0000950170-23-021784 | 10-Q | XBRL Viewer

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Other Balance Sheet Details - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Balance Sheet Related Disclosures [Abstract]
Accrued external research and development costs	$ 11,638	$ 3,510
Accrued payroll and payroll-related costs	1,657	4,018
Other	4,117	682
Total accrued expenses	$ 17,412	$ 8,210

Condensed Consolidated Statements of Operations and Comprehensive Loss (Parenthetical) (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Statement [Abstract]
Related party expenses	$ 168	$ 1,422
General and administrative, related party	3	26
Interest expense, related party	0	529
Change in fair value of convertible promissory notes, related party	$ 0	$ 4,378

- Definition

Direct costs arising from transactions with related parties who are not affiliates or joint Ventures. These costs are categorized as cost of goods sold.

+ References

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+ Details

Stockholders' Equity - Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total	$ 2,642	$ 272
Research and Development
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total	1,276	201
General and Administrative
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total	$ 1,366	$ 71

Convertible Promissory Notes and Long-Term Debt (Tables)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Schedule of Term Loan

The Company’s Term Loan consists of the following (in thousands):


	March 31, 2023
Long-term debt	$	15,000
Accumulated PIK interest		181
Total principal (including PIK interest)		15,181
Unamortized debt discount		(278	)
Long-term debt, net of debt discount	$	14,903

Schedule of Future Minimum Principal and Interest Payments

Future minimum principal and interest payments, including the final payment fee, as of March 31, 2023 are as follows (in thousands):


	March 31, 2023
Years ending December 31:
2023	$	709
2024	$	967
2025	$	5,063
2026	$	7,982
2027	$	7,405
Total principal payments, interest payments and final payment fee		22,126
Less: interest, PIK interest and final payment fee		(6,945	)
Long-term debt	$	15,181

- Definition

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

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+ Details

Stockholder's Equity (Tables)

3 Months Ended

Mar. 31, 2023

Stockholders Equity Note [Abstract]

Summary of Stock Option Activity

A summary of the Company’s stock option activity under the Plans is as follows (in thousands, except share and per share data):


	Number of Outstanding Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Balance at December 31, 2022		2,111,989		$	10.62		9.33	$	13,330
Granted		1,276,725			17.97
Exercised		(11,382	)		6.99
Cancelled		(4,000	)		6.99
Balance at March 31, 2023		3,373,332		$	13.38		9.21	$	12,973
Vested and expected to vest at March 31, 2023		3,373,332		$	13.38		9.21	$	12,973
Exercisable at March 31, 2023		363,259		$	7.58		8.60	$	3,255

Summary of Assumptions used in Black-Scholes Option Pricing Model to Determine Fair Value of Stock Option Grants

The assumptions used in the Black-Scholes option pricing model to determine the fair value of stock option grants were as follows:


	Three Months Ended March 31,
	2023	2022
Risk-free interest rate	1.9%–4.2%	1.9%–2.5%
Expected volatility	83.4%–94.3%	88.1%–89.5%
Expected term (in years)	5.3–6.1	5.5–6.1
Expected dividend yield	0%	0%

Schedule of Stock-based Compensation Expense

Stock-based compensation expense has been reported in the condensed consolidated statements of operations as follows (in thousands):


	Three Months Ended March 31,
	2023		2022
Research and development	$	1,276	$	201
General and administrative		1,366		71
Total	$	2,642	$	272

Summary of Unvested Shares

A summary of the Company’s unvested shares is as follows:


	Number of Unvested Shares
Balance at December 31, 2022		1,584,709
Shares granted		759,266
Shares forfeited		(51,954	)
Share vested		(174,568	)
Balance at March 31, 2023		2,117,453

Schedule of Common Stock Reserved for Future Issuance

Common stock reserved for future issuance consists of the following:


	March 31, 2023
Common stock options outstanding		3,373,332
Shares available for issuance under the Plans		4,134,339
Shares available for issuance under the ESPP		774,574
		8,282,245

Leases - Additional Information (Details) - USD ($)	1 Months Ended		3 Months Ended
Leases - Additional Information (Details) - USD ($)	Mar. 31, 2022	Aug. 31, 2021	Mar. 31, 2023	Mar. 31, 2022
Lessee, Lease, Description [Line Items]
Increase in operating lease liability			$ 1,409,000	$ (9,000)
Operating lease expense			$ 779,000	$ 0
Switzerland
Lessee, Lease, Description [Line Items]
Operating lease term		5 years
Operating lease option to extend			The Company has an option to extend the lease for a period of five years which the Company is not reasonably certain to exercise.
Operating lease, existence of option to extend [true false]		true
Operating lease renewal term		5 years
Boston, Massachusetts
Lessee, Lease, Description [Line Items]
Operating lease option to extend			an option for the Company to extend the lease for a period of five years
Operating lease, existence of option to extend [true false]	true
Operating lease renewal term			5 years
Increase in operating lease liability			$ 1,900,000
Maximum lessee operating lease tenant improvement allowances for reimbursement cost			6,300,000
Lease incentive			6,300,000
Irrevocable standby letter of credit secured by restricted cash amount			$ 1,600,000

Leases - Schedule of Future Minimum Noncancelable Operating Lease Payments (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Leases [Abstract]
2023	$ 2,613
2024	3,584
2025	3,688
2026	3,784
2027	3,860
Thereafter	21,075
Total undiscounted operating lease payments	38,604
Present value adjustment	(11,113)
Tenant improvement reimbursements	(4,476)
Operating lease liability	23,015
Less current portion of operating lease liability	38	$ 37
Operating lease liability, net of current portion	$ 22,977	$ 21,569

Leases - Schedule of Cash Paid for Amounts Included in the Measurement of Lease Liabilities (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Leases [Abstract]
Cash paid for amounts included in the measurement of operating lease liabilities (operating cash flows)	$ 871

Summary of Significant Accounting Policies - Schedule of Potential Dilutive Securities Not Included in the Calculation of Diluted Net Loss Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount	5,510,787	9,401,519
Common Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount	3,373,332	1,190,148
Common Stock Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount		5,883,500
Unvested common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount	2,117,453	2,327,871
ESPP shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount	20,002

Stockholders' Equity - Schedule of Common Stock Reserved for Future Issuance (Details)	Mar. 31, 2023 shares
Class Of Stock [Line Items]
Common stock reserved for future issuance	8,282,245
Common Stock Options
Class Of Stock [Line Items]
Common stock reserved for future issuance	3,373,332
Shares Available for Issuance Under the 2021 Plan
Class Of Stock [Line Items]
Common stock reserved for future issuance	4,134,339
Shares available for issuance under the ESPP
Class Of Stock [Line Items]
Common stock reserved for future issuance	774,574

Other Balance Sheet Details - Schedule of Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Balance Sheet Related Disclosures [Abstract]
Cash and cash equivalents	$ 260,542	$ 279,401
Restricted cash	1,631	1,631
Total cash, cash equivalents and restricted cash	$ 262,173	$ 281,032	$ 111,252	$ 124,566

Stockholders' Equity - Summary of Stock Option Activity (Details) - Plans - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of outstanding options, Beginning balance	2,111,989
Number of outstanding options, Granted	1,276,725
Number of outstanding options, Exercised	(11,382)
Number of outstanding options, Cancelled	(4,000)
Number of outstanding options, Ending Balance	3,373,332	2,111,989
Number of outstanding options, Vested and expected to vest at March 31, 2023	3,373,332
Number of outstanding options, Exercisable at March 31, 2023	363,259
Weighted average exercise price, Beginning balance	$ 10.62
Weighted average exercise price, Granted	17.97
Weighted average exercise price, Exercised	6.99
Weighted average exercise price, Cancelled	6.99
Weighted average exercise price, Ending balance	13.38	$ 10.62
Weighted average exercise price, Vested and expected to vest at March 31, 2023	13.38
Weighted average exercise price, Exercisable at March 31, 2023	$ 7.58
Weighted-average remaining contractual term (in years)	9 years 2 months 15 days	9 years 3 months 29 days
Weighted-average remaining contractual term (in years), Vested and expected to vest at March 31, 2023	9 years 2 months 15 days
Weighted-average remaining contractual term (in years) Exercisable at March 31, 2023	8 years 7 months 6 days
Aggregate intrinsic value	$ 12,973	$ 13,330
Aggregate intrinsic value, Vested and expected to vest at March 31, 2023	12,973
Aggregate intrinsic value, Exercisable at March 31, 2023	$ 3,255

Convertible Promissory Notes and Long-Term Debt - Additional Information (Details) - USD ($)			3 Months Ended		12 Months Ended
	Apr. 18, 2022	Aug. 31, 2021	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2021
Convertible Promissory Notes [Line Items]
Change in fair value of convertible promissory notes				$ 17,073,000
Debt instrument, carrying amount			$ 15,000,000
PIK interest			94,000
Amortization of debt discount			$ 126,000
Minimum
Convertible Promissory Notes [Line Items]
Notes issuance, maturity period			12 months
Maximum
Convertible Promissory Notes [Line Items]
Notes issuance, maturity period			18 months
Term Loan
Convertible Promissory Notes [Line Items]
Interest expense			$ 400,000
Debt instrument, accretion of final payment fee			100,000
PIK interest			100,000
Debt instrument, coupon interest			$ 200,000
Term Loan \| Loan Agreement
Convertible Promissory Notes [Line Items]
Debt instrument, interest rate	4.55%		6.05%
Debt instrument, carrying amount	$ 75,000,000.0
Debt instrument, minimum draw amount	$ 5,000,000.0
Debt instrument, basis spread on variable rate	5.00%
Debt instrument, interest rate per annum	2.85%
Debt instrument, payment terms	The monthly payments consist of interest-only through June 1, 2025 or, if prior to April 30, 2025, (x) the conditions to Term Loan 3 have been satisfied and (y) the Company has reasonably determined that (i) the HIL-214 Vaccine Trial has achieved the protocol-specified primary efficacy endpoint and (ii) HIL-214 has demonstrated acceptable safety results in the HIL-214 Vaccine Trial, and, as a result, the Company supports the initiation of a Phase 3 registrational trial as the next immediate step in the development of HIL-214, in each case subject to reasonable verification by Hercules, through June 1, 2026. Subsequent to the interest-only period, the Term Loans will be payable in equal monthly installments of principal, plus accrued and unpaid interest, through the maturity date of May 1, 2027.
Debt instrument, maturity date	May 01, 2027
Debt instrument, final payment fee	$ 2,100,000		$ 2,100,000
Percentage of original principal amount payable	7.15%
Percentage of interest upon event of default	4.00%
Term Loan \| Loan Agreement \| Maximum
Convertible Promissory Notes [Line Items]
Percentage of prepayment fee on outstanding principal balance	2.00%
Term Loan \| Prime Rate \| Loan Agreement
Convertible Promissory Notes [Line Items]
Debt instrument, basis spread on variable rate	1.05%
Term Loan 1 \| Loan Agreement
Convertible Promissory Notes [Line Items]
Debt instrument, amount borrowed	$ 15,000,000.0
Frazier
Convertible Promissory Notes [Line Items]
Aggregate amount			$ 8,500,000
Frazier \| Minimum
Convertible Promissory Notes [Line Items]
Bearing interest			0.12%
Frazier \| Maximum
Convertible Promissory Notes [Line Items]
Bearing interest			2.52%
2019 Frazier Notes
Convertible Promissory Notes [Line Items]
Aggregate amount			$ 900,000
2020 Frazier Notes
Convertible Promissory Notes [Line Items]
Aggregate amount			1,300,000
2021 Frazier Notes
Convertible Promissory Notes [Line Items]
Aggregate amount			$ 6,300,000
August 2021 Notes \| Common Stock
Convertible Promissory Notes [Line Items]
Debt instrument conversion, common stock shares issued				10,672,138	10,672,138
August 2021 Notes \| Frazier Life Sciences X, L.P. \| Common Stock
Convertible Promissory Notes [Line Items]
Debt instrument conversion, common stock shares issued				2,736,234
August 2021 Notes \| Note Purchase Agreement
Convertible Promissory Notes [Line Items]
Aggregate amount		$ 139,520,000
Debt instrument, interest rate		6.00%
Debt instrument, frequency of periodic payment			annually
Interest expense				$ 2,100,000
Convertible promissory notes, outstanding principal balance				139,500,000
Change in fair value of convertible promissory notes				$ 17,100,000
August 2021 Notes \| Note Purchase Agreement \| New Investors
Convertible Promissory Notes [Line Items]
Aggregate amount		$ 103,750,000
August 2021 Notes \| Note Purchase Agreement \| Frazier Life Sciences X, L.P.
Convertible Promissory Notes [Line Items]
Aggregate amount		10,770,000
Cash proceeds from issuance of convertible notes		$ 25,000,000.0
Term Loan 1 Borrowing through June 30, 2023 \| Term Loan 1 \| Loan Agreement \| Maximum
Convertible Promissory Notes [Line Items]
Debt instrument, available credit under loan agreement			$ 15,000,000.0
Term Loan 2 Borrowing through June 30, 2023 \| Term Loan 2 \| Loan Agreement \| Maximum
Convertible Promissory Notes [Line Items]
Debt instrument, available credit under loan agreement			20,000,000.0
Term Loan 3 Borrowing through March 31, 2024 \| Term Loan 3 \| Loan Agreement \| Maximum
Convertible Promissory Notes [Line Items]
Debt instrument, available credit under loan agreement			$ 25,000,000.0

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Schedule of Potentially Dilutive Securities Not Included in the Calculation of Diluted Net Loss Per Share

Potentially dilutive securities not included in the calculation of diluted net loss per share, because to do so would be anti-dilutive, are as follows (in common stock equivalent shares):


	March 31,
	2023		2022
Common stock options		3,373,332		1,190,148
Common stock warrants		—		5,883,500
Unvested common stock		2,117,453		2,327,871
ESPP shares		20,002		—
Total potentially dilutive shares		5,510,787		9,401,519

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 260,542	$ 279,401
Prepaid expenses and other current assets	9,317	11,212
Total current assets	269,859	290,613
Property and equipment, net	10,450	5,586
Operating lease right-of-use assets	18,999	19,359
Restricted cash	1,631	1,631
Other assets	22	22
Total assets	300,961	317,211
Current liabilities:
Accounts payable (includes related party amounts of $0 and $141,respectively)	1,744	4,744
Accrued expenses (includes related party amounts of $312 and $140,respectively)	17,412	8,210
Accrued interest	79	55
Current portion of operating lease liability	38	37
Total current liabilities	19,273	13,046
Operating lease liability, net of current portion	22,977	21,569
Long-term debt, net of debt discount	14,903	14,792
Other long-term liabilities	747	575
Total liabilities	57,900	49,982
Commitments and contingencies (Note 6)
Stockholders' equity:
Preferred stock, $0.0001 par value; authorized shares- 50,000,000 at March 31, 2023 and December 31, 2022; no shares issued and outstanding at March 31, 2023 and December 31, 2022
Common stock, $0.0001 par value; authorized shares- 500,000,000 at March 31, 2023 and December 31, 2022; issued shares- 39,200,174 and 39,240,746 at March 31, 2023 and December 31, 2022, respectively; outstanding shares- 37,841,987 and 37,656,037 at March 31, 2023 and December 31, 2022, respectively	4	4
Additional paid-in capital	535,221	532,499
Accumulated other comprehensive loss	(282)	(281)
Accumulated deficit	(291,882)	(264,993)
Total stockholders' equity	243,061	267,229
Total liabilities and stockholders' equity	$ 300,961	$ 317,211

Other Balance Sheet Details - Summary of Components of Property and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Total property and equipment, at cost	$ 10,451	$ 5,587
Less accumulated depreciation	1	1
Property, Plant and Equipment, Net, Total	10,450	5,586
Furniture and equipment
Property, Plant and Equipment [Line Items]
Total property and equipment, at cost	10	11
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total property and equipment, at cost	378	378
Construction in progress
Property, Plant and Equipment [Line Items]
Total property and equipment, at cost	$ 10,063	$ 5,198

Condensed Consolidated Statements of Stockholders' Deficit (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit
Beginning Balance at Dec. 31, 2021	$ (100,757)	$ 1	$ 4,426		$ (105,184)
Beginning Balance, Shares at Dec. 31, 2021		6,599,886
Vesting of restricted shares, Shares		297,564
Stock - based compensation	272		272
Net loss	(67,887)				(67,887)
Ending Balance at Mar. 31, 2022	(168,372)	$ 1	4,698		(173,071)
Ending Balance, Shares at Mar. 31, 2022		6,897,450
Beginning Balance at Dec. 31, 2022	267,229	$ 4	532,499	$ (281)	(264,993)
Beginning Balance, Shares at Dec. 31, 2022		37,656,037
Vesting of restricted shares, Shares		174,568
Stock - based compensation	2,642		2,642
Exercise of common stock options	80		80
Exercise of common stock options, Shares		11,382
Pension and other postemployment benefits	(1)			(1)
Net loss	(26,889)				(26,889)
Ending Balance at Mar. 31, 2023	$ 243,061	$ 4	$ 535,221	$ (282)	$ (291,882)
Ending Balance, Shares at Mar. 31, 2023		37,841,987

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

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+ Details

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The Company's financial statements include the accounts of HilleVax GmbH, a wholly-owned subsidiary formed in Zurich, Switzerland. The functional currency of both the Company and HilleVax GmbH is the U.S. dollar. The Company’s assets

and liabilities that are not denominated in the functional currency are remeasured into U.S. dollars at foreign currency exchange rates in effect at the balance sheet date except for nonmonetary assets, which are remeasured at historical foreign currency exchange rates in effect at the date of transaction. Net realized and unrealized gains and losses from foreign currency transactions and remeasurement are reported in other income (expense), in the condensed consolidated statements of operations and were not material for the periods presented. All intercompany transactions have been eliminated in consolidation.

Unaudited Interim Financial Information

The unaudited condensed consolidated financial statements as of March 31, 2023, and for the three months ended March 31, 2023 and 2022, have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”), and with U.S. generally accepted accounting principles (“GAAP”) applicable to interim financial statements. These unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s audited financial statements and include all adjustments, consisting of only normal recurring accruals, which in the opinion of management are necessary to present fairly the Company’s financial position as of the interim date and results of operations for the interim periods presented. Interim results are not necessarily indicative of results for a full year or future periods. The condensed consolidated balance sheet data as of December 31, 2022 was derived from the Company’s audited financial statements but does not include all disclosures required by GAAP. These unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 17, 2023.

Use of Estimates

The preparation of the Company’s unaudited condensed consolidated financial statements requires it to make estimates and assumptions that impact the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in the Company’s condensed consolidated financial statements and accompanying notes. The most significant estimates in the Company’s unaudited condensed consolidated financial statements relate to accruals for research and development expenses, and the valuation of convertible promissory notes, warrant liabilities and various other equity instruments. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results could differ materially from those estimates and assumptions.

Fair Value Option

As permitted under Accounting Standards Codification (“ASC”) 825, Financial Instruments, (“ASC 825”), the Company has elected the fair value option to account for its convertible promissory notes issued through May 2022, when the convertible promissory notes converted into equity in connection with the Company's IPO. In accordance with ASC 825, the Company recorded these convertible promissory notes at fair value with changes in fair value recorded in the condensed consolidated statements of operations. As a result of applying the fair value option, direct costs and fees related to the convertible promissory notes were recognized in earnings as incurred and not deferred.

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 non-recurring 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: Observable inputs such as quoted prices in active markets.

Level 2: Inputs, other than the quoted prices in active markets that are observable either directly or indirectly.

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The carrying amounts of the Company’s financial instruments, including cash, cash equivalents and restricted cash, classified within the Level 1 designation discussed above, prepaid expenses and other current assets, accounts payable, and accrued liabilities, approximate fair value due to their short maturities. The estimated fair value of the Company’s long-term debt approximated the carrying amount given its floating interest rate basis.

The Company has no financial assets measured at fair value on a recurring basis. None of the Company’s non-financial assets or liabilities are recorded at fair value on a non-recurring basis. No transfers between levels have occurred during the periods presented.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. Cash and cash equivalents include cash in readily available checking accounts and money market funds.

Restricted Cash

Restricted cash consists of a money market account securing a standby letter of credit issued in connection with the Company’s Boston Lease (as defined and described in Note 4).

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents and restricted cash. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held.

Property and Equipment, Net

Property and equipment are stated at cost and depreciated on a straight-line basis over the estimated useful life of the related assets (generally 3 years). Repairs and maintenance costs are charged to expense as incurred.

Leases

At the inception of a contractual arrangement, the Company determines whether the contract contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. Lease terms are determined at the commencement date by considering whether renewal options and termination options are reasonably assured of exercise. For its long-term operating leases, the Company recognizes a lease liability and a right-of-use (“ROU”) asset on its balance sheet and recognizes lease expense on a straight-line basis over the lease term. The lease liability is determined as the present value of future lease payments, reduced by any reimbursements for tenant improvements, using the discount rate implicit in the lease or, if the implicit rate is not readily determinable, an estimate of the Company’s incremental borrowing rate. The ROU asset is based on the lease liability, adjusted for any prepaid or deferred rent, and reduced by any reimbursements for tenant improvements. The Company aggregates all lease and non-lease components for each class of underlying assets into a single lease component and variable charges for common area maintenance and other variable costs are recognized as expense as incurred. The Company has elected to not recognize a lease liability or ROU asset in connection with short-term operating leases and recognizes lease expense for short-term operating leases on a straight-line basis over the lease term. The Company does not have any financing leases.

Impairment of Long-Lived Assets

The Company reviews long-lived assets, such as property and equipment, for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. Fair value would be assessed using discounted cash flows or other appropriate measures of fair value. The Company has not recognized any impairment losses through March 31, 2023.

Research and Development Expenses and Accruals

All research and development costs are expensed in the period incurred and consist primarily of salaries, payroll taxes, employee benefits, stock-based compensation charges for those individuals involved in research and development efforts, external research and development costs incurred under agreements with contract research organizations and consultants to conduct and support the Company’s clinical trials of HIL-214.

The Company has entered into various research and development contracts with clinical research organizations, clinical manufacturing organizations and other companies. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and payments made in advance of performance are reflected in the accompanying balance sheets as prepaid expenses. The Company records accruals for estimated costs incurred for ongoing research and development activities. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the services, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates may be made in determining the prepaid or accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates.

In-Process Research and Development

The Company evaluates whether acquired intangible assets are a business under applicable accounting standards. Additionally, the Company evaluates whether the acquired assets have a future alternative use. Intangible assets that do not have future alternative use are considered acquired in-process research and development. When the acquired in-process research and development assets are not part of a business combination, the value of the consideration paid is expensed on the acquisition date.

Patent Costs

Costs related to filing and pursuing patent applications are recorded as general and administrative expenses and expensed as incurred since recoverability of such expenditures is uncertain.

Stock-Based Compensation

Stock-based compensation expense represents the cost of the grant date fair value of equity awards, primarily consisting of stock options and employee stock purchase rights, recognized on a straight-line basis over the requisite service period for stock options and over the respective offering period for employee stock purchase plan rights. The Company recognizes forfeitures as they occur.

Benefit plans

The Company has established a defined contribution savings plan for its employees in the United States under Section 401(k) of the Internal Revenue Code, and a defined benefits plan for its employees outside of the United States.

The defined benefits plan is valued by an independent actuary using the projected unit credit method. The liabilities correspond to the projected benefit obligations of which the discounted net present value is calculated based on years of employment, expected salary increase, and pension adjustments. The Company reviews its actuarial assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends. This plan is recognized under ASC 715, Compensation - Retirement Benefits.

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the condensed consolidated statements of operations in the period that includes the enactment date.

The Company recognizes net deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their net recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

The Company records uncertain tax positions on the basis of a two-step process whereby (i) management determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense in the condensed consolidated statements of operations. Any accrued interest and penalties are included within the related tax liability in the condensed consolidated balance sheets. The Company did not recognize any interest or penalties during the periods presented.

Comprehensive Loss

Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources. For the three months ended March 31, 2023, comprehensive loss included gains and losses on the Company's pension benefit obligation. For the three months ended March 31, 2022, the Company’s comprehensive loss was the same as its reported net loss.

Segment Reporting

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker in making decisions on how to allocate resources and assess performance. The Company views its operations and manages its business as one operating segment.

Net Loss Per Share

Basic net loss per share is computed by dividing the consolidated net loss by the weighted-average number of common shares outstanding for the period, without consideration for potentially dilutive securities. The Company has excluded weighted-average unvested shares of 1,492,789 shares and 2,476,653 shares from the basic weighted-average number of common shares outstanding for the three months ended March 31, 2023 and 2022, respectively. Diluted net loss per share is computed by dividing the consolidated net loss by the weighted-average number of common shares and dilutive common stock equivalents outstanding for the period determined using the treasury-stock and if-converted methods. Potentially dilutive common stock equivalents are comprised of unvested common stock, common stock options, contingently issuable shares under the Company's employee stock purchase plan, and common stock warrants. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding as inclusion of the potentially dilutive common stock equivalents would be antidilutive.

Potentially dilutive securities not included in the calculation of diluted net loss per share, because to do so would be anti-dilutive, are as follows (in common stock equivalent shares):


	March 31,
	2023		2022
Common stock options		3,373,332		1,190,148
Common stock warrants		—		5,883,500
Unvested common stock		2,117,453		2,327,871
ESPP shares		20,002		—
Total potentially dilutive shares		5,510,787		9,401,519

Emerging Growth Company Status

The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has irrevocably elected to avail itself of this exemption from new or revised accounting standards and, therefore, will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

Recently Adopted Accounting Standards

There were no recently adopted accounting standards which would have a material impact on the Company's financial statements.

Recently Issued Accounting Pronouncements

The Company assesses the adoption impacts of recently issued accounting standards by the Financial Accounting Standards Board or other standard setting bodies on the Company's condensed consolidated financial statements as well as material updates to previous assessments, if any. 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.

Convertible Promissory Notes and Long-Term Debt - Schedule of Term Loan (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Debt Disclosure [Abstract]
Long-term debt	$ 15,000
Accumulated PIK interest	181
Total principal (including PIK interest)	15,181
Unamortized debt discount	(278)
Long-term debt, net of debt discount	$ 14,903

- Definition

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

+ References + Details

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2023	May 09, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Entity Registrant Name	HILLEVAX, INC.
Entity Central Index Key	0001888012
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Small Business	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		39,200,174
Entity Interactive Data Current	Yes
Entity Current Reporting Status	Yes
Entity File Number	001-41365
Entity Tax Identification Number	85-0545060
Entity Address Address Line1	75 State Street
Entity Address, Address Line Two	Suite 100 - #9995
Entity Address City Or Town	Boston
Entity Address State Or Province	MA
Entity Address Postal Zip Code	02109
Entity Incorporation State Country Code	DE
City Area Code	617
Local Phone Number	213-5054
Title of each class	Common Stock, $0.0001 par value per share
Trading Symbol	HLVX
Name of each exchange on which registered	NASDAQ
Document Annual Report	true
Document Transition Report	false

Stockholders' Equity

3 Months Ended

Mar. 31, 2023

Stockholders Equity Note [Abstract]

Stockholders' Equity

8. Stockholders’ Equity

Initial Public Offering

On May 3, 2022, the Company completed its IPO whereby it sold 13,529,750 shares of common stock at a public offering price of $17.00 per share, for net proceeds of approximately $209.5 million, after deducting underwriting discounts, commissions and offering costs of approximately $20.5 million. In connection with the Company's IPO, the Company increased the number of authorized shares of the Company's common stock and preferred stock to 500,000,000 shares and 50,000,000 shares, respectively.

2021 Equity Incentive Plan

On February 8, 2021, the Company’s board of directors and stockholders approved and adopted the HilleVax, Inc. 2021 Equity Incentive Plan (the “2021 Plan”). The term of the 2021 Plan is ten years from the adoption date. Under the 2021 Plan, the Company may grant stock options, restricted stock, restricted stock units, and other stock-based awards to employees, directors or consultants of the Company and its subsidiaries. The stock options granted under the plan generally vest over a four-year period from the vesting commencement date. Upon the effectiveness of the 2022 Plan defined and described below, no further grants will be made under the 2021 Plan, and any outstanding awards granted under the 2021 Plan will remain subject to the terms of the 2021 Plan and applicable award agreements.

2022 Incentive Award Plan

In April 2022, the Company’s board of directors and stockholders approved the 2022 Incentive Award Plan (the “2022 Plan,” and together with the 2021 Plan, the "Plans") under which the Company may grant stock options, restricted stock, dividend equivalents, restricted stock units, stock appreciation rights, and other stock or cash-based awards to its employees, consultants and directors. The 2022 Plan became effective in connection with the Company’s IPO and will remain in effect until the tenth anniversary of its effective date, which will be April 28, 2032, unless earlier terminated by the Company’s board of directors. The number of shares of the Company's common stock initially available for issuance under awards granted pursuant to the 2022 Plan was the sum of (1) 4,900,000 shares of the Company’s common stock, plus (2) 216,849 shares remaining available for issuance under the 2021 Plan as of the effective date of the 2022 Plan, plus (3) any shares subject to outstanding awards under the 2021 Plan as of the effective date of the 2022 Plan that become available for issuance under the 2022 Plan thereafter in accordance with its terms. The number of shares initially available for issuance will be increased by an annual increase on January 1 of each calendar year ending in and including 2032, equal to the lesser of (1) 5% of the shares of common stock outstanding on the final day of the immediately preceding calendar year and (2) such smaller number of shares as determined by the Company’s board of directors. As of March 31, 2023, 7,127,599 shares were reserved for issuance under the 2022 Plan, of which 4,134,339 shares remained available for future issuance.

2022 Employee Stock Purchase Plan

In April 2022, the Company’s board of directors and stockholders approved the 2022 Employee Stock Purchase Plan (the “2022 ESPP”). The 2022 ESPP became effective in connection with the Company’s IPO. The 2022 ESPP permits eligible employees who elect to participate in an offering under the ESPP to have up to a specified percentage of their eligible earnings withheld, subject to certain limitations, to purchase shares of common stock pursuant to the 2022 ESPP. The price of common stock purchased under the 2022 ESPP is equal to 85% of the lower of the fair market value of the

common stock on the first trading day of the offering period or the relevant purchase date. A total of 410,000 shares of the Company’s common stock was initially reserved for issuance under the 2022 ESPP. In addition, the number of shares available for issuance under the 2022 ESPP will be annually increased on January 1 of each calendar year, ending in and including 2032, by an amount equal to the lesser of (1) 1% of the shares outstanding on the final day of the immediately preceding calendar year and (2) such smaller number of shares as is determined by the Company’s board of directors, provided that no more than 10,000,000 shares of the Company’s common stock may be issued under the 2022 ESPP. Stock-based compensation expense related to the ESPP for the three months ended March 31, 2023 was not material.

A summary of the Company’s stock option activity under the Plans is as follows (in thousands, except share and per share data):


	Number of Outstanding Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Balance at December 31, 2022		2,111,989		$	10.62		9.33	$	13,330
Granted		1,276,725			17.97
Exercised		(11,382	)		6.99
Cancelled		(4,000	)		6.99
Balance at March 31, 2023		3,373,332		$	13.38		9.21	$	12,973
Vested and expected to vest at March 31, 2023		3,373,332		$	13.38		9.21	$	12,973
Exercisable at March 31, 2023		363,259		$	7.58		8.60	$	3,255

Stock-Based Compensation Expense

The assumptions used in the Black-Scholes option pricing model to determine the fair value of stock option grants were as follows:


	Three Months Ended March 31,
	2023	2022
Risk-free interest rate	1.9%–4.2%	1.9%–2.5%
Expected volatility	83.4%–94.3%	88.1%–89.5%
Expected term (in years)	5.3–6.1	5.5–6.1
Expected dividend yield	0%	0%

Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of grant for zero coupon U.S. Treasury notes with maturities similar to the expected term of the awards.

Expected volatility. Given the Company's limited historical stock price volatility data, the expected volatility assumption is based on volatilities of a peer group of similar companies whose share prices are publicly available. The peer group was developed based on companies in the biotechnology industry. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available.

Expected term. The expected term represents the period of time that options are expected to be outstanding. Because the Company does not have historical exercise behavior, it determines the expected life assumption using the simplified method, for employees, which is an average of the contractual term of the option and its vesting period.

Expected dividend yield. The Company bases the expected dividend yield assumption on the fact that it has never paid cash dividends and has no present intention to pay cash dividends and, therefore, used an expected dividend yield of zero.

Stock-based compensation expense has been reported in the condensed consolidated statements of operations as follows (in thousands):


	Three Months Ended March 31,
	2023		2022
Research and development	$	1,276	$	201
General and administrative		1,366		71
Total	$	2,642	$	272

The weighted average grant date fair value per share of option grants for the three months ended March 31, 2023 and 2022 was $13.80 and $5.92, respectively. As of March 31, 2023, total unrecognized stock-based compensation cost related to stock options was approximately $29.4 million, which is expected to be recognized over a remaining weighted-average period of approximately 3.2 years.

A summary of the Company’s unvested shares is as follows:


	Number of Unvested Shares
Balance at December 31, 2022		1,584,709
Shares granted		759,266
Shares forfeited		(51,954	)
Share vested		(174,568	)
Balance at March 31, 2023		2,117,453

The Company issued shares of restricted common stock during the three months ended March 31, 2023, which consisted only of restricted stock units. The Company did not issue any shares of restricted common stock during the three months ended March 31, 2022. The weighted average grant date fair value per share of restricted common stock grants for the three months ended March 31, 2023 was $18.00. As of March 31, 2023, total unrecognized stock-based compensation cost related to restricted stock was approximately $13.1 million, which is expected to be recognized over a remaining weighted-average period of approximately 3.8 years. For accounting purposes, unvested shares of restricted common stock are not considered outstanding until they vest. As of March 31, 2023 and December 31, 2022, the Company had no material repurchase liability related to the unvested shares in the table above.

Common Stock Reserved for Future Issuance

Common stock reserved for future issuance consists of the following:


	March 31, 2023
Common stock options outstanding		3,373,332
Shares available for issuance under the Plans		4,134,339
Shares available for issuance under the ESPP		774,574
		8,282,245

- Definition

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

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+ Details

Subsequent Event

3 Months Ended

Mar. 31, 2023

Subsequent Events [Abstract]

Subsequent Event

9. Subsequent Event

On May 12, 2023, the Company entered into an At-the-Market Equity Offering Sales Agreement (the "Sales Agreement") with Stifel, Nicolaus & Company, Incorporated (the “Agent”), pursuant to which the Company may offer and sell shares of the Company’s common stock having an aggregate offering price of up to $100.0 million from time to time, 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. The Company is not obligated to sell, and the Agent is not obligated to buy or sell, any shares of common stock under the Sales Agreement.

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Preferred stock par value	$ 0.0001	$ 0.0001
Preferred stock shares authorized	50,000,000	50,000,000
Preferred stock shares issued	0	0
Preferred stock shares outstanding	0	0
Common stock par value	$ 0.0001	$ 0.0001
Common stock shares authorized	500,000,000	500,000,000
Common stock shares issued	39,200,174	39,240,746
Common stock shares outstanding	37,841,987	37,656,037
Accounts Payable
Related party amounts	$ 0	$ 141
Accrued Expenses
Related party amounts	$ 312	$ 140

Leases

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Leases

4. Leases

Operating Leases

In August 2021, the Company entered into a five-year noncancelable operating lease for a facility in Switzerland, which it determined was an operating lease at the inception of the lease contract. The lease commencement date occurred in September 2021 when the Company gained access to the facility. The Company is obligated to make monthly rental payments that periodically escalate during the lease term and is subject to additional charges for common area maintenance and other costs. The Company has an option to extend the lease for a period of five years which the Company is not reasonably certain to exercise.

In March 2022, the Company entered into a lease for office and laboratory space located in Boston, Massachusetts (the “Boston Lease”), which it determined was an operating lease at the inception of the lease contract. The Boston Lease commenced in April 2022 with base rental payments beginning in January 2023. The Boston Lease includes certain tenant improvement allowances for the reimbursement of up to $6.3 million of costs incurred by the Company, and an option for the Company to extend the lease for a period of five years, which the Company is not reasonably certain to exercise. The Company determined that it owns the leasehold improvements related to the Boston Lease and, as such, reflected the $6.3 million lease incentive as a reduction of the rental payments used to measure the operating lease liability, and, in turn, the operating lease right-of-use asset as of the lease commencement date in April 2022. Between the lease commencement date and March 31, 2023, the Company recorded increases of $1.9 million to the operating lease liability as and when such leasehold improvements were paid for by the landlord. The Company expects to receive all tenant improvement reimbursements during the year ending December 31, 2023. Under the terms of the Boston Lease, the Company provided the lessor with an irrevocable standby letter of credit secured by restricted cash in the amount of $1.6 million.

The following table summarizes operating lease expense for the three months ended March 31, 2023 (in thousands):


	Three Months Ended March 31,
	2023
Lease expense:
Operating lease expense	$	779

The Company incurred an immaterial amount of expense related to short-term leases and variable lease costs during the three months ended March 31, 2023. Operating lease expense was not material for the three months ended March 31, 2022.

The following table summarizes the lease term and discount rate for operating leases:


	Three Months Ended March 31,
	2023			2022
Other information:
Weighted-average remaining lease term		9.70			4.50
Weighted-average discount rate		7.4	%		6.0	%

As there was not an implicit rate within the leases, management estimated the incremental borrowing rate based on the rate of interest the Company would have to pay to borrow a similar amount on a collateralized basis over a similar term as well as by using a set of peer companies' incremental borrowing rates.

The following table summarizes the cash paid for amounts included in the measurement of lease liabilities (in thousands):


	March 31, 2023
Cash paid for amounts included in the measurement of operating lease liabilities (operating cash flows)	$	871

At March 31, 2023, the future minimum noncancelable operating lease payments were as follows (in thousands):


	March 31, 2023
Years ending December 31:
2023	$	2,613
2024		3,584
2025		3,688
2026		3,784
2027		3,860
Thereafter		21,075
Total undiscounted operating lease payments		38,604
Present value adjustment		(11,113	)
Tenant improvement reimbursements		(4,476	)
Operating lease liability		23,015
Less current portion of operating lease liability		38
Operating lease liability, net of current portion	$	22,977

Convertible Promissory Notes and Long-Term Debt

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Convertible Promissory Notes and Long-Term Debt

7. Convertible Promissory Notes and Long-Term Debt

Frazier Convertible Note Financings

During 2019, 2020 and 2021, the Company issued the Frazier Notes for an aggregate of $8.5 million bearing interest at per annum rates ranging from 0.12% to 2.52%. An aggregate of $0.9 million of the Frazier Notes were issued in April, May and September of 2019 (the “2019 Frazier Notes”), an aggregate of $1.3 million of the Frazier Notes were issued in March, August and October of 2020 (the “2020 Frazier Notes”) and an aggregate of $6.3 million of Frazier Notes were issued from April to July 2021 (the “2021 Frazier Notes”). The Frazier Notes were generally scheduled to mature 12 to 18 months from the date of issuance. The Company recorded changes in the fair value of the Frazier Notes in the condensed consolidated statements of operations. The Frazier Notes were exchanged for convertible promissory notes newly issued in connection with the August 2021 convertible note financing described below.

August 2021 Convertible Note Financing

On August 31, 2021, the Company entered into a note purchase agreement under which it issued the August 2021 Notes for an aggregate of $139.52 million. Of the August 2021 Notes, $103.75 million were issued to new investors, $25.0 million were issued to Frazier for cash and $10.77 million were issued to Frazier in exchange for the then outstanding principal and accrued interest on the Frazier Notes. The August 2021 Notes carried interest at a rate of 6% per annum, compounded annually. As of March 31, 2022, the outstanding principal balance of the August 2021 Notes was $139.5 million. The principal and accrued interest on the August 2021 Notes automatically converted into 10,672,138 shares of the Company's common stock immediately prior to the completion of the IPO. Of these shares, 2,736,234 were issued to Frazier. For the three months ended March 31, 2022, the Company recognized a $17.1 million change in fair value of convertible promissory notes and recognized $2.1 million of interest expense in connection with convertible promissory notes.

Long-Term Debt

The Company’s Term Loan consists of the following (in thousands):


	March 31, 2023
Long-term debt	$	15,000
Accumulated PIK interest		181
Total principal (including PIK interest)		15,181
Unamortized debt discount		(278	)
Long-term debt, net of debt discount	$	14,903

On April 18, 2022, the Company entered into a Loan and Security Agreement (“Loan Agreement”) with Hercules Capital, Inc. (“Hercules”), as administrative and collateral agent, and the lenders party thereto¸ providing for term loans (“Term Loans”) of up to $75.0 million in the aggregate. As of March 31, 2023, the Company had borrowed $15.0 million pursuant to the Loan Agreement and has the right to borrow up to an additional $15.0 million through June 30, 2023 (collectively, “Term Loan 1”). The Company also has the right to borrow up to $20.0 million through June 30, 2023 (“Term Loan 2”). In addition, the Company had the right to borrow $25.0 million through March 31, 2024 (“Term Loan 3”), provided that (i) the Company had announced that the planned Phase 2b clinical trial evaluating the safety, immunogenicity, and efficacy of HIL-214 in infants (“HIL-214 Vaccine Trial”) will continue without material adverse modification after completion of the planned interim safety and immunogenicity analysis on the first 200 evaluable subjects in the HIL-214 Vaccine Trial, and (ii) the Company had announced the completion of subject enrollment for the HIL-214 Vaccine Trial, which involved the enrollment of more than 3,000 subjects. However, the Company did not announce the completion of subject enrollment for HIL-214 Vaccine Trial on or prior to March 31, 2023 so Term Loan 3 is not available for draw down. All Term Loans are subject to a minimum draw amount of $5.0 million and no event of default under the Loan Agreement having occurred and is continuing. The borrowings under the Loan Agreement are collateralized by substantially all of the Company’s assets, including intellectual property and certain other assets.

The Term Loans bear (a) cash interest at a floating rate of the higher of (i) the Wall Street Journal prime rate (or 5.00% if less) plus 1.05%, or (ii) 4.55% (interest rate of 6.05% as of March 31, 2023), and (b) additional interest ("PIK Interest") at a per annum rate equal to 2.85%, with such interest being added to the outstanding principal balance of the Term Loans on a monthly basis. The monthly payments consist of interest-only through June 1, 2025 or, if prior to April 30, 2025, (x) the conditions to Term Loan 3 have been satisfied and (y) the Company has reasonably determined that (i) the HIL-214 Vaccine Trial has achieved the protocol-specified primary efficacy endpoint and (ii) HIL-214 has demonstrated acceptable safety results in the HIL-214 Vaccine Trial, and, as a result, the Company supports the initiation of a Phase 3 registrational trial as the next immediate step in the development of HIL-214, in each case subject to reasonable verification by Hercules, through June 1, 2026. Subsequent to the interest-only period, the Term Loans will be payable in equal monthly installments of principal, plus accrued and unpaid interest, through the maturity date of May 1, 2027. In addition, the Company is obligated to pay a final payment fee equal to the greater of (i) $2.1 million and (ii) 7.15% of the original principal amount of the Term Loans (which is $2.1 million as of March 31, 2023). The final payment fee is recorded as a debt discount amortized over the life of the debt. The Company may elect to prepay all or a portion of the Term Loans prior to maturity, subject to a prepayment fee of up to 2.00% of the then outstanding principal balance and the pro rata application of such payment to the final payment fee. After repayment, no Term Loan amounts may be borrowed again.

The Loan Agreement contains certain customary affirmative and negative covenants and events of default. The affirmative covenants include, among others, covenants requiring the Company to maintain its legal existence and governmental approvals, deliver certain financial reports, maintain insurance coverage and satisfy certain requirements regarding its operating accounts. The negative covenants include, among others, limitations on the Company’s ability to incur additional indebtedness and liens, merge with other companies or consummate certain changes of control, acquire other companies or businesses, make certain investments, pay dividends, transfer or dispose of assets, amend certain material agreements, including the Takeda License, or enter into various specified transactions. Upon the occurrence of an event of default, subject to any specified cure periods, all amounts owed by the Company would begin to bear interest at a rate that is 4.00% above the rate effective immediately before the event of default and may be declared immediately due and payable by Hercules, as collateral agent.

During the three months ended March 31, 2023, the Company has recognized interest expense of $0.4 million related to the Term Loans using the effective interest method. Included in such expense was $0.1 million, related to accretion of the final payment fee to other long-term liabilities, $0.1 million of PIK interest, $0.2 million of coupon interest, and an immaterial amount of debt discount amortization.

Future minimum principal and interest payments, including the final payment fee, as of March 31, 2023 are as follows (in thousands):


	March 31, 2023
Years ending December 31:
2023	$	709
2024	$	967
2025	$	5,063
2026	$	7,982
2027	$	7,405
Total principal payments, interest payments and final payment fee		22,126
Less: interest, PIK interest and final payment fee		(6,945	)
Long-term debt	$	15,181

- Definition

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

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (h)
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section 50
-Paragraph 1C
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (a)
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Paragraph 1I
-Subparagraph (d)
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Paragraph 1
-Subparagraph (SX 210.4-08(c))
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
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-Section 50
-Paragraph 1C
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 1C
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Paragraph 1E
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
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-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
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-Section 50
-Paragraph 1I
-Subparagraph (b)
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Stockholders' Equity - Summary of Unvested Shares (Details) - shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Stockholders Equity Note [Abstract]
Number of unvested shares, Beginning balance	1,584,709
Number of unvested shares, Shares granted	759,266	0
Number of unvested shares, Shares forfeited	(51,954)
Number of unvested shares, Shares vested	(174,568)
Number of unvested shares, Ending balance	2,117,453

Commitments and Contingencies - Additional Information (Details) - USD ($)		1 Months Ended		3 Months Ended
	Jul. 02, 2021	Nov. 30, 2022	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Commitments And Contingencies Disclosure [Line Items]
Common stock shares issued				39,200,174		39,240,746
Company made matching contributions				$ 200,000	$ 0
Matching contribution				the Company made matching contributions equal to 100% of the employee’s contributions, subject to a maximum of 4% of eligible compensation. The Company made matching contributions of $0.2 million during the three months ended March 31, 2023. The Company did not make any matching contributions during the three months ended March 31, 2022.
Percentage Of employee's contributions		100.00%
Percentage of maximum eligible compensation		4.00%
Takeda
Commitments And Contingencies Disclosure [Line Items]
Purchase of common stock upon exercise of outstanding warrant	5,883,500
Transaction prices per share	$ 0.0000595
Contingent payment recorded as in-process research and development	$ 2,500,000		$ 2,500,000
Common stock shares issued	840,500
Issuance of common stock in connection with Takeda License	$ 4,400,000
Promissory notes initial fair value	34,000,000
Development Milestones	7,500,000
Sales Milestones	$ 150,000,000.0
License agreement milestone payments				$ 0

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities
Net loss	$ (26,889)	$ (67,887)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	1
Stock-based compensation	2,642	272
Change in fair value of convertible promissory notes (includes related part amounts of $0 and $4,378, respectively)		17,073
Change in fair value of warrant liabilities - related party		37,424
Amortization of operating lease right-of-use assets	360	13
Amortization of debt discount	126
Issuance of PIK interest debt	94
Acquired in-process research and development - related party		2,500
Loss on disposal of property and equipment		42
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	1,895	(339)
Accounts payable, accrued expenses and other long-term liabilities (includes related party amounts of $31 and $(3,402), respectively)	4,384	(1,868)
Accrued interest (includes related party amounts of $0 and $529,respectively)	24	2,064
Operating lease liabilities	1,409	(9)
Net cash used in operating activities	(15,954)	(10,715)
Cash flows from investing activities
Cash paid for purchased in-process research and development		(2,500)
Purchases of property and equipment	(2,985)
Net cash used in investing activities	(2,985)	(2,500)
Cash flows from financing activities
Payment of initial public offering costs		(99)
Proceeds from exercise of stock options	80
Net cash provided by (used in) financing activities	80	(99)
Net decrease in cash, cash equivalents and restricted cash	(18,859)	(13,314)
Cash, cash equivalents and restricted cash-beginning of period	281,032	124,566
Cash, cash equivalents and restricted cash-end of period	262,173	111,252
Supplemental disclosure of cash flow information
Cash paid for interest	192
Supplemental disclosure of noncash investing and financing activities
Unpaid initial public offering costs		$ 548
Unpaid property and equipment purchases	3,453
Accreted final interest payment fees	$ 109

Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions		1 Months Ended	3 Months Ended
	May 03, 2022	Apr. 30, 2022	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022	Apr. 22, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected dividend yield			0.00%	0.00%
Weighted average grant date fair value per share of option grants			$ 13.80	$ 5.92
Number of issued shares of restricted common stock grants			759,266	0
Weighted average grant date fair value per share of restricted common stock grants			$ 18.00
Common Stock Shares Issued			39,200,174		39,240,746
Total unrecognized stock-based compensation cost related to stock options			$ 29.4
Sale of common stock	13,529,750
Public offering price per share	$ 17.00
Net proceeds from initial public offering	$ 209.5
Underwriting discounts, commissions and offering costs	$ 20.5
Increase in number of authorized shares of common stock			500,000,000		500,000,000	50,000,000
Increase in number of authorized shares of preferred stock			50,000,000		50,000,000
Shares reserved for issuance			8,282,245
Total unrecognized stock-based compensation cost related to restricted stock			$ 13.1
Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total unrecognized stock-based compensation cost expected to be recognized over remaining weighted-average period			3 years 2 months 12 days
Shares reserved for issuance			3,373,332
Restricted Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total unrecognized stock-based compensation cost expected to be recognized over remaining weighted-average period			3 years 9 months 18 days
Initial Public Offering
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Sale of common stock	13,529,750
Public offering price per share	$ 17.00
Net proceeds from initial public offering	$ 209.5
Underwriting discounts, commissions and offering costs	$ 20.5
Increase in number of authorized shares of common stock	500,000,000
Increase in number of authorized shares of preferred stock	50,000,000
Common Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of outstanding options, Exercised			11,382
2021 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Plan term			ten years
Vesting period			4 years
Shares reserved for issuance			4,134,339
Number of shares remained available for issuance under awards granted		216,849
2022 Incentive Award Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Plan term			The 2022 Plan became effective in connection with the Company’s IPO and will remain in effect until the tenth anniversary of its effective date, which will be April 28, 2032, unless earlier terminated by the Company’s board of directors. The number of shares of the Company's common stock initially available for issuance under awards granted pursuant to the 2022 Plan was the sum of (1) 4,900,000 shares of the Company’s common stock, plus (2) 216,849 shares remaining available for issuance under the 2021 Plan as of the effective date of the 2022 Plan, plus (3) any shares subject to outstanding awards under the 2021 Plan as of the effective date of the 2022 Plan that become available for issuance under the 2022 Plan thereafter in accordance with its terms.
Shares reserved for issuance			7,127,599
Number of shares remained available for issuance under awards granted		4,900,000	4,134,339
Shares issuance, ending year		2032
Percentage of shares issued from outstanding number of shares		5.00%
2022 Employee Stock Purchase Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares reserved for issuance		410,000
Shares reserved for issuance			774,574
Maximum number of shares that may be authorized in accordance with plan		10,000,000
Shares issuance, ending year		2032
Percentage of shares issued from outstanding number of shares		1.00%
Purchase price of common stock, percent		85.00%

Commitments and Contingencies

3 Months Ended

Mar. 31, 2023

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

6. Commitments and Contingencies

License Agreement

On July 2, 2021, the Company entered into a license agreement with Takeda pursuant to which it was granted an exclusive sublicensable, royalty-bearing license (the “Takeda License”) to develop and commercialize HIL-214 pharmaceutical products for all human uses on a worldwide basis outside of Japan (the “Territory”).

The Company will be responsible, at its own cost, for the development, manufacture and commercialization of HIL-214 products in the Territory, and the Company will integrate certain Japan development activities into its development activities at its own cost. The Company is obligated to use commercially reasonable efforts to develop and commercialize HIL-214 products in the Territory, and to seek regulatory approval for such products throughout the world.

In consideration of the Takeda License, the Company (i) paid Takeda $2.5 million in cash, (ii) issued Takeda 840,500 shares of its common stock at a fair value of $4.4 million, (iii) issued Takeda a warrant (the “Takeda Warrant”) to purchase 5,883,500 shares of its common stock at an exercise price of $0.0000595 per share, which was fully exercised in November 2022, and (iv) issued Takeda a warrant right (the “Takeda Warrant Right”) to receive an additional common stock warrant should Takeda’s fully-diluted ownership of the Company, including the Takeda Warrant, represent less than a certain specified percentage of the fully-diluted capitalization, including shares issuable upon conversion of outstanding convertible promissory notes, calculated immediately prior to the earlier of the closing of the Company’s IPO or a change of control transaction, at an initial fair value of $34,000. In addition, the Company is obligated to pay Takeda an aggregate of $2.5 million upon the release of certain drug product and the completion of certain regulatory activities, which payment was made in March 2022, $7.5 million upon the achievement of a specified development milestone, up to an aggregate of $150.0 million in sales milestones upon the achievement of specified annual sales levels of HIL-214 products in the Territory, and tiered high single-digit to low-teen percentage royalties on net sales of HIL-214 products in the Territory, subject to specified offsets and reductions. Takeda has agreed to pay the Company tiered mid-single digit to low-double digit percentage royalties on net sales of HIL-214 products in Japan, subject to specified offsets and reductions. Royalties will be payable, on a product-by-product and country-by-country basis from the first commercial sale of such product in such country, until the latest of expiration of the licensed patents covering the applicable product, expiration of regulatory exclusivity in such country, or 20 years following first commercial sale of such product in such country. The obligations related to contingent payments are recognized in the accompanying condensed consolidated financial statements when the contingency is resolved and the consideration is paid or becomes payable. As of March 31, 2023, none of the remaining contingent payments were due or payable.

Absent early termination, the Takeda License expires on a country-by-country and product-by-product basis upon the expiration of the applicable royalty term with respect to each product in each country, as applicable, or in its entirety upon the expiration of the royalty term with respect to the last product commercialized in the last country. The Company may terminate the Takeda License upon six months’ prior written notice. The Company and Takeda may terminate the Takeda License in the case of the other party’s insolvency, or upon prior written notice within a specified time period for the other party’s material uncured breach. Takeda may terminate the Takeda License if the Company challenges licensed patents, or assists any third-party in challenging such patents.

The acquisition of the Takeda License has been accounted for as an asset acquisition as substantially all of the fair value is concentrated in a group of similar assets. In March 2022, the Company paid Takeda an aggregate $2.5 million contingent payment upon the release of certain drug products and the completion of certain regulatory activities, which have no alternative future use, and was recorded as in-process research and development in the Company’s condensed consolidated statement of operations for the three months ended March 31, 2022. The Company did not make any milestone payments to Takeda during the three months ended March 31, 2023.

Transitional Services Agreement with Takeda

As contemplated by the Takeda License, on December 17, 2021, the Company entered into a Transitional Services Agreement (“TSA”) with Takeda under which the Company will be obligated to pay Takeda for certain services, including pass-through costs, related to research and development and regulatory assistance services, oversight and management of ongoing clinical and research studies, and maintenance of third party vendor contracts. The TSA and related activities are considered related party transactions. Unless earlier terminated under its terms, the TSA will remain in effect until all transitional services are completed. The Company may terminate the provision of any or all services under the TSA upon certain written notice. The Company and Takeda may terminate the TSA in the case of the other party’s insolvency, or upon prior written notice within a specified time period for the other party’s material uncured breach. Takeda may terminate the TSA for non-payment and, in certain circumstances, upon a change of control of the Company.

401(k) Plan

The Company established a defined-contribution plan under Section 401(k) of the Internal Revenue Code (the 401(k) Plan). The 401(k) Plan covers all eligible employees who meet defined minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. Beginning November 2022, the Company made matching contributions equal to 100% of the employee’s contributions, subject to a maximum of 4% of eligible compensation. The Company made matching contributions of $0.2 million during the three months ended March 31, 2023. The Company did not make any matching contributions during the three months ended March 31, 2022.

Contingencies

In the event the Company becomes subject to claims or suits arising in the ordinary course of business, the Company would accrue a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated.

Fair Value Measurements - Additional Information (Details)	3 Months Ended
	Mar. 31, 2023 USD ($)
Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	$ 0
Non-Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Non-financial assets at fair value	0
Non-financial liabilities at fair value	$ 0

Convertible Promissory Notes and Long-Term Debt - Schedule of Future Minimum Principal and Interest Payments (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Debt Disclosure [Abstract]
2023	$ 709
2024	967
2025	5,063
2026	7,982
2027	7,405
Total principal payments, interest payments and final payment fee	22,126
Less: interest, PIK interest and final payment fee	(6,945)
Long-term debt	$ 15,181

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Operating expenses:
Research and development (includes related party amounts of $168 and $1,422, respectively)	$ 23,164	$ 6,211
In-process research and development - related party		2,500
General and administrative (includes related party amounts of $3 and $26, respectively)	5,795	2,603
Total operating expenses	28,959	11,314
Loss from operating ,Total	(28,959)	(11,314)
Other income (expense):
Interest income	2,574	6
Interest expense (includes related party amounts of $0 and $529, respectively)	(449)	(2,064)
Change in fair value of convertible promissory notes (includes related party amounts of $0 and $4,378, respectively)		(17,073)
Change in fair value of warrant liabilities - related party		(37,424)
Other income (expense)	(55)	(18)
Total other income (expense)	2,070	(56,573)
Net loss	(26,889)	(67,887)
Other comprehensive loss:
Pension and other postemployment benefits	(1)
Total comprehensive loss	$ (26,890)	$ (67,887)
Net loss per share, basic	$ (0.71)	$ (10.06)
Net loss per share, diluted	$ (0.71)	$ (10.06)
Weighted-average shares of common stock outstanding, basic	37,753,522	6,748,668
Weighted-average shares of common stock outstanding, diluted	37,753,522	6,748,668

Organization - Additional Information (Details) $ / shares in Units, $ in Millions	May 03, 2022 USD ($) $ / shares shares	Apr. 22, 2022 shares	Mar. 31, 2023 shares	Dec. 31, 2022 shares
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Forward split of shares		1.681
Common stock shares authorized \| shares		50,000,000	500,000,000	500,000,000
Sale of common stock \| shares	13,529,750
Public offering price per share \| $ / shares	$ 17.00
Net proceeds from initial public offering \| $	$ 209.5
Underwriting discounts, commissions and offering costs \| $	$ 20.5

Other Balance Sheet Details

3 Months Ended

Mar. 31, 2023

Balance Sheet Related Disclosures [Abstract]

Other Balance Sheet Details

3. Other Balance Sheet Details

Property and Equipment

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


	March 31,		December 31,
	2023		2022
Furniture and equipment	$	10	$	11
Leasehold improvements		378		378
Construction in progress		10,063		5,198
Total property and equipment, at cost		10,451		5,587
Less accumulated depreciation		1		1
Property and equipment, net	$	10,450	$	5,586

Depreciation expense for the three months ended March 31, 2023 and 2022 was not material.

Accrued Expenses

Accrued expenses consisted of the following (in thousands):


	March 31,		December 31,
	2023		2022
Accrued external research and development costs	$	11,638	$	3,510
Accrued payroll and payroll-related costs		1,657		4,018
Other		4,117		682
Total accrued expenses	$	17,412	$	8,210

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash recorded within the accompanying condensed consolidated balance sheets that sum to the amounts shown in the condensed consolidated statements of cash flows (in thousands):


	March 31,		December 31,
	2023		2022
Cash and cash equivalents	$	260,542	$	279,401
Restricted cash		1,631		1,631
Total cash, cash equivalents and restricted cash	$	262,173	$	281,032

Other Balance Sheet Details (Tables)

3 Months Ended

Mar. 31, 2023

Balance Sheet Related Disclosures [Abstract]

Property and Equipment

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


	March 31,		December 31,
	2023		2022
Furniture and equipment	$	10	$	11
Leasehold improvements		378		378
Construction in progress		10,063		5,198
Total property and equipment, at cost		10,451		5,587
Less accumulated depreciation		1		1
Property and equipment, net	$	10,450	$	5,586

Accrued Expenses

Accrued expenses consisted of the following (in thousands):


	March 31,		December 31,
	2023		2022
Accrued external research and development costs	$	11,638	$	3,510
Accrued payroll and payroll-related costs		1,657		4,018
Other		4,117		682
Total accrued expenses	$	17,412	$	8,210

Schedule of Reconciliation of Cash, Cash Equivalents and Restricted Cash


	March 31,		December 31,
	2023		2022
Cash and cash equivalents	$	260,542	$	279,401
Restricted cash		1,631		1,631
Total cash, cash equivalents and restricted cash	$	262,173	$	281,032

Related Party Transactions

3 Months Ended

Mar. 31, 2023

Related Party Transactions

5. Related Party Transactions

Frazier Life Sciences X, L.P. or its affiliates (“Frazier”) is a principal stockholder of the Company and is represented on the Company’s board of directors. From January 8, 2019 (inception) to March 31, 2023, the Company and Frazier reimbursed each other for various goods and services, including personnel related expenses, travel, insurance, facilities and other various overhead and administrative expenses. As of March 31, 2023 and December 31, 2022, the Company had outstanding amounts due to Frazier of $9,000 and $6,000, respectively, related to these shared operating expenses. For the three months ended March 31, 2023 and 2022, the Company incurred $3,000 and $26,000, respectively, of shared operating expenses.

As described in Note 7, the Company borrowed amounts from Frazier in connection with various convertible note financings. For the three months ended March 31, 2022, the Company recognized a $17.1 million change in fair value of convertible promissory notes in connection with convertible promissory notes issued to Frazier. For the three months ended March 31, 2022, the Company recognized $2.1 million of interest expense in connection with convertible promissory notes issued to Frazier. The convertible promissory notes automatically converted into 10,672,138 shares of the Company's common stock immediately prior to the completion of the IPO.

In connection with the Takeda License (as defined and described in Note 6), Takeda became a related party stockholder with representation on the Company’s board of directors. The Company and Takeda are party to a TSA (as defined and described in Note 6) under which the Company is obligated to pay Takeda for certain services, including pass-through costs, related to research and development and regulatory assistance services, oversight and management of ongoing clinical and research studies, and maintenance of third-party vendor contracts. For the three months ended March 31, 2023 and 2022, the Company incurred $0.2 million and $1.4 million, respectively, of research and development expenses for Takeda’s services. As of March 31, 2023 and December 31, 2022, the Company had $0.3 million and $0.3 million, respectively, of accounts payable and accrued expenses due to Takeda. See Note 6 for further information regarding the Company’s related party transactions with Takeda.

Leases - Schedule of Weighted Average Lease Term and Discount Rate for Operating Lease (Details)	Mar. 31, 2023	Mar. 31, 2022
Leases [Abstract]
Weighted-average remaining lease term	9 years 8 months 12 days	4 years 6 months
Weighted-average discount rate	7.40%	6.00%

Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Statement Of Cash Flows [Abstract]
Change in fair value of convertible promissory notes, related party	$ 0	$ 4,378
Related parties accounts payable, accrued expenses and other long-term liabilities	31	(3,402)
Related parties accrued interest	$ 0	$ 529

Leases - Schedule of Operating Lease Expense (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Lease expense:
Operating lease expense	$ 779,000	$ 0

Leases (Tables)

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Schedule of Operating Lease Expense

The following table summarizes operating lease expense for the three months ended March 31, 2023 (in thousands):


	Three Months Ended March 31,
	2023
Lease expense:
Operating lease expense	$	779

Schedule of Weighted Average Lease Term and Discount Rate for Operating Lease

The following table summarizes the lease term and discount rate for operating leases:


	Three Months Ended March 31,
	2023			2022
Other information:
Weighted-average remaining lease term		9.70			4.50
Weighted-average discount rate		7.4	%		6.0	%

Summary of Cash Paid for Amounts Included in Measurement of Lease Liabilities

The following table summarizes the cash paid for amounts included in the measurement of lease liabilities (in thousands):


	March 31, 2023
Cash paid for amounts included in the measurement of operating lease liabilities (operating cash flows)	$	871

Schedule of Future Minimum Noncancelable Operating Lease Payments

At March 31, 2023, the future minimum noncancelable operating lease payments were as follows (in thousands):


	March 31, 2023
Years ending December 31:
2023	$	2,613
2024		3,584
2025		3,688
2026		3,784
2027		3,860
Thereafter		21,075
Total undiscounted operating lease payments		38,604
Present value adjustment		(11,113	)
Tenant improvement reimbursements		(4,476	)
Operating lease liability		23,015
Less current portion of operating lease liability		38
Operating lease liability, net of current portion	$	22,977

Organization

3 Months Ended

Mar. 31, 2023

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Organization

1. Organization

Organization

HilleVax, Inc. (the “Company” or “HilleVax”) was incorporated in the state of Delaware in March 2020 under the name MokshaCo, Inc. (“MokshaCo”). On February 8, 2021, MokshaCo changed its name to HilleVax and merged with North Bridge V, Inc. (“North Bridge V”) and YamadaCo III, Inc. (“YamadaCo III”), each a Delaware corporation formed in 2019, with HilleVax being the surviving entity (the “Merger”). The Company is a biopharmaceutical company focused on developing and commercializing novel vaccines.

Forward Stock Split

On April 22, 2022, the Company effected a 1.681-for-1 forward split of shares of the Company’s common stock (the “Forward Stock Split”). The par value of the common stock was not adjusted as a result of the Forward Stock Split and the authorized shares were increased to 50,000,000 shares of common stock in connection with the Forward Stock Split. The accompanying financial statements and notes to the financial statements give retroactive effect to the Forward Stock Split for all periods presented, unless otherwise indicated.

Initial Public Offering

On May 3, 2022, the Company completed its initial public offering ("IPO") whereby it sold 13,529,750 shares of common stock at a public offering price of $17.00 per share, for net proceeds of approximately $209.5 million, after deducting underwriting discounts, commissions and offering costs of approximately $20.5 million (see Note 8).

Liquidity and Capital Resources

From inception to March 31, 2023, the Company has devoted substantially all of its efforts to organizing and staffing the Company, business planning, raising capital, in-licensing its initial vaccine candidate, HIL-214, preparing for and managing its clinical trials of HIL-214, and providing other general and administrative support for these operations. The Company has a limited operating history, has never generated any revenue, and the sales and income potential of its business is unproven. The Company has incurred net losses and negative cash flows from operating activities since its inception and expects to continue to incur net losses into the foreseeable future as it continues the development and potential commercialization of HIL-214. From inception to March 31, 2023, the Company has funded its operations through the issuance of convertible promissory notes, commercial bank debt and the sale of common stock in its IPO which closed in May 2022.

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classification of liabilities. Management is required to perform a two-step analysis over the Company’s ability to continue as a going concern. Management must first evaluate whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern (Step 1). If management concludes that substantial doubt is raised, management is also required to consider whether its plans alleviate that doubt (Step 2). Management believes that it has sufficient working capital on hand to fund operations through at least the next twelve months from the date these financial statements were issued. There can be no assurance that the Company will be successful in acquiring additional funding, if needed, that the Company’s projections of its future working capital needs will prove accurate, or that any additional funding would be sufficient to continue operations in future years.

Subsequent Event - Additional Information (Details) - Subsequent Event - Sales Agreement $ in Millions	May 12, 2023 USD ($)
Subsequent Event [Line Items]
Sales agreement date	May 12, 2023
Maximum commission percentage on gross proceeds of shares of common stock sold	3.00%
Maximum
Subsequent Event [Line Items]
Agreegate offering price	$ 100.0

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Forward Stock Split

Initial Public Offering

Liquidity and Capital Resources

Basis of Presentation

Unaudited Interim Financial Information

Use of Estimates

Fair Value Option

Fair Value Measurements

Level 1: Observable inputs such as quoted prices in active markets.

Level 2: Inputs, other than the quoted prices in active markets that are observable either directly or indirectly.

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

Cash and Cash Equivalents

Restricted Cash

Restricted cash consists of a money market account securing a standby letter of credit issued in connection with the Company’s Boston Lease (as defined and described in Note 4).

Concentrations of Credit Risk

Property and Equipment, Net

Leases

Impairment of Long-Lived Assets

Research and Development Expenses and Accruals

In-Process Research and Development

Patent Costs

Costs related to filing and pursuing patent applications are recorded as general and administrative expenses and expensed as incurred since recoverability of such expenditures is uncertain.

Stock-Based Compensation

Potentially dilutive securities not included in the calculation of diluted net loss per share, because to do so would be anti-dilutive, are as follows (in common stock equivalent shares):


	March 31,
	2023		2022
Common stock options		3,373,332		1,190,148
Common stock warrants		—		5,883,500
Unvested common stock		2,117,453		2,327,871
ESPP shares		20,002		—
Total potentially dilutive shares		5,510,787		9,401,519

Emerging Growth Company Status

Recently Adopted/Issued Accounting Standards/Pronouncements

Recently Adopted Accounting Standards

There were no recently adopted accounting standards which would have a material impact on the Company's financial statements.

Recently Issued Accounting Pronouncements

Related Party Transactions - Additional Information (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2021	Dec. 31, 2022
Related Party Transaction [Line Items]
Change in fair value of convertible promissory notes		$ 17,073,000
Accounts payable and accrued expenses	$ 17,412,000			$ 8,210,000
August 2021 Notes \| Common Stock
Related Party Transaction [Line Items]
Debt instrument conversion, common stock shares issued		10,672,138	10,672,138
Frazier
Related Party Transaction [Line Items]
Due to related parties	9,000			6,000
Shared operating expenses	3,000	$ 26,000
Change in fair value of convertible promissory notes		17,100,000
Interest Expense		2,100,000
Takeda \| TSA
Related Party Transaction [Line Items]
Research and development expenses	200,000	$ 1,400,000
Accounts payable and accrued expenses	$ 300,000			$ 300,000

Summary of Significant Accounting Policies - Additional Information (Details)	3 Months Ended
	Mar. 31, 2023 USD ($) Segment shares	Mar. 31, 2022 shares
Summary of Significant Accounting Policies [Line Item]
Number of operating segment \| Segment	1
Basic weighted- average common shares outstanding \| shares	37,753,522	6,748,668
Weighted-average unvested shares excluded from computation of earnings per share amount \| shares	1,492,789	2,476,653
Non-Recurring
Summary of Significant Accounting Policies [Line Item]
Non-financial liabilities at fair value	$ 0
Non-financial assets at fair value	0
Recurring
Summary of Significant Accounting Policies [Line Item]
Assets measured at fair value	$ 0

Stockholders' Equity - Summary of Assumptions used in Black-Scholes Option Pricing Model to Determine Fair Value of Stock Option Grants (Details)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Risk-free interest rate, minimum	1.90%	1.90%
Risk-free interest rate, maximum	4.20%	2.50%
Expected volatility, minimum	83.40%	88.10%
Expected volatility, maximum	94.30%	89.50%
Expected dividend yield	0.00%	0.00%
Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected term (in years)	5 years 3 months 18 days	5 years 6 months
Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected term (in years)	6 years 1 month 6 days	6 years 1 month 6 days