SEC Filing | Monte Rosa Therapeutics

View:

Download DOC

Download PDF

Download XLS

Download XBRL

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 June 30, 2024


☐	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.)

321 Harrison Avenue, Suite 900 Boston, Massachusetts	02118
(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 August 5, 2024 the registrant had 61,372,824 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, VAV1-directed MGD MRT-6160 and NEK7-directed MGD, MRT-8102;

•

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 Investigational New Drug, or IND applications to the U.S. Food and Drug Administration, or the FDA for current and 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 expected use of proceeds from sales of our common stock in "at-the-market" offerings and other offerings, and the period over which such proceeds, together with existing cash, will be sufficient to meet our operating needs;

•

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 effect of global economic uncertainty and financial market volatility caused by economic effects of rising inflation and interest rates, global health crises, geopolitical events, elections, changes in international trade relationships and military conflicts on any of the foregoing or other aspects of our business or 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, 2023, or our 2023 Annual Report, filed with the Securities and Exchange Commission, or the SEC, on March 14, 2024.

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.

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	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24

PART II.	OTHER INFORMATION	25
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Mine Safety Disclosures	27
Item 5	Other Information	27
Item 6.	Exhibits	28
Signatures		29

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)	June 30,			December 31,
(unaudited)	2024			2023
Assets
Current assets:
Cash and cash equivalents	$	108,847		$	128,101
Marketable securities		153,358			104,312
Accounts receivable		9,000			—
Other receivables		842			505
Prepaid expenses and other current assets		5,849			3,294
Total current assets		277,896			236,212
Property and equipment, net		33,250			33,803
Operating lease right-of-use assets		27,893			28,808
Restricted cash		4,866			4,580
Other long-term assets		209			352
Total assets	$	344,114		$	303,755
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	6,473		$	11,152
Accrued expenses and other current liabilities		12,759			14,600
Current deferred revenue		19,645			17,678
Current portion of operating lease liability		3,471			3,162
Total current liabilities		42,348			46,592
Deferred revenue, net of current		33,596			32,323
Defined benefit plan liability		2,614			2,713
Operating lease liability		40,885			42,877
Total liabilities		119,443			124,505
Commitments and contingencies (Note 8)
Stockholders’ equity
Preferred stock, $0.0001 par value, 10,000,000 shares authorized		—			—
Common stock, $0.0001 par value; 500,000,000 shares authorized, 61,333,597 shares issued and 61,328,282 shares outstanding as of June 30, 2024; and 50,154,929 shares issued and 50,140,233 shares outstanding as of December 31, 2023		6			5
Additional paid-in capital		655,501			547,857
Accumulated other comprehensive loss		(2,670	)		(2,724	)
Accumulated deficit		(428,166	)		(365,888	)
Total stockholders’ equity		224,671			179,250
Total liabilities and stockholders’ equity	$	344,114		$	303,755

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 June 30,						Six months ended June 30,
(unaudited)	2024			2023			2024			2023
Collaboration revenue	$	4,695		$	—		$	5,759		$	—
Operating expenses:
Research and development		28,055			29,076			55,081			55,831
General and administrative		9,282			8,145			18,267			15,649
Total operating expenses		37,337			37,221			73,348			71,480
Loss from operations		(32,642	)		(37,221	)		(67,589	)		(71,480	)
Other income (expense):
Interest income		2,637			2,302			5,079			4,739
Foreign currency exchange gain (loss), net		(53	)		(93	)		567			(178	)
Gain on disposal of fixed assets		—			24			—			24
Loss on sale of marketable securities		—			—			—			(131	)
Total other income		2,584			2,233			5,646			4,454
Net loss before income taxes		(30,058	)		(34,988	)		(61,943	)		(67,026	)
Provision for income taxes		(252	)		(190	)		(335	)		(190	)
Net loss	$	(30,310	)	$	(35,178	)	$	(62,278	)	$	(67,216	)
Net loss per share—basic and diluted	$	(0.43	)	$	(0.71	)	$	(0.95	)	$	(1.36	)
Weighted-average number of shares outstanding used in computing net loss per common share—basic and diluted		71,233,992			49,431,922			65,695,095			49,389,931
Comprehensive loss:
Net loss	$	(30,310	)	$	(35,178	)	$	(62,278	)	$	(67,216	)
Other comprehensive income (loss):
Provision for pension benefit obligation		35			14			70			28
Unrealized gain (loss) on available-for-sale securities		(12	)		(261	)		(16	)		84
Comprehensive loss	$	(30,287	)	$	(35,425	)	$	(62,224	)	$	(67,104	)

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, 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
Restricted common stock vesting		32,185		—		—		—			—			—
Exercise of common stock options		147,333		—		897		—			—			897
Provision for pension benefit obligation		—		—		—		14			—			14
Stock-based compensation expense		—		—		4,153		—			—			4,153
Unrealized loss on available-for-sale securities		—		—		—		(261	)		—			(261	)
Issuance of shares under employee stock purchase plan		51,977		—		303		—			—			303
Net Loss		—		—		—		—			(35,178	)		(35,178	)
Balance—June 30, 2023		49,592,479	$	5	$	513,041	$	(1,640	)	$	(297,752	)	$	213,654

Balance—January 1, 2024		50,140,233	$	5	$	547,857	$	(2,724	)	$	(365,888	)	$	179,250
Restricted common stock vesting		4,691		—		—		—			—			—
Exercise of common stock options		45,108		—		246		—			—			246
Provision for pension benefit obligation		—		—		—		35			—			35
Stock-based compensation expense		—		—		4,873		—			—			4,873
Unrealized loss on available-for-sale securities		—		—		—		(4	)		—			(4	)
Issuance of common stock pursuant to the at-the-market sales agreement		10,272		—		87		—			—			87
Net Loss		—		—		—		—			(31,968	)		(31,968	)
Balance—March 31, 2024		50,200,304	$	5	$	553,063	$	(2,693	)	$	(397,856	)	$	152,519
Restricted common stock vesting		85,249		—		—		—			—			—
Exercise of common stock options		190,160		—		422		—			—			422
Provision for pension benefit obligation		—		—		—		35			—			35
Stock-based compensation expense		—		—		4,502		—			—			4,502
Unrealized loss on available-for-sale securities		—		—		—		(12	)		—			(12	)
Issuance of shares under employee stock purchase plan		93,859		—		298		—			—			298
Issuance of common stock pursuant to the at-the-market sales agreement, net of issuance costs of $89		120,234		—		797		—			—			797
Issuance of common stock pursuant to the Underwritten Public Offering, net of issuance cost of $3,290		10,638,476		1		46,709		—			—			46,710
Issuance of pre-funded warrant, net of issuance costs of $290		—		—		49,710		—			—			49,710
Net Loss		—		—		—		—			(30,310	)		(30,310	)
Balance—June 30, 2024		61,328,282	$	6	$	655,501	$	(2,670	)	$	(428,166	)	$	224,671

See accompanying notes to the condensed consolidated financial statements

Monte Rosa Therapeutics, Inc.

Condensed consolidated statements of cash flows (unaudited)


(in thousands)	Six months ended June 30,
(unaudited)	2024			2023
Cash flows from operating activities:
Net loss	$	(62,278	)	$	(67,216	)
Adjustments to reconcile net loss to net cash used in operating activities
Stock-based compensation expense		9,375			8,127
Depreciation		3,957			2,542
Net accretion of discounts/premiums on marketable securities		(1,163	)		(2,680	)
Loss on sale of marketable securities		—			131
Gain on disposal of property and equipment		—			(24	)
Changes in operating assets and liabilities
Accounts receivable		(9,000	)		—
Other receivables		(337	)		1,858
Prepaid expenses and other current assets		(2,412	)		547
Accounts payable		(4,676	)		(696	)
Accrued expenses and other current liabilities		(1,842	)		(520	)
Defined benefit plan liability		(29	)		—
Right-of-use assets and operating lease liabilities		(768	)		9,201
Deferred revenue		3,241			—
Net cash used in operating activities	$	(65,932	)	$	(48,730	)
Cash flows from investing activities:
Purchases of property and equipment		(3,406	)		(15,693	)
Proceeds from the sale of property and equipment		—			62
Purchases of marketable securities		(130,027	)		(67,824	)
Proceeds from sale of marketable securities		—			45,631
Proceeds from maturities of marketable securities		82,128			76,700
Net cash provided by (used in) investing activities	$	(51,305	)	$	38,876
Cash flows from financing activities:
Proceeds from sale of common stock pursuant to the at-the-market sales agreement, net of underwriter's discount of $29		944			—
Proceeds from underwritten public offering cost, net of underwriter's discount of $3,000		47,001			—
Proceeds from the issuance of pre-funded warrants		50,000			—
Payment of common stock and pre-funded warrant issuance costs		(641	)		—
Proceeds from exercise of employee stock options		667			915
Proceeds from employee stock purchase plan		298			303
Net cash provided by financing activities	$	98,269		$	1,218
Net decrease in cash, cash equivalents and restricted cash	$	(18,968	)	$	(8,636	)
Cash, cash equivalents and restricted cash—beginning of period		132,681			60,190
Cash, cash equivalents and restricted cash—end of period	$	113,713		$	51,554
Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents	$	108,847		$	47,027
Restricted cash		4,866			4,527
Total cash, cash equivalents and restricted cash	$	113,713		$	51,554
Supplemental disclosure of noncash items
Reduction of right-of-use assets for lease incentives receivable	$	—		$	4,644
Purchases of property and equipment in accounts payable and accrued expenses	$	235		$	1,438

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, or Monte Rosa 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 issuance and sale of convertible promissory notes, convertible preferred stock, public offerings of common stock, registered direct offerings, and through a collaboration with Roche.

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 June 30, 2024, the Company had an accumulated deficit of $428.2 million. The Company has incurred losses and negative cash flows from operations since inception, including net losses of $62.3 million and $67.2 million for the six months ended June 30, 2024 and 2023, 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 $262.2 million as of June 30, 2024 will be sufficient to fund operating expenses and capital requirements for at least 12 months from the date the second 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 November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to provide enhanced segment disclosures. The standard will require disclosures about significant segment expenses and other segment items and identifying the Chief Operating Decision Maker and how they use the reported segment profitability measures to assess segment performance and allocate resources. These enhanced disclosures are required for all entities on an interim and annual basis, even if they have only a single reportable segment. The standard is effective for years beginning after December 15, 2023, and interim periods within annual periods beginning after December 15, 2024 and early adoption is permitted. The Company is currently in the process of evaluating the impact of this pronouncement on our related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to provide enhancements to annual income tax disclosures. The standard will require more detailed information in the rate reconciliation table and for income taxes paid, among other enhancements. The standard is effective for years beginning after December 15, 2024 and early adoption is permitted. The impact of the adoption of this standard will be 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 June 30, 2024
	Level 1		Level 2		Level 3		Total
Current assets
Money market funds	$	108,209	$	—	$	—	$	108,209
Pension plan assets		—		8,977		—		8,977
Corporate debt securities		—		73,618		—		73,618
U.S Treasury securities		—		79,740		—		79,740
Total assets measured at fair value	$	108,209	$	162,335	$	—	$	270,544


	As of December 31, 2023
	Level 1		Level 2		Level 3		Total
Current assets
Money market funds	$	122,791	$	—	$	—	$	122,791
Pension plan assets		—		9,317		—		9,317
Corporate debt securities		—		79,816		—		79,816
U.S Treasury securities		—		24,496		—		24,496
Total assets measured at fair value	$	122,791	$	113,629	$	—	$	236,420

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 Columna Collective Foundation Group 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 six months ended June 30, 2024 and 2023.

4. Marketable Securities

Marketable securities as of June 30, 2024 consisted of the following (in thousands):


	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Description
Corporate debt securities	$	73,655	$	6	$	(43	)		73,618
U.S Treasury securities		79,771		1		(32	)		79,740
Total	$	153,426	$	7	$	(75	)	$	153,358

Market securities as of December 31, 2023 consisted of the following (in thousands):


	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Description
Corporate debt securities	$	79,870	$	4	$	(58	)		79,816
U.S Treasury securities		24,495		11		(10	)		24,496
Total	$	104,365	$	15	$	(68	)	$	104,312

The Company evaluates securities for other-than-temporary impairments based on quantitative and qualitative factors, and considers the decline in market value as of June 30, 2024 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):


	June 30, 2024			December 31, 2023
Laboratory equipment	$	24,581		$	22,079
Computer hardware and software		1,192			1,052
Furniture and fixtures		1,099			1,099
Leasehold improvements		22,216			20,893
Construction in process		362			924
Total property and equipment, at cost	$	49,450		$	46,047
Less: accumulated depreciation		(16,200	)		(12,244	)
Property and equipment, net	$	33,250		$	33,803

The following table summarizes depreciation expense incurred (in thousands):