0001785530-23-000033 | 10-Q | XBRL Viewer | Werewolf Therapeutics INC

Restricted Cash and Cash Equivalents (Tables)

9 Months Ended

Sep. 30, 2023

Cash and Cash Equivalents [Abstract]

Restrictions on Cash and Cash Equivalents

prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets for all periods presented below (in thousands):


	Nine Months Ended September 30, 2023				Nine Months Ended September 30, 2022
	Beginning of Period		End of Period		Beginning of Period		End of Period
Cash and cash equivalents	$	129,315	$	130,058	$	157,531	$	140,450
Restricted cash and cash equivalents, current	—		210		91		—
Restricted cash and cash equivalents, net of current portion	1,214		21,019		1,208		1,211
Cash, cash equivalents and restricted cash and cash equivalents	$	130,529	$	151,287	$	158,830	$	141,661

Term Loan

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Term Loan

7. Term Loan

In April 2022, the Company entered into the Loan Agreement with PWB. Under the terms of the Loan Agreement, PWB made available a term loan in an aggregate principal amount of up to $20.0 million (“Tranche I Loan”) available at any time after the closing date until February 28, 2024 as extended to August 31, 2024 upon the satisfaction of certain conditions set forth in the Loan Agreement (such date, the “Amortization Date”). Based on the satisfaction of certain conditions defined in the Loan Agreement, PWB was also obligated to make available an additional term loan in the aggregate principal amount of up to $20.0 million (“Tranche II Loan”, or collectively with the Tranche I Loan, the “Term Loans”) available at any time after the closing date until the Amortization Date upon the acceptance by the U.S. Food and Drug Administration (the “FDA”) of two investigational new drug (“IND”) submissions on or before March 31, 2023. As of September 30, 2023, the Company has drawn down $40.0 million of the Term Loans.

The outstanding notes payable balance under the Term Loans as of September 30, 2023 consists of the following (in thousands):


	September 30, 2023
Note payable	$	40,000
Unamortized debt discount and issuance costs	(769)
Net carrying amount of note payable	39,231
Less: current portion of note payable	(1,667)
Note payable, net, less current portion	$	37,564

Subsequent to the interest-only period, which ends on August 31, 2024, the Company is required to make equal monthly principal payments plus interest until the Term Loans mature on August 31, 2026. The Term Loans will bear interest on the outstanding daily balance at a floating annual rate equal to greater of: (i) 0.5% above the prime rate then in effect or (ii) 4.5%. If the prime rate changes throughout the term, the interest rate will be adjusted effective on the date of the prime rate change. All interest chargeable under the Loan Agreement is computed on a 360-day year for the actual number of days elapsed, with interest payable monthly. The Company recognized interest expense related to the Loan Agreement of $0.9 million and $1.9 million during the three and nine months ended September 30, 2023, respectively. The Company did not incur interest expense during the three and nine months ended September 30, 2022.

The Company was obligated to pay PWB a one-time fee in the event of certain corporate transactions equal to either (i) the greater of (a) $0.2 million and (b) 2.0% of the amount drawn under the Term Loans, for a transaction occurring on or before

March 31, 2023, or (ii) for any transaction occurring thereafter, the greater of (a) $0.4 million and (b) 4.0% of the amount drawn under the Term Loans (the “Success Fee”). The Success Fee Event occurred during the second quarter of 2023, resulting in the immediate payment in full of the $1.6 million required Success Fee.

All outstanding obligations under the Loan Agreement are secured by the Company’s personal property (exclusive of any intellectual property) and are subject to acceleration in the event of default. In the event of a late payment or default, the Company is obligated to pay a fee equal to 5.0% of such unpaid amounts. In connection with the Loan Agreement, the Company is required to comply with certain negative covenants, which among other things, restrict the Company from (i) incurring future debt or granting liens, (ii) effectuating a merger or consolidation with or into any other business organization, (iii) paying dividends or making certain other distributions, (iv) selling or otherwise transferring its assets, (v) making investments in any entities or instruments other than certain investments specified in the Loan Agreement and (vi) making capitalized expenditures in excess of 125% of the amount provided for in the annual budget approved by the board of directors. The Loan Agreement also contains standard affirmative covenants, including with respect to the issuance of audited consolidated financial statements, insurance, and maintenance of good standing and government compliance in the Company’s state of formation. On or before September 30, 2023, the Company was required to raise aggregate gross cash process of at least $50.0 million from the sale or issuance of the Company’s equity or from strategic partnerships or any similar transaction. From after receipt of those proceeds, the Company is required to maintain at all times at least $20.0 million of otherwise unrestricted cash in accounts with PWB, which is included within restricted cash and cash equivalents, net of current portion on the Company’s condensed consolidated balance sheet as of September 30, 2023. On April 17, 2023, the Company achieved the $50.0 million funding milestone, triggering the corresponding $20.0 million cash covenant, full payment of the Success Fee of $1.6 million, and the updated Amortization Date of August 31, 2024.

PWB has the right to accelerate all outstanding obligations of the Company under the Loan Agreement or terminate any remaining Term Loan commitments in the event of a material adverse effect on (i) the operations, business or financial condition of the Company, (ii) the Company’s ability to repay any portion of the Term Loans or perform any of its other obligations under the Loan Agreement, and (iii) the Company’s interest in, or the value, perfection or priority of PWB’s security interest in the collateral. As of September 30, 2023, the Company had drawn both Term Loans and had $40.0 million outstanding principal.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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+ Details

Term Loan - Narrative (Details) - USD ($)		1 Months Ended	3 Months Ended		9 Months Ended
Term Loan - Narrative (Details) - USD ($)	Apr. 17, 2023	Apr. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Debt Instrument [Line Items]
Floating rate spread in effect (greater than) (percent)		4.50%
Success fee liability paid	$ 1,600,000		$ 1,600,000		$ 1,600,000
Proceeds from at the market offering of common stock					9,447,000	$ 14,761,000
Restricted cash and cash equivalents			21,200,000		21,200,000		$ 1,200,000
Prime Rate
Debt Instrument [Line Items]
Floating rate spread in effect (greater than) (percent)		0.50%
Term loan
Debt Instrument [Line Items]
Non-cash interest expense			900,000	$ 0	1,900,000	$ 0
Term loan \| Period One
Debt Instrument [Line Items]
Delayed draw fee		$ 200,000
Success Fee (percent)		2.00%
Term loan \| Period Two
Debt Instrument [Line Items]
Delayed draw fee		$ 400,000
Success Fee (percent)		4.00%
Term loan \| Tranche I Loan
Debt Instrument [Line Items]
Term loan available		$ 20,000,000
Term loan \| Tranche II Loan
Debt Instrument [Line Items]
Term loan available		$ 20,000,000
Term loan \| Term Loans
Debt Instrument [Line Items]
Drawings on term loans					40,000,000
Default payment fee (percent)		5.00%
Maximum annual capital expenditures		1.25
Proceeds from at the market offering of common stock	$ 50,000,000				50,000,000
Note payable			40,000,000		40,000,000
Restricted cash and cash equivalents			$ 20,000,000		$ 20,000,000

Accrued Expenses and Other Current Liabilities

9 Months Ended

Sep. 30, 2023

Payables and Accruals [Abstract]

Accrued Expenses and Other Current Liabilities

6. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities as of September 30, 2023 and December 31, 2022 were comprised as follows (in thousands):


	September 30, 2023		December 31, 2022
Manufacturing	$	1,928	$	6,674
Contract research	1,745		2,990
Employee compensation and benefits	2,666		3,135
Professional fees	678		613
Success payment liability	—		570
Other	950		170
Total accrued expenses and other current liabilities	$	7,967	$	14,152

Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Operating activities:
Net income (loss)	$ (25,365)	$ (41,880)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense	6,135	5,458
Depreciation expense	1,304	687
Non-cash interest expense	181	0
Non-cash lease expense	1,212	1,265
Change in fair value of success payment liability	(1,030)	253
Amortization of debt issuance costs	60	0
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	596	(3,398)
Other receivables	1,017	(4,300)
Other non-current assets	136	(1,204)
Accounts payable	241	(778)
Accrued expenses and other current liabilities	(5,338)	4,677
Deferred revenue	(5,258)	10,801
Operating lease liability	(1,727)	(498)
Other liabilities	(191)	191
Net cash used in operating activities	(28,027)	(28,726)
Investing activities:
Purchases of property and equipment	(571)	(3,093)
Net cash used in investing activities	(571)	(3,093)
Financing activities:
Proceeds from at the market offering of common stock	9,447	14,761
Proceeds from drawdown of term loans	40,000	0
Payment of equity issuance costs	(143)	(341)
Proceeds from issuances under Employee Stock Purchase Plan	45	0
Proceeds from stock option exercises	7	230
Net cash provided by financing activities	49,356	14,650
Net increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents	20,758	(17,169)
Cash, cash equivalents and restricted cash and cash equivalents—beginning of period	130,529	158,830
Cash, cash equivalents and restricted cash and cash equivalents—end of period	151,287	141,661
Supplemental disclosure of cash flow information:
Cash paid for interest	1,646	0
Supplemental disclosure of non-cash investing and financing activities:
Purchases of property and equipment in accounts payable and accrued expenses	198	307
Issuance costs in accounts payable and accrued expenses	24	61
Stock option exercise receivables in prepaid expenses and other current assets	0	(7)
Leasehold improvements paid by landlord	$ 0	$ 5,444

Related Parties	9 Months Ended
Related Parties	Sep. 30, 2023
Related Party Transactions [Abstract]
Related Parties	10. Related Parties In May 2022, the Company entered into a sublease agreement with Crossbow Therapeutics, Inc. (“Crossbow”), for which entities affiliated with MPM Capital (“MPM Capital”) are also beneficial owners, to sublease the entirety of its office and laboratory space in Cambridge, Massachusetts. Luke Evnin, Ph.D., the chair of the Company’s board of directors, co-founded MPM Capital and serves as Managing Director of MPM Capital. Briggs Morrison, who serves on the Company’s board of directors, serves as Executive Partner of MPM Capital and Chief Executive Officer of Crossbow. The term of the sublease agreement commenced in June 2022 and ends in March 2024, with no option to extend. The Company received cash payments under its sublease of approximately $1.2 million during the nine months ended September 30, 2023. In addition, the Company received $0.2 million from Crossbow in June 2022 as a security deposit that is included within accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheets as of September 30, 2023.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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+ Details

Financial Instruments and Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands		3 Months Ended	9 Months Ended
	Apr. 17, 2023	Sep. 30, 2023	Sep. 30, 2023	Dec. 31, 2022
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Success payment liability		$ 0	$ 0	$ 570
Success fee liability paid	$ 1,600	$ 1,600	1,600
Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Success payment liability				570
Recurring \| Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Success payment liability				$ 570
Change in fair value			$ 1,030

Financial Instruments and Fair Value Measurements

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Financial Instruments and Fair Value Measurements

4. Financial Instruments and Fair Value Measurements

Fair value is an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value is determined based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect certain market assumptions. As a basis for considering such assumptions, GAAP establishes a three-tier value hierarchy, which prioritizes the inputs used to develop the assumptions and for measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets for identical assets; (Level 2) inputs other than the quoted prices in active markets that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which requires the Company to develop its own assumptions. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value.

The Company’s financial instruments that are measured at fair value on a recurring basis consist of money market funds, classified as cash, cash equivalents and restricted cash and cash equivalents on the Company’s condensed consolidated balance

sheets, and a success payment liability pursuant to an amended and restated loan and security agreement (the “Loan Agreement”) with Pacific Western Bank (“PWB”) (see Note 7, Term Loan).

The Company measures the fair value of money market funds based on quoted prices in active markets for identical securities.

The carrying amounts reflected in the condensed consolidated balance sheets for cash, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values, due to their short-term nature.

Assets measured at fair value on a recurring basis as of September 30, 2023 were as follows (in thousands):


	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	144,740	$	—	$	—	$	144,740
Total assets	$	144,740	$	—	$	—	$	144,740

Assets and liabilities measured at fair value on a recurring basis as of December 31, 2022 were as follows (in thousands):


	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	128,812	$	—	$	—	$	128,812
Total assets	$	128,812	$	—	$	—	$	128,812
Liabilities
Success payment liability	$	—	$	—	$	570	$	570
Total liabilities	$	—	$	—	$	570	$	570

The success payment liability was included within accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheets as of December 31, 2022.

There were no changes in valuation techniques during the three or nine months ended September 30, 2023. There were no liabilities measured at fair value on a recurring basis as of September 30, 2023.

Success Payment Liability

The Company was obligated to pay to PWB a one-time success payment of up to $1.6 million upon the occurrence of the Company achieving certain conditions defined in the Loan Agreement. The Success Fee Event (as defined in the Loan Agreement) occurred during the second quarter of 2023, resulting in the immediate payment in full of the required Success Fee (as defined in Note 7 below).

The following table reconciles the change in fair value of the success payment liability during the nine months ended September 30, 2023 based on Level 3 inputs (in thousands):


	Nine Months Ended September 30, 2023
Balance at December 31, 2022	$	570
Additions	—
Change in fair value	1,030
Payment at Success Event	(1,600)
Balance at September 30, 2023	$	—

The success payment liability is stated at fair value and was previously considered Level 3 because its fair value measurement was based, in part, on significant inputs not observed in the market. Upon completion of the Success Fee Event, the Company removed the corresponding financial instrument for the success payment liability and paid the total $1.6 million. Prior to repayment, the Company remeasured the liability at fair value with a corresponding increase of $1.0 million recorded to other expense, net for the nine months ended September 30, 2023.

- 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

Condensed Consolidated Statements of Stockholders’ Equity (unaudited) (Parentheticals) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022
Statement of Stockholders' Equity [Abstract]
Issuance costs	$ 29	$ 31	$ 103	$ 87	$ 314

Term Loan (Tables)

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Schedule of Long-Term Debt Instruments

The outstanding notes payable balance under the Term Loans as of September 30, 2023 consists of the following (in thousands):


	September 30, 2023
Note payable	$	40,000
Unamortized debt discount and issuance costs	(769)
Net carrying amount of note payable	39,231
Less: current portion of note payable	(1,667)
Note payable, net, less current portion	$	37,564

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 470
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-Name Accounting Standards Codification
-Section 55
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+ Details

Related Parties (Details) $ in Millions	9 Months Ended
Related Parties (Details) $ in Millions	Sep. 30, 2023 USD ($)
Related Party Transactions [Abstract]
Sublease cash payments received	$ 1.2
Security deposit liability	$ 0.2

Nature of Business	9 Months Ended
Nature of Business	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Business	1. Nature of Business Werewolf Therapeutics, Inc. (“Werewolf” or the “Company”) was incorporated in the state of Delaware in October 2017. The Company is an innovative biopharmaceutical company pioneering the development of therapeutics engineered to stimulate the body’s immune system for the treatment of cancer. The Company’s headquarters are located in Watertown, Massachusetts. Since inception, the Company has devoted substantially all of its time and efforts to performing research and development activities, raising capital and recruiting management and technical staff to support these operations. The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry including, but not limited to, technical risks associated with the successful research, development and manufacturing of product candidates, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. Current and future programs will require significant research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. The Company had cash and cash equivalents of $130.1 million at September 30, 2023. The Company expects that its cash and cash equivalents will enable it to fund its operating expenses and capital expenditure requirements for at least twelve months from the date of issuance of the condensed consolidated financial statements in this Form 10-Q. However, additional funding will be necessary beyond this point to fund future preclinical and clinical activities. The Company expects to finance its future cash needs through a combination of equity or debt financings, collaboration agreements, strategic alliances and licensing arrangements.

Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Manufacturing	$ 1,928	$ 6,674
Contract research	1,745	2,990
Employee compensation and benefits	2,666	3,135
Professional fees	678	613
Success payment liability	0	570
Other	950	170
Accrued expenses and other current liabilities	$ 7,967	$ 14,152

Common and Preferred Stock - Schedule of Common Stock Reserved for Issuance (Details) - shares shares in Thousands	Sep. 30, 2023	Dec. 31, 2022
Class of Stock [Line Items]
Common stock available for issuance (shares)	8,667	6,809
Shares reserved for exercises of outstanding stock options
Class of Stock [Line Items]
Common stock available for issuance (shares)	6,480	5,244
Shares reserved for vesting of restricted stock units
Class of Stock [Line Items]
Common stock available for issuance (shares)	317	323
Warrants to purchase common stock
Class of Stock [Line Items]
Common stock available for issuance (shares)	59	59
Shares reserved for future issuance under the 2021 Employee Stock Purchase Plan
Class of Stock [Line Items]
Common stock available for issuance (shares)	530	244
Shares reserved for future issuance under the 2021 Stock Incentive Plan
Class of Stock [Line Items]
Common stock available for issuance (shares)	1,281	939

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

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+ Details

Stock-based Compensation

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock-based Compensation

9. Stock-based Compensation

2017 Stock Incentive Plan

In December 2017, the Company adopted the 2017 Stock Incentive Plan (the “2017 Plan”), as amended and restated, under which it could grant incentive stock options (“ISOs”), non-qualified stock options, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), stock appreciation rights and other stock-based awards to eligible employees, officers, directors and consultants. The terms of stock options and RSAs, including vesting requirements, are determined by the board of directors, subject to the provisions of the 2017 Plan.

2021 Stock Incentive Plan

In April 2021, the board of directors adopted and the Company’s stockholders approved the 2021 Stock Incentive Plan (the “2021 Plan”), which became effective immediately prior to the effectiveness of the Company’s initial public offering (“IPO”). As a result of the adoption of the 2021 Plan, no further awards will be made under the 2017 Plan.

The 2021 Plan provides for the grant of ISOs, non-qualified stock options, RSAs, RSUs, stock appreciation rights and other stock-based awards. The Company’s employees, officers, directors, consultants and advisors are eligible to receive awards under the 2021 Plan. The terms of awards, including vesting requirements, are determined by the board of directors, subject to the provisions of the 2021 Plan.

The Company initially registered 3,352,725 shares of common stock under the 2021 Plan, pursuant to a Registration Statement on Form S-8 filed with the SEC on April 30, 2021, which was comprised of (i) 2,843,116 shares of common stock reserved for issuance under the 2021 Plan, (ii) 31,884 shares of common stock originally reserved for issuance under the 2017 Plan that became available for issuance under the 2021 Plan upon the completion of the IPO, and (iii) 477,725 shares of unvested restricted stock subject to repurchase by the Company that may become issuable under the 2021 Plan following such repurchase. The 2021 Plan also provides that an additional number of shares will be added annually to the shares authorized for issuance under the 2021 Plan on the first day of each fiscal year, beginning with the fiscal year ended December 31, 2022 and continuing until, and including, the fiscal year ending December 31, 2031. The number of shares added each year will be equal to the lesser of (i) 5% of the number of outstanding common stock on such date and (ii) such amount as determined by the board of directors. Effective January 1, 2022 and 2023, 1,380,397 and 1,575,753 additional shares, respectively, were automatically added to the shares reserved for issuance under the 2021 Plan pursuant to this evergreen provision.

As of September 30, 2023, there were 1,281,089 shares available for future issuance under the 2021 Plan.

2021 Employee Stock Purchase Plan

In April 2021, the board of directors adopted and the Company’s stockholders approved the 2021 Employee Stock Purchase Plan (the “2021 ESPP”), which became effective immediately prior to the effectiveness of the IPO. The Company initially reserved 244,000 shares of common stock for future issuance under the 2021 ESPP. The 2021 ESPP provides that an additional number of shares will automatically be added to the shares reserved for issuance on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2022 and continuing for each fiscal year until, and including, the fiscal year ending on December 31, 2032. The number of shares added each year will be equal to the lowest of (i) 488,000 shares of common stock, (ii) 1% of the number of shares of outstanding common stock on such date, and (iii) such amount as determined by the board of directors. Effective January 1, 2023, 315,150 additional shares were automatically added to the shares reserved for issuance under the 2021 ESPP pursuant to the evergreen provision. The Company initiated its first offering period under the 2021 ESPP in December 2022.

The 2021 ESPP provides that eligible employees may contribute up to 15% of their eligible earnings toward the semi-annual purchase of the Company’s common stock. The 2021 ESPP is qualified under Section 423 of the Internal Revenue Code. The employee’s purchase price is derived from a formula based on the closing price of the common stock on the first day of the offering period versus the closing price on the last date of purchase (or, if not a trading day, on the immediately preceding trading day). The offering period under the 2021 ESPP has a duration of six months, and the purchase price with respect to each offering period beginning on or after such date is, until otherwise amended, equal to 85% of the lesser of (i) the fair market value of the Company’s common stock at the commencement of the applicable six-month offering period or (ii) the fair market value of the Company’s common stock on the purchase date. The Company estimates the fair value of the common stock under the 2021 ESPP using a Black-Scholes valuation model. For the three and nine months ended September 30, 2023, the fair value of common stock awarded was estimated on the date of grant using the Black-Scholes option valuation model and the straight-line attribution approach with the following assumptions: risk-free interest rate (3.8%); expected term (0.5 years); expected volatility (92.7%); and an expected dividend yield (0%). The Company recorded less than $0.1 million of stock-based compensation under the 2021 ESPP for the three and nine months ended September 30, 2023. As of September 30, 2023, there was unrecognized stock-based compensation expense of less than $0.1 million related to the most recent ESPP offering period, which ended May 31, 2023.

Stock-Based Compensation Expense

Total stock-based compensation expense recognized in the condensed consolidated statements of operations was as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Research and development	$	1,008	$	909	$	3,047	$	2,496
General and administrative	1,089		1,027		3,088		2,962
Total stock-based compensation	$	2,097	$	1,936	$	6,135	$	5,458

RSA Activity

The Company may, at its discretion, repurchase unvested shares of restricted stock issued pursuant to the 2017 Plan at the initial purchase price if the employees or non-employees terminate their service relationship with the Company.

The following table summarizes RSA activity during the nine months ended September 30, 2023 (in thousands, except per share amounts):


	Shares/Units	Weighted-Average Grant Date Fair Value Per Share
Unvested at December 31, 2022	81	$	1.38
Granted	—	$	—
Vested	(81)	$	1.38
Forfeited	—	$	—
Unvested at September 30, 2023	—	$	—

As of September 30, 2023, there was no unrecognized stock-based compensation expense related to unvested RSAs.

No RSAs vested during the three months ended September 30, 2023. The aggregate fair value of RSAs that vested during the three months ended September 30, 2022, based upon the fair values of the stock underlying the RSAs on the day of vesting, was $0.3 million. The aggregate fair value of RSAs that vested during the nine months ended September 30, 2023 and 2022, based upon the fair values of the stock underlying the RSAs on the day of vesting, was $0.2 million and $1.0 million, respectively.

RSU Activity

The Company has also granted RSUs to its employees under the 2021 Plan. The following table summarizes RSU activity during the nine months ended September 30, 2023 (in thousands, except per share amounts):


	Shares/Units	Weighted-Average Grant Date Fair Value Per Share
Unvested at December 31, 2022	323	$	4.32
Granted	—	$	—
Vested	—	$	—
Forfeited	(6)	$	4.97
Unvested at September 30, 2023	317	$	4.30

As of September 30, 2023, there was unrecognized stock-based compensation expense related to unvested RSUs of $0.4 million, which the Company expects to recognize over a weighted-average period of approximately 0.5 year.

No RSUs vested during the three or nine months ended September 30, 2023 or 2022.

Stock Option Activity

During the three months ended September 30, 2022, the Company granted performance-based stock options to certain executive officers for the purchase of an aggregate of 883,352 shares of common stock with a grant date fair value of $3.36 per share. These stock options vest only upon achievement of specified performance targets related to certain business objectives on or before December 31, 2023. As of September 30, 2023, none of these options were vested because none of the specified performance targets had been achieved. Because achievement of the specified performance targets was not deemed probable as

of September 30, 2023, the Company has not recorded any expense for these stock options from the date of issuance through September 30, 2023. During the second quarter of 2023, 101,447 of the performance-based stock options were forfeited by an executive who retired from the Company. The total unrecognized stock-based compensation expense for the remaining outstanding performance-based stock options is $2.6 million as of September 30, 2023.

The fair value of stock options granted during the three and nine months ended September 30, 2023 and 2022 was calculated on the date of grant using the following weighted-average assumptions:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Risk-free interest rate	4.3	%	2.9	%	3.9	%	2.3	%
Expected term (in years)	6.0		9.8		6.0		7.6
Dividend yield	—	%	—	%	—	%	—	%
Expected volatility	84.8	%	77.9	%	82.7	%	77.0	%

Using the Black-Scholes option pricing model, the weighted-average grant date fair value of stock options granted during the three months ended September 30, 2023 and 2022 was $1.91 and $3.35 per share, respectively. Using the Black-Scholes option pricing model, the weighted-average grant date fair value of stock options granted during the nine months ended September 30, 2023 and 2022 was $1.56 and $5.00 per share, respectively.

The following table summarizes stock option activity during the nine months ended September 30, 2023:


	Options Outstanding
	Number of Options (in thousands)	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (in years)
Outstanding at December 31, 2022	5,244	$	7.86	8.34
Granted	1,616	$	2.16
Exercised	(3)	$	1.98
Cancelled	(377)	$	5.82
Outstanding at September 30, 2023	6,480	$	6.56	8.14
Exercisable at September 30, 2023	2,831	$	7.67	7.64

The aggregate intrinsic fair value of stock options exercised during the three months ended September 30, 2023 and 2022 was less than $0.1 million in both periods. The aggregate intrinsic fair value of stock options exercised during the nine months ended September 30, 2023 and 2022 was less than $0.1 million and $0.4 million, respectively.

As of September 30, 2023, there was unrecognized stock-based compensation expense related to unvested stock options of $11.2 million, which the Company expects to recognize over a weighted-average period of approximately 1.7 years.

Stock-based Compensation - Stock Option Activity (Details) - Stock options shares in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023 $ / shares shares	Dec. 31, 2022 $ / shares shares
Number of Options (in thousands)
Outstanding at beginning of period (shares) \| shares	5,244
Granted (shares) \| shares	1,616
Exercised (shares) \| shares	(3)
Cancelled (shares) \| shares	(377)
Outstanding at end of period (shares) \| shares	6,480	5,244
Exercisable at end of period (shares) \| shares	2,831
Weighted-Average Exercise Price
Weighted-Average Exercise Price - Outstanding at beginning of period (in usd per share) \| $ / shares	$ 7.86
Weighted-Average Exercise Price - Granted (in usd per share) \| $ / shares	2.16
Weighted-Average Exercise Price - Exercised (in usd per share) \| $ / shares	1.98
Weighted-Average Exercise Price - Cancelled (in usd per share) \| $ / shares	5.82
Weighted-Average Exercise Price - Outstanding at end of period (in usd per share) \| $ / shares	6.56	$ 7.86
Weighted-Average Exercise Price - Exercisable at end of period (in usd per share) \| $ / shares	$ 7.67
Weighted-Average Remaining Contractual Life (in years)
Weighted Average Remaining Contractual Life - Outstanding	8 years 1 month 20 days	8 years 4 months 2 days
Weighted Average Remaining Contractual Life - Exercisable	7 years 7 months 20 days

Nature of Business (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Cash and cash equivalents	$ 130,058	$ 129,315	$ 140,450	$ 157,531

Condensed Consolidated Statements of Stockholders’ Equity (unaudited) - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit
Stockholders' equity, beginning balance (shares) at Dec. 31, 2021		27,608
Stockholders' equity, beginning balance at Dec. 31, 2021	$ 152,787	$ 2	$ 405,680	$ (252,895)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation expense	1,745		1,745
Stock option exercises (shares)		46
Stock option exercises	129		129
Net income (loss)	(15,343)			(15,343)
Stockholders' equity, ending balance (shares) at Mar. 31, 2022		27,654
Stockholders' equity, ending balance at Mar. 31, 2022	139,318	$ 2	407,554	(268,238)
Stockholders' equity, beginning balance (shares) at Dec. 31, 2021		27,608
Stockholders' equity, beginning balance at Dec. 31, 2021	152,787	$ 2	405,680	(252,895)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(41,880)
Stockholders' equity, ending balance (shares) at Sep. 30, 2022		30,736
Stockholders' equity, ending balance at Sep. 30, 2022	130,947	$ 3	425,719	(294,775)
Stockholders' equity, beginning balance (shares) at Mar. 31, 2022		27,654
Stockholders' equity, beginning balance at Mar. 31, 2022	139,318	$ 2	407,554	(268,238)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock from at the market offering, net of issuance costs (shares)		801
Issuance of common stock from at the market offering, net of issuance costs	3,339		3,339
Stock-based compensation expense	1,777		1,777
Stock option exercises (shares)		1
Stock option exercises	1		1
Net income (loss)	(14,594)			(14,594)
Stockholders' equity, ending balance (shares) at Jun. 30, 2022		28,456
Stockholders' equity, ending balance at Jun. 30, 2022	129,841	$ 2	412,671	(282,832)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock from at the market offering, net of issuance costs (shares)		2,248
Issuance of common stock from at the market offering, net of issuance costs	11,020	$ 1	11,019
Stock-based compensation expense	1,936		1,936
Stock option exercises (shares)		32
Stock option exercises	93		93
Net income (loss)	(11,943)			(11,943)
Stockholders' equity, ending balance (shares) at Sep. 30, 2022		30,736
Stockholders' equity, ending balance at Sep. 30, 2022	130,947	$ 3	425,719	(294,775)
Stockholders' equity, beginning balance (shares) at Dec. 31, 2022		31,515
Stockholders' equity, beginning balance at Dec. 31, 2022	122,337	$ 3	429,039	(306,705)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock from at the market offering, net of issuance costs (shares)		3,824
Issuance of common stock from at the market offering, net of issuance costs	8,610		8,610
Stock-based compensation expense	2,108		2,108
Net income (loss)	(11,982)			(11,982)
Stockholders' equity, ending balance (shares) at Mar. 31, 2023		35,339
Stockholders' equity, ending balance at Mar. 31, 2023	121,073	$ 3	439,757	(318,687)
Stockholders' equity, beginning balance (shares) at Dec. 31, 2022		31,515
Stockholders' equity, beginning balance at Dec. 31, 2022	122,337	$ 3	429,039	(306,705)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(25,365)
Stockholders' equity, ending balance (shares) at Sep. 30, 2023		35,658
Stockholders' equity, ending balance at Sep. 30, 2023	112,443	$ 3	444,510	(332,070)
Stockholders' equity, beginning balance (shares) at Mar. 31, 2023		35,339
Stockholders' equity, beginning balance at Mar. 31, 2023	121,073	$ 3	439,757	(318,687)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock from at the market offering, net of issuance costs (shares)		272
Issuance of common stock from at the market offering, net of issuance costs	644		644
Issuance of common stock under Employee Stock Purchase Plan (in shares)		29
Issuance of common stock under Employee Stock Purchase Plan	45		45
Stock-based compensation expense	1,930		1,930
Stock option exercises (shares)		2
Stock option exercises	5		5
Net income (loss)	(5,098)			(5,098)
Stockholders' equity, ending balance (shares) at Jun. 30, 2023		35,642
Stockholders' equity, ending balance at Jun. 30, 2023	118,599	$ 3	442,381	(323,785)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock from at the market offering, net of issuance costs (shares)		15
Issuance of common stock from at the market offering, net of issuance costs	30		30
Stock-based compensation expense	2,097		2,097
Stock option exercises (shares)		1
Stock option exercises	2		2
Net income (loss)	(8,285)			(8,285)
Stockholders' equity, ending balance (shares) at Sep. 30, 2023		35,658
Stockholders' equity, ending balance at Sep. 30, 2023	$ 112,443	$ 3	$ 444,510	$ (332,070)

Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 130,058	$ 129,315
Prepaid expenses and other current assets	3,289	3,957
Other receivables	5,911	6,928
Total current assets	139,258	140,200
Property and equipment, net	8,342	8,988
Restricted cash and cash equivalents, net of current portion	21,019	1,214
Operating lease right of use asset	7,251	8,463
Other non-current assets	516	1,380
Total assets	176,386	160,245
Current liabilities:
Accounts payable	1,386	1,221
Accrued expenses and other current liabilities	7,967	14,152
Operating lease liability, current	1,605	2,084
Deferred revenue, current	1,814	6,532
Note payable, current	1,667	0
Total current liabilities	14,439	23,989
Operating lease liability, net of current portion	11,352	12,600
Deferred revenue, net of current portion	588	1,128
Notes payable, net of discount, issuance costs, and current portion	37,564	0
Other liabilities	0	191
Total liabilities	63,943	37,908
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value, 5,000 shares authorized at September 30, 2023 and December 31, 2022; no shares issued or outstanding as of September 30, 2023 and December 31, 2022, respectively	0	0
Common stock, $0.0001 par value, 200,000 shares authorized as of September 30, 2023 and December 31, 2022; 35,658 and 31,515 shares issued as of September 30, 2023 and December 31, 2022, respectively; 35,658 and 31,434 shares outstanding as of September 30, 2023 and December 31, 2022, respectively	3	3
Additional paid-in capital	444,510	429,039
Accumulated deficit	(332,070)	(306,705)
Total stockholders’ equity	112,443	122,337
Total liabilities and stockholders’ equity	$ 176,386	$ 160,245

Restricted Cash and Cash Equivalents - Narrative (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash and cash equivalents	$ 21.2	$ 1.2
Term Loans \| Term loan
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash and cash equivalents	20.0
Non-current restricted cash	$ 20.0

Net Loss Attributable to Common Stockholders per Share - Antidilutive Shares (Details) - shares	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (shares)	6,856,000	5,700,000
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (shares)	6,480,000	5,279,000
Unvested RSAs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (shares)	0	126,000
Unvested RSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (shares)	317,000	236,000
Warrants to purchase common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (shares)	59,000	59,000

Summary of Significant Accounting Policies	9 Months Ended
Summary of Significant Accounting Policies	Sep. 30, 2023
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Basis of Presentation and Consolidation The accompanying condensed consolidated financial statements as of September 30, 2023 and December 31, 2022, and for the three and nine months ended September 30, 2023 and 2022, have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) and generally accepted accounting principles in the United States of America (“GAAP”) as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”) for condensed consolidated financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, these condensed consolidated financial statements reflect all normal recurring adjustments which are necessary for a fair presentation of the Company’s financial position and results of its operations, as of and for the periods presented. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 23, 2023 (the “2022 Annual Report”). The information presented in the condensed consolidated financial statements and related notes as of September 30, 2023, and for the three and nine months ended September 30, 2023 and 2022, is unaudited. The December 31, 2022 condensed consolidated balance sheet included herein was derived from the audited financial statements as of that date, but does not include all disclosures, including notes, required by GAAP for complete financial statements. Interim results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023, or any future period. The accompanying condensed consolidated financial statements include the accounts of Werewolf Therapeutics, Inc. and its wholly owned subsidiary, Werewolf Therapeutics Mass Securities, Inc. All intercompany transactions and balances have been eliminated in consolidation. Summary of Significant Accounting Policies The significant accounting policies and estimates used in the preparation of the condensed consolidated financial statements are described in the Company’s audited financial statements as of and for the year ended December 31, 2022, and the notes thereto, which are included in the 2022 Annual Report. There have been no material changes in the Company’s significant accounting policies during the nine months ended September 30, 2023. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, the Company’s management evaluates its estimates and judgments including, but not limited to, those related to revenue recognition, accrued expenses, assumptions used in the valuation of stock-based compensation and income taxes. Actual results could differ from those estimates. Recent Accounting Pronouncements Accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s condensed consolidated financial statements upon adoption. Subsequent Events The Company has evaluated subsequent events and transactions that occurred in the period from the balance sheet date to the date that the financial statements were issued. Other than as described in these condensed consolidated financial statements, the Company did not identify any subsequent events that require adjustment or disclosure in the condensed consolidated financial statements.

Restricted Cash and Cash Equivalents

9 Months Ended

Sep. 30, 2023

Cash and Cash Equivalents [Abstract]

Restricted Cash and Cash Equivalents

5. Restricted Cash and Cash Equivalents

The Company maintained restricted cash and cash equivalents of $21.2 million and $1.2 million at September 30, 2023 and December 31, 2022, respectively. At September 30, 2023, $20.0 million of the restricted cash and cash equivalents balance represents an obligation under the term loan facility to maintain a minimum cash balance in the Company’s PWB accounts. This became effective upon imminent achievement of the funding goal as required by the terms of the Loan Agreement (see Note 7, Term Loan). The remaining restricted cash amounts are comprised solely of letters of credit required pursuant to the

Company’s leased office spaces. The current portion of restricted cash and cash equivalents is included in prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets for all periods presented below (in thousands):


	Nine Months Ended September 30, 2023				Nine Months Ended September 30, 2022
	Beginning of Period		End of Period		Beginning of Period		End of Period
Cash and cash equivalents	$	129,315	$	130,058	$	157,531	$	140,450
Restricted cash and cash equivalents, current	—		210		91		—
Restricted cash and cash equivalents, net of current portion	1,214		21,019		1,208		1,211
Cash, cash equivalents and restricted cash and cash equivalents	$	130,529	$	151,287	$	158,830	$	141,661

Jazz Collaboration and License Agreement - Contract with Customer, Contract Asset, Contract Liability, and Receivable (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($)
Contract liabilities:
Deferred revenue, beginning balance	$ 7,660
Additions	5,000
Reductions	(10,258)
Deferred revenue, ending balance	$ 2,402

Stock-based Compensation - Expense Recognized (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	$ 2,097	$ 1,936	$ 6,135	$ 5,458
Research and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	1,008	909	3,047	2,496
General and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	$ 1,089	$ 1,027	$ 3,088	$ 2,962

Net Loss Attributable to Common Stockholders per Share

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Net Loss Attributable to Common Stockholders per Share

11. Net Loss Attributable to Common Stockholders per Share

For purposes of the diluted net loss attributable to common stockholders per share calculation, outstanding stock options, unvested RSAs, unvested RSUs and warrants to purchase common stock are considered to be potentially dilutive securities,

however the following weighted-average amounts were excluded from the calculation of diluted net loss attributable to common stockholders per share because their effect would be anti-dilutive (in thousands):


	September 30,
	2023	2022
Outstanding stock options	6,480	5,279
Unvested RSAs	—	126
Unvested RSUs	317	236
Warrants to purchase common stock	59	59
Total	6,856	5,700

Financial Instruments and Fair Value Measurements - Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Success payment liability	$ 0	$ 570
Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total assets	144,740	128,812
Success payment liability		570
Total liabilities		570
Money market funds \| Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Money market funds	144,740	128,812
Level 1 \| Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total assets	144,740	128,812
Success payment liability		0
Total liabilities		0
Level 1 \| Money market funds \| Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Money market funds	144,740	128,812
Level 2 \| Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total assets	0	0
Success payment liability		0
Total liabilities		0
Level 2 \| Money market funds \| Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Money market funds	0	0
Level 3 \| Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total assets	0	0
Success payment liability		570
Total liabilities	0	570
Level 3 \| Money market funds \| Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Money market funds	$ 0	$ 0

Net Loss Attributable to Common Stockholders per Share (Tables)

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Schedule of Antidilutive Securities Excluded from Computation of (Loss) Income per Share


	September 30,
	2023	2022
Outstanding stock options	6,480	5,279
Unvested RSAs	—	126
Unvested RSUs	317	236
Warrants to purchase common stock	59	59
Total	6,856	5,700

Financial Instruments and Fair Value Measurements - Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation (Details) - Recurring $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Contract liabilities, beginning balance	$ 570
Level 3
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Contract liabilities, beginning balance	570
Additions	0
Change in fair value	1,030
Payment at Success Event	(1,600)
Contract liabilities, ending balance	$ 0

Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred stock par value (usd per share)	$ 0.0001	$ 0.0001
Preferred stock authorized (shares)	5,000,000	5,000,000
Preferred stock issued (shares)	0	0
Preferred stock outstanding (shares)	0	0
Common stock par value (usd per share)	$ 0.0001	$ 0.0001
Common stock authorized (shares)	200,000,000	200,000,000
Common stock issued (shares)	35,658,000	31,515,000
Common stock outstanding (shares)	35,658,000	31,434,000

Common and Preferred Stock (Tables)

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Schedule of Common Stock Reserved for Issuance

The Company had reserved shares of common stock for issuance as follows (in thousands):


	As of September 30,	As of December 31,
	2023	2022
Shares reserved for exercises of outstanding stock options	6,480	5,244
Shares reserved for vesting of restricted stock units	317	323
Shares reserved for exercises of warrants	59	59
Shares reserved for future issuance under the 2021 Employee Stock Purchase Plan	530	244
Shares reserved for future issuance under the 2021 Stock Incentive Plan	1,281	939
Total shares reserved for future issuance	8,667	6,809

Restricted Cash and Cash Equivalents - Summary of Restricted Cash (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2021
Cash and Cash Equivalents [Abstract]
Cash and cash equivalents	$ 130,058	$ 129,315	$ 140,450	$ 157,531
Restricted cash and cash equivalents, current	210	0	0	91
Restricted cash and cash equivalents, net of current portion	21,019	1,214	1,211	1,208
Cash, cash equivalents and restricted cash and cash equivalents	$ 151,287	$ 130,529	$ 141,661	$ 158,830

Financial Instruments and Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Assets Measured at Fair Value on a Recurring Basis

Assets measured at fair value on a recurring basis as of September 30, 2023 were as follows (in thousands):


	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	144,740	$	—	$	—	$	144,740
Total assets	$	144,740	$	—	$	—	$	144,740

Assets and liabilities measured at fair value on a recurring basis as of December 31, 2022 were as follows (in thousands):


	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	128,812	$	—	$	—	$	128,812
Total assets	$	128,812	$	—	$	—	$	128,812
Liabilities
Success payment liability	$	—	$	—	$	570	$	570
Total liabilities	$	—	$	—	$	570	$	570

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The following table reconciles the change in fair value of the success payment liability during the nine months ended September 30, 2023 based on Level 3 inputs (in thousands):


	Nine Months Ended September 30, 2023
Balance at December 31, 2022	$	570
Additions	—
Change in fair value	1,030
Payment at Success Event	(1,600)
Balance at September 30, 2023	$	—

Stock-based Compensation - Restricted Stock Award Activity (Details) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Unvested RSAs \| 2017 Stock Incentive Plan
Shares/Units
Unvested at beginning of period (shares)			81,000
Granted (shares)			0
Vested (shares)	0		(81,000)
Forfeited (shares)			0
Unvested at end of period (shares)	0		0
Weighted-Average Grant Date Fair Value Per Share
Weighted Average Grant Date Fair Value - Unvested at beginning of period (in usd per share)			$ 1.38
Weighted Average Grant Date Fair Value - Granted (in usd per share)			0
Weighted Average Grant Date Fair Value - Vested (in usd per share)			1.38
Weighted Average Grant Date Fair Value - Forfeited (in usd per share)			0
Weighted Average Grant Date Fair Value - Unvested at end of period (in usd per share)	$ 0		$ 0
Unvested RSUs \| 2021 Stock Incentive Plan
Shares/Units
Unvested at beginning of period (shares)			323,000
Granted (shares)			0
Vested (shares)	0	0	0	0
Forfeited (shares)			(6,000)
Unvested at end of period (shares)	317,000		317,000
Weighted-Average Grant Date Fair Value Per Share
Weighted Average Grant Date Fair Value - Unvested at beginning of period (in usd per share)			$ 4.32
Weighted Average Grant Date Fair Value - Granted (in usd per share)			0
Weighted Average Grant Date Fair Value - Vested (in usd per share)			0
Weighted Average Grant Date Fair Value - Forfeited (in usd per share)			4.97
Weighted Average Grant Date Fair Value - Unvested at end of period (in usd per share)	$ 4.30		$ 4.30

Stock-based Compensation (Tables)

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock-based Compensation Expense Recognized

Total stock-based compensation expense recognized in the condensed consolidated statements of operations was as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Research and development	$	1,008	$	909	$	3,047	$	2,496
General and administrative	1,089		1,027		3,088		2,962
Total stock-based compensation	$	2,097	$	1,936	$	6,135	$	5,458

Restricted Stock Awards Activity

The following table summarizes RSA activity during the nine months ended September 30, 2023 (in thousands, except per share amounts):


	Shares/Units	Weighted-Average Grant Date Fair Value Per Share
Unvested at December 31, 2022	81	$	1.38
Granted	—	$	—
Vested	(81)	$	1.38
Forfeited	—	$	—
Unvested at September 30, 2023	—	$	—

The following table summarizes RSU activity during the nine months ended September 30, 2023 (in thousands, except per share amounts):


	Shares/Units	Weighted-Average Grant Date Fair Value Per Share
Unvested at December 31, 2022	323	$	4.32
Granted	—	$	—
Vested	—	$	—
Forfeited	(6)	$	4.97
Unvested at September 30, 2023	317	$	4.30

Weighted -average Valuation Assumptions

The fair value of stock options granted during the three and nine months ended September 30, 2023 and 2022 was calculated on the date of grant using the following weighted-average assumptions:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Risk-free interest rate	4.3	%	2.9	%	3.9	%	2.3	%
Expected term (in years)	6.0		9.8		6.0		7.6
Dividend yield	—	%	—	%	—	%	—	%
Expected volatility	84.8	%	77.9	%	82.7	%	77.0	%

Summary of Stock Option Activity

The following table summarizes stock option activity during the nine months ended September 30, 2023:


	Options Outstanding
	Number of Options (in thousands)	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (in years)
Outstanding at December 31, 2022	5,244	$	7.86	8.34
Granted	1,616	$	2.16
Exercised	(3)	$	1.98
Cancelled	(377)	$	5.82
Outstanding at September 30, 2023	6,480	$	6.56	8.14
Exercisable at September 30, 2023	2,831	$	7.67	7.64

Common and Preferred Stock

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Common and Preferred Stock

8. Common and Preferred Stock

Common Stock

The Company is authorized to issue 200.0 million shares of common stock. Common stockholders are entitled to dividends if and when declared by the Company’s board of directors. As of September 30, 2023, no dividends on common stock had been declared by the Company.

On May 10, 2022, the Company entered into a Sales Agreement (the “Sales Agreement”) with Leerink Partners LLC (“Leerink”), formerly known as SVB Securities LLC, pursuant to which the Company may offer and sell shares of its common stock with an aggregate offering price of up to $50.0 million (the “ATM Offering”). The Sales Agreement provides that Leerink will be entitled to a sales commission equal to 3.0% of the gross sales price per share of all shares sold under the ATM Offering. As of September 30, 2023, the Company had sold an aggregate of 7,938,848 shares under the ATM Offering at an average price of $3.33 per share for net proceeds of $25.0 million after deducting sales commissions and offering expenses.

Preferred Stock

The Company is authorized to issue 5.0 million shares of undesignated preferred stock in one or more series. As of September 30, 2023, no shares of preferred stock were issued or outstanding.

Shares Reserved for Future Issuance

The Company had reserved shares of common stock for issuance as follows (in thousands):


	As of September 30,	As of December 31,
	2023	2022
Shares reserved for exercises of outstanding stock options	6,480	5,244
Shares reserved for vesting of restricted stock units	317	323
Shares reserved for exercises of warrants	59	59
Shares reserved for future issuance under the 2021 Employee Stock Purchase Plan	530	244
Shares reserved for future issuance under the 2021 Stock Incentive Plan	1,281	939
Total shares reserved for future issuance	8,667	6,809

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-14

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 505
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481004/946-505-50-6

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480237/815-40-50-6

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480008/505-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 505
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//505/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (a)
-Publisher FASB
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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Reference 16: http://www.xbrl.org/2003/role/disclosureRef
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Reference 19: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Jazz Collaboration and License Agreement (Tables)

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Contract with Customer, Contract Asset, Contract Liability, and Receivable

The following table presents changes in the Company’s contract liabilities during the nine months ended September 30, 2023 (in thousands):


	Balance as of						Balance as of
	December 31, 2022		Additions		Reductions		September 30, 2023
Contract liabilities:
Deferred revenue	$	7,660	$	5,000	$	(10,258)	$	2,402
Totals	$	7,660	$	5,000	$	(10,258)	$	2,402

Stock-based Compensation - Weighted Average Assumptions (Details) - Stock options	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Risk-free interest rate	4.30%	2.90%	3.90%	2.30%
Expected term (in years)	6 years	9 years 9 months 18 days	6 years	7 years 7 months 6 days
Dividend yield	0.00%	0.00%	0.00%	0.00%
Expected volatility	84.80%	77.90%	82.70%	77.00%

Jazz Collaboration and License Agreement

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Jazz Collaboration and License Agreement

3. Jazz Collaboration and License Agreement

In April 2022, the Company entered into an exclusive global collaboration and license agreement (the “Collaboration Agreement”) with Jazz Pharmaceuticals Ireland Limited (“Jazz”) pursuant to which the Company granted Jazz certain licenses to develop and commercialize products containing the Company’s Interferon alpha (“IFNα”) INDUKINE™ molecule, JZP898 (formerly WTX-613), as well as products containing certain isolated recombinant polypeptides comprising IFNα that meet specified criteria (each such product, a “Licensed Product”). Under the Collaboration Agreement, the Company is responsible for certain pre-clinical development activities with respect to JZP898 and other development activities specified in mutually agreed upon development plans. Jazz will generally reimburse the Company for the cost of such activities. Jazz will be responsible for all other development and commercialization activities conducted to exploit the Licensed Products, including submission of an investigational new drug application (“IND”) to the U.S. Food and Drug Administration (the “FDA”). Jazz received IND application clearance for JZP898 in July 2023.

Under the terms of the Collaboration Agreement, the Company received a non-refundable upfront cash payment of $15.0 million in April 2022 and a variable consideration payment of $5.0 million in July 2023, which is included in the overall transaction price as described below.

Milestones and Royalties

The Company is eligible to receive up to $520.0 million in development and regulatory milestones, and up to $740.0 million in sales-based milestones for all Licensed Products. In addition, the Company is eligible to receive tiered mid-single digit royalties based on Jazz’s, and any of its affiliates’ and sublicensees’ annual net sales of Licensed Products, subject to reduction in specified circumstances.

As of September 30, 2023, the Company has not recognized any revenue related to sales-based milestones.

Accounting Analysis under ASC 606

Identification of the Contract(s)

The Company assessed the Collaboration Agreement and concluded that it represents a contract with a customer within the scope of ASC Topic 606, Revenue from Contracts with Customers.

Identification of Promises and Performance Obligations

The Company has concluded that the exclusive license to its intellectual property, JZP898, and the non-exclusive corresponding “know-how” are not capable of being distinct from the other promises within the contract, and as such, the Company has determined that the license and “know-how” combined with the other research and development services and supply represent a single combined performance obligation.

Determination of Transaction Price

The overall transaction price as of the inception of the contract was determined to be $32.3 million, which is comprised of the nonrefundable upfront payment of $15.0 million and the estimated costs for research services of $17.3 million. Outside of the estimated costs for research services, there is no other variable consideration included in the transaction price at inception. The Company used the most likely amount method to estimate variable consideration and estimated that the most likely amount for

each potential development and regulatory milestone payment under this agreement was zero at the inception of the contract, as achievement of those milestones was uncertain and highly susceptible to factors outside the Company’s control. Accordingly, all such milestone payments were excluded from the transaction price at inception of contract. Management reevaluates the transaction price at the end of each reporting period, including developing a revised estimate for research services costs and the most likely amount for each potential development and regulatory milestone, and as uncertain events are resolved or other changes in circumstances occur, adjusts the transaction price as necessary. Sales based royalties, including milestones based on the level of sales, were also excluded from the transaction price, as the license is deemed to be the predominant item to which the royalties relate. The Company will recognize such revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

The upfront payment of $15.0 million was recorded as deferred revenue and, along with payments related to the Company’s conduct of research services under the Collaboration Agreement or any development and regulatory milestones, will be recognized as revenue using an input-based measurement of actual costs incurred as a percentage of the estimated total costs expected to be incurred over the expected term of conduct of the research services. The Company believes this input-based method to recognize revenue best reflects the transfer of value to Jazz. The remaining deferred revenue is expected to be recognized as revenue over a term of approximately 2.5 years.

Recognition of Revenue

For the nine months ended September 30, 2023, using the cost-to-cost input method, which best depicts the research services performed for the customer, the Company recognized $18.4 million of revenue related to the Collaboration Agreement. During the three and nine months ended September 30, 2023, the Company determined that a variable consideration payment totaling $5.0 million was likely to be achieved and accordingly revised its estimate of the overall transaction price to include this amount. During the three and nine months ended September 30, 2023, the Company recognized a cumulative catch-up of revenue of $4.2 million related to the increase to the overall transaction price of $5.0 million, based on the cost-to-cost input method discussed above. As of September 30, 2023, there is $1.8 million and $0.6 million of current and non-current deferred revenue, respectively, related to the Collaboration Agreement. As of December 31, 2022, there was $6.5 million and $1.1 million of current and non-current deferred revenue, respectively, related to the Collaboration Agreement. All costs associated with the Collaboration Agreement are recorded in research and development expense in the condensed consolidated statements of operations.

Unbilled receivables related to the Collaboration Agreement of $0.9 million and $4.1 million is included within other receivables in the accompanying condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively. Receivables related to the Collaboration Agreement of $5.0 million and $2.8 million are included within other receivables in the accompanying condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively.

The following table presents changes in the Company’s contract liabilities during the nine months ended September 30, 2023 (in thousands):


	Balance as of						Balance as of
	December 31, 2022		Additions		Reductions		September 30, 2023
Contract liabilities:
Deferred revenue	$	7,660	$	5,000	$	(10,258)	$	2,402
Totals	$	7,660	$	5,000	$	(10,258)	$	2,402

As of September 30, 2023, the Company has not received any royalty payments under the Collaboration Agreement.

Term Loan - Schedule of Long-Term Debt Instruments (Details) - Term Loans - Term loan $ in Thousands	Sep. 30, 2023 USD ($)
Debt Instrument [Line Items]
Note payable	$ 40,000
Unamortized debt discount and issuance costs	(769)
Net carrying amount of note payable	39,231
Less: current portion of note payable	(1,667)
Note payable, net, less current portion	$ 37,564

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
-Paragraph 1
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

- Definition

Amount, after deduction of unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2023	Nov. 10, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	001-40366
Entity Registrant Name	WEREWOLF THERAPEUTICS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	82-3523180
Entity Address, Address Line One	200 Talcott Ave
Entity Address, Address Line Two	2nd Floor
Entity Address, City or Town	Watertown
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02472
City Area Code	617
Local Phone Number	952‑0555
Title of 12(b) Security	Common Stock, $0.0001 par value per share
Trading Symbol	HOWL
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		36,192,248
Entity Central Index Key	0001785530
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Amendment Flag	false

Jazz Collaboration and License Agreement - Narrative (Details) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended		9 Months Ended
	Jul. 31, 2023	Apr. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Collaboration revenue			$ 5,897	$ 4,970	$ 18,442	$ 9,118
Revenue recognized			5,000		5,000
Cumulative catch up to revenue			4,200		4,200
Deferred revenue, current			1,814		1,814		$ 6,532
Deferred revenue, net of current portion			588		588		1,128
Unbilled receivables			900		900		4,100
Receivables			$ 5,000		$ 5,000		$ 2,800
Jazz Collaboration Agreement
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Non-refundable upfront cash payment received		$ 15,000
Collaboration revenue	$ 5,000
Development and regulatory milestones (up to)		520,000
Sales-based milestones (up to)		740,000
Transaction price		32,300
Estimated future reimbursable costs		$ 17,300
Collaboration agreement, term					2 years 6 months

Common and Preferred Stock - Narrative (Details)	9 Months Ended		17 Months Ended
Common and Preferred Stock - Narrative (Details)	Sep. 30, 2023 USD ($) $ / shares shares	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) $ / shares shares	Dec. 31, 2022 shares	May 10, 2022 USD ($)
Class of Stock [Line Items]
Common stock authorized (shares)	200,000,000		200,000,000	200,000,000
Dividends declared \| $	$ 0		$ 0
Proceeds from at the market offering of common stock \| $	$ 9,447,000	$ 14,761,000
Preferred stock authorized (shares)	5,000,000		5,000,000	5,000,000
Preferred stock issued (shares)	0		0	0
Preferred stock outstanding (shares)	0		0	0
ATM Offering
Class of Stock [Line Items]
Sales commissions, percentage					0.030
Issuance of common stock from at the market offering, net of issuance costs (shares)			7,938,848
Price per share (in usd per share) \| $ / shares	$ 3.33		$ 3.33
Proceeds from at the market offering of common stock \| $			$ 25,000,000
Maximum \| ATM Offering
Class of Stock [Line Items]
Common stock, amount authorized \| $					$ 50,000,000

Summary of Significant Accounting Policies (Policies)	9 Months Ended
Summary of Significant Accounting Policies (Policies)	Sep. 30, 2023
Accounting Policies [Abstract]
Basis of Presentation and Consolidation	Basis of Presentation and Consolidation The accompanying condensed consolidated financial statements as of September 30, 2023 and December 31, 2022, and for the three and nine months ended September 30, 2023 and 2022, have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) and generally accepted accounting principles in the United States of America (“GAAP”) as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”) for condensed consolidated financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, these condensed consolidated financial statements reflect all normal recurring adjustments which are necessary for a fair presentation of the Company’s financial position and results of its operations, as of and for the periods presented. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 23, 2023 (the “2022 Annual Report”).
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, the Company’s management evaluates its estimates and judgments including, but not limited to, those related to revenue recognition, accrued expenses, assumptions used in the valuation of stock-based compensation and income taxes. Actual results could differ from those estimates.
Recent Accounting Pronouncements	Recent Accounting Pronouncements Accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s condensed consolidated financial statements upon adoption.
Subsequent Events	Subsequent Events The Company has evaluated subsequent events and transactions that occurred in the period from the balance sheet date to the date that the financial statements were issued. Other than as described in these condensed consolidated financial statements, the Company did not identify any subsequent events that require adjustment or disclosure in the condensed consolidated financial statements.

Accrued Expenses and Other Current Liabilities (Tables)

9 Months Ended

Sep. 30, 2023

Payables and Accruals [Abstract]

Accrued Expenses

Accrued expenses and other current liabilities as of September 30, 2023 and December 31, 2022 were comprised as follows (in thousands):


	September 30, 2023		December 31, 2022
Manufacturing	$	1,928	$	6,674
Contract research	1,745		2,990
Employee compensation and benefits	2,666		3,135
Professional fees	678		613
Success payment liability	—		570
Other	950		170
Total accrued expenses and other current liabilities	$	7,967	$	14,152

Stock-based Compensation - Narrative (Details) $ / shares in Units, $ in Thousands			1 Months Ended	3 Months Ended						9 Months Ended
	Jan. 01, 2023 shares	Jan. 01, 2022 shares	Apr. 30, 2021 shares	Sep. 30, 2023 USD ($) $ / shares shares	Jun. 30, 2023 shares	Dec. 31, 2022 $ / shares shares	Sep. 30, 2022 USD ($) $ / shares shares	Jun. 30, 2022 shares	Mar. 31, 2022 shares	Sep. 30, 2023 USD ($) $ / shares shares	Sep. 30, 2022 USD ($) $ / shares shares
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Common stock available for issuance (shares)				8,667,000		6,809,000				8,667,000
Total stock-based compensation (less than) \| $				$ 2,097			$ 1,936			$ 6,135	$ 5,458
Share-based compensation expense not yet recognized (less than) \| $				$ 11,200						$ 11,200
Weighted-average grant date fair value of awards (in usd per share) \| $ / shares				$ 1.91			$ 3.35			$ 1.56	$ 5.00
Aggregate intrinsic fair value of options exercised \| $				$ 100			$ 100			$ 100	$ 400
Unvested RSAs \| 2017 Stock Incentive Plan
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense not yet recognized, excluding option \| $				$ 0						0
Aggregate fair value of awards that vested \| $							$ 300			$ 200	$ 1,000
Vested (shares)				0						81,000
Granted (shares)										0
Weighted Average Grant Date Fair Value - Granted (in usd per share) \| $ / shares										$ 0
Performance shares forfeited (in shares)										0
Shares reserved for vesting of restricted stock units \| 2021 Stock Incentive Plan
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense not yet recognized, excluding option \| $				$ 400						$ 400
Share-based compensation not yet recognized, recognition period										6 months
Vested (shares)				0			0			0	0
Granted (shares)										0
Weighted Average Grant Date Fair Value - Granted (in usd per share) \| $ / shares										$ 0
Performance shares forfeited (in shares)										6,000
Performance Shares
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense not yet recognized, excluding option \| $				$ 2,600						$ 2,600
Vested (shares)										0
Granted (shares)						883,352
Weighted Average Grant Date Fair Value - Granted (in usd per share) \| $ / shares						$ 3.36
Performance shares forfeited (in shares)					101,447
Shares reserved for future issuance under the 2021 Stock Incentive Plan
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Risk-free interest rate				4.30%			2.90%			3.90%	2.30%
Expected term (in years)				6 years			9 years 9 months 18 days			6 years	7 years 7 months 6 days
Expected volatility				84.80%			77.90%			82.70%	77.00%
Dividend yield				0.00%			0.00%			0.00%	0.00%
Share-based compensation not yet recognized, recognition period										1 year 8 months 12 days
Stock option exercises (shares)										3,000
2021 Stock Incentive Plan
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Maximum number of shares to be added annually, as a percentage of outstanding shares (percent)			5.00%
Common stock available for issuance (shares)				1,281,089						1,281,089
2021 Stock Incentive Plan \| Unvested RSAs
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Common stock authorized to be issued (shares)			477,725
2021 Stock Employee Stock Purchase Plan
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Defined contribution plan, maximum annual contributions per employee, percent			15.00%
Offering period			6 months
Employee stock ownership plan, purchase price, percent			0.85
Risk-free interest rate				3.80%						3.80%
Expected term (in years)				6 months						6 months
Expected volatility				92.70%						92.70%
Dividend yield				0.00%						0.00%
Total stock-based compensation (less than) \| $				$ 100						$ 100
Share-based compensation expense not yet recognized (less than) \| $				$ 100						$ 100
2021 Stock Employee Stock Purchase Plan \| Employee stock
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Common stock authorized to be issued (shares)			244,000
Maximum number of shares to be added annually, as a percentage of outstanding shares (percent)			1.00%
Maximum number of shares to be added annually, as a percentage of outstanding shares (shares)	315,150
2021 Stock Employee Stock Purchase Plan \| Employee stock \| Minimum
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Maximum number of shares to be added annually, as a percentage of outstanding shares (shares)			488,000
Common Stock
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Common stock authorized to be issued (shares)			3,352,725
Stock option exercises (shares)				1,000	2,000		32,000	1,000	46,000
Common Stock \| 2021 Stock Incentive Plan
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Common stock authorized to be issued (shares)			2,843,116
Maximum number of shares to be added annually, as a percentage of outstanding shares (shares)	1,575,753	1,380,397
Common Stock \| 2017 Stock Incentive Plan
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Common stock authorized to be issued (shares)			31,884

Condensed Consolidated Statements of Operations (unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenue:
Collaboration revenue	$ 5,897	$ 4,970	$ 18,442	$ 9,118
Operating expenses:
Research and development	10,838	13,070	32,127	37,902
General and administrative	4,310	4,439	13,856	14,093
Total operating expenses	15,148	17,509	45,983	51,995
Operating loss	(9,251)	(12,539)	(27,541)	(42,877)
Other income:
Other (expense) income, net	(5)	3	(1,136)	268
Interest income, net	971	593	3,312	729
Total other income	966	596	2,176	997
Net loss	$ (8,285)	$ (11,943)	$ (25,365)	$ (41,880)
Net loss per share attributable to common stockholders, basic and diluted
Net loss per share, basic (usd per share)	$ (0.23)	$ (0.40)	$ (0.72)	$ (1.48)
Net loss per share, diluted (usd per share)	$ (0.23)	$ (0.40)	$ (0.72)	$ (1.48)
Weighted-average common shares outstanding, basic and diluted
Weighted average common shares outstanding, basic (shares)	35,654	29,764	35,335	28,233
Weighted average common shares outstanding, diluted (shares)	35,654	29,764	35,335	28,233