0001558370-22-008103 | 10-Q | XBRL Viewer | Reneo Pharmaceuticals INC

Leases (Tables)

3 Months Ended

Mar. 31, 2022

Schedule of Maturities of lease liabilities by fiscal year for operating leases

Maturities of lease liabilities by fiscal year for our operating leases are as follows:


	As of March 31, 2022
2022 (remaining nine months)	$	399
2023		414
2024		323
2025		332
Thereafter		285
Total lease payments		1,753
Less: Imputed interest		(169)
Present value of lease liabilities	$	1,584

Stock-Based Compensation - Market-Based Awards (Details) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended
	Dec. 31, 2021 USD ($) D $ / shares shares	Mar. 31, 2022 USD ($)	Mar. 31, 2021 USD ($)
Stock-Based Compensation
Stock-based compensation expense		$ 1,107	$ 471
Unrecognized compensation expense		10,400
Equity Incentive Plan 2021 \| Market Based Restricted Stock Units
Stock-Based Compensation
Unrecognized compensation expense		$ 400
Equity Incentive Plan 2021 \| Market Based Restricted Stock Units \| Employee
Stock-Based Compensation
Number of shares granted \| shares	100,000
Threshold share price for vesting of shares \| $ / shares	$ 20
Consecutive trading days \| D	30
Share price \| $ / shares	$ 6.69
Fair value of share-based awards granted	$ 400
Service period	3 years

Stock-Based Compensation - Shares Reserved for Future Issuance (Details)	Mar. 31, 2022 shares
Class of Stock [Line Items]
Total shares of common stock reserved	7,286,601
Unvested Restricted Stock Units
Class of Stock [Line Items]
Total shares of common stock reserved	279,500
Equity Incentive Plan 2021
Class of Stock [Line Items]
Total shares of common stock reserved	2,165,387
Employee Stock Purchase Plan (ESPP) 2021
Class of Stock [Line Items]
Total shares of common stock reserved	479,012
Inducement Award 2021 Plan
Class of Stock [Line Items]
Total shares of common stock reserved	100,000
Common Stock
Class of Stock [Line Items]
Total shares of common stock reserved	4,262,702

License Agreement (Details) - USD ($)	1 Months Ended	3 Months Ended		52 Months Ended
License Agreement (Details) - USD ($)	Dec. 31, 2017	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2022	Dec. 31, 2020
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Research and development		$ 9,278,000	$ 5,472,000
vTv Therapeutics
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Milestone payments		$ 0	$ 0	$ 0	$ 2,000,000.0
Milestone payments payable on achievement of sales thresholds of the licensed product	$ 30,000,000.0
Research and development \| vTv Therapeutics
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Upfront license fee payment	$ 64,500,000			$ 3,000,000.0
Common stock issued, Shares	576,443

Stock-Based Compensation

3 Months Ended

Mar. 31, 2022

Stock-Based Compensation

Stock-Based Compensation

8. Stock-Based Compensation

In March 2021, the Company’s board of directors adopted the Company’s 2021 Equity Incentive Plan (2021 Plan), which is the successor to the 2014 Equity Incentive Plan (2014 Plan). As of the effectiveness of the 2021 Plan, awards granted under the 2014 Plan that are forfeited or otherwise become available under the 2014 Plan will be included and available for issuance under the 2021 Plan. Under the 2021 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, directors or consultants of the Company, and employees and consultants of the Company’s affiliates.

Under the 2014 Plan, certain employees were granted the ability to early exercise their options. The shares of common stock issued pursuant to the early exercise of unvested stock options are restricted and continue to vest over the requisite service period after issuance. The Company has the option to repurchase any unvested shares at the original purchase price upon any voluntary or involuntary termination. The shares purchased by the employees pursuant to the early exercise of stock options are not deemed, for accounting purposes, to be outstanding until

those shares vest. As of March 31, 2022, there were no shares subject to stock options that have been early exercised.

Shares Reserved for Future Issuance

As of March 31, 2022, the Company had reserved shares of its common stock for future issuance as follows:


		Shares
		Reserved
Common stock options outstanding		4,262,702
Unvested restricted stock units		279,500
Available for future grants under the 2021 Equity Incentive Plan		2,165,387
Available for future grants under the 2021 Employee Stock Purchase Plan		479,012
Available for future grants outside of the 2021 Plan as inducement award		100,000
Total shares of common stock reserved		7,286,601

Stock Options

A summary of the Company’s stock option activity and related information during the three months ended March 31, 2022 is as follows:


	Options Outstanding	Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at December 31, 2021	4,215,643	$	5.49	8.5
Granted	233,600	$	6.80
Exercised	(713)	$	3.45
Forfeited/Expired	(185,828)	$	6.48
Outstanding at March 31, 2022	4,262,702	$	5.52	8.0	$	379
Vested at March 31, 2022	1,490,020	$	4.20	6.4	$	368
Exercisable at March 31, 2022	2,703,228	$	4.49	7.2	$	375

Options exercisable at March 31, 2022 include vested options and options eligible for early exercise. All outstanding options as of March 31, 2022 are expected to vest.

Unrecognized stock-based expense at March 31, 2022 was $10.4 million, which is expected to be recognized over a weighted-average vesting term of 2.9 years.

The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the employee stock option grants were as follows:



	Three Months Ended March 31,
	2022		2021
Risk-free interest rate	1.8	%	0.7	%
Expected volatility	85.2	%	71.2	%
Expected term (in years)	6.0		5.9
Expected dividend yield	—	%	—	%

Risk-free interest rate. The Company bases the risk-free interest rate assumption on the U.S. Treasury’s rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued.

Expected volatility. Since the Company recently completed its IPO and does not have sufficient trading history for its common stock the expected volatility assumption is based on volatilities of a peer group of similar companies whose share prices are publicly available. The peer group was developed based on companies in the biotechnology industry.

Expected term. The expected term represents the period of time that options are expected to be outstanding. Because the Company does not have historical exercise behavior, it determines the expected life assumption using the simplified method, which is an average of the contractual term of the option and its vesting period.

Expected dividend yield. The Company bases the expected dividend yield assumption on the fact that it has never paid cash dividends and has no present intention to pay cash dividends.

Fair value of common stock. For periods prior to the IPO, since there had been no public market for the Company’s common stock, the Company’s board of directors, with input from management, determined the fair value of the Company’s common stock on each grant date by considering a number of objective and subjective factors, including the most recent independent third-party valuations of the Company’s common stock, sales of the Company’s convertible preferred stock to unrelated third-parties, operating and financial performance of the Company, the lack of liquidity of capital stock and general and industry-specific economic outlook, and the Company’s board of directors’ assessment of additional objective and subjective factors that it believed were relevant.

Performance-Based Restricted Stock Units (PSUs)

The following table summarizes PSU activity as of March 31, 2022, under the 2021 Plan:


		Weighted-
	Number of	Average Grant Date
	PSUs	Fair Value
Outstanding at December 31, 2021	299,500	$	6.32
Granted	10,000		8.98
Released	—		—
Cancelled	(30,000)		6.69
Outstanding at March 31, 2022	279,500	$	6.37

The PSUs vest based on the Company achieving certain regulatory milestones and are subject to the employee’s continued employment with the Company through the achievement date. The fair value of the awards was based on the value of the Company’s common stock at the date of the award and expense recognition is based on the probability of achieving the performance metric. The Company concluded that achievement of the performance conditions was not probable as of March 31, 2022, and therefore no compensation expense was recognized for the three months ended March 31, 2022 in connection with the PSUs. Compensation cost is adjusted in future periods for subsequent changes in the expected outcome of the performance related conditions.

Market-Based Awards

Restricted Stock Units

In December 2021, the Company granted 100,000 market-based restricted stock units (MRSUs) to its chief executive officer (CEO) pursuant to the 2021 Plan. The MRSUs vest based on the Company’s closing stock price trading above $20 per share for 30 consecutive trading days subject to the employee’s continued employment with the Company through the date of achievement. The share price of the Company’s common stock on the date of issuance of the MRSUs was $6.69 per share. The fair value was $0.4 million based on Monte Carlo simulation model on the grant date. Compensation expense is recognized over the derived service period of 3 years. Stock-

based compensation expense in connection with the MRSUs was immaterial for the three months ended March 31, 2022. As of March 31, 2022, there was $0.4 million of unrecognized compensation expense related to this MRSU.

Performance Award

In November 2020, in connection with the CEO’s employment agreement he is entitled to receive a Performance Award in the amount of $7.5 million, payable in cash, common stock or a combination of cash and common stock, at the election of the Company, in the event that (i) the Company’s market value exceeds $750 million utilizing the volume-weighted average of the closing sale price of its common stock on the Nasdaq Stock Market or other principal exchange for each of the 30 trading days immediately prior to the measurement date, or (ii) the fair market value of the net proceeds available for distribution to the Company’s stockholders in connection with a change in control as defined in the Company’s severance benefit plan, as determined in good faith by its board of directors, exceeds $750 million. The Company has determined that the Performance Award is subject to ASC 718, Compensation – Stock Compensation and includes both market and performance conditions. Since the IPO, neither of the events have yet been satisfied. The Company estimated the fair value of the Performance Award at each reporting period using the Monte Carlo simulation (Note 4), which is recognized as compensation cost over the derived service period.

During the three-months ended March 31, 2022, the Company reversed $0.4 million in compensation expenses as a direct result of decreased value of the Performance Award caused by a decline in the Company’s common stock price.

As of March 31, 2021, prior to the IPO, the Performance Award was not probable of being achieved; therefore, no stock-based compensation expense was recognized during the three months ended March 31, 2021.

2021 Employee Stock Purchase Plan (ESPP)

In March 2021, the Company’s board of directors adopted the ESPP, which became effective immediately prior to the execution of the underwriting agreement in connection with the Company’s IPO. As of March 31, 2022, 8,624 shares have been issued under the ESPP.

In September 2021, the Company’s board of directors adopted the Company’s 2021 UK Sharesave Sub-plan (SAYE). An allocation of 25,875 shares of common stock from the ESPP reserve pool was approved and reserved for issuance under the SAYE. No shares have been issued under the SAYE through March 31, 2022.

The stock-based compensation expense related to the ESPP and SAYE for the three months ended March 31, 2022, was immaterial.

The following table summarizes stock compensation expense, including expense associated with award modifications for unvested options, reflected in the unaudited consolidated statements of operations and comprehensive loss (in thousands):



	Three Months Ended March 31,
	2022		2021
Research and development	$	387	$	364
General and administrative		720		107
Total	$	1,107	$	471

Summary of Significant Accounting Policies (Policies)	3 Months Ended
Summary of Significant Accounting Policies (Policies)	Mar. 31, 2022
Summary of Significant Accounting Policies
Basis of Presentation and Consolidation	Basis of Presentation and Consolidation The Company has prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted, although the Company believes that the disclosures made are adequate to make the information not misleading. The Company recommends that the unaudited consolidated financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s latest Annual Report on Form 10-K. In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair statement of the financial statements, have been included in the accompanying unaudited financial statements. Interim results are not necessarily indicative of results that may be expected for any other interim period or for an entire year. The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries as of March 31, 2021; all intercompany transactions and balances have been eliminated.
New Accounting Pronouncements	New Accounting Pronouncements Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, Leases (ASC 842) in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheets for those leases classified as operating leases under previous GAAP. ASU 2016-02 requires a lessee to recognize a liability for lease payments (lease liability) and a right-of-use (ROU)assets (representing its right to use the underlying asset for the lease term) on the balance sheet. In July 2018, the FASB issued ASU 2018-11, Leases (ASC 842): Targeted Improvements, which provides entities an optional transition method to apply the new guidance as of the adoption date, rather than as of the earliest period presented. In transition, entities may also elect a package of practical expedients that must be applied in its entirety to all leases commencing before the effective date, unless the lease was modified, to not reassess (a) whether a contract is or contains a lease, (b) lease classification or (c) determination of initial direct costs, which effectively allows entities to carryforward accounting conclusions under previous GAAP. The Company early adopted this standard on January 1, 2022, using the optional transitional method and elected the package of practical expedients in transition for leases that commenced prior to January 1, 2022. As a result of implementing ASC 842, the Company recognized operating lease ROU assets of $1.5 million and lease liabilities of $1.7 million on January 1, 2022, with no impact on its beginning retained earnings, consolidated statements of operations and comprehensive loss, or cash flows. See Note 6, Leases, for further details. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes. The standard simplifies the accounting for income taxes, eliminates certain exceptions within Accounting Standards Codification (ASC) 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. The new guidance was effective for the Company as of January 1, 2022. Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company adopted this standard on January 1, 2022. Adoption of this standard had no material impact on the Company’s consolidated financial position, results of operations or cash flows. Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (ASC 326), Measurement of Credit Losses on Financial Instruments. The standard amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses for most financial assets and certain other instruments that aren’t measured at fair value through net income. For available-for-sale debt securities, entities will be required to recognize an allowance for credit losses rather than a reduction in the carrying value of the asset. Entities will no longer be permitted to consider the length of time that fair value has been less than amortized cost when evaluating when credit losses should be recognized. This new guidance is effective for the Company as of January 1, 2023. The Company is currently evaluating the impact of this ASU and does not expect that adoption of this standard will have a material impact on its consolidated financial statements and related disclosures.

Subsequent Events

3 Months Ended

Mar. 31, 2022

Subsequent Events

Subsequent Events

10. Subsequent Events

On May 2, 2022, the Company entered into a sales agreement with SVB Securities LLC (ATM facility), under which the Company may offer and sell, from time to time at its sole discretion, up to $20.0 million in shares of its common stock. The Company has not yet sold any shares of its common stock under the ATM facility.

Stock-Based Compensation - Equity Incentive Plans (Details)	3 Months Ended
	Mar. 31, 2022 shares
Stock-Based Compensation
Stock options exercised and vested	1,490,020
Equity Incentive Plan 2014
Stock-Based Compensation
Stock options exercised and vested	0

Net Loss Per Share - Anti-dilutive securities not included in diluted net loss per share calculation (Details) - shares	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	4,542,202	19,021,269
Convertible preferred stock outstanding	0
Convertible preferred stock (as converted)
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total		15,907,629
Common stock options outstanding
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	4,262,702	3,113,640
Unvested Restricted Stock Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	279,500

Leases - Maturities of lease liabilities (Details) $ in Thousands	Mar. 31, 2022 USD ($)
Leases
2022 (remaining nine months)	$ 399
2023	414
2024	323
2025	332
Thereafter	285
Total lease payments	1,753
Less: Imputed interest	(169)
Present value of lease liabilities	$ 1,584

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2022	Dec. 31, 2021
Consolidated Balance Sheets
Common stock, Par value	$ 0.0001	$ 0.0001
Common stock, authorized	200,000,000	200,000,000
Common stock, issued	24,458,550	24,457,838
Common stock, outstanding	24,458,550	24,455,390

Consolidated Statements Changes in Convertible Preferred Stock and Stockholders' Deficit (Parenthetical) $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($)
Series B convertible preferred stock
Stock Issuance costs	$ 29

Summary of Significant Accounting Policies (Narrative) (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Jan. 01, 2022
Right-of-use assets	$ 1,382
Operating Lease, Liability	$ 1,584
Accounting Standards Update 2016-02 [Member]
Right-of-use assets		$ 1,500
Operating Lease, Liability		$ 1,700

Fair Value Measurements - Narratives (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Dec. 31, 2020	Nov. 30, 2020
Assets transferred into L3	$ 0
Assets transferred out of L3	0
Liabilities transferred into L3	0
Liabilities transferred out of L3	$ 0
Performance Shares [Member] \| Chief executive officer
Special performance bonus payable		$ 7,500	$ 7,500

Leases

3 Months Ended

Mar. 31, 2022

Leases

Leases

6. Leases

The Company’s headquarters are located in Irvine, California, where it leases office space. The Company leases additional office space located in San Diego, California, and in Kent, United Kingdom. The lease terms for the Irvine, San Diego, and Kent offices extend through November 30, 2026, July 31, 2023, and December 20, 2022, respectively.

The Company adopted ASU 2016-02 on January 1, 2022, which requires it to recognize a liability for lease payments and a ROU asset on the balance sheet. The Company elected the package of practical expedients permitted within the standard, which allows an entity to forego reassessing (i) whether a contract contains a lease, (ii) classification of leases, and (iii) whether capitalized costs associated with a lease meet the definition of initial direct costs. Also, the Company elected the expedient allowing an entity to use hindsight to determine the lease term and impairment of ROU assets and the expedient to allow the Company to not have to separate lease and non-lease components.

At March 31, 2022, the weighted average incremental borrowing rate and the weighted average remaining lease term for the operating leases held by the Company were 5% and 4.1 years, respectively. During the three months

ended March 31, 2022, operating lease expenses recognized and cash paid for amounts included for the measurement of lease liabilities were immaterial. The Company has elected to net the amortization of the ROU assets and the reduction of the lease liabilities principal in other current and long-term liabilities in the consolidated statements of cash flows.

Maturities of lease liabilities by fiscal year for our operating leases are as follows:


	As of March 31, 2022
2022 (remaining nine months)	$	399
2023		414
2024		323
2025		332
Thereafter		285
Total lease payments		1,753
Less: Imputed interest		(169)
Present value of lease liabilities	$	1,584

Subsequent Events (Details) - Subsequent Events [Member] - SVB Securities LLC [Member] $ in Millions	May 02, 2022 USD ($) shares
Subsequent Event [Line Items]
Stock Issued During Period, Shares, New Issues \| shares	0
Scenario, Plan [Member]
Subsequent Event [Line Items]
Stock Issued During Period, Value, New Issues \| $	$ 20.0

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 121,094	$ 124,660
Short-term Investments	17,568	23,010
Prepaid expenses and other current assets	4,053	6,064
Total current assets	142,715	153,734
Property and equipment, net	237	212
Right-of-use assets	1,382
Other non-current assets	78	78
Total assets	144,412	154,024
Current liabilities:
Accounts payable	1,566	2,022
Accrued expenses	5,887	4,180
Operating lease liabilities, current portion	457
Total current liabilities	7,910	6,202
Operating lease liabilities, less current portion	1,127
Other long-term liabilities		167
Performance award (Note 7)	57	444
Total liabilities	9,094	6,813
Commitments and contingencies (Note 9)
Stockholders' equity (deficit):
Common stock, $0.0001 par value; 200,000,000 shares authorized at March 31, 2022 and December 31, 2021; 24,458,550 shares issued and outstanding at March 31, 2022; and 24,457,838 and 24,455,390 shares issued and outstanding at December 31, 2021, respectively	3	3
Additional paid-in capital	233,015	231,902
Accumulated deficit	(97,764)	(84,728)
Accumulated other comprehensive income	64	34
Total stockholders' equity (deficit)	135,318	147,211
Total liabilities, convertible preferred stock and stockholders' equity (deficit)	$ 144,412	$ 154,024

Leases (Details)	Jan. 01, 2022	Mar. 31, 2022
Leases
Lease, Practical Expedients, Package [true false]	true
Lease, Practical Expedient, Use of Hindsight [true false]	true
Weighted average incremental borrowing rate		5.00%
Weighted average remaining lease term		4 years 1 month 6 days

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2022

Fair Value Measurements [Abstract]

Schedule of recurring fair value measurement of the Company's assets and liabilities

The recurring fair value measurement of the Company’s assets and liabilities measured at fair value at March 31, 2022 consisted of the following (in thousands):


	Quoted Prices in				Significant
	Active Markets		Significant Other		Unobservable
	For Identical Items		Observable Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Assets
Cash and cash equivalents:
Money market investments	$	117,921	$	—	$	—	$	117,921
Short-term Investments:
Commercial paper		—		17,568		—		17,568
Total	$	117,921	$	17,568	$	—	$	135,489
Liabilities
Performance award	$	—	$	—	$	57	$	57
Total	$	—	$	—	$	57	$	57

The recurring fair value measurement of the Company’s assets and liabilities measured at fair value at December 31, 2021 consisted of the following (in thousands):


	Quoted Prices in				Significant
	Active Markets		Significant Other		Unobservable
	For Identical Items		Observable Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Assets
Cash and cash equivalents:
Money market investments	$	118,535	$	—	$	—	$	118,535
Short-term Investments:
Commercial paper		—		23,010		—		23,010
Total	$	118,535	$	23,010	$	—	$	141,545
Liabilities
Performance award	$	—	$	—	$	444	$	444
Total	$	—	$	—	$	444	$	444

Schedule Changes in fair value measurements of the performance award

The following table summarizes changes in fair value measurements of the Performance Award during the three months ended March 31, 2022 (in thousands):


Balance as of January 1, 2022	$	444
Change in fair value		(387)
Balance as of March 31, 2022	$	57

Net Loss Per Share

3 Months Ended

Mar. 31, 2022

Net Loss Per Share [Abstract]

Net Loss Per Share

3. Net Loss Per Share

The Company computes basic loss per share by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share assumes the conversion, exercise or issuance of all potential common stock equivalents, unless the effect of inclusion would be anti-dilutive. For purposes of this calculation, common stock equivalents include the Company’s stock options and convertible preferred stock, which are convertible into shares of the Company’s common stock. As of March 31, 2022, no shares of convertible preferred stock were outstanding. No shares related to the convertible preferred stock were included in the diluted net loss per share calculation for the three months ended March 31, 2021 because the inclusion of such shares would have had an anti-dilutive effect. The shares to be issued upon exercise of all outstanding stock options and restricted stock units were also excluded from the diluted net loss per share calculation for the three months ended March 31, 2022 and 2021 because such shares are anti-dilutive.

Historical outstanding anti-dilutive securities not included in the diluted net loss per share calculation include the following:


	As of March 31,
	2022	2021
Convertible preferred stock (as converted)	—	15,907,629
Common stock options outstanding	4,262,702	3,113,640
Unvested restricted stock units	279,500	—
Total	4,542,202	19,021,269

Stock-Based Compensation - Appointment of CEO (Details) $ in Thousands	1 Months Ended	3 Months Ended
	Nov. 30, 2020 USD ($) D	Mar. 31, 2022 USD ($)	Mar. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Stock-Based Compensation
Stock-based compensation expense		$ 1,107	$ 471
Chief executive officer
Stock-Based Compensation
Threshold market value	$ 750,000
Number of trading days \| D	30
Threshold fair market value of the net proceeds	$ 750,000
Stock-based compensation expense			$ 0
Allocated share based compensation income		$ 400
Chief executive officer \| Performance Shares [Member]
Stock-Based Compensation
Special performance bonus payable	$ 7,500			$ 7,500

Accrued Expenses

3 Months Ended

Mar. 31, 2022

Accrued Expenses.

Accrued Expenses

5. Accrued Expenses

Accrued expenses consisted of the following (in thousands):


	As of March 31, 2022		As of December 31, 2021
Accrued clinical and regulatory	$	2,049	$	1,236
Accrued contract manufacturing cost		2,176		1,482
Accrued compensation		1,218		1,027
Accrued research and development-other		444		435
Total accrued expenses	$	5,887	$	4,180

Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2022

Stock-Based Compensation

Summary of common stock reserved for future issuance


		Shares
		Reserved
Common stock options outstanding		4,262,702
Unvested restricted stock units		279,500
Available for future grants under the 2021 Equity Incentive Plan		2,165,387
Available for future grants under the 2021 Employee Stock Purchase Plan		479,012
Available for future grants outside of the 2021 Plan as inducement award		100,000
Total shares of common stock reserved		7,286,601

Summary of the Company's stock option activity


	Options Outstanding	Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at December 31, 2021	4,215,643	$	5.49	8.5
Granted	233,600	$	6.80
Exercised	(713)	$	3.45
Forfeited/Expired	(185,828)	$	6.48
Outstanding at March 31, 2022	4,262,702	$	5.52	8.0	$	379
Vested at March 31, 2022	1,490,020	$	4.20	6.4	$	368
Exercisable at March 31, 2022	2,703,228	$	4.49	7.2	$	375

Summary of weighted-average assumptions to determine the fair value of the employee stock option



	Three Months Ended March 31,
	2022		2021
Risk-free interest rate	1.8	%	0.7	%
Expected volatility	85.2	%	71.2	%
Expected term (in years)	6.0		5.9
Expected dividend yield	—	%	—	%

Summary of PSU activity


		Weighted-
	Number of	Average Grant Date
	PSUs	Fair Value
Outstanding at December 31, 2021	299,500	$	6.32
Granted	10,000		8.98
Released	—		—
Cancelled	(30,000)		6.69
Outstanding at March 31, 2022	279,500	$	6.37

Summary of Non-cash stock-based compensation expense recorded



	Three Months Ended March 31,
	2022		2021
Research and development	$	387	$	364
General and administrative		720		107
Total	$	1,107	$	471

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash flows from operating activities
Net loss	$ (13,036)	$ (7,212)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	19	10
Amortization/accretion on short-term investments	1
Changes in the fair value of performance award	(387)
Stock-based compensation	1,107	471
Changes in operating assets and liabilities:
Non-cash lease expense	143
Accounts payable and accrued expenses	1,251	(927)
Prepaid expenses and other assets	2,011	(929)
Operating lease liabilities	(108)
Other current and long-term liabilities		(2)
Net cash used in operating activities	(8,999)	(8,589)
Cash flows from investing activities
Purchase of property and equipment	(44)	(25)
Purchase of available-for-sale short-term investments	(16,029)
Proceeds from maturities of available-for-sale short-term investments	21,500
Net cash provided by (used in) investing activities	5,427	(25)
Cash flows from financing activities
Proceeds from initial public offering, net of offering costs	6	187
Costs paid in connection with initial public offering		(1,223)
Net cash provided by financing activities	6	46,222
Net (decrease) increase in cash and cash equivalents	(3,566)	37,608
Cash and cash equivalents, beginning of period	124,660	53,613
Cash and cash equivalents, end of period	121,094	91,221
Supplemental cash flow information:
Right-of-use assets obtained in exchange for lease obligations	$ 1,524
Property and equipment in accounts payable		2
Unpaid Series B convertible preferred stock issuance costs		19
Accrued deferred initial public offering costs		361
Series B convertible preferred stock
Cash flows from financing activities
Proceeds from issuance of Series B convertible preferred stock, net of issuance costs		$ 47,258

Convertible Preferred Stock and Stockholders' Equity

3 Months Ended

Mar. 31, 2022

Convertible Preferred Stock and Stockholders' Deficit

Convertible Preferred Stock and Stockholders' Equity

7. Convertible Preferred Stock and Stockholders’ Equity

Series A Convertible Preferred Stock

As of March 31, 2022, there were no shares of Series A convertible preferred stock outstanding. In connection with the IPO (Note 1) in April 2021, all outstanding shares of Series A convertible preferred stock were converted into 5,430,957 shares of common stock.

Series B Convertible Preferred Stock

As of March 31, 2022, there were no shares of Series B convertible preferred stock outstanding. In March 2021, the Company completed milestone closing of it’s the Series B convertible preferred stock financing and sold a total of 23,440,514 shares of Series B convertible preferred stock, at $2.0215 per share for aggregate net proceeds of approximately $47.4 million.

In connection with the IPO in April 2021, all outstanding shares of Series B convertible preferred stock were converted into 10,476,672 shares of common stock.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI http://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (g)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-URI http://asc.fasb.org/topic&trid=2208762

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (h)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
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-Paragraph 14
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 16
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496180-112644

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (i)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644

Reference 15: 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(e)(1))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

License Agreement

3 Months Ended

Mar. 31, 2022

License Agreement

License Agreement

9. License Agreement

In December 2017, the Company entered into a License Agreement with vTv Therapeutics LLC (vTv Therapeutics) (the vTv License Agreement), under which the Company obtained an exclusive, worldwide, sublicensable license under certain vTv Therapeutics intellectual property to develop, manufacture and commercialize PPARδ agonists and products containing such PPARδ agonists, including REN001, for any therapeutic, prophylactic or diagnostic application in humans. To date, the Company has paid a $3.0 million upfront payment and a total of $2.0 million in milestone payments and issued an aggregate of 576,443 shares of our common stock to vTv Therapeutics.

Upon the achievement of certain pre-specified development and regulatory milestones, the Company is also required to pay vTv Therapeutics milestone payments totaling up to $64.5 million. The Company is also required to pay vTv Therapeutics up to $30.0 million in total sales-based milestones upon achievement of certain sales thresholds of the licensed product. In addition, the Company is obligated to make royalty payments to vTv Therapeutics at mid-single digit to low teen percentage royalty rates, based on tiers of annual net sales of licensed products, subject to certain customary reductions. There were no milestone payments achieved or recorded for the three months ended March 31, 2022 and 2021.

Fair Value Measurements

3 Months Ended

Mar. 31, 2022

Fair Value Measurements [Abstract]

Fair Value Measurements

4. Fair Value Measurements

ASC 820, Fair Value Measurement, establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing an asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances.

ASC 820 identifies fair value as the 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 a basis for considering market

participant assumptions in fair value measurements, ASC 820 establishes a three-tier fair value hierarchy that distinguishes between the following:

Level 1 – Observable inputs such as quoted prices in active markets for identical assets or liabilities.

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

Level 3 – Unobservable inputs in which there is little or no market data, which requires the Company to develop its own assumptions.

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. The Company’s financial assets are subject to fair value measurements on a recurring basis.

The Company categorized its money market funds as Level 1, using the quoted prices in active markets. Commercial paper is valued using Level 2 significant other observable inputs. The Company considers all highly liquid investments purchased with a remaining maturity of three months or less to be cash equivalents. The fair value of the Company’s investments in certain money market funds is their face value and such instruments are classified as Level 1 and are included in cash and cash equivalents on the consolidated balance sheets.

In November 2020, in connection with the CEO’s employment agreement he is entitled to receive a special performance award in the amount of $7.5 million (Performance Award), payable in cash, common stock or a combination of cash and common stock, at the election of the Company, based on achievement of certain conditions as described in more detail in Note 8. The Company estimated the fair value of the Performance Award using a Monte Carlo simulation, which incorporates the stock price at the date of the valuation and utilizes Level 3 inputs such as volatility, probabilities of success, and other inputs that are not observable in active markets. The Performance Award is required to be measured at fair value on a recurring basis each reporting period, with changes in the fair value recognized in general and administrative expense in the consolidated statements of operations and comprehensive loss over the derived service period of the award.

No assets or liabilities were transferred into or out of their classifications during the three months ended March 31, 2022.

The recurring fair value measurement of the Company’s assets and liabilities measured at fair value at March 31, 2022 consisted of the following (in thousands):


	Quoted Prices in				Significant
	Active Markets		Significant Other		Unobservable
	For Identical Items		Observable Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Assets
Cash and cash equivalents:
Money market investments	$	117,921	$	—	$	—	$	117,921
Short-term Investments:
Commercial paper		—		17,568		—		17,568
Total	$	117,921	$	17,568	$	—	$	135,489
Liabilities
Performance award	$	—	$	—	$	57	$	57
Total	$	—	$	—	$	57	$	57

The following table summarizes changes in fair value measurements of the Performance Award during the three months ended March 31, 2022 (in thousands):


Balance as of January 1, 2022	$	444
Change in fair value		(387)
Balance as of March 31, 2022	$	57

The recurring fair value measurement of the Company’s assets and liabilities measured at fair value at December 31, 2021 consisted of the following (in thousands):


	Quoted Prices in				Significant
	Active Markets		Significant Other		Unobservable
	For Identical Items		Observable Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Assets
Cash and cash equivalents:
Money market investments	$	118,535	$	—	$	—	$	118,535
Short-term Investments:
Commercial paper		—		23,010		—		23,010
Total	$	118,535	$	23,010	$	—	$	141,545
Liabilities
Performance award	$	—	$	—	$	444	$	444
Total	$	—	$	—	$	444	$	444

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Organization and Business (Narrative) (Details) $ / shares in Units, $ in Thousands			3 Months Ended
	Apr. 13, 2021 USD ($) $ / shares shares	Apr. 05, 2021	Mar. 31, 2022 USD ($)	Mar. 31, 2021 USD ($)	Dec. 31, 2021 USD ($)	Apr. 14, 2021 shares
Stock split reverse description		On April 5, 2021, the Company effected a 1-for-4.4748 reverse stock split of its common stock. The par value and the authorized number of shares of the common stock were not adjusted as a result of the reverse stock split. The reverse stock split resulted in an adjustment to the Series A and Series B convertible preferred stock conversion prices to reflect a proportional decrease in the number of shares of common stock to be issued upon conversion. The accompanying consolidated financial statements and notes to the consolidated financial statements give retroactive effect to the reverse stock split for all periods presented.
Stock split reverse conversion ratio		0.2235
Cash, cash equivalents at carrying value and short term investments				$ 138,700
Accumulated deficit			$ 97,764	97,800	$ 84,728
Net loss			13,036	7,212
Cash used for operating activities			$ 8,999	$ 8,589
IPO [Member]
Common stock issued, Shares \| shares	6,250,000
Share price \| $ / shares	$ 15.00
Proceeds from issuance initial public offering	$ 93,800
Initial public offering underwriting discounts and commissions	6,600
Initial public offering offering expenses	$ 2,600
Convertible preferred stock [Member]
Preferred stock, shares outstanding \| shares	71,183,500					0
Convertible preferred stock [Member] \| IPO [Member]
Shares issued from conversion of convertible stock \| shares	15,907,629

Net Loss Per Share (Tables)

3 Months Ended

Mar. 31, 2022

Net Loss Per Share [Abstract]

Schedule of Anti-dilutive securities not included in diluted net loss per share calculation


	As of March 31,
	2022	2021
Convertible preferred stock (as converted)	—	15,907,629
Common stock options outstanding	4,262,702	3,113,640
Unvested restricted stock units	279,500	—
Total	4,542,202	19,021,269

Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Accrued Expenses
Accrued clinical and regulatory	$ 2,049	$ 1,236
Accrued contract manufacturing cost	2,176	1,482
Accrued compensation	1,218	1,027
Accrued research and development-other	444	435
Total accrued expenses	$ 5,887	$ 4,180

Stock-Based Compensation - Employee Stock Purchase Plan (Details) - shares	3 Months Ended	7 Months Ended
	Mar. 31, 2022	Mar. 31, 2022	Sep. 30, 2021
Employee Stock Purchase Plan (ESPP) 2021
Stock-Based Compensation
Number of shares issued	8,624
UK Sharesave Sub-plan (SAYE)
Stock-Based Compensation
Options authorized			25,875
Number of shares issued		0

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2022

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The Company has prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in

the United States of America (GAAP) have been condensed or omitted, although the Company believes that the disclosures made are adequate to make the information not misleading. The Company recommends that the unaudited consolidated financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s latest Annual Report on Form 10-K.

In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair statement of the financial statements, have been included in the accompanying unaudited financial statements. Interim results are not necessarily indicative of results that may be expected for any other interim period or for an entire year.

The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries as of March 31, 2021; all intercompany transactions and balances have been eliminated.

Summary of Significant Accounting Policies

The significant accounting policies used in the preparation of these consolidated financial statements for the three months ended March 31,2022 are consistent with those discussed in Note 2 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, Leases (ASC 842) in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheets for those leases classified as operating leases under previous GAAP. ASU 2016-02 requires a lessee to recognize a liability for lease payments (lease liability) and a right-of-use (ROU)assets (representing its right to use the underlying asset for the lease term) on the balance sheet. In July 2018, the FASB issued ASU 2018-11, Leases (ASC 842): Targeted Improvements, which provides entities an optional transition method to apply the new guidance as of the adoption date, rather than as of the earliest period presented. In transition, entities may also elect a package of practical expedients that must be applied in its entirety to all leases commencing before the effective date, unless the lease was modified, to not reassess (a) whether a contract is or contains a lease, (b) lease classification or (c) determination of initial direct costs, which effectively allows entities to carryforward accounting conclusions under previous GAAP. The Company early adopted this standard on January 1, 2022, using the optional transitional method and elected the package of practical expedients in transition for leases that commenced prior to January 1, 2022.

As a result of implementing ASC 842, the Company recognized operating lease ROU assets of $1.5 million and lease liabilities of $1.7 million on January 1, 2022, with no impact on its beginning retained earnings, consolidated statements of operations and comprehensive loss, or cash flows. See Note 6, Leases, for further details.

In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes. The standard simplifies the accounting for income taxes, eliminates certain exceptions within Accounting Standards Codification (ASC) 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. The new guidance was effective for the Company as of January 1, 2022. Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company adopted this standard on January 1, 2022. Adoption of this standard had no material impact on the Company’s consolidated financial position, results of operations or cash flows.

Recent Accounting Pronouncements Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (ASC 326), Measurement of Credit Losses on Financial Instruments. The standard amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses for most financial assets and certain other instruments that aren’t measured at fair value through net income. For available-for-sale debt securities, entities will be required to recognize an allowance for credit losses rather than a reduction in the carrying value of the asset. Entities will no longer be permitted to consider the length of time that fair value has been less than amortized cost when evaluating when credit losses should be recognized. This new guidance is effective for the Company as of January 1, 2023. The Company is currently evaluating the impact of this ASU and does not expect that adoption of this standard will have a material impact on its consolidated financial statements and related disclosures.

Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Operating expenses:
Research and development	$ 9,278	$ 5,472
General and administrative	3,737	1,742
Total operating expenses	13,015	7,214
Loss from operations	(13,015)	(7,214)
Other income:
Other (loss) income	(21)	2
Net loss	(13,036)	(7,212)
Unrealized gain on short-term investments	30
Comprehensive loss	$ (13,006)	$ (7,212)
Net loss per share attributable to common stockholders, basic	$ (0.53)	$ (3.48)
Net loss per share attributable to common stockholders, diluted	$ (0.53)	$ (3.48)
Weighted-average shares used in computing net loss per share, basic	24,458,290	2,070,935
Weighted-average shares used in computing net loss per share, diluted	24,458,290	2,070,935

Accrued Expenses (Tables)

3 Months Ended

Mar. 31, 2022

Accrued Expenses

Schedule of Accrued expenses

Accrued expenses consisted of the following (in thousands):


	As of March 31, 2022		As of December 31, 2021
Accrued clinical and regulatory	$	2,049	$	1,236
Accrued contract manufacturing cost		2,176		1,482
Accrued compensation		1,218		1,027
Accrued research and development-other		444		435
Total accrued expenses	$	5,887	$	4,180

Convertible Preferred Stock and Stockholders' Equity (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended		3 Months Ended
	Apr. 30, 2021	Mar. 31, 2021	Mar. 31, 2021	Mar. 31, 2022	Apr. 14, 2021	Apr. 13, 2021
Convertible preferred stock [Member]
Temporary Equity [Line Items]
Preferred stock, shares outstanding					0	71,183,500
Series A convertible preferred stock
Temporary Equity [Line Items]
Shares issued from conversion of convertible stock	5,430,957
Preferred stock, shares outstanding				0
Series B convertible preferred stock
Temporary Equity [Line Items]
Issuance of convertible preferred stock net of issuance cost (in shares)		23,440,514	23,440,514
Temporary equity, share price		$ 2.0215	$ 2.0215
Shares issued from conversion of convertible stock	10,476,672
Proceeds from issuance of Series B convertible preferred stock, net of issuance costs			$ 47,258
Net Proceeds from temporary equity		$ 47,400
Preferred stock, shares outstanding				0

Stock-Based Compensation - Assumptions (Details)	3 Months Ended
Stock-Based Compensation - Assumptions (Details)	Mar. 31, 2022	Mar. 31, 2021
Weighted-average assumptions
Risk-free interest rate	1.80%	0.70%
Expected volatility	85.20%	71.20%
Expected term (in years)	6 years	5 years 10 months 24 days
Expected dividend yield	0.00%	0.00%

Stock-Based Compensation - Non-cash stock-based compensation expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Stock-Based Compensation
Stock-based compensation expense	$ 1,107	$ 471
Research and development
Stock-Based Compensation
Stock-based compensation expense	387	364
General and administrative
Stock-Based Compensation
Stock-based compensation expense	$ 720	$ 107

Stock-Based Compensation - Performance-Based Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Weighted Average Grant Date Fair Value
Stock-based compensation expense	$ 1,107	$ 471
Performance Based Restricted Stock Units R S U [Member] \| Equity Incentive Plan 2021
Number of PSUs
Outstanding at Beginning	299,500
Granted	10,000
Cancelled	(30,000)
Outstanding at End	279,500
Weighted Average Grant Date Fair Value
Outstanding at Beginning	$ 6.32
Granted	8.98
Cancelled	6.69
Outstanding at End	$ 6.37
Stock-based compensation expense	$ 0

Organization and Business

3 Months Ended

Mar. 31, 2022

Organization and Business

Organization and Business

1. Organization and Business

Organization

Reneo Pharmaceuticals, Inc. (Reneo or the Company) commenced operations on September 22, 2014 as a clinical-stage pharmaceutical company focused on the development of therapies for patients with rare genetic mitochondrial diseases. In December 2017, the Company in-licensed REN001, a novel oral peroxisome proliferator-activated receptor (PPAR) agonist.

Reverse Stock Split

On April 5, 2021, the Company effected a 1-for-4.4748 reverse stock split of its common stock. The par value and the authorized number of shares of the common stock were not adjusted as a result of the reverse stock split. The reverse stock split resulted in an adjustment to the Series A and Series B convertible preferred stock conversion prices to reflect a proportional decrease in the number of shares of common stock to be issued upon conversion. The accompanying consolidated financial statements and notes to the consolidated financial statements give retroactive effect to the reverse stock split for all periods presented.

Initial Public Offering

On April 13, 2021, the Company completed an initial public offering (IPO) of its common stock. In connection with its IPO, the Company issued and sold 6,250,000 shares of its common stock at a price to the public of $15.00 per share. The gross proceeds from the IPO were approximately $93.8 million before deducting underwriting discounts and commissions of $6.6 million and offering expenses of approximately $2.6 million payable by the Company.

At the closing of the IPO, 71,183,500 shares of outstanding convertible preferred stock were automatically converted into 15,907,629 shares of common stock. Following the IPO, there were no shares of preferred stock outstanding.

Liquidity

Since inception in 2014, the Company has incurred significant losses and negative cash flows from operations. As of March 31, 2022, the Company had cash, cash equivalents and short-term investments of $138.7 million and an accumulated deficit of $97.8 million. Due to the Company’s continuing research and development activities, the Company expects to continue to incur net losses into the foreseeable future and may never become profitable. As a result, the Company will need to raise capital through public or private equity or debt financings, government or other third-party funding, collaborations, strategic alliances and licensing arrangements or a combination of these.

Consolidated Statements Changes in Convertible Preferred Stock and Stockholders' Deficit - USD ($) $ in Thousands	Series A convertible preferred stock	Series B convertible preferred stock	Common Stock	Additional Paid-in Capital	Accumulated comprehensive income	Accumulated Deficit	Total
Beginning Balance at Dec. 31, 2020	$ 45,652	$ 47,068
Beginning Balance (in shares) at Dec. 31, 2020	24,302,472	23,440,514
Increase (Decrease) in Temporary Equity [Roll Forward]
Issuance of convertible preferred stock net of issuance cost		$ 47,356
Issuance of convertible preferred stock net of issuance cost (in shares)		23,440,514
Ending Balance at Mar. 31, 2021	$ 45,652	$ 94,424
Ending Balance (in shares) at Mar. 31, 2021	24,302,472	46,881,028
Beginning Balance at Dec. 31, 2020				$ 2,843		$ (44,958)	$ (42,115)
Beginning Balance (in shares) at Dec. 31, 2020			2,053,070
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock based compensation				471			471
Stock option exercise				139			139
Stock option exercise (in shares)			70,663
Net loss						(7,212)	(7,212)
Ending Balance at Mar. 31, 2021				3,453		(52,170)	$ (48,717)
Ending Balance (in shares) at Mar. 31, 2021			2,123,733
Ending Balance (in shares) at Mar. 31, 2022							0
Beginning Balance at Dec. 31, 2021			$ 3	231,902	$ 34	(84,728)	$ 147,211
Beginning Balance (in shares) at Dec. 31, 2021			24,455,390
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock based compensation				1,107			1,107
Stock option exercise				6			$ 6
Stock option exercise (in shares)			3,160				713
Net loss						(13,036)	$ (13,036)
Other comprehensive loss					30		30
Ending Balance at Mar. 31, 2022			$ 3	$ 233,015	$ 64	$ (97,764)	$ 135,318
Ending Balance (in shares) at Mar. 31, 2022			24,458,550

Stock-Based Compensation - Stock option activity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Options Outstanding
Outstanding at beginning of period (in shares)	4,215,643
Granted (in shares)	233,600
Exercised (in shares)	(713)
Forfeited/Expired (in shares)	(185,828)
Outstanding at end of period (in shares)	4,262,702	4,215,643
Vested (in shares)	1,490,020
Exercisable (in shares)	2,703,228
Weighted-Average Exercise Price
Outstanding at beginning of period (in dollars per share)	$ 5.49
Granted (in dollars per share)	6.80
Exercised (in dollars per share)	3.45
Forfeited/Expired (in dollars per share)	6.48
Outstanding at end of period (in dollars per share)	5.52	$ 5.49
Vested (in dollars per share)	4.20
Exercisable (in dollars per share)	$ 4.49
Weighted-Average Remaining Contractual Term / Aggregate Intrinsic Value
Weighted Average Remaining Contractual Term, Options Outstanding	8 years	8 years 6 months
Weighted Average Remaining Contractual Term, Vested	6 years 4 months 24 days
Weighted Average Remaining Contractual Term, Exercisable	7 years 2 months 12 days
Aggregate Intrinsic Value, Outstanding	$ 379
Aggregate Intrinsic Value, Vested	368
Aggregate Intrinsic Value, Exercisable	375
Unrecognized compensation expense	$ 10,400
Weighted-average vesting term	2 years 10 months 24 days

Fair Value Measurements - Schedule Changes in fair value measurements of the performance award (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	$ 444
Change in fair value	(387)
Ending Balance	$ 57

Fair Value Measurements - Recurring fair value measurement of the Company's assets and liabilities (Detail) - Fair Value, Recurring [Member] - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments		$ 141,545
Total	$ 135,489
Total	57	444
Quoted Prices in Active Markets For Identical Items (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments		118,535
Total	117,921
Significant Other Observable Inputs (Level 2)[Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments		23,010
Total	17,568
Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	57	444
Performance Award Liability [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	57	444
Performance Award Liability [Member] \| Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	57	444
Money market investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	117,921	118,535
Money market investments \| Quoted Prices in Active Markets For Identical Items (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	117,921	118,535
Commercial Paper [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	17,568	23,010
Commercial Paper [Member] \| Significant Other Observable Inputs (Level 2)[Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	$ 17,568	$ 23,010