SEC Filing | Monte Rosa Therapeutics

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10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended March 31, 2023


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

For the transition period from ____________ to ____________

Commission File Number: 001-40522

Monte Rosa Therapeutics, Inc.

(Exact name of registrant as specified in its charter)


Delaware	84-3766197
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

645 Summer Street, Suite 102 Boston, Massachusetts	02210
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (617) 949-2643

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

Title of each class

Trading
Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.0001 per share

GLUE

The Nasdaq Global Select Market

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

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

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


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

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

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

As of May 8, 2023, the registrant had 49,383,711 shares of common stock, $0.0001 per share, outstanding.

Special note regarding forward-looking statements

This Quarterly Report on Form 10-Q, or Quarterly Report, contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, or the or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expects”, “intends”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential”, “continue” or the negative of these terms or other comparable terminology. These statements are not guarantees of future results or performance and involve substantial risks and uncertainties. Forward-looking statements in this Quarterly Report include, but are not limited to, statements about:

•

the initiation, timing, progress, results, costs, and any expectations and/or predictions of success of our current and future research and development programs and preclinical studies, including our expectations for our molecular glue degraders, or MGDs, molecules, including our GSPT1-directed MGD MRT-2359;

•

the initiation, timing, progress, results, costs, and any expectations and/or predictions of success of our current and any future clinical trials, including statements regarding the nature of or the timing for when any results of any clinical trials will become available;

•

our ability to continue to develop our proprietary platform, called QuEENTM, and to expand our proteomics and translational medicine capabilities;

•

the potential advantages of our platform technology and product candidates;

•

the extent to which our scientific approach and platform technology may target proteins that have been considered undruggable or inadequately drugged;

•

our plans to submit IND applications to the FDA for future product candidates;

•

the potential benefits of strategic collaborations and our ability to enter into strategic collaborations with third parties who have the expertise to enable us to further develop our biological targets, product candidates and platform technologies;

•

our ability to obtain and maintain regulatory approval of our product candidates;

•

our ability to maintain and expand, including through third-party vendors, our library of MGDs

•

our ability to manufacture, including through third-party manufacturers, our product candidates for preclinical use, future clinical trials and commercial use, if approved;

•

our ability to commercialize our product candidates, including our ability to establish sales, marketing and distribution capabilities for our product candidates;

•

the rate and degree of market acceptance of our product candidates;

•

the size and growth potential of the markets for our product candidates, and our ability to serve those markets;

•

our ability to establish and maintain intellectual property rights covering our current and future product candidates and technologies;

•

the implementation of our business model and strategic plans for our business, product candidates, and technology;

•

estimates of our future expenses, revenues, capital requirements, and our needs for additional financing;

•

our ability to obtain funding for our operations necessary to complete further development and commercialization of our product candidates;

•

our financial performance;

•

developments in laws and regulations in the United States, or the U.S., and foreign countries;

•

the success of competing therapies that are or may become available;

•

our ability to attract and retain key scientific or management personnel;

•

the impact of the COVID-19 pandemic on our business and operations; and

•

other risks and uncertainties, including those listed under the section entitled “Risk factors" and those included in "Part 1, Item 1A, Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2022, or our 2022 Annual Report, filed with the Securities and Exchange Commission, or the SEC, on March 16, 2023.

Any forward-looking statements in this Quarterly Report reflect our current views with respect to future events and with respect to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those described under Part II, Item 1A, “Risk Factors” and elsewhere in this Quarterly Report. Given these uncertainties, you should not place undue reliance on these forward-looking statements.

All of our forward-looking statements are as of the date of this Quarterly Report only. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of or any material adverse change in one or more of the risk factors or risks and uncertainties referred to in this Quarterly Report or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the SEC could materially and adversely affect our business, prospects, financial condition and results of operations. Except as required by law, we do not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections or other circumstances affecting such forward-looking statements occurring after the date of this Quarterly Report, even if new information becomes available in the future or if such results, changes or circumstances make it clear that any forward-looking information will not be realized. Any public statements or disclosures by us following this Quarterly Report that modify or impact any of the forward-looking statements contained in this Quarterly Report will be deemed to modify or supersede such statements in this Quarterly Report.

We may from time to time provide estimates, projections and other information concerning our industry, the general business environment, and the markets for certain diseases, including estimates regarding the potential size of those markets and the estimated incidence and prevalence of certain medical conditions. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties, and actual events, circumstances or numbers, including actual disease prevalence rates and market size, may differ materially from the information reflected in this Quarterly Report. Unless otherwise expressly stated, we obtained this industry, business information, market data, prevalence information and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data, and similar sources, in some cases applying our own assumptions and analysis that may, in the future, prove not to have been accurate.

We have applied for various trademarks that we use in connection with the operation of our business. All other trade names, trademarks and service marks of other companies appearing in this Quarterly Report are the property of their respective holders. Solely for convenience, the trademarks and trade names in this Quarterly Report may be referred to without the ® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend to use or display other companies’ trademarks and trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

From time to time, we may use our website, our Twitter at @MonteRosaTx and on our LinkedIn account at linkedin.com/company/monte-rosa-therapeutics to distribute material information. Our financial and other material information is routinely posted to and accessible on the Investors section of our website, available at www.monterosatx.com. Investors are encouraged to review the Investor Relations section of our website because we may post material information on that site that is not otherwise disseminated by us. Information that is contained in and can be accessed through our website, our Twitter posts and our LinkedIn posts is not incorporated into, and does not form a part of, this Quarterly Report.

TRADEMARKS

Solely for convenience, our trademarks and trade names in this report are sometimes referred to without the ® and ™ symbols, but such references should not be construed as any indicator that we will not assert, to the fullest extent under applicable law, our rights thereto.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets (Unaudited)	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)	2
	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)	3
	Condensed Consolidated Statements of Cash Flows (Unaudited)	4
	Notes to the Condensed Consolidated Financial Statements (Unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 4.	Controls and Procedures	21

PART II.	OTHER INFORMATION	22
Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3.	Defaults Upon Senior Securities	24
Item 4.	Mine Safety Disclosures	24
Item 6.	Exhibits	25
Signatures		26

iii

Part I ─ Financial Information

Item 1. Financial Statements

Monte Rosa Therapeutics, Inc.

Condensed consolidated balance sheets (unaudited)


(in thousands, except share and per share amounts)	March 31,			December 31,
(unaudited)	2023			2022
Assets
Current assets:
Cash and cash equivalents	$	51,847		$	54,912
Marketable securities		179,887			207,914
Other receivables		2,170			7,656
Prepaid expenses and other current assets		5,692			4,444
Current restricted cash		960			960
Total current assets		240,556			275,886
Property and equipment, net		33,266			27,075
Operating lease right-of-use assets		30,534			34,832
Restricted cash, net of current		4,321			4,318
Other long-term assets		351			278
Total assets	$	309,028		$	342,389
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	7,382		$	7,862
Accrued expenses and other current liabilities		10,243			14,580
Current portion of operating lease liability		2,890			3,127
Total current liabilities		20,515			25,569
Defined benefit plan liability		1,512			1,533
Operating lease liability		43,275			43,874
Total liabilities		65,302			70,976
Commitments and contingencies
Stockholders’ equity
Preferred stock, $0.0001 par value, 10,000,000 shares authorized, no shares issued and outstanding		—			—
Common stock, $0.0001 par value; 500,000,000 shares authorized, 49,450,063 shares issued and 49,360,984 shares outstanding as of March 31, 2023; and 500,000,000 shares authorized, 49,445,802 shares issued and 49,323,531 shares outstanding as of December 31, 2022		5			5
Additional paid-in capital		507,688			503,696
Accumulated other comprehensive loss		(1,393	)		(1,752	)
Accumulated deficit		(262,574	)		(230,536	)
Total stockholders’ equity		243,726			271,413
Total liabilities and stockholders’ equity	$	309,028		$	342,389

See accompanying notes to the condensed consolidated financial statements.

Monte Rosa Therapeutics, Inc.

Condensed consolidated statements of operations and comprehensive loss (unaudited)


(in thousands, except share and per share amounts)	Three months ended March 31,
(unaudited)	2023			2022
Operating expenses:
Research and development	$	26,755		$	17,915
General and administrative		7,504			6,387
Total operating expenses		34,259			24,302
Loss from operations		(34,259	)		(24,302	)
Other income (expense):
Interest income, net		2,437			149
Foreign currency exchange gain (loss), net		(85	)		96
Gain (loss) on disposal of fixed assets		—			125
Loss on sale of marketable securities		(131	)		—
Total other income		2,221			370
Net loss	$	(32,038	)	$	(23,932	)
Net loss per share attributable to common stockholders—basic and diluted	$	(0.65	)	$	(0.51	)
Weighted-average number of shares outstanding used in computing net loss per common share—basic and diluted		49,347,473			46,595,782
Comprehensive loss:
Net loss	$	(32,038	)	$	(23,932	)
Other comprehensive income (loss):
Provision for pension benefit obligation		14			34
Unrealized gain (loss) on available-for-sale securities		345			(146	)
Comprehensive loss	$	(31,679	)	$	(24,044	)

See accompanying notes to the condensed consolidated financial statements.

Monte Rosa Therapeutics, Inc.

Condensed consolidated statements of stockholders’ equity (unaudited)


	Common stock
(in thousands, except share amounts) (unaudited)	Shares		Amount		Additional paid-in capital		Accumulated other comprehensive loss			Accumulated deficit			Total Stockholders’ equity
Balance—January 1, 2022		46,535,966	$	5	$	471,566	$	(2,021	)	$	(122,035	)	$	347,515
Restricted common stock vesting		34,505		—		—		—			—			—
Exercise of common stock options		60,240		—		153		—			—			153
Provision for pension benefit obligation		—		—		—		34			—			34
Stock-based compensation expense		—		—		2,251		—			—			2,251
Unrealized loss on available-for-sale securities		—		—		—		(146	)		—			(146	)
Net Loss		—		—		—		—			(23,932	)		(23,932	)
Balance—March 31, 2022		46,630,711	$	5		473,970	$	(2,133	)	$	(145,967	)	$	325,875

Balance—January 1, 2023		49,323,531	$	5		503,696	$	(1,752	)	$	(230,536	)	$	271,413
Restricted common stock vesting		33,192		—		—		—			—			—
Exercise of common stock options		4,261		—		18		—			—			18
Provision for pension benefit obligation		—		—		—		14			—			14
Stock-based compensation expense		—		—		3,974		—			—			3,974
Unrealized gain on available-for-sale securities		—		—		—		345			—			345
Net Loss		—		—		—		—			(32,038	)		(32,038	)
Balance—March 31, 2023		49,360,984	$	5		507,688	$	(1,393	)	$	(262,574	)	$	243,726

See accompanying notes to the condensed consolidated financial statements

Monte Rosa Therapeutics, Inc.

Condensed consolidated statements of cash flows (unaudited)


(in thousands)	Three months ended March 31,
(unaudited)	2023			2022
Cash flows from operating activities:
Net loss	$	(32,038	)	$	(23,932	)
Adjustments to reconcile net loss to net cash used in operating activities
Stock-based compensation expense		3,974			2,251
Depreciation		1,151			753
Noncash lease expense		—			379
Net accretion of discounts/premiums on marketable securities		(1,266	)		(45	)
Loss on sale of marketable securities		131			—
Gain on disposal of property and equipment		—			(125	)
Changes in operating assets and liabilities
Other receivables		2,053			—
Prepaid expenses and other current assets		(1,320	)		(608	)
Accounts payable		306			(2,184	)
Accrued expenses and other current liabilities		(3,285	)		(3,559	)
Defined benefit plan liability		(7	)		41
Right-of-use assets and operating lease liabilities		6,895			(375	)
Net cash used in operating activities	$	(23,406	)	$	(27,404	)
Cash flows from investing activities:
Purchases of property and equipment		(9,181	)		(1,687	)
Proceeds from sale of property and equipment		—			125
Purchases of marketable securities		(67,824	)		(178,958	)
Proceeds from sale of marketable securities		45,631			—
Proceeds from maturities of marketable securities		51,700			—
Net cash provided by (used in) investing activities	$	20,326		$	(180,520	)
Cash flows from financing activities:
Proceeds from exercise of employee stock options		18			153
Net cash provided by financing activities	$	18		$	153
Net decrease in cash, cash equivalents and restricted cash	$	(3,062	)	$	(207,771	)
Cash, cash equivalents and restricted cash—beginning of period		60,190			351,409
Cash, cash equivalents and restricted cash—end of period	$	57,128		$	143,638
Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents	$	51,847		$	138,305
Restricted cash		5,281			5,333
Total cash, cash equivalents and restricted cash	$	57,128		$	143,638
Supplemental disclosure of noncash items
Reduction of right-of-use assets for lease incentives receivable	$	3,433		$	—
Purchases of property and equipment in accounts payable and accrued expenses	$	4,402		$	794

See accompanying notes to the condensed consolidated financial statements.

Monte Rosa Therapeutics, Inc.

Notes to the condensed consolidated financial statements

(unaudited)

1. Description of business and liquidity

Business

Monte Rosa Therapeutics, Inc. is a biotechnology company developing a portfolio of novel small molecule precision medicines that employ the body’s natural mechanisms to selectively degrade therapeutically-relevant proteins. As used in these condensed consolidated financial statements, unless the context otherwise requires, references to the Company or Monte Rosa refer to Monte Rosa Therapeutics, Inc. and its wholly owned subsidiaries Monte Rosa Therapeutics AG and Monte Rosa Therapeutics Securities Corp. Monte Rosa Therapeutics AG, a Swiss operating company, was incorporated under the laws of Switzerland in April 2018. Monte Rosa Therapeutics, Inc. was incorporated in Delaware in November 2019. The Company is headquartered in Boston, Massachusetts with research operations in both Boston and Basel, Switzerland.

Liquidity considerations

Since inception, the Company has devoted substantially all its efforts to business planning, research and development, recruiting management and technical staff, and raising capital and has financed its operations primarily through the issuance of convertible preferred shares and public offerings of the Company's common stock.

The Company’s continued discovery and development of its product candidates will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even if product development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

As of March 31, 2023, the Company had an accumulated deficit of $262.6 million. The Company has incurred losses and negative cash flows from operations since inception, including net losses of $32.0 million and $23.9 million for the three months ended March 31, 2023 and 2022, respectively. The Company expects that its operating losses and negative cash flows will continue for the foreseeable future as the Company continues to develop its product candidates. The Company currently expects that its cash, cash equivalents, and marketable securities of $231.7 million as of March 31, 2023 will be sufficient to fund operating expenses and capital requirements for at least 12 months from the date the first quarter interim condensed consolidated financial statements are issued. However, additional funding will be necessary to fund future discovery research, pre-clinical and clinical activities. The Company will seek additional funding through public financings, debt financings, collaboration agreements, strategic alliances and licensing arrangements. Although it has been successful in raising capital in the past, there is no assurance that the Company will be successful in obtaining such additional financing on terms acceptable to it, if at all, and the Company may not be able to enter into collaborations or other arrangements. If the Company is unable to obtain funding, it could be forced to delay, reduce or eliminate its research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect the Company’s business prospects, even the ability to continue operations.

2. Summary of significant accounting policies

Basis of presentation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S., or GAAP, and are stated in U.S. dollars. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification and Accounting Standards Updates, or ASUs, of the Financial Accounting Standards Board, or FASB. All intercompany balances and transactions have been eliminated in consolidation.

Unaudited Financial Information

The Company’s condensed consolidated financial statements included herein have been prepared in conformity with GAAP and pursuant to the rules and regulations of the Securities and Exchange Commission, or the SEC. In the Company’s opinion, the information furnished reflects all adjustments, all of which are of a normal and recurring nature, necessary for a fair presentation of the financial position and results of operations for the reported interim periods. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure.

The results of operations for interim periods are not necessarily indicative of results to be expected for the full year or any other interim period.

Recently issued accounting pronouncements

The Company has elected to use the extended transition period for complying with new or revised accounting standards as available under the Jumpstart Our Business Startups Act, or the JOBS Act.

In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging Contracts in Entity s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. ASU 2020-06 will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models results in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (i) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (ii) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU 2020-06 also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 will be effective for the Company for fiscal years beginning after December 15, 2023. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is currently assessing the impact adoption of ASU 2020-06 will have on its financial statements and disclosures.

Recently adopted accounting pronouncements

On January 1, 2023, the Company adopted Accounting Standards Update No. 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires measurement and recognition of expected credit losses for financial assets. In April 2019, the FASB issued clarification to ASU 2016-13 within ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, or ASU 2016-13. The guidance is effective for fiscal years beginning after December 15, 2022. The adoption of the standard was immaterial to the accompanying condensed consolidated financial statements.

\\\

3. Fair value measurements

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values (in thousands):


	As of March 31, 2023
	Level 1		Level 2		Level 3		Total
Current assets
Money market funds	$	36,151	$	—	$	—	$	36,151
Pension plan assets		—		4,650		—		4,650
Corporate debt securities		—		148,714		—		148,714
U.S Treasury securities		—		31,173		—		31,173
Total assets measured at fair value	$	36,151	$	184,537	$	—	$	220,688

Money market funds are highly liquid investments and are actively traded. The pricing information on the Company’s money market funds are based on quoted prices in active markets for identical securities. This approach results in the classification of these securities as Level 1 of the fair value hierarchy.

The fair value of pension plan assets has been determined as the surrender value of the portfolio of active insured members held within the Swiss Life Collective BVG Foundation collective investment fund and are classified within Level 2 of the fair value hierarchy.

Marketable securities consist of corporate debt securities and U.S. Treasury securities which are classified as available-for-sale pursuant to ASC 320, Investments—Debt and Equity Securities. Marketable securities are classified within Level 2 of the fair value hierarchy because pricing inputs are other than quoted prices in active markets. The fair values of these investments are estimated by taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income- and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spreads, benchmark securities based on historical data and other observable inputs.

There were no transfers among Level 1, Level 2 or Level 3 categories in the three months ended March 31, 2023 and 2022.

4. Marketable Securities

Marketable securities as of March 31, 2023 consisted of the following (in thousands):


	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Description
Corporate debt securities	$	148,738	$	59	$	(83	)		148,714
U.S Treasury securities		31,252		4		(83	)		31,173
Total	$	179,990	$	63	$	(166	)	$	179,887

As of March 31, 2023, the Company held 43 marketable securities, 17 of which were in an unrealized loss position. The aggregate fair value of securities in a loss position is $70.5 million. There were no individual securities that were in a significant unrealized loss position as of March 31, 2023. The Company evaluates securities for other-than-temporary impairments based on quantitative and qualitative factors, and considers the decline in market value as of March 31, 2023, to be primarily attributable to the then current economic and market conditions. The Company neither intends to sell these investments nor concludes that it is more-likely-than-not that the Company will have to sell them before recovery of their carrying values. The Company also believes that it will be able to collect both principal and interest amounts due to it at maturity.

5. Property and Equipment, net

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


	March 31, 2023			December 31, 2022
Laboratory equipment	$	18,042		$	17,766
Computer hardware and software		499			499
Furniture and fixtures		388			388
Leasehold improvements		2,659			2,660
Construction in process		19,080			12,013
Total property and equipment, at cost	$	40,668		$	33,326
Less: accumulated depreciation		(7,402	)		(6,251	)
Property and equipment, net	$	33,266		$	27,075

Depreciation expense for the three months ended March 31, 2023 and 2022 was $1.2 million and $0.8 million, respectively.

6. Accrued expenses and other current liabilities

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


	March 31,		December 31,
	2023		2022
Compensation and benefits	$	3,173	$	5,624
Accrued research and development		3,234		3,936
Other		3,836		5,020
Total other current liabilities	$	10,243	$	14,580

7. Leases

The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use, or ROU, assets and operating lease liabilities in the condensed consolidated balance sheets. The Company has no finance leases as of March 31, 2023.

ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, management estimated the incremental borrowing rate based on the rate of interest the Company would have to pay to borrow a similar amount on a collateralized basis over a similar term. The Company uses its

incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.