Tyra Biosciences, Inc. - Quarter Report: 2023 September (Form 10-Q)

10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended September 30, 2023


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

For the transition period from _________ to _________.

Commission File Number: 001-40800

TYRA BIOSCIENCES, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware	83-1476348
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2656 State Street Carlsbad, California	92008
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (619) 728-4760

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

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, $0.0001 par value per share

TYRA

The Nasdaq Global Select Market

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

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

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


Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

Emerging growth company	☒

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

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

As of November 6, 2023, the registrant had 43,058,747 shares of common stock, $0.0001 par value per share, outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Condensed Financial Statements	2
	Condensed Balance Sheets	2
	Condensed Statements of Operations and Comprehensive Loss	3
	Condensed Statements of Stockholders' Equity	4
	Condensed Statements of Cash Flows	6
	Notes to the Condensed Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3.	Defaults Upon Senior Securities	24
Item 4.	Mine Safety Disclosures	24
Item 5.	Other Information	24
Item 6.	Exhibits	25
Signatures		26

PART I—FINANCIAL INFORMATION

Item 1. Condensed Financial Statements

Tyra Biosciences, Inc.
Condensed Balance Sheets

(in thousands, except share and par value data)


	September 30,			December 31,
	2023			2022
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	215,652		$	251,213
Prepaid and other current assets		8,978			6,075
Total current assets		224,630			257,288
Restricted cash		1,000			1,000
Property and equipment, net		1,147			1,077
Right-of-use assets		6,236			2,466
Other long-term assets		5,345			4,350
Total assets	$	238,358		$	266,181
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,308		$	1,145
Lease liabilities, current		148			140
Accrued and other current liabilities (including related party amounts of $0 and $59, respectively)		7,691			4,416
Total current liabilities		10,147			5,701
Lease liabilities, noncurrent		5,964			2,482
Other long-term liabilities		77			169
Total liabilities		16,188			8,352
Commitments and contingencies (Note 10)
Stockholders’ equity:
Preferred stock, $0.0001 par value; 50,000,000 shares authorized at September 30, 2023 and December 31, 2022; no shares issued and outstanding at September 30, 2023 and December 31, 2022.		—			—
Common stock, $0.0001 par value; 500,000,000 shares authorized at September 30, 2023 and December 31, 2022; 43,055,393 and 42,634,459 shares issued at September 30, 2023 and December 31, 2022, respectively, and 42,928,884 and 42,353,550 shares outstanding at September 30, 2023 and December 31, 2022, respectively.		4			4
Additional paid-in capital		364,166			353,521
Accumulated deficit		(142,000	)		(95,696	)
Total stockholders’ equity		222,170			257,829
Total liabilities and stockholders’ equity	$	238,358		$	266,181

See accompanying notes to unaudited condensed financial statements.

Tyra Biosciences, Inc.
Condensed Statements of Operations and Comprehensive Loss

(unaudited)
(in thousands, except share and per share data)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Operating expenses:
Research and development	$	19,271		$	10,915		$	41,841		$	32,608
General and administrative (including related party amounts of $0, $173, $0 and $570, respectively)		4,692			2,730			12,470			11,301
Total operating expenses		23,963			13,645			54,311			43,909
Loss from operations		(23,963	)		(13,645	)		(54,311	)		(43,909	)
Other income (expense):
Interest income		2,816			1,131			8,035			1,496
Other income (expense)		(5	)		5			(28	)		(17	)
Total other income, net		2,811			1,136			8,007			1,479
Net loss and comprehensive loss	$	(21,152	)	$	(12,509	)	$	(46,304	)	$	(42,430	)
Net loss per share, basic and diluted	$	(0.49	)	$	(0.30	)	$	(1.09	)	$	(1.02	)
Weighted-average shares used to compute net loss per share, basic and diluted		42,868,340			41,997,195			42,619,075			41,777,052

See accompanying notes to unaudited condensed financial statements.

Tyra Biosciences, Inc.

Condensed Statements of Stockholders’ Equity

(unaudited)

(in thousands, except share amounts)


	Common Stock				Additional Paid-In Capital		Accumulated Deficit			Total Stockholders’ Equity
	Shares		Amount
Balance at December 31, 2021		41,441,135	$	4	$	342,104	$	(40,371	)	$	301,737
Issuance of common stock under benefit plans		28,951		—		238		—			238
Vesting of shares of common stock subject to repurchase		226,478		—		63		—			63
Stock-based compensation		—		—		3,972		—			3,972
Net loss		—		—		—		(14,826	)		(14,826	)
Balance at March 31, 2022		41,696,564	$	4	$	346,377	$	(55,197	)	$	291,184
Issuance of common stock under benefit plans		15,247		—		34		—			34
Vesting of shares of common stock subject to repurchase		191,299		—		42		—			42
Stock-based compensation		—		—		2,688		—			2,688
Net loss		—		—		—		(15,095	)		(15,095	)
Balance at June 30, 2022		41,903,110	$	4	$	349,141	$	(70,292	)	$	278,853
Issuance of common stock under benefit plans		52,477		—		356		—			356
Vesting of shares of common stock subject to repurchase		181,384		—		37		—			37
Stock-based compensation		—		—		1,019		—			1,019
Net loss		—		—		—		(12,509	)		(12,509	)
Balance at September 30, 2022		42,136,971	$	4	$	350,553	$	(82,801	)	$	267,756


	Common Stock				Additional Paid-In Capital		Accumulated Deficit			Total Stockholders’ Equity
	Shares		Amount
Balance at December 31, 2022		42,353,550	$	4	$	353,521	$	(95,696	)	$	257,829
Issuance of common stock under benefit plans		129,669		—		376		—			376
Vesting of shares of common stock subject to repurchase		52,155		—		32		—			32
Stock-based compensation		—		—		2,433		—			2,433
Net loss		—		—		—		(11,880	)		(11,880	)
Balance at March 31, 2023		42,535,374	$	4	$	356,362	$	(107,576	)	$	248,790
Issuance of common stock under benefit plans		230,502		—		494		—			494
Vesting of shares of common stock subject to repurchase		51,357				31					31
Stock-based compensation		—		—		2,529		—			2,529
Net loss		—		—		—		(13,272	)		(13,272	)
Balance at June 30, 2023		42,817,233	$	4	$	359,416	$	(120,848	)	$	238,572
Issuance of common stock under benefit plans		60,763		—		343		—			343
Vesting of shares of common stock subject to repurchase		50,888		—		30		—			30
Stock-based compensation		—		—		4,377		—			4,377
Net loss		—		—		—		(21,152	)		(21,152	)
Balance at September 30, 2023		42,928,884	$	4	$	364,166	$	(142,000	)	$	222,170

See accompanying notes to unaudited condensed financial statements.

Tyra Biosciences, Inc.

Condensed Statements of Cash Flows

(unaudited)

(in thousands)


	Nine Months Ended September 30,
	2023			2022
Cash flows from operating activities:
Net loss	$	(46,304	)	$	(42,430	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		251			214
Stock-based compensation		9,339			7,679
Loss on disposal of property and equipment		4			3
Changes in operating assets and liabilities:
Prepaid expenses and other assets		(3,910	)		(5,945	)
Accounts payable, accrued expenses and other liabilities (including related party amounts of $0 and $17, respectively)		4,293			2,150
Right-of-use assets and lease liabilities, net		(280	)		24
Net cash used in operating activities		(36,607	)		(38,305	)
Cash flows from investing activities:
Purchases of property and equipment		(167	)		(538	)
Net cash used in investing activities		(167	)		(538	)
Cash flows from financing activities:
Proceeds from issuances of common stock under benefit plans		1,213			629
Net cash provided by financing activities		1,213			629
Net cash decrease for the period		(35,561	)		(38,214	)
Cash, cash equivalents and restricted cash at beginning of the period		252,213			302,425
Cash, cash equivalents and restricted cash at end of the period	$	216,652		$	264,211
Reconciliation of cash, cash equivalents and restricted cash to the balance sheet
Cash and cash equivalents	$	215,652		$	263,211
Restricted cash		1,000			1,000
Total cash, cash equivalents and restricted cash	$	216,652		$	264,211
Supplemental disclosure of cash flow information:
Right-of-use asset obtained in exchange for lease liability	$	4,004		$	1,556
Non-cash investing and financing activities:
Purchases of equipment included in accounts payable and accrued expenses	$	146		$	9
Vesting of options early exercised subject to repurchase	$	93		$	142

See accompanying notes to unaudited condensed financial statements.

Tyra Biosciences, Inc.

Notes to the Condensed Financial Statements

(unaudited)

1. Organization and Basis of Presentation

Organization

Tyra Biosciences, Inc. (the Company) was incorporated in the state of Delaware on August 2, 2018. The Company is a clinical-stage biotechnology company focused on developing next-generation precision medicines that target large opportunities in Fibroblast Growth Factor Receptor (FGFR) biology. The Company’s in-house precision medicine platform, SNÅP, enables rapid and precise drug design through iterative molecular SNÅPshots that help predict genetic alterations most likely to cause acquired resistance to existing therapies. The Company’s initial focus is on applying accelerated small molecule drug discovery engine to develop therapies in targeted oncology and genetically defined conditions.

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP) for interim financial information and pursuant to the instructions of the Securities and Exchange Commission (SEC) on Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Updates (ASU) promulgated by the Financial Accounting Standards Board (FASB). The unaudited condensed financial statements include only normal and recurring adjustments that the Company believes are necessary to fairly state the Company’s financial position and the results of its operations and cash flows. The results for the three and nine months ended September 30, 2023 and 2022 are not necessarily indicative of the results expected for the full fiscal year or any subsequent interim period. The condensed balance sheet at September 30, 2023 has been derived from the financial statements at that date but does not include all disclosures required by GAAP for complete financial statements. Because all of the disclosures required by GAAP for complete financial statements are not included herein, these unaudited condensed financial statements and the notes accompanying them should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

2. Summary of Significant Accounting Policies

During the three and nine months ended September 30, 2023, there have been no changes to the Company's significant accounting policies as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Restricted Cash

Restricted cash is comprised of cash that is restricted as to its withdrawal or use under the terms of certain contractual agreements. Restricted cash as of both September 30, 2023 and December 31, 2022 was $1.0 million, which consisted of collateral for letters of credit related to the Company’s operating leases which are considered a non-current asset on the condensed balance sheets.

Commitments and Contingencies

The Company recognizes a liability with regard to loss contingencies when it believes it is probable a liability has been incurred, and the amount can be reasonably estimated. If some amount within a range of loss appears at the time to be a better estimate than any other amount within the range, the Company accrues that amount. When no amount within the range is a better estimate than any other amount the Company accrues the minimum amount in the range.

Related Parties

Transactions between related parties are considered to be related party transactions even though they may not be given accounting recognition. FASB ASC 850, Related Party Disclosures (FASB ASC 850) requires that transactions with related parties that would make a difference in decision making shall be disclosed so that users of the financial statements can evaluate their significance. Related party transactions typically occur within the context of the following relationships:

•

Affiliates of the entity;

•

Entities for which investments in their equity securities is typically accounted for under the equity method by the investing entity;

•

Trusts for the benefit of employees;

•

Principal owners of the entity and members of their immediate families;

•

Management of the entity and members of their immediate families; or

•

Other parties that can significantly influence the management or operating policies of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The Company previously entered into a consulting agreement with van den Boom & Associates, LLC (van den Boom & Associates), a professional services firm contracted to provide resources to assist with day-to-day accounting functions. Services provided under the agreement with van den Boom & Associates are billed at hourly rates. On April 16, 2021, Ms. van den Boom, the managing partner of van den Boom & Associates, entered into an employment agreement with the Company whereby she became its Chief Financial Officer. Van den Boom & Associates is considered a related party under FASB ASC 850 from the point in which Ms. van den Boom became a Company officer. On October 28, 2022, Ms. van den Boom informed the Company of her intent to resign as the Chief Financial Officer, effective December 31, 2022. Effective January 1, 2023, van den Boom & Associates is no longer considered a related party.

Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments. Under the new guidance, credit losses for certain types of financial instruments will be estimated based on expected losses. The new guidance also modifies the impairment models for available-for-sale debt securities and for purchased financial assets with credit deterioration since their origination. In November 2019, the FASB issued ASU No. 2019-10, which changed the effective date of ASU 2016-13 for smaller reporting companies to fiscal years beginning after December 15, 2022, including interim periods. This update was effective for the Company beginning January 1, 2023. The adoption of this new standard did not have a material impact on the Company's financial statements.

There were no other significant updates not already disclosed in the Company’s audited financial statements for the years ended December 31, 2022 and 2021 to the recently issued accounting standards for the three and nine months ended September 30, 2023. Although there were several other new accounting pronouncements issued or proposed by the FASB, the Company does not believe any of those accounting pronouncements have had or will have a material impact on its financial position or operating results.

3. Fair Value Measurements

The accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

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

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

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

The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, prepaid and other current assets, restricted cash, accounts payable, and accrued and other current liabilities, approximate fair value due to their short maturities.

Assets measured at fair value on a recurring basis are as follows (in millions):


			Fair Value Measurements Using
	As of September 30, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash and Cash Equivalents	$	215.7	$	215.7	$	—	$	—
Restricted Cash		1.0		1.0		—		—
Total assets	$	216.7	$	216.7	$	—	$	—

			Fair Value Measurements Using
	As of December 31, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash and Cash Equivalents	$	251.2	$	251.2	$	—	$	—
Restricted Cash		1.0		1.0		—		—
Total assets	$	252.2	$	252.2	$	—	$	—

None of the Company’s non-financial assets or liabilities are recorded at fair value on a non-recurring basis.

4. Property and Equipment

Property and equipment consisted of the following (in thousands):


	September 30, 2023			December 31, 2022
Equipment	$	1,244		$	1,119
Computers and software		196			181
Leasehold improvements		310			156
Furniture and fixtures		103			82
		1,853			1,538
Less: accumulated depreciation		(706	)		(461	)
Total property and equipment, net	$	1,147		$	1,077

The Company recognized $0.1 million and $0.3 million in depreciation expense for the three and nine months ended September 30, 2023, respectively, and $0.1 million and $0.2 million in depreciation expense for the three and nine months ended September 30, 2022, respectively.

5. Accrued and Other Current Liabilities

Accrued and other current liabilities consisted of the following (in thousands):


	September 30, 2023		December 31, 2022
Accrued payroll and other employee benefits	$	2,403	$	2,854
Accrued research and development		4,753		1,028
Accrued legal and professional fees		255		94
Accrued other general and administrative fees		280		440
Total accrued and other current liabilities	$	7,691	$	4,416

6. Stockholders' Equity

Common Stock

Common stock reserved for future issuance consisted of the following:


	September 30, 2023		December 31, 2022
Common stock options granted and outstanding		8,110,570		5,890,869
Shares available for future issuance under the 2021 Incentive Award Plan		3,886,847		4,339,373
Shares available for future issuance under the 2021 Employee Stock Purchase Plan		1,129,399		759,442
Total common stock reserved for future issuance		13,126,816		10,989,684

On October 3, 2022, the Company entered into an ATM Sales Agreement (the Sales Agreement) with Virtu Americas LLC (the Agent), under which the Company may, from time to time, sell shares of its common stock having an aggregate offering price of up to $150.0 million in “at the market” offerings through the Agent. Sales of the shares of common stock, if any, will be made at prevailing market prices at the time of sale, or as otherwise agreed with the Agent. The Agent will receive a commission from the Company of up to 3.0% of the gross proceeds of any shares of common stock sold under the Sales Agreement. As of September 30, 2023, no shares of common stock were issued and sold pursuant to the Sales Agreement.

Restricted Stock

Since inception, the Company has issued 2,820,560 shares of restricted common stock at a price of $0.0001 per share to certain founders of the Company (Founders Stock). The Company maintains a repurchase right whereby the shares of Founders Stock are released from such repurchase right over a period of time of continued service by the recipient. Any shares subject to repurchase by the Company are not deemed to be outstanding, for accounting purposes, until those shares vest. Unvested outstanding Founders Stock as of September 30, 2023 and December 31, 2022 were 1,865 and 3,828 shares, respectively. The amount recorded as liabilities associated with shares issued with repurchase rights were immaterial as of September 30, 2023 and December 31, 2022.

For the nine months ended September 30, 2023 and 2022, 1,962 and 367,410 shares vested in each period and the Company recognized $5 thousand and $0.2 million of stock-based compensation expense for each period related to the Founders Stock, respectively. As of September 30, 2023, the total unrecognized compensation expense related to unvested Founders Stock was immaterial.

7. Equity Incentive Plans and Stock-Based Compensation

Equity Incentive Plans

In September 2021, the Company's Board of Directors adopted, and its stockholders approved, the 2021 Incentive Award Plan (the 2021 Plan). Upon the adoption of the 2021 Plan, the Company restricted the grant of future equity awards under the 2020 Equity Incentive Plan (the 2020 Plan).

The 2021 Plan provides for the grants of stock options and other equity-based awards to employees, non-employee directors, and consultants of the Company. A total of 5,570,000 shares of the Company’s common stock were initially reserved for issuance pursuant to the 2021 Plan, consisting of 4,537,850 shares reserved under the 2021 Plan and 1,032,150 shares of the Company’s common stock that remained available for issuance under the 2020 Plan. The 2021 Plan share reserve will be increased by the number of shares under the 2020 Plan that are repurchased, forfeited, expired or cancelled after the effective date of the 2021 Plan. In addition, the number of shares of the Company’s common stock available for issuance under the 2021 Plan automatically increases on the first day of each fiscal year, beginning with the Company’s 2022 fiscal year, in an amount equal to the lesser of (1) 5% of the outstanding shares of the Company’s common stock on the last day of the immediately preceding fiscal year, or (2) such smaller amount as determined by the Company’s Board of Directors. As of September 30, 2023, 3,886,847 shares were available for future grant under the 2021 Plan.

A summary of the Company’s stock option activity for the period ended September 30, 2023 is as follows (in thousands, expect share and per share data and years):


	Options			Weighted-Average Exercise Price per Share		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at December 31, 2022		5,890,869		$	7.91		8.8	$	13,492
Granted		2,883,689		$	13.32
Exercised		(364,547	)	$	2.25
Cancelled		(299,441	)	$	10.29
Outstanding at September 30, 2023		8,110,570		$	10.00		8.5	$	39,978
Exercisable at September 30, 2023		2,721,726		$	8.07		7.6	$	19,786
Vested and expected to vest as of September 30, 2023		8,110,570		$	10.00		8.5	$	39,978

As of September 30, 2023, 67,074 performance-based stock options were both outstanding and unvested. During the three and nine months ended September 30, 2023, the Company recognized $0.7 million and $0.8 million, respectively, in expenses related to these options as the achievement of certain performance conditions was deemed probable to occur. As of September 30, 2023, the unrecognized stock-based compensation expense related to the performance-based options was $0.5 million.

Stock-Based Compensation Expense

The Company estimated the fair value of stock options using the Black-Scholes valuation model. The Company accounts for forfeitures of options when they occur. Previously recognized compensation expense for an award is reversed in the period that the award is forfeited. The fair value of stock options was estimated using the following assumptions (excluding option modifications):


	Nine Months Ended September 30,
	2023	2022
Risk-free rate of interest	3.5 - 4.3%	1.6 - 3.6%
Expected term (years)	5.2 - 6.1	5.1 - 6.1
Expected stock price volatility	87.0 - 92.3%	82.3 - 90.4 %
Dividend yield	—	—

Stock-based compensation expense recognized for all equity awards has been reported in the condensed statements of operations and comprehensive loss as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Research and development expense	$	2,811	$	651	$	5,749	$	3,732
General and administrative expense		1,566		368		3,590		3,947
Total	$	4,377	$	1,019	$	9,339	$	7,679

The weighted-average grant date fair value of options granted for the nine months ended September 30, 2023 and 2022 was $10.01 and $5.59 per share, respectively.

For nine months ended September 30, 2023, forfeitures resulted in the reversal of compensation expense totaling $0.1 million. For nine months ended September 30, 2022, forfeitures resulted in the reversal of compensation expense totaling $1.1 million, of which $1.0 million related to compensation expense for performance-based options, previously recorded in 2022.

As of September 30, 2023, the unrecognized compensation cost related to outstanding employee and nonemployee options was $42.3 million, and is expected to be recognized as expense over a weighted-average period of approximately 2.6 years.

Employee Stock Purchase Plan

In September 2021, the Company’s Board of Directors and stockholders approved and adopted the 2021 Employee Stock Purchase Plan (ESPP). The ESPP became effective on the business day immediately prior to the effective date of the Company’s first registration statement. A total of 380,000 shares of the Company’s common stock were initially reserved for issuance pursuant to the ESPP. In addition, the number of shares of the Company’s common stock available for issuance under the ESPP will automatically increase on the first day of each fiscal year, beginning with the Company’s 2022 fiscal year, in an amount equal to the lesser of (1) 1% of the outstanding shares of the Company’s common stock on the last day of the immediately preceding fiscal year, or (2) such smaller amount as determined by the Company’s Board of Directors. On January 1, 2022, the number of shares reserved for issuance under the ESPP was increased to 805,361 shares and on January 1, 2023, the number of shares reserved for issuance under the ESPP was increased to 1,231,705 shares.

The ESPP permits eligible employees who elect to participate in an offering under the ESPP to have up to 15% of their eligible earnings withheld, subject to certain limitations, to purchase shares of common stock pursuant to the ESPP. The price of common stock purchased under the ESPP is equal to 85% of the lower of the fair market value of the common stock at the commencement date of each offering period or the relevant date of purchase. Each offering period is 24 months, with new offering periods commencing every six months on or about the dates of March 15 and September 15 of each year. During the nine months ended September 30, 2023 and 2022, the Company issued 56,387 and 45,919 shares, respectively, of common stock in connection with the ESPP. As of September 30, 2023, there were 1,129,399 shares available for future purchase under the ESPP.

The Company recognized compensation expense of $0.1 million and $0.1 million for the three months ended September 30, 2023 and 2022, respectively, and $0.4 million and $0.4 million for the nine months ended September 30, 2023 and 2022, respectively, related to the ESPP. As of September 30, 2023, the remaining unrecognized compensation expense related to the ESPP was $0.3 million, and is expected to be recognized as expense over a weighted-average period of approximately 1.2 years.

Liability for Early Exercise of Stock Options

Certain individuals were granted the ability to early exercise their stock options prior to the IPO. The shares of common stock issued from the early exercise of unvested stock options are restricted and continue to vest in accordance with the original vesting schedule. The Company has the option to repurchase any unvested shares at the original purchase price upon any voluntary or involuntary termination. The shares purchased by the employees and non-employees pursuant to the early exercise of stock options are not deemed, for accounting purposes, to be outstanding until those shares vest. The cash received in exchange for exercised and unvested shares related to stock options granted is recorded as a liability for the early exercise of stock options on the accompanying condensed balance sheets and will be transferred into common stock and additional paid-in capital as the shares vest. As of September 30, 2023 and December 31, 2022, 124,644 and 277,081 unvested shares issued under early exercise provisions were subject to repurchase by the Company, respectively. As of September 30, 2023 and December 31, 2022, the Company recorded $0.1 million and $0.2 million, respectively, associated with early exercised stock options in other long-term liabilities.

8. Net Loss Per Share

The following table sets forth the computation of the basic and diluted net loss per share (in thousands, except share and per share amounts):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Numerator:
Net loss	$	(21,152	)	$	(12,509	)	$	(46,304	)	$	(42,430	)
Denominator:
Weighted-average common shares outstanding		43,020,965			42,646,810			42,822,677			42,614,902
Less: weighted-average unvested restricted common stock subject to repurchase		(2,107	)		(209,421	)		(2,762	)		(330,928	)
Less: weighted-average unvested common stock issued upon early exercise of common stock options		(150,518	)		(440,194	)		(200,840	)		(506,922	)
Weighted-average shares used to compute net loss per common share, basic and diluted		42,868,340			41,997,195			42,619,075			41,777,052
Net loss per share, basic and diluted	$	(0.49	)	$	(0.30	)	$	(1.09	)	$	(1.02	)

The following table sets forth the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because their inclusion would be anti-dilutive.


	As of September 30,
	2023		2022
Unvested restricted common stock subject to repurchase		1,865		127,760
Unvested common stock upon early exercise of stock options		124,644		368,127
Options to purchase common stock		8,110,570		5,948,170
		8,237,079		6,444,057

9. Leases

The Company has operating leases for its office and laboratory space, including its corporate headquarters.

In August 2020, the Company entered into a lease agreement for approximately 4,734 square feet of office and lab space at 2656 State Street in Carlsbad, California, for the Company’s headquarters (the Original Lease). The Original Lease commenced in May 2021, and had an original term of 60 months, with an option to extend for two additional 36 month periods.

In March 2022, the Company entered into a lease agreement for approximately 7,377 square feet of additional office and laboratory space at 2676 State Street in Carlsbad, California (the Expansion Lease). The Expansion Lease commenced for accounting purposes when the Company gained access to the premises in May 2023. The Company's obligation for payment of base rent begins on the date the landlord delivers possession of the Expansion Lease premises, estimated to occur in November 2023. The landlord is completing improvements on the Expansion Lease premises, and the Company paid $0.5 million of these costs prior to the Expansion Lease commencement. The Company has concluded that the landlord is the accounting owner of these improvements, and therefore this payment has been included in the calculation of the right-of-use asset and lease liability. The Company is entitled to certain rent abatement for delays related to the landlord's delivery of the Expansion Lease premises to the Company. The Expansion Lease has a lease term of 120 months, starting on the day the landlord delivers possession of the Expansion Lease premises. The Company has an option to renew the Expansion Lease for two additional 36 month periods. The Original Lease was also amended to have the same lease expiration as the Expansion Lease.

The Company did not include the renewal periods in determining the lease term, as the Company was not reasonably certain to exercise either the amended Original Lease or the Expansion Lease renewal options.

In connection with the Company's lease agreements, the Company paid security deposits of $0.1 million and is required to maintain a letter of credit of $1.0 million until 2027 at which time it can be reduced to $0.5 million throughout the end of the lease term.

Cash paid for amounts included in the measurement of lease liabilities was $0.1 million and $0.1 million for the three months ended September 30, 2023 and 2022, respectively, and $0.8 million and $0.2 million for the nine months ended September 30, 2023 and 2022, respectively.

The components of lease expense include operating, short-term, and variable lease costs. Amortization is recorded within research and development and general and administrative expenses in the condensed statements of operations and comprehensive loss. Components of lease cost for the three and nine months ended September 30, 2023 and 2022, respectively, were as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Operating lease cost	$	227	$	83	$	473	$	239
Short-term lease cost		19		21		39		60
Variable lease cost		19		16		53		46
Total lease cost	$	265	$	120	$	565	$	345

Maturities of lease liabilities, weighted-average remaining term and weighted-average discount rate were as follows (in thousands):


	As of September 30,
Year ending December 31,
2023 (remaining three months)	$	76
2024		717
2025		827
2026		852
2027		877
Thereafter		5,667
Total minimum lease payments		9,016
Less: amount representing interest		(2,904	)
Present value of lease liabilities		6,112
Less: current portion of lease liabilities		(148	)
Lease liabilities, noncurrent	$	5,964


	September 30,			December 31,
	2023			2022
Weighted-average remaining lease term (years) - operating leases		10.1			10.5
Weighted-average incremental borrowing rate - operating leases		8.03	%		6.50	%

10. Commitments and Contingencies

Other Funding Commitments

As of September 30, 2023, the Company had ongoing clinical and pre-clinical studies for its various pipeline programs. The Company enters into contracts in the normal course of business with contract research organizations in preparation for clinical trials, professional consultants for expert advice and other vendors for clinical supply manufacturing or other services. These contracts are generally cancellable, with notice, at the Company's option and do not have significant cancellation penalties.

Litigation

The Company, from time to time, may be party to litigation arising in the ordinary course of business. The Company was not subject to any material legal proceedings as of September 30, 2023, and no material legal proceedings are currently pending or threatened. If the potential loss from any claim, asserted or unasserted, or legal proceeding is considered probable and the amount is reasonably estimable, the Company will accrue a liability for the estimated loss.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis and the unaudited interim condensed financial statements included in this Quarterly Report on Form 10-Q should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2022 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in the Annual Report on Form 10-K for the year ended December 31, 2022 (the 2022 Annual Report).

Forward-Looking Statements

This Quarterly Report on Form 10-Q (Quarterly Report) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future results of operations and financial position, business strategy, research and development plans, the anticipated timing and phase of development, costs, design and conduct of our ongoing and planned preclinical studies and clinical trials for our product candidates, the timing and likelihood of regulatory filings and approvals for our product candidates, the potential to develop product candidates and the safety and therapeutic benefits of our product candidates, our ability to commercialize our product candidates, if approved, the pricing and reimbursement of our product candidates, if approved, the timing and likelihood of success, plans and objectives of management for future operations and future results of anticipated product development efforts, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “contemplate,” “continue” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target” “will” or “would” or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of risks, uncertainties and assumptions, including, without limitation, the risk factors described in Part II, Item 1A, “Risk Factors” of this Quarterly Report. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise. All forward-looking statements are qualified in their entirety by this cautionary statement, which is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Overview

We are a clinical-stage biotechnology company focused on developing next-generation precision medicines that target large opportunities in Fibroblast Growth Factor Receptor (FGFR) biology. Our in-house precision medicine platform, SNÅP, enables rapid and precise drug design through iterative molecular SNÅPshots that help predict genetic alterations most likely to cause acquired resistance to existing therapies. Our initial focus is on applying our accelerated small molecule drug discovery engine to develop therapies in targeted oncology and genetically defined conditions.

In oncology, the widespread availability of approved targeted treatments, such as kinase inhibitors, has transformed the cancer treatment landscape. Despite the therapeutic benefit that targeted oncology treatments have created for some patients, the response rate and duration of efficacy is often limited by acquired drug resistance, off-target toxicities and other shortcomings of existing therapies. We are using our proprietary SNÅP platform, which is optimized to enable rapid and precise refinement of structural design through iterative molecular SNÅPshots, in order to generate novel product candidates that are specifically designed to limit off-target toxicities and address acquired drug resistance to provide next-generation treatment options. Genomic alterations in FGFR family members occur in approximately 7% of all human cancers, representing about 126,000 new cases per year.

We are advancing multiple oncology product candidates toward the clinic, including our lead product candidate TYRA-300, an FGFR3 selective inhibitor with an initial focus on patients with metastatic urothelial carcinoma of the bladder and urinary tract (mUC). We submitted an Investigational New Drug application (IND) to the U.S. Food and Drug Administration (FDA) for TYRA-300 in June 2022 and received clearance in July 2022 to proceed with our Phase 1/2 clinical trial of TYRA-300, SURF301 (Study in Untreated and Resistant FGFR3+ Advanced Solid Tumors), a multi-center, open label study designed to determine the optimal and maximum tolerated doses and the recommended Phase 2 dose of TYRA-300, as well as to evaluate the preliminary antitumor activity of TYRA-300. In November 2022, the first patient was dosed with TYRA-300 in our Phase 1/2 study SURF301.

Beyond oncology, FGFR3 is implicated in many developmental conditions, such as achondroplasia (ACH) and other skeletal dysplasias, due to its role in regulating bone and cartilage formation. In March 2023, we announced we were expanding development of TYRA-300 into achondroplasia based on positive preclinical results demonstrated in a study performed in collaboration with the Imagine Institute in Paris, France. Data from the study showed that TYRA-300 increased body length in mice by 17.9% compared to the vehicle (p<0.0001) and increased the length of the femur (+22.6%), tibia (+33.0%) and L4-L6 (+23.5%) in mice (p<0.0001) (with n=8 for TYRA-300, after excluding two mice from dataset when molecular analysis showed chimeric incorporation of mutation, and n=10 for vehicle, after excluding one vehicle mouse). Achondroplasia, the most common form of dwarfism, is a skeletal dysplasia in which growth plate cartilage is affected, resulting in decreased growth of the long bones, vertebral bodies and skull base. These growth differences can result in health complications such as cranial and spinal stenosis, hydrocephalus, genu varum (bowed legs), and sleep apnea. A specific mutation in FGFR3 causes an estimated 99% of achondroplasia. We believe that the design of TYRA-300 may have a meaningful impact on achondroplasia and other skeletal dysplasias. We are conducting additional IND-enabling studies and anticipate submitting an IND to the FDA to enable a Phase 2 study in pediatric achondroplasia in 2024. In July 2023, the FDA granted TYRA-300 Orphan Drug Designation (ODD) for the treatment of achondroplasia.

We are also advancing our second oncology product candidate, TYRA-200, an FGFR1/2/3 inhibitor with potency against activating FGFR2 gene alterations, as well as clinically important molecular brake and gatekeeper resistance mutations. In December 2022, we submitted an IND to the FDA for TYRA-200 and received clearance in January 2023 to proceed with a Phase 1 clinical trial of TYRA-200, which will be focused on intrahepatic cholangiocarcinoma resistant to other FGFR inhibitors. We anticipate dosing the first patient in this trial by the end of 2023.

Since the commencement of our operations in 2018, we have devoted substantially all of our resources to organizing and staffing the company, business planning, raising capital, developing our proprietary SNÅP platform, undertaking research and development activities for our development programs, establishing our intellectual property portfolio, and providing general and administrative support for our operations. We have not generated any revenue to date and have funded our operations primarily from our initial public offering (IPO), private placements of our convertible preferred stock, and the issuance of Simple Agreements for Future Equity. Our net losses for the nine months ended September 30, 2023 and 2022 were $46.3 million and $42.4 million, respectively. As of September 30, 2023, we had an accumulated deficit of $142.0 million. As of September 30, 2023, we had cash and cash equivalents of $215.7 million.

We have incurred significant operating losses since inception. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical development activities, other research and development activities and capital expenditures. We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future particularly if and as we conduct preclinical studies and clinical trials, continue our research and development activities, utilize third parties to manufacture our product candidates and related raw materials, hire additional personnel, expand and protect our intellectual property, and incur additional costs associated with being a public company.

Based on our current operating plan, we believe that our existing cash and cash equivalents will be sufficient to fund our operating expenses and capital expenditures through at least 2024. We have never generated any revenue and do not expect to generate any revenues from product sales unless and until we successfully complete development of and obtain regulatory approval for our product candidates, which will not be for several years, if ever. In addition, if we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. Accordingly, until such time as we can generate significant revenue from sales of our product candidates, if ever, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. However, we may not be able to raise additional funds or enter into such other arrangements when needed or on favorable terms, or at all. If we are unable to raise additional capital or enter into such arrangements when needed, we could be forced to delay, limit, reduce or terminate our research and development programs or future commercialization efforts, or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.

Components of Results of Operations

Operating Expenses

Research and Development Expenses

To date, our research and development expenses consist primarily of external and internal costs related to the development of our SNÅP platform and our product candidates and development programs. Our research and development expenses primarily include:

•

external costs, including:

•

expenses incurred in connection with conducting clinical trials, including investigator grants and site payments for time and pass-through expenses and expenses incurred under agreements with contract research organizations (CROs), central laboratories and other vendors and service providers engaged to conduct our trials;

•

expenses incurred in connection with the discovery and preclinical development of our product candidates, including under agreements with third parties, such as consultants and CROs;

•

costs associated with consultants for chemistry, manufacturing and controls (CMC) development, and other services;

•

the cost of manufacturing compounds for use in our preclinical studies, including under agreements with third parties, such as consultants and third-party manufacturers; and

•

costs related to compliance with drug development regulatory requirements; and

•

internal costs, including:

•

employee-related expenses, including salaries, related benefits, travel and share-based compensation expenses for employees engaged in research and development functions;

•

the costs of laboratory supplies and acquiring, developing and manufacturing preclinical study materials; and

•

facilities, depreciation and other expenses, which include allocated expenses for rent and maintenance of facilities, and supplies.

We expense research and development expenses in the periods in which they are incurred. External expenses are recognized based on an evaluation of the progress to completion of specific tasks using information provided to us by our service providers or our estimate of the level of service that has been performed at each reporting date. We track external expenses on a development program and other program specific basis. However, we do not track internal costs on a program specific basis because these costs primarily relate to compensation, early research and consumable costs, which are deployed across multiple programs under development.

Research and development activities are central to our business model. There are numerous factors associated with the successful development of any of our product candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development. In addition, future regulatory factors beyond our control may impact our clinical development programs. Product candidates in later stages of development generally have higher development costs than those in earlier stages of development. As a result, we expect that our research and development expenses will increase substantially over the next several years as we advance our product candidates through preclinical studies into and through clinical trials, continue to discover and develop additional product candidates and expand our pipeline, maintain, expand, protect and enforce our intellectual property portfolio, and hire additional personnel.

Our future research and development expenses may vary significantly based on a wide variety of factors such as:

•

the number and scope, rate of progress, expense and results of our discovery and preclinical development activities and clinical trials;

•

the number of trials required for approval;

•

the number of sites included in each of our trials;

•

the countries in which the trials are conducted;

•

the length of time required to enroll eligible patients;

•

the number of patients that participate in the trials;

•

the ability to identify appropriate patients eligible for our clinical trials;

•

the number of doses that patients receive;

•

the drop-out or discontinuation rates of patients;

•

potential additional safety monitoring requested by regulatory agencies;

•

the duration of patient participation in the trials and follow-up;

•

the phase of development of the product candidate;

•

the efficacy and safety profile of the product candidate;

•

the timing, receipt, and terms of any approvals from applicable regulatory authorities including the FDA and non-U.S. regulators;

•

maintaining a continued acceptable safety profile of our product candidates following approval, if any;

•

the cost and timing of manufacturing our product candidates;

•

significant and changing government regulation and regulatory guidance;

•

the impact of any business interruptions to our operations or to those of the third parties with whom we work,

•

geopolitical instability, such as the war in Ukraine and, more recently, the war between Israel and Hamas;

•

adverse effects on the financial markets, the global economy, the supply chain and our expenses due to pandemics or other epidemic diseases, geopolitical instability, inflation, rising interest rates and other factors; and

•

the extent to which we establish additional strategic collaborations or other arrangements.

A change in the outcome of any of these variables with respect to the development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate.

The process of conducting the necessary preclinical and clinical research to obtain regulatory approval is costly and time-consuming. The actual probability of success for our product candidates or any future candidates may be affected by a variety of factors. We may never succeed in achieving regulatory approval for any of our product candidates or any future candidates.

General and Administrative Expenses

General and administrative expenses consist primarily of personnel-related expenses, including employee salaries, bonuses, benefits, and stock-based compensation charges, for personnel in executive and administrative functions. Other significant general and administrative expenses include legal fees relating to intellectual property and corporate matters, professional fees for accounting, tax and consulting services and insurance costs. We expect our general and administrative expenses will increase for the foreseeable future to support our increased research and development activities, manufacturing activities, and the increased costs associated with operating as a public company. These increased costs will likely include increased expenses related to hiring of additional personnel, audit, legal, regulatory and tax-related services associated with maintaining compliance with exchange listing and the Securities and Exchange Commission (SEC) requirements, director and officer insurance costs, and investor and public relations costs.

Other Income and Expense

Other income (expense) consists primarily of interest income from our cash and cash equivalents.

Results of Operations

Comparison of the Three Months Ended September 30, 2023 and 2022

The following table summarizes our results of operations for the periods indicated (in thousands):


	Three Months Ended September 30,
	2023			2022			Change
Operating expenses:
Research and development	$	19,271		$	10,915		$	8,356
General and administrative		4,692			2,730			1,962
Total operating expenses		23,963			13,645			10,318
Loss from operations		(23,963	)		(13,645	)		(10,318	)
Other income (expense):
Interest income		2,816			1,131			1,685
Other income (expense)		(5	)		5			(10	)
Total other income, net		2,811			1,136			1,675
Net loss and comprehensive loss	$	(21,152	)	$	(12,509	)	$	(8,643	)

Research and Development Expenses

Research and development expenses were $19.3 million and $10.9 million for the three months ended September 30, 2023 and 2022, respectively. The overall increase of $8.4 million was primarily due to an increase in CRO and drug manufacturing costs to support our ongoing and planned clinical trials of $5.9 million, an increase in stock-based compensation costs of $2.2 million, an increase in compensation costs of $1.3 million, and an increase in facilities and other operating costs of $0.3 million. The increase was partially offset by a decrease in preclinical expenses of $1.3 million.

The following table summarizes our research and development expenses by development program for the three months ended September 30, 2023 and 2022 (in thousands):


	Three Months Ended September 30,
	2023		2022
External research and development expense by program
TYRA-300 ONC	$	4,797	$	2,844
TYRA-200		1,626		1,770
TYRA-300 ACH		2,176		816
RET		101		966
FGFR4		1,819		463
Other development programs		1,679		831
Unallocated research and development expense
Other research and development		1,308		923
Compensation and stock-based compensation		5,765		2,302
Total research and development expense	$	19,271	$	10,915

General and Administrative Expenses

General and administrative expenses were $4.7 million and $2.7 million for the three months ended September 30, 2023 and 2022, respectively. The increase of $2.0 million was primarily due to an increase in stock-based compensation costs of $1.2 million, an increase in professional services costs of $0.6 million, and an increase in compensation costs of $0.3 million. The increase was partially offset by a decrease in facilities and other operating costs of $0.1 million.

Other Income

Other income was $2.8 million and $1.1 million for the three months ended September 30, 2023 and 2022, respectively. The increase of $1.7 million was primarily related to an increase in interest rate return on our cash and cash equivalents.

Comparison of the Nine Months Ended September 30, 2023 and 2022

The following table summarizes our results of operations for the periods indicated (in thousands):


	Nine Months Ended September 30,
	2023			2022			Change
Operating expenses:
Research and development	$	41,841		$	32,608		$	9,233
General and administrative		12,470			11,301			1,169
Total operating expenses		54,311			43,909			10,402
Loss from operations		(54,311	)		(43,909	)		(10,402	)
Other income (expense):
Interest income		8,035			1,496			6,539
Other expense		(28	)		(17	)		(11	)
Total other income, net		8,007			1,479			6,528
Net loss and comprehensive loss	$	(46,304	)	$	(42,430	)	$	(3,874	)

Research and Development Expenses

Research and development expenses were $41.8 million and $32.6 million for the nine months ended September 30, 2023 and 2022, respectively. The overall increase of $9.2 million was primarily due to an increase in CRO and drug manufacturing costs to support our ongoing and planned clinical trials of $6.1 million, an increase of compensation costs of $2.3 million, an increase of stock-based compensation costs of $2.0 million, and an increase in facilities and other operating costs of $0.8 million. The increase was partially offset by a decrease in preclinical expenses of $2.0 million.

The following table summarizes our research and development expenses by development program for the nine months ended September 30, 2023 and 2022 (in thousands):


	Nine Months Ended September 30,
	2023		2022
External research and development expense by program
TYRA-300 ONC	$	9,755	$	8,195
TYRA-200		3,413		4,634
FGFR3 ACH		3,153		2,208
RET		822		3,555
FGFR4		3,130		1,547
Other development programs		5,197		1,302
Unallocated research and development expense
Other research and development		3,061		2,218
Compensation and stock-based compensation		13,310		8,949
Total research and development expense	$	41,841	$	32,608

General and Administrative Expenses

General and administrative expenses were $12.5 million and $11.3 million for the nine months ended September 30, 2023 and 2022, respectively. The increase of $1.2 million was primarily due to an increase in compensation costs of $0.8 million, an increase in professional services costs of $0.5 million, and an increase in facilities and other operating costs of $0.3 million. The increase was partially offset by a decrease in stock-compensation costs of $0.4 million.

Other Income

Other income was $8.0 million and $1.5 million for the nine months ended September 30, 2023 and 2022, respectively. The increase of $6.5 million was primarily related to an increase in interest rate return on our cash and cash equivalents.

Liquidity and Capital Resources

Sources of Liquidity

On September 17, 2021, we completed our IPO and issued 12,420,000 shares of common stock for net proceeds of approximately $181.2 million. Prior to our IPO, we funded our operations primarily through private placements of our convertible preferred stock with net proceeds of $157.2 million excluding issuance costs of $0.4 million.

Our primary uses of cash to date have been to fund our research and development activities, including with respect to TYRA-300 and TYRA-200 and other research programs, business planning, establishing and maintaining our intellectual property portfolio, hiring personnel, raising capital, and providing general and administrative support for these operations.

On October 3, 2022, we entered into an ATM Sales Agreement (the Sales Agreement) with Virtu Americas LLC (the Agent), under which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $150.0 million in “at the market” offerings through the Agent. Sales of the shares of common stock, if any, will be made at prevailing market prices at the time of sale, or as otherwise agreed with the Agent. The Agent will receive a commission from us of up to 3.0% of the gross proceeds of any shares of common stock sold under the Sales Agreement.

We are not obligated to sell, and the Agent is not obligated to buy or sell, any shares of common stock under the Sales Agreement. No assurance can be given that we will sell any shares of common stock under the Sales Agreement, or, if we do, as to the price or amount of shares of common stock that we may sell or the dates when such sales will take place. As of September 30, 2023, we have not sold any shares under the Sales Agreement.

Cash Flows

The following table sets forth a summary of our cash flows for the periods indicated (in thousands):


	Nine Months Ended September 30,
	2023			2022
Net cash used in operating activities	$	(36,607	)	$	(38,305	)
Net cash used in investing activities		(167	)		(538	)
Net cash provided by financing activities		1,213			629
Net cash decrease for the period	$	(35,561	)	$	(38,214	)

Operating Activities

Net cash used in operating activities for the nine months ended September 30, 2023 was $36.6 million, consisting primarily of our net loss of $46.3 million, adjusted for $9.6 million of non-cash charges primarily related to stock-based compensation expense and $0.1 million for net changes in operating assets and liabilities.

Net cash used in operating activities for the nine months ended September 30, 2022 was $38.3 million, consisting primarily of our net loss of $42.4 million and $3.8 million for net changes in operating assets and liabilities, adjusted for $7.9 million of non-cash charges primarily related to stock-based compensation expense and depreciation and amortization.

Investing Activities

Net cash used in investing activities for the nine months ended September 30, 2023 and 2022 was $0.2 million and $0.5 million, respectively, consisting of purchases of property and equipment.

Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2023 and 2022 was $1.2 million and $0.6 million, respectively, primarily related to proceeds from issuances of common stock under benefit plans.

Future Funding Requirements

Based on our current operating plan, we believe that our existing cash and cash equivalents will be sufficient to meet our anticipated operating expenses and capital expenditures through at least 2024. However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect. Additionally, the process of conducting preclinical studies and testing product candidates in clinical trials is costly, and the timing of progress and expenses in these studies and trials is uncertain.

Our future capital requirements will depend on many factors, including:

•

the initiation, type, number, scope, results, costs and timing of, our ongoing and planned preclinical studies and clinical trials of existing product candidates or clinical trials of other potential product candidates we may choose to pursue in the future, including based on feedback received from regulatory authorities;

•

the costs and timing of manufacturing for current or future product candidates, including commercial scale manufacturing if any product candidate is approved;

•

the costs, timing and outcome of regulatory review of current or future product candidates;

•

the costs of obtaining, maintaining and enforcing our patents and other intellectual property rights;

•

our efforts to enhance operational systems and hire additional personnel to satisfy our obligations as a public company, including enhanced internal controls over financial reporting;

•

the costs associated with hiring additional personnel and consultants as our business grows, including additional executive officers and clinical development personnel;

•

the costs and timing of establishing or securing sales and marketing capabilities if any current or future product candidate is approved;

•

our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products;

•

costs associated with any products or technologies that we may in-license or acquire; and

•

delays or issues with any of the above, including that the risk of each may be exacerbated by any future pandemics or epidemic diseases, potential geopolitical instability and war, inflation or rising interest rates.

Until such time, if ever, as we can generate substantial product revenues to support our cost structure, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.

Contractual Obligations and Commitments

Other than disclosed below, there were no material changes outside the ordinary course of our business during the nine months ended September 30, 2023 to the information regarding our contractual obligations that was disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the 2022 Annual Report.

As of September 30, 2023, total future aggregate operating lease commitments were $9.0 million, with approximately $0.1 million due in 2023, and the remaining due in periods from 2024 through 2033.

Critical Accounting Policies and Estimates

There have been no material changes to our critical accounting policies and estimates during the three and nine months ended September 30, 2023, as compared to the critical accounting policies and estimates disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the 2022 Annual Report.

Recently Adopted Accounting Pronouncements

See Note 2 to our condensed financial statements included elsewhere in this Quarterly Report on Form 10-Q for recently issued accounting pronouncements that may potentially impact our financial position and results of operations.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As of September 30, 2023, there have been no material changes surrounding our market risk, including interest rate risk, foreign currency exchange risk, and inflation risk, from the discussion provided in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Quantitative and Qualitative Disclosures about Market Risk” in the 2022 Annual Report.

Item 4. Controls and Procedures

Our management, with the participation of our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), has evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this quarterly report. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by SEC Rule 13a-15(b), we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the quarter covered by this report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during our most recent quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

We are not currently subject to any material legal proceedings. From time to time, we may be involved in legal proceedings or subject to claims incident to the ordinary course of business. Regardless of the outcome, such proceedings or claims can have an adverse impact on us because of defense and settlement costs, diversion of resources and other factors, and there can be no assurances that favorable outcomes will be obtained.

Item 1A. Risk Factors

There have been no material changes to the risk factors disclosed in Item 1A of our 2022 Annual Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

None.

Use of Proceeds from Initial Public Offering

On September 14, 2021, our registration statement on Form S-1 (File No. 333-258970) was declared effective by the SEC for our IPO. At the closing of the offering on September 17, 2021, we sold 12,420,000 shares of common stock, which included the exercise in full by the underwriters of their option to purchase 1,620,000 additional shares, at an initial public offering price of $16.00 per share and received gross proceeds of $198.7 million, which resulted in net proceeds to us of approximately $181.2 million, after deducting underwriting discounts and commissions of approximately $13.9 million and offering-related transaction costs of approximately $3.6 million. None of the expenses associated with the IPO were paid to directors, officers, persons owning 10% or more of any class of equity securities, or to their associates, or to our affiliates. BofA Securities, Inc., Jefferies LLC, and Cowen and Company, LLC acted as joint book-running managers for the offering.

As of September 30, 2023, we estimate that we have used approximately $98 million of the proceeds from our IPO for general corporate purposes, including to fund the development of TYRA-300, TYRA-200 and our other development programs. There has been no material change in the planned use of proceeds from that described in the final prospectus filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act on September 15, 2021.

Issuer Repurchases of Equity Securities

None.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits


Exhibit Number	Exhibit Description	Incorporated by Reference			Filed Herewith
		Form	Date	Number
3.1	Amended and Restated Certificate of Incorporation	10-K	3/22/23	3.1
3.2	Amended and Restated Bylaws, effective as of October 26, 2023	8-K	10/26/23	3.1
4.1	Specimen stock certificate evidencing the shares of common stock	S-1	8/20/21	4.1
4.2	Amended and Restated Investors’ Rights Agreement, dated March 5, 2021, by and among the Registrant and certain of its stockholders	S-1/A	9/9/21	4.2
10.1	Non-Employee Director Compensation Program, amended and restated effective August 1, 2023				X
31.1	Certification of Chief Executive Officer, as required by Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				X
31.2	Certification of Chief Financial Officer, as required by Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				X
32.1*	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				X
32.2*	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				X
101.INS	Inline XBRL Instance Document				X
101.SCH	Inline XBRL Taxonomy Extension Schema Document				X
101.CAL	Inline XBRL Taxonomy Calculation Linkbase Document				X
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document				X
101.LAB	Inline XBRL Taxonomy Label Linkbase Document				X
101.PRE	Inline XBRL Presentation Linkbase Document				X
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)				X

* This certification is deemed not filed for purpose of Section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	TYRA BIOSCIENCES, INC.

Date: November 7, 2023	By:	/s/ Todd Harris, Ph.D.
		Todd Harris, Ph.D.
		President, Chief Executive Officer, and Director
		(Principal Executive Officer)

Date: November 7, 2023	By:	/s/ Alan Fuhrman
		Alan Fuhrman
		Chief Financial Officer
		(Principal Financial and Accounting Officer)