0001558370-23-005875 | 10-K | XBRL Viewer

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Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Dec. 31, 2022	Apr. 13, 2023	Jun. 30, 2022
Document and Entity Information
Document Type	10-K
Document Annual Report	true
Document Transition Report	false
Document Period End Date	Dec. 31, 2022
Entity File Number	001-31918
Entity Registrant Name	Aceragen, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	04-3072298
Entity Address, Address Line One	505 Eagleview Blvd., Suite 212
Entity Address, City or Town	Exton
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	19341
City Area Code	484
Local Phone Number	348-1600
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	ACGN
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
ICFR Auditor Attestation Flag	false
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		8,423,504
Entity Public Float			$ 24.0
Entity Central Index Key	0000861838
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Amendment Flag	false
Auditor Firm ID	42
Auditor Name	ERNST & YOUNG LLP
Auditor Location	Philadelphia, Pennsylvania

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 12,044	$ 32,545
Accounts receivable	4,208
Prepaid expenses and other current assets	1,611	1,493
Total current assets	17,863	34,038
Property and equipment, net	7	22
Intangible assets	71,600
Goodwill	11,100
Operating lease right-of-use assets	537	734
Other assets		70
Total assets	101,107	34,864
Current liabilities:
Accounts payable	5,200	565
Accrued expenses	9,911	4,088
Acquisition obligation, net	6,078
Operating lease liability	234	209
Total current liabilities	21,423	4,862
Warrant liability	2,819
Series X preferred stock liability (includes 5 shares of Series X convertible preferred stock, $0.01 par value per share issued and outstanding as December 31, 2022 - Note 8)	34,300
Operating lease liability, net of current portion	326	549
Deferred tax liability	3,283
Other liabilities	22
Total liabilities	62,173	5,411
Commitments and contingencies (Note 15)
Stockholders' equity:
Preferred stock, $0.01 par value, Authorized - 5,000,000 shares: Series A convertible preferred stock; Designated - 1,500,000 shares; Issued and outstanding - 241 shares
Common stock, $0.001 par value, Authorized - 140,000,000 shares; Issued and outstanding - 3,653,685 and 3,106,947 at December 31, 2022 and December 31, 2021, respectively	4	3
Additional paid-in capital	770,663	764,911
Accumulated deficit	(758,821)	(735,461)
Accumulated other comprehensive income (loss)	(21)
Total stockholders' equity	11,826	29,453
Total liabilities, convertible redeemable preferred stock, and stockholders' equity	101,107	34,864
Series A convertible preferred stock
Stockholders' equity:
Preferred stock, $0.01 par value, Authorized - 5,000,000 shares: Series A convertible preferred stock; Designated - 1,500,000 shares; Issued and outstanding - 241 shares
Series Z convertible preferred stock
Current liabilities:
Preferred stock, $0.01 par value, Authorized - 5,000,000 shares: Series Z convertible redeemable preferred stock (Note 9); Designated - 150,000 shares, Issued and outstanding - 77,900 shares at December 31, 2022	27,108
Series B1 convertible preferred stock
Stockholders' equity:
Preferred stock, $0.01 par value, Authorized - 5,000,000 shares: Series A convertible preferred stock; Designated - 1,500,000 shares; Issued and outstanding - 241 shares	$ 1

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2022	Dec. 31, 2021
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	140,000,000	140,000,000
Common stock, shares issued	3,653,685	3,106,947
Common stock, shares outstanding	3,653,685	3,106,947
Series A convertible preferred stock
Preferred stock, shares designated	1,500,000	1,500,000
Preferred stock, shares issued	655	655
Preferred stock, shares outstanding	655	655
Series B Preferred Stock
Preferred stock, shares designated	200,000	200,000
Preferred stock, shares issued	62,355	62,355
Preferred stock, shares outstanding	62,355	62,355
Series X convertible preferred stock
Preferred stock liability, par value	$ 0.01
Preferred stock liability, shares issued	5
Preferred stock liability, shares outstanding	5
Series Z convertible preferred stock
Temporary equity, preferred stock, par value	$ 0.01	$ 0.01
Temporary Equity, preferred stock, shares authorized	5,000,000	5,000,000
Temporary Equity, preferred stock, shares designated	150,000
Temporary Equity, preferred stock, shares issued	77,900

Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Consolidated Statements of Operations and Comprehensive Income (Loss)
Government contracts revenue	$ 4,862	$ 0
Operating expenses:
Research and development	12,188	16,375
General and administrative	12,213	9,976
Acquisition-related costs	4,566
Restructuring and other costs	3,713	1,322
Total operating expenses	32,680	27,673
Loss from operations	(27,818)	(27,673)
Other income (expense):
Interest income (expense), net	204	2
Warrant revaluation gain	361	6,983
Series X preferred stock liability gain	(2,400)
Future tranche right revaluation gain		118,803
Foreign currency exchange and other gain (loss), net	(25)	(24)
(Loss) income before income tax benefit	(29,678)	98,091
Income tax benefit	6,318	(6,300)
Net (loss) income	(23,360)	98,091
Undistributed earnings to preferred stockholders		(1,150)
Net (loss) income applicable to common stockholders	(23,360)	96,941
Net (loss) income applicable to common stockholders (Note 18)
- Basic	(23,360)	96,941
- Diluted	$ (23,360)	$ (28,845)
Net (loss) income per share applicable to common stockholders (Note 18)
- Basic	$ (7.18)	$ 33.49
- Diluted	$ (7.18)	$ (9.78)
Weighted-average number of common shares used in computing net (loss) income per share applicable to common stockholders
- Basic	3,255,648	2,894,287
- Diluted	3,255,648	2,948,659
Comprehensive (loss) income:
Net (loss) income	$ (23,360)	$ 98,091
Income (Loss) from Continuing Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest	(23,360)	98,091
Other comprehensive income (loss), net of tax:
Foreign currency translation	(21)
Other Comprehensive Income (Loss), Net of Tax	(21)
Total comprehensive (loss) income	$ (23,381)	$ 98,091

Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders Equity (Deficit) - USD ($) $ in Thousands	Common Stock	Preferred Stock Series B1 Preferred	Preferred Stock Series Z preferred stock	Preferred Stock Series B Preferred Stock	Additional Paid-In Capital	Accumulated Deficit	Other Comprehensive Income (Loss)	Total
Temporary equity, Beginning balance (in shares) at Dec. 31, 2020		23,684
Increase (Decrease) in Temporary Equity
Conversion of Series B1 preferred stock (in shares)		(23,684)
Beginning balance at Dec. 31, 2020	$ 2				$ 742,378	$ (833,552)		$ (91,172)
Beginning balance (in shares) at Dec. 31, 2020	2,252,390
Increase (Decrease) in Stockholders' Equity
Sale of common stock, net of issuance costs	$ 1				19,514			19,515
Sale of common stock, net of issuance costs (in shares)	348,079
Conversion of Series B1 preferred stock (in shares)	139,317
Issuance of common stock under employee stock purchase plan					59			59
Issuance of common stock under employee stock purchase plan (in shares)	2,889
Issuance of common stock under equity incentive plan (vesting of restricted stock units) (in shares)	13,927
Issuance of common stock upon exercise of common stock options and warrants					271			271
Issuance of common stock upon exercise of common stock options and warrants (in shares)	345,332
Issuance of common stock for services rendered					152			152
Issuance of common stock for services rendered (in shares)	5,013
Stock-based compensation expense					2,537			2,537
Net (loss) income						98,091		98,091
Ending balance at Dec. 31, 2021	$ 3				764,911	(735,461)		$ 29,453
Ending balance (in shares) at Dec. 31, 2021	3,106,947							3,106,947
Increase (Decrease) in Temporary Equity
Issuance of preferred stock upon Acquisition of Aceragen			$ 27,108
Issuance of preferred stock upon Acquisition of Aceragen (in shares)			77,663
Vesting of restricted stock awards (in shares)			237
Temporary equity, Ending balance at Dec. 31, 2022			$ 27,108
Temporary equity, Ending balance (in shares) at Dec. 31, 2022			77,900
Increase (Decrease) in Stockholders' Equity
Sale of common stock, net of issuance costs					(15)			$ (15)
Issuance of common stock under employee stock purchase plan					49			49
Issuance of common stock under employee stock purchase plan (in shares)	7,788
Common stock dividend issued in the form of Series B Preferred Stock				$ 1				1
Common stock dividend issued in the form of Series B Preferred Stock (in shares)				62,355
Issuance of common stock under equity incentive plan (vesting of restricted stock units) (in shares)	1,600
Vesting of restricted stock awards (in shares)	1,331
Issuance of common stock upon exercise of common stock warrants					15			15
Issuance of common stock upon exercise of common stock warrants (in shares)	90,185
Issuance of common stock for services rendered					88			88
Issuance of common stock for services rendered (in shares)	10,989
Stock-based compensation expense					2,188			2,188
Issuance of common stock upon Acquisition of Aceragen	$ 1				3,427			3,428
Issuance of common stock upon Acquisition of Aceragen (in shares)	434,845
Currency translation adjustment							$ (21)	(21)
Net (loss) income						(23,360)		(23,360)
Ending balance at Dec. 31, 2022	$ 4			$ 1	$ 770,663	$ (758,821)	$ (21)	$ 11,826
Ending balance at Dec. 31, 2022				62,355
Ending balance (in shares) at Dec. 31, 2022	3,653,685							3,653,685

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Cash Flows from Operating Activities:
Net (loss) income	$ (23,360)	$ 98,091
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Stock-based compensation	2,188	2,537
Foreign currency translation	6
Warrant liability revaluation gain	(361)	(6,983)
Series X preferred stock liability loss	2,400
Future tranche right liability revaluation gain		(118,803)
Issuance of common stock for services rendered	88	152
Accretion of discounts on short-term investments		(1)
Accretion of discounts on acquisition obligation	66
Depreciation and amortization expense	15	22
Deferred tax benefit	(6,318)
Changes in operating assets and liabilities, net of effects from Acquisition:
Accounts receivable	(2,294)
Prepaid expenses and other assets	506	2,134
Accounts payable, accrued expenses, and other liabilities	2,548	(1,751)
Other	21	5
Net cash used in operating activities	(24,495)	(24,597)
Cash Flows from Investing Activities:
Cash acquired in acquisition of Aceragen	5,482
Proceeds from maturity of available-for-sale securities		4,500
Net cash provided by investing activities	5,482	4,500
Cash Flows from Financing Activities:
Proceeds from common stock financings, net	(15)	19,518
Proceeds from employee stock purchases	49	59
Proceeds from exercise of common stock options and warrants	15	271
Payment on Acquisition Obligation	(1,534)
Payments on seller-financed purchases		(435)
Other	(3)
Net cash (used in) provided by financing activities	(1,488)	19,413
Net decrease in cash and cash equivalents	(20,501)	(684)
Cash and cash equivalent, beginning of period	32,545	33,229
Cash and cash equivalents, end of period	$ 12,044	32,545
Supplemental disclosure of cash flow information:
Cash paid for interest		5
Supplemental disclosure of non-cash financing and investing activities:
Offering costs in accrued expenses		3
Non-cash seller-financed purchases		$ 652

Business and Organization

12 Months Ended

Dec. 31, 2022

Business and Organization

Business and Organization

Note 1. Business and Organization

Business Overview

Aceragen, Inc. (“Aceragen” or the “Company”) (f/k/a Idera Pharmaceuticals, Inc. (“Idera”)), a Delaware corporation, is a clinical-stage biopharmaceutical company with a business strategy focused on the clinical development, and ultimately the commercialization, of drug candidates for rare disease indications characterized by small, well-defined patient populations with serious unmet medical needs. The Company’s current focus is to develop and optimize commercial value of ACG-701 (patented formulation of sodium fusidate) and ACG-801 (recombinant human acid ceramidase (rhAC)) for appropriate patients. The Company has in the past and may in the future explore clinical funding arrangements and collaborative alliances to support development and commercialization of any of its drug candidates. The Company may also seek to identify and potentially acquire rights to novel development or commercial stage rare disease programs, through new business development opportunities, including additional strategic alternatives.

On September 28, 2022 (the “Effective Date”), Idera acquired Aceragen, Inc. and its wholly owned subsidiaries (“Legacy Aceragen”), in accordance with the terms of the Agreement and Plan of Merger, dated as of the Effective Date (the “Merger Agreement”). Legacy Aceragen was a privately-held biotechnology company addressing severe, rare, and orphan pulmonary and rheumatic diseases for which there are limited or no available treatments. The Company acquired Legacy Aceragen as a strategic extension of its rare disease business and focus with the primary objective of further developing Legacy Aceragen’s portfolio of rare disease product candidates.

Following the Special Meeting of Stockholders held on January 12, 2023 (the “Special Meeting”), Idera’s name was changed to Aceragen, Inc. (the “Merger” and, together with the other transactions contemplated by the Merger Agreement, the “Aceragen Acquisition”). See Note 3, “Business Acquisition,” for additional information on the Aceragen Acquisition.

Prior to December 2021, the Company was developing a toll-like receptor agonist, tilsotolimod (IMO-2125), for oncology indications. In December 2021, all Company-sponsored development of tilsotolimod was discontinued and all study-related activities have subsequently been concluded. However, the Company is considering the potential for out-licensing arrangements so that tilsotolimod’s full potential might continue to be explored on behalf of patients who did not respond to traditional immunotherapy, together with other alternatives.

Liquidity and Financial Condition

The Company follows the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 205-40, Presentation of Financial Statements—Going Concern, which requires management to assess the Company’s ability to continue as a going concern within one year after the date the consolidated financial statements are issued.

The Company has incurred substantial losses and negative cash flows from operations since its inception and had an accumulated deficit of $758.8 million as of December 31, 2022. The Company’s cash and cash equivalents balance of $12.0 million as of December 31, 2022 is not sufficient to fund its operations for the one-year period after the date the financial statements are issued. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

The Company anticipates incurring additional losses until such time, if ever, that it can generate significant sales of its product candidates currently in development. The Company is subject to a number of risks and uncertainties

similar to those of other companies of the same size within the biotechnology industry, such as uncertainty of clinical trial outcomes, uncertainty of additional funding, and history of operating losses. Substantial additional financing will be needed by the Company to fund its operations and to commercially develop its product candidates. Management is currently evaluating different strategies to obtain the required funding for future operations. These strategies may include, but are not limited to: product development financing, private placements and/or public offerings of equity and/or debt securities, payments from potential strategic research and development collaborations and/or similar arrangements, and payments from the potential sale and/or licensing of technology assets. There can be no assurance that these future funding efforts will be successful. Accordingly, management has concluded that substantial doubt exists with respect to the Company’s ability to continue as a going concern within one year after the date that these financial statements are issued.

Reverse Stock Split

As further described in Note 19, on January 17, 2023, the Company effected a 1-for-17 reverse stock split of the Company's outstanding shares of common stock, as approved by the Company’s stockholders at the Special Meeting. All share and per share amounts of common stock, options, warrants, restricted stock, restricted stock units, and conversion ratio of convertible preferred stock and convertible preferred stock warrants in the accompanying consolidated financial statements and notes thereto have been retroactively adjusted for all periods presented to reflect the reverse stock split.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2022

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Aceragen, LLC, including Aceragen, LLC’s wholly owned subsidiaries, Arrevus, Inc., a Delaware Corporation (“Arrevus”), and Aceragen GmbH, a limited liability company (“AGmbH”). All intercompany accounts and transactions have been eliminated in consolidation. The Company has determined the functional currency of AGmbH to be the Swiss Franc. The Company translates assets and liabilities of AGmbH’s operations at exchange rates in effect at the balance sheet date with the resulting translation adjustments directly recorded as a separate component of accumulated other comprehensive income. Income and expense accounts are translated at average exchange rates for the period. Transactions which are not in the functional currency of AGmbH are remeasured into the functional currency and gains and losses resulting from the remeasurement are recorded in foreign currency exchange and other gain (loss), net.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates, judgements, and assumptions that affect the reported amounts of assets and liabilities at the date of consolidated financial statements and reported amounts of revenues and expenses during the reporting period, and related disclosure of contingencies in the accompanying consolidated financial statements and these notes. In addition, management’s assessment of the Company’s ability to continue as a going concern involves the estimation of the amount and timing of future cash inflows and outflows. The Company bases its estimates and assumptions on historical experience when available and on various factors that it believes to be reasonable under the circumstances and are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from these estimates. Estimates that are critical to the accompanying consolidated financial statements include the estimated fair value of the net assets acquired in connection with the Aceragen Acquisition, the estimated fair value of the liability classified warrants issued to Legacy Aceragen warrant holders, Series X Preferred Stock (Note 8), and accrued clinical trial expenses.

Segment Information

Operating segments are defined as components of an enterprise in which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and assessing performance. The Company views its operations and manages its business as one operating segment, which is the business of developing novel therapeutics for rare diseases.

Financial Instruments

The fair value of the Company’s financial instruments is determined and disclosed in accordance with the three-tier fair value hierarchy specified in Note 4. The Company is required to disclose the estimated fair values of its financial instruments. As of December 31, 2022, the Company’s financial instruments included cash and cash equivalents, accounts receivable, accounts payable, Acquisition Obligation (defined below), and Series X Preferred Stock and Series Z Preferred Stock Warrant liabilities. As of December 31, 2021, the Company’s financial instruments consisted of cash and cash equivalents. The carrying amount of cash and cash equivalents, accounts receivable, and accounts payable approximates fair value due to the short-term maturities of these instruments. The carrying values of the Acquisition Obligation (defined below), Series X Preferred Stock liability and Series Z Preferred Stock Warrants liability are recorded at their estimated fair values. As of December 31, 2022, the Company did not have any other derivatives, hedging instruments or other similar financial instruments.

Concentration of Credit Risk

Financial instruments that subject the Company to significant concentrations of credit risk consist primarily of cash, which, at times, may exceed federally insured limits, and cash equivalents consisting of investments in money market funds managed by a variety of financial institutions. The Company's credit risk is managed by investing in only highly rated money market instruments. As a result, no significant additional credit risk is believed by management to be inherent in the Company’s assets and the Company has not experienced any losses in such accounts and believes it is not exposed to any significant risk on such accounts. As of December 31, 2022, the Company’s cash and cash equivalents were held at six financial institutions.

As more fully described in Note 19, “Subsequent Events” the Company had approximately 56% of its cash and cash equivalent balances in segregated custodial accounts held by a third-party custodian for which SVB (as defined below) was the Company’s agent and/or SVB Asset Management, an affiliate of SVB, was the advisor at the time SVB was closed. The Company does not believe it will be impacted by the closure of SVB.

Business Combinations

The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen is met, the transaction is accounted for as an asset acquisition. If the screen is not met, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs, which would meet the requirements of a business. If determined to be a business combination, the Company accounts for the transaction under the acquisition method of accounting as indicated in ASU 2017-01, Business Combinations (ASC 805), which requires the acquiring entity in a business combination to recognize the fair value of all assets acquired, liabilities assumed, and any non-controlling interest in the acquiree and establishes the acquisition date as the fair value measurement point. Accordingly, the Company recognizes assets acquired and liabilities assumed in business combinations based on the fair value estimates as of the date of acquisition. In accordance with ASC 805, Business Combinations, the Company recognizes and measures goodwill as of the acquisition date, as the excess of the fair value of the consideration paid over the fair value of the identified net assets acquired.

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of 90 days or less when purchased to be “cash equivalents.” Cash and cash equivalents at December 31, 2022 and 2021 consisted of cash and money market funds.

Accounts Receivable

The U.S. Government accounted for all of the Company’s accounts receivable as of December 31, 2022. Accordingly, the Company does not expect any credit losses with respect to its accounts receivable and no credit losses have been incurred to date. Included in accounts receivable at December 31, 2022 is $0.4 million of unbilled receivables which relates to revenue recognized for work that has been performed but the invoicing has not yet occurred as of the reporting date.

Property and Equipment

Property and equipment are carried at acquisition cost less accumulated depreciation, subject to review for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable as described further under the heading "Impairment of Long-Lived Assets" below. The cost of normal, recurring, or periodic repairs and maintenance activities related to property and equipment are expensed as incurred. The cost for planned major maintenance activities, including the related acquisition or construction of assets, is capitalized if the repair will result in future economic benefits.

Depreciation and amortization are computed using the straight-line method based on the estimated useful lives of the related assets. Leasehold improvements are amortized over the remaining lease term or the related useful life, if shorter. Equipment and other long-lived assets are depreciated over three to five years.

When an asset is disposed of, the associated cost and accumulated depreciation is removed from the related accounts on the Company's balance sheet with any resulting gain or loss included in the Company's consolidated statement of operations.

Indefinite-Lived Intangible Assets

Indefinite-lived intangible assets consist of In-Process Research and Development (“IPR&D”). The fair values of IPR&D project assets acquired in business combinations are capitalized. The Company generally utilizes the Multi-Period Excess Earning Method to determine the estimated fair value of the IPR&D assets acquired in a business combination. The projections used in this valuation approach are based on many factors, such as relevant market size, the estimated probability of regulatory success rates, anticipated patent protection, expected pricing, expected treated population, and estimated payments (e.g., royalty). The estimated future net cash flows are then discounted to the present value using an appropriate discount rate. These assets are treated as indefinite-lived intangible assets until completion or abandonment of the projects, at which time the assets are amortized over the remaining useful life or written off, as appropriate.

Intangible assets with indefinite lives, including IPR&D, are tested for impairment if impairment indicators arise and, at a minimum, annually. However, an entity is permitted to first assess qualitative factors to determine if a quantitative impairment test is necessary. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that an indefinite-lived intangible asset’s fair value is less than its carrying amount. Otherwise, no further impairment testing is required. The indefinite-lived intangible asset impairment test consists of a one-step analysis that compares the fair value of the intangible asset with its carrying amount. If the carrying amount of an intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. The Company considers many factors in evaluating whether the value of our intangible assets with indefinite lives may not be recoverable, including, but not limited to, expected growth rates, the cost of equity and debt capital, general economic conditions, our outlook and market performance of our industry and recent and forecasted financial performance.

The Company evaluates indefinite-lived intangible assets for impairment at least annually on October 1 and whenever facts and circumstances indicate that their carrying amounts may not be recoverable. For the year ended December 31, 2022, the Company determined that there was no impairment to IPR&D.

Goodwill

Goodwill represents the amount of consideration paid in excess of the fair value of net assets acquired as a result of the Company’s business acquisitions accounted for using the acquisition method of accounting. The intangible assets acquired represented the fair value of IPR&D which has been recorded on the accompanying consolidated balance sheet as indefinite-lived intangible assets. A deferred tax liability was recorded for the difference between the fair value of the acquired IPR&D and its tax basis which was recognized as goodwill in applying the purchase method of accounting. Goodwill is not amortized and is subject to impairment testing at a reporting unit level on an annual basis or when a triggering event occurs that may indicate the carrying value of the goodwill is impaired. An entity is permitted to first assess qualitative factors to determine if a quantitative impairment test is necessary. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying amount.

The Company evaluates goodwill for impairment at least annually on October 1 and whenever facts and circumstances indicate that their carrying amounts may not be recoverable. For the year ended December 31, 2022, the Company determined that there was no impairment to goodwill.

Operating Lease Right-of-use Asset and Lease Liability

The Company accounts for leases under ASC 842, Leases. Operating leases are included in “Operating lease right-of-use assets” within the Company’s consolidated balance sheets and represent the Company’s right to use an underlying asset for the lease term. The Company’s related obligation to make lease payments are included in “Operating lease liability” and “Operating lease liability, net of current portion” within the Company’s consolidated balance sheets. Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The ROU assets are tested for impairment according to ASC 360, Property, Plant, and Equipment (“ASC 360”). Leases with an initial term of 12 months or less are not recorded on the balance sheet and are recognized as lease expense on a straight-line basis over the lease term.

As of December 31, 2022 and 2021, the Company’s operating lease ROU assets and corresponding short-term and long-term lease liabilities primarily relate to its existing Exton, Pennsylvania facility operating lease, which expires on May 31, 2025. In connection with the Aceragen Acquisition, the Company acquired an operating lease for an office in Basel, Switzerland, which expired on March 31, 2023.

Impairment of Long-Lived Assets

In accordance with ASC 360-10-35, Impairment or Disposal of Long-Lived Assets, the Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable (i.e., impaired). Once an impairment is determined, the actual impairment recognized is the difference between the carrying amount and the fair value (less costs to sell for assets to be disposed of) as estimated using one of the following approaches: income, cost, and/or market. Fair value using the income approach is determined primarily using a discounted cash flow model that uses the estimated cash flows associated with the asset or asset group under review, discounted at a rate commensurate with the risk involved. Fair value utilizing the cost approach is determined based on the replacement cost of the asset reduced for, among other things, depreciation and obsolescence. Fair value, utilizing the market approach, benchmarks the fair value against the carrying amount.

Warrant Liability

The Company accounts for stock warrants as either equity instruments, liabilities or derivative liabilities in accordance with ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and/or ASC 815, Derivatives and Hedging (“ASC 815”), depending on the specific terms of the warrant agreement. Freestanding warrants for shares that are potentially redeemable, whereby the Company may be required to transfer assets (e.g., cash or other assets) outside of its control, are classified as liabilities. Liability-classified warrants are recorded at their estimated fair values at each reporting period until they are exercised, terminated, reclassified or otherwise settled. Changes in the estimated fair value of liability-classified warrants are recorded in “warrant revaluation gain (loss)” in the Company’s consolidated statements of operations. Equity classified warrants are recorded within additional paid-in capital at the time of issuance and not subject to remeasurement.

In connection with the Aceragen Acquisition, a portion of the consideration paid to Legacy Aceragen warrant holders was in the form of warrants to purchase shares of Series Z Preferred Stock (“Series Z Warrants”). Such warrants were classified as liabilities upon issuance and as of December 31, 2022 because the underlying Series Z Preferred Stock is contingently redeemable. The fair value of the Series Z Warrants on the date of issuance was recorded as a component to the carrying value of the shares Series Z Preferred Stock and as a long-term liability in the consolidated balance sheets. The Series Z Warrants are remeasured to fair value at each balance sheet date until the warrants are exercised, reclassified, expire, or otherwise settled. Changes in the fair values of the Series Z Warrants are recognized as other income or expense in the consolidated statements of operations and comprehensive loss. See Notes 3, 4, and 9 to these consolidated financial statements for further details.

Redeemable Preferred Stock

The Company applies ASC 480 when determining the classification and measurement of its preferred stock. Preferred shares subject to mandatory redemption are classified as liability instruments and are measured at fair value. Conditionally redeemable preferred shares (including preferred shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, preferred shares are classified as stockholders’ equity. See Notes 8, 9 and 10 to these consolidated financial statements.

Series X Preferred Stock Liability

In conjunction with the Aceragen Acquisition, the Company evaluated the newly issued Series X Preferred Stock and determined its revised terms represents a sale of future revenues and is classified as a liability under ASC 470, Debt and the Company has elected to account for the Series X Preferred Stock liability under the fair value option. The fair value of the Series X Preferred Stock liability represents the present value of estimated future payments, including royalty payments, as well as estimated payments that are contingent upon the achievement of specified milestones. The fair value of the Series X Preferred Stock liability is based on the cumulative probability of the various estimated payments. The fair value measurement is based on significant Level 3 unobservable inputs which are further described in Note 4. Any changes in the fair value of the liability in each reporting period are recognized in the consolidated statements of operations until it is settled. See Note 8 to these consolidated financial statements for further discussion of the Series X Preferred Stock Liability.

Future Tranche Right Liability and Revaluation Gain

The December 2019 Securities Purchase Agreement (as defined in Note 9) contained call options on redeemable preferred shares with warrants (conditionally exercisable for shares that are puttable). The Company determined that these call options represent freestanding financial instruments and accounted for the options as liabilities under ASC 480, which required the measurement and recognition of the fair value of the liability at the time of issuance and at each reporting period until such call options were exercised or cancelled. During the year ended December 31, 2021, the liability-classified call options provided for under the December 2019 Securities Purchase Agreement terminated and, accordingly, the liability balance was derecognized resulting in a future tranche right revaluation gain recorded in the Company’s statements of operations.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”), which applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. In accordance with ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, it performs the following five steps:

●

identify the contract(s) with a customer;

●

identify the performance obligations in the contract;

●

determine the transaction price;

●

allocate the transaction price to the performance obligations in the contract; and

●

recognize revenue when (or as) the entity satisfies a performance obligation.

The Company only applies the five-step model to contracts when it determines that it is probable it will collect the consideration to which it is entitled in exchange for the goods or services it transfers to the customer. 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. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

Amounts received prior to satisfying the revenue recognition criteria are recognized as deferred revenue in the Company’s balance sheet. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current portion of deferred revenue. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, net of current portion.

Government Contract Revenue

Revenues from reimbursable contracts are recognized as costs are incurred, generally based on allowable direct costs incurred during the period, plus allocable overheads together with any recognizable earned fee. The Company uses this output method to measure progress as the customer has access to the development research under these projects and benefits incrementally as research and development activities occur.

See Note 11, “Government Contracts Revenue,” of the notes to these consolidated financial statements for discussion of the Company’s cost reimbursement contracts.

Other Revenues

Certain of the Company’s collaborative research, development, and/or commercialization agreements may result in the recognition of revenue for one or more of the following: nonrefundable, up-front license fees; research, development, and commercial milestone payments; and other contingent payments due based on the activities of the counterparty or the reimbursement by licensees of costs associated with patent maintenance. See Note 12, “Clinical Funding, Collaboration and License Agreements,” of the notes to these consolidated financial statements for additional details regarding the Company’s collaboration and out-licensing arrangements.

Customer Concentration Risk

The U.S. Government accounted for all of the Company’s revenues for the year ended December 31, 2022.

Research and Development Prepayments, Accruals and Related Expenses

All research and development expenses are expensed as incurred. Research and development expenses are comprised of costs incurred in performing research and development activities, including drug development trials and studies, research collaborations, drug manufacturing, laboratory supplies, external research, payroll including stock-based compensation and overhead. The Company is required to estimate our accrued and prepared expenses for research and development activities performed by third parties, including Clinical Research Organizations (“CROs”) and clinical investigators. These estimates are made as of the reporting date of the work completed over the life of the individual study in accordance with agreements established with CROs and other clinical sites. Some CROs invoice the Company on a monthly basis, while others invoice upon the achievement of milestones. The Company determines the estimates of research and development activities incurred at the end of each reporting period through discussion with internal personnel, outside service providers, and research collaboration partners as to the progress or stage of completion of trials or services, as of the end of the reporting period, pursuant to contracts with clinical trial centers or CROs and the agreed upon fee to be paid for such services. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are deferred and capitalized. The capitalized amounts are expensed as the related goods are accepted by the Company or the services are performed. As of December 31, 2022 and 2021, the Company recorded approximately $0.6 million and $0.9 million, respectively, as prepaid research and development, which is included within prepaid expenses and other current assets in the accompanying balance sheets.

Acquisition-Related Costs

Acquisition-related costs include direct expenses incurred in connection with the Aceragen Acquisition, as well as integration-related professional fees and other incremental costs directly associated to the Aceragen Acquisition.

Stock-Based Compensation

The Company accounts for stock-based compensation using ASC 718, Compensation – Stock Compensation, or ASC 505-50, Equity – Equity Based Payments to Non-Employees, as applicable. The Company accounts for stock-based awards to employees and non-employee directors using the fair value-based method to determine compensation expense for all arrangements where shares of stock or equity instruments are issued for compensation.

The Company recognizes all share-based payments to employees and directors as expense in the statements of operations based on their fair values. The Company records compensation expense on a straight-line basis over an award’s requisite service period, or vesting period, based on the award’s fair value at the date of grant. Vesting for time-based options and restricted stock units is generally four years for employees and one year for directors. The Company uses a Black-Scholes option-pricing model to determine the fair value of each option grant as of the date of grant for expense incurred. The Black-Scholes option pricing model requires inputs for risk-free interest rate, dividend yield, expected stock price volatility and expected term of the options. Forfeitures are accounted for as they occur. See Note 14, “Stock-based Compensation,” for additional details.

Income Taxes

An asset and liability approach is used for financial accounting and reporting for income taxes. Deferred income taxes arise from temporary differences between income tax and financial reporting and principally relate to recognition of revenue and expenses in different periods for financial and tax accounting purposes and are measured using currently enacted tax rates and laws. In addition, a deferred tax asset can be generated by a net operating loss carryover. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.

In the event the Company is charged interest or penalties related to income tax matters, the Company would record such interest as interest expense and would record such penalties as other expense in the Statements of Operations. No such charges have been incurred by the Company. For each of the years ended December 31, 2022 and 2021, the Company had no uncertain tax positions. See Note 16, “Income Taxes,” for additional details.

Net Income (Loss) per Common Share Applicable to Common Stockholders

The Company uses the two-class method to compute net income per common share during periods the Company realizes net income and has securities outstanding (e.g., redeemable convertible preferred stock) that entitle the holder to participate in dividends and earnings of the Company. In addition, the Company analyzes the potential dilutive effect of outstanding redeemable convertible preferred stock under the "if-converted" method when calculating diluted earnings per share and reports the more dilutive of the approaches (two class or "if-converted"). The two-class method is not applicable during periods with a net loss, as the holders of the redeemable convertible preferred stock have no obligation to fund losses. The Company also analyzes the potential dilutive effect of outstanding stock options, unvested restricted stock and restricted stock units, warrants and shares underlying future tranche rights under the treasury stock method (as applicable), during periods of income, or during periods in which income is recognized related to changes in fair value of its liability-classified securities.

New Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB and rules are issued by the Securities and Exchange Commission (“SEC”) that the Company has or will adopt as of a specified date. Unless otherwise noted, management does not believe that any other recently issued accounting pronouncements issued by the FASB or guidance issued by the SEC had, or is expected to have, a material impact on the Company’s present or future financial statements.

Business Acquisition

12 Months Ended

Dec. 31, 2022

Business Acquisition

Business Acquisition

Note 3. Business Acquisition

On the Effective Date, and in accordance with the terms of the Merger Agreement, the Company acquired 100% of the outstanding security interests of Legacy Aceragen in a “stock-for-stock” transaction whereby all Legacy Aceragen outstanding equity interests were exchanged for a combination of shares of Company common stock, shares of Series Z Preferred Stock, and shares of the newly designated Series X non-voting preferred stock, par value $0.01 per share (“Series X Preferred Stock”). Under the terms of the Merger Agreement, Legacy Aceragen stockholders received (i) 451,608 shares of the Company’s common stock (inclusive of unvested restricted common stock – see Note 14), (ii) 80,656 shares of Series Z Preferred Stock (inclusive of unvested restricted preferred stock – see Note 14) and (iii) five shares of Series X Preferred Stock. In addition, all outstanding options and warrants to purchase Legacy Aceragen common stock were assumed by the Company and converted into stock options and warrants to purchase shares of the Company’s common stock and Series Z Preferred Stock on terms substantially identical to those in effect prior to the Aceragen Acquisition, except for adjustments to the underlying number of shares and the exercise price based on the Merger Agreement exchange ratio. The Aceragen Acquisition was unanimously approved by the board of directors of the Company and the board of directors of Legacy Aceragen. The closing of the transaction was not subject to the approval of the Company’s stockholders.

Pursuant to the Merger Agreement, at the Special Meeting the Company’s stockholders approved, among other matters: (i) the conversion of Series Z Preferred Stock into shares of common stock in accordance with Nasdaq Listing Rule 5635(a) (the “Conversion Proposal”) and (ii) a proposal to amend our Restated Certificate of Incorporation to effect a reverse stock split of all of the Company’s issued and outstanding shares of common stock (the “Reverse Stock Split Proposal” and, together with the Conversion Proposal, the “Merger Agreement Meeting Proposals”).

The Company’s transaction costs of $4.6 million were expensed as incurred and included in the “Acquisition-related costs” financial statement line item in the Company’s consolidated statement of operations.

The transaction was accounted for under the acquisition method of accounting. Under the acquisition method, the total purchase price of the acquisition is allocated to the net tangible and identifiable intangible assets acquired and liabilities assumed based on the fair values as of the date of the acquisition. Consideration paid is comprised of the estimated fair value of various securities issued including the Series Z Preferred Stock, Series X Preferred Stock, stock options, restricted stock and warrants issued to Legacy Aceragen shareholders. In the fourth quarter of fiscal 2022, the preliminary purchase price allocation was updated, including the related determination of fair value of these securities issued as consideration, the allocation of consideration to the specific in-process research

and development programs acquired and the related income tax implications for the updates to the purchase price allocation. The fair value of the consideration totaled approximately $65.6 million, summarized as follows:


(In thousands)
Common stock issued to Aceragen stockholders	$	2,809
Series Z issued to Aceragen stockholders (Note 9)		25,085
Series X liability in connection with Aceragen Acquisition (Note 8)		31,900
Stock options, restricted stock and warrants allocated to consideration paid		5,822
Total Consideration paid	$	65,616

The Company recorded the assets acquired and liabilities assumed as of the date of the Aceragen Acquisition based on the information available at that date. The following table presents the allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed as of the Aceragen Acquisition date:


(In thousands)
Assets acquired:
Cash and cash equivalents	$	5,482
Receivables		1,914
Prepaid expenses and other assets		575
In-process research and development assets		71,600
Goodwill		11,100
	$	90,671
Liabilities assumed:
Accounts Payable and accrued expenses	$	7,886
Acquisition Obligation (Note 7)		7,546
Operating lease liabilities		22
Deferred tax liabilities		9,601
	$	25,055

Net assets acquired	$	65,616

The fair value of IPR&D was capitalized as of the Aceragen Acquisition date and accounted for as indefinite-lived intangible assets until completion or disposition of the assets or abandonment of the associated research and development efforts. Upon successful completion of the development efforts, the useful lives of the IPR&D assets will be determined based on the anticipated period of regulatory exclusivity and will be amortized within operating expenses. Until that time, the IPR&D assets will be subject to impairment testing and will not be amortized. The goodwill recorded related to the acquisition is the excess of the fair value of the consideration transferred by the acquirer over the fair value of the net identifiable assets acquired and liabilities assumed at the date of the Aceragen Acquisition. The goodwill recorded is not deductible for tax purposes.

The following summarizes the Company’s intangible assets acquired in connection with the Aceragen Acquisition and their carrying value as of December 31, 2022.


					Carrying Value
					as of
	Acquisition Date				December 31,
(In thousands)	Fair Value		Impairment		2022
ACG-701 for Cystic Fibrosis	$	50,700	$	—	$	50,700
ACG-701 for Melioidosis		14,900		—		14,900
ACG-801 for Farber Disease		6,000		—		6,000
Total in-process research and development costs (IPR&D)	$	71,600	$	—	$	71,600

Intangible asset fair values for the three IPR&D programs were determined using the Multi-Period Excess Earnings Method (“MPEEM”) which is a form of the income approach. Under the MPEEM, the fair value of an intangible asset is equal to the present value of the asset's incremental after-tax cash flows (excess earnings) remaining after deducting the market rates of return on the estimated value of contributory assets (contributory charge) over its remaining useful life. To calculate fair value of acquired IPR&D programs under the MPEEM, the Company uses probability-weighted cash flows discounted at a rate considered appropriate given the significant inherent risks associated with drug development by development-stage companies. Cash flows were calculated based on estimated projections of revenues and expenses related to each program and then reduced by a contributory charge on requisite assets employed. Contributory assets included debt-free working capital, net fixed assets and assembled workforce. Rates of return on the contributory assets were based on rates used for comparable market participants. Cash flows were assumed to extend through the market exclusivity period estimated to be provided by orphan drug designation. The resultant cash flows were then discounted to present value using a weighted-average cost of equity capital for companies with profiles substantially similar to that of each acquired IPR&D program, which the Company believes represents the rate that market participants would use to value the assets. The Company compensated for the phase of development of each program by probability-adjusting its estimation of the expected future cash flows. The projected cash flows were based on significant assumptions, such as the time and resources needed to complete the development and approval of each IPR&D program, estimates of revenue and operating profit related to the program considering its stage of development, the life of the potential commercialized product and associated risks, including the inherent difficulties and uncertainties in drug development, such as obtaining marketing approval from the FDA and other regulatory agencies, and risks related to the viability of and potential alternative treatments in any future target markets.

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information reflects the consolidated results of operations of the Company as if the Aceragen Acquisition had taken place on January 1, 2021. The unaudited pro forma financial information is not necessarily indicative of the results of operations as they would have been had the transactions been effected on the assumed date.


	December 31,
(In thousands)	2022		2021
Net revenues	$	18,196	$	1,005
Net (loss) income	$	(35,379)	$	80,502

Nonrecurring pro forma transaction costs directly attributable to the Aceragen Acquisition was $11.2 million for the year ended December 31, 2022. There were no such costs for the year ending December 31, 2021. The costs deducted included success fees of $4.0 million in the aggregate incurred with financial advisors in connection with the Aceragen Acquisition. Additionally, the Company incurred $0.8 million in retention costs as a result of stay bonuses to employees immediately following the closing of the Aceragen Acquisition. The Company also incurred $3.7 million in restructuring costs related to the reduction-in-workforce during 2022 (see Note 13). These costs are excluded from the pro forma financial information for the year ended December 31, 2022. In addition, the Company recognized the $6.3 million income tax benefit for the year ended December 31, 2021 as if the transaction was completed on January 1, 2021.

Fair Value Measurements

12 Months Ended

Dec. 31, 2022

Fair Value Measurements

Fair Value Measurements

Note 4. Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The Company applies the guidance in ASC 820, Fair Value Measurement, to account for financial assets and liabilities measured on a recurring basis. Fair value is measured at the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability.

The Company uses a fair value hierarchy, which distinguishes between assumptions based on market data (observable inputs) and an entity's own assumptions (unobservable inputs). The guidance requires that fair value measurements be classified and disclosed in one of the following three categories:

●

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

●

Level 2: Quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

●

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each reporting period. There were no transfers between Level 1, 2, and 3 during the year ended December 31, 2022.

The table below presents the assets and liabilities measured and recorded in the consolidated financial statements at fair value on a recurring basis at December 31, 2022 and 2021 categorized by the level of inputs used in the valuation of each asset and liability.



	December 31, 2022
(In thousands)	Total		Level 1		Level 2		Level 3
Assets
Cash	$	3,342	$	3,342	$	—	$	—
Cash equivalents – money market funds		8,702		8,702		—		—
Total assets	$	12,044	$	12,044	$	—	$	—
Liabilities
Warrant liability	$	2,819	$	—	$	—	$	2,819
Series X Preferred Stock liability		34,300		—		—		34,300
Total liabilities	$	37,119	$	—	$	—	$	37,119


	December 31, 2021
(In thousands)	Total		Level 1		Level 2		Level 3
Assets
Cash	$	250	$	250	$	—	$	—
Cash equivalents – money market funds		32,295		32,295		—		—
Total assets	$	32,545	$	32,545	$	—	$	—

The Level 1 assets consist of cash and money market funds, which are actively traded daily. The Level 3 liabilities include the Company’s warrant liability and Series X Preferred Stock liability.

Changes in Level 3 Liabilities Measured at Fair Value on a Recurring Basis

Warrant Liability and Series X Preferred Stock Liability

The reconciliation of the Company's warrant and Series X Preferred Stock liability measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows:


			Series X
	Warrant		Preferred Stock
(In thousands)	Liability		Liability
Balance, December 31, 2021	$	—	$	—
Issuance in connection with the Aceragen Acquisition		3,180		31,900
Change in fair value		(361)		2,400
Balance, December 31, 2022	$	2,819	$	34,300

Assumptions Used in Determining Fair Value of Liability-Classified Warrants

The Company utilizes an option pricing model to value its liability-classified warrants. Inherent in the valuation model are assumptions related to volatility, risk-free interest rate, expected term, and dividend rate.

The fair value of the warrants has been estimated with the following weighted-average assumptions:


	December 31,
	2022
Risk-free interest rate		4.09%
Expected dividend yield		—
Expected term (years)		4.1
Expected volatility		104%
Stock price (common stock)	$	5.95
Discount rate applied to preferred shares		15%
Exercise price (per share)	$	7.82

Assumptions Used in Determining Fair Value of Liability-Classified Series X Preferred Stock

The fair value of the Series X Preferred Stock represents the present value of estimated future payments that include royalty payments, as well as potential payments contingent upon the Company being awarded a priority review voucher (“PRV”). The Company utilized an income approach and Monte Carlo simulation method to determine the estimated fair value of the Series X Preferred Stock. The inputs used in the valuation approach are based on many factors such as estimated sales proceeds related to the PRV, the relevant market size, the estimated probability of regulatory success rates, anticipated patent protection, expected pricing, expected treated population, sales by region, estimated royalty payments and discount rate.

- Definition

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

+ References + Details

Property and Equipment

12 Months Ended

Dec. 31, 2022

Property and Equipment

Property and Equipment

Note 5. Property and Equipment

At December 31, 2022 and 2021, net property and equipment at cost consisted of the following:


	December 31,		December 31,
($ in thousands)	2022		2021
Leasehold improvements	$	107	$	107
Equipment and other		712		712
Total property and equipment, at cost	$	819	$	819
Less: Accumulated depreciation and amortization		812		797
Property and equipment, net	$	7	$	22

Depreciation and amortization expense on property and equipment was less than $0.1 million for each of the years ended December 31, 2022 and 2021.

Accrued Expenses

12 Months Ended

Dec. 31, 2022

Accrued Expenses

Accrued Expenses

Note 6. Accrued Expenses

At December 31, 2022 and 2021, accrued expenses consisted of the following:


	December 31,		December 31,
($ in thousands)	2022		2021
Payroll and related costs	$	1,886	$	477
Clinical and nonclinical trial expenses		2,106		2,909
Professional and consulting fees		1,637		591
Restructuring and other costs (Note 13)		2,327		—
Acquisition-related costs		1,666		—
Other		289		111
Total accrued expenses	$	9,911	$	4,088

Acquisition Obligation

12 Months Ended

Dec. 31, 2022

Acquisition Obligation

Acquisition Obligation

Note 7. Acquisition Obligation

As a result of the Aceragen Acquisition, the Company assumed an obligation pursuant to the Arrevus Merger Agreement (as defined below), whereby Legacy Aceragen was obligated to make an aggregate future payment of $7.5 million to the Former Stockholders (as defined below), $6.0 million and $1.5 million of which was originally due in October 2022 and January 2023, respectively (the “Acquisition Obligation”). The estimated fair value of the Acquisition Obligation on the Effective Date was $7.5 million. During the fourth quarter of 2022, $1.5 million of the $7.5 million obligation was paid.

In connection with the closing of the Aceragen Acquisition, Legacy Aceragen entered into a binding term sheet (the “Term Sheet”) with the representative of certain former stockholders of Arrevus (the “Former Stockholders”), pursuant to which Legacy Aceragen and the Former Stockholders agreed to defer certain payments owed by Legacy Aceragen to the Former Stockholders under that certain Agreement and Plan of Merger, dated October 18, 2021, by and among Legacy Aceragen, Arrevus, and their respective affiliates (the “Arrevus Merger Agreement”), in an aggregate amount of $6.0 million (the “Deferred Payments”) until October 24, 2023. The Deferred Payments bear interest at 12% per annum, paid quarterly beginning on April 1, 2023. The Company may prepay the Deferred Payments at any time, subject to payment in full in cash of the Deferred Payments, plus accrued interest up until the date of such prepayment. Any prepayment of the Deferred Payments must be made on a pro-rata basis among the holders of the Convertible Notes (as defined below) in proportion to their respective shares of the Deferred Payments; provided that prior to any such prepayment, the holder of each Convertible Note shall be given written notice thereof and the option to convert the principal balance into shares of common stock pursuant to the terms of the Convertible Note.

The Term Sheet provided that the Deferred Payments will be memorialized in 12% convertible unsecured promissory notes to be issued by the Company, pursuant to which each Former Stockholder will have the right to convert such Former Stockholder’s portion of its right to receive the Deferred Payments into shares of common stock (the “Convertible Notes”), The Term Sheet further provides that the Convertible Notes will provide the Former

Stockholders with customary registration rights covering the Common Stock issued following any conversion of the Convertible Notes. See Note 19 for discussion of Convertible Notes issued in January 2023.

During the period the Term Sheet was in effect, the Company imputed interest expense using the effective interest method based on the difference between the estimated fair value and the notional value. Interest expense for the year ended December 31, 2022 was immaterial.

Series X Preferred Stock Liability

12 Months Ended

Dec. 31, 2022

Series X Preferred Stock Liability

Series X Preferred Stock Liability

Note 8. Series X Preferred Stock Liability

In connection with the Aceragen Acquisition, the Company issued five shares of Series X Preferred Stock. The shares of Series X Preferred Stock are non-convertible and non-voting and are entitled to discrete development and commercial milestone payments as well as royalty payments on net product sales of ACG-801 for Farber disease. The royalty rates range between low single digits to low double digits and expire, unless terminated earlier, upon the later of the expiration of the last valid claim in the licensed patent rights in such country covering such product and the expiration of data exclusivity in such country for such product. In addition, the payments due to the holders of the Series X shares are secured by substantially all of the assets related to ACG-801.

The Company concluded that the shares of Series X Preferred Stock do not represent a residual interest in the Company and are accounted for as debt. The liabilities associated with the shares of Series X Preferred Stock require the Company to make certain estimates and assumptions, particularly about the achievement of future development and regulatory milestones and future product sales. Such estimates and assumptions are utilized in determining the expected repayment term, accretion of interest expense and classification between current and long-term portions of amounts outstanding. The Company elected to carry the Series X Preferred Stock liability at fair value, and the debt instrument is outside the scope of ASC 480, Distinguishing Liabilities from Equity, and thus will be classified as a liability under ASC 470, Debt, in the Company’s consolidated financial statements. Any changes in the fair value of the liability are recognized in the consolidated statement of operations until it is settled.

Redeemable Convertible Preferred Stock

12 Months Ended

Dec. 31, 2022

Redeemable Convertible Preferred Stock

Redeemable Convertible Preferred Stock

Note 9. Redeemable Convertible Preferred Stock

Series B1 Preferred Stock

On December 23, 2019, the Company entered into a Securities Purchase Agreement (the “December 2019 Securities Purchase Agreement”) with institutional investors affiliated with Baker Brothers Advisors, LP (the “Purchasers”). Pursuant to the December 2019 Securities Purchase Agreement, the Company sold 23,684 shares of Series B1 convertible preferred stock (“Series B1 Preferred Stock”) and warrants to purchase 139,318 shares of the Company’s common stock at an exercise price of $25.84 per share (or, if the holder elected to exercise the warrants for shares of Series B1 Preferred Stock, 23,684 shares of Series B1 Preferred Stock at an exercise price of $2,584 per share) for aggregate gross proceeds of $3.9 million.

Due to the redeemable nature of the Series B1 Preferred Stock, the Series B1 Preferred Stock was classified as temporary equity and the carrying value was being accreted to its redemption value as of December 31, 2020 and while the Series B1 Preferred Stock was outstanding during 2021. During 2021, all the Company’s 23,684 shares of Series B1 Preferred Stock outstanding were converted into shares of the Company’s common stock.

The Series B1 warrants were classified as liabilities until their termination in March 2021 as the underlying shares were potentially redeemable and such redemption was deemed to be outside of the Company’s control.

Series B2, B3 and B4 Preferred Stock (Future Tranche Rights)

Pursuant to the December 2019 Securities Purchase Agreement, the Company agreed to sell to the Purchasers, at their option and subject to certain conditions, (i) 98,685 shares of the Company’s Series B2 convertible preferred stock (“Series B2 Preferred Stock”) and 580,500 warrants to purchase common stock at an exercise price of $25.84 per share (or, at the election of the holder, 98,685 shares of Series B2 Preferred Stock at an price of $2,584.00 per share), for aggregate gross proceeds of $15 million (the “Series B2 Tranche”), (ii) 82,418 shares of Series B3 convertible preferred stock (“Series B3 Preferred Stock”) and 387,849 warrants to purchase common stock at an exercise price of $30.94 per share (or, at the election of the holder, 65,934 shares of Series B3 Preferred Stock at a price of $3,094.00 per share), for aggregate gross proceeds of $15.0 million (the “Series B3

Tranche”), and (iii) 82,418 shares of Series B4 convertible preferred stock (“Series B4 Preferred Stock”) and 387,849 warrants to purchase common stock at an exercise price of $30.94 per share (or, at the election of the holder, 65,934 shares of Series B3 Preferred Stock at a price of $3,094.00 per share), for aggregate gross proceeds of $15.0 million (the “Series B4 Tranche”) (collectively, the “Future Tranche Rights”) over a period of up to 21 months following the Company’s 2020 Annual Meeting of Stockholders held on May 12, 2020. As consideration for the Future Tranche Rights, the Company received aggregate gross proceeds of $6.2 million in December 2019.

The purchase and sale of the securities issuable under the Series B2, B3, and B4 tranches described above were subject to three separate closings, each to be conducted at the purchasers’ discretion. As a result of the Purchasers not exercising the Series B2 Tranche prior to expiration, all Future Tranche Rights and outstanding warrants previously issued pursuant to the December 2019 Securities Purchase Agreement were terminated during the year ended December 31, 2021. Accordingly, the Company is no longer eligible to receive additional proceeds pursuant to the December 2019 Securities Purchase Agreement.

The Future Tranche Rights were classified as liabilities until their termination in March 2021. Changes to the fair value of the future tranche right liability each reporting period, including the derecognition of the liability during the year ended December 31, 2021, is included in Future Tranche Right Liability Revaluation Gain in the Company’s statements of operations.

Series Z Redeemable Preferred Stock

In connection with the Aceragen Acquisition, the Company issued 80,656 shares of Series Z Preferred Stock. The Series Z Preferred Stock did not have voting rights except for voting on specific corporate matters including (i) changes to the rights and preferences of the Series Z Preferred Stock, (ii) issuance of additional Series Z Preferred Stock, and (iii) enter into a fundamental transaction such as a sale of the Company. Certain provisions of the Series Z Preferred Stock are as follows:

●

Conversion: Upon obtaining stockholder approval at the Special Meeting, each share of Series Z automatically converted into 58.82 shares of common stock, subject to beneficial ownership limitations.

●

Dividends: Series Z Preferred Stock was eligible to participate in any dividends with common stockholders on an as-converted basis

●

Liquidation: In the event of the liquidation, dissolution, or winding up of the affairs of the Company (a “Liquidity Event”), prior to stockholder approval at the Special Meeting, the holders of Series Z Preferred Stock would have been entitled to receive a liquidation preference prior to any payment to the holders of common stock.

●

Redemption: In the event the Company would have been unable to obtain an affirmative stockholder vote at the Special Meeting to permit conversion, each holder of Series Z Preferred Stock would have been entitled to elect, at the holder’s option, to have the shares of Series Z Preferred Stock be redeemed by the Company and equal to the estimated fair value of the Series Z Preferred Stock share at the time of redemption. Due to this redemption feature, as of December 31, 2022, the Series Z Preferred Stock was classified within temporary equity on the consolidated balance sheet.

The carrying value of the shares of Series Z is accreted to redemption value using the estimated fair value of the redemption value at each reporting period until the redeemable convertible preferred stock cease to be outstanding or the redemption right has expired. There was no accretion for the year ended December 31, 2022.

As more fully described in Note 19, “Subsequent Events”, in January 2023, following shareholder approval of the Merger Agreement Proposals at the Special Meeting, all outstanding Series Z Preferred Stock converted into shares of common stock.

Stockholders' Equity (Deficit)

12 Months Ended

Dec. 31, 2022

Stockholders' Equity (Deficit)

Stockholders' Equity (Deficit)

Note 10. Stockholders’ Equity (Deficit)

Preferred Stock

The Restated Certificate of Incorporation, as amended, of the Company permits its Board of Directors to issue up to 5,000,000 shares of preferred stock, par value $0.01 per share, in one or more series, to designate the number of shares constituting such series, and fix by resolution, the powers, privileges, preferences and relative, optional or special rights thereof, including liquidation preferences and dividends, and conversion and redemption rights of each such series.

As of December 31, 2022, the Company has designated the following class of preferred stock:

●

Series A: 1,500,000 authorized shares of Series A Convertible Preferred Stock

●

Series B: 200,000 authorized shares of Series B Preferred Stock

●

Series B1: 277,921 authorized shares of Series B1 Redeemable Convertible Preferred Stock

●

Series B2:98,685 authorized shares of Series B2 Redeemable Convertible Preferred Stock

●

Series B3: 82,814 authorized shares of Series B3 Redeemable Convertible Preferred Stock

●

Series B4: 82,814 authorized shares of Series B4 Redeemable Convertible Preferred Stock

●

Series Z: 80,656 authorized shares of Series Z Redeemable Convertible Preferred Stock

●

Series X: 5 authorized shares of Series X Preferred Stock

Series A Convertible Preferred Stock. The dividends on the Series A convertible preferred stock (“Series A Preferred Stock”) are payable semi-annually in arrears at the rate of 1% per annum, at the election of the Company, either in cash or additional duly designated, fully paid and nonassessable shares of Series A Preferred Stock. In the event of liquidation, dissolution, or winding up of the Company, after payment of debts and other liabilities of the Company, the holders of the Series A Preferred Stock then outstanding will be entitled to a distribution of $1 per share out of any assets available to shareholders. The Series A Preferred Stock is non-voting. All remaining shares of Series A Preferred Stock rank, as to payment upon the occurrence of any liquidation event, senior to the Company’s common stock. Shares of Series A Preferred Stock are convertible, in whole or in part, at the option of the holder into fully paid and nonassessable shares of common stock at $4,624.00 per share, subject to adjustment. As of December 31, 2022 and 2021, there were 655 shares of Series A Preferred Stock outstanding.

Series B Preferred Stock. On November 17, 2022, the Company’s Board of Directors declared a dividend of one one-thousandth of a share of Series B Preferred Stock, par value $0.01 per share (“Series B Preferred Stock”), for each outstanding share of the Company’s common stock to stockholders of record at 5:00 p.m. Eastern Time on November 28, 2022 (the “Record Date”). Each share of Series B Preferred Stock entitled the holder thereof to 1,000,000 votes per share, together with the outstanding shares of the Company’s common stock as a single class, exclusively with respect to certain proposals at the Special Meeting. The holders of the Series B Preferred Stock were not entitled to receive dividends of any kind. All outstanding shares of Series B Preferred Stock were redeemed immediately prior to, or concurrently with, the approval of the Reverse Stock Split Proposal at the Special Meeting.

Series B1, B2, B3 and B4 Convertible Preferred Stock. No shares outstanding at December 31, 2022 and 2021.

Series Z Preferred Stock. In connection with the Aceragen Acquisition, the Company issued Series Z Preferred Stock. See Note 9 for details on rights and preferences of holders of the Series Z Preferred Stock.

Series X Preferred Stock. In connection with the Aceragen Acquisition, the Company issued five shares of Series X Preferred Stock. Holders of shares of Series X Preferred Stock are entitled to receive distributions on shares of Series X Preferred Stock as set forth in (a) that certain the Stock and Warrant Purchase Agreement, dated as of March 24, 2021, by and between Legacy Aceragen and NovaQuest, as amended by that Amendment, dated

October 25, 2021, and as such agreement may be amended from time to time (the “Purchase Agreement”), and (b) that certain Sales Distribution and PRV Agreement dated as of October 25, 2021 (the “PRV Agreement”).

Such distributions include tiered royalty payments on net sales of ACG-801 for Farber disease based on a mid-double-digit percentage which drops to mid-single digits after reaching a predetermined milestone cap, and a required 35% share of the proceeds from the possible sale of a priority review voucher (“PRV”), which may be awarded by the FDA upon regulatory approval in the U.S. for ACG-801.

Common Stock

Common Stock Authorized

As of December 31, 2022, the Company had 140,000,000 shares of common stock authorized, of which 7,861,082 shares of common stock were reserved for issuance upon the exercise of outstanding warrants and options to purchase common stock, outstanding restricted stock units, the conversion of Series A Preferred Stock, the conversion of Series Z Preferred Stock, and shares available for grant under the Company’s equity incentive and employee stock purchase plans, each more fully described in Note 14.

Put Shares

Pursuant to the terms of a unit purchase agreement dated as of May 5, 1998, the Company issued and sold a total of 8,821 shares of common stock (the “Put Shares”) at a price of $2,176.00 per share. Under the terms of the unit purchase agreement, the initial purchasers (the “Put Holders”) of the Put Shares have the right (the “Put Right”) to require the Company to repurchase the Put Shares. The Put Right may not be exercised by any Put Holder unless: (1) the Company liquidates, dissolves or winds up its affairs pursuant to applicable bankruptcy law, whether voluntarily or involuntarily; (2) all of the Company’s indebtedness and obligations, including without limitation the indebtedness under the Company’s then outstanding notes, has been paid in full; and (3) all rights of the holders of any series or class of capital stock ranking prior and senior to the common stock with respect to liquidation, including without limitation the Series A convertible preferred stock, have been satisfied in full. The Company may terminate the Put Right upon written notice to the Put Holders if the closing sales price of its common stock exceeds $4,352.00 per share for the twenty consecutive trading days prior to the date of notice of termination. Because the Put Right is not transferable, in the event that a Put Holder has transferred Put Shares since May 5, 1998, the Put Right with respect to those shares has terminated. As a consequence of the Put Right, in the event the Company is liquidated, holders of shares of common stock that do not have Put Rights with respect to such shares may receive smaller distributions per share upon the liquidation than if there were no Put Rights outstanding.

As of December 31, 2022, the Company had repurchased or received documentation of the transfer of 2,941 Put Shares and 263 of the Put Shares continued to be held in the name of Put Holders. The Company cannot determine at this time what portion of the Put Rights of the remaining 5,617 Put Shares have terminated.

Equity Financings

Common Stock Purchase Agreement

On March 4, 2019, the Company entered into a Purchase Agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”), which was amended on September 2, 2020 (as amended to date, the “LPC Purchase Agreement”), pursuant to which, upon the terms and subject to the conditions and limitations set forth therein, Lincoln Park committed to purchase an aggregate of $35.0 million of shares of Company common stock from time to time at the Company’s sole discretion over a 36-month period, which expired on March 4, 2022. As consideration for entering into the LPC Purchase Agreement, the Company issued 15,867 shares of Company common stock to Lincoln Park as a commitment fee (the “Commitment Shares”). The closing price of the Company’s common stock on March 4, 2019 was $48.28 and the Company did not receive any cash proceeds from the issuance of the Commitment Shares.

During the year ended December 31, 2021, the Company sold 47,059 shares pursuant to the LPC Purchase Agreement, resulting in net proceeds of $4.2 million. No shares were sold during the year ended December 31, 2022, prior to the March 4, 2022 expiration of the LPC Purchase Agreement.

"At-The-Market" Equity Program

In November 2018, the Company entered into an Equity Distribution Agreement (the “ATM Agreement”) with JMP Securities LLC (“JMP”), pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $50.0 million (the “Shares”) through JMP as its agent. Subject to the terms and conditions of the ATM Agreement, JMP will use its commercially reasonable efforts to sell the Shares from time to time, based upon the Company’s instructions, by methods deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended, or if specified by the Company, by any other method permitted by law, including but not limited to in negotiated transactions. The Company has no obligation to sell any of the Shares, and the Company or JMP may at any time suspend sales under the ATM Agreement or terminate the ATM Agreement. JMP is entitled to a fixed commission of 3.0% of the gross proceeds from Shares sold.

During the year ended December 31, 2021, the Company sold 301,021 Shares pursuant to the ATM Agreement resulting in net proceeds, after deduction of commissions and other offering expenses, of $15.3 million. No Shares were sold during the year ended December 31, 2022. As of December 31, 2022, the Company may sell up to an additional $19.5 million of shares under the ATM Agreement.

Common and Preferred Stock Warrants

In connection with various financing transactions, the Company has issued warrants to purchase shares of the Company’s common stock and preferred stock. The Company accounts for common stock and preferred stock warrants as equity instruments or liabilities, depending on the specific terms of the warrant agreement. See Note 2 for further details on accounting policies related to the Company’s warrants.

In connection with the Aceragen Acquisition, the Company issued warrants to Legacy Aceragen warrant holders to purchase shares of its common stock and Series Z Preferred Stock. The Series Z Preferred Stock warrants are liability classified and remeasured at each reporting period.

The following table summarizes outstanding warrants to purchase shares of the Company’s common stock and/or preferred stock as of December 31, 2022 and 2021:


	Number of Warrants
	December 31,	December 31,	Weighted-Average
Description	2022	2021	Exercise Price		Expiration Date
Equity-classified warrants:
May 2013 warrants	908	908		$ 1.36	None
September 2013 warrants	241	241		$ 1.36	None
February 2014 warrants	128	128		$ 1.36	None
April 2020 Private Placement first closing warrants	178,794	178,794		$ 38.76	Apr 2023
April 2020 Private Placement second closing warrants	80,801	80,801		$ 46.07	Dec 2023
April 2020 Private Placement second closing warrants	—	67,260		$ 0.17	None
July 2020 Private Placement first closing warrants	—	22,925		$ 0.17	None
July 2020 Private Placement first closing warrants	162,601	162,601		$ 43.86	Jul 2023
Assumed Legacy Aceragen common stock warrants	79,596	—		$ 7.82	Mar 2031
	503,069	513,658
Liability-classified warrants:
Assumed Legacy Aceragen Series Z Warrants (1)	14,215	—		$ 460.00	Mar 2031
	14,215	—
Total outstanding	517,284	513,658

The table below is a summary of the Company's warrant activity for the year ended December 31, 2022.


	Number of Warrants
	Common	Series Z		Weighted-Average
	Warrants	Warrants	Total	Exercise Price ⁽¹⁾
Outstanding at December 31, 2021	513,658	—	513,658	$	21.76
Issued ⁽²⁾	79,596	14,215	93,811		7.82
Exercised	(90,185)	—	(90,185)		0.17
Expired	—	—	—		—
Outstanding at December 31, 2022	503,069	14,215	517,284	$	17.58

(1)

Weighted-average exercise price for Series Z Warrants is calculated based on the common stock equivalent shares and exercise price as all Series Z Warrants were automatically converted into warrants to purchase common stock on January 12, 2023. See Note 19.

(2)

Represents warrants issued in connection with the Aceragen Acquisition. See Note 3.

- Definition

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

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+ Details

Government Contracts Revenue

12 Months Ended

Dec. 31, 2022

Government Contracts Revenue

Government Contracts Revenue

Note 11. Government Contracts Revenue

Government contracts revenue for the years ended December 31, 2022 consists of revenue from contracts with customers (U.S. government agencies) accounted for in accordance with ASC Topic 606, as more fully described in Note 2.

As of December 31, 2022, the Company had three in-process contracts with various agencies of the U.S. government with a total aggregate contract value of $46.3 million, of which $16.0 million has been used as of December 31, 2022. Of the $30.3 million total contractual value remaining as of December 31, 2022, $30.0 million is related to a contract awarded by Defense Threat Reduction Agency (“DTRA”) to develop ACG-701 as a potential medical countermeasure against the pathogen that causes melioidosis, B. Pseudomallei (the “DTRA Award”). The DTRA Award was granted pursuant to an agreement with a consortium management firm (“CMF”) with a contractual term through December 2026. While the contractual arrangement is with a CMF, the Company has determined that DTRA is the customer in the arrangement and the contract contains a single performance obligation (ACG-801 development services) which meet the criteria to be recognized over time. Other government contracts are not currently material.

During the year ended December 31, 2022, the Company recognized government contract revenues of $4.9 million, of which $4.6 million related to the DTRA Award. No such revenues were recognized during the year ended December 31, 2021. As of December 31, 2022, there were no material amounts of remaining performance obligations that are required to be disclosed.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

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+ Details

Clinical Funding, Collaboration and License Agreements

12 Months Ended

Dec. 31, 2022

Clinical Funding, Collaboration and License Agreements

Clinical Funding, Collaboration and License Agreements

Note 12. Clinical Funding, Collaboration and License Agreements

Clinical Funding Agreements

Cystic Fibrosis Foundation Award

In December 2021, the Cystic Fibrosis Foundation (“CFF”) provided Legacy Aceragen a Therapeutic Development Award Agreement (the “CFF Award”) in the amount of $3.5 million, of which $1.0 million had been received as of December 31, 2022. The CFF Award is intended to support the Company’s clinical trial for cystic fibrosis pulmonary exacerbations. The CFF Awards will provide the Company with $2.5 million of additional funding to be paid in line with certain development program milestones anticipated to begin in 2023 and go through 2024.

U.S. Government Clinical Funding Contracts

The Company is party to contracts with various agencies of the U.S. government which provide funding for the development of certain product candidates as more fully discussed in Note 11.

Collaboration Agreement with Scriptr

In February 2021, the Company entered into a collaboration and option agreement with Scriptr Global, Inc. (“Scriptr”), pursuant to which (i) Scriptr and the Company will conduct a research collaboration utilizing Scriptr Platform Technology (“SPT”) to identify, research and develop gene therapy candidates (each, a “Collaboration Candidate”) for the treatment, palliation, diagnosis or prevention of (a) myotonic dystrophy type 1 (“DM1 Field”) and (b) Friedreich’s Ataxia (“FA Field”) on a Research Program-by-Research Program basis, as applicable, and (ii) the Company was granted an exclusive option, in its sole discretion, to make effective the Scriptr License Agreement (as defined below) for a given Research Program, as defined below, to make use of Collaboration Candidates and related intellectual property (collectively, the “Scriptr Agreement”).

Pursuant to the Scriptr Agreement, Scriptr will use commercially reasonable efforts to carry out research activities set forth in accordance with the applicable DM1 Field and FA Field research plans, including certain pre-clinical proof of concept studies, to identify research Collaboration Candidates utilizing SPT (each, a “Research Program”). Following the completion of activities under a given Research Program, Scriptr will prepare and submit to the Company a comprehensive data package (each, a “Data Package”) that summarizes, on a Research Program-by-Research Program basis, any Collaboration Candidates researched under the Research Program, including any data and results. Upon receipt of a Data Package, the Company has, in its sole discretion, up to two-hundred seventy (270) calendar days to make effective the exclusive license agreement entered into by and between Scriptr and the Company, pursuant to which, among other things, Scriptr grants us exclusive rights and licenses with respect to the development, manufacture and commercialization of licensed candidates and products, subject to certain conditions and limitations (the “Scriptr License Agreement”), for a given Research Program (each licensed Research Program, a “Licensed Program”). The Scriptr License Agreement provides for customary development milestones on candidates developed under a Licensed Program and royalties on licensed products, if any.

In partial consideration of the rights granted by Scriptr to Idera under the Scriptr Agreement, the Company made a one-time, non-creditable and non-refundable payment to Scriptr during the first quarter of 2021. In order to fund the Research Programs, the Company will reimburse Scriptr for costs incurred by or on behalf of Scriptr in connection with the conduct of each Research Program during the research term in accordance with the applicable Research Program budget and payment schedule. The Company incurred research and development expenses under the Scriptr Agreement of $0.5 million and $2.1 million during the years ended December 31, 2022 and 2021, respectively.

Option and License Agreement with Licensee

In April 2019, the Company entered into an amended and restated option and license agreement with a privately-held biopharmaceutical company (“Licensee”), pursuant to which the Company granted Licensee (i) exclusive worldwide rights to develop and market IMO-8400 for the treatment, palliation, and diagnosis of all diseases, conditions, or indications in humans (the “IMO-8400 License”), (ii) an exclusive right and license to develop IMO-9200 in accordance with certain IMO-9200 pre-option exercise protocols (the “IMO-9200 Option Period License”), and (iii) an exclusive one-year option, exercisable at Licensee’s discretion, to obtain the exclusive worldwide rights to develop and market IMO-9200 for the treatment, palliation and diagnosis of all diseases, conditions, or indications in humans (the “IMO-9200 Option”) (collectively, the “Licensee Agreement”).

Under the terms of the Licensee Agreement, the Company received upfront, non-refundable fees totaling approximately $1.4 million and ownership of 10% of Licensee’s outstanding common stock, subject to future adjustment, for granting Licensee the IMO-8400 License, the IMO-9200 Option Period License and transfer of related drug materials in 2019. In 2020, the IMO-9200 Option expired and, in 2022, the Licensee Agreement was terminated in its entirety. Accordingly, the Company is no longer eligible to receive any development and sales-based milestone payments and royalties pursuant to the Licensee Agreement.

As disclosed above, in connection with the Licensee Agreement, the Company acquired 10% of Licensee’s outstanding common stock, subject to future adjustment. The Company accounted for the investment in accordance with ASC 321, Investments-Equity Securities. In connection with the termination of the Licensee Agreement, the Company determined that the value of the investment in License was de minimis and wrote off the carrying value at the date of termination, of less than $0.1 million.

Restructuring and Other Costs

12 Months Ended

Dec. 31, 2022

Restructuring and Other Costs

Restructuring and Other Costs

Note 13. Restructuring and Other Costs

On September 28, 2022, in connection with the Aceragen Acquisition, the Company determined to restructure its operations and reduce its workforce which resulted in seven positions being eliminated, representing approximately 54% of the Company’s pre-Aceragen Acquisition employees, of which five were eliminated on or before September 28, 2022. All seven of the positions were eliminated by December 31, 2022.

In April 2021, in order to align the Company’s workforce with its needs in light of clinical trial outcomes and related shift in focus to business development activities aimed on identifying new portfolio opportunities, the Company determined to restructure its operations and reduce its workforce which resulted in 16 positions being eliminated, representing approximately 50% of the Company’s pre-restructuring employees.

As a result of the above restructuring initiatives, the Company incurred restructuring-related charges of $3.7 million and $1.3 million for the years ended December 31, 2022 and 2021, respectively. Restructuring-related charges for both periods which were comprised of one-time termination costs in connection with the reduction-in-workforce, including severance, benefits, and related costs.

As of December 31, 2022, the short-term portion of the accrued restructuring balance, or $2.3 million, is included in “Accrued expenses” in the accompanying consolidated balance sheets. The long-term portion of less than $0.1 million is included within “Other liabilities” in the accompanying consolidated balance sheets.

Stock-Based Compensation

12 Months Ended

Dec. 31, 2022

Stock-Based Compensation

Stock-Based Compensation

Note 14. Stock-based Compensation

As of December 31, 2022, the only equity compensation plans from which the Company was permitted to issue new awards from was the Company’s 2013 Stock Incentive Plan (as amended to date, the “2013 Plan”) and 2017 Employee Stock Purchase Plan (the “2017 ESPP”), each as more fully described below. Subsequent to December 31, 2022, the Company’s board of directors adopted the 2022 Equity Plan (as defined in Note 19), which was approved by the Company’s stockholders at the Special Meeting on January 12, 2023.

Equity Incentive and Employee Stock Purchase Plans

2013 Stock Incentive Plan

The Company's board of directors adopted the 2013 Plan, which was approved by the Company’s stockholders effective July 26, 2013. Amendments to the 2013 Plan were approved by the Company’s stockholders in June 2014, June 2015, June 2017, June 2019, and June 2022. The 2013 Plan was intended to further align the interests of the Company and its stockholders with its employees, including its officers, non-employee directors, consultants, and advisers by providing equity-based incentives. The 2013 Plan allows for the issuance of incentive stock options intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended, non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock units (“RSUs”), other stock-based awards and performance awards. The total number of shares of common stock authorized for issuance under the 2013 Plan is 603,121 shares of the Company’s common stock, plus such additional number of shares of common stock (up to 9,174 shares) as is equal to the number of shares of common stock subject to awards granted under the Company’s 2008 Stock Incentive Plan (the “2008 Plan”), to the extent such awards expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right.

As of December 31, 2022, options to purchase a total of 284,017 shares of common stock and 48,910 unvested RSUs were outstanding, and up to 252,527 shares of common stock remained available for grant under the 2013 Plan. However, on the effective date of the 2022 Equity Plan (as defined in Note 19), all shares remaining available for grant under the 2013 Plan were rolled into the 2022 Equity Plan (as defined in Note 19).

Legacy Aceragen 2021 Stock Incentive Plan

In accordance with the Merger Agreement, the Company assumed and became the sponsor of the Legacy Aceragen’s 2021 Stock Incentive Plan, as amended (the “Legacy Aceragen Plan”). Under the Merger Agreement,

each Legacy Aceragen option that was outstanding and unexercised immediately prior to the effective time of the Aceragen Acquisition was assumed and converted into and became an option to purchase (i) shares of the Company’s common stock (the “Legacy Aceragen Common Options”) and (ii) shares of the Company’s Series Z Preferred Stock (the “Legacy Aceragen Preferred Options”), each on the same terms and conditions as applied to such options immediately prior to the Aceragen Acquisition as adjusted by the exchange ratio pursuant to the Merger Agreement. No additional awards were permitted to be issued from the Legacy Aceragen Plan as of the effective time of the Aceragen Acquisition.

Following stockholder approval of the Conversion Proposal, and pursuant to the terms of the Merger Agreement, in January 2023, each Legacy Aceragen Preferred Option became exercisable solely for shares of the Company’s common stock. See Note 19.

Other Awards and Inducement Grants

The Company has not made any awards pursuant to other equity incentive plans, including the 2008 Plan, since the Company’s stockholders approved the 2013 Plan. As of December 31, 2022, options to purchase a total of 4,908 shares of common stock were outstanding under the 2008 Plan. In addition, as of December 31, 2022, non-statutory stock options to purchase an aggregate of 19,116 shares of common stock were outstanding that were issued outside of the 2013 Plan to certain employees in 2015 and 2014 pursuant to the Nasdaq inducement grant exception as a material component of new hires’ employment compensation.

2017 Employee Stock Purchase Plan

The Company’s board of directors adopted the 2017 ESPP which was approved by the Company’s stockholders and became effective June 7, 2017. Amendments to the 2017 ESPP were approved by the Company’s stockholders in June 2019 and June 2022. The 2017 ESPP is intended to qualify as an “employee stock purchase plan” as defined in Section 423 of the Internal Revenue Code of 1986, as amended, and is intended to encourage our employees to become stockholders of ours, to stimulate increased interest in our affairs and success, to afford employees the opportunity to share in our earnings and growth and to promote systematic savings by them. The total number of shares of common stock authorized for issuance under the 2017 ESPP is 59,558 shares of common stock, subject to adjustment as described in the 2017 ESPP. Participation is limited to employees that would not own 5% or more of the total combined voting power or value of the stock of the Company after the grant. As of December 31, 2022, 39,048 shares remained available for issuance under the 2017 ESPP, however, future offering periods have been suspended until further notice.

Stock Purchase Plan Administration

The 2017 ESPP provides for offerings to employees to purchase common stock with offerings beginning on dates determined by the compensation committee of the board of directors or on the first business day thereafter. Each offering begins a “plan period” during which payroll deductions are to be made and held for the purchase of common stock at the end of the plan period. The compensation committee may, at its discretion, choose a plan period of 12 months or less for subsequent offerings and/or choose a different commencement date for offerings. During each plan period participating employees may elect to have a portion of their compensation, ranging from 1% to 10% of compensation as defined by the plan, withheld and used for the purchase of common stock at the end of each plan period. The purchase price is equal to 85% of the lower of the fair market value of a share of common stock on the first trading date of each plan period or the fair market value of a share of common stock on the last trading day of the plan period, and is limited by participant to $25,000 in fair value of common stock per year as well as other quarterly plan limitations as defined by each plan.

For the years ended December 31, 2022 and 2021, the Company issued 7,788 and 2,889 shares of common stock, respectively, under the 2017 ESPP and received proceeds of less than $0.1 million for each year, as a result of stock purchases.

Accounting for Stock-based Compensation

The Company recognizes non-cash compensation expense for stock-based awards under the Company’s equity incentive plans and employee stock purchases under the Company’s 2017 ESPP as follows:

●

Stock Options: Compensation cost is recognized over an award’s requisite service period, or vesting period, using the straight-line attribution method, based on the grant date fair value determined using the Black-Scholes option-pricing model.

●

RSUs: Compensation cost for time-based RSUs, which vest over time based only on continued service, is recognized on a straight-line basis over the requisite service period based on the fair value of the Company’s common stock on the date of grant. Compensation cost for awards that are subject to market considerations is recognized on a straight-line basis over the implied requisite service period, based on the grant date fair value estimated using a Monte Carlo simulation. Compensation cost for awards that are subject to performance conditions is recognized over the period of time commencing when the performance condition is deemed probable of achievement based on the fair value of the Company’s common stock on the date of grant.

●

Employee Stock Purchases: Compensation cost is recognized over each plan period based on the fair value of the look-back provision, calculated using the Black-Scholes option-pricing model, considering a 15% discount on shares purchased.

Total stock-based compensation expense attributable to stock-based payments made to employees and directors and employee stock purchases included in operating expenses in the Company's statements of operations for the years ended December 31, 2022 and 2021 was as follows:


		Year Ended
		December 31,
(in thousands)	2022		2021
Stock-based compensation:
Research and development
Employee Stock Purchase Plan	$	24	$	28
Equity Incentive Plans		258		546
	$	282	$	574
General and administrative
Employee Stock Purchase Plan	$	5	$	3
Equity Incentive Plans		1,901		1,960
	$	1,906	$	1,963
Total stock-based compensation expense	$	2,188	$	2,537

During the years ended December 31, 2022 and 2021, the weighted average fair market value of stock options granted was $5.88 and $26.18, respectively.

Assumptions Used in Determining Fair Value of Stock Options

Inherent in the Black-Scholes option-pricing model are the following assumptions:

●

Volatility. The Company estimates stock price volatility based on the Company’s historical stock price performance over a period of time that matches the expected term of the stock options.

●

Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant commensurate with the expected term assumption.

●

Expected term. The expected term of stock options granted is based on an estimate of when options will be exercised or cancelled in the future.

●

Dividend rate. The dividend rate is based on the historical rate, which the Company anticipates will remain at zero.

The fair value of each option award at the date of grant was estimated using the Black-Scholes option pricing model. All options granted during the years ended December 31, 2022 and 2021 were granted at exercise prices equal to the fair market value of the common stock on the dates of grant.

The following weighted average assumptions apply to the options to purchase 68,796 and 79,784 shares of common stock granted to employees and directors during the years ended December 31, 2022 and 2021, respectively:


	2022		2021
Average risk-free interest rate		2.6%		0.4%
Expected dividend yield		—		—
Expected lives (years)		3.8		3.6
Expected volatility		104%		94%
Weighted average exercise price (per share)	$	8.34	$	45.56

All options granted during the years ended December 31, 2022 were granted at exercise prices equal to the fair market value of the common stock on the dates of grant.

Stock Option Activity

The following table summarizes stock option activity for the year ended December 31, 2022.


	Common Stock Options
($ in thousands, except per share data)	Number of Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value
Outstanding at December 31, 2021	305,838	$	137.08	5.9	$	—
Granted	68,796		8.34
Assumed in connection with Aceragen Acquisition	111,038		6.22
Exercised	—		—
Forfeited	(15,963)		3.27
Expired	(63,535)		148.30
Outstanding at December 31, 2022 ⁽¹⁾	406,174	$	83.00	6.1	$	102
Exercisable at December 31, 2022	239,866	$	132.26	4.1	$	54

	Preferred Stock Options
($ in thousands, except per share data)	Number of Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value
Outstanding at December 31, 2021	—	$	—	—		—
Assumed in connection with Aceragen Acquisition	19,826		365.96
Forfeited	(2,304)		130.00
Outstanding at December 31, 2022 ⁽¹⁾	17,522	$	397.02	9.1	$	1,073
Exercisable at December 31, 2022	5,229	$	317.43	8.9	$	568

(1)

Includes both vested stock options as well as unvested stock options for which the requisite service period has not been rendered but that are expected to vest based on achievement of a service condition.

In March 2021, the Company accelerated the vesting of 90,328 options, which were previously granted from 2019 to 2021. The modification resulted in an insignificant incremental stock-based compensation charge.

As of December 31, 2022, there was $3.9 million of unrecognized compensation cost related to unvested options, which the Company expects to recognize over a weighted average period of 2.7 years.

Restricted Stock Unit Activity

The following table summarizes restricted stock unit activity for the year ended December 31, 2022:


	Time-based Awards			Market/Performance-based Awards
	Number of Shares	Weighted-Average Grant Date Fair Value		Number of Shares	Weighted-Average Grant Date Fair Value
Nonvested shares at December 31, 2021	4,039	$	39.10	29,814	$	26.14
Granted	16,657		6.79	—		—
Cancelled	—		—	—		—
Vested	(1,600)		41.36	—		—
Nonvested shares at December 31, 2022	19,096	$	10.73	29,814	$	26.14

Time-based Restricted Stock Units

In March 2021, the Company accelerated the vesting of 8,110 unvested time-based RSUs which were previously granted in 2019 and 2020. The modification resulted in an insignificant incremental stock-based compensation charge on the modification date. During the years ended December 31, 2022 and 2021, the Company recognized $0.7 million and $0.3 million of compensation expense related to modified time-based RSUs that would have vested under the original terms of the award.

As of December 31, 2022, there was less than $0.1 million of unrecognized compensation cost related to the Company’s time-based RSUs, which is expected to be recognized over a weighted average period of 0.8 years.

Market/Performance-based Restricted Stock Units

In July 2020, the Company granted RSUs to certain employees, including executive officers, under the 2013 Plan, with vesting that may occur upon a combination of specific performance and/or market conditions. Accordingly, the Company views these RSUs as two separate awards: (i) an award that vests if the market condition is achieved, and (ii) an award that vests whether or not the market condition is achieved, so long as the performance condition is achieved.

The Company recognized compensation expense for these awards over the estimated requisite service period of 2.36 years based on the estimated fair value when considering the market condition of the award, which was determined using a Monte Carlo simulation. During the year ended December 31, 2022, the Company recognized $0.3 million of compensation expense related to these awards. As of December 31, 2022, there was no remaining unrecognized compensation cost for the market-based component of these awards. However, should the performance condition be achieved, the Company would recognize an additional $0.3 million of compensation expense.

Restricted Stock Activity

The following table summarizes restricted stock activity for the year ended December 31, 2022:


	Number of Shares
	Common Stock	Series Z
Nonvested shares at December 31, 2021	—	—
Issued in connection with Aceragen Acquisition ⁽¹⁾	16,763	2,993
Cancelled	—	—
Vested	(1,331)	(237)
Nonvested shares at December 31, 2022	15,432	2,756

(1)

Issued in connection with Aceragen Acquisition to Legacy Aceragen shareholders as part of the merger consideration which include time-based vesting restrictions.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2022

Commitments and Contingencies

Commitments and Contingencies

Note 15. Commitments and Contingencies

Lease Commitments

As of December 31, 2022, the Company’s leased assets primarily consisted of its office headquarters in Exton, Pennsylvania. During each of the years ended December 31, 2022 and 2021, rent expense, including real estate taxes, totaled approximately $0.4 million. The leases are classified as operating leases.

Future minimum commitments as of December 31, 2022 under the Company’s lease agreements are approximately:



December 31,	Operating Leases (in thousands)
2023	$	285
2024		240
2025		101
Total lease payments	$	626
Less: imputed interest		(66)
Total present value of lease liabilities	$	560

The Company entered into the Exton, Pennsylvania facility lease on April 1, 2015, which was subsequently amended on September 23, 2015 to include additional space. The Company currently leases approximately 11,000 square feet of office space at its Exton facility. The lease expires on May 31, 2025.

Employee Benefit Plans

Through December 31, 2022, the Company had an employee benefit plan under Section 401(k) of the Internal Revenue Code of 1986, as amended, which allowed eligible employees to make contributions up to a specified percentage of their compensation. Under the plan, the Company matched up to 5% of base salary, by matching 100% of the first 5% of base salary contributed by each employee.

Additionally, in connection with the Aceragen Acquisition, the Company assumed Legacy Aceragen’s pooled employer benefit plan under Section 401(k) of the Internal Revenue Code of 1986, as amended (“Aceragen Pooled Plan”), which allows employees to make contributions up to a specified percentage of their compensation. Under the Aceragen Pooled Plan, the Company matches 100% of the first 3% of employee eligible compensation, as defined, contributed to the Aceragen Pooled Plan and 50% of the next 2% of the employee eligible compensation contributed to the Aceragen Pooled Plan. The Aceragen Pooled Plan was effective for Legacy Aceragen employees only through December 31, 2022. Effective January 1, 2023, the Company adopted the Aceragen Pooled Plan for all of its employees.

Total matching contributions for the years ended December 31, 2022 and 2021 was approximately $0.2 million and $0.3 million, respectively.

Contingent Severance and Retention Payments

In connection with the Aceragen Acquisition, the Company entered into transition and separation agreements with two former executives and retention agreements with three retained executives. These arrangements include certain compensation totaling $2.7 million in the aggregate to be paid to such executives in the form of stock and/or cash contingent on certain events occurring, including obtaining certain shareholder approvals at the Special Meeting for terminated executives and termination of employment within six months from the date of the Special Meeting for retained employees. As none of these contingencies were probable of occurring as of December 31, 2022, no expenses have been recognized in the consolidated statements of operations.

Income Taxes

12 Months Ended

Dec. 31, 2022

Income Taxes

Income Taxes

Note 16. Income Taxes

As of December 31, 2022 and 2021, the significant components of the Company’s deferred tax assets and liabilities after applying the enacted corporate tax rates are approximately as follows:


(in thousands)	2022		2021
Deferred tax assets:
Operating loss carryforwards	$	94,356	$	90,550
Tax credit carryforwards		29,988		28,226
Stock-based compensation		4,959		6,902
Capitalized research and development		11,287		7,818
Lease liabilities		141		220
Other		459		70
Total deferred tax assets	$	141,190	$	133,786
Deferred tax liabilities:
Right-of-use asset	$	(134)	$	(213)
In-process research and development intangible assets		(15,312)		—
Total deferred tax liabilities	$	(15,446)	$	(213)
Valuation allowance	$	(129,027)	$	(133,573)
Net deferred tax assets (liabilities)	$	(3,283)	$	—

The Company has provided a full valuation allowance for its deferred tax asset as of December 31, 2021 due to the uncertainty surrounding the ability to realize these assets. At December 31, 2022, the Company evaluated the realizability of its deferred tax assets and determined that the valuation allowance should be decreased by approximately $6.3 million primarily for consideration of the acquired in-process research and development intangible assets. An income tax benefit for the year ended December 31, 2022 is reflected in the consolidated statement of operations.

The difference between the U.S. federal corporate tax rate and the Company’s effective tax rate for the years ended December 31, 2022 and 2021 are as follows:


	2022		2021
Expected federal income tax rate	(21.0)	%	(21.0)	%
State income taxes, net of federal benefit	1.7		2.1
Federal and state credits	(4.2)		1.7
Reduction of state income tax rate	14.9		—
Warrant and future tranche right revaluation gain	(0.3)		26.9
Series X revaluation loss	1.7		—
Stock-based compensation	4.6		—
Other	1.7		(0.4)
Change in valuation allowance	(20.4)		(9.3)
Effective tax rate	(21.3)	%	0.0	%

The components of income tax benefit are as follows:


(in thousands)	2022		2021
Current:
Federal	$	—	$	—
State		—		—
	$	—	$	—
Deferred:
Federal	$	(6,318)	$	—
State		—		—
	$	(6,318)	$	—

Total Income Tax Benefit	$	(6,318)	$	—

As of December 31, 2022, the Company had cumulative federal, various state, and Switzerland net operating loss carryforwards (“NOLs”) of approximately $355.8 million, $362.7 million, and $0.9 million, respectively, available to reduce federal, state and foreign taxable income, respectively. As a result of the Tax Cuts and Jobs Act of 2017, federal net operating losses incurred for taxable years beginning after January 1, 2018 have an unlimited carryforward period, but can only be utilized to offset 80% of taxable income in future taxable periods. Of the $355.8 million of federal NOLs, $158.4 million have an unlimited carryforward and the remaining NOLs are subject to expiration through 2037. In addition, at December 31, 2022, the Company had cumulative federal and state tax credit carryforwards of $28.3 million and $1.9 million, respectively. The federal credits expire through 2042 and the state credits expire through 2033.

Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, prescribe limitations on the amount of NOLs and tax credit carryforwards that may be utilized in any one year. Under Internal Revenue Code Section 382, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes to offset its post-change income may be limited. In December 2017, the Company completed a study which determined that ownership changes had occurred. The ownership changes have and will continue to subject the Company’s pre-ownership change NOL carryforwards to an annual limitation, which will significantly restrict the Company’s ability to use them to offset taxable income in periods following the ownership change. The federal and state net operating loss and tax credit carryforwards and related deferred tax assets shown in the table below have been adjusted to reflect the limitations that resulted from this study. As no study has been completed subsequent to 2017, additional ownership change limitations may result from ownership changes that have occurred, or may occur in the future. In conjunction with the Aceragen Acquisition, the Company acquired Legacy Aceragen’s federal, various state, and Switzerland NOL’s of $8.1 million, $19.1 million, and $0.8 million, respectively.

The Company applies ASC 740-10, Accounting for Uncertainty in Income Taxes, an interpretation of ASC 740. ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in financial statements and requires the impact of a tax position to be recognized in the financial statements if that position is more likely than not of being sustained by the taxing authority. The Company had no unrecognized tax benefits resulting from uncertain tax positions at December 31, 2022 and 2021.

The Company files income tax returns in the U.S., various states, and Switzerland and is subject to examination in each of these jurisdictions. The Company’s tax years in the US are open under statute from inception to present. All open years may be examined to the extent that tax credits or net operating loss carry forwards are used in future periods. The Company does not expect any material increase or decrease in its income tax expense, in the next twelve months, related to examinations or changes in uncertain tax positions. The Company’s policy is to record interest and penalties on uncertain tax positions as general and administrative expense.

- Definition

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

+ References

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

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

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

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

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

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

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

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

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

+ Details

Related Party Transactions

12 Months Ended

Dec. 31, 2022

Related Party Transactions

Related Party Transactions

Note 17. Related Party Transactions

Pillar Investment Entities

Youssef El Zein, a member of the Company’s Board of Directors until his resignation in October 2017, is a director and controlling stockholder of Pillar Invest Corporation (“Pillar Invest”), which is the general partner of Pillar Pharmaceuticals I, L.P., Pillar Pharmaceuticals II, L.P., Pillar Pharmaceuticals III, L.P., Pillar Pharmaceuticals IV, L.P., Pillar Pharmaceuticals V, L.P., Pillar 6, Pillar 7 and Pillar Partners (collectively, the “Pillar Investment Entities”). As of December 31, 2022, the Pillar Investment Entities beneficially owned 985,204 shares of the Company's common stock.

During the year ended December 31, 2021, certain of the Pillar Investment Entities exercised warrants to purchase 185,787 shares of the Company’s common stock at an exercise price of $0.17 per share for a total exercise price of less than $0.1 million. A total of 1,121 shares were used as cashless shares to cover the exercise costs.

During the year ended December 31, 2022, certain of the Pillar Investment Entities exercised warrants to purchase 90,186 shares of the Company’s common stock at an exercise price of $0.17 per share for a total exercise price of less than $0.1 million.

As of December 31, 2022, the Pillar Investment Entities held (i) warrants to purchase up to 178,794 shares of the Company’s common stock at an exercise price of $38.76 per share, (ii) warrants to purchase up to 162,601 shares of the Company’s common stock at an exercise price of $43.86 per share, and (iii) warrants to purchase up to 80,801 shares of the Company’s common stock at an exercise price of $46.07 per share.

NovaQuest

Ron Wooten, a member of the Company’s Board of Directors, is a member of the investment committee of NQ POF V GP, Ltd. ("NovaQuest GP"), which is the general partner of NovaQuest Co-Investment Fund XV, L.P. (“NovaQuest”).

In connection with the Aceragen Acquisition, NovaQuest was issued five shares of Series X Preferred Stock and is entitled to receive distributions on shares of Series Z Preferred Stock, as more fully described in Note 10. In addition, all outstanding warrants to purchase Legacy Aceragen common stock held by NovaQuest immediately prior to the Aceragen Acquisition were assumed by the Company and converted into warrants to purchase shares of the Company’s common stock and Series Z Preferred Stock on terms substantially identical to those in effect prior to the Aceragen Acquisition, except for adjustments to the underlying number of shares and the exercise price based on the Merger Agreement exchange ratio.

As of December 31, 2022, NovaQuest held five shares of Series X Preferred Stock, warrants to purchase 79,032 shares of the Company’s common stock, and warrants to purchase 14,115 shares of Series Z Preferred Stock.

Agreement with Dr. Atul Chopra

In March 2021, Legacy Aceragen entered into a consulting agreement with Dr. Atul Chopra, a founder and a member of Legacy Aceragen’s board of directors, pursuant to which Dr. Chopra provides consulting and advisory services in exchange for (i) $16,667 per month and (ii) a right to purchase 1,000,000 fully vested shares of Legacy Aceragen’s common stock at a price equivalent to par value $0.001 per share. Subsequent to the executed consulting agreement, Dr. Chopra purchased all 1,000,000 shares, which were converted into shares of the Company’s common stock and Series Z Preferred Stock in connection with the Aceragen Acquisition based on the Merger Agreement exchange ratio. The term of the consulting agreement was to remain in effect for a period of one year and automatically renew for successive one-year terms until terminated. At the effective time of the Aceragen Acquisition, the consulting agreement was terminated. Since March 2021 (inception of consulting agreement) through the termination of the agreement, Dr. Chopra received $0.3 million in consulting fees pursuant to the agreement.

As of December 31, 2022, Dr. Chopra owned 127,718 shares of the Company’s common stock and 22,810 shares of Series Z Preferred Stock, which in January automatically converted into 1,341,764 shares of the Company’s common stock. Following the conversion of the Series Z Preferred Stock, Dr. Chopra owned 1,469,482 shares of the Company’s common stock.

Board Fees Paid in Stock

Pursuant to the Company’s director compensation program, in lieu of director board and committee fees of $0.1 million during each of the years ended December 31, 2022 and 2021, the Company issued 10,781 and 16,221 shares of common stock, respectively, to certain of its directors. Director board and committee fees are paid in arrears and the number of shares issued was calculated based on the market closing price of the Company’s common stock on the issuance date.

Net Income (Loss) per Common Share Applicable to Common Stockholders

12 Months Ended

Dec. 31, 2022

Net Income (Loss) per Common Share Applicable to Common Stockholders

Net Income (Loss) per Common Share Applicable to Common Stockholders

Note 18. Net Income (Loss) per Common Share Applicable to Common Stockholders

Details in the computation of basic and diluted net income (loss) per common share were as follows:


	Year Ended
	December 31,
($ in thousands except share and per share data)		2022		2021
Net (loss) income per share — Basic:
Net (loss) income	$	(23,360)	$	98,091
Less: Undistributed earnings to preferred stockholders		—		(1,150)
Net (loss) income applicable to common stockholders - basic	$	(23,360)	$	96,941

Numerator for basic net (loss) income applicable to common stockholders	$	(23,360)	$	96,941
Denominator for basic net (loss) income applicable to common stockholders		3,255,648		2,894,287
Net (loss) income applicable to common stockholders - basic	$	(7.18)	$	33.49

Net (loss) income per share — Diluted:
Net (loss) income applicable to common holders - basic	$	(23,360)	$	96,941
Less: Warrant revaluation gain applicable to dilutive liability-classified warrants		—		(6,983)
Less: Future tranche right revaluation gain applicable to dilutive liability-classified future tranche rights		—		(118,803)
Numerator for diluted net (loss) income applicable to common stockholders	$	(23,360)	$	(28,845)

Denominator for basic net (loss) income applicable to common stockholders		3,255,648		2,894,287
Plus: Incremental shares underlying “in the money” liability-classified warrants outstanding		—		5,492
Plus: Incremental shares underlying “in the money” liability-classified future tranche rights outstanding		—		48,880
Denominator for diluted net income (loss) applicable to common stockholders		3,255,648		2,948,659
Net (loss) income applicable to common stockholders - diluted	$	(7.18)	$	(9.78)

Total antidilutive securities (or their common stock equivalent, where applicable) excluded from the calculation of diluted net loss per share for the years ended December 31, 2022 and 2021 were as follows:


	Year Ended
	December 31,
		2022	2021
Common stock options		406,174	306,000
Preferred stock options		1,030,693	—
Restricted stock units and restricted stock awards		226,460	33,865
Common stock warrants		503,069	513,661
Preferred stock warrants		836,176	—
Convertible preferred stock		4,582,364	14
Total		7,584,936	853,540

Subsequent Events

12 Months Ended

Dec. 31, 2022

Subsequent Events.

Subsequent Events

Note 19. Subsequent Events

The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. In some instances, such subsequent events may require retroactive adjustment to information reported at the balance sheet date.

Conversion of Series Z Preferred Stock

On January 12, 2023, at the Special Meeting, the Company’s stockholders approved the issuance of shares of the Company’s common stock upon conversion of the Series Z Preferred Stock in accordance with Nasdaq Listing Rule 5635(a). Following approval, effective January 17, 2023 at 5:00 p.m. Eastern Time, all 80,656 outstanding shares of Series Z Preferred Stock were automatically converted into 4,744,467 shares of the Company’s common stock pursuant to the terms of the Series Z Preferred Stock. In addition, all Legacy Aceragen Preferred Options were automatically converted into Legacy Aceragen Common Options.

Reverse Stock Split

On January 12, 2023, at the Special Meeting, the Company’s stockholders approved an amendment to the Company’s Restated Certificate of Incorporation, as amended, to effect a reverse stock split of the Company’s issued and outstanding common stock by a whole number ratio to be determined by the Company board of directors within a range of one-for-seventeen (1:17) and one-for-twenty-three (1:23) (or any number in between), to be effected in the sole discretion of the Company’s board of directors at any time within one year of the date of the Special Meeting.

On January 17, 2023, the Company implemented a one-for-seventeen (1:17) reverse split of its issued and outstanding shares of common stock (the “Reverse Split”). The Reverse Split became effective on January 17, 2023 at 5:00 p.m., Eastern Time, and the Company’s common stock began trading on the Nasdaq Capital Market on a Reverse Split-adjusted basis at the opening of trading on January 18, 2023. As of a result of the Reverse Split, every seventeen (17) shares of the Company’s issued and outstanding common stock were combined into one share of its common stock, except to the extent that the Reverse Split resulted in any of the Company’s stockholders owning a fractional share, which was settled in cash. The Reverse Split did not change the number of authorized shares or par value of the Company’s common or preferred stock.

2022 Equity Plan

On January 12, 2023, at the Special Meeting, the Company’s stockholders approved the Idera Pharmaceuticals, Inc. 2022 Stock Incentive Plan (the “2022 Equity Plan”). The 2022 Equity Plan provides for the issuance of incentive stock options, non-qualified stock options, stock awards, stock units, stock appreciation rights, and other stock-based awards. The 2022 Equity Plan was adopted principally to serve as a successor plan to the 2013 Plan and to increase the number of shares of the Company’s common stock reserved for equity-based awards by an amount equal to the sum of: (i) 1,388,235 shares of Company common stock, plus (ii) 194,456 shares of Company common stock, which is the number of shares of Company common stock reserved for issuance under the 2013 Plan that remained available for grant under the 2013 Plan as of the effective date of the 2022 Equity Plan. In addition, shares of the Company’s common stock underlying any outstanding award granted under the 2013 Plan that, following the 2022 Equity Plan effective date, expire, or are terminated, surrendered, or forfeited for any reason without issuance of such shares shall be available for new grants under the 2022 Equity Plan.

January 2023 Convertible Notes

Pursuant to the terms of the Term Sheet, on January 31, 2023, the Company issued 12% convertible unsecured promissory notes (the “Convertible Notes”) to certain of the Former Stockholders in an aggregate amount of approximately $5.9 million. The Convertible Notes bear annual interest at 12%. Under the terms of the Convertible Notes, at the holder’s election, any or all of the outstanding principal and accrued interest may be converted into shares of Company’s common stock using a conversion price determined by the VWAP (as defined in the Convertible Notes) on the applicable trading market for the fifteen consecutive trading days ending prior to the date the holder provides notice of their intent to convert. The terms of the Convertible Notes provide the Former

Stockholders with customary registration rights covering the Common Stock issued following any conversion of the Convertible Notes.

Silicon Valley Bank Closure

Silicon Valley Bank (“SVB”) was closed on March 10, 2023 by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver. At the time of closing, the Company had approximately 56% of its cash and cash equivalent balances in segregated custodial accounts held by a third-party custodian for which SVB was the Company’s agent and/or SVB Asset Management, an affiliate of SVB, is the advisor. The Company’s investment portfolio currently does not contain any securities of SVB. On March 12, 2023, the U.S. Treasury, Federal Reserve, and FDIC announced that SVB depositors would have access to all of their money starting March 13, 2023 and the Company has received such access. The Company does not believe it will be impacted by the closure of SVB and will continue to monitor the situation as it evolves.

Cost-reduction Plan Implementation

On April 13, 2023, the Board approved certain cost-cutting measures with a view to preserving capital to support the Company’s continuing operations. As part of this plan, the Company has commenced the furlough of 12 employees, representing approximately 46% of its workforce. Additionally, certain of the Company’s employees and executive officers will defer portions of their respective base salaries in amounts that exceed $200,000, with such deferrals having a retroactive effective date of April 5, 2023. The Company will continue continue to review operations for other opportunities to reduce costs and pursue financing opportunities. For more information, please see Item 9B of this Form 10-K.

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2022

Summary of Significant Accounting Policies

Basis of Presentation

Use of Estimates

Segment Information

Financial Instruments

Concentration of Credit Risk

Business Combinations

Cash and Cash Equivalents

Accounts Receivable

Property and Equipment

Indefinite-Lived Intangible Assets

Goodwill

Operating Lease Right-of-use Asset and Lease Liability

Impairment of Long-Lived Assets

Warrant Liability

Redeemable Preferred Stock

Series X Preferred Stock Liability

Series X Preferred Stock Liability

Future Tranche Right Liability and Revaluation Gain

Revenue Recognition

●

identify the contract(s) with a customer;

●

identify the performance obligations in the contract;

●

determine the transaction price;

●

allocate the transaction price to the performance obligations in the contract; and

●

recognize revenue when (or as) the entity satisfies a performance obligation.

Government Contract Revenue

See Note 11, “Government Contracts Revenue,” of the notes to these consolidated financial statements for discussion of the Company’s cost reimbursement contracts.

Other Revenues

Customer Concentration Risk

The U.S. Government accounted for all of the Company’s revenues for the year ended December 31, 2022.

Research and Development Prepayments, Accruals and Related Expenses

Acquisition-Related Costs

Stock-Based Compensation

Income Taxes

Net Income (Loss) per Common Share applicable to Common Stockholders

Net Income (Loss) per Common Share Applicable to Common Stockholders

New Accounting Pronouncements

Income Tax Uncertainties

Business Acquisition (Tables)

12 Months Ended

Dec. 31, 2022

Business Acquisition

Schedule of purchase price consideration


(In thousands)
Common stock issued to Aceragen stockholders	$	2,809
Series Z issued to Aceragen stockholders (Note 9)		25,085
Series X liability in connection with Aceragen Acquisition (Note 8)		31,900
Stock options, restricted stock and warrants allocated to consideration paid		5,822
Total Consideration paid	$	65,616

Summary of preliminary allocation of the purchase price to the assets acquired and liabilities assumed


(In thousands)
Assets acquired:
Cash and cash equivalents	$	5,482
Receivables		1,914
Prepaid expenses and other assets		575
In-process research and development assets		71,600
Goodwill		11,100
	$	90,671
Liabilities assumed:
Accounts Payable and accrued expenses	$	7,886
Acquisition Obligation (Note 7)		7,546
Operating lease liabilities		22
Deferred tax liabilities		9,601
	$	25,055

Net assets acquired	$	65,616

Schedule of intangible assets acquired in connection with the Aceragen Acquisition


					Carrying Value
					as of
	Acquisition Date				December 31,
(In thousands)	Fair Value		Impairment		2022
ACG-701 for Cystic Fibrosis	$	50,700	$	—	$	50,700
ACG-701 for Melioidosis		14,900		—		14,900
ACG-801 for Farber Disease		6,000		—		6,000
Total in-process research and development costs (IPR&D)	$	71,600	$	—	$	71,600

Schedule of pro forma financial information


	December 31,
(In thousands)	2022		2021
Net revenues	$	18,196	$	1,005
Net (loss) income	$	(35,379)	$	80,502

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2022

Fair Value Measurements

Schedule of assets and liabilities measured and recorded in financial statements at fair value on a recurring basis



	December 31, 2022
(In thousands)	Total		Level 1		Level 2		Level 3
Assets
Cash	$	3,342	$	3,342	$	—	$	—
Cash equivalents – money market funds		8,702		8,702		—		—
Total assets	$	12,044	$	12,044	$	—	$	—
Liabilities
Warrant liability	$	2,819	$	—	$	—	$	2,819
Series X Preferred Stock liability		34,300		—		—		34,300
Total liabilities	$	37,119	$	—	$	—	$	37,119


	December 31, 2021
(In thousands)	Total		Level 1		Level 2		Level 3
Assets
Cash	$	250	$	250	$	—	$	—
Cash equivalents – money market funds		32,295		32,295		—		—
Total assets	$	32,545	$	32,545	$	—	$	—

Schedule of reconciliation measured at fair value on a recurring basis using unobservable inputs


			Series X
	Warrant		Preferred Stock
(In thousands)	Liability		Liability
Balance, December 31, 2021	$	—	$	—
Issuance in connection with the Aceragen Acquisition		3,180		31,900
Change in fair value		(361)		2,400
Balance, December 31, 2022	$	2,819	$	34,300

Warrant liability

Fair Value Measurements

Schedule of assumptions used in determining fair value


	December 31,
	2022
Risk-free interest rate		4.09%
Expected dividend yield		—
Expected term (years)		4.1
Expected volatility		104%
Stock price (common stock)	$	5.95
Discount rate applied to preferred shares		15%
Exercise price (per share)	$	7.82

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2022

Property and Equipment

Schedule of net property and equipment at cost


	December 31,		December 31,
($ in thousands)	2022		2021
Leasehold improvements	$	107	$	107
Equipment and other		712		712
Total property and equipment, at cost	$	819	$	819
Less: Accumulated depreciation and amortization		812		797
Property and equipment, net	$	7	$	22

Accrued Expenses (Tables)

12 Months Ended

Dec. 31, 2022

Accrued Expenses

Schedule of accrued expenses


	December 31,		December 31,
($ in thousands)	2022		2021
Payroll and related costs	$	1,886	$	477
Clinical and nonclinical trial expenses		2,106		2,909
Professional and consulting fees		1,637		591
Restructuring and other costs (Note 13)		2,327		—
Acquisition-related costs		1,666		—
Other		289		111
Total accrued expenses	$	9,911	$	4,088

Stockholders' Equity (Deficit) (Tables)

12 Months Ended

Dec. 31, 2022

Stockholders' Equity (Deficit)

Schedule of warrants outstanding and exercisable for purchase of common stock


	Number of Warrants
	December 31,	December 31,	Weighted-Average
Description	2022	2021	Exercise Price		Expiration Date
Equity-classified warrants:
May 2013 warrants	908	908		$ 1.36	None
September 2013 warrants	241	241		$ 1.36	None
February 2014 warrants	128	128		$ 1.36	None
April 2020 Private Placement first closing warrants	178,794	178,794		$ 38.76	Apr 2023
April 2020 Private Placement second closing warrants	80,801	80,801		$ 46.07	Dec 2023
April 2020 Private Placement second closing warrants	—	67,260		$ 0.17	None
July 2020 Private Placement first closing warrants	—	22,925		$ 0.17	None
July 2020 Private Placement first closing warrants	162,601	162,601		$ 43.86	Jul 2023
Assumed Legacy Aceragen common stock warrants	79,596	—		$ 7.82	Mar 2031
	503,069	513,658
Liability-classified warrants:
Assumed Legacy Aceragen Series Z Warrants (1)	14,215	—		$ 460.00	Mar 2031
	14,215	—
Total outstanding	517,284	513,658

Summary of warrant activity


	Number of Warrants
	Common	Series Z		Weighted-Average
	Warrants	Warrants	Total	Exercise Price ⁽¹⁾
Outstanding at December 31, 2021	513,658	—	513,658	$	21.76
Issued ⁽²⁾	79,596	14,215	93,811		7.82
Exercised	(90,185)	—	(90,185)		0.17
Expired	—	—	—		—
Outstanding at December 31, 2022	503,069	14,215	517,284	$	17.58

(1)

(2)

Represents warrants issued in connection with the Aceragen Acquisition. See Note 3.

Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2022

Stock-Based Compensation

Schedule of stock-based compensation expense attributable to share-based payments made to employees and directors and included in operating expenses


		Year Ended
		December 31,
(in thousands)	2022		2021
Stock-based compensation:
Research and development
Employee Stock Purchase Plan	$	24	$	28
Equity Incentive Plans		258		546
	$	282	$	574
General and administrative
Employee Stock Purchase Plan	$	5	$	3
Equity Incentive Plans		1,901		1,960
	$	1,906	$	1,963
Total stock-based compensation expense	$	2,188	$	2,537

Schedule of weighted average assumptions applied to options


	2022		2021
Average risk-free interest rate		2.6%		0.4%
Expected dividend yield		—		—
Expected lives (years)		3.8		3.6
Expected volatility		104%		94%
Weighted average exercise price (per share)	$	8.34	$	45.56

Schedule of information related to outstanding and exercisable options


	Common Stock Options
($ in thousands, except per share data)	Number of Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value
Outstanding at December 31, 2021	305,838	$	137.08	5.9	$	—
Granted	68,796		8.34
Assumed in connection with Aceragen Acquisition	111,038		6.22
Exercised	—		—
Forfeited	(15,963)		3.27
Expired	(63,535)		148.30
Outstanding at December 31, 2022 ⁽¹⁾	406,174	$	83.00	6.1	$	102
Exercisable at December 31, 2022	239,866	$	132.26	4.1	$	54

	Preferred Stock Options
($ in thousands, except per share data)	Number of Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value
Outstanding at December 31, 2021	—	$	—	—		—
Assumed in connection with Aceragen Acquisition	19,826		365.96
Forfeited	(2,304)		130.00
Outstanding at December 31, 2022 ⁽¹⁾	17,522	$	397.02	9.1	$	1,073
Exercisable at December 31, 2022	5,229	$	317.43	8.9	$	568

(1)

Schedule of information related to restricted stock activity


	Time-based Awards			Market/Performance-based Awards
	Number of Shares	Weighted-Average Grant Date Fair Value		Number of Shares	Weighted-Average Grant Date Fair Value
Nonvested shares at December 31, 2021	4,039	$	39.10	29,814	$	26.14
Granted	16,657		6.79	—		—
Cancelled	—		—	—		—
Vested	(1,600)		41.36	—		—
Nonvested shares at December 31, 2022	19,096	$	10.73	29,814	$	26.14

Schedule of summary of restricted stock activity


	Number of Shares
	Common Stock	Series Z
Nonvested shares at December 31, 2021	—	—
Issued in connection with Aceragen Acquisition ⁽¹⁾	16,763	2,993
Cancelled	—	—
Vested	(1,331)	(237)
Nonvested shares at December 31, 2022	15,432	2,756

(1)

Issued in connection with Aceragen Acquisition to Legacy Aceragen shareholders as part of the merger consideration which include time-based vesting restrictions.

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2022

Commitments and Contingencies

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]



December 31,	Operating Leases (in thousands)
2023	$	285
2024		240
2025		101
Total lease payments	$	626
Less: imputed interest		(66)
Total present value of lease liabilities	$	560

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Taxes

Schedule of components of deferred tax assets


(in thousands)	2022		2021
Deferred tax assets:
Operating loss carryforwards	$	94,356	$	90,550
Tax credit carryforwards		29,988		28,226
Stock-based compensation		4,959		6,902
Capitalized research and development		11,287		7,818
Lease liabilities		141		220
Other		459		70
Total deferred tax assets	$	141,190	$	133,786
Deferred tax liabilities:
Right-of-use asset	$	(134)	$	(213)
In-process research and development intangible assets		(15,312)		—
Total deferred tax liabilities	$	(15,446)	$	(213)
Valuation allowance	$	(129,027)	$	(133,573)
Net deferred tax assets (liabilities)	$	(3,283)	$	—

Schedule of difference between U.S. federal corporate tax rate and Company effective tax rate


	2022		2021
Expected federal income tax rate	(21.0)	%	(21.0)	%
State income taxes, net of federal benefit	1.7		2.1
Federal and state credits	(4.2)		1.7
Reduction of state income tax rate	14.9		—
Warrant and future tranche right revaluation gain	(0.3)		26.9
Series X revaluation loss	1.7		—
Stock-based compensation	4.6		—
Other	1.7		(0.4)
Change in valuation allowance	(20.4)		(9.3)
Effective tax rate	(21.3)	%	0.0	%

Schedule of components of income tax benefit


(in thousands)	2022		2021
Current:
Federal	$	—	$	—
State		—		—
	$	—	$	—
Deferred:
Federal	$	(6,318)	$	—
State		—		—
	$	(6,318)	$	—

Total Income Tax Benefit	$	(6,318)	$	—

Net Income (Loss) per Common Share Applicable to Common Stockholders (Tables)

12 Months Ended

Dec. 31, 2022

Net Income (Loss) per Common Share Applicable to Common Stockholders

Computation of basic and diluted net income (loss) per share


	Year Ended
	December 31,
($ in thousands except share and per share data)		2022		2021
Net (loss) income per share — Basic:
Net (loss) income	$	(23,360)	$	98,091
Less: Undistributed earnings to preferred stockholders		—		(1,150)
Net (loss) income applicable to common stockholders - basic	$	(23,360)	$	96,941

Numerator for basic net (loss) income applicable to common stockholders	$	(23,360)	$	96,941
Denominator for basic net (loss) income applicable to common stockholders		3,255,648		2,894,287
Net (loss) income applicable to common stockholders - basic	$	(7.18)	$	33.49

Net (loss) income per share — Diluted:
Net (loss) income applicable to common holders - basic	$	(23,360)	$	96,941
Less: Warrant revaluation gain applicable to dilutive liability-classified warrants		—		(6,983)
Less: Future tranche right revaluation gain applicable to dilutive liability-classified future tranche rights		—		(118,803)
Numerator for diluted net (loss) income applicable to common stockholders	$	(23,360)	$	(28,845)

Denominator for basic net (loss) income applicable to common stockholders		3,255,648		2,894,287
Plus: Incremental shares underlying “in the money” liability-classified warrants outstanding		—		5,492
Plus: Incremental shares underlying “in the money” liability-classified future tranche rights outstanding		—		48,880
Denominator for diluted net income (loss) applicable to common stockholders		3,255,648		2,948,659
Net (loss) income applicable to common stockholders - diluted	$	(7.18)	$	(9.78)

Schedule of potentially dilutive securities excluded from diluted net income (loss) per common share


	Year Ended
	December 31,
		2022	2021
Common stock options		406,174	306,000
Preferred stock options		1,030,693	—
Restricted stock units and restricted stock awards		226,460	33,865
Common stock warrants		503,069	513,661
Preferred stock warrants		836,176	—
Convertible preferred stock		4,582,364	14
Total		7,584,936	853,540

Business and Organization (Details) $ in Thousands	Jan. 17, 2023	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Accumulated deficit		$ 758,821	$ 735,461
Cash, cash equivalents and investments		$ 12,000
Subsequent Events
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Reverse stock split conversion ratio	0.059

Summary of Significant Accounting Policies (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($) segment Institution	Dec. 31, 2021 USD ($)	Mar. 10, 2023
Summary of Significant Accounting Policies
Number of operating segments \| segment	1
Number of financial institutions \| Institution	6
Unbilled accounts receivable	$ 400
Impairment of goodwill	0
Prepaid expenses research and development	600	$ 900
Unrecognized Tax Benefits, Income Tax Penalties Expense	0	0
Uncertain tax positions	$ 0	$ 0
Subsequent Events
Summary of Significant Accounting Policies
Percentage of cash and cash equivalent balance in segregated custodial accounts held by third party custodian			56.00%
Minimum
Summary of Significant Accounting Policies
Equipment depreciation period	3 years
Maximum
Summary of Significant Accounting Policies
Equipment depreciation period	5 years
Directors
Summary of Significant Accounting Policies
Stock options, vesting period	1 year
Employees
Summary of Significant Accounting Policies
Stock options, vesting period	4 years
IPR&D
Summary of Significant Accounting Policies
Impairment of intangible assets	$ 0

Business Acquisition - Additional Information (Details) - USD ($)		12 Months Ended
	Sep. 28, 2022	Dec. 31, 2022	Dec. 31, 2021
Business Acquisition [Line Items]
Preferred stock, par value		$ 0.01	$ 0.01
Acquisition-related costs		$ 4,566,000
Nonrecurring pro forma transaction costs		11,200,000	$ 0
Payment of success fee		4,000,000.0
Severance costs		800,000
Restructuring costs		3,713,000	1,322,000
Tax expense (benefit)		(6,318,000)	$ 6,300,000
Series X preferred stock
Business Acquisition [Line Items]
Preferred stock, par value	$ 0.01
Aceragen
Business Acquisition [Line Items]
Acquisition-related costs	$ 4,600,000
Fair value of total consideration		$ 65,616,000
Aceragen \| Merger Agreement
Business Acquisition [Line Items]
Outstanding security interests percentage	100.00%
Number of share acquisitions	451,608
Aceragen \| Series Z convertible preferred stock \| Merger Agreement
Business Acquisition [Line Items]
Shares issued during the acquisitions	80,656
Aceragen \| Series X preferred stock \| Merger Agreement
Business Acquisition [Line Items]
Number of share acquisitions	5

Business Acquisition - Purchase price consideration (Details) - Aceragen $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
Business Acquisition
Total Consideration paid	$ 65,616
Stock options, restricted stock and warrants
Business Acquisition
Stock issued	5,822
Series Z convertible preferred stock \| Stock options, restricted stock and warrants
Business Acquisition
Stock issued	25,085
Series X preferred stock \| Stock options, restricted stock and warrants
Business Acquisition
Stock issued	31,900
Common Stock \| Stock options, restricted stock and warrants
Business Acquisition
Stock issued	$ 2,809

Business Acquisition - Allocation of the purchase price to the assets acquired and liabilities assumed (Details) $ in Thousands	Dec. 31, 2022 USD ($)
Assets acquired:
Goodwill	$ 11,100
Aceragen
Assets acquired:
Cash, cash equivalents and restricted cash	5,482
Receivables	1,914
Prepaid expenses and other assets	575
In-process research and development assets	71,600
Goodwill	11,100
Total assets acquired	90,671
Liabilities assumed:
Accounts Payable and accrued expenses	7,886
Acquisition Obligation (Note 7)	7,546
Operating lease liabilities	22
Deferred tax liabilities	9,601
Total liabilities assumed	25,055
Net assets acquired	$ 65,616

Business Acquisition - Summary of intangible assets acquired (Details) - Aceragen $ in Thousands	Dec. 31, 2022 USD ($)
Business Acquisition
Acquisition Date Fair Value	$ 71,600
In-process research and development costs (IPR&D)
Business Acquisition
Acquisition Date Fair Value	71,600
Carrying Value	71,600
ACG-701 for Cysatic Fibrosis
Business Acquisition
Acquisition Date Fair Value	50,700
Carrying Value	50,700
ACG-701 for Melioidosis
Business Acquisition
Acquisition Date Fair Value	14,900
Carrying Value	14,900
ACG-801 for Farber Disease
Business Acquisition
Acquisition Date Fair Value	6,000
Carrying Value	$ 6,000

Business Acquisition - Pro Forma Financial Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Business Acquisition
Net revenues	$ 18,196	$ 1,005
Net (loss) income	$ (35,379)	$ 80,502

Fair Value Measurements - Transfers Between Levels (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
Fair Value Measurements
Fair value of assets transfers from level 1 to level 2	$ 0
Fair value of assets transfers from level 2 to level 1	0
Fair value of liabilities transfers from level 1 to level 2	0
Fair value of liabilities transfers from level 2 to level 1	0
Fair value of assets transfers into level 3	0
Fair value of assets transfers out of level 3	0
Fair value of liabilities transfers into level 3	0
Fair value of liabilities transfers out of level 3	$ 0

Fair Value Measurements - Assets and Liabilities at Fair Value on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Fair Value of Assets and Liabilities Measured at Fair Value on a Recurring Basis
Total Assets	$ 12,044	$ 32,545
Total Liabilities	37,119
Warrant liability
Fair Value of Assets and Liabilities Measured at Fair Value on a Recurring Basis
Total Liabilities	2,819
Series X preferred stock liability
Fair Value of Assets and Liabilities Measured at Fair Value on a Recurring Basis
Total Liabilities	34,300
Cash
Fair Value of Assets and Liabilities Measured at Fair Value on a Recurring Basis
Cash equivalents - money market funds	3,342	250
Money market funds
Fair Value of Assets and Liabilities Measured at Fair Value on a Recurring Basis
Cash equivalents - money market funds	8,702	32,295
Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)
Fair Value of Assets and Liabilities Measured at Fair Value on a Recurring Basis
Total Assets	12,044	32,545
Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) \| Cash
Fair Value of Assets and Liabilities Measured at Fair Value on a Recurring Basis
Cash equivalents - money market funds	3,342	250
Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) \| Money market funds
Fair Value of Assets and Liabilities Measured at Fair Value on a Recurring Basis
Cash equivalents - money market funds	8,702	$ 32,295
Significant Unobservable Inputs (Level 3)
Fair Value of Assets and Liabilities Measured at Fair Value on a Recurring Basis
Total Liabilities	37,119
Significant Unobservable Inputs (Level 3) \| Warrant liability
Fair Value of Assets and Liabilities Measured at Fair Value on a Recurring Basis
Total Liabilities	2,819
Significant Unobservable Inputs (Level 3) \| Series X preferred stock liability
Fair Value of Assets and Liabilities Measured at Fair Value on a Recurring Basis
Total Liabilities	$ 34,300

Fair Value Measurements - Assets and Liabilities at Fair Value Changes in Level 3 Liabilities (Details) - Fair Value, Measurements, Recurring	12 Months Ended
	Dec. 31, 2022 USD ($)
Warrant liability
Fair Value of Assets and Liabilities Measured at Fair Value on a Recurring Basis
Issuance in connection with Acquisition of Aceragen	$ 3,180,000
Change in fair value	(361,000)
Ending balance	2,819,000
Series X Preferred Stock liability
Fair Value of Assets and Liabilities Measured at Fair Value on a Recurring Basis
Issuance in connection with Acquisition of Aceragen	31,900
Change in fair value	2,400
Ending balance	$ 34,300

Fair Value Measurements - Weighted-average assumptions (Details)	Dec. 31, 2022 $ / shares
Risk-free interest rate
Fair Value Measurement Inputs and Valuation Techniques
Debt instrument measurement input	0.0409
Expected term
Fair Value Measurement Inputs and Valuation Techniques
Debt instrument measurement input	0.041
Expected volatility
Fair Value Measurement Inputs and Valuation Techniques
Debt instrument measurement input	1.04
Stock price (common stock)
Fair Value Measurement Inputs and Valuation Techniques
Debt instrument measurement input	0.0595
Discount rate applied to preferred shares
Fair Value Measurement Inputs and Valuation Techniques
Debt instrument measurement input	0.15
Exercise price
Fair Value Measurement Inputs and Valuation Techniques
Debt instrument measurement input	7.82

Property and Equipment - Net Property and Equipment at Cost (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Property, Plant and Equipment
Total property and equipment, at cost	$ 819	$ 819
Less: Accumulated depreciation and amortization	812	797
Property and equipment, net	7	22
Leasehold improvements
Property, Plant and Equipment
Total property and equipment, at cost	107	107
Laboratory equipment and other
Property, Plant and Equipment
Total property and equipment, at cost	$ 712	$ 712

Property and Equipment - Depreciation and Amortization Expense (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Property and Equipment
Depreciation and amortization expense on property and equipment	$ 0.1	$ 0.1

Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Accrued Expenses
Payroll and related costs	$ 1,886	$ 477
Clinical and nonclinical trial expenses	2,106	2,909
Professional and consulting fees	1,637	591
Restructuring and other costs (Note 13)	2,327
Acquisition-related costs	1,666
Other	289	111
Total accrued expenses	$ 9,911	$ 4,088

Acquisition Obligation (Details) $ in Thousands		3 Months Ended	12 Months Ended
Acquisition Obligation (Details) $ in Thousands	Jan. 31, 2023 USD ($) D	Dec. 31, 2022 USD ($)	Dec. 31, 2022 USD ($)
Business Acquisition
Acquisition obligation, net		$ 6,078	$ 6,078
Payment on debts			1,534
Convertible Notes \| Subsequent Events
Business Acquisition
Annual interest rate	12.00%
Aggregate amount	$ 5,900
Consecutive trading days \| D	15
Aceragen
Business Acquisition
Aggregate future payment		7,500	7,500
Acquisition obligation, net		6,000	6,000
Acquisition obligation, net		1,500	1,500
Fair value of acquisition obligation		7,500	7,500
Payment on debts		1,500
Deferred acquisition obligation		$ 6,000	$ 6,000
Annual interest rate		12.00%	12.00%

Series X Preferred Stock Liability (Details)	12 Months Ended
Series X Preferred Stock Liability (Details)	Dec. 31, 2022 shares
Series X preferred stock \| Aceragen
Stock issued (in shares)	5

Redeemable Convertible Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Millions		1 Months Ended	12 Months Ended
	Dec. 23, 2019	Dec. 31, 2019	Dec. 31, 2022	Dec. 31, 2021
Redeemable Convertible Preferred Stock
Warrant exercised price (per share)			$ 17.58	$ 21.76
Aggregate gross proceeds	$ 3.9
Shares authorized (in shares)			140,000,000	140,000,000
Gross proceeds		$ 6.2
Series B1 convertible preferred stock
Redeemable Convertible Preferred Stock
Sale of redeemable convertible preferred stock	23,684			23,684
Series B1 convertible preferred stock \| Common stock warrants
Redeemable Convertible Preferred Stock
Warrant to purchase stock	139,318
Warrant exercised price (per share)	$ 25.84
Series B1 convertible preferred stock \| Preferred Stock Warrant
Redeemable Convertible Preferred Stock
Warrant to purchase stock	23,684
Warrant exercised price (per share)	$ 2,584
Series B2 convertible preferred stock
Redeemable Convertible Preferred Stock
Aggregate gross proceeds	$ 15.0
Preferred shares	98,685
Series B2 convertible preferred stock \| Common stock warrants
Redeemable Convertible Preferred Stock
Warrant to purchase stock	580,500
Warrant exercised price (per share)	$ 25.84
Series B2 convertible preferred stock \| Preferred Stock Warrant
Redeemable Convertible Preferred Stock
Warrant to purchase stock	98,685
Warrant exercised price (per share)	$ 2,584.00
Series B3 convertible preferred stock
Redeemable Convertible Preferred Stock
Aggregate gross proceeds	$ 15.0
Preferred shares	82,418
Series B3 convertible preferred stock \| Common stock warrants
Redeemable Convertible Preferred Stock
Warrant to purchase stock	387,849
Warrant exercised price (per share)	$ 30.94
Series B3 convertible preferred stock \| Preferred Stock Warrant
Redeemable Convertible Preferred Stock
Warrant to purchase stock	65,934
Warrant exercised price (per share)	$ 3,094.00
Series B4 convertible preferred stock
Redeemable Convertible Preferred Stock
Aggregate gross proceeds	$ 15.0
Preferred shares	82,418
Expiration period	21 months
Series B4 convertible preferred stock \| Common stock warrants
Redeemable Convertible Preferred Stock
Warrant to purchase stock	387,849
Warrant exercised price (per share)	$ 30.94
Series B4 convertible preferred stock \| Preferred Stock Warrant
Redeemable Convertible Preferred Stock
Warrant to purchase stock	65,934
Warrant exercised price (per share)	$ 3,094.00
Series Z Redeemable Convertible Preferred Stock
Redeemable Convertible Preferred Stock
Conversion of common stock			58.82
Series Z Redeemable Convertible Preferred Stock \| Aceragen
Redeemable Convertible Preferred Stock
Shares issued during the acquisitions			80,656

Stockholders' Equity (Deficit) - Preferred Stock (Details)		12 Months Ended
	Nov. 17, 2022 Vote $ / shares shares	Dec. 31, 2022 $ / shares shares	Sep. 28, 2022 $ / shares	Dec. 31, 2021 $ / shares shares
Class of Stock
Preferred stock, shares authorized		5,000,000		5,000,000
Preferred stock, par value \| $ / shares		$ 0.01		$ 0.01
Series A convertible preferred stock
Class of Stock
Preferred stock, shares designated		1,500,000		1,500,000
Annual percentage of dividend of preferred stock		1.00%
Series A preferred stock liquidation preference per share \| $ / shares		$ 1
Series A Preferred stock conversion price per share \| $ / shares		$ 4,624.00
Preferred stock, shares outstanding		655		655
Series B Preferred Stock
Class of Stock
Preferred stock, par value \| $ / shares	$ 0.01
Preferred stock, shares designated		200,000		200,000
Preferred stock, shares outstanding		62,355		62,355
Number of shares of preferred stock issued as dividends for each outstanding share	0.001
Number of votes per share \| Vote	1,000,000
Series B1 convertible preferred stock
Class of Stock
Preferred stock, shares designated		277,921
Preferred stock, shares outstanding		0		0
Series B2 convertible preferred stock
Class of Stock
Preferred stock, shares designated		98,685
Preferred stock, shares outstanding		0		0
Series B3 convertible preferred stock
Class of Stock
Preferred stock, shares designated		82,814
Preferred stock, shares outstanding		0		0
Series B4 convertible preferred stock
Class of Stock
Preferred stock, shares designated		82,814
Preferred stock, shares outstanding		0		0
Series Z Redeemable Convertible Preferred Stock
Class of Stock
Preferred stock, shares designated		80,656
Series X preferred stock
Class of Stock
Preferred stock, par value \| $ / shares			$ 0.01
Preferred stock, shares designated		5
Series X preferred stock \| Aceragen
Class of Stock
Stock issued (in shares)		5

Stockholders' Equity (Deficit) - Common Stock (Details) - USD ($) $ / shares in Units, $ in Millions			1 Months Ended	12 Months Ended
	Mar. 04, 2019	May 05, 1998	Nov. 30, 2018	Dec. 31, 2022	Dec. 31, 2021
Class of Stock
Shares authorized (in shares)				140,000,000	140,000,000
Shares available for future issuance				7,861,082
Common Stock
Class of Stock
Stock issued (in shares)		8,821			348,079
Sale price of common shares subject to the liquidation put		$ 2,176.00
Minimum closing sales price of common stock to issue termination notice to put holders				$ 4,352.00
Price exceeds on number of days				20 days
Put Rights outstanding				0
Liquidation put shares no longer held by original holders				2,941
Shares held by put holders				263
Remaining shares of common stock subject to the liquidation put				5,617
"At-The-Market" Equity Program
Class of Stock
Stock issued (in shares)				0	301,021
Percentage of fixed commission expense of gross proceeds of shares sold in ATM agreement			3.00%
Maximum value of shares that are permitted to be sold, subject to certain limitations				$ 19.5
Net proceeds from offering of common stock					$ 15.3
"At-The-Market" Equity Program \| Common Stock
Class of Stock
Net proceeds from offering of common stock			$ 50.0
Lincoln Park Capital Fund, LLC ("Investor")
Class of Stock
Stock issued (in shares)	15,867			0	47,059
Value of shares which may be sold	$ 35.0
Duration over which common stock purchase agreement may be sold	36 months
Stock issued (per share)	$ 48.28
Net proceeds from offering of common stock					$ 4.2

Stockholders' Equity (Deficit) - Common Stock Warrants (Details) - $ / shares	Dec. 31, 2022	Dec. 31, 2021
Class of Warrant or Right
Number of Shares	517,284	513,658
Weighted-Average Exercise Price	$ 17.58	$ 21.76
Equity Classified Warrants
Class of Warrant or Right
Number of Shares	503,069	513,658
May 2013 Warrants
Class of Warrant or Right
Number of Shares	908	908
Weighted-Average Exercise Price	$ 1.36	$ 1.36
September 2013 Warrants
Class of Warrant or Right
Number of Shares	241	241
Weighted-Average Exercise Price	$ 1.36	$ 1.36
February 2014 Warrants
Class of Warrant or Right
Number of Shares	128	128
Weighted-Average Exercise Price	$ 1.36	$ 1.36
April 2020 Private Placement first closing warrants
Class of Warrant or Right
Number of Shares	178,794	178,794
Weighted-Average Exercise Price	$ 38.76	$ 38.76
April 2020 Private Placement second closing warrants
Class of Warrant or Right
Number of Shares	80,801	80,801
Weighted-Average Exercise Price	$ 46.07	$ 46.07
April 2020 Private Placement second closing warrants
Class of Warrant or Right
Number of Shares		67,260
Weighted-Average Exercise Price	0.17
July 2020 Private Placement first closing warrants
Class of Warrant or Right
Number of Shares		22,925
Weighted-Average Exercise Price	$ 0.17
July 2020 Private Placement first closing warrants
Class of Warrant or Right
Number of Shares	162,601	162,601
Weighted-Average Exercise Price	$ 43.86	$ 43.86
Assumed Legacy Aceragen common stock warrants
Class of Warrant or Right
Number of Shares	79,596
Weighted-Average Exercise Price	$ 7.82
Liability Classified Warrants
Class of Warrant or Right
Number of Shares	14,215
Assumed Legacy Aceragen Series Z Warrants
Class of Warrant or Right
Number of Shares	14,215
Weighted-Average Exercise Price	$ 460.00

Stockholders' Equity (Deficit) - Warrant Activity (Details)	12 Months Ended
	Dec. 31, 2022 $ / shares shares
Class of Warrant or Right
Outstanding at December 31, 2021	513,658
Issued	93,811
Exercised	(90,185)
Outstanding at December 31, 2022	517,284
Warrant exercise price at December 31, 2021 \| $ / shares	$ 21.76
Warrant exercise price per share, issued \| $ / shares	7.82
Exercised \| $ / shares	0.17
Warrant exercise price at December 31, 2022 \| $ / shares	$ 17.58
Series Z Warrants
Class of Warrant or Right
Issued	14,215
Outstanding at December 31, 2022	14,215
Common stock warrants
Class of Warrant or Right
Outstanding at December 31, 2021	513,658
Issued	79,596
Exercised	(90,185)
Outstanding at December 31, 2022	503,069

Government Contracts Revenue (Details) $ in Thousands	12 Months Ended
Government Contracts Revenue (Details) $ in Thousands	Dec. 31, 2022 USD ($) contract	Dec. 31, 2021 USD ($)
Government Contracts Revenue
Number of in process contracts \| contract	3
Aggregate contract value	$ 46,300
Contract value	16,000
Remaining contractual value	30,300
Government contracts revenue	4,862	$ 0
Performance obligation	0
Defense Threat Reduction Agency
Government Contracts Revenue
Remaining contractual value	30,000
Government contracts revenue	$ 4,600

- Definition

Amount, including tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value-added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130545-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8906-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130543-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI https://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Clinical Funding, Collaboration and License Agreements (Details) - USD ($) $ in Thousands	1 Months Ended		12 Months Ended
	Feb. 28, 2021	Apr. 30, 2019	Dec. 31, 2022	Dec. 31, 2021
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Research and development			$ 12,188	$ 16,375
Option and License Agreement with Licensee
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Percentage of shares acquired		10.00%
Maximum \| Option and License Agreement with Licensee
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Amount of investment in equity security without readily determinable fair value, written off		$ 100
Cystic Fibrosis Foundation \| Cystic Fibrosis Foundation Therapeutic Development Award
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Clinical funding amount				3,500
Proceeds from clinical funding			1,000
Additional clinical funding amount			2,500
Scriptr Global, Inc. \| Research and Development Plans and Designation of Development Candidates
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Research and development			$ 500	$ 2,100
Scriptr Global, Inc. \| Maximum \| Research and Development Plans and Designation of Development Candidates
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Research period	270 days
Deferred revenue recognition period	270 days
IMO-9200 License \| Option and License Agreement with Licensee
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Upfront payment received under collaboration agreement		$ 1,400

Restructuring and Other Costs (Details) $ in Thousands			1 Months Ended	12 Months Ended
Restructuring and Other Costs (Details) $ in Thousands	Sep. 28, 2022 position	Sep. 27, 2022 position	Apr. 30, 2021 position	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Restructuring costs
Restructuring and other costs				$ 3,713	$ 1,322
Accrued restructuring				2,327
Employee Severance and Benefits
Restructuring costs
Number of positions eliminated \| position	7	5	16
Percentage of positions eliminated	54.00%		50.00%
Restructuring and other costs				3,700	$ 1,300
Accrued Liabilities \| Employee Severance and Benefits
Restructuring costs
Accrued restructuring				2,300
Other liabilities \| Employee Severance and Benefits
Restructuring costs
Long-term portion of the accrued restructuring balance				$ 100

Stock-Based Compensation - Equity Incentive Plans (Details) - shares		12 Months Ended
	Jul. 26, 2013	Dec. 31, 2022	Sep. 28, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding under earlier plans		4,908
Grant of inducement stock option		19,116
2013 Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common shares available for grant	603,121	252,527
Maximum number of additional common shares	9,174
Common stock options outstanding		284,017
Restricted stock units outstanding		48,910
Legacy Aceragen 2021 Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock shares authorized for issuance under stock purchase plan			0

Stock-Based Compensation - Employee Stock Purchase Plans (Details) - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Defined Contribution Plan, Cost	$ 200,000	$ 300,000
Percentage of share-based compensation expense	15.00%
Weighted average grant date fair value of options granted during the period (per share)	$ 5.88	$ 26.18
2017 Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum percentage of total combined voting power or value of the stock of the Company after the grant	5.00%
Common shares available for grant	39,048
Common stock share issued	7,788	2,889
Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Minimum percentage in payroll of deduction base salary to acquire shares of common stock	1.00%
Maximum percentage in payroll of deduction base salary to acquire shares of common stock	10.00%
Percentage of fair market value of common stock for the ESPP option price	85.00%
Annual maximum a participant may purchase under the employee stock purchase plan	$ 25,000
Maximum \| 2017 Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock shares authorized for issuance under stock purchase plan	59,558
Maximum \| Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Subsequent offering period as established by the compensation committee	12 months
Defined Contribution Plan, Cost	$ 100,000	$ 100,000

Stock-Based Compensation - Accounting for Stock-based Compensation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award
Stock-based compensation	$ 2,188	$ 2,537
Research and development
Share-based Compensation Arrangement by Share-based Payment Award
Stock-based compensation	282	574
Research and development \| Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award
Stock-based compensation	24	28
Research and development \| Equity Incentive Plans
Share-based Compensation Arrangement by Share-based Payment Award
Stock-based compensation	258	546
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award
Stock-based compensation	1,906	1,963
General and administrative \| Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award
Stock-based compensation	5	3
General and administrative \| Equity Incentive Plans
Share-based Compensation Arrangement by Share-based Payment Award
Stock-based compensation	$ 1,901	$ 1,960

Stock-Based Compensation - Assumptions Used in Determining Fair Value of Stock Options (Details) - $ / shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Stock-Based Compensation
Options to purchase common stock granted to employees and directors	68,796	79,784
Average risk free interest rate	2.60%	0.40%
Dividend rate	0.00%
Expected lives (years)	3 years 9 months 18 days	3 years 7 months 6 days
Expected volatility	104.00%	94.00%
Weighted average exercise price (per share)	$ 8.34	$ 45.56

Stock-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award
Granted, Weighted Average Exercise Price		$ 8.34	$ 45.56
Outstanding, Intrinsic Value		$ 102
Stock options
Share-based Compensation Arrangement by Share-based Payment Award
Accelerated vesting, number of shares	90,328
Unrecognized compensation cost related to nonvested stock-based compensation		$ 3,900
Weighted average remaining period over which unrecognized compensation expense will be recognized		2 years 8 months 12 days
Common Stock Options
Share-based Compensation Arrangement by Share-based Payment Award
Options, Outstanding, Beginning Balance		305,838
Granted		68,796
Assumed in connection with Aceragen Acquisition		111,038
Forfeited		(15,963)
Expired		(63,535)
Options, Outstanding, Ending Balance		406,174	305,838
Exercisable, Ending Balance		239,866
Weighted Average Exercise Price, Beginning Balance		$ 137.08
Granted, Weighted Average Exercise Price		8.34
Assumed in connection with Aceragen Acquisition, Weighted Average Exercise Price		6.22
Forfeited, Weighted Average Exercise Price		3.27
Expired, Weighted Average Exercise Price		148.30
Weighted Average Exercise Price, Ending Balance		83.00	$ 137.08
Exercisable, Weighted Average Exercise Price		$ 132.26
Outstanding, Weighted Average Remaining Contractual Term		6 years 1 month 6 days	5 years 10 months 24 days
Exercisable, Weighted Average Remaining Contractual Term		4 years 1 month 6 days
Exercisable, Intrinsic Value		$ 54
Preferred Stock Options
Share-based Compensation Arrangement by Share-based Payment Award
Assumed in connection with Aceragen Acquisition		19,826
Forfeited		(2,304)
Options, Outstanding, Ending Balance		17,522
Exercisable, Ending Balance		5,229
Assumed in connection with Aceragen Acquisition, Weighted Average Exercise Price		$ 365.96
Forfeited, Weighted Average Exercise Price		130.00
Weighted Average Exercise Price, Ending Balance		397.02
Exercisable, Weighted Average Exercise Price		$ 317.43
Outstanding, Weighted Average Remaining Contractual Term		9 years 1 month 6 days
Exercisable, Weighted Average Remaining Contractual Term		8 years 10 months 24 days
Outstanding, Intrinsic Value		$ 1,073
Exercisable, Intrinsic Value		$ 568

Stock-Based Compensation - Restricted Stock Unit Activity (Details) - USD ($)	1 Months Ended		12 Months Ended
	Mar. 31, 2021	Jul. 31, 2020	Dec. 31, 2022	Dec. 31, 2021
Restricted Stock Unit Activity, Weighted-Average Grant Date Fair Value
Share-based Compensation			$ 2,188,000	$ 2,537,000
Restricted stock units
Restricted Stock Unit Activity, Number of Shares
Nonvested shares, Beginning Balance			4,039
Granted			16,657
Vested			(1,600)
Nonvested shares, Ending Balance			19,096	4,039
Restricted Stock Unit Activity, Weighted-Average Grant Date Fair Value
Nonvested shares, Weighted Average Grant Date Fair Value, Beginning Balance			$ 39.10
Granted, Weighted-Average Grant Date Fair Value			6.79
Vested, Weighted-Average Grant Date Fair Value			41.36
Nonvested shares, Weighted Average Grant Date Fair Value, Ending Balance			$ 10.73	$ 39.10
Accelerated vesting, number of shares	8,110
Recognized compensation expense			$ 700,000	$ 300,000
Weighted average remaining period over which unrecognized compensation expense will be recognized			9 months 18 days
Restricted stock units \| Maximum
Restricted Stock Unit Activity, Weighted-Average Grant Date Fair Value
Unrecognized compensation expense			$ 100,000
Performance Shares [Member]
Restricted Stock Unit Activity, Number of Shares
Nonvested shares, Beginning Balance			29,814
Nonvested shares, Ending Balance			29,814	29,814
Restricted Stock Unit Activity, Weighted-Average Grant Date Fair Value
Nonvested shares, Weighted Average Grant Date Fair Value, Beginning Balance			$ 26.14
Nonvested shares, Weighted Average Grant Date Fair Value, Ending Balance			$ 26.14	$ 26.14
Unrecognized compensation expense			$ 0
Requisite service period (in years)		2 years 4 months 9 days
Share-based Compensation			300,000
Additional compensation expense as a result of meeting certain achievements			$ 300,000

Stock-Based Compensation - Restricted Stock Activity (Details)	12 Months Ended
	Dec. 31, 2022 shares
Restricted Common Stock
Restricted Stock Unit Activity, Number of Shares
Granted	16,763
Vested	(1,331)
Nonvested shares, Ending Balance	15,432
Restricted Series Z Preferred Stock
Restricted Stock Unit Activity, Number of Shares
Granted	2,993
Vested	(237)
Nonvested shares, Ending Balance	2,756

Commitments and Contingencies - Rent Expense and Lease Information (Details) $ in Millions	12 Months Ended
	Dec. 31, 2022 USD ($) ft²	Dec. 31, 2021 USD ($)
Property, Plant and Equipment [Line Items]
Rent expense, including real estate taxes \| $	$ 0.4	$ 0.4
Exton Facility
Property, Plant and Equipment [Line Items]
Leased office space \| ft²	11,000

Commitments and Contingencies - Future Minimum Commitments Under Lease Agreements (Details) $ in Thousands	Dec. 31, 2022 USD ($)
Commitments and Contingencies
2023	$ 285
2024	240
2025	101
Total lease payments	626
Less: imputed interest	(66)
Total present value of lease liabilities	$ 560

Commitments and Contingencies - Employee Benefit Plan (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Defined Contribution Plan Disclosure [Line Items]
Maximum employer match as a percentage of base pay	5.00%
Percentage the employer matches of employee contributions	100.00%
Portion of the employee's base salary that the Company matches	5.00%
Total matching contributions	$ 0.2	$ 0.3
Legacy Aceragen Pooled 401(K) Plan \| First 3% of employee eligible compensation
Defined Contribution Plan Disclosure [Line Items]
Percentage the employer matches of employee contributions	100.00%
Portion of the employee's base salary that the Company matches	3.00%
Legacy Aceragen Pooled 401(K) Plan \| Next 2% of employee eligible compensation
Defined Contribution Plan Disclosure [Line Items]
Percentage the employer matches of employee contributions	50.00%
Portion of the employee's base salary that the Company matches	2.00%

Commitments and Contingencies - Acquisition Obligations (Details) - Acquisition obligations - Aceragen		12 Months Ended
	Sep. 28, 2022 USD ($) item	Dec. 31, 2022 USD ($)
Loss Contingencies [Line Items]
Number of former executives \| item	2
Number of retained executives \| item	3
Compensation cost resulting in liability \| $	$ 2,700,000
Period of employment termination	6 months
Compensation expense recognized \| $		$ 0

Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Sep. 28, 2022	Dec. 31, 2021
Income Taxes
Deferred tax assets	$ 6,300
Unrecognized tax benefits from uncertain tax	0		$ 0
Federal
Income Taxes
Cumulative net operating loss carryforwards	$ 355,800
Percentage of taxable income that can be used to offset future taxable periods as a result of the TCJA	80.00%
Unlimited carryforward	$ 158,400
Tax credit carryforwards	28,300
State
Income Taxes
Cumulative net operating loss carryforwards	362,700
Tax credit carryforwards	1,900
Aceragen \| SWITZERLAND
Income Taxes
Cumulative net operating loss carryforwards	$ 900	$ 800
Aceragen \| Federal
Income Taxes
Cumulative net operating loss carryforwards		8,100
Aceragen \| State
Income Taxes
Cumulative net operating loss carryforwards		$ 19,100

Income Taxes - Components of the Deferred Tax Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Deferred tax assets:
Operating loss carryforwards	$ 94,356	$ 90,550
Tax credit carryforwards	29,988	28,226
Stock-based compensation	4,959	6,902
Capitalized research and development	11,287	7,818
Lease liabilities	141	220
Other	459	70
Total deferred tax assets	141,190	133,786
Deferred tax liabilities:
Right-of-use asset	(134)	(213)
IPR&D intangible assets	(15,312)
Total deferred tax liabilities	(15,446)	(213)
Valuation allowance	(129,027)	$ (133,573)
Net deferred tax assets (liabilities)	$ (3,283)

Income Taxes - Difference Between U.S. Federal Corporate Tax Rate and Company's Effective Tax Rate (Details)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Income Taxes
Expected federal income tax rate	(21.00%)	(21.00%)
State income taxes, net of federal benefit	1.70%	2.10%
Federal and state credits	(4.20%)	1.70%
Reduction of state income tax rate	14.90%
Warrant and future tranche right revaluation loss	(0.30%)	26.90%
Series X revaluation loss	1.70%
Stock-based compensation	4.60%
Other	1.70%	(0.40%)
Change in valuation allowance	(20.40%)	(9.30%)
Effective tax rate	(21.30%)	0.00%

Income Taxes - Components of Income Tax Benefit (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Deferred:
Federal	$ (6,318)
Deferred income tax benefit	(6,318)
Total Income Tax Benefit	$ (6,318)	$ 6,300

- Definition

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

+ References + Details

Related Party Transactions - Overview of Related Parties (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended		12 Months Ended		19 Months Ended
	Jan. 31, 2023	Mar. 31, 2021	Dec. 31, 2022	Dec. 31, 2021	Sep. 28, 2022	Jan. 17, 2023
Related Party Transactions
Exercise price of warrants			$ 17.58	$ 21.76
Common stock, par value			$ 0.001	$ 0.001
Board fees paid in stock in lieu of director board and committee fees			$ 100
Common stock issued in lieu of board fees			10,781	16,221
Series Z convertible preferred stock \| Subsequent Events
Related Party Transactions
Convertible preferred stock						4,744,467
Series Z convertible preferred stock \| Directors
Related Party Transactions
Aggregate common shares			127,718
Convertible preferred stock held by related party			22,810
Series Z convertible preferred stock \| Directors \| Subsequent Events
Related Party Transactions
Aggregate common shares	1,469,482
Convertible preferred stock	1,341,764
Pillar Investment Entities
Related Party Transactions
Aggregate common shares			985,204
Exercise price of warrants			$ 0.17	$ 0.17
Issuance of common stock upon exercise of warrants (in shares)			90,186	185,787
Cashless shares				1,121
Pillar Investment Entities \| Maximum
Related Party Transactions
Proceeds from exercise of warrants			$ 100	$ 100
Pillar Investment Entities \| Warrant, Tranche One
Related Party Transactions
Number of Shares			178,794
Exercise price of warrants			$ 38.76
Pillar Investment Entities \| Warrant, Tranche Two
Related Party Transactions
Number of Shares			162,601
Exercise price of warrants			$ 43.86
Pillar Investment Entities \| Warrant, Tranche Three
Related Party Transactions
Number of Shares			80,801
Exercise price of warrants			$ 46.07
NovaQuest
Related Party Transactions
Percentage of proceeds from possible sale of priority review voucher				35.00%
NovaQuest \| Common Stock Warrants
Related Party Transactions
Warrants right to purchase			79,032
NovaQuest \| Series Z Preferred Stock Warrants
Related Party Transactions
Warrants right to purchase			14,115
NovaQuest \| Series X convertible preferred stock
Related Party Transactions
Convertible preferred stock held by related party			5
Dr. Atul Chopra \| Consulting Agreement
Related Party Transactions
Warrants right to purchase		1,000,000
Consulting fees					$ 300
Service fees per month		$ 16,667
Term of agreement		1 year
Renewal term of agreement		1 year
Common stock, par value		$ 0.001
Issuance of common stock for services rendered (in shares)		1,000,000

Net Income (Loss) per Common Share Applicable to Common Stockholders -Computation of basic and diluted net income per common share-as adjusted (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Net (loss) income per share - Basic:
Net (loss) income	$ (23,360)	$ 98,091
Less: Undistributed earnings to preferred stockholders		(1,150)
Net (loss) income applicable to common stockholders	(23,360)	96,941
Numerator for basic net (loss) income applicable to common stockholders	$ (23,360)	$ 96,941
Denominator for basic net (loss) income applicable to common stockholders	3,255,648	2,894,287
Net (loss) income applicable to common stockholders - basic	$ (7.18)	$ 33.49
Net (loss) income per share - Diluted:
Numerator for basic net (loss) income applicable to common stockholders	$ (23,360)	$ 96,941
Less: Warrant revaluation gain applicable to dilutive liability-classified warrants		(6,983)
Less: Future tranche right revaluation gain applicable to dilutive liability-classified future tranche rights		(118,803)
Numerator for diluted net (loss) income applicable to common stockholders	$ (23,360)	$ (28,845)
Denominator for basic net (loss) income applicable to common stockholders	3,255,648	2,894,287
Plus: Incremental shares underlying "in the money" liability-classified warrants outstanding		5,492
Plus: Incremental shares underlying "in the money" liability-classified future tranche rights outstanding		48,880
Denominator for diluted net income (loss) applicable to common stockholders	3,255,648	2,948,659
Net (loss) income applicable to common stockholders - diluted	$ (7.18)	$ (9.78)

Net Income (Loss) per Common Share Applicable to Common Stockholders - Antidilutive securities (Details) - shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Antidilutive securities
Total antidilutive securities	7,584,936	853,540
Common stock options
Antidilutive securities
Total antidilutive securities	406,174	306,000
Preferred stock options
Antidilutive securities
Total antidilutive securities	1,030,693
Restricted stock units and restricted stock awards
Antidilutive securities
Total antidilutive securities	226,460	33,865
Common stock warrants
Antidilutive securities
Total antidilutive securities	503,069	513,661
Preferred stock warrants
Antidilutive securities
Total antidilutive securities	836,176
Convertible preferred stock
Antidilutive securities
Total antidilutive securities	4,582,364	14

Subsequent Events (Details)	Jan. 31, 2023 USD ($) D	Jan. 17, 2023 shares	Jan. 12, 2023 shares	Apr. 13, 2023 USD ($) person	Mar. 10, 2023	Dec. 31, 2022 shares	Jul. 26, 2013 shares
Subsequent Events
Shares available for future issuance						7,861,082
2013 Stock Incentive Plan
Subsequent Events
Common shares available for grant						252,527	603,121
Subsequent Events
Subsequent Events
Reverse stock split conversion ratio		0.059
Percentage of cash and cash equivalent balance in segregated custodial accounts held by third party custodian					56.00%
Number of employees temporarily furloughed \| person				12
Percentage of the workforce of persons temporarily furloughed				46.00%
Minimum amount of base salary an executive officer is required to defer \| $				$ 200,000
Subsequent Events \| Convertible Notes
Subsequent Events
Annual interest rate	12.00%
Aggregate amount \| $	$ 5,900,000
Consecutive trading days \| D	15
Subsequent Events \| 2013 Stock Incentive Plan
Subsequent Events
Shares available for future issuance			194,456
Subsequent Events \| 2022 Equity Plan
Subsequent Events
Shares available for future issuance			1,388,235
Subsequent Events \| Minimum
Subsequent Events
Reverse stock split conversion ratio			0.059
Subsequent Events \| Maximum
Subsequent Events
Reverse stock split conversion ratio			0.043
Subsequent Events \| Series Z convertible preferred stock
Subsequent Events
Temporary Equity, preferred stock, shares outstanding		80,656
Convertible preferred stock		4,744,467