0000950170-23-035925 | 10-Q | XBRL Viewer

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Property and Equipment, Net - Summary of Property and Equipment (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Property Plant And Equipment [Line Items]
Total property and equipment	$ 425	$ 419
Less: accumulated depreciation	(97)	(62)
Equipment, net	$ 328	$ 357

Leases

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Leases

7. LEASES

The Company has the following operating leases:


Location	Primary Use	Lease Expiration Date	Renewal Option
Copenhagen, Denmark	Corporate headquarters	January 2025	None
London, United Kingdom	Office space	February 2024	None
Gothenburg, Sweden	Office space	August 2026	None
Stevenage, United Kingdom	Laboratory space	August 2025	None

The Company has no finance leases and has elected to apply the short-term lease exception to all leases of one year or less. Rent expense for the three and six months ended June 30, 2023 was $0.1 million and $0.3 million, respectively. Rent expense for the three and six months ended June 30, 2022 was $0.1 million and $0.2 million, respectively.

Quantitative information regarding the Company’s leases for the three and six months ended June 30, 2023 and 2022 was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
Lease Cost	2023		2022		2023		2022
Operating lease cost (in thousands)	$	139	$	117	$	276	$	243
Other Information
Operating cash flows paid for amounts included in the measurement of lease liabilities (in thousands)	$	125	$	120	$	273	$	234
Operating lease liabilities arising from obtaining right-of-use assets (in thousands)	$	—	$	—	$	409	$	—

As of June 30, 2023 and December 31, 2022, the weighted average remaining lease term for operating leases was 1.6 years and 1.8 years, respectively.

As of June 30, 2023 and December 31, 2022, the weighted average discount rate for operating leases was 8% for both periods.

Operating lease liabilities at June 30, 2023 are as follows (in thousands):


	Operating
Future Lease Payments	Leases
2023 (excluding the period ended June 30, 2023)	$	270
2024		316
2025		68
2026		10
2027		—
Total lease payments		664
Less: imputed interest		(38	)
Total lease liabilities	$	626

Condensed Consolidated Statements of Cash Flows - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities:
Net loss	$ (23,738,000)	$ (33,825,000)
Adjustment to reconcile net loss to net cash used in operating activities:
Depreciation	35,000	15,000
Stock-based compensation	2,873,000	2,823,000
Amortization of premiums and discounts on marketable securities	(248,000)	438,000
Net loss on sale of marketable securities		70,000
Amortization of right of use lease asset	199,000	207,000
Accretion of lease liability	30,000	28,000
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	450,000	6,740,000
Other assets, noncurrent	(203,000)	(981,000)
Accounts payable	2,207,000	1,284,000
Accrued expenses and other current liabilities	1,639,000	1,790,000
Operating lease liabilities	(227,000)	(226,000)
Net cash used in operating activities	(16,983,000)	(21,637,000)
Cash flows from investing activities:
Purchases of marketable securities	(21,994,000)	(40,656,000)
Proceeds from sale of marketable securities	26,459,000	30,415,000
Purchases of property and equipment		(17,000)
Net cash provided by (used in) investing activities	4,465,000	(10,258,000)
Cash flows from financing activities:
Proceeds from issuance of common stock, net of issuance costs	2,705,000	18,000
Net cash provided by financing activities	2,705,000	18,000
Net decrease in cash and cash equivalents	(9,813,000)	(31,877,000)
Effect of exchange rate changes on cash and cash equivalents	(17,000)	(891,000)
Cash and cash equivalents, beginning of period	32,786,000	62,563,000
Cash and cash equivalents, end of period	22,956,000	$ 29,795,000
Supplemental disclosures of noncash activities:
Operating lease liabilities arising from obtaining right-of-use assets	$ 409,000

Stock-Based Compensation - Summary of Stock-based Compensation Expenses Related to Issuance of Stock (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation	$ 1,439	$ 1,419	$ 2,873	$ 2,823
Research and Development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation	686	670	1,370	1,323
General and Administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation	$ 753	$ 749	$ 1,503	$ 1,500

Property and Equipment, Net - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 17,000	$ 7,000	$ 35,000	$ 15,000

Leases - Quantitative Information Regarding Leases (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Lease Cost
Operating lease cost (in thousands)	$ 139	$ 117	$ 276	$ 243
Operating cash flows paid for amounts included in the measurement of lease liabilities (in thousands)	$ 125	$ 120	273	$ 234
Operating lease liabilities arising from obtaining right-of-use assets (in thousands)			$ 409

Commitments and Contingencies

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

9. COMMITMENTS AND CONTINGENCIES

During the three and six months ended June 30, 2023, there were no material changes to the Company’s commitments and contingencies as disclosed in Note 9 of the 2022 Consolidated Financial Statements. Further, the Company’s commitments related to lease agreements are disclosed in Note 7 to the Company’s unaudited interim condensed consolidated financial statements.

Property and Equipment, Net (Tables)

6 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

Summary of Property and Equipment

Property and equipment as of June 30, 2023 consisted of the following (in thousands):


	June 30,			December 31,
	2023			2022
Equipment	$	425		$	419
Less: accumulated depreciation		(97	)		(62	)
Equipment, net	$	328		$	357

Property and Equipment, Net

6 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

4. PROPERTY AND EQUIPMENT, NET

Property and equipment as of June 30, 2023 consisted of the following (in thousands):


	June 30,			December 31,
	2023			2022
Equipment	$	425		$	419
Less: accumulated depreciation		(97	)		(62	)
Equipment, net	$	328		$	357

Depreciation expense for the three and six months ended June 30, 2023 was $17,000 and $35,000, respectively. Depreciation expense for the three and six months ended June 30, 2022 was $7,000 and $15,000, respectively.

Investments

6 Months Ended

Jun. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Investments

3. INVESTMENTS

Cash in excess of the Company’s immediate requirements is invested in accordance with the Company’s investment policy that primarily seeks to maintain adequate liquidity and preserve capital.

A summary of the Company’s available-for-sale investments as of June 30, 2023 and December 31, 2022 consisted of the following (in thousands):


	At June 30, 2023
	Amortized		Gross Unrealized		Gross Unrealized			Fair
Marketable securities:	Cost		Gains		Losses			Value
Corporate bonds	$	29,317	$	—	$	(149	)	$	29,168
Total	$	29,317	$	—	$	(149	)	$	29,168

	At December 31, 2022
	Amortized		Gross Unrealized		Gross Unrealized			Fair
Marketable securities:	Cost		Gains		Losses			Value
Corporate bonds	$	27,573	$	—	$	(135	)	$	27,438
Total	$	27,573	$	—	$	(135	)	$	27,438
Marketable securities, noncurrent:
Corporate bonds	$	5,963	$	—	$	(131	)	$	5,832
Total	$	5,963	$	—	$	(131	)	$	5,832

Description of Business, Organization and Liquidity - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Description Of Business Organization And Liquidity [Line Items]
Accumulated deficit	$ 241,474		$ 241,474		$ 217,736
Net loss	(10,700)	$ (16,900)	(23,738)	$ (33,825)
Cash, cash equivalents and marketable securities	52,100		52,100		66,100
Current assets	55,362		55,362		63,910
Current liabilities	$ 14,897		14,897		$ 11,107
Clinical Development and Corporate General and Administrative Activities
Description Of Business Organization And Liquidity [Line Items]
Net loss			$ (17,000)	$ (21,600)

- Definition

Sum of the carrying amounts as of the balance sheet date of all assets that are expected to be realized in cash, sold, or consumed within one year (or the normal operating cycle, if longer). Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events.

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Total obligations incurred as part of normal operations that are expected to be paid during the following twelve months or within one business cycle, if longer.

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The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

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+ Details

Description of Business, Organization and Liquidity

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business, Organization and Liquidity

1. DESCRIPTION OF BUSINESS, ORGANIZATION AND LIQUIDITY

Business and Organization

Galecto, Inc., together with its consolidated subsidiaries (the “Company” or “Galecto”), is a clinical-stage biotechnology company developing novel therapeutics that are designed to target the biological processes that lie at the heart of fibrotic diseases and cancer. The Company’s initial focus is on the development of small molecule inhibitors of galectin-3 and lysyl oxidase-like 2 ("LOXL2”), which play key roles in regulating fibrosis and cancer.

As of June 30, 2023, the Company’s wholly owned subsidiaries were PharmAkea, Inc. or PharmAkea, Galecto Securities Corporation, and Galecto Biotech AB, a Swedish company. Galecto Biotech ApS, a Danish operating company, is a wholly-owned subsidiary of Galecto Biotech AB.

Risks and uncertainties

The Company is subject to risks common to companies in the biotechnology industry, including, but not limited to, new technological innovations, protection of proprietary technology, dependence on key personnel, compliance with government regulations and the need to obtain additional financing. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel infrastructure and extensive compliance reporting capabilities.

The Company’s product candidates are in development. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained, that any products developed will obtain necessary government regulatory approval or that any approved products will be commercially viable. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate significant revenue from product sales. The Company operates in an environment of rapid change in technology and substantial competition from pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees and consultants.

Liquidity and management plans

Since inception, the Company has devoted substantially all its efforts to business planning, research and development,

recruiting management and technical staff and raising capital, and has financed its operations primarily through the issuance of redeemable convertible preferred shares, debt financings, the Company’s initial public offering (“IPO”) and sales of the Company's common stock in "at-the-market" offerings.

As of June 30, 2023, the Company had an accumulated deficit of $241.5 million, from recurring losses since inception in 2011. The Company has incurred recurring losses and has no sales as none of its product candidates have obtained the necessary regulatory approval for commercialization and to be marketed as approved products. The Company expects to continue to incur losses as a result of costs and expenses related to the Company’s clinical development and corporate general and administrative activities. The Company had negative cash flows from operating activities during the six months ended June 30, 2023 and 2022 of $17.0 million and $21.6 million, respectively, and current projections indicate that the Company will have continued negative cash flows for the foreseeable future as it continues to develop its product candidates. Net losses incurred for the three and six months ended June 30, 2023 were $10.7 million and $23.7 million, respectively. Net losses incurred for the three and six months ended June 30, 2022 were $16.9 million and $33.8 million, respectively.

At June 30, 2023, the Company’s cash, cash equivalents and marketable securities amounted to $52.1 million and current assets amounted to $55.4 million and current liabilities amounted to $14.9 million. At December 31, 2022, the Company’s cash, cash equivalents and marketable securities amounted to $66.1 million, current assets amounted to $63.9 million and current liabilities amounted to $11.1 million.

In the future, the Company will consider the following ways to fund its operations including: (1) raising additional capital through equity and/or debt financings; (2) new commercial relationships to help fund future clinical trial costs (i.e. licensing and partnerships); (3) reducing spending on one or more research and development programs by discontinuing development; and/or (4) restructuring operations to change its overhead structure. Volatility in equity capital markets may adversely affect the market price of the Company’s shares of common stock, which may materially and adversely affect the Company’s ability to fund its business through public or private sales of equity securities. The Company’s future liquidity needs, and ability to address those needs, will largely be determined by the success of its product candidates, key developments and regulatory events.

Condensed Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Statement of Stockholders' Equity [Abstract]
Common stock issuance costs, net	$ 0.1	$ 0.1	$ 0.1	$ 0.1

Net Loss Per Share

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Net Loss Per Share

11. NET LOSS PER SHARE

Basic and diluted net loss per share is calculated as follows (in thousands except share and per share amounts):


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Net loss	$	(10,744	)	$	(16,887	)	$	(23,738	)	$	(33,825	)
Weighted-average number of shares used in computing net loss per common share, basic and diluted		26,375,076			25,270,314			26,025,929			25,266,096
Net loss per common share, basic and diluted	$	(0.41	)	$	(0.67	)	$	(0.91	)	$	(1.34	)

The following outstanding potentially dilutive securities have been excluded from the calculation of diluted net loss per share, as their effect is anti-dilutive:


	Six Months Ended June 30,
	2023		2022
Stock options to purchase common stock		7,670,710		5,760,144

Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	Oct. 31, 2020	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022	Nov. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Issuance and sale of common stock		$ 2,682	$ 23	$ 2,705	$ 23
Number of options, granted				1,923,350
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average grant date fair value of stock options granted				$ 0.98
Intrinsic value per share of stock options				$ 2.52		$ 1.15
Fair value of stock options vested				$ 3,500	$ 4,400
2020 Plan \| Unvested Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense		$ 9,900		$ 9,900
2020 Plan \| Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for future grant	0
2020 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for future grant		275,362		275,362
2020 Equity Incentive Plan \| Unvested Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense that is expected to be recognized over a weighted-average period				2 years
2020 Equity Incentive Plan \| Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options, vesting period	4 years
Stock options, expiration period	10 years
Percentage increase of number of shares of common stock issued and outstanding	5.00%
Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of aggregate shares of common stock sold		1,348,425	80,306	1,369,507	80,306
Common Stock \| 2022 Inducement Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for future grant							250,000
Shares issued				0

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Summary of Assets Measured at Fair Value

A summary of the assets that are measured at fair value as of June 30, 2023 and December 31, 2022 is as follows (in thousands):


	Fair Value Measurement at June 30, 2023
Assets:	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Money market funds(1)	$	10,478	$	10,478	$	—	$	—
Debt securities		29,168		—		29,168		—
Total	$	39,646	$	10,478	$	29,168	$	—

	Fair Value Measurement at December 31, 2022
Assets:	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Money market funds(1)	$	16,445		16,445		—		—
Debt securities		33,270		—		33,270		—
Total	$	49,715	$	16,445	$	33,270	$	—

(1)

Money market funds with maturities of 90 days or less at the date of purchase are included within cash and cash equivalents in the accompanying condensed consolidated balance sheets and are recognized at fair value.

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details

Fair Value Measurements

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

5. FAIR VALUE MEASUREMENTS

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value are performed in a manner to maximize the use of observable inputs and minimize the use of unobservable inputs.

The Company classified its money market funds within Level 1 because their fair values are based on their quoted market prices. The Company classified its debt securities within Level 2 because their fair values are determined using alternative pricing sources or models that utilized market observable inputs.

A summary of the assets that are measured at fair value as of June 30, 2023 and December 31, 2022 is as follows (in thousands):


	Fair Value Measurement at June 30, 2023
Assets:	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Money market funds(1)	$	10,478	$	10,478	$	—	$	—
Debt securities		29,168		—		29,168		—
Total	$	39,646	$	10,478	$	29,168	$	—

	Fair Value Measurement at December 31, 2022
Assets:	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Money market funds(1)	$	16,445		16,445		—		—
Debt securities		33,270		—		33,270		—
Total	$	49,715	$	16,445	$	33,270	$	—

(1)

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Operating expenses
Research and development	$ 8,089	$ 13,707	$ 18,451	$ 26,942
General and administrative	3,070	3,414	6,200	7,118
Total operating expenses	11,159	17,121	24,651	34,060
Loss from operations	(11,159)	(17,121)	(24,651)	(34,060)
Other income (expense), net
Interest income, net	442	156	876	217
Loss on sale of marketable securities		(70)		(70)
Foreign exchange transaction gain (loss), net	(27)	148	37	88
Total other income, net	415	234	913	235
Net loss	$ (10,744)	$ (16,887)	$ (23,738)	$ (33,825)
Net loss per common share, basic	$ (0.41)	$ (0.67)	$ (0.91)	$ (1.34)
Net loss per common share, diluted	$ (0.41)	$ (0.67)	$ (0.91)	$ (1.34)
Weighted-average number of shares used in computing net loss per common share, basic	26,375,076	25,270,314	26,025,929	25,266,096
Weighted-average number of shares used in computing net loss per common share, diluted	26,375,076	25,270,314	26,025,929	25,266,096
Other comprehensive loss, net of tax
Currency translation loss	$ (35)	$ (719)	$ (10)	$ (889)
Unrealized gain (loss) on marketable securities	25	(155)	117	(360)
Reclassification adjustment for loss included in net income		70		70
Other comprehensive gain (loss), net of tax	(10)	(804)	107	(1,179)
Total comprehensive loss	$ (10,754)	$ (17,691)	$ (23,631)	$ (35,004)

Stock-Based Compensation - Summary of Stock Options Activity (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]
Number of Options, Outstanding	5,778,885
Number of Options, Granted	1,923,350
Number of Options, Cancelled	(31,525)
Number of Options, Outstanding	7,670,710	5,778,885
Number of Options, Vested and expected to vest	7,366,568
Number of Options, Vested and exercisable	3,670,775
Weighted average exercise price per share, Outstanding	$ 5.43
Weighted average exercise price per share, Granted	1.28
Weighted average exercise price per share, Cancelled	2.58
Weighted average exercise price per share, Outstanding	4.40	$ 5.43
Weighted average exercise price per share, Vested and expected	4.36
Weighted average exercise price per share, Vested and exercisable	$ 5.39
Weighted average remaining contractual term (in years), Outstanding	8 years 2 months 12 days	7 years 10 months 24 days
Weighted average remaining contractual term (in years), Vested and expected to vest	8 years 2 months 12 days
Weighted average remaining contractual term (in years), Vested and exercisable	7 years 6 months
Aggregate intrinsic value, Granted	$ 433,020
Aggregate intrinsic value, Cancelled	11,445
Aggregate intrinsic value, Outstanding	3,256,209
Aggregate intrinsic value, Vested and expected to vest	3,256,209
Aggregate intrinsic value, Vested and exercisable	$ 744,040

Prepaid Expenses and Other Current Assets (Tables)

6 Months Ended

Jun. 30, 2023

Prepaid Expense and Other Assets, Current [Abstract]

Schedule of Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following (in thousands):


	June 30,		December 31,
	2023		2022
Contract research and development costs	$	1,553	$	1,450
Research and development tax credit receivable		802		792
Prepaid insurance costs		339		805
Value-added tax refund receivable		390		587
Other		154		52
Total prepaid expenses and other current assets	$	3,238	$	3,686

Leases - Summary of Operating Lease Liabilities (Details) $ in Thousands	Jun. 30, 2023 USD ($)
Future Lease Payments
2023 (excluding the period ended March 31, 2023)	$ 270
2024	316
2025	68
2026	10
Total lease payments	664
Less: imputed interest	(38)
Total lease liabilities	$ 626

Accrued Expenses and Other Current Liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Contract research and development costs	$ 6,695	$ 6,145
Employee compensation costs	1,770	597
Operating lease liabilities, current	$ 420	$ 476
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Accrued Liabilities and Other Liabilities	Accrued Liabilities and Other Liabilities
Other liabilities	$ 455	$ 539
Total accrued expenses and other current liabilities	$ 9,340	$ 7,757

Investments - Summary of Available-for-Sale Investments (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Schedule of Available for Sale Securities [Line Items]
Debt Securities, Available-for-sale, Type [Extensible List]	us-gaap:CorporateDebtSecuritiesMember	us-gaap:CorporateDebtSecuritiesMember
Investments - Current
Schedule of Available for Sale Securities [Line Items]
Amortized Cost	$ 29,317	$ 27,573
Gross Unrealized Losses	(149)	(135)
Fair Value	$ 29,168	27,438
Investments - Noncurrent
Schedule of Available for Sale Securities [Line Items]
Amortized Cost		5,963
Gross Unrealized Losses		(131)
Fair Value		$ 5,832

Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Summary of Stock Options Activity

The following table sets forth the activity for the Company’s stock options during the six months ended June 30, 2023:


	Number of Options			Weighted- average exercise price per share		Weighted- average remaining contractual term (in years)		Aggregate intrinsic value
Outstanding at December 31, 2022		5,778,885		$	5.43		7.9	$	—
Granted		1,923,350			1.28		—		433,020
Cancelled		(31,525	)		2.58		—		11,445
Outstanding at June 30, 2023		7,670,710		$	4.40		8.2	$	3,256,209
Vested and expected to vest at June 30, 2023		7,366,568		$	4.36		8.2	$	3,256,209
Vested and exercisable at June 30, 2023		3,670,775		$	5.39		7.5	$	744,040

Summary of Stock-based Compensation Expense

The Company recorded stock-based compensation expense related to the issuance of stock as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Research and development	$	686	$	670	$	1,370	$	1,323
General and administrative		753		749		1,503		1,500
Total stock-based compensation	$	1,439	$	1,419	$	2,873	$	2,823

Summary of Fair Value Assumptions of Options Granted

The fair values of the options granted were estimated using the following assumptions:


	Six Months Ended
	June 30,
	2023			2022
Risk-free interest rate		3.8	%		1.7	%
Expected term (in years)		6.0			6.0
Expected volatility		91.0	%		90.0	%
Expected dividend yield		—			—

Prepaid Expenses and Other Current Assets - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Prepaid Expense and Other Assets, Current [Abstract]
Contract research and development costs	$ 1,553	$ 1,450
Research and development tax credit receivable	802	792
Prepaid insurance costs	339	805
Value-added tax refund receivable	390	587
Other	154	52
Total prepaid expenses and other current assets	$ 3,238	$ 3,686

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 22,956	$ 32,786
Marketable securities	29,168	27,438
Prepaid expenses and other current assets	3,238	3,686
Total current assets	55,362	63,910
Marketable securities, non-current		5,832
Operating lease right-of-use asset	633	810
Equipment, net	328	357
Other assets, non-current	2,480	2,279
Total assets	58,803	73,188
Current liabilities
Accounts payable	5,557	3,350
Accrued expenses and other current liabilities	9,340	7,757
Total current liabilities	14,897	11,107
Operating lease liabilities, non-current	206	328
Total liabilities	15,103	11,435
Commitments and contingencies (Note 9)
Stockholders’ equity
Preferred stock, par value of $0.00001 per share; 10,000,000 shares authorized at June 30, 2023 and December 31, 2022; no shares issued or outstanding as of June 30, 2023 and December 31, 2022
Common stock, par value of $0.00001 per share; 300,000,000 shares authorized at June 30, 2023 and December 31, 2022; 27,021,899 and 25,652,392 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively
Additional paid-in capital	285,311	279,733
Accumulated deficit	(241,474)	(217,736)
Accumulated other comprehensive loss	(137)	(244)
Total stockholders’ equity	43,700	61,753
Total liabilities and stockholders' equity	$ 58,803	$ 73,188

Prepaid Expenses and Other Current Assets

6 Months Ended

Jun. 30, 2023

Prepaid Expense and Other Assets, Current [Abstract]

Prepaid Expenses and Other Current Assets

6. PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist of the following (in thousands):


	June 30,		December 31,
	2023		2022
Contract research and development costs	$	1,553	$	1,450
Research and development tax credit receivable		802		792
Prepaid insurance costs		339		805
Value-added tax refund receivable		390		587
Other		154		52
Total prepaid expenses and other current assets	$	3,238	$	3,686

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Recently issued accounting standards

The Company periodically reviews new accounting standards that are issued and has not identified any new standards that it believes merit further discussion or would have a significant impact on its financial statements.

Net Loss Per Share - Schedule of Antidilutive Securities Excluded from Calculation of Diluted Net Loss Per Share (Details) - shares	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Stock Options to Purchase Common Stock
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	7,670,710	5,760,144

Net Loss Per Share (Tables)

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Net Loss Per Share

Basic and diluted net loss per share is calculated as follows (in thousands except share and per share amounts):


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Net loss	$	(10,744	)	$	(16,887	)	$	(23,738	)	$	(33,825	)
Weighted-average number of shares used in computing net loss per common share, basic and diluted		26,375,076			25,270,314			26,025,929			25,266,096
Net loss per common share, basic and diluted	$	(0.41	)	$	(0.67	)	$	(0.91	)	$	(1.34	)

Schedule of Antidilutive Securities Excluded from Calculation of Diluted Net Loss Per Share

The following outstanding potentially dilutive securities have been excluded from the calculation of diluted net loss per share, as their effect is anti-dilutive:


	Six Months Ended June 30,
	2023		2022
Stock options to purchase common stock		7,670,710		5,760,144

Stock-Based Compensation - Summary of Fair Value Assumptions of Options Granted (Details)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Share-Based Payment Arrangement [Abstract]
Risk-free interest rate	3.80%	1.70%
Expected term (in years)	6 years	6 years
Expected volatility	91.00%	90.00%
Expected dividend yield	0.00%	0.00%

Accrued Expenses and Other Current Liabilities

6 Months Ended

Jun. 30, 2023

Payables and Accruals [Abstract]

Accrued Expenses and Other Current Liabilities

8. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

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


	June 30,		December 31,
	2023		2022
Contract research and development costs	$	6,695	$	6,145
Employee compensation costs		1,770		597
Operating lease liabilities, current		420		476
Other liabilities		455		539
Total accrued expenses and other current liabilities	$	9,340	$	7,757

Net Loss Per Share - Schedule of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Earnings Per Share [Abstract]
Net loss	$ (10,744)	$ (16,887)	$ (23,738)	$ (33,825)
Weighted-average number of shares used in computing net loss per common share, basic	26,375,076	25,270,314	26,025,929	25,266,096
Weighted-average number of shares used in computing net loss per common share, diluted	26,375,076	25,270,314	26,025,929	25,266,096
Net loss per common share, basic	$ (0.41)	$ (0.67)	$ (0.91)	$ (1.34)
Net loss per common share, diluted	$ (0.41)	$ (0.67)	$ (0.91)	$ (1.34)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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+ Details

Leases - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Leases [Line Items]
Rent expense	$ 0.1	$ 0.1	$ 0.3	$ 0.2
Weighted average remaining lease term for operating leases	1 year 7 months 6 days		1 year 7 months 6 days		1 year 9 months 18 days
Weighted average discount rate for operating leases	8.00%		8.00%		8.00%

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying interim condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”).

The accompanying interim condensed consolidated financial statements as of June 30, 2023 and for the three and six months ended June 30, 2023 and 2022, and related interim information contained within the notes to the interim condensed consolidated financial statements, are unaudited. In management’s opinion, the unaudited interim condensed consolidated financial statements have been prepared on the same basis as the Company’s audited consolidated financial statements and include all adjustments (including normal recurring adjustments) necessary for the fair presentation of the Company’s financial position as of June 30, 2023, results of operations, statement of stockholders’ equity for the three and six months ended June 30, 2023 and 2022 and its cash flows for the six months ended June 30, 2023 and 2022. All intercompany balances and transactions have been eliminated. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as filed with the Securities and Exchange Commission (“SEC”) on March 9, 2023 ("2022 Consolidated Financial Statements"). The results for the three and six months ended June 30, 2023 are not necessarily indicative of the results expected for the full fiscal year or any interim period.

For the six months ended June 30, 2023, there have been no changes to the significant accounting policies as disclosed in Note 2 to the 2022 Consolidated Financial Statements.

Recently issued accounting standards

Investments (Tables)

6 Months Ended

Jun. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Summary of Available-for-Sale Investments

A summary of the Company’s available-for-sale investments as of June 30, 2023 and December 31, 2022 consisted of the following (in thousands):


	At June 30, 2023
	Amortized		Gross Unrealized		Gross Unrealized			Fair
Marketable securities:	Cost		Gains		Losses			Value
Corporate bonds	$	29,317	$	—	$	(149	)	$	29,168
Total	$	29,317	$	—	$	(149	)	$	29,168

	At December 31, 2022
	Amortized		Gross Unrealized		Gross Unrealized			Fair
Marketable securities:	Cost		Gains		Losses			Value
Corporate bonds	$	27,573	$	—	$	(135	)	$	27,438
Total	$	27,573	$	—	$	(135	)	$	27,438
Marketable securities, noncurrent:
Corporate bonds	$	5,963	$	—	$	(131	)	$	5,832
Total	$	5,963	$	—	$	(131	)	$	5,832

Leases - Summary of Operating Leases (Details)	6 Months Ended
Leases - Summary of Operating Leases (Details)	Jun. 30, 2023
Copenhagen, Denmark
Operating Leased Assets [Line Items]
Operating lease, expiration date	Jan. 31, 2025
Operating lease,renewal option	None
London,United Kingdom
Operating Leased Assets [Line Items]
Operating lease, expiration date	Feb. 29, 2024
Operating lease,renewal option	None
Gothenburg, Sweden
Operating Leased Assets [Line Items]
Operating lease, expiration date	Aug. 31, 2026
Operating lease,renewal option	None
Stevenage, United Kingdom
Operating Leased Assets [Line Items]
Operating lease, expiration date	Aug. 31, 2025
Operating lease,renewal option	None

Subsequent Events

6 Months Ended

Jun. 30, 2023

Subsequent Events [Abstract]

Subsequent Events

12. SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date on which the unaudited interim condensed consolidated financial statements were issued. The Company has concluded that no subsequent events have occurred that require disclosure to the unaudited interim condensed consolidated financial statements.

Accrued Expenses And Other Current Liabilities (Tables)

6 Months Ended

Jun. 30, 2023

Payables and Accruals [Abstract]

Schedule of Accrued Expenses and Other Current Liabilities

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


	June 30,		December 31,
	2023		2022
Contract research and development costs	$	6,695	$	6,145
Employee compensation costs		1,770		597
Operating lease liabilities, current		420		476
Other liabilities		455		539
Total accrued expenses and other current liabilities	$	9,340	$	7,757

Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)
Beginning balance at Dec. 31, 2021	$ 117,223		$ 273,655	$ (156,112)	$ (320)
Beginning balance (in shares) at Dec. 31, 2021		25,261,832
Stock-based compensation expense	2,823		2,823
Issuance of common stock; net of issuance costs of $0.1 million	23		23
Issuance of common stock; net of issuance costs of $0.1 million (in shares)		80,306
Other comprehensive gain (loss), net	(1,179)				(1,179)
Net loss	(33,825)			(33,825)
Ending balance at Jun. 30, 2022	85,065		276,501	(189,937)	(1,499)
Ending balance (in shares) at Jun. 30, 2022		25,342,138
Beginning balance at Mar. 31, 2022	101,314		275,059	(173,050)	(695)
Beginning balance (in shares) at Mar. 31, 2022		25,261,832
Stock-based compensation expense	1,419		1,419
Issuance of common stock; net of issuance costs of $0.1 million	23		23
Issuance of common stock; net of issuance costs of $0.1 million (in shares)		80,306
Other comprehensive gain (loss), net	(804)				(804)
Net loss	(16,887)			(16,887)
Ending balance at Jun. 30, 2022	85,065		276,501	(189,937)	(1,499)
Ending balance (in shares) at Jun. 30, 2022		25,342,138
Beginning balance at Dec. 31, 2022	61,753		279,733	(217,736)	(244)
Beginning balance (in shares) at Dec. 31, 2022		25,652,392
Stock-based compensation expense	2,873		2,873
Issuance of common stock; net of issuance costs of $0.1 million	2,705		2,705
Issuance of common stock; net of issuance costs of $0.1 million (in shares)		1,369,507
Other comprehensive gain (loss), net	107				107
Net loss	(23,738)			(23,738)
Ending balance at Jun. 30, 2023	43,700		285,311	(241,474)	(137)
Ending balance (in shares) at Jun. 30, 2023		27,021,899
Beginning balance at Mar. 31, 2023	50,333		281,190	(230,730)	(127)
Beginning balance (in shares) at Mar. 31, 2023		25,673,474
Stock-based compensation expense	1,439		1,439
Issuance of common stock; net of issuance costs of $0.1 million	2,682		2,682
Issuance of common stock; net of issuance costs of $0.1 million (in shares)		1,348,425
Other comprehensive gain (loss), net	(10)				(10)
Net loss	(10,744)			(10,744)
Ending balance at Jun. 30, 2023	$ 43,700		$ 285,311	$ (241,474)	$ (137)
Ending balance (in shares) at Jun. 30, 2023		27,021,899

- Definition

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

+ References

+ Details

- Definition

Amount after tax and reclassification adjustments of other comprehensive income (loss).

+ References

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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

Leases (Tables)

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Summary of Operating Leases

The Company has the following operating leases:


Location	Primary Use	Lease Expiration Date	Renewal Option
Copenhagen, Denmark	Corporate headquarters	January 2025	None
London, United Kingdom	Office space	February 2024	None
Gothenburg, Sweden	Office space	August 2026	None
Stevenage, United Kingdom	Laboratory space	August 2025	None

Quantitative Information Regarding Leases

Quantitative information regarding the Company’s leases for the three and six months ended June 30, 2023 and 2022 was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
Lease Cost	2023		2022		2023		2022
Operating lease cost (in thousands)	$	139	$	117	$	276	$	243
Other Information
Operating cash flows paid for amounts included in the measurement of lease liabilities (in thousands)	$	125	$	120	$	273	$	234
Operating lease liabilities arising from obtaining right-of-use assets (in thousands)	$	—	$	—	$	409	$	—

Summary of Operating Lease Liabilities

Operating lease liabilities at June 30, 2023 are as follows (in thousands):


	Operating
Future Lease Payments	Leases
2023 (excluding the period ended June 30, 2023)	$	270
2024		316
2025		68
2026		10
2027		—
Total lease payments		664
Less: imputed interest		(38	)
Total lease liabilities	$	626

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2023	Jul. 26, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	001-39655
Entity Registrant Name	GALECTO, INC.
Entity Central Index Key	0001800315
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	37-1957007
Entity Address, Address Line One	75 State Street
Entity Address, Address Line Two	Suite 100
Entity Address, City or Town	Boston
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02109
City Area Code	+45
Local Phone Number	70 70 52 10
Title of 12(b) Security	Common Stock, par value $0.00001 per share
Trading Symbol	GLTO
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	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		27,112,697

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.00001	$ 0.00001
Preferred stock, authorized	10,000,000	10,000,000
Preferred stock, issued	0	0
Preferred stock, outstanding	0	0
Common stock, par value	$ 0.00001	$ 0.00001
Common stock, authorized	300,000,000	300,000,000
Common stock, issued	27,021,899	25,652,392
Common stock, outstanding	27,021,899	25,652,392

Fair Value Measurements - Summary of Assets Measured at Fair Value (Details) - USD ($)
$ in Thousands

Jun. 30, 2023

Dec. 31, 2022

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Assets fair value

$ 39,646

$ 49,715

Money Market Funds

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Assets fair value

^[1]

10,478

16,445

Debt Securities

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Assets fair value

29,168

33,270

Level 1

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Assets fair value

10,478

16,445

Level 1 | Money Market Funds

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Assets fair value

^[1]

10,478

16,445

Level 2

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Assets fair value

29,168

33,270

Level 2 | Debt Securities

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Assets fair value

$ 29,168

$ 33,270

[1]	Money market funds with maturities of 90 days or less at the date of purchase are included within cash and cash equivalents in the accompanying condensed consolidated balance sheets and are recognized at fair value

Stock-Based Compensation

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

10. STOCK-BASED COMPENSATION

Employee equity plan

In March 2020, the Company's Board of Directors and stockholders approved the 2020 Stock Option and Grant Plan (“2020 Plan”). Holders of stock options under the 2020 Plan shall be entitled to exercise the vested portion of the stock option during the term of the grant. If a qualified exit, as defined in the 2020 Plan, occurs, then all of the holders' unvested options shall vest immediately.

In October 2020, the Company's Board of Directors and stockholders approved the 2020 Equity Incentive Plan (“2020 Equity Plan”). Following the adoption of the 2020 Equity Plan, no further options are available to be issued under the 2020 Plan. Stock options granted under the 2020 Equity Plan generally vest over a four-year period and expire ten years from the grant date. The shares available for grant under the 2020 Equity Plan will cumulatively increase by 5 percent of the number of shares of common stock issued and outstanding on January 1st each year. At June 30, 2023, the Company had 275,362 shares available for future grant under the 2020 Equity Plan.

The following table sets forth the activity for the Company’s stock options during the six months ended June 30, 2023:


	Number of Options			Weighted- average exercise price per share		Weighted- average remaining contractual term (in years)		Aggregate intrinsic value
Outstanding at December 31, 2022		5,778,885		$	5.43		7.9	$	—
Granted		1,923,350			1.28		—		433,020
Cancelled		(31,525	)		2.58		—		11,445
Outstanding at June 30, 2023		7,670,710		$	4.40		8.2	$	3,256,209
Vested and expected to vest at June 30, 2023		7,366,568		$	4.36		8.2	$	3,256,209
Vested and exercisable at June 30, 2023		3,670,775		$	5.39		7.5	$	744,040

The weighted-average grant date fair value of all stock options granted for the six months ended June 30, 2023 was $0.98. The intrinsic value at June 30, 2023 and December 31, 2022 was based on the closing price of the Company’s common stock on that date of $2.52 and $1.15 per share, respectively.

In November 2022, the Company's Board of Directors approved the 2022 Inducement Plan (the “Inducement Plan”), which allows for the grant of equity awards to be made to a new employee where the equity award is a material inducement to an employee entering into employment with the Company. The Inducement Plan was adopted by the Company's Board of Directors without stockholder approval pursuant to Nasdaq Listing Rule 5635(c)(4). A total of 250,000 shares of the Company's common stock have been reserved for issuance under the Inducement Plan. As of June 30, 2023, no shares have been issued under the Inducement Plan.

Stock-based compensation

The grant date fair value of stock options vested during the six months ended June 30, 2023 and 2022 was $3.5 million and $4.4 million, respectively. Total unrecognized compensation expense related to unvested options granted under the Company’s stock-based compensation plan was $9.9 million at June 30, 2023, which is expected to be recognized over a weighted average period of 2.0 years. The Company recorded stock-based compensation expense related to the issuance of stock as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Research and development	$	686	$	670	$	1,370	$	1,323
General and administrative		753		749		1,503		1,500
Total stock-based compensation	$	1,439	$	1,419	$	2,873	$	2,823

The Company uses a Black-Scholes option pricing model to determine fair value of its stock options. The Black-Scholes option pricing model includes various assumptions, including the fair value of common shares, expected life of stock options, the expected volatility based on the historical volatility of a publicly traded set of peer companies and the expected risk-free interest rate based on the implied yield on a U.S. Treasury security.

The fair values of the options granted were estimated using the following assumptions:


	Six Months Ended
	June 30,
	2023			2022
Risk-free interest rate		3.8	%		1.7	%
Expected term (in years)		6.0			6.0
Expected volatility		91.0	%		90.0	%
Expected dividend yield		—			—