SEC Filing | Longboard Pharmaceuticals

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10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended March 31, 2023


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

For the transition period from __________ to ___________

Commission File Number: 001-40192

Longboard Pharmaceuticals, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware	84-5009619
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
4275 Executive Square, Suite 950 La Jolla, CA	92037
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (858) 789-9283

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

Title of each class

Trading
Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.0001 per share

LBPH

The Nasdaq Global Market

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

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

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

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

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

As of May 4, 2023, the registrant had 22,969,364 shares of common stock, $0.0001 par value per share, outstanding, comprised of 20,548,609 shares of voting common stock, $0.0001 par value per share, and 2,420,755 shares of non-voting common stock, $0.0001 par value per share.

Table of Contents


		Page
	SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS	1
	SUMMARY OF RISKS ASSOCIATED WITH OUR BUSINESS	2

PART I.	FINANCIAL INFORMATION	3
Item 1.	Financial Statements (Unaudited)	3
	Condensed Balance Sheets	3
	Condensed Statements of Operations and Comprehensive Loss	4
	Condensed Statements of Cash Flows	5
	Notes to Unaudited Condensed Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	26

PART II.	OTHER INFORMATION	27
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	72
Item 3.	Defaults Upon Senior Securities	74
Item 4.	Mine Safety Disclosures	74
Item 5.	Other Information	74
Item 6.	Exhibits	75
Signatures		76

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this Quarterly Report) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), that involve substantial risks and uncertainties. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements, which speak only as of the date they are made and are not guarantees of future performance. In some cases, you can identify forward-looking statements by words such as “anticipate,” “believe,” “contemplate,” “continue,” “consider,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would” or the negative or plural of these words or other comparable terminology. These forward-looking statements generally relate to future events or our future financial or operating results and may include, but are not limited to, statements about:

•

our plans to research, develop and commercialize our product candidates;

•

the initiation, progress, success, cost and timing of our clinical trials and product development activities;

•

the therapeutic potential of our product candidates, and the disease indications for which we intend to develop our product candidates;

•

our ability and timing to advance our product candidates into, and to successfully initiate, conduct, enroll and complete, clinical trials;

•

our ability to manufacture our product candidates for clinical development and, if approved, for commercialization, and the timing and costs of such manufacture;

•

the performance of third parties in connection with the development and manufacture of our product candidates, including third parties conducting our clinical trials as well as third-party suppliers and manufacturers;

•

our ability to obtain funding for our operations, including funding necessary to initiate and complete clinical trials of our product candidates;

•

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

•

the potential scope, duration and value of our intellectual property rights;

•

our ability, and the ability of our licensors, to obtain, maintain, defend and enforce intellectual property rights protecting our product candidates, and our ability to develop and commercialize our product candidates without infringing the proprietary rights of third parties;

•

our ability to recruit and retain key personnel;

•

the effects on our operations of general political and economic conditions, including the COVID-19 pandemic, the invasion of Ukraine by Russia, economic slowdowns, recessions or market corrections, inflation, rising interest rates, tightening of credit markets resulting from the pandemic, bank failures or others; and

•

other risks and uncertainties, including those described under Part II, Item 1A, “Risk Factors” of this Quarterly Report.

Any forward-looking statements in this Quarterly Report reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Part II, Item 1A, “Risk Factors” of this Quarterly Report. Given these uncertainties, you should not place undue reliance on these forward-looking statements or rely on forward-looking statements as predictions of future events. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

Unless the context otherwise indicates, references in this Quarterly Report to the terms, “Longboard,” “the Company,” “we,” “our” and “us” refer to Longboard Pharmaceuticals, Inc. and references to our “common stock” refer to our voting common stock.

SUMMARY OF RISKS ASSOCIATED WITH OUR BUSINESS

An investment in shares of our common stock involves a high degree of risk. Below is a list of the more significant risks associated with our business. This summary does not address all of the risks that we face. Additional discussion of the risks listed in this summary, as well as other risks that we face, are set forth under Part II, Item 1A, “Risk Factors” in this Quarterly Report. Some of the material risks associated with our business include the following:

•

We have a limited operating history, and we have incurred losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future. We may never generate any revenue or become profitable or, if we achieve profitability, we may not be able to sustain it.

•

We will need substantial additional capital to finance our operations, which may not be available on acceptable terms, or at all. The effects of macroeconomic conditions and geopolitical events, including economic slowdowns, recessions, inflation, rising interest rates, bank failures and tightening of credit markets caused by COVID-19 or another pandemic, the conflict in Ukraine or otherwise, may limit our access to capital. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate certain of our product development efforts or other operations.

•

We are early in our development efforts and have only one product candidate, LP352, in clinical testing. All of our other product candidates are in the preclinical or research stage. If we are unable to advance our product candidates in clinical development, obtain regulatory approval and ultimately commercialize our product candidates, or experience significant delays in doing so, our business will be materially harmed.

•

Clinical and preclinical drug development involves a lengthy and expensive process with an uncertain outcome. The results of prior clinical trials and early preclinical studies and clinical trials of our product candidates are not necessarily predictive of future results.

•

Because we have multiple product candidates in our pipeline and are considering a variety of target indications, we may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.

•

The regulatory approval processes of the U.S. Food and Drug Administration (FDA) and comparable foreign authorities are lengthy, time consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed.

•

If the market opportunities for our product candidates are smaller than we estimate, even assuming approval of a product candidate, our business may suffer. Because the patient populations in the market for our product candidates may be small, we must be able to successfully identify patients and acquire a significant market share to achieve profitability and growth.

•

We currently have no marketing and sales organization and have no experience as a company in commercializing products, and we may have to invest significant resources to develop these capabilities. If we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell our products, we may not be able to generate product revenue.

•

COVID-19 has impacted and could continue to adversely impact our business.

•

We intend to rely on third parties to conduct, supervise and monitor our preclinical studies and clinical trials, and if those third parties perform in an unsatisfactory manner, it may harm our business.

•

Our principal stockholders and management own a significant percentage of our stock and are able to exert significant control over matters subject to stockholder approval. Our stock market price may be negatively affected if our principal stockholders and management sell some or all of their stock.

•

We depend on intellectual property licensed from third parties, including Arena Pharmaceuticals, Inc. (Arena), and the failure by us or our licensors to protect the licensed intellectual property or the termination of our license could result in the loss of significant rights, which would harm our business.

•

If we are unable to obtain and maintain patent protection for our current or any future product candidates, or if the scope of the patent protection obtained is not sufficiently broad, we may not be able to compete effectively in our markets.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Longboard Pharmaceuticals, Inc.

Condensed Balance Sheets

(unaudited)


	March 31,			December 31,
(in thousands, except share and per share data)	2023			2022
ASSETS
Current assets:
Cash and cash equivalents	$	25,121		$	10,775
Short-term investments		51,005			56,814
Prepaid expenses and other current assets		2,834			2,249
Total current assets		78,960			69,838
Right-of-use assets		681			736
Property and equipment		8			9
Other long-term assets		35			33
Total assets	$	79,684		$	70,616
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	283		$	1,310
Accrued research and development expenses		4,813			4,168
Accrued compensation and related expenses		704			2,438
Accrued other expenses		1,068			490
Right-of-use liabilities, current portion		371			358
Total current liabilities		7,239			8,764
Right-of-use liabilities, net of current portion		312			382
Commitments and contingencies (see Note 9)
Stockholders' equity:
Preferred stock, $0.0001 par value; authorized shares - 10,000,000 at March 31, 2023 and December 31, 2022; issued and outstanding shares - none at March 31, 2023 and December 31, 2022		—			—
Voting common stock, $0.0001 par value; authorized shares - 300,000,000 at March 31, 2023 and December 31, 2022; issued and outstanding shares - 20,544,595 and 13,585,950 at March 31, 2023 and December 31, 2022, respectively		2			1
Non-voting common stock, $0.0001 par value; authorized shares - 10,000,000 at March 31, 2023 and December 31, 2022; issued and outstanding shares - 2,420,755 and 3,629,400 at March 31, 2023 and December 31, 2022, respectively		—			—
Additional paid-in capital		170,150			148,303
Accumulated other comprehensive loss		(421	)		(692	)
Accumulated deficit		(97,598	)		(86,142	)
Total stockholders' equity		72,133			61,470
Total liabilities and stockholders' equity	$	79,684		$	70,616

The accompanying notes are an integral part of these financial statements.

Longboard Pharmaceuticals, Inc.

Condensed Statements of Operations and Comprehensive Loss

(unaudited)


	Three Months Ended March 31,
(in thousands, except share and per share data)	2023			2022
Operating expenses:
Research and development	$	8,530		$	7,121
General and administrative		3,432			2,499
Total operating expenses		11,962			9,620
Loss from operations		(11,962	)		(9,620	)
Interest income, net		516			32
Other expense		(10	)		(9	)
Net loss	$	(11,456	)	$	(9,597	)

Net loss per share, basic and diluted	$	(0.56	)	$	(0.56	)

Weighted-average shares outstanding, basic and diluted		20,409,794			17,086,615

Comprehensive loss:
Net loss	$	(11,456	)	$	(9,597	)
Unrealized gain (loss) on short-term investments		271			(432	)
Comprehensive loss	$	(11,185	)	$	(10,029	)

The accompanying notes are an integral part of these financial statements.

Longboard Pharmaceuticals, Inc.

Condensed Statements of Cash Flows

(unaudited)


	Three Months Ended March 31,
(in thousands)	2023			2022
Cash flows from operating activities:
Net loss	$	(11,456	)	$	(9,597	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		697			571
Depreciation		1			1
(Accretion) amortization of premiums on investments, net		(1	)		145
Changes in operating assets and liabilities:
Prepaid expenses and other assets		(798	)		(2,377	)
Accounts payable		(1,027	)		329
Accrued research and development expenses		645			753
Accrued compensation and related expenses		(1,734	)		(1,036	)
Accrued other expenses		578			1,184
Operating right-of-use assets and lease liabilities, net		(2	)		2
Net cash used in operating activities		(13,097	)		(10,025	)
Cash flows from investing activities:
Purchases of short-term investments		(20,567	)		(21,284	)
Maturities of short-term investments		26,650			—
Net cash provided by (used in) investing activities		6,083			(21,284	)
Cash flows from financing activities:
Proceeds from follow-on public offering		23,000			—
Follow-on public offering costs		(1,640	)		—
Net cash provided by financing activities		21,360			—
Net increase (decrease) in cash and cash equivalents		14,346			(31,309	)
Cash and cash equivalents at the beginning of the period		10,775			66,346
Cash and cash equivalents at the end of the period	$	25,121		$	35,037

Supplemental disclosure of cash flow information:
Follow-on public offering costs in accrued other expenses	$	172		$	—

The accompanying notes are an integral part of these financial statements.

Longboard Pharmaceuticals, Inc.

Notes to Unaudited Financial Statements

Note 1. Organization and Basis of Presentation

Description of Business

Longboard Pharmaceuticals, Inc. (the Company), formerly Arena Neuroscience, Inc., was incorporated in the state of Delaware on January 3, 2020, and is based in La Jolla, California. The Company was organized and initially wholly-owned by Arena Pharmaceuticals, Inc. (Arena), until the closing of its Series A convertible preferred stock (Series A Preferred Stock) financing in October 2020. The Company is a clinical-stage biopharmaceutical company focused on developing novel, transformative medicines for neurological diseases. The Company’s most advanced product candidate, LP352, is a serotonin receptor that is being developed for the treatment of seizures associated with developmental and epileptic encephalopathies and is currently in a Phase 1b/2a clinical trial (the PACIFIC Study). The Company is also developing LP659, an S1P receptor modulator, which could have applicability in multiple neurological conditions.

Basis of Presentation

The Company’s unaudited condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) and applicable regulations of the U.S. Securities and Exchange Commission (SEC). Accordingly, the accompanying unaudited condensed financial statements do not include all of the information and notes required by GAAP for complete financial statements. The unaudited condensed financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results for the periods presented. All such adjustments are of a normal and recurring nature. The balance sheet as of December 31, 2022 has been derived from the audited financial statements at that date but does not include all information and notes required by GAAP for complete financial statements. The operating results presented in these unaudited condensed financial statements are not necessarily indicative of the results that may be expected for any future periods. The Company’s unaudited condensed financial statements should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed on March 2, 2023.

Liquidity and Capital Resources

Since its inception, the Company has devoted substantially all of its resources to research and development (R&D) activities, organizing and staffing, business planning, raising capital, in-licensing intellectual property rights and establishing its intellectual property portfolio, and providing general and administrative (G&A) support for these operations and has funded its operations primarily with the net proceeds from the issuance of Series A Preferred Stock and common stock. The Company has incurred losses and negative cash flows from operations since commencement of its operations. The Company had an accumulated deficit of $97.6 million and $86.1 million as of March 31, 2023 and December 31, 2022, respectively.

Management expects the Company will incur substantial operating losses for the foreseeable future in order to complete preclinical studies and clinical trials, seek regulatory approval, and launch and commercialize any product candidates for which it receives regulatory approval. The Company will need to raise additional capital through public or private equity or debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements.

Geopolitical and macroeconomic events, such as the COVID-19 pandemic, bank failures, and the conflict in Ukraine, continue to evolve and have resulted in a significant disruption of global financial markets. The Company’s ability to raise additional capital may be adversely impacted by potential worsening of global economic conditions and the disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from such events. If the disruption persists or deepens, the Company could experience an inability to access additional capital.

As of March 31, 2023, the Company had available cash, cash equivalents and short-term investments of $76.1 million and working capital of $71.7 million to fund future operations. Management believes that its capital resources as of March 31, 2023 will be sufficient to fund the Company’s operations for at least 12 months after the date these unaudited condensed financial statements are issued.

Note 2. Summary of Significant Accounting Policies

Use of Estimates

The Company’s financial statements are prepared in accordance with GAAP. The preparation of the Company’s financial statements requires the Company to make estimates and assumptions that impact the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in the financial statements and accompanying notes. Such estimates

include the accrual of R&D expenses and stock-based compensation. Management evaluates its estimates on an ongoing basis. Estimates are based on the Company’s historical experience, knowledge of current events and actions it may undertake in the future, and actual results may materially differ from these estimates and assumptions.

Concentration of Credit Risk

Financial instruments which potentially subject the Company to significant concentration of credit risk consist of cash, cash equivalents and short-term investments. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits and invests in short-term investments with the primary objectives of seeking to preserve principal, achieve liquidity requirements and safeguard funds. Management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held and the nature, including the credit-ratings, of its short-term investments.

Comprehensive Loss

Comprehensive loss is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources, including unrealized gains and losses on short-term investments.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. Cash and cash equivalents include cash in readily available checking accounts, money market funds, corporate debt securities, and obligations of U.S. government-sponsored enterprises. The carrying amounts reported in the unaudited condensed balance sheets for cash and cash equivalents are valued at cost, which approximates fair value.

Short-Term Investments

Short-term investments primarily consist of commercial paper, corporate debt securities, and government and agency bonds. The Company has classified these investments as available-for-sale securities, as the sale of such investments may be required prior to maturity to implement management strategies, and therefore has classified all investments with maturity dates beyond three months at the date of purchase as current assets in the accompanying unaudited balance sheets. Any premium or discount arising at purchase is amortized and/or accreted to interest income as an adjustment to yield using the straight-line method over the life of the instrument. Investments are reported at their estimated fair value. Unrealized gains and losses are included in accumulated other comprehensive loss as a component of stockholders' equity until realized.

R&D Expenses

R&D expenses are expensed in the periods in which they are incurred. External expenses consist primarily of payments to contract research organizations, outside consultants and other third parties in connection with the Company’s discovery, preclinical and clinical activities, process development, manufacturing activities, regulatory and other services. Certain R&D external expenses are recognized based on an evaluation of the progress to completion of specific tasks using information provided to the Company by its service providers or the estimate of the level of service that has been performed at each reporting date. R&D expenses amounted to $8.5 million and $7.1 million for the three months ended March 31, 2023 and 2022, respectively.

Stock-Based Compensation

Stock-based awards are measured at fair value and compensation expense is recognized over the requisite service period. Forfeitures are accounted for in the period they occur. The Company estimates the fair value of each stock-based award on the date of grant using the Black-Scholes option pricing model which requires the input of subjective assumptions, including price volatility of the underlying stock, risk-free interest rate, dividend yield, and expected term of the option.

Leases

The Company determines if an arrangement is a lease or contains lease components at inception. Lease terms are determined at the commencement date by considering whether renewal options and termination options, if any, are reasonably assured of exercise. For long-term operating leases, the Company recognizes a lease liability and a right-of-use (ROU) asset on its balance sheets and recognizes lease expense on a straight-line basis over the lease term. The lease liability is determined as the present value of future lease payments using the discount rate implicit in the lease or, if the implicit rate is not readily determinable, an estimate of the

Company’s incremental borrowing rate. The ROU asset is based on the lease liability, adjusted for any prepaid or deferred rent. The Company does not have any financing leases.

Net Loss Per Share

Basic net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock and potentially dilutive securities outstanding for the period. Since the Company had a net loss in each of the periods presented, basic and diluted net loss per share of common stock are the same.

The table below provides potentially dilutive securities not included in the calculation of the diluted net loss per share as it would be anti-dilutive:


	Three Months Ended March 31,
	2023		2022
Options to purchase common stock		3,877,556		2,350,934
Restricted stock awards, issued but unvested		—		101,635
Total		3,877,556		2,452,569

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (ASU 2016-13), to improve financial reporting by requiring timely recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. This guidance became effective for the Company on January 1, 2023. The adoption of this standard did not have a material impact on the Company’s financial statements.

Risks and Uncertainties

In December 2019, COVID-19, a novel strain of coronavirus, was first identified in Wuhan, China. In March 2020, the World Health Organization categorized COVID-19 as a pandemic, and the virus has spread to over 100 countries, including the United States. The impact of this pandemic has been and will likely continue to be extensive in many aspects of society, which has resulted in and will likely continue to result in significant disruptions to the global economy, as well as businesses and capital markets around the world.

Potential impacts to the Company’s business include, but are not limited to, temporary closures of facilities of its vendors, disruptions or restrictions on its employees’ ability to travel, disruptions to or delays in ongoing laboratory experiments, preclinical studies, clinical trials, third-party manufacturing supply and other operations, the potential diversion of healthcare resources away from the conduct of clinical trials to focus on pandemic concerns, interruptions or delays in the operations of the U.S. Food and Drug Administration or other regulatory authorities, and the Company’s ability to raise capital and conduct business development activities.

In February 2022, Russia commenced a military invasion of Ukraine causing ongoing geopolitical turmoil, including continuing military action in the region and sanctions imposed on Russia.

These and other events have caused and will likely continue to cause significant disruption, instability and volatility in the global economy and financial markets, resulting in inflation, rising interest rates, tightening of credit markets and bank failures, the actual or anticipated occurrence of which may have an adverse impact on the Company’s business or ability to access capital markets in the future.

Note 3. Fair Value Measurements

The accounting guidance defines fair value, establishes a consistent framework for measuring fair value, and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in

pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

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 for similar assets and liabilities in active markets, 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.

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).

The following table summarizes the Company's financial instruments measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022.


			Fair Value Measurements at Reporting Date Using
(in thousands)	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
As of March 31, 2023
Assets:
Money market funds	$	20,133	$	20,133	$	—	$	—

Commercial paper	$	23,620	$	—	$	23,620	$	—
Corporate debt securities		13,768		—		13,768		—
Government and agency securities		15,607		12,969		2,638		—
Total assets measured at fair value	$	73,128	$	33,102	$	40,026	$	—

As of December 31, 2022
Assets:
Money market funds	$	8,784	$	8,784	$	—	$	—

Commercial paper	$	19,429	$	—	$	19,429	$	—
Corporate debt securities		19,737		—		19,737		—
Government and agency securities		18,639		14,759		3,880		—
Total assets measured at fair value	$	66,589	$	23,543	$	43,046	$	—

Note 4. Short-Term Investments

The following table summarizes short-term investments:


	As of March 31, 2023
			Unrealized
(in thousands)	Amortized Cost		Gains		Losses			Estimated Fair Value
Commercial paper	$	21,645	$	1	$	(16	)	$	21,630
Corporate debt securities		13,994		—		(226	)		13,768
Government and agency securities		15,786		5		(184	)		15,607
Total short-term investments	$	51,425	$	6	$	(426	)	$	51,005

	As of December 31, 2022
			Unrealized
(in thousands)	Amortized Cost		Gains		Losses			Estimated Fair Value
Commercial paper	$	18,453	$	—	$	(15	)	$	18,438
Corporate debt securities		20,090		—		(353	)		19,737
Government and agency securities		18,963		1		(325	)		18,639
Total short-term investments	$	57,506	$	1	$	(693	)	$	56,814

The following table summarizes the maturities of the Company's short-term investments at March 31, 2023:


(in thousands)	Amortized Cost		Estimated Fair Value
Due in one year or less	$	47,463	$	47,184
Due after one year through two years		3,962		3,821
Total short-term investments	$	51,425	$	51,005

The following table shows the Company’s available-for-sale investments’ gross unrealized losses and fair value aggregated by investment category and length of time that individual securities have been in a continuous loss position, at March 31, 2023 and December 31, 2022:


	As of March 31, 2023
	Less than 12 months							More than 12 months							Total
(in thousands)	Count		Fair Value		Unrealized Losses			Count		Fair Value		Unrealized Losses			Count		Fair Value		Unrealized Losses
Commercial paper		6	$	17,667	$	(16	)		—	$	—	$	—			6	$	17,667	$	(16	)
Corporate debt securities		4		3,378		(12	)		7		9,629		(214	)		11		13,007		(226	)
Government and agency securities		1		1,240		(14	)		5		8,450		(170	)		6		9,690		(184	)
		11	$	22,285	$	(42	)		12	$	18,079	$	(384	)		23	$	40,364	$	(426	)

	As of December 31, 2022
	Less than 12 months							More than 12 months							Total
(in thousands)	Count		Fair Value		Unrealized Losses			Count		Fair Value		Unrealized Losses			Count		Fair Value		Unrealized Losses
Commercial paper		8	$	7,934	$	(15	)		—	$	—	$	—			8	$	7,934	$	(15	)
Corporate debt securities		7		7,626		(43	)		9		12,111		(310	)		16		19,737		(353	)
Government and agency securities		3		4,511		(37	)		6		10,653		(288	)		9		15,164		(325	)
		18	$	20,071	$	(95	)		15	$	22,764	$	(598	)