plan
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Common stock reserved for future issuance (in shares)	842,036	270,000

Balance Sheet Details - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Accrued Liabilities Current [Abstract]
Accrued research and development expenses	$ 3,165	$ 4,864
Accrued compensation expenses	6,344	4,587
Accrued professional & consulting expenses	1,855	1,123
Accrued other	41	32
Total accrued expenses	$ 11,405	$ 10,606

Debt - Schedule of Total Debt (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Debt Disclosure [Abstract]
Long-term debt, current portion		$ 7,353
Long-term debt, non-current portion	$ 100,990
Unamortized debt discount	(11,319)
Total debt, net of debt discount	$ 89,671

- Definition

Amount, after unamortized (discount) premium and debt issuance costs, of long-term debt. Includes, but not limited to, notes payable, bonds payable, debentures, mortgage loans and commercial paper. Excludes capital lease obligations.

+ References + Details

Related Party Transactions

12 Months Ended

Dec. 31, 2021

Related Party Transactions

3. Related Party Transactions

Frazier is a principal stockholder of the Company. The Company has conducted operations within office space controlled by Frazier and Frazier allocated a portion of the costs associated with this office space to the Company. In addition, Frazier paid for various goods and services, such as employee wages, insurance and expense reimbursements and various administrative services associated with the operations of the Company and charged the Company for those expenses. As of December 31, 2021 and 2020, the Company had outstanding accounts payable and accrued expenses due to Frazier in the amount of $0 and $35,000, respectively, related to these shared operating expenses. For the years ended December 31, 2021 and 2020, the Company incurred $18,000 and $0.2 million, respectively, of shared operating expenses.

Frazier is a principal stockholder in PCI Pharma Services, or PCI. In the third quarter of 2019, the Company engaged PCI for clinical manufacturing services. As of December 31, 2021 and 2020, the Company had $1.7 million and $0.4 million, respectively, in outstanding accounts payable and accrued expenses related to these manufacturing services. For the years ended December 31, 2021 and 2020, the Company incurred $3.2 million and $2.3 million, respectively, of expenses related to services performed by PCI.

Takeda became a common stockholder of the Company in connection with the May 2019 license agreement (see Note 4). In conjunction with this license, Takeda provides proprietary supplies for the Company’s ongoing clinical development of vonoprazan in addition to the exclusive license for the commercialization of vonoprazan in the United States, Canada and Europe. As of December 31, 2021 and 2020, the Company had $22,000 and $22,000, respectively, in outstanding accounts payable and accrued expenses related to these supply services. The Company did not have any such supply services expenses incurred for the years ended December 31, 2021 and 2020.

On May 5, 2020, the Company entered into a Commercial Supply Agreement, or the Commercial Supply Agreement, with Takeda, pursuant to which Takeda will supply commercial quantities of vonoprazan bulk drug product or drug substance. Pursuant to the Commercial Supply Agreement, Takeda has agreed to supply the Company with, and the Company has agreed to purchase from Takeda, certain quantities of vonoprazan bulk drug product according to approved specifications at a fixed price per batch of bulk drug product in order to commercialize vonoprazan in accordance with the Takeda License. Unless terminated earlier, the term of the Commercial Supply Agreement extends for a period of two years from the date the Company places an order for bulk drug product or drug substance for the first commercial launch of vonoprazan in any jurisdiction in the licensed territory, provided that this two-year period will expire no later than December 31, 2023. The Commercial Supply Agreement will terminate immediately upon the termination of the Takeda License in accordance with its terms. As of December 31, 2021 and 2020, the Company had $0.7 million and $0.2 million, respectively, in outstanding accounts payable and accrued expenses related to these product costs. For the years ended December 31, 2021 and 2020, the Company incurred $1.8 million and $0.3 million, respectively, of expenses related to the Commercial Supply Agreement. The Company has a remaining minimum purchase obligation of approximately $0.4 million related to this agreement.

In connection with the Takeda License, the Company entered into a temporary services agreement, or the Temporary Services Agreement, with Takeda on November 24, 2020. Pursuant to the Temporary Services Agreement, Takeda agreed to provide or procure the provision of services related to the ongoing clinical development of vonoprazan. The Temporary Services Agreement will terminate immediately upon termination of the Takeda License in accordance with its terms. As of December 31, 2021 and 2020, the Company had $0.2 million and $0.2 million, respectively, in outstanding accounts payable and accrued expenses related to these temporary services. For the year ended December 31, 2021 and 2020, the company incurred $0 and $0.2 million, respectively, of expenses related to the temporary services performed by Takeda.

Commitments and Contingencies - Additional Information (Details) - USD ($)			12 Months Ended
	Oct. 11, 2019	May 07, 2019	Dec. 31, 2021	Dec. 31, 2020
Commitments And Contingencies [Line Items]
Common stock fair value			$ 3,000	$ 3,000
Common stock, shares issued			31,656,035	31,262,769
Common stock, authorized shares	50,000,000		400,000,000	400,000,000
Fair value adjustment of warrants				$ (95,000)
Expenses incurred related to purchase commitments			$ 0	$ 0
Minimum
Commitments And Contingencies [Line Items]
Purchase obligation in the first 24-month period			$ 3,800,000
Common Stock
Commitments And Contingencies [Line Items]
Warrants exercised to purchase shares			228,696
Takeda License \| Takeda
Commitments And Contingencies [Line Items]
License agreement description			The agreement will remain in effect, on a country-by-country and product-by-product basis, until the later of (i) the expiration of the last to expire valid patent claim covering vonoprazan fumarate alone or in combination with at least one other therapeutically active ingredient, (ii) the expiration of the applicable regulatory exclusivity and (iii) 15 years from the date of first commercial sale, unless earlier terminated. The Company may terminate the Takeda License upon six months’ written notice. The Company and Takeda may terminate the Takeda License in the case of the other party’s insolvency or material uncured breach. Takeda may terminate the Takeda License if the Company challenges, or assists in challenging, licensed patents
Agreement expiration term from date of first commercial sale		15 years
Cash consideration paid for license		$ 25,000,000.0
Common stock fair value		$ 5,900,000
Common stock, shares issued		1,084,000
Warrants exercise price		$ 0.00004613
Initial fair value of warrants		$ 47,900,000
Additional warrant issued		0
Maximum amount payable in sales milestones upon achievement of specified levels of product sales		$ 250,000,000.0
Transaction costs		$ 100,000
Warrants expiration date		May 07, 2029
Fair value adjustment of warrants	$ 144,200,000
Takeda License \| Takeda \| Common Stock
Commitments And Contingencies [Line Items]
Warrants exercised to purchase shares			228,696
Warrants issued to purchase shares		7,588,000
Warrants issued to common stock remains exercisable			7,359,304

Income Taxes - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Operating Loss Carryforwards [Line Items]
Provision for income taxes	$ 0	$ 0
Research and development credits	6,694,000	3,744,000
Gross unrecognized tax benefits	1,704,000	938,000	$ 176,000
Unrecognized tax benefits that would affect effective tax rate	0
Interest or penalties related income tax	0
Accrual for interest or penalties related to income tax	0
Federal
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards which are carried over indefinitely	290,100,000	$ 157,800,000
Research and development credits	$ 7,800,000
Research and development credits expiration period	2038
State
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	$ 400,000
Net operating loss carryforwards expiration year	2036
Research and development credits	$ 700,000
Research and development credits expiration period	2025

Subsequent Events - Additional Information (Details)	Feb. 28, 2022 ft²
Florham Park, New Jersey \| Subsequent Event
Subsequent Event [Line Items]
Area for operating lease	6,250

Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Statement Of Cash Flows [Abstract]
Related parties prepaid expenses and other assets current	$ 82	$ (82)
Related parties accounts payable and accrued expenses	$ 2,766	$ 399

Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

8. Income Taxes

For the years ended December 31, 2021 and 2020, the Company did not record a provision for income taxes due to a full valuation against its deferred taxes. A reconciliation between the provision for income taxes and income taxes computed using the U.S. federal statutory corporate tax rate is as follows (in thousands):


	Years Ended December 31,
	2021			2020
Income taxes computed at the statutory rate	$	(30,216	)	$	(27,105	)
Permanent items		1,387			291
Change in fair value of warrants and convertible debt		—			(20	)
Research and development credit		(2,950	)		(3,047	)
Change in valuation allowance		31,783			29,949
Other		(4	)		(68	)
Provision (benefit) for income taxes	$	—		$	—

Significant components of the Company’s net deferred tax assets are as follows (in thousands):


	Years Ended December 31,
	2021			2020
Deferred tax assets:
Net operating loss carryforwards	$	60,936		$	33,162
Research credits		6,694			3,744
Intangible assets		13,809			14,929
Other		3,996			1,914
Gross deferred tax assets		85,435			53,749
Less valuation allowance		(85,033	)		(53,250	)
Deferred tax assets, net of valuation allowance		402			499
Deferred tax liabilities:
Other		(402	)		(499	)
Net deferred tax assets	$	—		$	—

Based upon the Company’s history of operating losses, the Company is unable to conclude that it is more likely than not that the benefit of its deferred tax assets will be realized. Accordingly, the Company has provided a full valuation allowance for its deferred tax assets as of December 31, 2021 and 2020.

As of December 31, 2021 and 2020, the Company had federal net operating loss carryforwards of approximately $290.1 million and $157.8 million, respectively, which are carried over indefinitely.

As of December 31, 2021, the Company had approximately $0.4 million of state net operating loss carryforwards that begins to expire in 2036.

As of December 31, 2021, the Company has available federal research and development credits of $7.8 million which begin to expire in 2038. The Company has $0.7 million of state research and development credits, some of which, begin to expire in 2025.

The Company has not completed a formal analysis of the potential impact of Section 382 on its deferred tax assets as of December 31, 2021. Until this analysis has been completed, the Company has not adjusted any of its deferred tax assets, including net operating losses or research and development credits. The Company will reassess the amount of net operating losses and credits subject to limitation under Section 382 when a study is complete. Due to the existence of the valuation allowance, future changes in the deferred tax assets related to these tax attributes will not impact the Company’s effective tax rate.

The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. While the Company believes that it has appropriate support for the positions taken on its tax returns, the Company regularly assesses the potential outcome of examinations by tax authorities in determining the adequacy of its provision for income taxes.

The following table summarizes the activity related to the Company's gross unrecognized tax benefits:


	Years Ended December 31,
	2021		2020
Beginning balance	$	938	$	176
Increases related to prior year tax positions		64		-
Increases related to current year tax positions		702		762
Ending balance	$	1,704	$	938

As of December 31, 2021, the Company has gross unrecognized tax benefits of $1.7 million, none of which would affect the effective tax rate due to a full valuation allowance. The Company does not anticipate any significant changes in its unrecognized tax benefits over the next 12 months. The Company's policy is to recognize the interest expense and/or penalties related to income tax matters as a component of income tax expense. The Company has no accrual for interest or penalties on its balance sheet at December 31, 2021 and has not recognized interest or penalties in its statement of operations for the year ended December 31, 2021.

The Company is subject to taxation in the United States and various states. The Company is not currently under examination by any taxing authorities. Due to the carryover of tax attributes, the statute of limitations is currently open for tax years since inception.

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
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-Subparagraph (SAB Topic 11.C)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
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-Section S99
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-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
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-Section 50
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-URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI http://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
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-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details