SUMMIT THERAPEUTICS INC., 10-K filed on 3/17/2022
Annual Report
v3.22.0.1
Document and Entity Information - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Mar. 10, 2022
Jun. 30, 2021
Cover [Abstract]      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 31, 2021    
Current Fiscal Year End Date --12-31    
Document Transition Report false    
Entity File Number 001-36866    
Entity Registrant Name Summit Therapeutics Inc.    
Entity Incorporation, State or Country Code DE    
Entity Tax Identification Number 37-1979717    
Entity Address, Address Line One One Broadway, 14th Floor    
Entity Address, City or Town Cambridge,    
Entity Address, State or Province MA    
Entity Address, Postal Zip Code 02142    
City Area Code 617    
Local Phone Number 514-7149    
Title of 12(b) Security Common Stock, par value $0.01 per share    
Trading Symbol SMMT    
Security Exchange Name NASDAQ    
Entity Well-known Seasoned Issuer No    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Non-accelerated Filer    
Entity Small Business true    
Entity Emerging Growth Company false    
ICFR Auditor Attestation Flag false    
Entity Shell Company false    
Entity Public Float     $ 186.0
Entity Common Stock, Shares Outstanding   98,122,356  
Documents Incorporated by Reference Portions of the registrant’s definitive Proxy Statement to be filed with the Securities and Exchange Commission within 120 days after registrant’s fiscal year ended December 31, 2021 are incorporated by reference into Part III of this report.    
Amendment Flag false    
Entity Central Index Key 0001599298    
Document Fiscal Year Focus 2021    
Document Fiscal Period Focus FY    
v3.22.0.1
Audit Information
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Audit Information [Abstract]    
Auditor Firm ID 238 876
Auditor Name PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP
Auditor Location Boston, Massachusetts Reading, United Kingdom
v3.22.0.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Current assets:    
Cash $ 71,791 $ 66,417
Accounts receivable 1,464 331
Prepaid expenses 7,161 9,547
Other current assets 1,201 1,523
Research and development tax credit receivable 15,695 9,856
Total current assets 97,312 87,674
Non-current assets:    
Property and equipment, net 694 725
Right-of-use assets 2,790 554
Goodwill 2,009 2,030
Intangible assets, net 10,399 11,515
Other assets 170 0
Total assets 113,374 102,498
Current liabilities:    
Accounts payable 4,374 6,140
Accrued liabilities 7,197 3,278
Accrued compensation 4,125 983
Lease liabilities 1,091 390
Deferred revenue and other income 7,939 8,370
Other current liabilities 897 729
Total current liabilities 25,623 19,890
Non-current liabilities    
Lease liabilities, net of current portion 1,691 75
Deferred revenue and other income, net of current portion 0 569
Other non-current liabilities 2,776 2,511
Total liabilities 30,090 23,045
Commitments and contingencies (Note 19)
Stockholders' equity:    
Common stock, $0.01 par value: 250,000,000 shares authorized; 98,039,540 and 82,575,064 shares issued and outstanding at December 31, 2021 and 2020, respectively 980 826
Additional paid-in capital 384,049 293,367
Accumulated other comprehensive loss (2,197) (3,794)
Accumulated deficit (299,548) (210,946)
Total stockholders' equity 83,284 79,453
Total liabilities and stockholders' equity $ 113,374 $ 102,498
v3.22.0.1
Consolidated Balance Sheets (Parenthetical) - $ / shares
Dec. 31, 2021
Dec. 31, 2020
Statement of Financial Position [Abstract]    
Common stock par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized (in shares) 250,000,000 250,000,000
Common stock, shares issued (in shares) 98,039,540 82,575,064
Common stock, shares outstanding (in shares) 98,039,540 82,575,064
v3.22.0.1
Consolidated Statements of Operations and Comprehensive Loss - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Income Statement And Statement Of Comprehensive Income [Abstract]    
Revenue $ 1,809 $ 860
Operating expenses:    
Research and development 85,352 53,274
General and administrative 23,611 19,232
Impairment of intangible assets 0 859
Total operating expenses 108,963 73,365
Other operating income 20,968 19,312
Operating loss (86,186) (53,193)
Other (expense) income, net (2,416) 283
Loss before income tax (88,602) (52,910)
Income tax benefit 0 213
Net loss $ (88,602) $ (52,697)
Net loss per share:    
Basic (in dollars per share) $ (0.96) $ (0.76)
Diluted (in dollars per share) $ (0.96) $ (0.76)
Weighted average common shares outstanding:    
Basic (in shares) 92,239,306 69,524,148
Diluted (in shares) 92,239,306 69,524,148
Other comprehensive (loss) income:    
Foreign currency translation adjustments $ 1,597 $ 970
Comprehensive loss $ (87,005) $ (51,727)
v3.22.0.1
Consolidated Statements of Stockholders' Equity - USD ($)
$ in Thousands
Total
Common Stock
Additional Paid-In Capital
Accumulated Other Comprehensive Loss
Total Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2019   67,178,054      
Beginning balance at Dec. 31, 2019 $ 78,863 $ 672 $ 241,204 $ (4,764) $ (158,249)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Private placement/Rights offering of common stock, net of offering costs (in shares)   14,970,060      
Private placement/Rights offering of common stock, net of offering costs 49,952 $ 150 49,802    
Fractional shares issued from reverse stock split   3      
Issuance on common stock from exercise of share options (in shares)   426,947      
Issuance on common stock from exercise of share options 599 $ 4 595    
Stock-based compensation 1,766   1,766    
Foreign currency translation adjustment 970     970  
Net loss $ (52,697)       (52,697)
Ending balance (in shares) at Dec. 31, 2020 82,575,064 82,575,064      
Ending balance at Dec. 31, 2020 $ 79,453 $ 826 293,367 (3,794) (210,946)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Private placement/Rights offering of common stock, net of offering costs (in shares)   14,312,976      
Private placement/Rights offering of common stock, net of offering costs $ 74,841 $ 143 74,698    
Issuance on common stock from exercise of share options (in shares) 1,124,577 1,151,500      
Issuance on common stock from exercise of share options $ 3,088 $ 11 3,077    
Stock-based compensation 12,804   12,804    
Imputed interest expense on promissory note payable to a related party 103   103    
Foreign currency translation adjustment 1,597     1,597  
Net loss $ (88,602)       (88,602)
Ending balance (in shares) at Dec. 31, 2021 98,039,540 98,039,540      
Ending balance at Dec. 31, 2021 $ 83,284 $ 980 $ 384,049 $ (2,197) $ (299,548)
v3.22.0.1
Consolidated Statements of Stockholders' Equity (Deficit) (Parenthetical) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Statement of Stockholders' Equity [Abstract]    
Offering cots $ 159 $ 48
v3.22.0.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Cash flows used in operating activities:    
Net loss $ (88,602) $ (52,697)
Adjustments to reconcile net loss to net cash used in operating activities:    
Gain on remeasurement of liabilities 0 (480)
Gain on recognition of contingent consideration payable 0 (102)
Non-cash interest expense 196 255
Unrealized foreign exchange loss (gain) 326 (278)
Amortization of operating right-of-use assets 1,108 451
Depreciation 330 302
Amortization of intangible assets 1,017 1,250
Impairment of intangible assets 0 859
Stock-based compensation 12,804 1,766
Other adjustments 301 (56)
Changes in operating assets and liabilities:    
Accounts receivable (1,138) 212
Prepaid expenses 2,345 (447)
Other current and long-term assets 104 (24)
Research and development tax credit receivable (6,015) (4,381)
Deferred revenue and other income (813) 5,372
Accounts payable (1,711) 1,642
Accrued liabilities and accrued compensation 8,229 (1,296)
Operating lease liabilities (1,068) (459)
Net cash used in operating activities (72,587) (48,111)
Cash flows used in investing activities:    
Purchase of property and equipment (306) (421)
Net cash used in investing activities (306) (421)
Cash flows provided by financing activities:    
Proceeds from the issuance of common stock 75,000 50,000
Transaction costs from the issuance of common stock (118) (48)
Proceeds from related party promissory notes 110,000 0
Re-payment of related party promissory notes (110,000) 0
Payments of related party promissory notes issuance costs (54) 0
Proceeds from exercise of share options 3,088 599
Net cash provided by financing activities 77,916 50,551
Effect of exchange rates on cash 351 556
Increase in cash 5,374 2,575
Cash at beginning of period 66,417 63,842
Cash at end of period 71,791 66,417
Supplemental Disclosure of Cash Flow Information    
Cash paid for interest on related party promissory note 85 0
Cash paid (received) for income taxes 7 (70)
Transaction costs included in accrued expenses 41 0
Leased assets obtained in exchange for operating lease liabilities $ 3,389 $ 0
v3.22.0.1
Nature of Business and Operations and Recent Events
 12 Months Ended
Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Nature of Business and Operations and Recent Events Nature of Business and Operations and Recent Events
Nature of Business and Operations

The Company is a biopharmaceutical company focused on the discovery, development, and commercialization of patient-, physician-, caregiver- and societal-friendly medicinal therapies intended to improve quality of life, increase life expectancy, and resolve serious unmet needs. The Company's novel mechanism pipeline of product candidates is designed with the goal to become the patient-friendly, new-era standard-of-care medicines, and to work in harmony with the human microbiome. Currently, the Company's lead product candidate, ridinilazole, is a novel first-in-class drug that is engaged in a global Phase III clinical trial program. On December 20, 2021, the Company announced topline results for the Phase III Ri-CoDIFy study evaluating ridinilazole for treating patients suffering from Clostridioides difficile infection, also known as C. difficile infection, or CDI. The Company's second product candidate, SMT-738, was announced in May 2021 for combating multidrug resistant infections, specifically Carbapenem-resistant Enterobacteriaceae (“CRE”) infections. SMT-738 is the first of a novel class of precision antibiotics that has entered into preclinical development. The Company intends to expand its portfolio by developing further new mechanism, new era product offerings that are designed to work in harmony with the human gut microbiome in the therapeutic areas of oncology and infectious diseases.

On September 18, 2020, Summit Therapeutics Inc. ("Summit"), a Delaware corporation, became the successor issuer to Summit Therapeutics plc, a public limited company incorporated under the laws of England and Wales with the Registrar of Companies of England and Wales, United Kingdom ("U.K."), for certain purposes under both the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, or the Exchange Act. Such succession occurred pursuant to a statutory scheme of arrangement under U.K. law pursuant to which all Summit Therapeutics plc outstanding ordinary shares were exchanged on a five-for-one basis for newly issued shares of Summit common stock and Summit became the holding company of Summit Therapeutics plc (the predecessor registrant and former holding company) and its subsidiaries (which is referred to as the "Redomiciliation Transaction"). Concurrently, Summit Therapeutics plc was converted into a private limited company under the laws of England and Wales and renamed Summit Therapeutics Limited. In addition, the warrants and stock options to purchase shares of Summit Therapeutics plc were canceled and replacement warrants and stock options to purchase common stock in Summit Therapeutics Inc. were issued. The scheme of arrangement was accounted for as an exchange of equity interests among entities under common control. All assets and liabilities of Summit Therapeutics plc were assumed by Summit, resulting in the retention of the historical basis of accounting as if they had always been combined for accounting purposes and the historical consolidated financial statements of Summit Therapeutics plc became the historical consolidated financial statements of Summit Therapeutics Inc. All share and per share data for periods prior to the Redomiciliation Transaction in the financial statements were retroactively reflected to be presented as shares of the Company's common stock, par value $0.01 per share.

Recent Events

On May 12, 2021, the Company closed its rights offering, which was fully subscribed. The Company received aggregate gross proceeds from the rights offering of $75,000 from the sale of 14,312,976 shares of its common stock at a price per share of $5.24. Issuance costs associated with the rights offering were immaterial. In connection with the closing of the rights offering, a promissory note, dated April 20, 2021, was issued by the Company in favor of the Company's Chairman, Chief Executive Officer, and the beneficial owner of approximately 70% of its outstanding common stock prior to this rights offering, Robert W. Duggan, in the principal amount of $55,000, matured and became due and the Company repaid all principal and accrued interest thereunder using a portion of the proceeds from the rights offering.

On August 11, 2021, based on a thorough review of the design and enrollment status of its two ongoing blinded Phase III Ri-CoDIFy trials, the Company announced that it combined its two blinded pivotal Phase III clinical trials evaluating ridinilazole versus vancomycin into a single study and presented this decision to the United States ("U.S.") Food and Drug Administration (the "FDA") as such. During September 2021, the Company received feedback from the FDA that the FDA did not agree with the change to the primary endpoint that the Company proposed and subsequently implemented in its ongoing Phase III Ri-CoDIFy studies when combining the trials.
On December 20, 2021, the Company announced topline results for the Phase III Ri-CoDIFy study evaluating ridinilazole, for the treatment of and Sustained Clinical Response (“SCR”), as defined below, for patients suffering from C. difficile infection ("C. diff. infection" or "CDI"). The study showed that ridinilazole resulted in a numerically higher SCR rate than vancomycin, but did not meet the study’s primary endpoint for superiority. The pivotal Phase III clinical trial consisted of two Phase III clinical trials combined into a single study, designed to assess, as the primary endpoint, the superiority of ridinilazole compared to vancomycin in SCR, which is defined as clinical response of the treated episode of CDI and no recurrence of CDI through 30 days after the end of treatment. Additional endpoints included safety, tolerability, analyses of the gut microbiome and metabolome, in addition to quality of life and health economic outcome measures. We are in the process of evaluating the future path forward with respect to ridinilazole, including potential partnership opportunities.

On March 10, 2022, the Company’s Chief Executive Officer, Robert W. Duggan, entered into a Note Purchase Agreement (the “2022 Note”), pursuant to which he has loaned the Company $25,000 in exchange for the issuance by the Company of an unsecured promissory note in the amount of $25,000. The 2022 Note is to accrue interest at a rate per annum equal to the prime rate as reported in the Wall Street Journal, which is 3.25% as of the effective date. The 2022 Note becomes due upon the earlier of (i) the consummation of a registered public offering with net proceeds of no less than $25,000 or (ii) 18 months from the date of issuance of the 2022 Note.
v3.22.0.1
Basis of Presentation and Use of Estimates
 12 Months Ended
Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation and Use of Estimates Basis of Presentation and Use of Estimates
The consolidated financial statements include the accounts of Summit Therapeutics Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, accrued research and development expenses, stock-based compensation, intangible assets, goodwill, other long-lived assets and income taxes. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

The progression of the COVID-19 pandemic continues to evolve and its enduring impact on the Company's business remains uncertain. Management believes the estimates and assumptions underlying its financial statements are reasonable and supportable based on the information available as of December 31, 2021, however, the extent to which the COVID-19 pandemic impacts the Company's financial results beyond December 31, 2021 will depend on future developments that are highly uncertain and cannot be predicted at this time.
v3.22.0.1
Liquidity and Capital Resources
 12 Months Ended
Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Liquidity and Capital Resources Liquidity and Capital Resources
During the year ended December 31, 2021, the Company incurred a net loss of $88,602 and cash flows used in operating activities was $72,587. As of December 31, 2021, the Company had an accumulated deficit of $299,548, cash of $71,791, research and development tax credit receivable of $15,695 and accounts receivable of $1,464. The Company expects to continue to generate operating losses for the foreseeable future. Until the Company can generate substantial revenue and achieve profitability, the Company will need to raise additional capital to fund its ongoing operations and capital needs.
Based on the Company's current funding arrangements and financial resources as of December 31, 2021, and after considering proceeds received of $25,000 from the 2022 Note issued on March 10, 2022, the Company has the ability to fund its operating costs and working capital needs for more than twelve months from the date of issuance. In order to continue to fund the operations of the Company beyond this time period, management has developed plans, which primarily consist of raising additional capital through some combination of equity or debt financings, and/or potentially entering into new collaborations. There is no assurance, however, that additional financing will be available when needed or that management of the Company will be able to obtain financing on terms acceptable to the Company. If the Company is unable to obtain funding when required
in the future, the Company could be required to delay, reduce, or eliminate research and development programs, product portfolio expansion, or future commercialization efforts, which could adversely affect its business prospects.

The accompanying consolidated financial statements are prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of the business. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classifications of liabilities that might result from the outcome of this uncertainty.
v3.22.0.1
Summary of Significant Accounting Policies
 12 Months Ended
Dec. 31, 2021
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies Summary of Significant Accounting Policies
The significant accounting policies adopted by the Company in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Principles of Consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. The consolidated financial statements include the accounts of Summit Therapeutics Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Foreign Currency Translation

The financial statements of the Company’s subsidiaries with functional currencies other than the U.S. dollar are translated into U.S. dollars using period-end exchange rates for assets and liabilities, historical exchange rates for stockholders’ equity and weighted average exchange rates for operating results. Translation gains and losses are included in accumulated other comprehensive (loss) income in shareholders’ equity. Foreign currency transaction gains and losses are included in other (expense) income, net in the results of operations. The Company recorded realized and unrealized foreign currency transaction (losses) gains of $(2,135) and $54 for the years ended December 31, 2021 and 2020, respectively, which is included in other (expense) income in the statements of operations and comprehensive loss.

Revenue Recognition
The Company accounts for revenue using Accounting Standards Codification ("ASC") 606 ("ASC 606"). This standard applies to all contracts with customers, except for contracts that are within the scope of other standards.
The Company enters into out-licensing agreements within the scope of ASC 606 under which it licenses certain rights to its product candidates to third parties. Such agreements may include the transfer of intellectual property rights in the form of licenses, transfer of technological know-how, delivery of drug substances, research and development services, and participation on certain committees with the counterparty. Payments made by the customers may include one or more of the following: non-refundable, up-front license fees; development, regulatory, and commercial milestone payments; payments for manufacturing supply services the Company provides through its contract manufacturers; and royalties on net sales of licensed products if they are successfully approved and commercialized. Each of these payments may result in license, collaboration, or other revenue, except revenue from royalties on net sales of licensed products, which would be classified as royalty revenue.

In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under each of its out-licensing agreements, the following steps are performed: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv)
allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. Revenue is then recognized in respect of the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. As part of the accounting for these arrangements, the Company must use significant judgment to determine: (a) the performance obligations based on the determination under step (ii) above; (b) the transaction price under step (iii) above; and (c) the standalone selling price for each performance obligation identified in the contract for the allocation of transaction price in step (iv) above. The Company also uses judgment to determine whether milestone payments or other variable consideration, except for royalties and sales-based milestones, should be included in the transaction price, as described below. The transaction price is allocated to each performance obligation based on the relative standalone selling price of each performance obligation in the contract, and the Company recognizes revenue based on those amounts when, or as, the performance obligations under the contract are satisfied.

Exclusive Licenses
If the license to the Company’s intellectual property is determined to be distinct from the other promises or performance obligations identified in the arrangement, the Company recognizes revenue from nonrefundable, upfront fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. In assessing whether a promise or performance obligation is distinct from the other promises, the Company considers factors such as the research, development, manufacturing and commercialization capabilities of the collaboration partner and the availability of the associated expertise in the general marketplace. In addition, the Company considers whether the collaboration partner can benefit from a promise for its intended purpose without the receipt of the remaining promises, whether the value of the promise is dependent on the unsatisfied promises, whether there are other vendors that could provide the remaining promises, and whether it is separately identifiable from the remaining promises. For licenses that are combined with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of progress and related revenue recognition. The measure of progress, and the resulting periods over which revenue should be recognized, are subject to estimates by management and may change over the course of the research, development and licensing arrangement. Such a change could have a material impact on the amount of revenue the Company records in future periods. Under the Company’s existing license and collaboration agreements, the Company has concluded that the transfer of control to the customer occurs over the time period that the research and development services are to be provided by the Company, and this output method is, in management’s judgment, the best measure of progress towards satisfying the performance obligation.

Milestone Payments

At the inception of each arrangement that includes potential research, development or regulatory milestone payments, the Company evaluates whether the milestones are considered likely to be met and estimates the amount to be considered for inclusion in the transaction price using the most-likely-amount method. If it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur, the associated milestone payment value is included in the transaction price. For milestone payments due upon events that are not within the control of the Company or the licensee, such as regulatory approvals, the Company is not able to assert that it is likely that the regulatory approval will be granted and that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur until those approvals are received. In making this assessment, the Company evaluates factors such as the scientific, clinical, regulatory, commercial and other risks that must be overcome to achieve the particular milestone. There is considerable judgment involved in determining whether it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur. At the end of each subsequent reporting period, the Company reevaluates the probability of achievement of all milestones subject to constraint and, if necessary, adjusts its estimate of the overall transaction price of the arrangement. Any such adjustments are recorded on a cumulative catch-up basis, which would affect the amounts of revenue and earnings in the period of adjustment.

Royalties
For arrangements that include sales-based royalties, including milestone payments due upon first commercial sales or based on a level of sales, that are the result of a customer-vendor relationship and for which the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) the occurrence of the related sales or (ii) the date upon which the performance obligation to which some or all of the royalty has been allocated has been satisfied or partially satisfied. To date, the Company has not recognized any royalty revenue from any of its licensing arrangements.

Other Operating Income

The Company generates income from government contracts that reimburse the Company for certain allowable costs for funded projects. For contracts with government agencies where the funding arrangement is considered central to the Company’s ongoing operations, the Company classifies the recognized funding received as other operating income.
Income from government grants is recognized as the qualifying expenses related to the contracts are incurred, provided that there is reasonable assurance of recoverability. If the government agency approves the project proposed by the Company, the government agency funds the project upon receipt of the support for the costs incurred up to the contract limit. Income recognized upon incurring qualifying expenses in advance of billing is recorded as accrued income, a component of other current assets, in the consolidated balance sheet.
Grant income is not recognized as deductions of research and development costs because the Company acts as the principal in conducting the research and development activities and these contracts are central to its ongoing operations. The funds received through these means are held as deferred income in the consolidated balance sheets and are released to the consolidated statement of operations and comprehensive loss as the underlying expenditure is incurred and to the extent the conditions of the grant are met. The related costs incurred by the Company are included in research and development expense in the Company’s consolidated statements of operations and comprehensive loss.
The Company benefits from two U.K. research and development ("R&D") tax credit cash rebate regimes: Small and Medium Enterprise ("SME") Program and the Research and Development Expenditure Credit ("RDEC") Program. Each reporting period, management evaluates which tax relief programs the Company is expected to be eligible for and records as other operating income the portion of the expense that it expects to qualify under the programs, that it plans to submit a claim for, and it has reasonable assurance that the amount will ultimately be realized. Based on criteria established by HM Revenue and Customs (“HMRC”), management of the Company expects a proportion of expenditures being undertaken in relation to its pipeline research, clinical trials management and manufacturing development activities to be eligible for the research and development tax relief programs for the year ended December 31, 2021. Qualifying expenditures largely comprise of employment costs for research staff, consumables, a proportion of relevant, permitted sub-contract costs and certain internal overhead costs incurred as part of research projects for which the Company does not receive commercial or other funding income. Credits related to the SME and RDEC Programs are recorded as other operating income in the consolidated statements of operations and other comprehensive (loss)/income. Under both schemes, the Company receives cash rebate payments of up to 33.3% of eligible research and development expenditures and these payments are not dependent on the Company’s pre-tax net income levels. The Company has qualified under the more favorable SME regime for the year ended December 31, 2020 and expects to qualify under the SME regime for the year ending December 31, 2021.

Net Income Per Share

Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding for the period. Diluted net loss per share is computed by dividing the diluted net loss by the weighted-average number of common shares outstanding for the period, including potentially dilutive common shares. The dilutive effect of share options and warrants are determined under the treasury stock method using the average market price for the period. In addition, the assumed proceeds under the treasury stock method include the average unrecognized compensation expense of stock options and warrants that are in-the-money.

Business Combinations

Business combinations are accounted for under the acquisition method. Acquired assets and assumed liabilities are measured at their fair values at the acquisition date. The excess of the consideration transferred over the net fair value of assets acquired and liabilities assumed is recorded as goodwill. The accounting for an acquisition involves a considerable amount of judgement and estimation. Cost, income, market or a combination of approaches may be used to establish the fair value of consideration exchanged, assets acquired, and liabilities assumed, depending on the nature of those items. The valuation approach is
determined in accordance with generally accepted valuation methods. Key areas of estimation and judgment may include the selection of valuation approaches, cost of capital, market characteristics, cost structure, impacts of synergies, and estimates of terminal value, among other factors.

While the Company uses estimates and assumptions as part of the purchase price allocation process to estimate the value of assets acquired and liabilities assumed, estimates are inherently uncertain and subject to refinement. During the measurement period, which maybe up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill, to the extent that adjustments are identified to the preliminary purchase price allocation. Upon conclusion of the measurement period, or final determination of the value of the assets acquired and liabilities assumed, whichever comes first, any subsequent adjustments are recorded to results of operations. Results of operations related to business combinations are included prospectively beginning with the date of acquisition and transaction costs related to business combinations are recorded within general and administrative expenses.

Goodwill

Goodwill represents the excess of the consideration transferred over the fair value of net assets acquired. Goodwill is assigned to reporting units at the time of acquisition or when there is a change in the reporting structure and bases that allocation on which reporting units will benefit from the acquired assets and liabilities. Reporting units are defined as operating segments or one level below an operating segment, referred to as a component. The Company assesses goodwill for impairment on an annual basis or more frequently when events and circumstances occur indicating that the recorded goodwill may be impaired.

In performing the Company’s annual goodwill impairment test, the Company is permitted to first assess qualitative factors to determine whether it is more likely than not that the fair value of the Company’s reporting unit is less than its carrying amount, including goodwill. In performing the qualitative assessment, the Company considers certain events and circumstances specific to the reporting unit and to the entity as a whole, such as macroeconomic conditions, industry and market considerations, overall financial performance and cost factors when evaluating whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. The Company is also permitted to bypass the qualitative assessment and proceed directly to the quantitative test. If the Company chooses to undertake the qualitative assessment and concludes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the Company would then proceed to the quantitative impairment test. In the quantitative assessment, the Company compares the fair value of the reporting unit to its carrying amount, which includes goodwill. If the fair value exceeds the carrying value, no impairment loss exists. If the fair value is less than the carrying amount, a goodwill impairment loss is measured and recorded.

As of December 31, 2021, the Company performed its annual impairment assessment of goodwill by performing a qualitative analysis for its single identified reporting unit for goodwill and determined that it is more likely than not that the fair value of the reporting unit exceeded its carrying amount.

Intangible Assets

Intangible assets include patents, licenses, an option over non-financial assets and a research and development discovery platform ("Discuva Platform").

Patents, licenses, and the option over non-financial assets are initially recorded at fair value, assigned an estimated useful life, and amortized primarily on a straight-line basis over their estimated useful lives. The Company evaluates the recoverability of its intangible and long-lived assets whenever events and changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. If events and circumstances indicate that the carrying amount may not fully be recoverable, the Company will perform a qualitative assessment, and consider certain events and circumstances specific to the intangible asset and to the entity as a whole, such as macroeconomic conditions, industry and market considerations, overall financial performance and cost factors when evaluating whether it is more likely than not that the fair value of the intangible asset is less than its carrying amount. This periodic review may result in an adjustment of estimated depreciable lives or asset impairment. When indicators of impairment are present, the carrying values of the asset are evaluated in relation to their operating performance and future undiscounted cash flows of the underlying business. If the future undiscounted cash flows are less than their carrying value, impairment exists. The impairment is measured as the difference between the carrying value and the fair
value of the underlying asset. Fair values are based on estimates of market prices and assumptions concerning the amount and timing of estimated future cash flows and assumed discount rates, reflecting varying degrees of perceived risk.

Other intangible assets are amortized in equal installments over their estimated useful lives as follows:
Intangible AssetAmortization Period
Option over non-financial assetsOver the period of the relevant agreement
Amortization of intangible assets is included as part of the research and development expense line shown on the face of the consolidated statement of operations and comprehensive loss.


Property and Equipment
Property and equipment are stated at cost less accumulated depreciation. Cost comprises the purchase price plus any incidental costs of acquisition and commissioning.
Depreciation is calculated based on cost, less residual value, in equal annual installments over the estimated useful lives of the assets. The residual value, if not insignificant, is reassessed annually.
Leasehold improvementsOver the shorter of the asset's useful life or the remaining lease term
Laboratory equipment
2-10 years
Office and IT equipment
3-5 years
Depreciation is recognized as part of the general and administrative and research and development expense lines shown on the face of the consolidated statement of operations and comprehensive loss depending on the nature of the underlying assets.

Expenditures for repairs and maintenance are expensed as incurred. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in loss from operations.

Leases

The Company has operating leases for real estate. The Company does not have any finance leases. Under Accounting Standards Codification 842, a contract is or contains a lease when the lessee has the right to control the use of an identified asset. The Company determines if an arrangement is a lease at inception of the contract, which is the date on which the terms of the contract are agreed to and the agreement creates enforceable rights and obligations. The lease term used to calculate the lease liability include options to extend or terminate the lease when it is reasonably certain that the option will be exercised.
At the lease commencement date, the Company measures and recognizes a lease liability and a right-of-use asset in the financial statements. Lease liabilities are recognized based on the present value of the future lease payments over the lease term at commencement date. The right-of use asset is measured by taking the present value of future lease payments, plus any incremental direct costs incurred, less any lease incentives received. As most of the Company's leases do not provide an implicit rate, the Company uses an estimated incremental borrowing rate based on the lease term and the economic environment of the lease at the lease commencement date, which is then utilized to determine the present value of future lease payments. Lease expense for minimum lease payments are recognized on a straight-line basis over the lease term, with variable lease payments recognized in the periods in which they are incurred.
The Company has existing lease agreements with lease and non-lease components, has elected to account for the lease and non-lease components as a single lease component, and has allocated all of the contract consideration to the lease component only.

Leases with an initial lease term of 12 months or less are not recorded on the balance sheet. The Company recognizes lease expense for its short-term leases on a straight-line basis over the lease term.
Research and Development Costs
Research and development costs are expensed as incurred. Research and development expenses consist of costs incurred to discover, research and develop product candidates, including personnel expenses, stock-based compensation expense, allocated facility-related and depreciation expenses, third-party license fees and external costs of outside vendors engaged to conduct preclinical and clinical development activities and clinical trials as well as to manufacture clinical trial materials. Non - refundable prepayments for goods or services that will be used or rendered for future research and development activities are recorded as prepaid expenses. Such amounts are recognized as an expense as the goods are delivered or the related services are performed, or until it is no longer expected that the goods will be delivered, or the services rendered. Milestone and other payments made to third-parties with respect to in-process research and development, in accordance with the Company’s license, acquisition and other similar agreements are expensed when determined to be probable and estimable.

The Company has entered into various research and development contracts with other companies. These agreements are generally cancellable, and related payments are recorded as research and development expenses as incurred. The Company records accruals for estimated ongoing research and development costs or prepaid expenses where the payments made exceeds the estimated costs. When evaluating the adequacy of these balances, the Company analyzes progress of the studies, including the estimated costs to complete each study or activity, the estimation of the current stage of completion and the invoices received, as well as predetermined milestones which are not reflective of the current stage of development for prepaid expenses. Actual results could differ from the Company’s estimates. In all cases, the full cost of each study or activity is expensed by the time the final report or where applicable, product, has been received. The Company’s historical estimates have not been materially different from the actual costs.
Stock-Based Compensation
The Company measures and recognizes compensation expense for all stock option and restricted stock unit awards based on the estimated fair value of the award on the grant date. The Company uses the Black-Scholes option pricing model to estimate the fair value of stock option awards. The fair value is recognized as expense, over the requisite service period, which is generally the vesting period of the respective award, on a straight-line basis for each separately vesting portion of the award when the only condition to vesting is continued service. If vesting is subject to a market or performance condition, recognition is based on the derived service period of the award. Expense for awards with performance conditions is estimated and adjusted on a quarterly basis based upon the assessment of the probability that the performance condition will be met. Use of the Black-Scholes option-pricing model requires management to apply judgment under highly subjective assumptions. These assumptions include:
•Expected term—The expected term of stock options represents the weighted-average period the stock options are expected to be outstanding. The Company uses the simplified method for estimating the expected term as provided by the Securities and Exchange Commission. The simplified method calculates the expected term as the average of the time-to-vesting and the contractual life of the options.
•Expected volatility—The expected volatility was calculated based on historical volatility of the Company's share price.
•Risk-free interest rate—The risk-free rate assumption is based on the U.S. Treasury instruments, the terms of which were consistent with the expected term of the Company’s stock options.
•Expected dividend—The expected dividend assumption is based on the Company’s history and expectation of dividend payouts. The Company has not paid and does not intend to pay dividends.

The Company estimates expected forfeitures at the time of grant instead of accounting for forfeitures as they occur. Stock option and restricted stock unit awards have been granted at fair value to non-employees, in connection with research and consulting services provided to the Company, to non-employees in connection with corporate activities, and to employees, in connection with Stock Purchase and Restriction Agreements. Equity awards generally vest over terms of 3 or 4 years.
Income Taxes

The provision for income taxes is determined using the asset and liability approach. Tax laws may require items to be included in tax filings at different times than the items are reflected in the financial statements. A current asset or liability is recognized for the estimated taxes receivable or payable for the current year. Deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. Deferred taxes are initially recognized at enacted tax rates in force at the time of initial recognition and are subsequently adjusted for any enacted changes in tax rates and tax laws. Subsequent changes to deferred taxes originally recognized in equity are recognized in income. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. The Company has recorded a full valuation allowance against the deferred tax assets in excess of its deferred tax liabilities, as the deferred tax liability represents future reversals of existing taxable temporary differences. The Company records interest and penalties related to income tax matters as part of income tax expense.

Concentration of Credit Risk and of Significant Supplier

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of short-term cash deposits and accounts and other receivables. The Company's cash is comprised of short-term cash deposits at a variety of financial institutions with strong credit ratings in amounts that may exceed federally insured limits and has not experienced any losses on such accounts. Cash balances maintained during the year have been principally held with reputable U.K.-based and U.S.-based banks. The Company does not believe it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

The Company maintains deposits in accredited financial institutions in excess of federally insured limits. The Company deposits its cash in financial institutions that it believes have high credit quality and has not experienced any losses on such accounts and does not believe it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

The credit risk with respect to customers and funding bodies is limited as the Company has only a small number of these arrangements, including with Eurofarma, BARDA and CARB-X.

The Company relies, and expects to continue to rely, on a number of vendors to conduct its clinical trials and preclinical studies, manufacture drug product and supply clinical trial and preclinical study materials for its development programs. These programs could be adversely affected by a significant interruption in these services or the availability of materials.

Fair Value Measurements

In accordance with the provisions of fair value accounting, a fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability and defines fair value based on the exit price model.

The fair value measurement guidance establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The guidance describes three levels of inputs that may be used to measure fair value:

Level 1
Quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2
Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less
frequently than exchange-traded instruments or securities or derivative contracts that are valued using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data.

Level 3
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the Company categorizes such assets and liabilities based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset.

Assumed Contingent Liabilities

As part of the acquisition of Discuva Limited in December 2017, the Company assumed certain contingent liabilities as certain employees, former employees and former directors of Discuva Limited are eligible for payments from Discuva Limited based on specified development and clinical milestones related to proprietary product candidates developed under the Discuva Platform. The timing of these potential payments is uncertain. The fair value of the assumed contingent liability was estimated using the expected value of the payments. The assumed contingent liabilities are subsequently measured at amortized cost using discounted cash flow models which calculate the risk adjusted net present values of estimated potential future cash flows of the payments. The assumed contingent liabilities are remeasured when there is a specific significant event that provides evidence of a significant change in the probability of successful development and clinical milestones being achieved. The models will be updated for changes in the probability of successful development and clinical milestones being achieved and other associated assumptions with the discount factor remaining unchanged within the model. A discount factor of 13% has been used to discount the contingent liabilities back to net present value. This discount factor has been calculated using appropriate measures and rates which could have been obtained in the period that the contingent liabilities were assumed. Accretion of the discount factor is recognized as part of operating expenses in the consolidated statements of operations and comprehensive loss.

Warrants

Warrants issued by the Company are recognized and classified as equity when, upon exercise, the Company would issue a fixed amount of its own equity instruments (common stock) in exchange for a fixed amount of cash or another financial asset.

Consideration received, net of incremental costs directly attributable to the issue of such new warrants, is shown in equity. Such warrants are not remeasured at fair value in subsequent reporting periods.

Warrants issued in which external services are received as consideration for equity instruments of the company should be measured at the fair value of the goods or services received. Only if the fair value of the services cannot be measured reliably would the fair value of the equity instruments granted be used. The fair value for the warrants is calculated using the Black-Scholes formula and recorded in the consolidated statement of operations and comprehensive loss on a straight-line basis over the period of the consulting services. If the services are terminated prior to the end of the consultancy agreement, the warrants cease vesting and any unvested portion of the warrants will lapse immediately.
The warrants in issue are classified within stockholders’ equity as they are indexed to the Company's own shares of common stock and require settlement in its shares of common stocks with no provision for any cash settlement.
v3.22.0.1
Recently Issued or Adopted Accounting Pronouncements
 12 Months Ended
Dec. 31, 2021
Accounting Changes and Error Corrections [Abstract]  
Recently Issued or Adopted Accounting Pronouncements Recently Issued or Adopted Accounting Pronouncements In November 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2021-10, " Government Assistance (Topic 832)." This ASU increases the transparency of government assistance including the disclosure of (1) the types of assistance, (2) an entity's accounting for the assistance, and (3) the effect of the assistance on an
entity's financial statements as diversity currently exists in the recognition, measurement, presentation and disclosure of government assistance received by business entities because of the lack of specific authoritative guidance in U.S. GAAP. This ASU is effective for annual periods, and interim periods within those fiscal years, beginning after December 15, 2021. Early application of this ASU is permitted. The Company applied the amendments of this ASU to its disclosures during the fourth quarter of 2021 and the application of this ASU did not have a material impact on its financial position, results of operations or cash flows.

In October 2021, the FASB issued ASU No. 2021-08, "Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers." This ASU improves the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency relating to: 1) recognition of an acquired contract liability and 2) payment terms and their effect on subsequent revenue recognized by the acquirer. The amendments in this ASU require acquiring entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination, whereas current U.S. GAAP requires that the acquirer measure such assets and liabilities at fair value on the acquisition date. This ASU is effective for annual periods, and interim periods within those fiscal years, beginning after December 15, 2022. The Company will apply this ASU on a prospective basis for business combinations once this ASU is effective and at that time, will be able to determine the potential impact on its financial position, results of operations or cash flows.

In May 2021, the FASB issued AS No. 2021-04, "Earnings Per Share (Topic 260), Debt - Modifications and Extinguishments (Subtopic 470-50), Compensation - Stock Compensation (Topic 718), and Derivatives and Hedging Contracts in Entity's Own Equity (Subtopic 815-40) - Issuer's Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options." This ASU provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. This ASU is effective for annual periods, and interim periods within those fiscal years, beginning after December 15, 2021. The Company will apply this ASU on a prospective basis for any modifications or exchanges once this ASU is effective and at that time, will be able to determine the potential impact on its financial position, results of operations or cash flows.

In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740)." This ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application and simplify U.S. GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This ASU is effective for annual periods, and interim periods within those fiscal years, beginning after December 15, 2020. The Company adopted this ASU during the first quarter of 2021 and the adoption of this ASU did not have a material impact on its financial position, results of operations or cash flows.
v3.22.0.1
Segment Reporting
 12 Months Ended
Dec. 31, 2021
Segment Reporting [Abstract]  
Segment Reporting Segment Reporting The Company's chief operating decision makers (the "CODM function"), which are the Company's Chief Executive Officer and Chief Operating Officer, utilize consolidated financial information to make decisions about allocating resources and assessing performance for the entire Company. The CODM function approves of key operating and strategic decisions, including key decisions in clinical development and clinical operating activities, entering into significant contracts, such as revenue contracts and collaboration agreements and approves the Company's consolidated operating budget. The CODM function views the Company's operations and manages its business as a single reportable operating segment. The Company's single operating segment covers the Company’s research and development activities, primarily comprising the CDI program and antibiotic pipeline research activities. As the Company operates in one operating segment, all required financial segment information can be found in the consolidated financial statements.
The Company operates in two geographic regions: the U.K. and the U.S. The following table summarizes the Company's long-lived assets, which include the Company's property and equipment, net and right-of-use assets by geography:

Year Ended December 31, 2021Year Ended December 31, 2020
United Kingdom$2,762 $1,228 
United States722 51 
$3,484 $1,279 

For details of revenue from external customers by geography refer to Note 7.
v3.22.0.1
Revenue
 12 Months Ended
Dec. 31, 2021
Revenue from Contract with Customer [Abstract]  
Revenue Revenue
    
The following table summarizes revenue by category:
Year Ended December 31, 2021Year Ended December 31, 2020
Revenue by category:
Licensing agreements$1,809 $860 

Revenue recognized during the years ended December 31, 2021 and December 31, 2020 consists of amounts received from the Company's license and commercialization agreement with Eurofarma Laboratórios S.A.

The following table summarizes revenue by geography:
Year Ended December 31, 2021Year Ended December 31, 2020
Revenue by geography:
United States$— $— 
Latin America1,809 860 
$1,809 $860 

The analysis of revenue by geography has been identified on the basis of the geographical location of each collaboration partner.
The following table summarizes the deferred revenue relating to Eurofarma Laboratórios S.A. and deferred other income relating to BARDA (as defined in Note 8), respectively:

2021
Beginning deferred revenue and other income, January 1 (1)
$8,939 
Additions5,438
Amount of deferred revenue and other income recognized in the statement of operations(6,438)
Ending deferred revenue and other income, December 31 (2)
$7,939 
__________
(1) Beginning deferred revenue and other income included $8,370 of current deferred revenue and other income and $569 of long-term deferred revenue and other income.
(2) Ending deferred revenue and other income is classified within current liabilities.

Refer to Note 8 below for further details regarding other income recognized under the BARDA contract.

Eurofarma Laboratórios S.A.
On December 21, 2017, Summit announced it had entered into an exclusive license and commercialization agreement with Eurofarma Laboratórios S.A. ("Eurofarma"), pursuant to which the Company granted Eurofarma the exclusive right to commercialize ridinilazole in specified countries in South America, Central America and the Caribbean. The Company has retained commercialization rights in the rest of the world.

Under the terms of the license and commercialization agreement with Eurofarma, the Company received an upfront payment of $2,500 in December 2017. In February 2020, the Company reached the first enrollment milestone and earned $1,000. In September 2021, the Company reached the second enrollment milestone and earned $1,250. The terms of the contract have been assessed under ASC 606 and currently only the upfront payment and the first two enrollment milestone payments are included in the transaction price. These payments were initially reported as deferred revenue in the balance sheet and are being recognized as revenue ratably over the performance period.

Revenue recognized during the period ended December 31, 2021 was based on the transaction price that included the upfront payment and the first two enrollment milestones earned in accordance with the Company's revenue recognition policy. Revenue recognized during the period ended December 31, 2020 was based on the transaction price that included the upfront payment and the first enrollment milestone earned in accordance with the Company's revenue recognition policy. The revenue is being recognized ratably over the performance period to reflect the transfer of control to the customer occurring over the time period that the research and development services are provided by the Company. This output method is, in management’s judgment, the best measure of progress towards satisfying the performance obligation. As of December 31, 2021 and 2020, the current contract liability relating to the Eurofarma contract was $756 and $759, respectively, and was recorded in current deferred revenue in the consolidated balance sheet. As of December 31, 2021 and 2020, the non-current contract liability relating to the Eurofarma contract was $0 and $569, respectively, and was recorded in non-current deferred revenue and other income in the consolidated balance sheet.

In addition, the Company will be entitled to receive an additional $1,500 for various development milestones. The Company is also eligible to receive up to $21,400 in additional development, commercial and sales milestones when cumulative net sales equal or exceed $100,000 in the Eurofarma licensed territory. Each subsequent achievement of an additional $100,000 in cumulative net sales will result in the Company receiving additional milestone payments, which, when combined with anticipated product supply transfer payments from Eurofarma paid to the Company in connection with a commercial supply agreement to be entered into between the two parties, will provide payments estimated to range from a mid-teens to high-teens percentage of cumulative net sales in the territories where we have granted Eurofarma commercialization rights. Upon achievement of these milestones, the Company will recognize the revenues in accordance with the Company's revenue policy.
v3.22.0.1
Other Operating Income
 12 Months Ended
Dec. 31, 2021
Other Income and Expenses [Abstract]  
Other Operating Income Other Operating Income
The following table sets forth the components of other operating income by category:
Year Ended December 31, 2021Year Ended December 31, 2020
Other operating income by category:
Funding income from BARDA (as defined below)$4,604 $9,472 
Research and development tax credits15,206 9,363 
Grant income from CARB-X (as defined below)1,158 477 
$20,968 $19,312 

BARDA (as defined below)
In September 2017, the Company was awarded a funding contract from the Biomedical Advanced Research and Development Authority ("BARDA"), part of the Office of the Assistant Secretary for Preparedness and Response at the United States Department of Health and Human Services, in support of the Company's Ri-CoDIFy clinical trials and clinical development of of ridinilazole.

The awarded contract was originally worth up to $62,000. In June 2019 and again in January 2020, BARDA increased the value of the contract such that it is now worth up to $72,500 and brought the total amount of committed funding to $62,400. The remaining federal government funding is dependent on BARDA in its sole discretion exercising the final independent option work segment, upon the achievement by the Company of certain agreed-upon milestones for ridinilazole. As of December 31, 2021, an aggregate of $56,492 of the total committed BARDA funding had been received and the Company has recognized $50,265 of cumulative income since contract inception.

Research and development credits

Income from tax credits, consist of R&D tax credits received in the U.K. The Company benefits from two U.K. research and development tax credit cash rebate regimes: Small and Medium Enterprise Program ("SME, Program") and the Research and Development Expenditure Credit Program ("RDEC Program"). Qualifying expenditures largely comprise of employment costs for research staff, consumables, a proportion of relevant, permitted sub-contract costs and certain internal overhead costs incurred as part of research projects for which the Company does not receive income. Tax credits related to the SME Program and RDEC Program are recorded as other operating income in the consolidated statements of operations and other comprehensive loss. Under both schemes, the Company receives cash payments that are not dependent on the Company’s pre-tax net income levels.
Based on criteria established by Her Majesty’s Revenue and Customs ("HMRC"), a portion of expenditures being carried out in relation to the Company's pipeline research and development, clinical trials management and third-party manufacturing development activities are eligible for the SME regime and the Company expects such elements of expenditure will also continue to be eligible for the SME regime for future periods.
As of December 31, 2021 and 2020, the current research and development tax credit receivable was $15,695 and $9,856, respectively.
CARB-X (as defined below)
In May 2021, the Company announced the selection of a new preclinical candidate, SMT-738, from the DDS-04 series for development in the fight against multi-drug resistant infections, specifically Carbapenem-resistant Enterobacteriaceae ("CRE") infections. Simultaneously, the Company announced it had received an award from the Trustees of Boston University under the Combating Antibiotic Resistant Bacteria Biopharmaceutical Accelerator program ("CARB-X") to progress this candidate through preclinical development and Phase Ia clinical trials. The award commits initial funding of up to $4,100, with the possibility of up to another $3,700 based on the achievement of future milestones. As of December 31, 2021, $485 of grant funding from CARB-X has been received, $96 is in accounts receivable for amounts billed, $574 is in other current assets as a contract asset and the Company has recognized $1,155 of cumulative income since contract inception.

Grant income recognized during the year ended December 31, 2021 relates to SMT-738. Grant income recognized during the year ended December, 31, 2020 consists of income from a sub-award from CARB-X for the Company's antibiotic pipeline research and development activities specifically relating to the DDS-01 series of antibiotics, targeting Neisseria gonorrhoeae, or N. gonorrhoeae, using the Discuva Platform. In the fourth quarter of 2020, the Company decided not to advance the DDS-01 series and to cease work on the gonorrhoeae program, and as such, no further grant income has been received from CARB-X under this sub-award.
v3.22.0.1
Other (Expense) Income
 12 Months Ended
Dec. 31, 2021
Other Income and Expenses [Abstract]  
Other (Expense) Income Other (Expense) Income
The following table sets forth the components of other (expense) income:
Year Ended December 31, 2021Year Ended December 31, 2020
Foreign currency (loss) gain$(2,135)$54 
Remeasurement of liabilities (1)
— 480 
Interest income— 4 
Interest expense(281)(255)
$(2,416)$283 

_____________
(1) Remeasurement of liabilities during the year ended December 31, 2020, relates to a revaluation of assumed contingent liabilities for potential payments to certain employees, former employees and former directors of Discuva Limited, based on specified development and clinical milestones related to proprietary product candidates developed under the Discuva Platform (see Note 16 for further details).
v3.22.0.1
Income Tax
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Tax Income Tax 
The components of the Company's loss before income taxes are as follows:
Year Ended December 31, 2021Year Ended December 31, 2020
United Kingdom$(72,244)$(51,197)
United States(16,358)(1,713)
Loss before income taxes$(88,602)$(52,910)
Significant components of the provision for income taxes are as follows:

Year Ended December 31, 2021Year Ended December 31, 2020
Current income tax benefit:
Federal United States$— $(215)
State - United States— 2 
Non-United States— — 
Total— (213)
Federal - United States— — 
State - United States— — 
Non-United States— — 
Total deferred tax— — 
Total income tax benefit$— $(213)

Deferred taxes are recognized for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes.

The major components of deferred tax assets and liabilities are as follows:

December 31, 2021December 31, 2020
Deferred tax assets:
Net operating loss carryforward$49,422 $29,831 
Research and development credit carryforward941 — 
Stock based compensation2,560 1,167
Other1,477 491
Total deferred tax assets54,400 31,489
Deferred tax liabilities:
Intangible asset(2,600)(2,189)
Other(54)(71)
Total deferred tax liabilities(2,654)(2,260)
Net deferred tax assets before valuation allowance 51,74629,229
Valuation allowance(51,746)(29,229)
Deferred tax, net$— $— 

For the year ended December 31, 2021 and 2020, the Company recorded a deferred tax asset of $54.400 and $31,489 respectively. The Company has evaluated the positive and negative evidence bearing upon its ability to realize its deferred tax assets, which are comprised primarily of net operating loss carryforwards and excess tax benefits related to stock-based compensation. Management has considered the Company’s history of cumulative net losses in the United States ("U.S.") and the United Kingdom ("U.K."), estimated future taxable income, as well as prudent and feasible tax planning strategies, and has concluded that it is more likely than not that the Company will not realize the benefits of its U.S. federal and state deferred tax
assets and U.K. deferred tax assets. Accordingly, a full valuation allowance has been established against these net deferred tax assets as of December 31, 2021 and 2020, respectively. The Company reevaluates the positive and negative evidence at each reporting period. The Company’s valuation allowance increased during 2021 by $22,517 primarily due to the generation of net operating loss and stock-based compensation.

As of December 31, 2021 and 2020, the Company had U.S. Federal net operating loss carryforwards of approximately $1,034 and $232, respectively, which may be available to offset future income tax liabilities. The 2017 Tax Cuts and Jobs Act (“ TCJA”) will generally allow losses incurred after 2017 to be carried over indefinitely, but will generally limit the net operating loss deduction to the lesser of the net operating loss carryover or 80% of a corporation’s taxable income (subject to Section 382 of the Internal Revenue Code of 1986, as amended). In addition, the Company has approximately $165 in U.S. State loss carryforwards which expire through various dates through 2040 and as of December 31, 2021, the Company had an estimated U.S. federal research and development tax credit carryforwards of $941 which may be available to offset future tax liabilities, and each begin to expire in 2033. The Company also had approximately $191,714 in U.K. loss carryforwards available to use against future taxable profits on a year-by-year basis (a potential deferred tax asset of $47,929). To the extent that U.K. taxable profits exceed £5,000 in each year, the loss available to utilize against profits in excess of £5,000 will be restricted to 50%. The U.K. loss carryforwards do not lapse and therefore, the full amount will be relieved over time provided there are sufficient profits against which the losses can be utilized.

Utilization of the U.S. net operating loss carryforwards and research and development tax credit carryforwards may be subject to a substantial annual limitation under Section 382 of the Internal Revenue Code of 1986 due to ownership changes that have occurred previously or that could occur in the future. These ownership changes may limit the amount of carryforwards that can be utilized annually to offset future taxable income. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50% over a three-year period. The Company has not completed a study to assess whether a change of ownership has occurred, or whether there have been multiple ownership changes since its formation. Any limitation may result in the loss of a portion of the net operating loss carryforwards or research and development tax credit carryforwards before utilization.

U.K. tax losses are subject to additional restrictions where there is a change in ownership in the business and certain other conditions are met. An ownership change of a UK tax resident company would occur where (directly or indirectly) a single person acquires more than half of the ordinary share capital of a company, or two or more persons each acquire a holding of at least 5% of the ordinary share capital of a company and these holdings together amount to more than half the ordinary share capital of a company. Where a change in ownership has occurred, and within three years prior to that change in ownership and five years afterwards, there is a major change in the nature and conduct of trade of that company or the trade of that business becomes small or negligible, any losses carried forward will be extinguished from the point of the change in ownership. In addition, losses accrued subsequent to April 1, 2017 will be extinguished on a change of ownership when there is a major change in the nature or conduct of a company’s business, or where there is a major change in the scale of that business, or a company ceases to carry on a particular trade or business. The Company has not completed a study to assess whether a change of ownership has occurred since its formation, or whether there has been a major change in the Company's business that would restrict the U.K. tax losses. Any limitation may result in the loss of a portion of the net operating loss carryforwards before utilization.

The 2017 Tax Cuts and Jobs Act (“2017 Act”) created a requirement that US corporations include in income earnings of certain controlled foreign corporations (“CFC”) under the global intangible low taxed income (“GILTI”) regime. Pursuant to the FASB Staff Q&A, Topic 740 No.5. Accounting for Global Intangible Low-taxed Income, the Company is allowed to make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or to provide for the tax expense related to GILTI in the year the tax is incurred as period expense only. The Company has elected to account for GILTI in the year the tax is incurred and include the current tax impact of GILTI in the effective tax rate. Given the Company's loss position in the U.S. and the valuation allowance recorded against its U.S. net deferred tax assets, these provisions have not had a material impact on the Company's consolidated financial statements.

On March 27, 2020, the United States enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The Cares Act includes provisions relating to refundable payroll tax credits, deferment of the employer portion of certain payroll taxes, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction
limitations, and technical corrections to tax depreciation methods for qualified improvement property. The CARES Act also established a Paycheck Protection Program whereby certain small businesses are eligible for a loan to fund payroll expenses, rent, and related costs.

The Company considered the provisions under the CARES Act and elected not to take advantage of the provisions of the CARES Act as the effect of such provisions was not expected to have a material impact on the Company’s results of operations, cash flows, and consolidated financial statements.

During 2021, the U.K. Government announced that from April 1, 2023, the corporation tax rate would increase to 25%. This new law was enacted on June 10, 2021. The overall effect of the change was an increase in net deferred tax assets by $9,311 and an increase in valuation allowance by an equal amount.

A reconciliation of the Company's effective tax rate to the U.S. federal statutory rate is as follows:

Year Ended December 31, 2021Year Ended December 31, 2020
U.S. federal income tax statutory rate21.0 %21.0 %
Change in valuation allowance(10.5)%(12.1)%
Non-deductible expenses(0.4)%(3.9)%
Refundable research and development tax credit(8.3)%(7.0)%
Effect of foreign operations taxed at various rates0.5 %0.9 %
Stock-based compensation(1.6)%— %
Other(0.7)%1.4 %
— %0.30 %

In the U.K., the Company is entitled to a research and development tax relief for small and medium-sized enterprises which allows the Company an enhanced deduction rate of 230% on qualifying research and development expenditure (the tax relief). If the Company incurs tax losses, it is entitled to surrender the lesser of unrelieved tax loss sustained and the tax relief. As the realization of the tax relief does not depend on generation of future taxable income or the Company's ongoing tax status or tax position, the Company does not consider the tax relief as an element of income tax accounting under ASC 740. For the year ended December 31, 2021 and 2020, the Company recognized research and development tax relief of $15,206 and $9,363 respectively, which is included in other operating income in the consolidated statements of operations and other comprehensive loss.

It is the intention of the Company to reinvest the earnings of its non-U.S. subsidiaries in those operations and not to repatriate the earnings to the U.S. Accordingly, the Company does not provide for deferred taxes on differences between financial reporting and tax basis in its investments in foreign subsidiaries as they are considered permanent in duration or are not expected to reverse in the foreseeable future.

The Company does not have any uncertain tax positions as of December 31, 2021. In the U.K., tax returns for the year ended December 31, 2020 remains subject to examination by HMRC.

In the U.S., the Company files income tax returns in various states. In the U.S., tax years from 2018 remain subject to examination by the U.S. Internal Revenue Service and state tax authorities. The Company is not currently under examination by the Internal Revenue Service or any other jurisdiction for years 2018 through present. To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may be adjusted upon examination by the Internal Revenue Service or state tax authorities to the extent utilized in a future period. The Company’s policy is to recognize interest and penalties related to uncertain tax positions as part of its income tax provision. As of December 31, 2021, and 2020, the
Company has recorded no liability for unrecognized tax benefits, interest, or penalties related to federal, state or foreign income tax matters.
v3.22.0.1
Loss per Share
 12 Months Ended
Dec. 31, 2021
Earnings Per Share [Abstract]  
Loss per Share Loss per Share
The following table sets forth the computation of basic and diluted net loss per share:
Year Ended December 31, 2021Year Ended December 31, 2020
Net loss$(88,602)$(52,697)
Basic weighted average number of shares of common stock outstanding92,239,306 69,524,148 
Diluted weighted average number of shares of common stock outstanding92,239,306 69,524,148 
Basic net loss per share$(0.96)$(0.76)
Diluted net loss per share$(0.96)$(0.76)

Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding for the period. Diluted net loss per share is computed by dividing the diluted net loss by the weighted-average number of common shares outstanding for the period, including potentially dilutive common shares. The dilutive effect of share options and warrants are determined under the treasury stock method using the average market price for the period. In addition, the assumed proceeds under the treasury stock method include the average unrecognized compensation expense of stock options and warrants that are in-the-money. Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share for all periods, as the inclusion of all potential common share equivalents outstanding would have been anti-dilutive.

The following potentially dilutive securities were excluded from the computation of the diluted net loss per share of common stock for the periods presented because their effect would have been anti-dilutive:

20212020
Restricted stock units—26,923
Options to purchase common stock13,797,5563,672,968
Warrants5,821,1375,821,137
Shares expected to be purchased under employee stock purchase plan202,045—
19,820,7389,521,028
v3.22.0.1
Goodwill and Intangible Assets
 12 Months Ended
Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Goodwill and Intangible Assets
Goodwill

Goodwill is measured as the excess of the cost of the acquisition over the sum of the amounts assigned to tangible and identifiable intangible assets acquired less liabilities assumed. The Company assigns assets acquired (including goodwill) and liabilities assumed to one or more reporting units as of the date of acquisition. Typically acquisitions related to a single reporting unit do not require the allocation of goodwill to multiple reporting units. If the products obtained in an acquisition are assigned to multiple reporting units, the goodwill is distributed to the respective reporting units as part of the purchase price allocation process.
Goodwill and purchased intangible assets are reviewed for impairment annually during the fourth quarter of each fiscal year and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The process of evaluating the potential impairment of goodwill and intangible assets requires significant judgment. The Company regularly monitors current business conditions and other factors including, but not limited to, adverse industry or economic trends and lower projections of profitability that may impact future operating results.

The Company’s annual evaluation for impairment of goodwill consists of one reporting unit. In accordance with the Company’s policy, the Company completed its annual evaluation for impairment in the fourth quarter of 2021 using the qualitative assessment. No impairment charge was recognized for the year ended December 31, 2021 and there have been no cumulative goodwill impairment charges recognized to date.

As of December 31, 2021 and 2020, goodwill was $2,009 and $2,030, respectively and represents goodwill recognized from the acquisition of Discuva Limited in December of 2017. Changes year over year are the result of foreign currency movements.

Intangible Assets
Components of the Company's acquired intangible assets are comprised of the following:

December 31, 2021
GrossAccumulated amortization and impairment chargesNet
Utrophin program acquired$4,487 $(4,487)$— 
Discuva platform acquired14,416 (4,017)10,399 
Option over non-financial asset912 (912)— 
Other patents and licenses148 (148)— 
$19,963 $(9,564)$10,399 
December 31, 2020
GrossAccumulated amortization and impairment chargesNet
Utrophin program acquired$4,534 $(4,534)$— 
Discuva platform acquired14,565 (3,050)11,515 
Option over non-financial asset(1)
921 (921)— 
Other patents and licenses150 (150)— 
$20,170 $(8,655)$11,515 

(1)During the year ended December 31, 2020, management identified an impairment related to the option over non-financial asset pursuant to an Evaluation and Option Agreement with a collaboration partner. The partner is no longer conducting antibiotic candidate programs over which the Company had the option, management therefore determined that the fair value of the option to acquire the assignment of the proprietary rights for antibiotic candidates is $0. Accordingly, the asset was written off in its entirety resulting in an impairment charge of $859 recognized in operating expenses.

Amortization expense was $1,017 and $1,250 for the years ended December 31, 2021 and 2020, respectively. The weighted-average remaining life at December 31, 2021 for our Discuva platform intangible asset was approximately 10.4 years.
The estimated net amortization expense related to acquired intangible assets for future years is:

Amount
2022$999 
2023$999 
2024$999 
2025$999 
2026$999 
Thereafter$5,404 
v3.22.0.1
Property and Equipment
 12 Months Ended
Dec. 31, 2021
Property, Plant and Equipment [Abstract]  
Property and Equipment Property and Equipment
Property and equipment consisted of the following:
December 31, 2021December 31, 2020
Laboratory equipment$2,626 $759 
Furniture and fixtures, office equipment and software1,081 804 
Leasehold improvements364 291 
Property and equipment, gross4,071 1,854 
Less: accumulated depreciation3,377 1,129 
Property and equipment, net$694 $725 

Depreciation expense for the years ended December 31, 2021 and 2020 was $330 and $302, respectively.
v3.22.0.1
Research and Development Prepaid Expenses and Accrued Liabilities
 12 Months Ended
Dec. 31, 2021
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Research and Development Prepaid Expenses and Accrued Liabilities Research and Development Prepaid Expenses and Accrued Liabilities Included within prepaid expenses at December 31, 2021 and 2020 is $6,138 and $8,490, respectively, of prepayments relating to research and development expenditures. Included within accrued liabilities at December 31, 2021 and 2020 is $5,226 and $1,502, respectively, relating to research and development expenditures.These amounts are determined based on the estimated costs to complete each study or activity, the estimation of the current stage of completion and the invoices received, as well as predetermined milestones which are not reflective of the current stage of development for prepaid expenses. However, prepaid expenses decrease and accrued liabilities increase as the activities progress, and if actual costs incurred exceed the prepaid expense, an accrual will be recorded for the liability. The key sensitivity is the estimated current stage of completion of each study or activity, which is based on information received from the supplier and the Company's operational knowledge of the work completed under those contracts.
v3.22.0.1
Leases
 12 Months Ended
Dec. 31, 2021
Leases [Abstract]  
Leases Leases
The Company has operating leases for real estate. The Company does not have any finance leases.

During the year ended December 31, 2021, the Company recorded $3,389 of additional right-of-use assets of which $2,359 related to two new leases that commenced during the period for its Menlo Park, California, U.S. and Sawston, U.K. locations and $1,030 which related to one lease that was extended during the period for its Oxfordshire, U.K location.

The carrying value of the right-of-use assets as of December 31, 2021 and 2020 is $2,790 and $554, respectively.
The elements of lease expense were as follows:

Year Ended December 31, 2021Year Ended December 31, 2020
Lease Cost:
    Fixed lease costs$785 $478 
    Variable lease costs164171
    Short-term lease278272
Total lease cost$1,227 $921 

The weighted average discount rate and the weighted average remaining lease term were 2.5% and 3.9 years, respectively, as of December 31, 2021. The weighted average discount rate and the weighted average remaining lease term were 3.75% and 1.1 years, respectively, as of December 31, 2020.

Future lease payments under non-cancelable leases as of December 31, 2021 are detailed as follows:

Year Ending December 31,Amount
2022$1,037 
2023509 
2024508 
2025508 
2026386 
Total lease payments2,948 
Less: imputed interest166 
Total operating lease liabilities$2,782 
Total operating lease liabilities balance sheet presentation:
Current lease liabilities$1,091 
Non-current lease liabilities1,691 
$2,782 
Amounts presented above do not include payments related to the Company's Cambridge, Massachusetts, United States office where the lease term is month to month and therefore was not capitalized on the balance sheet.
v3.22.0.1
Other Non-Current Liabilities
 12 Months Ended
Dec. 31, 2021
Payables and Accruals [Abstract]  
Other Non-Current Liabilities Other Non-Current Liabilities
Included within other non-current liabilities at December 31, 2021 and 2020 is $2,531 and $2,263, respectively, relating to assumed contingent liabilities. As part of the acquisition of Discuva Limited in December 2017, the Company assumed certain contingent liabilities as certain employees, former employees and former directors of Discuva Limited are eligible for payments from Discuva Limited based on specified development and clinical milestones related to proprietary product candidates developed under the Discuva Platform. The timing of these potential payments is uncertain.

The contingent liability was remeasured in the third quarter of 2020 to reflect a change in the timing of expected payments following the Company's decision not to advance the DDS-01 series of antibiotics and to cease work on the gonorrhoeae program. The gain on the remeasurement of the liability recognized during the year ended December 31, 2020 of $480 is included within other (expense) income in the consolidated statements of operations and comprehensive loss. There were no remeasurement losses or gains recognized during the year ended December 31, 2021.
v3.22.0.1
Stockholders' Equity
 12 Months Ended
Dec. 31, 2021
Equity [Abstract]  
Stockholders' Equity Stockholders' Equity
Reverse Stock Split

In conjunction with the Company’s Redomiciliation Transaction in (as defined in Note 1), the Company acquired all of the outstanding ordinary shares of Summit Therapeutics plc on the basis of one share of the Company’s common stock for every 5 ordinary shares outstanding, which had the effect of a 1-for-5 reverse stock split. On the effective date of the Redomiciliation, the number of outstanding shares was reduced from 336,159,511 to 67,231,903. All share and per share amounts in these consolidated financial statements and related notes for periods prior to the Redomiciliation Transaction have been retroactively adjusted to reflect the effect of the exchange ratio.

Common Stock

On May 12, 2021, the Company closed its rights offering, which was fully subscribed and received aggregate gross proceeds of $75,000 from the sale of 14,312,976 shares of common stock to existing investors at a price per share of $5.24. Offering costs of $159 were incurred. In connection with the closing of the rights offering, the Second Note (see Note 20) matured and became due and the Company repaid all principal and accrued interest thereunder using a portion of the proceeds from the rights offering.

On November 6, 2020 the Company completed a private placement of its common stock and received gross proceeds of $50,000 from the issuance and sale of 14,970,060 shares of common stock to Mr. Robert W. Duggan and two other existing shareholders of the Company at a price of $3.34 per share. Offering costs of $48 were incurred.

On December 24, 2019, the Company completed a private placement of its common stock, and received aggregate gross proceeds of $50,000 from the issuance and sale of 35,075,690 shares of common stock to existing investors at a price of $1.43 per share. Offering costs of $912 were incurred.

Warrants

As part of the private placement on December 24, 2019, the participating investors were granted warrants with the right to subscribe for 5,261,350 shares of common stock at an exercise price of $1.58, exercisable any time in the period commencing on the date falling six months following December 24, 2019 and ending on the tenth anniversary of admission. Each warrant entitles the warrant holder to subscribe in cash for one share. Shares of common stock allotted pursuant to the exercise of the warrant will rank in full for all dividends and other distributions with a record date after the exercise date with the shares of common stock in issue at that date. The Company has the option to require the warrant holder to exercise some or all of the outstanding warrants after the third anniversary date if the ten-day volume weighted average price of the shares of common stock as reported on Nasdaq represents a premium of at least 50 percent to the exercise price. The warrants are classified within stockholders’ equity as they are indexed to the Company's shares of common stock and require settlement in its shares of common stock with no provision for any cash settlement.
Also, as part of the private placement on December 24, 2019, certain consultants were granted warrants with the right to subscribe for 3,358,732 shares of common stock in exchange for certain services. The warrants have an exercise price of $1.44 and vest quarterly over three years. If the consulting agreement terminated prior to three years after the date of the grant, all unvested warrants will be deemed cancelled. On June 30, 2020, the consulting agreement was terminated and 2,798,945 warrants cancelled immediately. The remaining 559,787 of outstanding warrants are held by Dr. Maky Zanganeh and Dr. Elaine Stracker (see Note 20).
Warrants granted over shares of common stock to consultants in exchange of certain services are similar to stock-based compensation (see Note 18). The Company had 5,821,137 total warrants outstanding as of December 31, 2021 and 2020, respectively, and an intrinsic value of $6,559 as of December 31, 2021 and $18,260 as of December 31, 2020.
DividendsThe Company has never declared or paid cash dividends on its shares of common stock or on Summit Therapeutics plc's ordinary shares. The Company currently intends to retain all of its future earnings to fund the development and expansion of its business.
v3.22.0.1
Stock-Based Compensation
 12 Months Ended
Dec. 31, 2021
Share-based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-Based Compensation
2016 Long Term Incentive Plan

In September 2020, in conjunction with the Redomiciliation, the 2016 Long Term Incentive Plan, (the "2016 Plan") and the Company's outstanding restricted stock units ("RSUs") were assumed and adopted by Summit Therapeutics Inc., and all awards were exchanged with replacement awards issued. Subsequent to the Redomiciliation, no additional grants will be made under the 2016 Plan and any outstanding awards under the 2016 Plan and RSUs will continue with their original terms. The Company concluded that the adoption of the 2016 Plan and RSUs and issuance of replacement awards was a modification but with no change in the material rights and preferences and therefore, no recorded change in the fair value of each respective award is needed.

2020 Stock Award Plan

In September 2020, the Company’s Board of Directors approved the 2020 Stock Incentive Plan (the “2020 Plan”), which became effective on September 21, 2020. The 2020 plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards. Upon the effectiveness of the 2020 Plan, the Company ceased granting awards under its 2016 Plan.

A total of 8,000,000 shares of common stock were initially reserved for issuance under the 2020 Plan. Additionally, up to 5,000,000 shares of common stock, including RSUs can be added to the 2020 Plan for future issuance from options that expire, lapse unexercised or are terminated from the 2016 Plan or any other predecessor plans. The number of shares of common stock that may be issued under the 2020 Plan will automatically increase on each January 1, beginning in 2021 and continuing for each fiscal year until, and including, the fiscal year ending December 31, 2030, equal to the lesser of (i) 6,400,000 shares of common stock, (ii) 4% of the common shares outstanding on the final day of the immediately preceding calendar year and (iii) an amount as determined by the Company’s Board of Directors. As of December 31, 2021, there are 2,293,700 shares available to be issued under the 2020 Plan.

2020 Employee Stock Purchase Plan

The 2020 Employee Stock Purchase Plan (the "2020 ESPP") was adopted by the Board of Directors and approved by the Company's shareholders on July 17, 2020 and approved by the predecessor company shareholders on August 19, 2020. The 2020 ESPP initially authorized the issuance of up to 1,000,000 shares of common stock to participating employees. The number of common shares that may be issued under the 2020 ESPP automatically increases on each fiscal year commencing January 1, 2021 and continuing for each fiscal year until, and including the fiscal year commencing on, January 1, 2030 equal to the least of (i) 1,600,000 shares of common stock, (ii) 1% of the common shares outstanding on such date and (iii) an amount as determined by the Company’s Board of Directors. As of December 31, 2021, there were 1,825,750 shares available to be issued under the 2020 ESPP.

The first offering period of the 2020 ESPP plan consists of seven months, commenced on August 2, 2021 and will terminate on February 28, 2022. Offering periods thereafter will be six months in duration and will commence immediately proceeding the end of the previous offering period, unless otherwise determined by the Board of Directors or Compensation Committee. The next offering period commenced on March 1, 2022. Under the 2020 ESPP, eligible employees can purchase shares of common stock through payroll deductions of up to 15% of their compensation received during the plan period or such shorter period during which deductions from payroll are made, up to a defined maximum amount. The option price is determined based on the lesser of the closing price of common stock on (i) the first business day of the plan period or (ii) the exercise date, or shall be based solely on the closing price of the common stock on the exercise date; provided that such option price shall be at least 85% of the applicable closing price. In the absence of a determination by the Board of Directors or the Compensation Committee, the
option price is 85% of the lesser of the closing price of the common stock on (i) the first business day of the plan period or (ii) the exercise date.

The closing price is the (a) the closing price (for the primary trading session) on the Nasdaq Global Select Market or (b) the average of the closing bid and asked prices in the over-the-counter-market, whichever is applicable, as published in the Wall Street Journal or another source selected by the Board or the Committee.

Stock Option Valuation

The Company estimates the fair value of stock options granted to employees and directors using the Black-Scholes valuation model. Stock options granted under the 2016 and 2020 Plans generally vest over three or four years and expire after ten years. This valuation methodology utilizes several key assumptions as highlighted below.

The assumptions used in the Company's valuation are summarized as follows, presented on a weighted average basis:

Year Ended December 31, 2021Year Ended December 31, 2020
Risk-free interest rate1.05 %0.29 %
Expected term (in years)5.75.9
Expected volatility74.5 %71.9 %
Expected annual dividends per share— %— %
The following table summarizes the Company's stock option activity for the year ended December 31, 2021:     
Number of share optionsWeighted average exercise priceWeighted average remaining contractual termAggregate intrinsic value
Outstanding as of December 31, 20203,672,968 $2.90 8.9 years$6,641 
     Granted13,262,016 $5.76 
     Forfeited(2,012,851)$3.61 
     Exercised(1,124,577)$2.74 
Outstanding as of December 31, 202113,797,556 $5.55 8.6 years$712 
Outstanding as of December 31, 2021 - vested and expected to vest12,685,817 $5.51 8.6 years$709 
Exercisable at December 31, 20211,598,709 $3.60 7.2 years$406 

The weighted-average grant-date fair value of stock options granted during the years ended December 31, 2021 and 2020 was $3.50 and $2.20, per share, respectively.

The aggregate intrinsic value of stock options exercised during the years ended December 31, 2021 and December 31, 2020 was $3,744 and $857, respectively. The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock.

As of December 31, 2021, total unrecognized compensation cost related to unvested stock option grants was approximately $27,905. This amount is expected to be recognized over a weighted average period of approximately 2.2 years.
In September 2021, the Compensation Committee of the Board of Directors approved a modification to the Company's outstanding performance-based stock option awards for active employees which removed the performance-based vesting criteria from these awards. Following this modification, the option awards are subject only to previously existing time-based vesting conditions. The Company accounted for this change as a modification in accordance with the requirements of Accounting Standards Codification Topic 718. As a result, 9,250,000 options, related to twenty-five employees, that were previously authorized that had not achieved a grant date became granted on September 24, 2021 relating to the modification. The Company will recognize the newly assessed measurement date fair value of the awards as compensation expense over the remaining vesting period. The incremental compensation expense related to the modification for the year ended December 31, 2021 was $4,872. The stock option activity above incorporates the modified awards.

Restricted Stock Units
The Company's outstanding restricted stock units ("RSUs") consist of nominal-cost options which were granted to non-executive directors. The following table summarizes the activity relating to RSUs for the year ended December 31, 2021:
Number of SharesWeighted Average Grant Date Fair Value
RSUs - beginning of period26,923 $1.60 
Vested(26,923)$1.60 
RSUs - end of period— $— 

The aggregate intrinsic value of restricted stock units vested during the years ended December 31, 2021 and December 31, 2020 was $125, respectively.

Warrants

The fair value of warrants is estimated on the date of grant using the Black-Scholes valuation methodology. Expected volatilities are based on historical share price performance, weighted to exclude periods of unusually high volatility. The Company assumed the warrants to be exercised immediately on vesting. The risk-free rate is equal to the prevailing U.K. Gilts rate at grant date that most closely matches the expected term of the grant, as the warrants were issued prior to the Redomiciliation. Expected dividend yield is zero, and consistent with the Board of Directors’ view that the Company’s business model is to generate value through capital growth rather than the payment of dividends.

Each warrant entitles the warrant holder to subscribe in cash for one share. Shares of common stock allotted pursuant to the exercise of the warrant will rank in full for all dividends and other distributions with a record date after the exercise date with the shares of common stock in issue at that date.
As of December 31, 2021, 5,821,137 warrants were granted, of which 559,787 warrants were granted to consultants and 5,261,350 warrants were granted to investors (refer to Note 20 for further details). All warrants are considered vested at December 31, 2021, have a weighted-average exercise price of $1.56, an aggregate intrinsic value of $6,559, and a weighted average remaining contractual life of 4.0 years.
At December 31, 2021, there was no unrecognized compensation expense related to warrants.
Stock-Based Compensation
Stock‑based compensation expense related to stock options is recorded within the consolidated statements of operations and comprehensive loss as follows:
Year Ended December 31, 2021Year Ended December 31, 2020
Research and development
$5,909 $749 
General and administrative
6,895 1,017 
Total stock-based compensation
$12,804 $1,766 
v3.22.0.1
Commitments and Contingencies
 12 Months Ended
Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
Fixed asset purchase commitments
At December 31, 2021 and 2020, the Company had no capital commitments.
Other commitments
The Company enters into contracts in the normal course of business with various third parties for clinical trials, preclinical research studies and testing, manufacturing and other services and products for operating purposes. Most contracts provide for termination upon notice, and therefore are cancellable contracts. As of December 31, 2021, total contractual commitments are estimated to be approximately $17,046 and the majority of these commitments are due within one year.
Indemnifications
The Company's certificate of incorporation provides that it will indemnify the directors and officers to the fullest extent permitted by Delaware law. In addition, the Company has entered into indemnification agreements with all of the directors and executive officers. These indemnification agreements may require the Company, among other things, to indemnify each such director or executive officer for some expenses, including attorneys’ fees, judgments, fines, and settlement amounts incurred by him or her in any action or proceeding arising out of his or her service as one of the Company's directors or executive officers. The Company believes the fair value for these indemnification obligations is minimal. Accordingly, the Company has not recognized any liabilities relating to these obligations as of December 31, 2021.
Legal Proceedings
The Company is not currently subject to any material legal proceedings.
v3.22.0.1
Related Party Transactions
 12 Months Ended
Dec. 31, 2021
Related Party Transactions [Abstract]  
Related Party Transactions Related Party Transactions
On December 6, 2019, the Company entered into a deed of termination of the relationship agreement with Mr. Robert W. Duggan and Cairn Financial Advisers LLP, a limited liability partnership incorporated in England and Wales with the Registrar of Companies of England and Wales, as the Company's nominated adviser. The relationship agreement regulated the Company’s relationship with Mr. Robert W. Duggan and limited Mr. Robert W. Duggan’s influence over the Company’s corporate actions and activities and the outcome of general matters pertaining to the Company. The deed of termination became effective on February 24, 2020, upon the cancellation of the admission of the ordinary shares on the Alternative Investment Market, a sub-market of the London Stock Exchanges.

December 24, 2019 Private Placement

On December 24, 2019, the Company completed a private placement of its common stock and received aggregate gross proceeds of $50,000 from the issuance and sale of 35,075,690 shares of common stock at a price of $1.43 per share, of which 33,231,410 shares of common stock were subscribed by Mr. Robert W. Duggan. Also, as part of the private placement,
participating investors were granted warrants with the right to subscribe for 5,261,350 shares of common stock at an exercise price of $1.58, of which 4,984,711 were granted to Mr. Robert W. Duggan at an exercise price of $1.43 per share for a subscription share plus a subscription warrant, pursuant to a securities purchase agreement he entered into with the Company.

In conjunction with the December 24, 2019 private placement, 90,495 shares of common stock were subscribed by Mr. Glyn Edwards, the Company's former Chief Executive Officer. Also as part of this private placement, Mr. Glyn Edwards was granted warrants with the right to subscribe for 13,574 shares of common stock at an exercise price of $1.43 per share for a subscription share plus a subscription warrant, pursuant to a securities purchase agreement he entered into with the Company.

November 6, 2020 Private Placement

On November 6, 2020 the Company completed a private placement of its common stock and received gross proceeds of $50,000 from the issuance and sale of 14,970,060 shares of common stock at a price of $3.34 per share, of which 14,071,856 shares of common stock were subscribed by Mr. Robert W. Duggan.

In conjunction with the November 6, 2020 private placement, 149,701 shares of common stock were subscribed by the Mahkam Zanganeh Revocable Trust. Dr. Maky Zanganeh was appointed to the Board of Directors on November 11, 2020 and became the Company's Chief Operations Officer on November 22, 2020. As trustee of the Mahkam Zanganeh Revocable Trust, Dr. Maky Zanganeh is deemed to beneficially own the securities of the Company held by the Mahkam Zanganeh Revocable Trust.

Consultancy Agreements

In 2020, the Company had in place a consultancy agreement with Dr. Maky Zanganeh and Associates, Inc. (“MZA”) to provide support for clinical operation activities related to the global Phase III clinical program. Dr. Maky Zanganeh is the sole owner of MZA, and Dr. Elaine Stracker, who served for a period during fiscal year 2020 as a director of the Company and as the Company’s Interim Chief Operations Officer, was at the time the General Counsel and Senior Vice President for Corporate Development at MZA. The fees for such services under the consultancy agreement with MZA were $75 per month. In addition to such monthly fee, MZA was granted warrants over 3,358,732 shares of common stock with an exercise price of $1.44 per share, vesting on a quarterly basis over three years from the date of grant, subject to MZA’s provision of consultancy services to the Company during such period. During the period of MZA's engagement, $470 of consultancy fees were incurred by the Company and a warrant expense of $512 was recognized. The consultancy agreement with MZA was terminated by mutual agreement on June 30, 2020. The warrants granted to MZA were subsequently assigned to Dr. Maky Zanganeh and Dr. Elaine Stracker. Dr. Maky Zanganeh and Dr. Elaine Stracker have vested warrants to purchase 489,815 and 69,972 shares of common stock, respectively, which can be exercised through June 30, 2025.

March 24, 2021 Note Purchase Agreement

On March 24, 2021, Mr. Robert W. Duggan, entered into a Note Purchase Agreement (the “Initial Purchase Agreement”) pursuant to which he has loaned the Company $55,000 in exchange for the issuance by the Company of an unsecured promissory note (the “Initial Note”) in the amount of $55,000. The Initial Note was to accrue interest at a rate per annum equal to 150% of the applicable 10 Year U.S. Treasury rate, as adjusted monthly. The rate is initially estimated to be approximately 2.4%. The terms of the Initial Note were that it would mature and become due upon the earlier of (i) the consummation of a registered public offering with net proceeds of no less than $55,000, or (ii) 13 months from the date of issuance of the Initial Note. On April 20, 2021, the Company determined, with Mr. Duggan’s agreement, to rescind both the Initial Purchase Agreement and the Initial Note issued thereunder, and repaid the principal amount of the Initial Note in full, without interest or penalty, as such for the year ended December 31, 2021, the Company recognized imputed interest of $103 within additional paid in capital. For the year ended December 31, 2021, debt issuance costs recognized related to the Initial Note were immaterial.
March 26, 2021 Sublease Agreement with Dr. Maky Zanganeh and Associates, Inc.

On March 26, 2021, the Company entered into a sublease with Dr. Maky Zanganeh and Associates, Inc. ("MZA") consisting of 4,500 square feet of office space at 2882 Sand Hill Road, Menlo Park, CA (the “Sublease”). Dr. Maky Zanganeh is the sole owner of MZA. The sublease runs until September 2022. The rent payable under the terms of the sublease is equivalent to the proportionate share of the rent payable by MZA to the third-party landlord, based on the square footage of office space sublet by the Company, and no mark-up has been applied. During the year ended December 31, 2021, payments of $556, were made pursuant to the sublease.

April 20, 2021 Note Purchase Agreement

On April 20, 2021, subsequent to the repayment of the Initial Note, Mr. Robert W. Duggan entered into a second Note Purchase Agreement (the “Second Purchase Agreement”) pursuant to which he loaned the Company $55,000 in exchange for the issuance by the Company of an unsecured promissory note (the “Second Note”) in the amount of $55,000. The Second Note accrued interest at a rate per annum equal to 150% of the applicable 10 Year US Treasury rate, as adjusted monthly (initially estimated to be approximately 2.4%). The Company was permitted to prepay any portion of the second note at its option without penalty.

May 12, 2021 Rights Offering

On May 12, 2021, the Company closed its rights offering, which was fully subscribed. Aggregate gross proceeds from the rights offering of $75,000 from the sale of 14,312,976 shares of the Company's common stock, of which 11,365,921 shares were purchased by Mr. Robert W. Duggan and 389,977 shares were purchased by Dr. Maky Zanganeh, at price of $5.24 per share. In connection with the closing of the rights offering, the Second Note, issued by the Company in favor of Mr. Robert W. Duggan, matured and became due and was repaid using a portion of the proceeds from the rights offering.
v3.22.0.1
Subsequent Event
 12 Months Ended
Dec. 31, 2021
Subsequent Events [Abstract]  
Subsequent Event Subsequent EventOn March 10, 2022, Mr. Robert W. Duggan, entered into a Note Purchase Agreement (the “2022 Note”), pursuant to which he has loaned the Company $25,000 in exchange for the issuance by the Company of an unsecured promissory note in the amount of $25,000. The 2022 Note is to accrue interest at a rate per annum equal to the prime rate as reported in the Wall Street Journal, which is 3.25% as of the effective date. The 2022 Note becomes due upon the earlier of (i) the consummation of a registered public offering with net proceeds of no less than $25,000 or (ii) 18 months from the date of issuance of the 2022 Note.
v3.22.0.1
Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2021
Accounting Policies [Abstract]  
Basis of Presentation The consolidated financial statements include the accounts of Summit Therapeutics Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission.
Use of Estimates The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, accrued research and development expenses, stock-based compensation, intangible assets, goodwill, other long-lived assets and income taxes. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Principles of Consolidation Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. The consolidated financial statements include the accounts of Summit Therapeutics Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Foreign Currency Translation
Foreign Currency Translation

The financial statements of the Company’s subsidiaries with functional currencies other than the U.S. dollar are translated into U.S. dollars using period-end exchange rates for assets and liabilities, historical exchange rates for stockholders’ equity and weighted average exchange rates for operating results. Translation gains and losses are included in accumulated other comprehensive (loss) income in shareholders’ equity. Foreign currency transaction gains and losses are included in other (expense) income, net in the results of operations. The Company recorded realized and unrealized foreign currency transaction (losses) gains of $(2,135) and $54 for the years ended December 31, 2021 and 2020, respectively, which is included in other (expense) income in the statements of operations and comprehensive loss.
Revenue Recognition
Revenue Recognition
The Company accounts for revenue using Accounting Standards Codification ("ASC") 606 ("ASC 606"). This standard applies to all contracts with customers, except for contracts that are within the scope of other standards.
The Company enters into out-licensing agreements within the scope of ASC 606 under which it licenses certain rights to its product candidates to third parties. Such agreements may include the transfer of intellectual property rights in the form of licenses, transfer of technological know-how, delivery of drug substances, research and development services, and participation on certain committees with the counterparty. Payments made by the customers may include one or more of the following: non-refundable, up-front license fees; development, regulatory, and commercial milestone payments; payments for manufacturing supply services the Company provides through its contract manufacturers; and royalties on net sales of licensed products if they are successfully approved and commercialized. Each of these payments may result in license, collaboration, or other revenue, except revenue from royalties on net sales of licensed products, which would be classified as royalty revenue.

In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under each of its out-licensing agreements, the following steps are performed: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv)
allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. Revenue is then recognized in respect of the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. As part of the accounting for these arrangements, the Company must use significant judgment to determine: (a) the performance obligations based on the determination under step (ii) above; (b) the transaction price under step (iii) above; and (c) the standalone selling price for each performance obligation identified in the contract for the allocation of transaction price in step (iv) above. The Company also uses judgment to determine whether milestone payments or other variable consideration, except for royalties and sales-based milestones, should be included in the transaction price, as described below. The transaction price is allocated to each performance obligation based on the relative standalone selling price of each performance obligation in the contract, and the Company recognizes revenue based on those amounts when, or as, the performance obligations under the contract are satisfied.

Exclusive Licenses
If the license to the Company’s intellectual property is determined to be distinct from the other promises or performance obligations identified in the arrangement, the Company recognizes revenue from nonrefundable, upfront fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. In assessing whether a promise or performance obligation is distinct from the other promises, the Company considers factors such as the research, development, manufacturing and commercialization capabilities of the collaboration partner and the availability of the associated expertise in the general marketplace. In addition, the Company considers whether the collaboration partner can benefit from a promise for its intended purpose without the receipt of the remaining promises, whether the value of the promise is dependent on the unsatisfied promises, whether there are other vendors that could provide the remaining promises, and whether it is separately identifiable from the remaining promises. For licenses that are combined with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of progress and related revenue recognition. The measure of progress, and the resulting periods over which revenue should be recognized, are subject to estimates by management and may change over the course of the research, development and licensing arrangement. Such a change could have a material impact on the amount of revenue the Company records in future periods. Under the Company’s existing license and collaboration agreements, the Company has concluded that the transfer of control to the customer occurs over the time period that the research and development services are to be provided by the Company, and this output method is, in management’s judgment, the best measure of progress towards satisfying the performance obligation.

Milestone Payments

At the inception of each arrangement that includes potential research, development or regulatory milestone payments, the Company evaluates whether the milestones are considered likely to be met and estimates the amount to be considered for inclusion in the transaction price using the most-likely-amount method. If it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur, the associated milestone payment value is included in the transaction price. For milestone payments due upon events that are not within the control of the Company or the licensee, such as regulatory approvals, the Company is not able to assert that it is likely that the regulatory approval will be granted and that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur until those approvals are received. In making this assessment, the Company evaluates factors such as the scientific, clinical, regulatory, commercial and other risks that must be overcome to achieve the particular milestone. There is considerable judgment involved in determining whether it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur. At the end of each subsequent reporting period, the Company reevaluates the probability of achievement of all milestones subject to constraint and, if necessary, adjusts its estimate of the overall transaction price of the arrangement. Any such adjustments are recorded on a cumulative catch-up basis, which would affect the amounts of revenue and earnings in the period of adjustment.

Royalties
For arrangements that include sales-based royalties, including milestone payments due upon first commercial sales or based on a level of sales, that are the result of a customer-vendor relationship and for which the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) the occurrence of the related sales or (ii) the date upon which the performance obligation to which some or all of the royalty has been allocated has been satisfied or partially satisfied. To date, the Company has not recognized any royalty revenue from any of its licensing arrangements.
Other Operating Income
Other Operating Income

The Company generates income from government contracts that reimburse the Company for certain allowable costs for funded projects. For contracts with government agencies where the funding arrangement is considered central to the Company’s ongoing operations, the Company classifies the recognized funding received as other operating income.
Income from government grants is recognized as the qualifying expenses related to the contracts are incurred, provided that there is reasonable assurance of recoverability. If the government agency approves the project proposed by the Company, the government agency funds the project upon receipt of the support for the costs incurred up to the contract limit. Income recognized upon incurring qualifying expenses in advance of billing is recorded as accrued income, a component of other current assets, in the consolidated balance sheet.
Grant income is not recognized as deductions of research and development costs because the Company acts as the principal in conducting the research and development activities and these contracts are central to its ongoing operations. The funds received through these means are held as deferred income in the consolidated balance sheets and are released to the consolidated statement of operations and comprehensive loss as the underlying expenditure is incurred and to the extent the conditions of the grant are met. The related costs incurred by the Company are included in research and development expense in the Company’s consolidated statements of operations and comprehensive loss.
The Company benefits from two U.K. research and development ("R&D") tax credit cash rebate regimes: Small and Medium Enterprise ("SME") Program and the Research and Development Expenditure Credit ("RDEC") Program. Each reporting period, management evaluates which tax relief programs the Company is expected to be eligible for and records as other operating income the portion of the expense that it expects to qualify under the programs, that it plans to submit a claim for, and it has reasonable assurance that the amount will ultimately be realized. Based on criteria established by HM Revenue and Customs (“HMRC”), management of the Company expects a proportion of expenditures being undertaken in relation to its pipeline research, clinical trials management and manufacturing development activities to be eligible for the research and development tax relief programs for the year ended December 31, 2021. Qualifying expenditures largely comprise of employment costs for research staff, consumables, a proportion of relevant, permitted sub-contract costs and certain internal overhead costs incurred as part of research projects for which the Company does not receive commercial or other funding income. Credits related to the SME and RDEC Programs are recorded as other operating income in the consolidated statements of operations and other comprehensive (loss)/income. Under both schemes, the Company receives cash rebate payments of up to 33.3% of eligible research and development expenditures and these payments are not dependent on the Company’s pre-tax net income levels. The Company has qualified under the more favorable SME regime for the year ended December 31, 2020 and expects to qualify under the SME regime for the year ending December 31, 2021.
Net Income Per Share
Net Income Per Share

Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding for the period. Diluted net loss per share is computed by dividing the diluted net loss by the weighted-average number of common shares outstanding for the period, including potentially dilutive common shares. The dilutive effect of share options and warrants are determined under the treasury stock method using the average market price for the period. In addition, the assumed proceeds under the treasury stock method include the average unrecognized compensation expense of stock options and warrants that are in-the-money.
Business Combinations
Business Combinations

Business combinations are accounted for under the acquisition method. Acquired assets and assumed liabilities are measured at their fair values at the acquisition date. The excess of the consideration transferred over the net fair value of assets acquired and liabilities assumed is recorded as goodwill. The accounting for an acquisition involves a considerable amount of judgement and estimation. Cost, income, market or a combination of approaches may be used to establish the fair value of consideration exchanged, assets acquired, and liabilities assumed, depending on the nature of those items. The valuation approach is
determined in accordance with generally accepted valuation methods. Key areas of estimation and judgment may include the selection of valuation approaches, cost of capital, market characteristics, cost structure, impacts of synergies, and estimates of terminal value, among other factors.While the Company uses estimates and assumptions as part of the purchase price allocation process to estimate the value of assets acquired and liabilities assumed, estimates are inherently uncertain and subject to refinement. During the measurement period, which maybe up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill, to the extent that adjustments are identified to the preliminary purchase price allocation. Upon conclusion of the measurement period, or final determination of the value of the assets acquired and liabilities assumed, whichever comes first, any subsequent adjustments are recorded to results of operations. Results of operations related to business combinations are included prospectively beginning with the date of acquisition and transaction costs related to business combinations are recorded within general and administrative expenses.
Goodwill
Goodwill

Goodwill represents the excess of the consideration transferred over the fair value of net assets acquired. Goodwill is assigned to reporting units at the time of acquisition or when there is a change in the reporting structure and bases that allocation on which reporting units will benefit from the acquired assets and liabilities. Reporting units are defined as operating segments or one level below an operating segment, referred to as a component. The Company assesses goodwill for impairment on an annual basis or more frequently when events and circumstances occur indicating that the recorded goodwill may be impaired.

In performing the Company’s annual goodwill impairment test, the Company is permitted to first assess qualitative factors to determine whether it is more likely than not that the fair value of the Company’s reporting unit is less than its carrying amount, including goodwill. In performing the qualitative assessment, the Company considers certain events and circumstances specific to the reporting unit and to the entity as a whole, such as macroeconomic conditions, industry and market considerations, overall financial performance and cost factors when evaluating whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. The Company is also permitted to bypass the qualitative assessment and proceed directly to the quantitative test. If the Company chooses to undertake the qualitative assessment and concludes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the Company would then proceed to the quantitative impairment test. In the quantitative assessment, the Company compares the fair value of the reporting unit to its carrying amount, which includes goodwill. If the fair value exceeds the carrying value, no impairment loss exists. If the fair value is less than the carrying amount, a goodwill impairment loss is measured and recorded.
Intangible Assets
Intangible Assets

Intangible assets include patents, licenses, an option over non-financial assets and a research and development discovery platform ("Discuva Platform").

Patents, licenses, and the option over non-financial assets are initially recorded at fair value, assigned an estimated useful life, and amortized primarily on a straight-line basis over their estimated useful lives. The Company evaluates the recoverability of its intangible and long-lived assets whenever events and changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. If events and circumstances indicate that the carrying amount may not fully be recoverable, the Company will perform a qualitative assessment, and consider certain events and circumstances specific to the intangible asset and to the entity as a whole, such as macroeconomic conditions, industry and market considerations, overall financial performance and cost factors when evaluating whether it is more likely than not that the fair value of the intangible asset is less than its carrying amount. This periodic review may result in an adjustment of estimated depreciable lives or asset impairment. When indicators of impairment are present, the carrying values of the asset are evaluated in relation to their operating performance and future undiscounted cash flows of the underlying business. If the future undiscounted cash flows are less than their carrying value, impairment exists. The impairment is measured as the difference between the carrying value and the fair
value of the underlying asset. Fair values are based on estimates of market prices and assumptions concerning the amount and timing of estimated future cash flows and assumed discount rates, reflecting varying degrees of perceived risk.

Other intangible assets are amortized in equal installments over their estimated useful lives as follows:
Intangible AssetAmortization Period
Option over non-financial assetsOver the period of the relevant agreement
Amortization of intangible assets is included as part of the research and development expense line shown on the face of the consolidated statement of operations and comprehensive loss.
Property and Equipment
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation. Cost comprises the purchase price plus any incidental costs of acquisition and commissioning.
Depreciation is calculated based on cost, less residual value, in equal annual installments over the estimated useful lives of the assets. The residual value, if not insignificant, is reassessed annually.
Leasehold improvementsOver the shorter of the asset's useful life or the remaining lease term
Laboratory equipment
2-10 years
Office and IT equipment
3-5 years
Depreciation is recognized as part of the general and administrative and research and development expense lines shown on the face of the consolidated statement of operations and comprehensive loss depending on the nature of the underlying assets.

Expenditures for repairs and maintenance are expensed as incurred. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in loss from operations.
Leases
Leases

The Company has operating leases for real estate. The Company does not have any finance leases. Under Accounting Standards Codification 842, a contract is or contains a lease when the lessee has the right to control the use of an identified asset. The Company determines if an arrangement is a lease at inception of the contract, which is the date on which the terms of the contract are agreed to and the agreement creates enforceable rights and obligations. The lease term used to calculate the lease liability include options to extend or terminate the lease when it is reasonably certain that the option will be exercised.
At the lease commencement date, the Company measures and recognizes a lease liability and a right-of-use asset in the financial statements. Lease liabilities are recognized based on the present value of the future lease payments over the lease term at commencement date. The right-of use asset is measured by taking the present value of future lease payments, plus any incremental direct costs incurred, less any lease incentives received. As most of the Company's leases do not provide an implicit rate, the Company uses an estimated incremental borrowing rate based on the lease term and the economic environment of the lease at the lease commencement date, which is then utilized to determine the present value of future lease payments. Lease expense for minimum lease payments are recognized on a straight-line basis over the lease term, with variable lease payments recognized in the periods in which they are incurred.
The Company has existing lease agreements with lease and non-lease components, has elected to account for the lease and non-lease components as a single lease component, and has allocated all of the contract consideration to the lease component only.

Leases with an initial lease term of 12 months or less are not recorded on the balance sheet. The Company recognizes lease expense for its short-term leases on a straight-line basis over the lease term.
Research and Development Costs
Research and Development Costs
Research and development costs are expensed as incurred. Research and development expenses consist of costs incurred to discover, research and develop product candidates, including personnel expenses, stock-based compensation expense, allocated facility-related and depreciation expenses, third-party license fees and external costs of outside vendors engaged to conduct preclinical and clinical development activities and clinical trials as well as to manufacture clinical trial materials. Non - refundable prepayments for goods or services that will be used or rendered for future research and development activities are recorded as prepaid expenses. Such amounts are recognized as an expense as the goods are delivered or the related services are performed, or until it is no longer expected that the goods will be delivered, or the services rendered. Milestone and other payments made to third-parties with respect to in-process research and development, in accordance with the Company’s license, acquisition and other similar agreements are expensed when determined to be probable and estimable.

The Company has entered into various research and development contracts with other companies. These agreements are generally cancellable, and related payments are recorded as research and development expenses as incurred. The Company records accruals for estimated ongoing research and development costs or prepaid expenses where the payments made exceeds the estimated costs. When evaluating the adequacy of these balances, the Company analyzes progress of the studies, including the estimated costs to complete each study or activity, the estimation of the current stage of completion and the invoices received, as well as predetermined milestones which are not reflective of the current stage of development for prepaid expenses. Actual results could differ from the Company’s estimates. In all cases, the full cost of each study or activity is expensed by the time the final report or where applicable, product, has been received. The Company’s historical estimates have not been materially different from the actual costs.
Stock-Based Compensation
Stock-Based Compensation
The Company measures and recognizes compensation expense for all stock option and restricted stock unit awards based on the estimated fair value of the award on the grant date. The Company uses the Black-Scholes option pricing model to estimate the fair value of stock option awards. The fair value is recognized as expense, over the requisite service period, which is generally the vesting period of the respective award, on a straight-line basis for each separately vesting portion of the award when the only condition to vesting is continued service. If vesting is subject to a market or performance condition, recognition is based on the derived service period of the award. Expense for awards with performance conditions is estimated and adjusted on a quarterly basis based upon the assessment of the probability that the performance condition will be met. Use of the Black-Scholes option-pricing model requires management to apply judgment under highly subjective assumptions. These assumptions include:
•Expected term—The expected term of stock options represents the weighted-average period the stock options are expected to be outstanding. The Company uses the simplified method for estimating the expected term as provided by the Securities and Exchange Commission. The simplified method calculates the expected term as the average of the time-to-vesting and the contractual life of the options.
•Expected volatility—The expected volatility was calculated based on historical volatility of the Company's share price.
•Risk-free interest rate—The risk-free rate assumption is based on the U.S. Treasury instruments, the terms of which were consistent with the expected term of the Company’s stock options.
•Expected dividend—The expected dividend assumption is based on the Company’s history and expectation of dividend payouts. The Company has not paid and does not intend to pay dividends.
The Company estimates expected forfeitures at the time of grant instead of accounting for forfeitures as they occur. Stock option and restricted stock unit awards have been granted at fair value to non-employees, in connection with research and consulting services provided to the Company, to non-employees in connection with corporate activities, and to employees, in connection with Stock Purchase and Restriction Agreements. Equity awards generally vest over terms of 3 or 4 years.
Income Taxes
Income Taxes

The provision for income taxes is determined using the asset and liability approach. Tax laws may require items to be included in tax filings at different times than the items are reflected in the financial statements. A current asset or liability is recognized for the estimated taxes receivable or payable for the current year. Deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. Deferred taxes are initially recognized at enacted tax rates in force at the time of initial recognition and are subsequently adjusted for any enacted changes in tax rates and tax laws. Subsequent changes to deferred taxes originally recognized in equity are recognized in income. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. The Company has recorded a full valuation allowance against the deferred tax assets in excess of its deferred tax liabilities, as the deferred tax liability represents future reversals of existing taxable temporary differences. The Company records interest and penalties related to income tax matters as part of income tax expense.
Concentration of Credit Risk and of Significant Supplier
Concentration of Credit Risk and of Significant Supplier

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of short-term cash deposits and accounts and other receivables. The Company's cash is comprised of short-term cash deposits at a variety of financial institutions with strong credit ratings in amounts that may exceed federally insured limits and has not experienced any losses on such accounts. Cash balances maintained during the year have been principally held with reputable U.K.-based and U.S.-based banks. The Company does not believe it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

The Company maintains deposits in accredited financial institutions in excess of federally insured limits. The Company deposits its cash in financial institutions that it believes have high credit quality and has not experienced any losses on such accounts and does not believe it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

The credit risk with respect to customers and funding bodies is limited as the Company has only a small number of these arrangements, including with Eurofarma, BARDA and CARB-X.

The Company relies, and expects to continue to rely, on a number of vendors to conduct its clinical trials and preclinical studies, manufacture drug product and supply clinical trial and preclinical study materials for its development programs. These programs could be adversely affected by a significant interruption in these services or the availability of materials.
Financial Value Measurements
Fair Value Measurements

In accordance with the provisions of fair value accounting, a fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability and defines fair value based on the exit price model.

The fair value measurement guidance establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The guidance describes three levels of inputs that may be used to measure fair value:

Level 1
Quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2
Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less
frequently than exchange-traded instruments or securities or derivative contracts that are valued using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data.

Level 3
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the Company categorizes such assets and liabilities based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset.
Assumed Contingent Liabilities
Assumed Contingent Liabilities

As part of the acquisition of Discuva Limited in December 2017, the Company assumed certain contingent liabilities as certain employees, former employees and former directors of Discuva Limited are eligible for payments from Discuva Limited based on specified development and clinical milestones related to proprietary product candidates developed under the Discuva Platform. The timing of these potential payments is uncertain. The fair value of the assumed contingent liability was estimated using the expected value of the payments. The assumed contingent liabilities are subsequently measured at amortized cost using discounted cash flow models which calculate the risk adjusted net present values of estimated potential future cash flows of the payments. The assumed contingent liabilities are remeasured when there is a specific significant event that provides evidence of a significant change in the probability of successful development and clinical milestones being achieved. The models will be updated for changes in the probability of successful development and clinical milestones being achieved and other associated assumptions with the discount factor remaining unchanged within the model. A discount factor of 13% has been used to discount the contingent liabilities back to net present value. This discount factor has been calculated using appropriate measures and rates which could have been obtained in the period that the contingent liabilities were assumed. Accretion of the discount factor is recognized as part of operating expenses in the consolidated statements of operations and comprehensive loss.
Warrants
Warrants

Warrants issued by the Company are recognized and classified as equity when, upon exercise, the Company would issue a fixed amount of its own equity instruments (common stock) in exchange for a fixed amount of cash or another financial asset.

Consideration received, net of incremental costs directly attributable to the issue of such new warrants, is shown in equity. Such warrants are not remeasured at fair value in subsequent reporting periods.

Warrants issued in which external services are received as consideration for equity instruments of the company should be measured at the fair value of the goods or services received. Only if the fair value of the services cannot be measured reliably would the fair value of the equity instruments granted be used. The fair value for the warrants is calculated using the Black-Scholes formula and recorded in the consolidated statement of operations and comprehensive loss on a straight-line basis over the period of the consulting services. If the services are terminated prior to the end of the consultancy agreement, the warrants cease vesting and any unvested portion of the warrants will lapse immediately.
The warrants in issue are classified within stockholders’ equity as they are indexed to the Company's own shares of common stock and require settlement in its shares of common stocks with no provision for any cash settlement.
Recently Issued or Adopted Accounting Pronouncements Recently Issued or Adopted Accounting Pronouncements In November 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2021-10, " Government Assistance (Topic 832)." This ASU increases the transparency of government assistance including the disclosure of (1) the types of assistance, (2) an entity's accounting for the assistance, and (3) the effect of the assistance on an
entity's financial statements as diversity currently exists in the recognition, measurement, presentation and disclosure of government assistance received by business entities because of the lack of specific authoritative guidance in U.S. GAAP. This ASU is effective for annual periods, and interim periods within those fiscal years, beginning after December 15, 2021. Early application of this ASU is permitted. The Company applied the amendments of this ASU to its disclosures during the fourth quarter of 2021 and the application of this ASU did not have a material impact on its financial position, results of operations or cash flows.

In October 2021, the FASB issued ASU No. 2021-08, "Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers." This ASU improves the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency relating to: 1) recognition of an acquired contract liability and 2) payment terms and their effect on subsequent revenue recognized by the acquirer. The amendments in this ASU require acquiring entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination, whereas current U.S. GAAP requires that the acquirer measure such assets and liabilities at fair value on the acquisition date. This ASU is effective for annual periods, and interim periods within those fiscal years, beginning after December 15, 2022. The Company will apply this ASU on a prospective basis for business combinations once this ASU is effective and at that time, will be able to determine the potential impact on its financial position, results of operations or cash flows.

In May 2021, the FASB issued AS No. 2021-04, "Earnings Per Share (Topic 260), Debt - Modifications and Extinguishments (Subtopic 470-50), Compensation - Stock Compensation (Topic 718), and Derivatives and Hedging Contracts in Entity's Own Equity (Subtopic 815-40) - Issuer's Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options." This ASU provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. This ASU is effective for annual periods, and interim periods within those fiscal years, beginning after December 15, 2021. The Company will apply this ASU on a prospective basis for any modifications or exchanges once this ASU is effective and at that time, will be able to determine the potential impact on its financial position, results of operations or cash flows.

In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740)." This ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application and simplify U.S. GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This ASU is effective for annual periods, and interim periods within those fiscal years, beginning after December 15, 2020. The Company adopted this ASU during the first quarter of 2021 and the adoption of this ASU did not have a material impact on its financial position, results of operations or cash flows.
v3.22.0.1
Summary of Significant Accounting Policies (Tables)
 12 Months Ended
Dec. 31, 2021
Accounting Policies [Abstract]  
Schedule of acquired intangible assets
Other intangible assets are amortized in equal installments over their estimated useful lives as follows:
Intangible AssetAmortization Period
Option over non-financial assetsOver the period of the relevant agreement
Components of the Company's acquired intangible assets are comprised of the following:

December 31, 2021
GrossAccumulated amortization and impairment chargesNet
Utrophin program acquired$4,487 $(4,487)$— 
Discuva platform acquired14,416 (4,017)10,399 
Option over non-financial asset912 (912)— 
Other patents and licenses148 (148)— 
$19,963 $(9,564)$10,399 
December 31, 2020
GrossAccumulated amortization and impairment chargesNet
Utrophin program acquired$4,534 $(4,534)$— 
Discuva platform acquired14,565 (3,050)11,515 
Option over non-financial asset(1)
921 (921)— 
Other patents and licenses150 (150)— 
$20,170 $(8,655)$11,515 

(1)During the year ended December 31, 2020, management identified an impairment related to the option over non-financial asset pursuant to an Evaluation and Option Agreement with a collaboration partner. The partner is no longer conducting antibiotic candidate programs over which the Company had the option, management therefore determined that the fair value of the option to acquire the assignment of the proprietary rights for antibiotic candidates is $0. Accordingly, the asset was written off in its entirety resulting in an impairment charge of $859 recognized in operating expenses.
Schedule of property and equipment useful lives
Depreciation is calculated based on cost, less residual value, in equal annual installments over the estimated useful lives of the assets. The residual value, if not insignificant, is reassessed annually.
Leasehold improvementsOver the shorter of the asset's useful life or the remaining lease term
Laboratory equipment
2-10 years
Office and IT equipment
3-5 years
Property and equipment consisted of the following:
December 31, 2021December 31, 2020
Laboratory equipment$2,626 $759 
Furniture and fixtures, office equipment and software1,081 804 
Leasehold improvements364 291 
Property and equipment, gross4,071 1,854 
Less: accumulated depreciation3,377 1,129 
Property and equipment, net$694 $725 
v3.22.0.1
Segment Reporting (Tables)
 12 Months Ended
Dec. 31, 2021
Segment Reporting [Abstract]  
Summary of long-lived assets by geography The following table summarizes the Company's long-lived assets, which include the Company's property and equipment, net and right-of-use assets by geography:
Year Ended December 31, 2021Year Ended December 31, 2020
United Kingdom$2,762 $1,228 
United States722 51 
$3,484 $1,279 
v3.22.0.1
Revenue (Tables)
 12 Months Ended
Dec. 31, 2021
Revenue from Contract with Customer [Abstract]  
Summary of revenue by category
The following table summarizes revenue by category:
Year Ended December 31, 2021Year Ended December 31, 2020
Revenue by category:
Licensing agreements$1,809 $860 
Summary of revenue by geography
The following table summarizes revenue by geography:
Year Ended December 31, 2021Year Ended December 31, 2020
Revenue by geography:
United States$— $— 
Latin America1,809 860 
$1,809 $860 
Summary of deferred revenue and other income
The following table summarizes the deferred revenue relating to Eurofarma Laboratórios S.A. and deferred other income relating to BARDA (as defined in Note 8), respectively:

2021
Beginning deferred revenue and other income, January 1 (1)
$8,939 
Additions5,438
Amount of deferred revenue and other income recognized in the statement of operations(6,438)
Ending deferred revenue and other income, December 31 (2)
$7,939 
__________
(1) Beginning deferred revenue and other income included $8,370 of current deferred revenue and other income and $569 of long-term deferred revenue and other income.
(2) Ending deferred revenue and other income is classified within current liabilities.
v3.22.0.1
Other Operating Income (Tables)
 12 Months Ended
Dec. 31, 2021
Other Income and Expenses [Abstract]  
Summary of other operating income by category
The following table sets forth the components of other operating income by category:
Year Ended December 31, 2021Year Ended December 31, 2020
Other operating income by category:
Funding income from BARDA (as defined below)$4,604 $9,472 
Research and development tax credits15,206 9,363 
Grant income from CARB-X (as defined below)1,158 477 
$20,968 $19,312 
v3.22.0.1
Other (Expense) Income (Tables)
 12 Months Ended
Dec. 31, 2021
Other Income and Expenses [Abstract]  
Schedule of other (expense) income
The following table sets forth the components of other (expense) income:
Year Ended December 31, 2021Year Ended December 31, 2020
Foreign currency (loss) gain$(2,135)$54 
Remeasurement of liabilities (1)
— 480 
Interest income— 4 
Interest expense(281)(255)
$(2,416)$283 

_____________
(1) Remeasurement of liabilities during the year ended December 31, 2020, relates to a revaluation of assumed contingent liabilities for potential payments to certain employees, former employees and former directors of Discuva Limited, based on specified development and clinical milestones related to proprietary product candidates developed under the Discuva Platform (see Note 16 for further details).
v3.22.0.1
Income Tax (Tables)
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Components of loss before income taxes
The components of the Company's loss before income taxes are as follows:
Year Ended December 31, 2021Year Ended December 31, 2020
United Kingdom$(72,244)$(51,197)
United States(16,358)(1,713)
Loss before income taxes$(88,602)$(52,910)
Significant components of the provision for income taxes
Significant components of the provision for income taxes are as follows:

Year Ended December 31, 2021Year Ended December 31, 2020
Current income tax benefit:
Federal United States$— $(215)
State - United States— 2 
Non-United States— — 
Total— (213)
Federal - United States— — 
State - United States— — 
Non-United States— — 
Total deferred tax— — 
Total income tax benefit$— $(213)
Major components of deferred tax assets and liabilities
The major components of deferred tax assets and liabilities are as follows:

December 31, 2021December 31, 2020
Deferred tax assets:
Net operating loss carryforward$49,422 $29,831 
Research and development credit carryforward941 — 
Stock based compensation2,560 1,167
Other1,477 491
Total deferred tax assets54,400 31,489
Deferred tax liabilities:
Intangible asset(2,600)(2,189)
Other(54)(71)
Total deferred tax liabilities(2,654)(2,260)
Net deferred tax assets before valuation allowance 51,74629,229
Valuation allowance(51,746)(29,229)
Deferred tax, net$— $— 
Reconciliation of the effective income tax rate to the statutory rate
A reconciliation of the Company's effective tax rate to the U.S. federal statutory rate is as follows:

Year Ended December 31, 2021Year Ended December 31, 2020
U.S. federal income tax statutory rate21.0 %21.0 %
Change in valuation allowance(10.5)%(12.1)%
Non-deductible expenses(0.4)%(3.9)%
Refundable research and development tax credit(8.3)%(7.0)%
Effect of foreign operations taxed at various rates0.5 %0.9 %
Stock-based compensation(1.6)%— %
Other(0.7)%1.4 %
— %0.30 %
v3.22.0.1
Loss per Share (Tables)
 12 Months Ended
Dec. 31, 2021
Earnings Per Share [Abstract]  
Schedule of net loss per share
The following table sets forth the computation of basic and diluted net loss per share:
Year Ended December 31, 2021Year Ended December 31, 2020
Net loss$(88,602)$(52,697)
Basic weighted average number of shares of common stock outstanding92,239,306 69,524,148 
Diluted weighted average number of shares of common stock outstanding92,239,306 69,524,148 
Basic net loss per share$(0.96)$(0.76)
Diluted net loss per share$(0.96)$(0.76)
Schedule of potentially dilutive securities excluded from the computation of loss per share
The following potentially dilutive securities were excluded from the computation of the diluted net loss per share of common stock for the periods presented because their effect would have been anti-dilutive:

20212020
Restricted stock units—26,923
Options to purchase common stock13,797,5563,672,968
Warrants5,821,1375,821,137
Shares expected to be purchased under employee stock purchase plan202,045—
19,820,7389,521,028
v3.22.0.1
Goodwill and Intangible Assets (Tables)
 12 Months Ended
Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of acquired intangible assets
Other intangible assets are amortized in equal installments over their estimated useful lives as follows:
Intangible AssetAmortization Period
Option over non-financial assetsOver the period of the relevant agreement
Components of the Company's acquired intangible assets are comprised of the following:

December 31, 2021
GrossAccumulated amortization and impairment chargesNet
Utrophin program acquired$4,487 $(4,487)$— 
Discuva platform acquired14,416 (4,017)10,399 
Option over non-financial asset912 (912)— 
Other patents and licenses148 (148)— 
$19,963 $(9,564)$10,399 
December 31, 2020
GrossAccumulated amortization and impairment chargesNet
Utrophin program acquired$4,534 $(4,534)$— 
Discuva platform acquired14,565 (3,050)11,515 
Option over non-financial asset(1)
921 (921)— 
Other patents and licenses150 (150)— 
$20,170 $(8,655)$11,515 

(1)During the year ended December 31, 2020, management identified an impairment related to the option over non-financial asset pursuant to an Evaluation and Option Agreement with a collaboration partner. The partner is no longer conducting antibiotic candidate programs over which the Company had the option, management therefore determined that the fair value of the option to acquire the assignment of the proprietary rights for antibiotic candidates is $0. Accordingly, the asset was written off in its entirety resulting in an impairment charge of $859 recognized in operating expenses.
Schedule estimated future amortization expense related to acquired intangible assets
The estimated net amortization expense related to acquired intangible assets for future years is:

Amount
2022$999 
2023$999 
2024$999 
2025$999 
2026$999 
Thereafter$5,404 
v3.22.0.1
Property and Equipment (Tables)
 12 Months Ended
Dec. 31, 2021
Property, Plant and Equipment [Abstract]  
Schedule of property and equipment
Depreciation is calculated based on cost, less residual value, in equal annual installments over the estimated useful lives of the assets. The residual value, if not insignificant, is reassessed annually.
Leasehold improvementsOver the shorter of the asset's useful life or the remaining lease term
Laboratory equipment
2-10 years
Office and IT equipment
3-5 years
Property and equipment consisted of the following:
December 31, 2021December 31, 2020
Laboratory equipment$2,626 $759 
Furniture and fixtures, office equipment and software1,081 804 
Leasehold improvements364 291 
Property and equipment, gross4,071 1,854 
Less: accumulated depreciation3,377 1,129 
Property and equipment, net$694 $725 
v3.22.0.1
Leases (Tables)
 12 Months Ended
Dec. 31, 2021
Leases [Abstract]  
Schedule of lease expense
The elements of lease expense were as follows:

Year Ended December 31, 2021Year Ended December 31, 2020
Lease Cost:
    Fixed lease costs$785 $478 
    Variable lease costs164171
    Short-term lease278272
Total lease cost$1,227 $921 
Schedule of future lease payments
Future lease payments under non-cancelable leases as of December 31, 2021 are detailed as follows:

Year Ending December 31,Amount
2022$1,037 
2023509 
2024508 
2025508 
2026386 
Total lease payments2,948 
Less: imputed interest166 
Total operating lease liabilities$2,782 
Total operating lease liabilities balance sheet presentation:
Current lease liabilities$1,091 
Non-current lease liabilities1,691 
$2,782 
v3.22.0.1
Stock Based Compensation (Tables)
 12 Months Ended
Dec. 31, 2021
Share-based Payment Arrangement [Abstract]  
Schedule of weighted-average assumptions used for stock option awards
The assumptions used in the Company's valuation are summarized as follows, presented on a weighted average basis:

Year Ended December 31, 2021Year Ended December 31, 2020
Risk-free interest rate1.05 %0.29 %
Expected term (in years)5.75.9
Expected volatility74.5 %71.9 %
Expected annual dividends per share— %— %
Schedule of stock option activity
The following table summarizes the Company's stock option activity for the year ended December 31, 2021:     
Number of share optionsWeighted average exercise priceWeighted average remaining contractual termAggregate intrinsic value
Outstanding as of December 31, 20203,672,968 $2.90 8.9 years$6,641 
     Granted13,262,016 $5.76 
     Forfeited(2,012,851)$3.61 
     Exercised(1,124,577)$2.74 
Outstanding as of December 31, 202113,797,556 $5.55 8.6 years$712 
Outstanding as of December 31, 2021 - vested and expected to vest12,685,817 $5.51 8.6 years$709 
Exercisable at December 31, 20211,598,709 $3.60 7.2 years$406 
Schedule of RSU activity The following table summarizes the activity relating to RSUs for the year ended December 31, 2021:
Number of SharesWeighted Average Grant Date Fair Value
RSUs - beginning of period26,923 $1.60 
Vested(26,923)$1.60 
RSUs - end of period— $— 
Schedule of stock-based compensation expense
Stock‑based compensation expense related to stock options is recorded within the consolidated statements of operations and comprehensive loss as follows:
Year Ended December 31, 2021Year Ended December 31, 2020
Research and development
$5,909 $749 
General and administrative
6,895 1,017 
Total stock-based compensation
$12,804 $1,766 
v3.22.0.1
Nature of Business and Operations and Recent Events (Details)
$ / shares in Units, $ in Thousands
 12 Months Ended
Mar. 10, 2022
USD ($)
May 12, 2021
USD ($)
$ / shares
shares
Apr. 20, 2021
USD ($)
Sep. 18, 2020
Dec. 31, 2021
USD ($)
$ / shares
Dec. 31, 2020
USD ($)
$ / shares
May 11, 2021
Subsidiary, Sale of Stock [Line Items]              
Reverse stock split ratio       0.2      
Common stock par value (in dollars per share) | $ / shares         $ 0.01 $ 0.01  
Proceeds from related party promissory notes         $ 110,000 $ 0  
Chief Executive Officer              
Subsidiary, Sale of Stock [Line Items]              
Beneficial ownership percentage             70.00%
Second Purchase Agreement | Chief Executive Officer              
Subsidiary, Sale of Stock [Line Items]              
Notes payable     $ 55,000        
Proceeds from related party promissory notes     $ 55,000        
2022 Note | Chief Executive Officer | Subsequent event              
Subsidiary, Sale of Stock [Line Items]              
Notes payable $ 25,000            
Proceeds from related party promissory notes $ 25,000            
Interest rate 3.25%            
Notes payable, maturity triggering event, public offering proceeds threshold $ 25,000            
Notes payable, maximum term 18 months            
Rights Offering              
Subsidiary, Sale of Stock [Line Items]              
Consideration received on sale of stock   $ 75,000          
Shares issued (in shares) | shares   14,312,976          
Sale of stock price (in dollars per share) | $ / shares   $ 5.24          
Rights Offering | Chief Executive Officer              
Subsidiary, Sale of Stock [Line Items]              
Shares issued (in shares) | shares   11,365,921          
Sale of stock price (in dollars per share) | $ / shares   $ 5.24          
v3.22.0.1
Liquidity and Capital Resources (Details) - USD ($)
$ in Thousands
 12 Months Ended
Mar. 10, 2022
Dec. 31, 2021
Dec. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]      
Net loss   $ 88,602 $ 52,697
Net cash used in operating activities   72,587 48,111
Accumulated deficit   299,548 210,946
Cash   71,791 66,417
Research and development tax credit receivable   15,695  
Accounts receivable   1,464 331
Related Party Transaction [Line Items]      
Proceeds from related party promissory notes   $ 110,000 $ 0
2022 Note | Chief Executive Officer | Subsequent event      
Related Party Transaction [Line Items]      
Proceeds from related party promissory notes $ 25,000    
v3.22.0.1
Summary of Significant Accounting Policies - Narrative (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
USD ($)
Dec. 31, 2020
USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Foreign currency transaction (losses) gains $ (2,135) $ 54
Research and development maximum cash rebate percentage 33.30%  
Discount rate    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Assumed contingent liability, measurement input 0.13  
Minimum    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Vesting period 3 years  
Maximum    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Vesting period 4 years  
v3.22.0.1
Summary of Significant Accounting Policies - Property and equipment useful lives (Details)
 12 Months Ended
Dec. 31, 2021
Laboratory equipment | Minimum  
Property, Plant and Equipment [Line Items]  
Property and equipment, estimated useful Lives 2 years
Laboratory equipment | Maximum  
Property, Plant and Equipment [Line Items]  
Property and equipment, estimated useful Lives 10 years
Office and IT equipment | Minimum  
Property, Plant and Equipment [Line Items]  
Property and equipment, estimated useful Lives 3 years
Office and IT equipment | Maximum  
Property, Plant and Equipment [Line Items]  
Property and equipment, estimated useful Lives 5 years
v3.22.0.1
Segment Reporting - Narrative (Details)
 12 Months Ended
Dec. 31, 2021
segment
country
Segment Reporting [Abstract]  
Number of operating segments | segment 1
Number of geographic regions in which the Company operates | country 2
v3.22.0.1
Segment Reporting - Long-lived assets by geography (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Revenues from External Customers and Long-Lived Assets [Line Items]    
Long-lived assets $ 3,484 $ 1,279
United Kingdom    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Long-lived assets 2,762 1,228
United States    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Long-lived assets $ 722 $ 51
v3.22.0.1
Revenue - Revenue by category (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Revenue from External Customer [Line Items]    
Revenue $ 1,809 $ 860
Licensing agreements    
Revenue from External Customer [Line Items]    
Revenue $ 1,809 $ 860
v3.22.0.1
Revenue - Revenue by geography (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Disaggregation of Revenue [Line Items]    
Revenue $ 1,809 $ 860
United States    
Disaggregation of Revenue [Line Items]    
Revenue 0 0
Latin America    
Disaggregation of Revenue [Line Items]    
Revenue $ 1,809 $ 860
v3.22.0.1
Revenue - Deferred revenue and other income (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Change in Contract with Customer, Asset and Liability [Roll Forward]    
Beginning deferred revenue and other income $ 8,939  
Additions 5,438  
Amount of deferred revenue and other income recognized in the statement of operations (6,438)  
Ending deferred revenue and other income 7,939  
Current deferred revenue and other income 7,939 $ 8,370
Long-term deferred revenue and other income $ 0 $ 569
v3.22.0.1
Revenue - Narrative (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
USD ($)
milestone
Sep. 30, 2021
USD ($)
Dec. 31, 2020
USD ($)
Feb. 29, 2020
USD ($)
Dec. 31, 2017
USD ($)
Disaggregation of Revenue [Line Items]          
Deferred revenue, upfront payment $ 7,939   $ 8,939    
Current contract liability 7,939   8,370    
Non-current contract liability $ 0   569    
Licensing agreements | EuroFarma          
Disaggregation of Revenue [Line Items]          
Deferred revenue, upfront payment         $ 2,500
Deferred revenue, enrollment milestone   $ 1,250   $ 1,000  
Number of enrollment milestones included in transaction price | milestone 2        
Current contract liability $ 756   759    
Non-current contract liability 0   $ 569    
Revenue entitled to receive upon various development milestones 1,500        
Revenue entitled to receive upon achieving cumulative net sales targets 21,400        
Cumulative net sales target threshold 100,000        
Incremental cumulative net sales target threshold $ 100,000        
v3.22.0.1
Other Operating Income - Other operating income by category (Details) - USD ($)
$ in Thousands
 12 Months Ended 52 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2021
Revenue from External Customer [Line Items]      
Research and development tax credits $ 15,206 $ 9,363  
Other operating income 20,968 19,312  
BARDA      
Revenue from External Customer [Line Items]      
Funding/Grant income 4,604 9,472 $ 50,265
Other grant funding counterparties      
Revenue from External Customer [Line Items]      
Funding/Grant income $ 1,158 $ 477  
v3.22.0.1
Other Operating Income - Narrative (Details) - USD ($)
$ in Thousands
 1 Months Ended 8 Months Ended 12 Months Ended 52 Months Ended
May 31, 2021
Sep. 30, 2017
Dec. 31, 2021
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2021
Research and Development Arrangement, Contract to Perform for Others [Line Items]            
Current research and development tax credit receivable     $ 15,695 $ 15,695 $ 9,856 $ 15,695
Accounts receivable     1,464 1,464 331 1,464
BARDA            
Research and Development Arrangement, Contract to Perform for Others [Line Items]            
Maximum funding value   $ 62,000   72,500    
Total committed funding       62,400    
Funding received           56,492
Funding/Grant income       4,604 $ 9,472 50,265
CARB-X            
Research and Development Arrangement, Contract to Perform for Others [Line Items]            
Funding received     485      
Funding/Grant income     1,155      
Committed funding base $ 4,100          
Funding increase based on achievement of future milestones $ 3,700          
Accounts receivable     96 96   96
Current contract asset     $ 574 $ 574   $ 574
v3.22.0.1
Other (Expense) Income (Details) - USD ($)
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Other Income and Expenses [Abstract]    
Foreign currency (loss) gain $ (2,135,000) $ 54,000
Remeasurement of liabilities 0 480,000
Interest income 0 4,000
Interest expense (281,000) (255,000)
Other (expense) income, net $ (2,416,000) $ 283,000
v3.22.0.1
Income Tax - Components of loss before income taxes (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Income Tax Disclosure [Abstract]    
United Kingdom $ (72,244) $ (51,197)
United States (16,358) (1,713)
Loss before income tax $ (88,602) $ (52,910)
v3.22.0.1
Income Tax - Significant components of the provision for income taxes (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Current income tax benefit:    
Federal United States $ 0 $ (215)
State - United States 0 2
Non-United States 0 0
Total 0 (213)
Federal - United States 0 0
State - United States 0 0
Non-United States 0 0
Total deferred tax 0 0
Total income tax benefit $ 0 $ (213)
v3.22.0.1
Income Tax - Major components of deferred tax assets and liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Deferred tax assets:    
Net operating loss carryforward $ 49,422 $ 29,831
Research and development credit carryforward 941 0
Stock based compensation 2,560 1,167
Other 1,477 491
Total deferred tax assets 54,400 31,489
Deferred tax liabilities:    
Intangible asset (2,600) (2,189)
Other (54) (71)
Total deferred tax liabilities (2,654) (2,260)
Net deferred tax assets before valuation allowance 51,746 29,229
Valuation allowance (51,746) (29,229)
Deferred tax, net $ 0 $ 0
v3.22.0.1
Income Tax - Narrative (Details) - USD ($)
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Schedule Of Income Tax [Line Items]    
Deferred tax asset $ 54,400,000 $ 31,489,000
Increase in valuation allowance 22,517,000  
Increase in net deferred tax assets due to change in enacted tax rate 9,311,000  
Increase in valuation allowance due to change in enacted tax rate 9,311,000  
Research and development tax relief 15,206,000 9,363,000
Liability for unrecognized tax benefits 0 0
Liability for interest and penalties 0 0
Research and development tax credit carryforwards    
Schedule Of Income Tax [Line Items]    
Tax credit carryforward 941,000  
U.S. Federal    
Schedule Of Income Tax [Line Items]    
Operating loss carryforwards 1,034,000 $ 232,000
U.S. State    
Schedule Of Income Tax [Line Items]    
Operating loss carryforwards 165,000  
U.K.    
Schedule Of Income Tax [Line Items]    
Operating loss carryforwards 191,714,000  
Potential deferred tax asset $ 47,929,000  
v3.22.0.1
Income Tax - Reconciliation of the effective income tax rate to statutory rate (Details)
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Income Tax Disclosure [Abstract]    
U.S. federal income tax statutory rate 21.00% 21.00%
Change in valuation allowance (10.50%) (12.10%)
Non-deductible expenses (0.40%) (3.90%)
Refundable research and development tax credit (8.30%) (7.00%)
Effect of foreign operations taxed at various rates 0.50% 0.90%
Stock-based compensation (1.60%) 0.00%
Other (0.70%) 1.40%
Effective tax rate 0.00% 0.30%
v3.22.0.1
Loss per Share - Computation of net loss per share (Details) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Earnings Per Share [Abstract]    
Net loss $ (88,602) $ (52,697)
Basic weighted average number of shares of common stock outstanding (in shares) 92,239,306 69,524,148
Diluted weighted average number of shares of common stock outstanding (in shares) 92,239,306 69,524,148
Basic net loss per share (in dollars per share) $ (0.96) $ (0.76)
Diluted net loss per share (in dollars per share) $ (0.96) $ (0.76)
v3.22.0.1
Loss per Share - Potentially dilutive securities excluded from the computation of loss per share (Details) - shares
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Potentially dilutive securities excluded from the computation of diluted loss per share 19,820,738 9,521,028
Restricted stock units    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Potentially dilutive securities excluded from the computation of diluted loss per share 0 26,923
Options to purchase common stock    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Potentially dilutive securities excluded from the computation of diluted loss per share 13,797,556 3,672,968
Warrants    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Potentially dilutive securities excluded from the computation of diluted loss per share 5,821,137 5,821,137
Shares expected to be purchased under employee stock purchase plan    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Potentially dilutive securities excluded from the computation of diluted loss per share 202,045 0
v3.22.0.1
Goodwill and Intangible Assets - Narrative (Details)
 12 Months Ended
Dec. 31, 2021
USD ($)
reporting_unit
Dec. 31, 2020
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]    
Number of reporting units | reporting_unit 1  
Goodwill impairment charge $ 0  
Cumulative goodwill impairment charges 0  
Goodwill 2,009,000 $ 2,030,000
Amortization expense $ 1,017,000 $ 1,250,000
Discuva platform | Software    
Finite-Lived Intangible Assets [Line Items]    
Weighted-average remaining useful life 10 years 4 months 24 days  
v3.22.0.1
Goodwill and Intangible Assets - Schedule of acquired intangible assets (Details) - USD ($)
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]    
Gross $ 20,170,000 $ 19,963,000
Accumulated amortization and impairment charges (8,655,000) (9,564,000)
Net 11,515,000 10,399,000
Software | Utrophin program    
Finite-Lived Intangible Assets [Line Items]    
Gross 4,534,000 4,487,000
Accumulated amortization and impairment charges (4,534,000) (4,487,000)
Net 0 0
Software | Discuva platform    
Finite-Lived Intangible Assets [Line Items]    
Gross 14,565,000 14,416,000
Accumulated amortization and impairment charges (3,050,000) (4,017,000)
Net 11,515,000 10,399,000
Option over non-financial asset    
Finite-Lived Intangible Assets [Line Items]    
Gross 921,000 912,000
Accumulated amortization and impairment charges (921,000) (912,000)
Net 0 0
Fair value of option over non-financial asset 0  
Impairment of Intangible Assets, Finite-lived 859,000  
Other patents and licenses    
Finite-Lived Intangible Assets [Line Items]    
Gross 150,000 148,000
Accumulated amortization and impairment charges (150,000) (148,000)
Net $ 0 $ 0
v3.22.0.1
Goodwill and Intangible Assets - Estimated amortization expense (Details)
$ in Thousands
Dec. 31, 2021
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]  
2022 $ 999
2023 999
2024 999
2025 999
2026 999
Thereafter $ 5,404
v3.22.0.1
Property and Equipment - Components of property and equipment (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 4,071 $ 1,854
Less: accumulated depreciation 3,377 1,129
Property and equipment, net 694 725
Laboratory equipment    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 2,626 759
Furniture and fixtures, office equipment and software    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 1,081 804
Leasehold improvements    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 364 $ 291
v3.22.0.1
Property and Equipment - Narrative (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Property, Plant and Equipment [Abstract]    
Depreciation expense $ 330 $ 302
v3.22.0.1
Research and Development Prepaid Expenses and Accrued Liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]    
Prepaid research and development expenditures $ 6,138 $ 8,490
Accrued research and development expenditure $ 5,226 $ 1,502
v3.22.0.1
Leases - Narrative (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
USD ($)
contract
Dec. 31, 2020
USD ($)
Lessee, Lease, Description [Line Items]    
Additional right-of-use assets recorded $ 3,389 $ 0
Right-of-use assets $ 2,790 $ 554
Weighted average discount rate 2.50% 3.75%
Weighted average remaining lease term 3 years 10 months 24 days 1 year 1 month 6 days
Menlo Park, California, U.S. and Sawston, UK    
Lessee, Lease, Description [Line Items]    
Additional right-of-use assets recorded $ 2,359  
Number of leases | contract 2  
Oxfordshire, UK    
Lessee, Lease, Description [Line Items]    
Additional right-of-use assets recorded $ 1,030  
Number of leases | contract 1  
v3.22.0.1
Leases - Lease expense (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Lease Cost:    
Fixed lease costs $ 785 $ 478
Variable lease costs 164 171
Short-term lease 278 272
Total lease cost $ 1,227 $ 921
v3.22.0.1
Leases - Future lease payments (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Leases [Abstract]    
2022 $ 1,037  
2023 509  
2024 508  
2025 508  
2026 386  
Total lease payments 2,948  
Less: imputed interest 166  
Total operating lease liabilities 2,782  
Total operating lease liabilities balance sheet presentation:    
Current lease liabilities 1,091 $ 390
Non-current lease liabilities 1,691 $ 75
Total operating lease liabilities $ 2,782  
v3.22.0.1
Other Non-Current Liabilities (Details) - USD ($)
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Payables and Accruals [Abstract]    
Assumed contingent liabilities, non-current $ 2,531,000 $ 2,263,000
Gain on remeasurement of contingent liability $ 0 $ 480,000
v3.22.0.1
Stockholders' Equity (Details)
$ / shares in Units, $ in Thousands
 12 Months Ended
May 12, 2021
USD ($)
$ / shares
shares
Nov. 06, 2020
USD ($)
$ / shares
shares
Sep. 18, 2020
shares
Jun. 30, 2020
shares
Dec. 24, 2019
USD ($)
$ / shares
shares
Dec. 31, 2021
USD ($)
shares
Dec. 31, 2020
USD ($)
shares
Sep. 17, 2020
shares
Subsidiary, Sale of Stock [Line Items]                
Reverse stock split ratio     0.2          
Common stock, shares outstanding (in shares)     67,231,903     98,039,540 82,575,064 336,159,511
Offering costs | $           $ 118 $ 48  
Number of common stock shares into which each warrant converts (in shares)           1    
Warrants outstanding (in shares)           5,821,137 5,821,137  
Consulting Agreement | Affiliated entity                
Subsidiary, Sale of Stock [Line Items]                
Number of common stock shares into which warrants may be converted (in shares)         3,358,732      
Exercise price of warrants (in dollars per share) | $ / shares         $ 1.44      
Warrants quarterly vesting period         3 years      
Warrants                
Subsidiary, Sale of Stock [Line Items]                
Aggregate intrinsic value | $           $ 6,559 $ 18,260  
Warrants | Consulting Agreement | Affiliated entity                
Subsidiary, Sale of Stock [Line Items]                
Warrants cancelled (in shares)       2,798,945        
Warrants outstanding (in shares)           559,787    
Rights Offering                
Subsidiary, Sale of Stock [Line Items]                
Consideration received on sale of stock | $ $ 75,000              
Shares issued (in shares) 14,312,976              
Sale of stock price (in dollars per share) | $ / shares $ 5.24              
Offering costs | $ $ 159              
Private placement                
Subsidiary, Sale of Stock [Line Items]                
Consideration received on sale of stock | $   $ 50,000     $ 50,000      
Shares issued (in shares)   14,970,060     35,075,690      
Sale of stock price (in dollars per share) | $ / shares   $ 3.34     $ 1.43      
Offering costs | $   $ 48     $ 912      
Number of common stock shares into which warrants may be converted (in shares)         5,261,350      
Exercise price of warrants (in dollars per share) | $ / shares         $ 1.58      
Number of common stock shares into which each warrant converts (in shares)         1      
Minimum volume weighted average common stock price to warrant exercise price, premium, percentage         50.00%      
v3.22.0.1
Stock Based Compensation - Narrative (Details)
 12 Months Ended
Mar. 01, 2022
Sep. 24, 2021
employee
shares
Aug. 02, 2021
Sep. 21, 2020
shares
Aug. 19, 2020
shares
Dec. 31, 2021
USD ($)
$ / shares
shares
Dec. 31, 2020
USD ($)
$ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Weighted-average grant date fair value of stock options granted (in dollars per share) | $ / shares           $ 3.50 $ 2.20
Aggregate intrinsic value, options exercised | $           $ 3,744,000 $ 857,000
Unrecognized compensation expense for options | $           $ 27,905,000  
Unrecognized compensation expense for options, period of recognition           2 years 2 months 12 days  
Stock options granted previously subject to performance-based vesting (in shares)   9,250,000       13,262,016  
Number of common stock shares into which each warrant converts (in shares)           1  
Minimum              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Vesting period           3 years  
Maximum              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Vesting period           4 years  
ESPP              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Number of shares initially reserve for future issuance (in shares)         1,000,000    
Number of additional shares that can be added to the plan for future issuance (in shares)         1,600,000    
Maximum percentage of outstanding shares         1.00%    
Number of shares available for grant (in shares)           1,825,750  
Offering period     7 months        
Maximum common stock purchase allowable as a percentage of compensation         15.00%    
Purchase price of common stock as a percentage of closing price         85.00%    
ESPP | Forecast              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Consecutive offering period 6 months            
ESPP | Minimum              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Purchase price of common stock as a percentage of closing price         85.00%    
Stock options              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Expiration period           10 years  
Number of employees affected by modification | employee   25          
Incremental costs related to the modification | $           $ 4,872,000  
Expected dividend yield           0.00% 0.00%
Stock options | Minimum              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Vesting period           3 years  
Stock options | Maximum              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Vesting period           4 years  
RSUs              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Aggregate intrinsic value | $           $ 125,000 $ 125,000
Warrants              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Aggregate intrinsic value | $           $ 6,559,000  
Expected dividend yield           0.00%  
Outstanding vested awards (in shares)           5,821,137  
Weighted average exercise price (in dollars per share) | $ / shares           $ 1.56  
Weighted average remaining contractual term           4 years  
Unrecognized compensation expense | $           $ 0  
Warrants | Consultants              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Outstanding vested awards (in shares)           559,787  
Warrants | Investor              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Outstanding vested awards (in shares)           5,261,350  
2020 Plan              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Number of shares initially reserve for future issuance (in shares)       8,000,000      
Number of shares that can be added to the plan (in shares)       5,000,000      
Number of additional shares that can be added to the plan for future issuance (in shares)       6,400,000      
Maximum percentage of outstanding shares       4.00%      
Number of shares available for grant (in shares)           2,293,700  
v3.22.0.1
Stock Based Compensation - Weighted-average assumptions used for stock option awards (Details) - Stock options
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Risk-free interest rate 1.05% 0.29%
Expected term (in years) 5 years 8 months 12 days 5 years 10 months 24 days
Expected volatility 74.50% 71.90%
Expected annual dividends per share 0.00% 0.00%
v3.22.0.1
Stock Based Compensation - Stock option activity (Details) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Sep. 24, 2021
Dec. 31, 2021
Dec. 31, 2020
Number of share options      
Beginning balance (in shares)   3,672,968  
Granted (in shares) 9,250,000 13,262,016  
Forfeited (in shares)   (2,012,851)  
Exercised (in shares)   (1,124,577)  
Ending balance (in shares)   13,797,556 3,672,968
Weighted average exercise price      
Beginning balance (in dollars per share)   $ 2.90  
Granted (in dollars per share)   5.76  
Forfeited (in dollars per share)   3.61  
Exercised (in dollars per share)   2.74  
Ending balance (in dollars per share)   $ 5.55 $ 2.90
Stock option activity, additional disclosures      
Weighted average remaining contractual term, options outstanding   8 years 7 months 6 days 8 years 10 months 24 days
Aggregate intrinsic value, options outstanding   $ 712 $ 6,641
Number of share options, vested and expected to vest (in shares)   12,685,817  
Weighted average exercise price, vested and expected to vest (in dollars per share)   $ 5.51  
Weighted average remaining contractual term, vested and expected to vest   8 years 7 months 6 days  
Aggregate intrinsic value, vested and expected to vest   $ 709  
Number of share options, exercisable (in shares)   1,598,709  
Weighted average exercise price, exercisable (in dollars per share)   $ 3.60  
Weighted average remaining contractual term, exercisable   7 years 2 months 12 days  
Aggregate intrinsic value, exercisable   $ 406  
v3.22.0.1
Stock-Based Compensation - RSU activity (Details) - RSUs
 12 Months Ended
Dec. 31, 2021
$ / shares
shares
Number of Shares  
Beginning balance (in shares) | shares 26,923
Vested (in shares) | shares (26,923)
Ending balance (in shares) | shares 0
Weighted Average Grant Date Fair Value  
Beginning balance (in dollars per share) | $ / shares $ 1.60
Vested (in dollars per share) | $ / shares 1.60
Ending balance (in dollars per share) | $ / shares $ 0
v3.22.0.1
Stock-Based Compensation - Summary of stock-based compensation expense (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]    
Stock-based compensation $ 12,804 $ 1,766
Research and development    
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]    
Stock-based compensation 5,909 749
General and administrative    
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]    
Stock-based compensation $ 6,895 $ 1,017
v3.22.0.1
Commitments and Contingencies (Details) - USD ($)
Dec. 31, 2021
Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]    
Capital commitments $ 0 $ 0
Contractual commitments $ 17,046,000  
Period for which the majority of contractual commitments are to be paid 1 year  
v3.22.0.1
Related Party Transactions (Details)
$ / shares in Units, $ in Thousands
 6 Months Ended 12 Months Ended
May 12, 2021
USD ($)
$ / shares
shares
Apr. 20, 2021
USD ($)
Mar. 24, 2021
USD ($)
Nov. 06, 2020
USD ($)
$ / shares
shares
Dec. 24, 2019
USD ($)
$ / shares
shares
Jun. 30, 2020
USD ($)
shares
Dec. 31, 2021
USD ($)
Dec. 31, 2020
USD ($)
Mar. 26, 2021
ft²
Related Party Transaction [Line Items]                  
Proceeds from related party promissory notes             $ 110,000 $ 0  
Imputed interest expense on promissory note payable to a related party             103    
Additional Paid-In Capital                  
Related Party Transaction [Line Items]                  
Imputed interest expense on promissory note payable to a related party             103    
Chief Executive Officer | Initial Purchase Agreement                  
Related Party Transaction [Line Items]                  
Proceeds from related party promissory notes     $ 55,000            
Notes payable     $ 55,000            
Notes payable, estimated interest rate     2.40%            
Notes payable, maturity triggering event, public offering proceeds threshold     $ 55,000            
Notes payable, maximum term     13 months            
Chief Executive Officer | Initial Purchase Agreement | Additional Paid-In Capital                  
Related Party Transaction [Line Items]                  
Imputed interest expense on promissory note payable to a related party             103    
Chief Executive Officer | Initial Purchase Agreement | 10 year US Treasury rate                  
Related Party Transaction [Line Items]                  
Notes payable, basis spread on variable rate     150.00%            
Chief Executive Officer | Second Purchase Agreement                  
Related Party Transaction [Line Items]                  
Proceeds from related party promissory notes   $ 55,000              
Notes payable   $ 55,000              
Notes payable, estimated interest rate   2.40%              
Chief Executive Officer | Second Purchase Agreement | 10 year US Treasury rate                  
Related Party Transaction [Line Items]                  
Notes payable, basis spread on variable rate   150.00%              
Beneficial owner | Assignment Agreement                  
Related Party Transaction [Line Items]                  
Warrants vested (in shares) | shares           489,815      
Affiliated entity                  
Related Party Transaction [Line Items]                  
Area of premises subleased | ft²                 4,500
Payments to related party             $ 556    
Affiliated entity | Consulting Agreement                  
Related Party Transaction [Line Items]                  
Number of common stock shares into which warrants may be converted (in shares) | shares         3,358,732        
Exercise price of warrants (in dollars per share) | $ / shares         $ 1.44        
Monthly expense from related party         $ 75        
Warrants quarterly vesting period         3 years        
Affiliated entity | Consultancy fees                  
Related Party Transaction [Line Items]                  
Expenses from related party transactions           $ 470      
Affiliated entity | Warrant vesting expense                  
Related Party Transaction [Line Items]                  
Expenses from related party transactions           $ 512      
Director | Assignment Agreement                  
Related Party Transaction [Line Items]                  
Warrants vested (in shares) | shares           69,972      
Private placement                  
Related Party Transaction [Line Items]                  
Consideration received on sale of stock       $ 50,000 $ 50,000        
Shares issued (in shares) | shares       14,970,060 35,075,690        
Sale of stock price (in dollars per share) | $ / shares       $ 3.34 $ 1.43        
Number of common stock shares into which warrants may be converted (in shares) | shares         5,261,350        
Exercise price of warrants (in dollars per share) | $ / shares         $ 1.58        
Private placement | Chief Executive Officer                  
Related Party Transaction [Line Items]                  
Sale of stock price (in dollars per share) | $ / shares         $ 1.43        
Number of shares of common stock subscribed (in shares) | shares       14,071,856 33,231,410        
Number of common stock shares into which warrants may be converted (in shares) | shares         4,984,711        
Private placement | Former Chief Executive Officer                  
Related Party Transaction [Line Items]                  
Sale of stock price (in dollars per share) | $ / shares         $ 1.43        
Number of shares of common stock subscribed (in shares) | shares         90,495        
Number of common stock shares into which warrants may be converted (in shares) | shares         13,574        
Private placement | Beneficial owner                  
Related Party Transaction [Line Items]                  
Number of shares of common stock subscribed (in shares) | shares       149,701          
Rights Offering                  
Related Party Transaction [Line Items]                  
Consideration received on sale of stock $ 75,000                
Shares issued (in shares) | shares 14,312,976                
Sale of stock price (in dollars per share) | $ / shares $ 5.24                
Rights Offering | Chief Executive Officer                  
Related Party Transaction [Line Items]                  
Shares issued (in shares) | shares 11,365,921                
Sale of stock price (in dollars per share) | $ / shares $ 5.24                
Rights Offering | Chief Operations Officer                  
Related Party Transaction [Line Items]                  
Shares issued (in shares) | shares 389,977                
Sale of stock price (in dollars per share) | $ / shares $ 5.24                
v3.22.0.1
Subsequent Event (Details) - USD ($)
$ in Thousands
 12 Months Ended
Mar. 10, 2022
Dec. 31, 2021
Dec. 31, 2020
Subsequent Event [Line Items]      
Proceeds from related party promissory notes   $ 110,000 $ 0
Subsequent event | 2022 Note | Chief Executive Officer      
Subsequent Event [Line Items]      
Proceeds from related party promissory notes $ 25,000    
Notes payable $ 25,000    
Interest rate 3.25%    
Notes payable, maturity triggering event, public offering proceeds threshold $ 25,000    
Notes payable, maximum term 18 months