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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022
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: 001-39303
PLIANT THERAPEUTICS, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware47-4272481
(State or other jurisdiction of(I.R.S. Employer
incorporation or organization)Identification No.)
260 Littlefield Avenue 
South San Francisco, CA
94080
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (650) 481-6770
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading
Symbol
Name of Each Exchange on which Registered
Common Stock, par value $0.0001 per sharePLRXThe Nasdaq Stock Market LLC
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 August 5, 2022, the registrant had 48,681,962 shares of common stock, $0.0001 par value per share, outstanding.



Table of Contents
  
 
 
 
 
 
  
  

2


SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (the "Report") contains forward-looking statements that involve risks, uncertainties, and assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The statements contained in this Report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or the negative of those terms, and similar expressions that convey uncertainty of future events or outcomes. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. Forward-looking statements in this Report include, but are not limited to, statements about:
•    Our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;
•    The success, cost and timing of our product development activities and clinical trials of our lead product candidate, PLN-74809, as well as PLN-1474 and our other product candidates;
•    Our estimates regarding the impact of the COVID-19 pandemic on our business and operations and our ability to manage such impacts;
•    Ours or our current or future collaborators plans to initiate, recruit and enroll patients in, and conduct our clinical trials at the pace that we project;
•    Our plans and strategy to obtain and maintain regulatory approvals of our product candidates;
•    Our plans and strategy to obtain funding for our operations, including funding necessary to complete further development and, upon successful development, if approved, commercialize any of our product candidates;
Our ability to borrow additional term loans under our term loan facility (the “Oxford Loan Agreement”) with Oxford Finance LLC, as collateral agent and lender (“Oxford”);
•    The potential benefits of orphan drug and fast track designations for PLN-74809;
•    Our ability to compete with companies currently marketing or engaged in the development of treatments for fibrosis;
•    Our plans and strategy regarding obtaining and maintaining intellectual property protection for our product candidates and the duration of such protection;
•    Our plans and strategy regarding the manufacture of our product candidates for clinical trials and for commercial use, if approved;
•    Our dependence on current and future collaborators for developing, obtaining regulatory approval for and commercializing product candidates in the collaboration;
•    Our receipt and timing of any milestone payments or royalties under any current of future research collaboration or license agreements or arrangements;
•    Our plans and strategy regarding the commercialization of any products that are approved for marketing and our ability to establish adequate pricing in the U.S. and international markets;
•    The size and growth potential of the markets for our product candidates, and our ability to serve those markets, either alone or in combination with others;
•    Our ability to attract and retain qualified employees and key personnel; and
•    Our expectations regarding government and third-party payor coverage and reimbursement.
These statements are based on the beliefs and assumptions of our management, which are in turn based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results and timing expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section entitled “Risk Factors” included under Part II, Item 1A in this Report. Furthermore, such forward-looking statements speak only as of the date of this Report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.
3




4


SUMMARY OF RISKS ASSOCIATED WITH OUR BUSINESS
Our business involves significant risks, some of which are summarized below. The summary risk factors listed below should be read together with the text of the full risk factors discussed in "Part II, Item 1A. Risk Factors" in this Report. You should carefully consider the risks described below, as well as the other information in this Report, including our financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as in other documents that we file with the Securities and Exchange Commission, or the SEC. The occurrence of any of the events or developments described in this Report could have a material adverse effect on our business, financial condition, results of operations, growth prospects and stock price. In such an event, the market price of our common stock could decline. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations and the market price of our common stock.

Risks Related to Our Financial Position and Need for Additional Capital
•    We have incurred significant net losses since inception, and we expect to continue to incur significant net losses for the foreseeable future.
•    We will require substantial additional capital to finance our operations. If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce and/or eliminate one or more of our research and drug development programs, future commercialization efforts or other operations.
Covenants and other provisions in the Oxford Loan Agreement restrict our business and operations in many ways, and if we do not effectively manage our covenants, our financial conditions and results of operations could be adversely affected. In addition, our operations may not provide sufficient cash to meet the repayment obligations of our debt incurred under the Oxford Loan Agreement.
Risks Related to Research and Development and the Biopharmaceutical Industry
•    We have a limited operating history, which may make it difficult to evaluate our prospects and likelihood of success.
•    Our business is highly dependent on the success of our lead product candidate, PLN-74809, as well as PLN-1474 and any other product candidates that we advance into the clinic. All of our product candidates will require significant additional preclinical and clinical development before we may be able to seek regulatory approval for and launch a product commercially.
Our approach to drug discovery and development in the area of fibrotic diseases is unproven and may not result in marketable products
•    Clinical development involves a lengthy, complex, and expensive process, with an uncertain outcome.
•    We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of PLN-74809 or any other product candidates.
•    We may fail to obtain and maintain orphan drug designations in some jurisdictions and therefore fail to secure orphan exclusivity in those jurisdictions.
Our ongoing and future clinical trials may reveal significant adverse events or unexpected drug-drug interactions not seen in our preclinical studies and may result in a safety profile that could delay or prevent regulatory approval or market acceptance of any of our product candidates.
•    If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.
•    We face substantial competition, which may result in others discovering, developing, or commercializing products before or more successfully than us.
Risks Related to Our Intellectual Property
•    Our success depends in part on our ability to obtain patent term extensions and protect our intellectual property. It is difficult and costly to protect our proprietary rights and technology, and we may not be able to ensure their protection.
5


•    Our collaborators may assert ownership or commercial rights to inventions they develop from research we support or that we develop from our use of the tissue samples or other biological materials, which they provide to us, or otherwise arising from the collaboration.
Risks Related to Our Reliance on Third Parties
•    We have entered into a collaboration agreement with Novartis Institutes for Biomedical Research, Inc., or Novartis, for the development of PLN-1474 and may in the future seek to enter into collaborations with third parties for the development and commercialization of other product candidates. If we fail to enter into such collaborations, or our collaborations are not successful, we may be unable to continue development of such product candidates, we would not receive any contemplated milestone payments or royalties, and we could fail to capitalize on the market potential of such product candidates
•    We rely on third parties to conduct certain aspects of our preclinical studies and clinical trials and for tissue samples and other materials required for our research and development activities.

Risks Related to Managing Our Business and Operations
•    The ongoing COVID-19 pandemic could adversely impact our business, including our preclinical studies and clinical trials.
•    Our loss of key management personnel, or if we fail to recruit additional highly skilled personnel, will impair our ability to develop current product candidates or identify and develop new product candidates, could result in loss of markets or market share and could make us less competitive.

6


PART I—FINANCIAL INFORMATION
Item 1. Condensed Financial Statements.
Pliant Therapeutics, Inc.
Condensed Balance Sheets
(Unaudited)
(In thousands, except number of shares and per share amounts)
 June 30,
2022
*December 31,
2021
Assets
Current assets
Cash and cash equivalents$25,070 $51,665 
Short-term investments138,527 148,931 
Accounts receivable4,989 1,998 
Tax credit receivable83 83 
Prepaid expenses and other current assets (Note 5)4,857 6,764 
Total current assets173,526 209,441 
Property and equipment, net4,534 4,606 
Operating lease right-of-use assets5,646 6,330 
Other non-current assets913 838 
Total assets$184,619 $221,215 
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable$3,116 $2,971 
Accrued liabilities (Note 6)17,395 11,991 
Lease liabilities, current$2,042 1,869 
Total current liabilities22,553 16,831 
Lease liabilities, non-current$4,407 5,325 
Term loan$9,871  
Total liabilities36,831 22,156 
Stockholders’ equity
Common stock, $0.0001 par value; 300,000,000 shares authorized at June 30, 2022 and December 31, 2021; and 36,182,297 and 36,083,301 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively;
3 3 
Additional paid-in capital421,781 414,348 
Accumulated deficit(272,737)(215,091)
Accumulated other comprehensive loss(1,259)(201)
Total stockholders’ equity147,788 199,059 
Total liabilities and stockholders’ equity$184,619 $221,215 
*The condensed balance sheet as of December 31, 2021 has been derived from the audited financial statements as of that date.
The accompanying notes are an integral part of these condensed financial statements
7


Pliant Therapeutics, Inc.
Condensed Statements of Operations and Comprehensive Loss
(Unaudited)
(In thousands, except number of shares and per share amounts)
Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
Revenue$4,989 $1,789 $6,238 $3,963 
Operating expenses:
Research and development$(26,335)(19,218)(47,216)(37,745)
General and administrative$(8,296)(5,475)(16,875)(12,041)
Total operating expenses(34,631)(24,693)(64,091)(49,786)
Loss from operations(29,642)(22,904)(57,853)(45,823)
Interest and other income (expense), net$96 73 207 136 
Net loss$(29,546)$(22,831)$(57,646)$(45,687)
Net loss attributable to common stockholders$(29,546)$(22,831)$(57,646)$(45,687)
Net loss per share, attributable to common stockholders:
Basic$(0.82)$(0.64)$(1.59)$(1.28)
Diluted$(0.82)$(0.64)$(1.59)$(1.28)
Shares used in computing net loss per share attributable to common stockholders:
Basic36,173,135 35,746,922 36,144,944 35,726,393 
Diluted36,173,135 35,746,922 36,144,944 35,726,393 
Comprehensive loss:
Net loss$(29,546)$(22,831)$(57,646)$(45,687)
Net unrealized gain (loss) on short-term investments$(309)$(12)$(1,058)$2 
Total other comprehensive income (loss)(309)(12)(1,058)2 
Comprehensive loss$(29,855)$(22,843)$(58,704)$(45,685)
The accompanying notes are an integral part of these condensed financial statements.
8


Pliant Therapeutics, Inc.
Condensed Statements of Stockholders’ Equity
(Unaudited)
(In thousands, except number of shares and per share amounts)
    Additional
Paid-In
Capital
Accumulated
Other
Comprehensive Loss
Accumulated
Deficit
Total
Stockholders’
Equity
 Common Stock
 SharesAmount
Balance at December 31, 202136,083,301 $3 $414,348 $(201)$(215,091)$199,059 
Vesting of restricted stock awards15,606 — 1 — — 1 
Option exercises63,552 — 51 — — 51 
Stock-based compensation expense— — 3,531 — — 3,531 
Net unrealized loss on short-term investments— — — (749)— (749)
Net loss— — — — (28,100)(28,100)
Balance at March 31, 202236,162,459 $3 $417,931 $(950)$(243,191)$173,793 
Vesting of restricted stock awards6,235 — 1 — — 1 
Option exercises13,603 — 446 — — 446 
Stock-based compensation expense— — 3,403 — — 3,403 
Net unrealized loss on short-term investments— — — (309)— (309)
Net loss— — — — (29,546)(29,546)
Balance at June 30, 202236,182,297 $3 $421,781 $(1,259)$(272,737)$147,788 

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

9


Pliant Therapeutics, Inc.
Condensed Statements of Stockholders’ Equity
(Unaudited)
(In thousands, except number of shares and per share amounts)
    Additional
Paid-In
Capital
Accumulated
Other
Comprehensive Loss
Accumulated
Deficit
Total
Stockholders’
Equity
 Common Stock
 SharesAmount
Balance at December 31, 202035,552,795 $3 $400,918 $(32)$(117,828)$283,061 
Vesting of restricted stock awards30,277 — 2 — — $2 
Option exercises165,264 — 1,370 — — 1,370 
Stock-based compensation expense— — 2,578 — — 2,578 
Net unrealized loss on short-term investments— — — 14 — 14 
Net loss— — — — (22,856)(22,856)
Balance at March 31, 202135,748,336 $3 $404,868 $(18)$(140,684)$264,169 
Vesting of restricted stock awards30,136 — 2 — — $2 
Option exercises75,444 — 372 — — 372 
Stock-based compensation expense— — 2,280 — — 2,280 
Net unrealized loss on short-term investments— — — (12)— (12)
Net loss— — — — (22,831)(22,831)
Balance at June 30, 202135,853,916 $3 $407,522 $(30)$(163,515)$243,980 

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


10


Pliant Therapeutics, Inc.
Condensed Statements of Cash Flows
(Unaudited)
  Six Months Ended
June 30,
(In thousands)20222021
Cash flows from operating activities  
Net loss$(57,646)$(45,687)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense914 729 
Stock-based compensation expense6,934 4,858 
Non-cash operating lease expense684 441 
Other 443 529 
Changes in operating assets and liabilities:
Accounts receivable(2,991)7,449 
Prepaid expenses and other current assets1,907 (328)
Other non-current assets  
Accounts payable202 741 
Accrued liabilities5,404 (1,333)
Other long term liabilities   
Operating lease liabilities(745)(467)
Net cash used in operating activities(44,894)(33,068)
Cash flows from investing activities
Purchase of short-term investments(78,048)(138,832)
Maturity of short-term investments86,972 155,529 
Purchase of property and equipment(898)(881)
Net cash provided by investing activities8,026 15,816 
Cash flows from financing activities
Proceeds from exercise of stock options498 1,741 
Payment of deferred offering costs(75)(179)
Payment of debt issuance costs(150) 
Proceeds from term loan10,000  
Net cash provided by financing activities10,273 1,562 
Net decrease in cash and cash equivalents(26,595)(15,690)
Cash and cash equivalents at beginning of period51,665 50,882 
Cash and cash equivalents at end of period$25,070 $35,192 
Supplemental disclosures of cash flow information:
Cash paid for interest$72 $ 
Supplemental disclosures of noncash investing and financing activities:
Purchase of property and equipment in accounts payable and accrued liabilities$ $82 
Reclassification of restricted stock awards from liabilities to common stock upon vesting
$1 $5 
Net unrealized (loss) gain on short-term investments$(1,058)$2 
The accompanying notes are an integral part of these condensed financial statements.
11


Pliant Therapeutics, Inc.
Notes to Condensed Financial Statements
(Unaudited)
1. Organization and Description of Business
Pliant Therapeutics, Inc. (the “Company” or "Pliant" or “we” or “our” or “us”) is a clinical stage biopharmaceutical company focused on discovering and developing novel therapies for the treatment of fibrosis with an initial focus on treating fibrosis by inhibiting integrin-mediated activation of TGF-ß. Fibrosis refers to the abnormal thickening and scarring of connective tissue due to the production and deposition of excess collagen in the extra-cellular matrix. Fibrosis can occur in many different tissues including lung, liver, kidney, muscle, skin and the GI tract, and often causes severe and debilitating disease leading to organ failure. The Company is located in South San Francisco, California, and was incorporated in the state of Delaware in June 2015.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain prior year reported amounts have been reclassified to conform with the current period presentation.
The accompanying condensed balance sheet as of June 30, 2022, condensed statements of operations and comprehensive loss for the three and six months ended June 30, 2022 and 2021, condensed statements of cash flows for the six months ended June 30, 2022 and 2021, and the condensed statements of stockholders’ equity for the three and six months ended June 30, 2022 and 2021, are unaudited. The balance sheet as of December 31, 2021 was derived from audited financial statements as of and for the year ended December 31, 2021. The unaudited interim financial statements have been prepared on the same basis as the audited annual financial statements as of and for the year ended December 31, 2021, and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of June 30, 2022, and the results of its operations and its cash flows for the three and six months ended June 30, 2022 and 2021. The financial data and other information disclosed in these notes related to the three and six months ended June 30, 2022 and 2021, are also unaudited.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and expenses as well as the disclosure of contingent assets and liabilities as of and during the reporting period. The Company bases its estimates and assumptions on historical experience when available and on various factors that it believes to be reasonable under the circumstances. Significant estimates and assumptions reflected in these financial statements include, but are not limited to stock-based compensation expense and accruals for research and development costs. The Company assesses estimates on an ongoing basis, however, actual results could materially differ from those estimates.
Significant Accounting Policies
There have been no significant changes to the accounting policies during the three months ended June 30, 2022, as compared to the significant accounting policies described in Note 2 of the "Notes to the Financial Statements" in the Company's audited financial statements included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
3. Financial Instruments
The Company’s short-term investments consist of U.S. Treasury securities, U.S. Government agency securities and highly rated, investment-grade corporate debt securities with original maturities beyond three months at the date of purchase. The Company has classified and accounted for its short-term investments as available-for-sale securities as the Company may sell these securities at any time even prior to maturity and such investments represent cash available for current operations. As a result, short-term investments may include securities with maturities beyond twelve months that are classified within current assets in the Balance Sheets. The Company’s short-term investments classified as available-for-sale are carried at fair market value with unrealized losses or income recognized in other comprehensive income (loss).
12


The Company’s cash equivalent Money Market Funds are classified as Level 1 because they are valued using quoted market prices. The fair value of the Company’s U.S. Treasury securities, U.S. government agency securities and corporate debt securities are classified as Level 2 because they are valued using observable inputs to quoted market prices, benchmark yields, reported trades, broker/dealer quotes or alternative pricing sources with reasonable levels of price transparency and include U.S. government agency securities, U.S. Treasury securities and corporate debt securities.
There were no assets or liabilities recorded at fair value to the condensed balance sheets using Level 3 inputs as of June 30, 2022 and as of December 31, 2021.
The following tables show the Company’s Money Market Funds, U.S. government agency securities and corporate debt securities by significant investment category as of June 30, 2022 and December 31, 2021 (in thousands):
 As of June 30, 2022
 Adjusted
Cost
Unrealized
Gains
Unrealized
Losses
Market
Value
Level 1:    
Money Market Funds$10,587 $ $ $10,587 
Level 2:
U.S. government agency securities included in cash and cash equivalents and short-term investments    
Corporate debt securities included in cash and cash equivalents and short-term investments
143,777  (1,259)142,518 
Total financial assets$154,364 $ $(1,259)$153,105 
 As of December 31, 2021
 Adjusted
Cost
Unrealized
Gains
Unrealized
Losses
Market
Value
Level 1:    
Money Market Funds$15,329 $ $ $15,329 
Level 2:
U.S. government agency securities included in short-term investments5,003   5,003 
Corporate debt securities included in cash and cash equivalents and short-term investments163,626 1 (202)163,425 
Total financial assets$183,958 $1 $(202)$183,757 
The Company may sell certain of its short-term securities prior to their stated maturities for reasons including, but not limited to, managing liquidity, credit risk, duration and asset allocation.
There were no liabilities measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021. There have been no transfers between fair value measurement levels during the six months ended June 30, 2022. In addition, there were no assets or liabilities measured at fair value on a non-recurring basis as of June 30, 2022 and December 31, 2021.
As of June 30, 2022, the Company had not recorded any impairment related to other-than-temporary declines in the fair value of short-term investments. Short-term investments are considered impaired when a decline in fair value is judged to be other-than-temporary. The Company consults with its investment managers and considers available quantitative and qualitative evidence in evaluating potential impairment of its short-term investments on a quarterly basis. If the cost of an individual investment exceeds its fair value, the Company evaluates, among other factors, general market conditions, the duration and extent to which the fair value is less than cost and its intent and ability to hold the investment.
The Company records interest income and accretion income earned on Money Market Funds and U.S. Treasury, U.S. government agency and corporate debt securities to interest and other income (expense), net in its condensed statement of operations and comprehensive loss.
13


4. Property and Equipment, net
Property and equipment, net consisted of the following (in thousands):
  As of June 30, 2022As of December 31, 2021
Computer equipment and software$30 $22 
Laboratory equipment8,713 7,947 
Leasehold improvements1,631 1,618 
Construction-in-progress91 38 
Total property and equipment, gross10,465 9,625 
Less: Accumulated depreciation(5,931)(5,019)
Total property and equipment, net$4,534 $4,606 
Depreciation expense for the three months ended June 30, 2022 and 2021 was $0.5 million and $0.4 million, respectively. Depreciation expense for the six months ended June 30, 2022 and 2021 was $0.9 million and $0.7 million, respectively.
5. Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following (in thousands):
As of June 30,
2022
As of December 31,
2021
Prepaid research and development2,448 2,819 
Prepaid insurance849 2,585 
Prepaid licenses1,028 819 
Interest receivable320 385 
Other212 156 
Total prepaid expenses and other current assets4,857 6,764 
6. Accrued Liabilities and Other Long-Term Liabilities
Accrued Liabilities
Accrued liabilities consisted of the following (in thousands):
As of June 30,
2022
As of December 31,
2021
Accrued compensation and benefits$3,520 $5,216 
Accrued research and development expenses13,094 5,868 
Other accrued liabilities781 907 
Total accrued liabilities$17,395 $11,991 
Accrued compensation and benefits consist primarily of accrued bonuses and accrued vacation.

7. Debt
In May 2022, we entered into a term loan facility (the “Oxford Loan Agreement”) with Oxford Finance LLC (the "Lender") for up to $100.0 million. At closing, we entered into a term loan for $10.0 million of an initial $25.0 million tranche, with the remaining $15.0 million available through the end of the year. The Oxford Loan Agreement provides for an additional $75.0 million over three tranches, $50.0 million of which is at our option upon the satisfaction of certain conditions related to the development of PLN-74809 and one of our preclinical product candidates, and $25.0 million at the Lender's discretion. In connection with the Oxford Loan Agreement, we granted a security interest in substantially all of our current and future assets. There are no warrants or financial covenants associated with the Oxford Loan Agreement.
14


Borrowings under the Oxford Loan Agreement bear interest at a rate per annum equal to 1-month term Secured Overnight Financing Rate (SOFR) plus 8.5%, subject to an agreed upon floor and cap. The Oxford Loan Agreement requires the Company to make monthly interest-only payments until July 1, 2026 (extendable to July 1, 2027) with monthly interest and principal payments thereafter until the maturity date of May 1, 2027 (extendable to May 1, 2028).
The estimated fair value of the term loan as of June 30, 2022 was measured using Level 3 inputs and approximates the carrying value recorded to the condensed balance sheet. The effective interest rate for the term loan is 9.27% and interest expense for the three and six months ended June 30, 2022 was $0.2 million. We had no outstanding debt and did not incur interest expense in 2021.

Future maturities of debt as of June 30, 2022 are as follows:
As of June 30, 2022
2022$ 
2023 
2024 
2025 
20265,455 
Thereafter4,545 
Total$10,000 


8. Novartis Collaboration and License Agreement (the "Novartis Agreement")
In 2019, we entered into the Novartis Agreement for the development and commercialization of our preclinical product candidate, PLN-1474 and up to three additional integrin research targets. PLN-1474 is an internally discovered small molecule selective inhibitor of integrin αvß1, currently being developed for the treatment of liver fibrosis associated with nonalcoholic steatohepatitis (“NASH”). Pursuant to the agreement, we received an upfront, non-refundable license fee of $50.0 million and were eligible to receive additional payments of $416.0 million contingent upon achievement of specified research, development, regulatory and commercial events and royalties on world-wide net sales thereafter. Additionally, Novartis is funding up to $20.0 million associated with research and development services for PLN-1474 and up to $16.8 million for research and development services on the integrin research targets. As of June 30, 2022, aggregate unrecognized transaction price of $2.3 million is associated with performance obligations we expect to satisfy in 2022.
In the second quarter of 2022, Novartis exercised their right to opt-in to a research program and secured an exclusive license to compounds associated with an integrin research target, which entitles us to a $4.0 million payment, which was recognized in accounts receivable and revenue as of and for three months ended June 30, 2022. To date, we have received $25.0 million in contingent payments and $387.0 million remain eligible for achievement. No contingent payments were recognized during the three and six months ended June 30, 2021. Revenues associated with the Novartis Agreement for the three and six months ended June 30, 2022 were $5.0 million and $6.2 million, respectively, and $1.8 million, and $4.0 million for three and six months ended June 30, 2021, respectively.

9. Regents of the University of California License Agreement (the "UC Agreement")
In 2015, we entered into the UC Agreement to obtain an exclusive, worldwide license relating to the use of certain patents and technology relating to αvß1 compound in fibrosis indications. Pursuant to the UC Agreement, we made a $2.4 million milestone payment upon the close of our initial public offering in June 2020. Subsequently, we determined the licensed technology was no longer relevant to the development of our product candidates and, therefore, we exercised our right to terminate the UC Agreement which became effective in the first quarter of 2021. No further obligations or financial commitments survive the termination.

10. Adimab Development and Option Agreement (the "Adimab Agreement")
In 2018, we entered into a development and option agreement with Adimab, LLC (“Adimab”) for the discovery and optimization of proprietary antibodies as potential therapeutic product candidates. Under the Adimab Agreement, we will select biological targets against which Adimab will use its proprietary platform technology to research and develop antibody proteins using a mutually agreed upon research plan. We are required to pay Adimab an agreed upon rate for its full-time employees during the discovery period while Adimab performs research on each target under the applicable research plan. We
15


have an exclusive option to obtain a worldwide, royalty-bearing, sublicensable license under Adimab platform patents and other Adimab technology to research, develop and commercialize up to 24 antibodies of our selection.
As of June 30, 2022, we have not exercised our option to further develop any antibody proteins. During the three and six months ended June 30, 2022, no research and development expenses under the Adimab Agreement were recognized relating to full-time employee costs. The Company recognized costs of $28,000 during the three and six months ended June 30, 2021.

11. Redeemable Convertible Preferred Stock
Under the Company’s Amended and Restated Certificate of Incorporation (“Certificate of Incorporation”), the Company is authorized to issue two classes of shares: preferred and common stock. The preferred stock may be issued in series, and the Company’s board of directors is authorized to determine the rights, preferences, and terms of each series. These rights preferences and terms could include dividend rights, conversion rights, voting rights, terms of redemptions, liquidation preferences and sinking fund terms. As of June 30, 2022 and December 31, 2021, the Company was authorized to issue 10,000,000 shares of preferred stock and there was no outstanding preferred stock as of June 30, 2022 and December 31, 2021.
12. Common Stock
As of June 30, 2022 and December 31, 2021, the Company was authorized to issue 300,000,000 shares of common stock at a par value of $0.0001 per share. The common stock has the following rights and privileges:
Voting
The holders of shares of common stock are entitled to one vote for each share of common stock held at any meeting of stockholders and at the time of any written action in lieu of a meeting.
Dividends
The holders of shares of common stock are entitled to receive dividends, when declared by the Company’s board of directors. Cash dividends may not be declared or paid to holders of shares of common stock until all unpaid dividends on preferred stock have been paid in accordance with their terms. No dividends have been declared or paid by the Company since its inception. The terms of the Oxford Loan Agreement restrict our ability to declare and pay dividends.
Liquidation
Subject to the preferential rights of holders of preferred stock then outstanding, the holders of shares of common stock are entitled to share ratably in the Company’s remaining assets available for distribution to its stockholders in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company.
Shares reserved for future issuance
As of
June 30,
2022
As of
December 31,
2021
Exercises of outstanding stock option awards5,420,264 3,620,180 
Shares of common stock available for future grants under the 2020 Equity Incentive Plan4,155,190 4,234,213 
Shares of common stock available for future issuance under the 2020 ESPP922,725 613,098 
Total shares reserved for future issuance10,498,179 8,467,491 
13. Equity Incentive Plans and Stock-Based Compensation
In August 2015, the Company's board of directors adopted the 2015 Equity Incentive Plan (as amended, the “2015 Plan”), which provides for the grant of incentive stock options, nonqualified stock options or other awards including stock appreciation rights and restricted stock awards to the Company’s employees, officers, directors, advisors, and consultants for the purchase of up to 1.5 million shares of the Company’s common stock. In July 2018 and January 2019, the 2015 Plan was amended to increase the number of shares reserved thereunder by 1.0 million and 0.4 million shares, respectively. In March 2020, the Company’s board of directors and stockholders voted to increase the number of shares reserved for issuance under the
16


2015 Plan by 1.4 million shares. In May 2020, the board of directors adopted the 2020 Stock Options and Incentive Plan (the “2020 Plan”). The 2015 Plan was suspended and no further grants may be issued under the 2015 Plan.
The 2020 Plan provides for the grant of incentive stock options, nonqualified stock options or other awards including stock appreciation rights, restricted stock awards and restricted stock units to the Company’s employees, officers, directors, advisors, and consultants for the purchase of up to 4.2 million shares of the Company’s common stock. In addition, to the extent that awards outstanding under the 2020 Plan or the 2015 Plan are cancelled, forfeited or held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, reacquired by the Company prior to vesting, satisfied without any issuance of stock, expire or are otherwise terminated (other than by exercise) subsequent to May 2020, the shares of common stock reserved for issuance pursuant to such awards will become available for issuance as shares of common stock under the 2020 Plan. The 2020 Plan provides that an additional number of shares will automatically be added to the shares authorized for issuance under the 2020 Plan on January 1 of each year beginning January 1, 2021. The number of shares added each January 1 will be equal to the lesser of: (i) 5% of the outstanding shares on the immediately preceding December 31 or (ii) such amount as determined by the administrator of the 2020 Plan, which is the compensation committee of the board of directors of the Company. As of June 30, 2022, 4.2 million shares remained available for issuance under the 2020 Plan.
Prior to the adoption of the 2020 Plan, options under the 2015 Plan could be granted for periods of up to 10 years and at prices no less than 100% of the estimated fair value of the shares on the date of grant as determined by our board of directors, provided, however, that the exercise price of an incentive stock option granted to a person owning (or deemed to own) stock possessing more than ten percent of the total combined voting power of all classes of stock of the Company or any affiliate of the Company (a "10% shareholder") could not be less than 110% of the estimated fair value of the shares on the date of grant and the option was not exercisable after the expiration of five years from the date of grant.
Options under the 2020 Plan may be granted for periods of up to 10 years and at prices no less than the market price of the Company’s common stock on the date of grant, provided, however, that the exercise price of an incentive stock option granted to a 10.0% shareholder shall not be less than 110.0% of the estimated fair value of the shares on the date of grant and the option is not exercisable after the expiration of five years from the date of grant.
Restricted Common Stock Awards
The Company granted restricted stock awards under the 2015 Plan. The purchase price of the restricted common stock awards was the estimated fair value as determined by the Company's board of directors at the issuance date. The shares vest from one to four years and vesting could be accelerated upon a change in control. A holder of an award may pay a total purchase price or a part of the purchase price for granted shares at any time during the vesting periods. Upon termination of employment, the Company has the right to repurchase any unvested restricted shares. The repurchase price for unvested shares of common stock will be the lower of (i) the fair market value on the date of repurchase or (ii) their original purchase price. During the vesting term, holders of restricted stock awards are deemed to be common stock shareholders and have dividends and voting rights.
The Company accounted for restricted stock awards as early exercised options and recognized a liability in other liabilities when cash was received for the purchase of shares of restricted stock. As shares of restricted stock vested, the Company reclassified the liability to common stock and additional paid in capital. As of June 30, 2022 and December 31, 2021, the Company recorded a liability included in accrued expenses and other liabilities of nil and $2,000, respectively.
There were no grants of restricted stock awards for the six months ended June 30, 2022 and 2021.
The following table summarizes restricted stock activity during the six months ended June 30, 2022:
  Number
of
Shares
Weighted-
Average
Grant Date
fair value
Outstanding and unvested, as of December 31, 202121,841 $2.16 
Issued $ 
Vested(21,841)$2.16 
Repurchases $ 
Outstanding and unvested, as of June 30, 2022 $ 
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The aggregate fair value of restricted stock awards vested during the six months ended June 30, 2022 was $47,000. Total intrinsic value of outstanding unvested restricted stock awards as of June 30, 2022 was nil.
Incentive Stock Options and Nonqualified Stock Options
Stock options issued under either the 2015 Plan or the 2020 Plan generally vest over four years and expire ten years from the date of grant. Certain options provide for accelerated vesting if there is a change in control, as defined in the respective plans.
The Company used Black-Scholes option pricing model to estimate stock-based compensation expense for stock option awards with the following assumptions:
  Six Months Ended
June 30,
 20222021
Expected volatility
73.78% - 75.17%
74.95% - 76.31%
Risk-free interest rate
1.64% - 3.39%
0.61% - 1.07%
Expected dividend
Expected term (in years)
5.33 - 6.08
5.44 - 6.08
Underlying common stock fair value
4.92 - 12.68
26.13 - 38.23
The Company granted 423,500 stock options under the 2020 Plan during the three months ended June 30, 2022.
A summary of option activity under the 2015 Plan and the 2020 Plan is as follows:
  Number
of
Options
Weighted-
Average Exercise
Price per Share
Weighted-
Average
Remaining
Contractual
Term (in Years)
Aggregate
Intrinsic
Value
Outstanding as of December 31, 20213,620,180 $14.56 8.25$16,735 
Granted2,114,870 $10.80 
Exercised(25,727)$4.07 
Forfeited(289,059)$13.19 
Outstanding as of June 30, 20225,420,264 $12.99 8.33$6,796 
Exercisable as of June 30, 20221,999,005 $11.48 7.28$4,666 
Vested and expected to vest as of June 30, 20225,420,264 $12.99 8.33$6,796 

Aggregate intrinsic value represents the difference between the fair value of the underlying common stock and the exercise price as of June 30, 2022. The weighted-average grant date fair value of options granted during the six months ended June 30, 2022 was $7.14 per share.
Stock-Based Compensation Expense
The following table presents the components and classification of stock-based compensation expense for the Company’s stock-based awards for the three and six months ended June 30, 2022 and 2021 (in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
Restricted stock awards$7 $51 $36 $102 
Stock options and ESPP3,396 2,229 6,898 4,756 
Total stock-based compensation expense$3,403 $2,280 $6,934 $4,858 
Research and development expenses$1,761 $868 $3,675 $2,038 
General and administrative expenses$1,642 $1,412 $3,259 $2,820 
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As of June 30, 2022, there were no unrecognized compensation costs related to restricted stock awards. As of June 30, 2022, there was $30.1 million of unrecognized compensation costs that is expected to be recognized over the weighted-average period of 2.75 years related to stock options.
2020 Employee Stock Purchase Plan
In June 2020, the Company adopted the Company's 2020 Employee Stock Purchase Plan (the "2020 ESPP"). The Company reserved 700,000 shares of common stock for future issuance under the plan. The 2020 ESPP provides that the number of shares reserved and available for issuance will automatically increase on January 1 of each calendar year, beginning January 1, 2021, by the least of (1) 1.0% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year, (2) 700,000 shares or (3) such lesser amount as determined by the administrator of the 2020 ESPP, which is the compensation committee of the board of directors of the Company.
Under the 2020 ESPP, eligible employees may purchase shares of our common stock through payroll deductions that cannot exceed 15% of each employee’s salary. The 2020 ESPP provides for a six-month offering period. At the end of the purchase period, eligible employees are permitted to purchase shares of common stock at the lower of 85% of the fair market value at the beginning of the offering period or 85% of the fair market value at the end of the purchase period, subject to tax limitations on the total value of the purchase. The 2020 ESPP is considered a compensatory plan, and the Company recorded $0.1 million in stock-based compensation expense for the three and six months ended June 30, 2022. There was $0.1 million and $0.4 million in stock-based compensation expense attributed to the 2020 ESPP for the three and six months ended June 30, 2021, respectively. During the six months ended June 30, 2022, 51,428 shares of common stock were issued under the 2020 ESPP with 922,725 shares remaining available for issuance under the 2020 ESPP. The Company used Black-Scholes option pricing model to estimate stock-based compensation expense for the 2020 ESPP with the following assumptions:
 Six Months Ended
June 30,
 20222021
Risk-free interest rate
0.60%
0.07%
Expected term of options (in years)
0.50
0.50
Expected stock price volatility
63.17%
89.51%
Expected dividends
14. Income Taxes
For the three and six months ended June 30, 2022 and 2021, the Company did not record an income tax provision. The Company will continue to maintain a 100% valuation allowance on total deferred tax assets. The Company believes it is more likely than not that the related deferred tax asset will not be realized. As a result, the Company’s effective tax rate will remain at 0% because there are no estimated or discrete items that would impact the tax provision.
15. Commitments and Contingencies
Purchase Commitments
The Company has contractual arrangements with research and development organizations and suppliers; however, these contracts are generally cancellable on 30 days’ notice and the obligations under these contracts are largely based on services performed.
License and Collaboration Agreements
Potential payments related to the Company’s license and research agreements, including milestone and royalty payments, are detailed in Notes 8 and 9.
16. Leases
In February 2018, the Company entered into a non-cancelable lease agreement (the “Lease”) for premises consisting of approximately 32,974 square feet located in South San Francisco, California (the “Premises”). The Company moved into the Premises in July 2018. The Premises is being used for the Company’s corporate headquarters and principal operating facility. The term of the Lease is eighty-four months, which commenced on July 1, 2018. Base rent was abated for the first two months of the lease term and thereafter is $0.2 million per month during the first year of the lease term, with specified annual increases thereafter. The Company paid a refundable security deposit of approximately $0.4 million, which is included in other non-
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current assets in the condensed balance sheets at June 30, 2022 and December 31, 2021. The Company has the right to extend the lease term by seven years upon written notice not more than twelve months nor less than nine months prior to the expiration of the original lease term, with monthly payments equal to the “fair rental value” as defined in the Lease. The exercise of lease renewal options is at the sole discretion of the Company and is not included in the right-of-use (ROU) asset and lease liability as it is not reasonably certain of exercise. This lease does not contain material variable rent payments, residual value guarantees, covenants, or other restrictions. The Company also enters into leases for equipment.
For each of the three months ended June 30, 2022 and 2021, the Company recognized expenses associated with the operating leases of $0.6 million. For the six months ended June 30, 2022 and 2021, the Company recognized expenses associated with the operating leases of $1.1 million and $1.2 million, respectively. Additionally, the Company incurred variable lease costs of $0.2 million and $0.3 million, and $0.3 million and $0.5 million, for the three and six months ended June 30, 2022 and 2021, respectively, which is comprised primarily of the Company's proportionate share of operating expenses, property taxes, and insurance. Short-term lease expense and variable lease payments recorded in operating expenses were immaterial for the three and six months ended June 30, 2022. Cash paid for amounts included in the measurement of operating lease liabilities was $1.2 million for the six months ended June 30, 2022 and 2021.
Maturities of the Company's operating lease liability as of June 30, 2022 were as follows:
Quarter ending June 30, 2022:Operating Lease
2022 (remainder of the year)$1,237 
20232,413 
20242,365 
20251,203 
2026 
Total lease payments$7,218 
Less: Present value discount769 
Total operating lease liabilities$6,449 
The weighted-average remaining lease terms and discount rates related to the Company's operating leases were as follows:
As of June 30, 2022
Weighted-average remaining lease term (in years)2.90
Weighted-average discount rate7.9%
17. Related Party Transactions
In June 2022 and 2021, the Company granted 15,000 and 26,572 stock options with a grant date fair value of $0.1 million and $0.5 million to non-employee directors on the Company's board of directors with an affiliation to Third Rock Ventures. The shares of common stock subject to these options vest 25% on the first day of each calendar quarter for three quarters with the final vest date being the earlier of (i) the one-year anniversary of the grant date or (ii) the next Annual Meeting of Stockholders. In March 2020, the Company granted 26,573 stock options with a grant date fair value of $0.1 million to a partner at Third Rock Ventures, who is also serving as a non-employee director on the Company’s board of directors. The shares of common stock subject to these options vest 1/12th on the last day of each calendar quarter over a three-year period and commenced vesting upon completion of our IPO. In order to vest, the stockholders must be providing continuous service to the Company through such vesting date. See Note 13 for additional information.
18. Defined Contribution Plan
The Company sponsors a defined contribution plan under Section 401(k) of the Internal Revenue Code covering substantially all full-time U.S. employees. Employee contributions are voluntary and are determined on an individual basis subject to the maximum allowable under federal tax regulations. The Company made contributions to the plan of $0.2 million for the three months ended June 30, 2022 and 2021, and $0.4 million for the six months ended June 30, 2022 and 2021.
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19. Net Loss Per Share Attributable to Common Stockholders
The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net (loss) per share attributable to common stockholders for the periods presented, because including them would have been antidilutive:
Six Months Ended June 30,
20222021
Options to purchase common stock5,420,264 3,842,588 
Restricted stock awards granted and not purchased 4,195 
Unvested restricted shares 66,046 
Total5,420,264 3,912,829 
A reconciliation of the numerator and denominator used in the calculation of the basic and diluted net loss per share attributable to common stockholders is as follows (in thousands, except share and per share amounts):
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Net loss per share:    
Net loss$(29,546)$(22,831)$(57,646)$(45,687)
Net loss attributable to common stockholders$(29,546)$(22,831)$(57,646)$(45,687)
Weighted-average common shares outstanding used to calculate net loss per share attributable to common stockholders:
Basic36,173,135 35,746,922 36,144,944 35,726,393 
Diluted36,173,135 35,746,922 36,144,944 35,726,393 
Net loss per share attributable to common stockholders:
Basic$(0.82)$(0.64)$(1.59)$(1.28)
Diluted$(0.82)$(0.64)$(1.59)$(1.28)


20. Subsequent Events
On July 15, 2022, the Company completed a public offering of 12,432,432 shares of common stock, including the exercise in full of the underwriters' option to purchase 1,621,621 additional shares of common stock. The shares were offered at a price to the public of $18.50 per share, resulting in aggregate proceeds of approximately $215.7 million, net of underwriting discounts, commissions and offering expenses.
Subsequent to June 30, 2022, the Company initiated a retention award to employees consisting of 525,825 Restricted Stock Units (RSUs) with a 2 year vesting term. Additionally, senior management received a Performance RSU (PRSU) grant whereby the number of shares to vest is based on a target of 709,064 and will be increased or decreased based upon the Company's total shareholder return as measured against a relevant market index and according to the achievement of multiple clinical development milestones over the term of the award concluding in the second quarter of 2024. The minimum and maximum number of PRSUs to vest is 0% and 200% of target, respectively.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis should be read in conjunction with our condensed financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q, or this Report, as well as our audited financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the Securities and Exchange Commission, or SEC. This discussion and analysis contains forward-looking statements based upon current beliefs, plans and expectations that involve risks, uncertainties and assumptions, such as statements regarding our plans, objectives, expectations, intention, beliefs and projections. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth in the section titled “Risk Factors” under Part II, Item 1A of this Report and under Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potentially,” “predict,” “should,” “will” or the negative of these terms or other similar expressions.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate we have conducted exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
Overview
We are a clinical stage biopharmaceutical company focused on discovering and developing novel therapies for the treatment of fibrosis and related diseases. Our initial focus is on treating fibrosis by inhibiting integrin-mediated activation of TGF-β. We have applied our deep understanding of fibrosis biology, along with our medicinal chemistry and translational medicine expertise to develop a set of proprietary tools designed to discover and de-risk product candidates quickly and efficiently. Our wholly owned lead product candidate, PLN-74809, is an oral, small-molecule, dual selective inhibitor of αvß6 and αvß1 integrins that we are developing for the treatment of idiopathic pulmonary fibrosis, or IPF, and primary sclerosing cholangitis, or PSC. Our development of PLN-74809 in both IPF and PSC continues to progress as described in the "Second Quarter and Recent Highlights" section below.
Our second product candidate, PLN-1474, is a small-molecule selective inhibitor of αvß1 for the treatment of liver fibrosis associated with nonalcoholic steatohepatitis, or NASH, which we have partnered with Novartis. PLN-1474 successfully completed a Phase 1 SAD/MAD trial in March 2021, and the Investigational New Drug, or IND, application was transferred to Novartis in the first quarter of 2021. Novartis is responsible for all PLN-1474 development, manufacturing and commercialization activities and we earn research and development services revenue in supporting certain aspects of the development plan.
In addition to our clinical programs, we currently have preclinical integrin-based programs targeting oncology and muscular dystrophies.
Second Quarter and Recent Highlights
PLN-74809 Highlights
INTEGRIS-IPF Phase 2a trial results showed PLN-74809 was well tolerated with dose-dependent treatment effects on forced vital capacity (FVC) and quantitative lung fibrosis (QLF) in patients with idiopathic pulmonary fibrosis (IPF). Exploratory endpoints a showed a dose-dependent treatment effect on FVC and QLF versus placebo in all PLN-74809 dose groups, both with and without standard of care therapy. In addition, a dose-dependent reduction in the proportion of patients with percent-predicted FVC (FVCpp) decline of ≥ 10%, a risk factor associated with increased mortality in IPF patients, was observed across all treatment groups.
INTEGRIS-IPF Phase 2a trial of PLN-74809 at 320 mg completed enrollment in patients with IPF. Enrollment is complete in the randomized, double-blind, placebo-controlled trial evaluating PLN-74809 at a once daily dose of 320 mg administered for at least six months and up to 48 weeks in approximately 28 patients with IPF. The trial will evaluate primary and secondary endpoints of safety, tolerability, and pharmacokinetics. Exploratory efficacy endpoints will include effect on FVC and QLF imaging as well as biomarkers. Interim 12-week data is anticipated in early 2023.
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INTEGRIS-PSC Phase 2a data anticipated in the first half of 2023. This 12-week randomized, dose-ranging, double-blind, placebo-controlled trial is evaluating the safety, tolerability, and pharmacokinetics of PLN-74809 in primary sclerosing cholangitis (PSC) patients. The trial is also evaluating exploratory endpoints including fibrosis biomarkers such as PRO-C3 and ELF, changes in ALP, and liver imaging. Topline data from this trial is expected in the first half of 2023.
FDA Fast Track designation received for PLN-74809 for the treatment of PSC. FDA’s Fast Track designation is intended to facilitate and expedite the development and review of new drugs to treat serious or life-threatening conditions. The benefits of Fast Track designation include opportunities for frequent meetings with the FDA to discuss trial design, development plans, and data needed to support drug approval, as well as the ability to submit a New Drug Application (NDA) on a rolling basis, and eligibility for priority review, if relevant criteria are met.
Early-Stage Development Programs
Advancement of integrin target in fibrosis under strategic collaboration. A fibrosis-directed integrin target moved into development as part of Pliant’s 2019 research and development collaboration with Novartis. Pliant earned a $4.0 million milestone payment and research funding in support of the development work.
Oncology and muscular dystrophy programs progressing through Investigational New Drug (IND) enabling studies. IND application submissions for both programs expected by the end of 2022.
Corporate
Underwritten public offering raised approximately $215.7 million in net proceeds. In July 2022, the Company closed a public offering of $230.0 million of common stock including the underwriter’s exercise in full of their overallotment option to support development of ongoing and future preclinical and clinical programs including PLN-74809.
Loan facility agreement with Oxford Finance LLC provides up to $100 million of non-dilutive financing. The agreement provides support for the continued clinical development of PLN-74809 in the lead indications of IPF and PSC. The Company drew $10.0 million at closing of an initial $25.0 million tranche. Following the achievement of a development milestone, the Company now has access to the second $25.0 million tranche.

Since inception, we have had significant operating losses. Our net loss was $29.5 million and $57.6 million for the three and six months ended June 30, 2022, respectively. As of June 30, 2022, we had an accumulated deficit of $272.7 million and cash, cash equivalents and short-term investments of $163.6 million. We expect to continue to incur net losses for the foreseeable future, and we expect our research and development expenses, general and administrative expenses, and capital expenditures will increase in connection with our ongoing activities, as we:
perform research and development activities to identify and develop product candidates;
advance product candidates into and through clinical development;
require the manufacture of supplies to support research and development, preclinical studies and clinical trials;
seek regulatory approvals for any product candidates that successfully complete clinical trials;
expand our operational, financial and management systems and increase personnel to support our clinical development, manufacturing and commercialization efforts and our operations as a public company;
maintain, expand and protect our intellectual property portfolio; and
invest in or in-license other technologies or product candidates.
Components of Operations
Revenue
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We have not generated any revenue from product sales and do not expect to do so in the near future. Our revenue to date is derived from a Collaboration and License Agreement with Novartis (the "Novartis Agreement") that was executed in 2019. The Novartis Agreement is for the development and commercialization of PLN-1474 and up to three additional integrin research targets. Under the terms of the Novartis Agreement, we received an upfront license fee payment of $50.0 million for the worldwide, exclusive license to PLN-1474 and an additional $25.0 million upon first-patient dosed in our Phase 1 trial of PLN-1474 in the first quarter of 2020. In the second quarter of 2022 we recognized a $4.0 million target validation fee as Novartis exercised their right to opt-in to a research program and secured an exclusive license to compounds associated with an integrin research target. We are eligible to receive additional milestone payments of up to $387.0 million in total, if defined developmental, regulatory and commercialization milestones are achieved, and tiered royalties on a product-by-product basis based on annual nets sales of products. Additionally, Novartis is providing up to $20.0 million and up to $16.8 million in funding for research and development activities associated with PLN-1474 and integrin research targets, respectively. As of June 30, 2022, we estimate an additional $2.3 million of aggregate research and development funding will be utilized over the effective term of the agreement.
Operating Expenses
Research and Development
Our research and development expenses consist of expenses incurred in connection with the development of our product candidates. Research and development expenses include:
employee-related expenses, which include salaries, benefits and stock-based compensation for our research and development personnel;
expenses incurred under agreements with third-party contract organizations for pre-clinical studies, clinical trials and consultants that conduct research and development activities on our behalf;
costs associated with the manufacture of supplies to support research and development, preclinical studies and clinical trials;
depreciation of laboratory equipment and costs of equipment and supplies;
costs associated with technology and intellectual property licenses; and
facilities and other allocated expenses, which include expenses for rent and other facility related costs and other supplies.
General and Administrative
Our general and administrative expenses consist primarily of salaries, benefits and stock-based compensation for our general and administrative personnel, allocated facilities costs, insurance and other expenses for outside professional services, including legal, marketing, investor relations, human resource and accounting services.
Interest and Other Income (Expense), net
Our interest and other income (expense), net consists of interest income earned on cash and cash equivalents, money market funds and short-term investments, realized gains and losses on investments and interest expense from a term loan entered into under our Oxford Loan Agreement.
Financial Operations Overview
Comparison of the three months ended June 30, 2022 and 2021 (in thousands)
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Three Months Ended June 30, 
 20222021$ Change
Revenue$4,989 $1,789 $3,200 
Operating expenses:
Research and development(26,335)(19,218)