0001558370-21-007321 | 10-Q | XBRL Viewer | Milestone Pharmaceuticals INC

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2021	May 03, 2021
Document and Entity Information
Document Type	10-Q
Document Period End Date	Mar. 31, 2021
Entity Registrant Name	Milestone Pharmaceuticals Inc.
Title of 12(b) Security	Common Shares
Trading Symbol	MIST
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		29,846,000
Entity Central Index Key	0001408443
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Amendment Flag	false

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Current assets
Cash and cash equivalents	$ 71,859	$ 72,310
Short-term investments (note 3)	58,000	70,000
Research and development tax credits receivable	816	725
Prepaid expenses	6,292	5,428
Other receivables	277	223
Total current assets	137,244	148,686
Operating lease right-of use asset	914	980
Property and equipment	285	308
Total assets	138,443	149,974
Current liabilities
Accounts payable and accrued liabilities (note 4)	5,564	5,914
Current portion of operating lease liabilities	252	245
Total current liabilities	5,816	6,159
Operating lease liabilities	635	696
Total liabilities	6,451	6,855
Shareholders’ Equity (note 5)
Common shares, no par value, unlimited shares authorized 29,846,000 shares issued and outstanding as of March 31, 2021, 29,827,997 shares issued and outstanding as of December 31, 2020	251,716	251,682
Pre-funded warrants - 11,417,034 issued and outstanding as of March 31, 2021 and as of December 31, 2020	48,007	48,007
Additional paid-in capital	9,883	8,530
Cumulative translation adjustment	(1,634)	(1,634)
Accumulated deficit	(175,980)	(163,466)
Total shareholders’ equity	131,992	143,119
Total liabilities, and shareholders’ equity	$ 138,443	$ 149,974

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Condensed Consolidated Balance Sheets
Common shares, par value (in dollars per share)	$ 0	$ 0
Common shares, Shares authorized (in shares)	Unlimited	Unlimited
Common shares, Shares issued (in shares)	29,846,000	29,827,997
Common shares, Shares outstanding (in shares)	29,846,000	29,827,997
Warrants issued	11,417,034	11,417,034
Warrants outstanding	11,417,034	11,417,034

Condensed Consolidated Statements of Loss and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Operating expenses
Research and development, net of tax credits	$ 8,595	$ 11,872
General and administrative	2,633	2,703
Commercial	1,366	2,183
Loss from operations	(12,594)	(16,758)
Interest income, net of bank charges	80	415
Net loss and comprehensive loss for the period	$ (12,514)	$ (16,343)
Weighted average number of shares and pre-funded warrants outstanding, basic and diluted	41,256,248	24,548,777
Net loss per share, basic and diluted (note 6)	$ (0.30)	$ (0.67)

- Definition

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

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+ Details

Condensed Consolidated Statements of Shareholders' Equity and Convertible Preferred Shares - USD ($) $ in Thousands	Common Shares	Pre-funded warrants	Additional paid-in capital	Cumulative translation adjustment	Accumulated deficit	Total
Opening balance at Dec. 31, 2019	$ 226,245		$ 3,805	$ (1,634)	$ (113,499)	$ 114,917
Balance at the beginning of period (in shares) at Dec. 31, 2019	24,505,748
Increase (Decrease) in Stockholders' Equity and Temporary Equity
Net loss and comprehensive loss					(16,343)	(16,343)
Exercise of stock options (note 5)	$ 133		(56)			77
Exercise of stock options (note 5) (in shares)	53,722
Share-based compensation (note 5)			981			981
Closing balance at Mar. 31, 2020	$ 226,378		4,730	(1,634)	(129,842)	$ 99,632
Balance at the end of period (in shares) at Mar. 31, 2020	24,559,470
Increase (Decrease) in Stockholders' Equity and Temporary Equity
Number of warrants		11,417,034				11,417,034
Opening balance at Dec. 31, 2020	$ 251,682	$ 48,007	8,530	(1,634)	(163,466)	$ 143,119
Balance at the beginning of period (in shares) at Dec. 31, 2020	29,827,997					29,827,997
Increase (Decrease) in Stockholders' Equity and Temporary Equity
Net loss and comprehensive loss					(12,514)	$ (12,514)
Exercise of stock options (note 5)	$ 34		(15)			19
Exercise of stock options (note 5) (in shares)	18,003
Share-based compensation (note 5)			1,368			1,368
Closing balance at Mar. 31, 2021	$ 251,716	$ 48,007	$ 9,883	$ (1,634)	$ (175,980)	$ 131,992
Balance at the end of period (in shares) at Mar. 31, 2021	29,846,000					29,846,000
Increase (Decrease) in Stockholders' Equity and Temporary Equity
Number of warrants		11,417,034				11,417,034

- Definition

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

+ References

+ Details

- 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.

+ References + Details

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Operating activities
Net loss for the period	$ (12,514)	$ (16,343)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of property and equipment	23	24
Share-based compensation expense (note 5)	1,368	981
Changes in operating assets and liabilities:
Other receivables	(54)	(1)
Research and development tax credits receivable	(91)	(106)
Prepaid expenses	(864)	280
Operating lease right of use asset, net	12	(87)
Accounts payable and accrued liabilities	(350)	(2,827)
Net cash used in operating activities	(12,470)	(18,079)
Investing Activities
Maturity of short-term investments	12,000
Net cash used in investing activities	12,000
Financing activities
Issuance of common shares on exercise of share options (note 5)	19	77
Net cash provided by financing activities	19	77
Net (decrease) in cash and cash equivalents during the period	(451)	(18,002)
Cash and cash equivalents – Beginning of period	72,310	119,818
Cash and cash equivalents – End of period	$ 71,859	$ 101,816

Organization and nature of operations	3 Months Ended
Organization and nature of operations	Mar. 31, 2021
Organization and nature of operations
Organization and nature of operations	1 Organization and nature of operations Milestone Pharmaceuticals Inc. (Milestone or the Company) is a biopharmaceutical company incorporated under the Business Corporations Act of Québec. Milestone is focused on the development and commercialization of cardiovascular medicines. Milestone’s lead product candidate, etripamil, is a novel, potent short‑acting calcium channel blocker that the Company designed and is developing as a rapid‑onset nasal spray to be administered by patients. The Company is developing etripamil to treat paroxysmal supraventricular tachycardia, atrial fibrillation, and other cardiovascular indications.

Summary of significant accounting policies	3 Months Ended
Summary of significant accounting policies	Mar. 31, 2021
Summary of significant accounting policies
Summary of significant accounting policies	2 Summary of significant accounting policies a) Basis of consolidation The consolidated financial statements include the accounts of the Company and Milestone Pharmaceuticals USA, Inc. All intercompany transactions and balances have been eliminated. b) Basis of presentation and use of accounting estimates These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP) and on a basis consistent with those accounting principles followed by the Company and disclosed in note 2 of its most recent annual consolidated financial statements. Certain information, in particular the accompanying notes normally included in the annual financial statements prepared in accordance with US GAAP have been omitted or condensed. Accordingly, the unaudited interim condensed consolidated financial statements do not include all the information required for full annual financial statements, and therefore, should be read in conjunction with the annual consolidated financial statements and the notes thereto for the year ended December 31, 2020. In the opinion of the Company's management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its balance sheet as of March 31, 2021, and its statements of loss and comprehensive loss, shareholders’ equity and of cash flows for the three months ended March 31, 2021 and 2020. The condensed consolidated balance sheet as of December 31, 2020, was derived from audited annual consolidated financial statements, but does not contain all of the footnote disclosures required by accounting principles generally accepted in the United States of America. These unaudited interim condensed consolidated financial statements are presented in US dollars, which is the Company’s functional currency. The preparation of unaudited interim condensed consolidated financial statements with US GAAP requires the Company to make estimates and judgments that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited interim condensed consolidated financial statements and the reported amounts of revenue and expenses during the period. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes are reasonable under the circumstances, to determine the carrying values of assets and liabilities that are not readily apparent from other sources. Significant estimates and judgments include, but are not limited to, research and development tax credits recoverable, progress of activities performed by the CROs and CMOs which are used to calculate the research and development expense incurred, and share-based compensation. Accordingly, actual results may differ from those estimates and such differences may be material. c) Significant Risks and Uncertainties The COVID-19 pandemic has had an impact on our business, operations and clinical development timelines. Government orders and restrictions in order to control the spread of the disease have impacted patient recruitment, enrollment and follow-up visits at clinical sites. With the global spread of the ongoing COVID-19 pandemic, the Company has implemented business continuity plans designed to address and mitigate the impact of the COVID-19 pandemic on its business. The Company anticipates that the COVID-19 pandemic will continue to have an impact on the development timelines for its clinical programs. The extent to which the COVID-19 pandemic continues to impact its business, its clinical development and regulatory efforts, its corporate development objectives and the value of and market for its common shares will depend on future developments that remain highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements in the U.S., Europe and other countries, and the effectiveness of actions taken globally to contain and treat the disease. The global economic slowdown, the overall disruption of global healthcare systems and the other risks and uncertainties associated with the pandemic could have a material adverse effect on the Company’s business, financial condition, results of operations and growth prospects. In addition, the Company is subject to other challenges and risks specific to its business and its ability to execute on its strategy, as well as risks and uncertainties common to companies in the pharmaceutical industry, including, without limitation, risks and uncertainties associated with: obtaining regulatory approval of its product candidate; delays or problems in the supply of its study drug or failure to comply with manufacturing regulations; identifying, acquiring or in-licensing product candidates; pharmaceutical product development and the inherent uncertainty of clinical success; and the challenges of protecting and enhancing its intellectual property rights; and complying with applicable regulatory requirements. d) Sources of Liquidity and Funding Requirements Since inception, the Company incurred significant operating losses. Prior to May 2019, the Company financed its operations primarily through sales of convertible preferred shares to accredited investors generating net proceeds of $138.8 million. In May 2019, the Company received net proceeds of $85.4 million from its Initial Public Offering (IPO). In July 2020, the Company received $24.8 million of net proceeds from the private placement of pre-funded warrants to existing shareholders. In October 2020, the Company concluded an offering of common shares and pre-funded warrants for net proceeds of $48.2 million. The Company has incurred operating losses and experienced negative operating cash flows since its inception and anticipates to continue to incur losses for at least the next several years. As of March 31, 2021, the Company had cash, cash equivalents and short-term investments of $129.9 million and an accumulated deficit of $176.0 million.

Short-term investments	3 Months Ended
Short-term investments	Mar. 31, 2021
Short-term investments
Short-term investments	3 Short-term investments Short-term investments are comprised of term deposits issued in US currency. These short term investments are in scope of ASC 320, Investments - Debt Securities. The short term investments maturity is greater than 90 days but less than one year, they are classified as held to maturity, recorded as current assets and are accounted for at amortized cost.

Accounts payable and accrued liabilities

3 Months Ended

Mar. 31, 2021

Accounts payable and accrued liabilities

Accounts payable and accrued liabilities

4 Accounts payable and accrued liabilities

Accounts payable and accrued liabilities comprised the following:


	March 31, 2021		December 31, 2020
Trade accounts payable	$	3,412	$	4,641
Accrued research and development liabilities		982		152
Other accrued liabilities		654		164
Accrued compensation and benefits payable		516		957
	$	5,564	$	5,914

Shareholders' equity

3 Months Ended

Mar. 31, 2021

Shareholders’ equity

Shareholders’ equity

5 Shareholders’ equity

Authorized share capital

An unlimited number of common shares, voting and participating, without par value.

On January 1, 2021 the number of the Company’s common shares reserved for issuance under the Employee Stock Purchase Plans (ESPP) increased by 298,279 [2020 – 245,057]. As of March 31, 2021, there were 822,100 common shares available for issuance under the ESPP and no common shares have been issued.

During the three-month period ended March 31, 2021, the Company issued a total of 18,003 common shares [2020 –53,722] for a total cash consideration of $19 [2020 - $77] pursuant to the exercise of 18,003 stock options [2020 – 53,722] at an average exercise price of US$1.08 per option [2020 – US$1.44]. As a result, an amount of $15 [2020 - $56] previously included in additional paid-in capital related to the exercised options has been credited to share capital and deducted from additional paid-in capital.

Additional paid-in capital


	Three months ended March 31,
	2021		2020
Opening balance	$	8,530	$	3,805
Share-based compensation expense		1,368		981
Exercise of stock options		(15)		(56)
Closing balance	$	9,883	$	4,730

Share-based compensation

Under the Company’s 2019 Equity Incentive Plan (the 2019 Plan) and the Company’s Stock Option Plan (the 2011 Plan), unless otherwise decided by the Board of Directors, options vest and are exercisable as follows: 25% vest and are exercisable on the one year anniversary of the grant date and one thirty-sixth (1/36th) of the remaining options vest and are exercisable each month thereafter, such that options are vested in full on four-year anniversary of the grant date.

On January 1, 2021, the number of the Company’s common shares reserved for issuance under the 2019 Plan increased by 1,193,119 [2020 - 980,229] common shares. In addition, 72,186 options have been forfeited under the 2011 Plan after adoption of the 2019 Plan and became available for issuance under the 2019 Plan. As of March 31, 2021, there were 4,562,467 [2020 - 3,316,239] shares available for issuance under the 2019 Plan, of which 992,327 shares were available for future grants.

The total outstanding and exercisable options from the 2011 Plan and 2019 Plan as at March 31 were as follows:


	2021							2020
						Weighted								Weighted
		Number				average			Number					average
		of shares				exercise			of shares					exercise
		2019 Plan		2011 Plan	Total	price			2019 Plan			2011 Plan	Total	price
Outstanding at beginning of year - 2011 Plan		—		2,080,087	2,080,087	$	2.15		—			2,364,526	2,364,526	$	2.15
Outstanding at beginning of year - 2019 Plan		1,706,190		—	1,706,190		13.55		220,140			—	220,140		20.78
Granted - 2019 Plan		1,863,950		—	1,863,950		6.31		765,160			—	765,160		21.49
Exercised - 2011 Plan		—		(16,753)	(16,753)		0.88		—			(53,722)	(53,722)		1.44
Exercised - 2019 Plan		(1,250)		—	(1,250)		3.74		—			—	—		—
Forfeited - 2011 Plan		—		—	—		—		—			(4,978)	(4,978)		2.12
Forfeited - 2019 Plan		—		—	—		—		(2,750)			—	(2,750)		21.48
Outstanding at end of period		3,568,890		2,063,334	5,632,224	$	6.99		982,550			2,305,826	3,288,376	$	7.89
Outstanding at end of period - Weighted average exercise price	$	9.77	$	2.16				$	21.33		$	2.17
Exercisable at end of period		591,885		1,613,229	2,205,114	$	4.86		5,660			1,327,637	1,333,297	$	1.92
Exercisable at end of period - Weighted average exercise price	$	12.55	$	2.05				$	18.43	$		1.85

As of March 31, 2021, the weighted average remaining contractual life was 8.4 for outstanding options [2020 – 8.2 years]. The weighted average remaining contractual life was 7.1 years for vested options [2020 – 7.0 years]. There were no options forfeited or cancelled for the three-month period ended March 31, 2021. There were 7,728 options forfeited and nil cancelled for the three-month period ended March 31, 2020.

Options granted are valued using the Black-Scholes option pricing model. Amortization of the fair value of the options over vesting years has been expensed and credited to additional paid-in capital in shareholders’ equity. The weighted average fair values of options granted in the three-month period ended March 31, 2021 was $4.79 per share [2020 - $15.19]. Share-based compensation expense recognized for the three-month period ended March 31, 2021 was $1,368 [2020 - $981].

As of March 31, 2021, there was $20,573 [2020 - $17,442] of total unrecognized compensation cost, related to non‑vested share options, which is expected to be recognized over a remaining weighted average vesting period of 3.1 years [2020 - 2.9 years].

The non-vested options as at March 31 were as follows:


	2021							2020
		Number				Weighted			Number				Weighted
		of options				average			of options				average
		2019 Plan		2011 Plan	Total	fair value			2019 Plan		2011 Plan	Total	fair value
Non-vested share options at beginning of year - 2011 Plan		—		543,192	543,192	$	1.81		—		1,152,300	1,152,300	$	1.88
Non-vested share options at beginning of year - 2019 Plan		1,438,026		—	1,438,026	$	10.28		218,975		—	218,975	$	14
Granted - 2019 Plan		1,863,950		—	1,863,950		4.79		765,160		—	765,160		15.19
Vested, outstanding 2011 Plan		—		(93,087)	(93,087)		1.61		—		(169,133)	(169,133)		5.81
Vested, outstanding 2019 Plan		(324,971)		—	(324,971)		11.38		(4,495)		—	(4,495)		12.85
Forfeited - 2011 Plan		—		—	—		—		—		(4,978)	(4,978)		1.52
Forfeited - 2019 Plan		—		—	—		—		(2,750)		—	(2,750)		15.25
Non-vested share options at end of period		2,977,005		450,105	3,427,110	$	6.08		976,890		978,189	1,955,079	$	8.12
Non-vested share options at end of period - Weighted average fair value	$	6.72	$	1.85				$	11.80	$	1.21

The fair value of share-based payment transaction is measured using Black-Scholes valuation model. This model also requires assumptions, including expected option life, volatility, risk-free interest rate and dividend yield, which greatly affect the calculated values.

The fair value of options granted was estimated using the Black-Scholes option pricing model, resulting in the following weighted average assumptions for the options granted for the three months ended March 31:



	2021			2020
Exercise price	$	6.31		$	21.41
Share price	$	6.31		$	21.41
Volatility		94	%		82	%
Risk-free interest rate		1.06	%		1.60	%
Expected life		6.10 years			6.24 years
Dividend		0	%		0	%

Expected volatility is determined using comparable companies for which the information is publicly available. The risk-free interest rate is determined based on the U.S. sovereign rates benchmark in effect at the time of grant with a remaining term equal to the expected life of the option. Expected option life is determined based on the simplified method as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The simplified method is an average of the contractual term of the options and its ordinary vesting period. Dividend yield is based on the share option’s exercise price and expected annual dividend rate at the time of grant.

The Company recognized share-based compensation expense as follows for the three months ended March 31:



	2021		2020
Administration	$	573	$	399
Research and development		580		386
Commercial activities		215		196
	$	1,368	$	981

Net loss per share

3 Months Ended

Mar. 31, 2021

Net loss per share

Net loss per share

6 Net loss per share

Basic and diluted net loss per common share is determined by dividing net loss applicable to common shareholders by the weighted average number of common shares and pre-funded warrants outstanding during the period. Share-based compensation options have been excluded from the calculation because their effects would be anti-dilutive. Therefore, the weighted average number of shares used to calculate both basic and diluted loss per share are the same.

The following potentially dilutive securities have been excluded from the computation of diluted weighted average shares outstanding as of March 31 as they would be anti-dilutive:


	2021	2020
Share options	5,632,224	3,288,376

Amounts above reflect the common share equivalents of the noted instruments.

Subsequent events	3 Months Ended
Subsequent events	Mar. 31, 2021
Subsequent events.
Subsequent events	7 Subsequent events On May 15, 2021, the Company signed an exclusive license and collaboration agreement with Ji Xing Pharmaceuticals (Ji Xing) , a company backed by RTW Investments, LP (“RTW”), to develop and, if approved by regulatory authorities, commercialize etripamil for PSVT and other indications in China and Taiwan (the Territory). Milestone will receive an upfront payment consisting of $15 million in cash and a $5 million equity investment by RTW. In addition, Milestone is eligible to receive milestone payments and royalties on future sales of etripamil in the Territory. Milestone will supply etripamil and delivery devices to Ji Xing. Ji Xing will be responsible for development and commercialization costs in the Territory.

Summary of significant accounting policies (Policies)	3 Months Ended
Summary of significant accounting policies (Policies)	Mar. 31, 2021
Summary of significant accounting policies
Basis of consolidation	a) Basis of consolidation The consolidated financial statements include the accounts of the Company and Milestone Pharmaceuticals USA, Inc. All intercompany transactions and balances have been eliminated.
Basis of presentation and use of accounting estimates	b) Basis of presentation and use of accounting estimates These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP) and on a basis consistent with those accounting principles followed by the Company and disclosed in note 2 of its most recent annual consolidated financial statements. Certain information, in particular the accompanying notes normally included in the annual financial statements prepared in accordance with US GAAP have been omitted or condensed. Accordingly, the unaudited interim condensed consolidated financial statements do not include all the information required for full annual financial statements, and therefore, should be read in conjunction with the annual consolidated financial statements and the notes thereto for the year ended December 31, 2020. In the opinion of the Company's management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its balance sheet as of March 31, 2021, and its statements of loss and comprehensive loss, shareholders’ equity and of cash flows for the three months ended March 31, 2021 and 2020. The condensed consolidated balance sheet as of December 31, 2020, was derived from audited annual consolidated financial statements, but does not contain all of the footnote disclosures required by accounting principles generally accepted in the United States of America. These unaudited interim condensed consolidated financial statements are presented in US dollars, which is the Company’s functional currency. The preparation of unaudited interim condensed consolidated financial statements with US GAAP requires the Company to make estimates and judgments that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited interim condensed consolidated financial statements and the reported amounts of revenue and expenses during the period. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes are reasonable under the circumstances, to determine the carrying values of assets and liabilities that are not readily apparent from other sources. Significant estimates and judgments include, but are not limited to, research and development tax credits recoverable, progress of activities performed by the CROs and CMOs which are used to calculate the research and development expense incurred, and share-based compensation. Accordingly, actual results may differ from those estimates and such differences may be material.
Significant Risks and Uncertainties	c) Significant Risks and Uncertainties The COVID-19 pandemic has had an impact on our business, operations and clinical development timelines. Government orders and restrictions in order to control the spread of the disease have impacted patient recruitment, enrollment and follow-up visits at clinical sites. With the global spread of the ongoing COVID-19 pandemic, the Company has implemented business continuity plans designed to address and mitigate the impact of the COVID-19 pandemic on its business. The Company anticipates that the COVID-19 pandemic will continue to have an impact on the development timelines for its clinical programs. The extent to which the COVID-19 pandemic continues to impact its business, its clinical development and regulatory efforts, its corporate development objectives and the value of and market for its common shares will depend on future developments that remain highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements in the U.S., Europe and other countries, and the effectiveness of actions taken globally to contain and treat the disease. The global economic slowdown, the overall disruption of global healthcare systems and the other risks and uncertainties associated with the pandemic could have a material adverse effect on the Company’s business, financial condition, results of operations and growth prospects. In addition, the Company is subject to other challenges and risks specific to its business and its ability to execute on its strategy, as well as risks and uncertainties common to companies in the pharmaceutical industry, including, without limitation, risks and uncertainties associated with: obtaining regulatory approval of its product candidate; delays or problems in the supply of its study drug or failure to comply with manufacturing regulations; identifying, acquiring or in-licensing product candidates; pharmaceutical product development and the inherent uncertainty of clinical success; and the challenges of protecting and enhancing its intellectual property rights; and complying with applicable regulatory requirements.
Sources of Liquidity and Funding Requirements	d) Sources of Liquidity and Funding Requirements Since inception, the Company incurred significant operating losses. Prior to May 2019, the Company financed its operations primarily through sales of convertible preferred shares to accredited investors generating net proceeds of $138.8 million. In May 2019, the Company received net proceeds of $85.4 million from its Initial Public Offering (IPO). In July 2020, the Company received $24.8 million of net proceeds from the private placement of pre-funded warrants to existing shareholders. In October 2020, the Company concluded an offering of common shares and pre-funded warrants for net proceeds of $48.2 million. The Company has incurred operating losses and experienced negative operating cash flows since its inception and anticipates to continue to incur losses for at least the next several years. As of March 31, 2021, the Company had cash, cash equivalents and short-term investments of $129.9 million and an accumulated deficit of $176.0 million.

Accounts payable and accrued liabilities (Tables)

3 Months Ended

Mar. 31, 2021

Accounts payable and accrued liabilities

Schedule of accounts payable and accrued liabilities


	March 31, 2021		December 31, 2020
Trade accounts payable	$	3,412	$	4,641
Accrued research and development liabilities		982		152
Other accrued liabilities		654		164
Accrued compensation and benefits payable		516		957
	$	5,564	$	5,914

Shareholders' equity (Tables)

3 Months Ended

Mar. 31, 2021

Shareholders’ equity

Schedule of additional paid-in capital


	Three months ended March 31,
	2021		2020
Opening balance	$	8,530	$	3,805
Share-based compensation expense		1,368		981
Exercise of stock options		(15)		(56)
Closing balance	$	9,883	$	4,730

Schedule of outstanding and exercisable options


	2021							2020
						Weighted								Weighted
		Number				average			Number					average
		of shares				exercise			of shares					exercise
		2019 Plan		2011 Plan	Total	price			2019 Plan			2011 Plan	Total	price
Outstanding at beginning of year - 2011 Plan		—		2,080,087	2,080,087	$	2.15		—			2,364,526	2,364,526	$	2.15
Outstanding at beginning of year - 2019 Plan		1,706,190		—	1,706,190		13.55		220,140			—	220,140		20.78
Granted - 2019 Plan		1,863,950		—	1,863,950		6.31		765,160			—	765,160		21.49
Exercised - 2011 Plan		—		(16,753)	(16,753)		0.88		—			(53,722)	(53,722)		1.44
Exercised - 2019 Plan		(1,250)		—	(1,250)		3.74		—			—	—		—
Forfeited - 2011 Plan		—		—	—		—		—			(4,978)	(4,978)		2.12
Forfeited - 2019 Plan		—		—	—		—		(2,750)			—	(2,750)		21.48
Outstanding at end of period		3,568,890		2,063,334	5,632,224	$	6.99		982,550			2,305,826	3,288,376	$	7.89
Outstanding at end of period - Weighted average exercise price	$	9.77	$	2.16				$	21.33		$	2.17
Exercisable at end of period		591,885		1,613,229	2,205,114	$	4.86		5,660			1,327,637	1,333,297	$	1.92
Exercisable at end of period - Weighted average exercise price	$	12.55	$	2.05				$	18.43	$		1.85

Schedule of non-vested share options activity


	2021							2020
		Number				Weighted			Number				Weighted
		of options				average			of options				average
		2019 Plan		2011 Plan	Total	fair value			2019 Plan		2011 Plan	Total	fair value
Non-vested share options at beginning of year - 2011 Plan		—		543,192	543,192	$	1.81		—		1,152,300	1,152,300	$	1.88
Non-vested share options at beginning of year - 2019 Plan		1,438,026		—	1,438,026	$	10.28		218,975		—	218,975	$	14
Granted - 2019 Plan		1,863,950		—	1,863,950		4.79		765,160		—	765,160		15.19
Vested, outstanding 2011 Plan		—		(93,087)	(93,087)		1.61		—		(169,133)	(169,133)		5.81
Vested, outstanding 2019 Plan		(324,971)		—	(324,971)		11.38		(4,495)		—	(4,495)		12.85
Forfeited - 2011 Plan		—		—	—		—		—		(4,978)	(4,978)		1.52
Forfeited - 2019 Plan		—		—	—		—		(2,750)		—	(2,750)		15.25
Non-vested share options at end of period		2,977,005		450,105	3,427,110	$	6.08		976,890		978,189	1,955,079	$	8.12
Non-vested share options at end of period - Weighted average fair value	$	6.72	$	1.85				$	11.80	$	1.21

Schedule of weighted average assumptions for the options granted



	2021			2020
Exercise price	$	6.31		$	21.41
Share price	$	6.31		$	21.41
Volatility		94	%		82	%
Risk-free interest rate		1.06	%		1.60	%
Expected life		6.10 years			6.24 years
Dividend		0	%		0	%

Schedule of share-based compensation expense



	2021		2020
Administration	$	573	$	399
Research and development		580		386
Commercial activities		215		196
	$	1,368	$	981

Net loss per share (Tables)

3 Months Ended

Mar. 31, 2021

Net loss per share

Schedule of potentially dilutive securities excluded from the computation of diluted weighted average shares


	2021	2020
Share options	5,632,224	3,288,376

Summary of significant accounting policies - Sources of Liquidity and Funding Requirements (Details) - USD ($) $ in Thousands		1 Months Ended
	Apr. 30, 2019	Oct. 31, 2020	Jul. 31, 2020	May 31, 2019	Mar. 31, 2021	Dec. 31, 2020
Summary of significant accounting policies
Net proceeds from convertible preferred shares to accredited investors	$ 138,800
Net proceeds from issuance of common shares in Initial Public Offering				$ 85,400
Net proceeds from issuance of pre-funded warrants in a private placement			$ 24,800
Net proceeds from offering of common shares and pre-funded warrants		$ 48,200
Cash, cash equivalents and short-term investments					$ 129,900
Accumulated deficit					$ (175,980)	$ (163,466)

Accounts payable and accrued liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Accounts payable and accrued liabilities
Trade accounts payable	$ 3,412	$ 4,641
Accrued research and development liabilities	982	152
Other accrued liabilities	654	164
Accrued compensation and benefits payable	516	957
Accounts payable and accrued liabilities	$ 5,564	$ 5,914

Shareholders' equity - Authorized share capital (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Authorized share capital
Average exercise price (in dollar per share)	$ 1.08	$ 1.44
Amount reclassified from APIC to share capital	$ (15)	$ (56)
Employee Stock Purchase Plan
Authorized share capital
Number of common shares available for issuance	822,100
Number of shares issued under the ESPP	0
Additional shares reserved for issuance	298,279	245,057
Options \| Common Shares
Authorized share capital
Number of shares issued upon exercise of options	18,003	53,722
Proceeds received	$ 19	$ 77
Number of shares options exercised	18,003	53,722

Shareholders' equity - Additional paid-in capital (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Additional paid-in capital
Opening balance	$ 143,119	$ 114,917
Share-based compensation expense	1,368	981
Exercise of stock options	19	77
Closing balance	131,992	99,632
Additional paid-in capital
Additional paid-in capital
Opening balance	8,530	3,805
Share-based compensation expense	1,368	981
Exercise of stock options	(15)	(56)
Closing balance	$ 9,883	$ 4,730

- Definition

+ References + Details

Shareholders' equity - Share-based compensation (Details) - shares	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2018	Jan. 01, 2021	Dec. 31, 2020	Mar. 31, 2020	Dec. 31, 2019
2011 Plan
Share-based compensation
Options outstanding	2,063,334			2,080,087	2,305,826	2,364,526
Number of options forfeited after termination of one plan		72,186
2019 Plan
Share-based compensation
Options outstanding	3,568,890			1,706,190	982,550	220,140
Shares reserved for issuance	4,562,467		1,193,119	980,229	3,316,239
Shares available for future grants	992,327
Options \| 2011 Plan
Share-based compensation
Vesting period	4 years
Options \| 2011 Plan \| Share-based Compensation Award, Tranche One
Share-based compensation
Percentage of shares to vest	25.00%
Options \| 2011 Plan \| Share-based Compensation Award, Tranche Two
Share-based compensation
Percentage of shares to vest	2.70%
Options \| 2019 Plan
Share-based compensation
Vesting period	4 years
Options \| 2019 Plan \| Share-based Compensation Award, Tranche One
Share-based compensation
Percentage of shares to vest	25.00%
Options \| 2019 Plan \| Share-based Compensation Award, Tranche Two
Share-based compensation
Percentage of shares to vest	2.70%

Shareholders' equity - Share-based compensation - Outstanding and exercisable options (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Outstanding and exercisable options, number of shares
Forfeited	0	(7,728)
Cancelled	0	0
Exercisable at end of period		1,333,297
Outstanding and exercisable options, weighted average exercise price
Granted	$ 4.79
Exercised	$ 1.08	$ 1.44
Forfeited		$ 2.12
Weighted average remaining contractual life (in years)	8 years 4 months 24 days	8 years 2 months 12 days
Weighted average remaining contractual life for vested options (in years)	7 years 1 month 6 days	7 years
Weighted average fair values of options granted		$ 15.19
Share-based compensation expense	$ 1,368	$ 981
Unrecognized compensation cost	$ 20,573	$ 17,442
Expected period for recognition	3 years 1 month 6 days	2 years 10 months 24 days
Option Plans 2011 and 2019
Outstanding and exercisable options, number of shares
Outstanding at end of period	5,632,224	3,288,376
Exercisable at end of period	2,205,114
Outstanding and exercisable options, weighted average exercise price
Outstanding at end of period	$ 6.99	$ 7.89
Exercisable at end of period	$ 4.86	$ 1.92
2011 Plan
Outstanding and exercisable options, number of shares
Outstanding at beginning of period	2,080,087	2,364,526
Exercised	(16,753)	(53,722)
Forfeited		(4,978)
Outstanding at end of period	2,063,334	2,305,826
Exercisable at end of period	1,613,229	1,327,637
Outstanding and exercisable options, weighted average exercise price
Outstanding at beginning of period	$ 2.15	$ 2.15
Exercised	0.88	1.44
Outstanding at end of period	2.16	2.17
Exercisable at end of period	$ 2.05	$ 1.85
2019 Plan
Outstanding and exercisable options, number of shares
Outstanding at beginning of period	1,706,190	220,140
Granted	1,863,950	765,160
Exercised	(1,250)
Forfeited		(2,750)
Outstanding at end of period	3,568,890	982,550
Exercisable at end of period	591,885	5,660
Outstanding and exercisable options, weighted average exercise price
Outstanding at beginning of period	$ 13.55	$ 20.78
Granted	6.31	21.49
Exercised	3.74
Forfeited		21.48
Outstanding at end of period	9.77	21.33
Exercisable at end of period	12.55	18.43
Weighted average fair values of options granted	$ 4.79	$ 15.19

Shareholders' equity - Share-based compensation - Non-vested share options (Details) - $ / shares	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Weighted average fair value
Granted		$ 15.19
Option Plans 2011 and 2019
Number of options
Non-vested share options at end of period	3,427,110	1,955,079
Weighted average fair value
Non-vested at end of period	$ 6.08	$ 8.12
2011 Plan
Number of options
Non-vested at beginning of period	543,192	1,152,300
Vested, outstanding	(93,087)	(169,133)
Forfeited		(4,978)
Non-vested share options at end of period	450,105	978,189
Weighted average fair value
Non-vested at beginning of period	$ 1.81	$ 1.88
Vested, outstanding	1.61	5.81
Forfeited/expired		1.52
Non-vested at end of period	$ 1.85	$ 1.21
2019 Plan
Number of options
Non-vested at beginning of period	1,438,026	218,975
Granted	1,863,950	765,160
Vested, outstanding	(324,971)	(4,495)
Forfeited		(2,750)
Non-vested share options at end of period	2,977,005	976,890
Weighted average fair value
Non-vested at beginning of period	$ 10.28	$ 14.00
Granted	4.79	15.19
Vested, outstanding	11.38	12.85
Forfeited/expired		15.25
Non-vested at end of period	$ 6.72	$ 11.80

Shareholders' equity - Share-based compensation - Weighted average assumptions for the options granted (Details) - Options - $ / shares	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Share-based compensation
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Exercise Price	$ 6.31	$ 21.41
Share price (in dollars per share)	$ 6.31	$ 21.41
Volatility (as a percent)	94.00%	82.00%
Risk-free interest rate (as a percent)	1.06%	1.60%
Expected life (in years)	6 years 1 month 6 days	6 years 2 months 27 days
Dividend (as a percent)	0.00%	0.00%

Shareholders' equity - Share-based compensation - Recognized share-based compensation expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Share-based compensation
Share-based compensation expense	$ 1,368	$ 981
General and Administration
Share-based compensation
Share-based compensation expense	573	399
Research and development
Share-based compensation
Share-based compensation expense	580	386
Commercial activities
Share-based compensation
Share-based compensation expense	$ 215	$ 196

Net loss per share (Details) - shares	3 Months Ended
Net loss per share (Details) - shares	Mar. 31, 2021	Mar. 31, 2020
Share options and unvested restricted share awards
Net loss per share
Potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding	5,632,224	3,288,376

Subsequent events (Details) - Subsequent events - Ji Xing Pharmaceuticals $ in Millions	May 15, 2021 USD ($)
Subsequent events
Upfront payment	$ 15
Equity investment	$ 5