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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_________________
FORM 10-Q
_________________
(Mark One)
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022
OR
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File Number: 001-40947
_________________
LianBio
(Exact Name of Registrant as Specified in its Charter)
_________________
Cayman Islands98-1594670
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
103 Carnegie Center Drive, Suite 309
Princeton, NJ
08540
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (609) 486-2308
_________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange
on which registered
American depositary shares, each representing 1 ordinary share, $0.000017100448 par value per shareLIANThe Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
o
Accelerated filer
o
Non-accelerated filer
x
Smaller reporting company
x
Emerging growth company
x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
As of August 8, 2022, 108,353,831 ordinary shares of the registrant, par value $0.000017100448 per share, were outstanding, of which 36,903,443 ordinary shares were held in the form of American Depositary Shares.




Table of Contents
Table of Contents
Page
PART I.
PART II
ITEM 1A.
ITEM 3.
ITEM 5.
2

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, about us and our industry that involve substantial risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, prospects, plans, objectives of management and expected growth, are forward-looking statements. These statements are based on our current beliefs, expectations and assumptions regarding our intentions, beliefs or current expectations concerning, among other things, the future of our business, future plans and strategies, our operational results and other future conditions. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
Forward-looking statements can be identified by words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “seek,” “target,” “will,” “would,” “could,” “should,” “continue,” “contemplate” and other similar expressions, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about:
our ability to successfully develop, gain regulatory approval for and launch commercial products in Greater China and other Asian markets;
our ability to deliver innovative therapeutic solutions to patients and become a leading biopharmaceutical company in Greater China, including Mainland China, Hong Kong, Taiwan and Macau, and other Asian markets;
our plans and ability to leverage data generated in our partners’ global registrational trials and clinical development programs to obtain regulatory approval for and bring our current product candidates to market in our licensed territories, and our plans to maximize patient reach for each of our product candidates;
our partners’ announced plans and expectations with respect to the success, cost and timing of their product development activities, preclinical studies and clinical trials, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the timing of expected review from regulatory authorities and the period during which the results of the trials are expected to become available;
our ability to expand our pipeline through the continued strategic in-licensing of innovative and complementary product candidates with the potential to become the new standard of care in Greater China and other Asian markets;
our ability to successfully establish an international infrastructure, including by building a focused salesforce in China and leveraging the commercial infrastructure we create to benefit our other assets;
our ability to establish and maintain relationships and collaborations with investors and our current and any future licensing partners that will contribute to our success in sourcing value and creating partnerships to enable us to build out a broad and clinically validated pipeline;
our ability to design, initiate and complete any clinical trials to advance our current product candidates, including mavacamten, TP-03, NBTXR3, infigratinib, BBP-398, LYR-210, omilancor, NX-13 and sisunatovir, as well as any future product candidates, towards regulatory approval in China and our other licensed territories;
our ability to conduct, and the timing of and costs related to, our product development activities, including any preclinical studies and related clinical trials in Greater China and other Asian markets of our current and any future product candidates, and our ability to obtain, and the timing of and costs related to, potential regulatory approval of such product candidates in Greater China and other Asian markets;
our plans to pursue the development of certain product candidates for additional treatment indications;
our ability to successfully utilize the data we may generate from any clinical trials we conduct in Greater China or other territories, including in conjunction with data from clinical trials conducted by our partners, to seek regulatory approval in Greater China and other Asian markets;
our plans and ability to join our current and future partners’ clinical and registrational trials and our plans and ability to initiate and complete our standalone clinical and registrational trials;
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our ability to design and implement the development strategies for our product candidates in each of our licensed territories and, where applicable, our ability to design and implement global development strategies for our product candidates in new indications in connection with our local development strategies;
the potential for certain of our current and future product candidates to have more benign safety profiles or result in differentiated safety profiles than currently available therapeutic options;
the size, composition and growth potential of the patient populations and markets we intend to target with our product candidates and our ability to develop and commercialize product candidates to address those patient populations and markets;
our ability to successfully procure from our partners or other third parties, as applicable, sufficient supply of our product candidates for any preclinical studies, clinical trials or commercial use, if approved;
our ability to obtain funding for our operations, including funding necessary to complete further development and commercialization of our product candidates and our general and administrative expenses;
the rate and degree of market acceptance of our product candidates;
our ability to attract and retain key scientific or management personnel;
the impact of laws and regulations and of any legal and regulatory developments in our licensed territories or internationally;
our expectations regarding our ability to obtain and maintain intellectual property protection for our product candidates;
our ability to license intellectual property relating to our product candidates and to comply with our existing license and collaboration agreements;
our reliance on third parties to conduct product development, manufacturing and other services, and any agreements we have or into which we may enter with such parties in connection with the commercialization of our product candidates and any other approved product;
our expectations regarding the time during which we will be an emerging growth company or smaller reporting company;
the direct and indirect impact of the COVID-19 pandemic on our business, operations (including clinical trials) and the markets and communities in which we and our partners, collaborators and vendors operate;
our estimates of our expenses, capital requirements and needs for additional financing; and
other risks and uncertainties, including those listed under the caption “Risk Factors”.
Although we base these forward-looking statements on assumptions that we believe are reasonable when made, we caution investors that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this Quarterly Report on Form 10-Q. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate are consistent with the forward-looking statements contained in this Quarterly Report on Form 10-Q, those results or developments may not be indicative of results or developments in subsequent periods.
Given these risks and uncertainties, investors are cautioned not to place undue reliance on these forward-looking statements. Any forward-looking statement that we make in this Quarterly Report on Form 10-Q speaks only as of the date of such statement, and we undertake no obligation to update any forward-looking statements or to publicly announce the results of any revisions to any of those statements to reflect future events or developments. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should only be viewed as historical data. Investors should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. Unless the context requires otherwise, references in this report to the “Company,” “LianBio,” “we,” “us” and “our” refer to LianBio and its consolidated subsidiaries.
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PART I-FINANCIAL INFORMATION
Item 1. Financial Statements
LianBio
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
(Unaudited)
June 30,
2022
December 31,
2021
Assets
Current assets:
Cash and cash equivalents$134,334 $228,182 
Marketable securities194,965 155,067 
Prepaid expenses and other current assets7,141 10,354 
Other receivable7,264 6,044 
Total current assets343,704 399,647 
Restricted cash, non-current20,075 20,000 
Property and equipment, net2,992 1,882 
Operating lease right-of-use assets5,003 4,763 
Other non-current assets39 51 
Total assets$371,813 $426,343 
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable$1,234 $3,231 
Accrued expenses17,972 9,976 
Current portion of operating lease liabilities1,803 1,125 
Other current liabilities738 760 
Total current liabilities21,747 15,092 
Operating lease liabilities3,660 3,709 
Other liabilities208 206 
Nonrefundable research deposit20,000 20,000 
Total liabilities$45,615 $39,007 
Commitments and contingencies (Note 8)
Shareholders’ equity (deficit):
Ordinary shares, $0.000017100448 par value. Authorized 2,923,900,005 shares as of June 30, 2022; 108,353,831 shares issued and outstanding at June 30, 2022; Authorized 2,923,900,005 shares as of December 31, 2021; 107,275,458 shares issued and outstanding at December 31, 2021
2 2 
Additional paid-in capital724,176 713,269 
Accumulated other comprehensive (loss) income (1,402)526 
Accumulated deficit(430,352)(360,235)
Total LianBio shareholders’ equity292,424 353,562 
Non-controlling interest33,774 33,774 
Total shareholders’ equity326,198 387,336 
Total liabilities and shareholders’ equity$371,813 $426,343 
See accompanying notes to the consolidated financial statements
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LianBio
Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except share and per share amounts)
(Unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Operating expenses:
Research and development$28,591 $93,030 $40,920 $146,383 
General and administrative14,551 6,461 30,639 13,607 
Total operating expenses43,142 99,491 71,559 159,990 
Loss from operations(43,142)(99,491)(71,559)(159,990)
Other income (expense):
Interest income, net553 106 833 139 
Other income (expense), net203 (68)620 (192)
Net loss before income taxes(42,386)(99,453)(70,106)(160,043)
Income taxes5 975 11 1,950 
Net loss(42,391)(100,428)(70,117)(161,993)
Other comprehensive (loss) income:
Foreign currency translation (loss) income, net of tax(421)122 (814)130 
Unrealized loss on marketable securities, net of tax(291) (1,114) 
Comprehensive loss$(43,103)$(100,306)$(72,045)$(161,863)
Net loss per share attributable to ordinary shareholders, basic and diluted$(0.39)$(4.90)$(0.65)$(7.91)
Weighted-average shares outstanding used in computing net loss per share attributable to ordinary shareholders, basic and diluted107,922,501 20,477,338 107,600,767 20,477,338 
See accompanying notes to the consolidated financial statements
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LianBio
Consolidated Statements of Redeemable Convertible Preferred Shares and Shareholders’ Equity (Deficit)
(In thousands, except share amounts)
(Unaudited)
 Redeemable
Convertible Preferred
Shares
Ordinary SharesAdditional
Paid in
Capital
Accumulated
Other
Comprehensive Income (Loss)
Accumulated
Deficit
Total LianBio
Shareholders’
Equity
Non-
Controlling
Interest
Total
Shareholders’
Equity (Deficit)
 SharesAmountSharesAmount
Balance, December 31, 2021 $ 107,275,458 $2 $713,269 $526 $(360,235)$353,562 $33,774 $387,336 
Share-based compensation expense— — — — 4,669 — — 4,669 — 4,669 
Receivable from related party— — — — 1,710 — — 1,710 — 1,710 
Net Loss— — — — — — (27,726)(27,726)— (27,726)
Comprehensive Loss— — — — — (1,216)— (1,216)— (1,216)
Balance, March 31, 2022 $ 107,275,458 $2 $719,648 $(690)$(387,961)$330,999 $33,774 $364,773 
Share-based compensation expense— — — — 4,528 — — 4,528 — 4,528 
Exercise of options— — 1,000,000 — — — — — — — 
Exercise of warrants— — 78,373 — — — — — — — 
Net Loss— — — — — — (42,391)(42,391)— (42,391)
Comprehensive Loss— — — — — (712)— (712)— (712)
Balance, June 30, 2022 $ 108,353,831 $2 $724,176 $(1,402)$(430,352)$292,424 $33,774 $326,198 









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LianBio
Consolidated Statements of Redeemable Convertible Preferred Shares and Shareholders’ Equity (Deficit)
(In thousands, except share amounts)
(Unaudited)
 Redeemable
Convertible Preferred
Shares
Ordinary SharesAdditional
Paid in
Capital
Accumulated
Other
Comprehensive
(Loss) Income
Accumulated
Deficit
Total LianBio
Shareholders’
Equity (Deficit)
Non-
Controlling
Interest
Total
Shareholders’
Equity (Deficit)
 SharesAmountSharesAmount
Balance, December 31, 202010,971,231 $349,789 20,477,338 $ $31,132 $(40)$(163,935)$(132,843)$34,773 $(98,070)
Share-based compensation expense— — — — 1,674 — — 1,674 — 1,674 
Issuance of Series A Preferred Shares at $56.66, net of issuance costs
52,947 2,940 — — — — — — — — 
Warrants issued in license agreement— — — — — — — — 9,415 9,415 
Net Loss— — — — — — (61,565)(61,565)— (61,565)
Comprehensive Income— — — — — 8 — 8 — 8 
Balance, March 31, 202111,024,178 $352,729 20,477,338 $ $32,806 $(32)$(225,500)$(192,726)$44,188 $(148,538)
Share-based compensation expense— — — — 1,443 — — 1,443 — 1,443 
Net Loss— — — — — — (100,428)(100,428)— (100,428)
Comprehensive Income— — — — — 122 — 122 — 122 
Balance, June 30, 202111,024,178 $352,729 20,477,338 $ $34,249 $90 $(325,928)$(291,589)$44,188 $(247,401)
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LianBio
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 Six Months Ended
June 30, 2022
Six Months Ended
June 30, 2021
Net loss$(70,117)$(161,993)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash share consideration, issued in acquisition of IPR&D 9,415 
Non-cash operating lease expense (benefit) 398 (40)
Depreciation expense409 137 
Share based compensation expense9,197 3,117 
Amortization of discounts on investments, net1  
Unrealized foreign currency transaction loss (gain), net240 (46)
Changes in operating assets and liabilities:
Decrease (increase) in prepaid expenses and other current assets3,130 (1,343)
(Increase) decrease in other receivable(1,281)20,000 
Increase in other non-current assets8 1 
(Decrease) increase in accounts payable(1,957)26,094 
Increase in accrued expenses7,414 8,178 
(Decrease) increase in other current liabilities50 1,704 
Net cash used in operating activities(52,508)(94,776)
Cash flows from investing activities:
Purchase of property and equipment(673)(67)
Purchase of marketable securities (126,138) 
Sales and redemption of marketable securities85,125  
Net cash used for investing activities(41,686)(67)
Cash flows from financing activities:
Proceeds from exercise of share options1,710  
Proceeds from issuance of redeemable convertible preferred shares 3,000 
Issuance costs related to redeemable convertible preferred shares (60)
Net cash provided by financing activities1,710 2,940 
Effect of exchange rate changes on cash and cash equivalents(1,289)177 
Net decrease in cash, cash equivalents and restricted cash$(93,773)$(91,726)
Cash and cash equivalents, and restricted cash—beginning of period248,182 254,350 
Cash and cash equivalents, and restricted cash—ending of period$154,409 $162,624 
Cash and cash equivalents—end of period$134,334 $142,624 
Restricted cash—end of period$20,075 $20,000 
Cash and cash equivalents, and restricted cash—ending of period$154,409 $162,624 
Supplemental disclosure of cash information
      Cash paid for income taxes$343 $ 
Supplemental disclosure of non-cash operating activities:
      Right-of-use assets obtained in exchange for lease obligations$1,233 $ 
      Issuance costs in accounts payable and other accrued liabilities$ $1,358 
      Purchase of property and equipment in accounts payable
$938 $ 
See accompanying notes to the consolidated financial statements
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular Dollars in Thousands, Except Share and per Share Data)
(Unaudited)
1. Nature of Business
LianBio (“LianBio” or the “Company”) is a global, science-driven biopharmaceutical company dedicated to developing and commercializing innovative medicines for patients with unmet medical needs, with an initial focus on in-licensing assets for Greater China and other Asian markets.
The Company was incorporated in the Cayman Islands in July 2019 and maintains its Chinese headquarters in Shanghai, China. The Company conducts its corporate activities at its United States headquarters located in Princeton, New Jersey.
On November 3, 2021, the Company completed its initial public offering (“IPO”) through an underwritten sale of 20,312,500 American Depositary Shares (“ADSs") representing 20,312,500 ordinary shares at a price of $16.00 per share. Following the close of the IPO, on December 1, 2021, the underwriters partially exercised their option to purchase additional shares and purchased an additional 593,616 ADSs at the IPO price of $16.00 per ADS. The Company received gross proceeds of $334.5 million in connection with the IPO and subsequent exercise of the underwriters’ option and aggregate net proceeds of $304.8 million after deducting underwriting discounts, commissions and other offering expenses.
Concurrent with the IPO, all of the Company’s convertible preferred shares then-outstanding were automatically converted into an aggregate of 64,467,176 ordinary shares and were reclassified into permanent equity. Following the IPO, there were no preferred shares outstanding.
2. Significant Accounting Policies
(A) Basis of presentation
The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, which include the People’s Republic of China (“PRC”) registered entities directly owned by the Company. All intercompany accounts and transactions have been eliminated in consolidation.
The interim balance sheet as of June 30, 2022, and the interim consolidated statements of operations and comprehensive loss, changes in redeemable convertible preferred shares and shareholders’ equity (deficit) for the three and six months ended June 30, 2022 and 2021, and the cash flows for the six months ended June 30, 2022 and 2021 are unaudited. These unaudited interim financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, which consist of only normal recurring adjustments, necessary for the fair statement of the Company’s financial information. The financial data and other information disclosed in these notes related to the three and six month periods are also unaudited. The interim results for the three and six months ended June 30, 2022 are not necessarily indicative of results to be expected for the year ending December 31, 2022, any other interim periods or any future year or period.
(B) Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported financial position at the date of the financial statements and the reported results of operations during the reporting period. Such estimates and assumptions affect the reported amounts of assets, liabilities, and expenses, and disclosure of contingent assets and liabilities in the consolidated financial statements and accompanying notes. The only material estimates in the accompanying financial statements are the fair value of warrants, share-based compensation, and share options. Actual results could differ from those used in evaluating these accounting estimates.
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(i) Concentration of Credit Risk and Other Risks and Uncertainties
In March 2020, the World Health Organization declared the global novel coronavirus disease 2019 (“COVID-19”) outbreak a pandemic. The Company’s operations have not been significantly impacted by the COVID-19 pandemic. However, the Company cannot at this time predict the specific extent, duration, or full impact that the COVID-19 pandemic will have on its financial condition and operations, including planned clinical trials. The impact of the COVID-19 pandemic on the Company’s financial performance will depend on future developments, including the duration and spread of the pandemic and related governmental advisories and restrictions. These developments and the impact of the COVID-19 pandemic on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy continue to be impacted for an extended period, the Company’s results may be materially adversely affected.
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents in deposits at financial institutions that exceed federally insured limits. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to material credit risk due to the financial position of the banking institutions. The Company has no off-balance sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements.
The Company’s results of operations involve numerous risks and uncertainties. Factors that could affect the Company’s operating results and cause actual results to vary materially from expectations include, but are not limited to, uncertainty of results of clinical trials, uncertainty of regulatory approval of the Company’s potential product candidates, uncertainty of market acceptance of its product candidates, competition from substitute products and larger companies, securing and protecting proprietary technology, strategic relationships and dependence on key individuals and sole source suppliers.
Each of the Company’s product candidates require approvals from the National Medical Products Administration (“NMPA”) in China and comparable foreign regulatory agencies prior to commercial sales in their respective jurisdictions. There can be no assurance that any product candidates will receive the necessary approvals. If the Company is denied approval, approval is delayed or the Company is unable to maintain approval for any product candidate, such events could have a materially adverse impact on the Company’s business.
(ii) Liquidity
The Company has incurred operating losses since inception and had an accumulated deficit of $430.4 million as of June 30, 2022 and $360.2 million as of December 31, 2021. The Company’s cash and cash equivalents and marketable securities were $329.3 million and $383.2 million as of June 30, 2022 and December 31, 2021, respectively. The Company has financed its operations to date primarily through equity capital raises.
The Company believes that existing capital resources, including the net proceeds from the IPO in November 2021, will be sufficient to meet projected operating requirements for at least 12 months from the date of issuance of the accompanying consolidated financial statements, though it expects to continue to incur operating losses and negative operating cash flows. The Company will be required to raise additional capital to fund future operations, however, no assurance can be given as to whether additional needed financing will be available on terms acceptable to the Company, if at all. If sufficient funds on acceptable terms are not available when needed, the Company may be required to curtail planned activities to preserve cash resources. These factors may adversely impact the Company’s ability to achieve its business objectives and would likely have an adverse effect on its future business prospects, or even its ability to remain a going concern.

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(C) Significant Accounting Policies Update
The Company’s significant accounting policies are disclosed in Note 2, Significant Accounting Policies in the Annual Report on Form 10-K for the year ended December 31, 2021. There have been no material changes to the Company’s significant accounting policies during the three and six months ended June 30, 2022.
(D) Recently Issued Accounting Pronouncements Not Yet Adopted
The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. As an emerging growth company, the Company has elected to “opt out” of such extended transition period for the implementation of new or revised accounting standards and, as a result, the Company will comply with new or revised accounting standards on the same timeline as other public companies. The Company has evaluated recent accounting pronouncements and believes that there are none that will have a material impact on its financial position or results of operations upon adoption.
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3. Material Agreements
License Agreement with QED Therapeutics, Inc.
In October 2019, the Company entered into a license agreement (as subsequently amended, the “QED License Agreement”) with QED Therapeutics, Inc. (“QED”), under which the Company obtained an exclusive license under certain patents and know-how (including patents and know-how that QED licensed from QED’s upstream licensor) to develop, manufacture, use, sell, import, and commercialize QED’s ATP-competitive, FGFR1-3 tyrosine kinase inhibitor, infigratinib, in pharmaceutical products in the licensed territory of Mainland China, Macau, Hong Kong, Taiwan, Thailand, Singapore and South Korea, in the licensed field of human prophylactic and therapeutic uses in cancer indications. In September 2020, the Company entered into an amendment with QED to reduce the licensed territories to include Mainland China, Macau and Hong Kong. In December 2021, the Company entered into a second amendment with QED to modify the Company’s development obligations with respect to certain clinical trials, and change the development milestone payments the Company owes to QED and the royalty rates for the tiered royalties on net sales of licensed products the Company will pay to QED. Under the QED License Agreement, QED received a nonrefundable upfront payment of $10.0 million and was granted warrants to purchase 100,000 ordinary shares in Lian Oncology, a subsidiary of LianBio, valued at $1.0 million. Pursuant to ASC 505-50, as the fair value of the warrants were more reliably determinable than the fair value of the benefits received from the licensing agreement, the Company valued the warrants using the Black-Scholes Model. The warrants were issued in three tranches with the aggregate number of shares across all tranches equaling 10% of the fully diluted equity of Lian Oncology as of the issue date. Vesting of the warrant shares are linked to regulatory milestones and the warrants expire 10 years from the issue date. The amended and restated option agreement also provides QED with the option to choose to either convert the warrant (“Subsidiary Warrant”) into ordinary shares of the Company (“Parent Company Shares”) or a warrant to purchase a certain number of Parent Company Shares (“Parent Company Warrant”) immediately prior to an IPO of the Company. In the event QED chooses to convert the Subsidiary Warrant into Parent Company Shares, the number of Parent Company Shares QED is entitled to receive would be calculated as the aggregate fair market value of the ordinary shares of Lian Oncology that are under the Subsidiary Warrant, divided by the per share fair market value of the Parent Company Shares, on a fully diluted and as-converted basis and as of the date the Company sent QED the notice of the IPO. In the event QED chose to convert the Subsidiary Warrant into the Parent Company Warrant, the number of Parent Company Shares under the Parent Company Warrant QED was entitled to receive would have been calculated as the aggregate intrinsic value of the Subsidiary Warrant (the number of the ordinary shares of Lian Oncology under the Subsidiary Warrant multiplied by the difference between the strike price of the Subsidiary Warrant and the per share fair market value of Lian Oncology), divided by the per share intrinsic value of the Parent Company Warrant (the difference between the strike price of the Parent Company Warrant and the per share fair market value of Parent Company Shares), on a fully diluted and as-converted basis on the date of the warrant conversion. This conversion feature was not required to be bifurcated as it is clearly and closely related to the equity host instrument, pursuant to ASC 815. On October 18, 2021, based on the conversion feature, LianBio issued to QED a warrant to purchase 347,569 of its ordinary shares at an exercise price of $0.000017100448 per share and, concurrently with such issuance, the Subsidiary Warrant was deemed to be performed and settled in full and was irrevocably terminated. The QED License Agreement also required the Company to refund QED for costs incurred on the study through the execution date which was determined to be $2.8 million. Additionally, QED is entitled to receive from the Company development milestone payments of up to $7.0 million upon achievement of specified development milestones, and sales milestone payments of up to $87.5 million based on cumulative net sales of infigratinib, in addition to tiered royalties on net sales of licensed products at the greater of (a) percentage rates in the mid- to high-teens on the net sales of the licensed products, or (b) the applicable rate payable under QED’s agreement with its upstream licensor (capped in the mid-teens).
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License Agreement with MyoKardia
In August 2020, the Company entered into an exclusive license agreement (the “MyoKardia License Agreement”) with MyoKardia Inc. (“MyoKardia,” now a wholly-owned subsidiary of Bristol-Myers Squibb (“BMS”)), under which the Company obtained an exclusive license under certain patents and know-how of MyoKardia to develop, manufacture, use, sell, import and commercialize MyoKardia’s proprietary compound, mavacamten, in the licensed territory of Mainland China, Hong Kong, Macau, Taiwan, Thailand and Singapore, and in the licensed field of any indication in humans, which includes any prophylactic or therapeutic use in humans. Under the MyoKardia License Agreement, MyoKardia received a nonrefundable upfront payment of $40.0 million and was granted a warrant to purchase 170,000 ordinary shares in Lian Cardiovascular, a subsidiary of LianBio, valued at $33.8 million. Pursuant to ASC 505-50, as the fair value of the warrants were more reliably determinable than the fair value of the benefits received from the licensing agreement, the Company valued the warrants using the Black-Scholes Model and the underlying assumptions are discussed in further detail in Note 10 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The warrants, representing 17% of the fully diluted equity of Lian Cardiovascular, are exercisable by MyoKardia at any time after issuance. The amended and restated option agreement also provides MyoKardia with the option to choose to either convert the warrant (“Subsidiary Warrant”) into ordinary shares of the Company (“Parent Company Shares”) or a warrant to purchase a certain number of Parent Company Shares (“Parent Company Warrant”) immediately prior to an IPO of the Company. MyoKardia was entitled to choose to convert the Subsidiary Warrant into Parent Company Shares, and the number of Parent Company Shares MyoKardia was entitled to receive would have been calculated as the aggregate fair market value of the ordinary shares of Lian Cardiovascular that are under the Subsidiary Warrant, divided by the per share fair market value of the Parent Company Shares, on a fully diluted and as-converted basis on the date the Company sent MyoKardia the notice of the IPO. Alternatively, MyoKardia was entitled to choose to convert the Subsidiary Warrant into the Parent Company Warrant, the number of Parent Company Shares under the Parent Company Warrant MyoKardia was entitled to receive would be calculated as the aggregate intrinsic value of the Subsidiary Warrant (the number of the ordinary shares of Lian Cardiovascular under the Subsidiary Warrant multiplied by the difference between the strike price of the Subsidiary Warrant and the per share fair market value of Lian Cardiovascular), divided by the per share intrinsic value of the Parent Company Warrant (the difference between the strike price of the Parent Company Warrant and the per share fair market value of Parent Company Shares), on a fully diluted and as-converted basis on the date of the warrant conversion. This conversion feature was not required to be bifurcated as it was clearly and closely related to the equity host instrument, pursuant to ASC 815. As of October 12, 2021, MyoKardia elected not to exercise this option and, therefore, continues to hold its warrant to purchase 170,000 ordinary shares in Lian Cardiovascular. MyoKardia’s option to convert the warrant irrevocably terminated upon the completion of the Company’s IPO. Additionally, MyoKardia was entitled to receive a nonrefundable financing milestone payment of $35.0 million upon a specified financing event, which occurred on October 29, 2020. The financing milestone was recorded at present value upon execution of the MyoKardia License Agreement, with total imputed interest of $2.3 million accreted under the effective interest method through the date the liability was settled. The financing milestone was paid to MyoKardia in December 2020 as a result of the Series A Preferred financing. Additionally, MyoKardia is entitled to receive from the Company development milestone payments of up to $60.0 million upon achievement of specified development milestones, and sales milestone payments of up to $87.5 million based on cumulative net sales of mavacamten, plus tiered royalties on net sales ranging from the low to upper-teens. As of June 30, 2022, the Company has paid for the first development milestone of $5.0 million.
Navire License
In August 2020, pursuant to the BridgeBio exclusivity agreement, the Company entered into an exclusive license agreement with Navire Pharma, Inc. (“Navire”), a BridgeBio affiliate. Pursuant to the license agreement, Navire granted to the Company an exclusive, sublicensable license under certain patents and know-how of Navire to develop, manufacture, use, sell, import and commercialize Navire’s proprietary SHP2 inhibitor, BBP-398 (formerly known as IACS-15509) in the licensed territory of Mainland China, Hong Kong, Macau, Taiwan, Thailand, Singapore, and South Korea. Under the license agreement, Navire received a nonrefundable upfront payment of $8.0 million. Additionally, Navire is entitled to receive from the Company development milestone payments of up to $24.5 million upon achievement of specified development milestones, and sales milestone payments of up to $357.6 million upon achievement of specified commercialization milestones, plus tiered royalties on net sales ranging from approximately 5-15% on the net sales of the licensed products. The Company paid the first development milestone of $8.5 million for IND acceptance in the PRC during the third quarter of 2021.
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Pfizer Strategic Collaboration
In November 2020, the Company entered into a strategic collaboration agreement (the “Pfizer Agreement”) with Pfizer Inc. (“Pfizer”), pursuant to which Pfizer will contribute up to $70.0 million of restricted, non-dilutive capital (the “Funds”), including a $20.0 million upfront payment, toward the Company’s in-licensing and co-development activities in Greater China. The Company has accounted for the Pfizer Agreement as a contract to perform research and development services for others under ASC 730-20 and the consideration received for performing these services will be recognized as contra-R&D in the consolidated statement of operations as the services are performed. Upon receipt of the $20.0 million upfront payment in the first quarter of 2021, the upfront payment was recorded as restricted cash within consolidated balance sheet and will remain restricted until such time as the upfront payment is utilized for specified in-licensing and co-development activities or until the Pfizer Agreement terminates. Under the Pfizer Agreement, Pfizer and LianBio will form a joint collaboration committee to discuss potential third party in-license opportunities and development and commercialization of the Company’s products in Greater China. In the event the Company seeks to engage a third-party commercialization partner with respect to the commercialization of the Company’s future products in Greater China, Pfizer will have a right to opt into such product. Upon opting in, a portion of the Funds will be used to pay for development and commercialization costs of such product and Pfizer will thereafter have a right of first negotiation and right of last refusal to obtain the commercialization rights of such product in Greater China, in each instance for additional, separate financial consideration. During the collaboration, Pfizer may provide in-kind support to us for marketing, development and regulatory activities.
ReViral License
In March 2021, the Company entered into an exclusive license agreement (the “ReViral License Agreement”) with ReViral Ltd. (“ReViral,” now a wholly-owned subsidiary of Pfizer). Pursuant to the license agreement, ReViral granted to the Company an exclusive, sublicensable license under the licensed patent rights and know-how to develop, manufacture and commercialize novel antiviral therapeutics that target respiratory syncytial virus in Mainland China, Macau, Hong Kong, and Singapore. Under the license agreement, ReViral received a nonrefundable upfront payment of $14.0 million. Additionally, ReViral is entitled to receive payments from the Company totaling an aggregate of up to $105.0 million upon the achievement of specified development and commercial milestones, up to $45.0 million and $60.0 million, respectively, plus tiered royalties on net sales ranging from ten to the low-teens.
Tarsus License
In March 2021, the Company entered into an exclusive license agreement (the “Tarsus License Agreement”) with Tarsus Pharmaceuticals, Inc. (“Tarsus”). Pursuant to the license agreement, Tarsus granted to the Company an exclusive, sublicensable license under the licensed patent rights and know-how to develop, manufacture and commercialize TP-03 for the treatment of patients with Demodex blepharitis and Meibomian Gland Disease in Mainland China, Macau, Hong Kong and Taiwan. Under the license agreement, Tarsus received a nonrefundable upfront payment of $15.0 million and was granted three warrants to purchase 125,000 ordinary shares in Lian Ophthalmology, a subsidiary of LianBio, valued at $9.4 million (the “Tarsus Warrants”). Pursuant to ASC 505-50, as the fair value of the warrants were more reliably determinable than the fair value of the benefits received from the licensing agreement, the Company valued the warrants using the Black-Scholes Model and the underlying assumptions are discussed in further detail in Note 10 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The warrants were issued in three tranches with the aggregate number of shares across all tranches equaling 12.5% of the fully diluted equity of Lian Ophthalmology as of the issue date. Vesting of the warrant shares are linked to regulatory milestones and the warrants expire 10 years from the issue date. Pursuant to a related option agreement (the “Tarsus Option Agreement”), Tarsus also had the option to convert the warrants into ordinary shares of the Company or warrants to purchase a certain number of the Company’s ordinary shares based on appreciation of the value in the Lian Ophthalmology since the inception of the Tarsus License Agreement. This conversion feature was not required to be bifurcated as it was clearly and closely related to the equity host instrument, pursuant to ASC 815. On October 18, 2021, Tarsus exercised its options to convert the Tarsus Warrants under the Tarsus Option Agreement and the Company subsequently issued to Tarsus 78,373 of its ordinary shares and two warrants to purchase an aggregate of 156,746 of its ordinary shares at an exercise price of $0.000017100448 per share. Following the issuances, the Tarsus Warrants were irrevocably terminated. On June 6, 2022, Tarsus exercised one warrant and the Company subsequently issued 78,373 of its ordinary shares at an exercise price of $0.000017100448 per share. Additionally, Tarsus is entitled to receive a nonrefundable second milestone payment of $10.0 million due and payable within forty-five days following the effective date. Furthermore, Tarsus is entitled to receive payments from the Company totaling an aggregate of up to $175.0 million upon the achievement of specified development and commercial milestones, up to $75.0 million and $100.0 million, respectively, plus tiered royalties at percentage rates ranging from the low- to high-teens on net sales. In the second quarter of 2022, the Company was notified that Tarsus had achieved a certain development milestone and subsequently paid $15 million in June 2022. As of June 30, 2022, the Company has paid an aggregate of $45.0 million to Tarsus as a result of the achievement of various development milestones.
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Landos License
In May 2021, the Company entered into an exclusive license agreement (the “Landos License Agreement”) with Landos BioPharma, Inc. (“Landos”). Pursuant to the license agreement, Landos granted to the Company an exclusive, sublicensable license under the licensed patent rights and know-how to develop, manufacture and commercialize novel, gut-restricted small molecule omilancor (formerly known as BT-11) and NX-13 for the treatment of inflammatory bowel disease, that targets the NLRX1 pathway in Mainland China, Hong Kong, Macau, Taiwan, Cambodia, Indonesia, Myanmar, Philippines, Singapore, South Korea, Thailand and Vietnam. Under the license agreement, Landos received a nonrefundable upfront payment of $18.0 million. Additionally, Landos is entitled to receive payments from the Company totaling an aggregate of up to $200.0 million upon the achievement of specified development and commercial milestones, up to $95.0 million and $105.0 million, respectively, plus tiered royalties at percentage rates ranging from the low- to the mid-teens on net sales.
Nanobiotix License
In May 2021, the Company entered into an exclusive license agreement (the “Nanobiotix License Agreement”) with Nanobiotix S.A. (“Nanobiotix”). Pursuant to the license agreement, Nanobiotix granted to the Company an exclusive, sublicensable license under the licensed patent rights and know-how to develop and commercialize NBTXR3, a potential first-in-class radioenhancer in Mainland China, Hong Kong, Taiwan, Macau, South Korea, Singapore and Thailand. Under the license agreement, Nanobiotix received a nonrefundable upfront payment of $20.0 million. Additionally, Nanobiotix is entitled to receive payments from the Company totaling an aggregate of up to $220.0 million upon the achievement of specified development and commercial milestones, up to $65.0 million and $155.0 million, respectively, plus tiered royalties of 10-13% of net sales.
Lyra License
In May 2021, the Company entered into an exclusive license agreement (the “Lyra License Agreement”) with Lyra Therapeutics, Inc. (“Lyra”). Pursuant to the license agreement, Lyra granted to the Company an exclusive, sublicensable license under the licensed patent rights and know-how to develop and commercialize LYR-210, an anti-inflammatory, intra-nasal drug matrix in late-stage development that is designed to treat chronic rhinosinusitis in Mainland China, Hong Kong, Taiwan, Macau, South Korea, Singapore and Thailand. Under the license agreement, Lyra received a nonrefundable upfront payment of $12.0 million. Additionally, Lyra is entitled to receive payments from the Company totaling an aggregate of up to $135.0 million upon the achievement of specified development and commercial milestones, up to $40.0 million and $95.0 million, respectively, plus tiered royalties from the low- to high-teens on net sales. As of June 30, 2022, the Company has paid for the first development milestone of $5.0 million.

4. Marketable Securities and Fair Value Measurements
The following is a summary of marketable securities accounted for as available-for-sale securities at June 30, 2022 and December 31, 2021:
As of June 30, 2022 (in thousands)
Amortized CostGross Unrealized GainsGross Unrealized LossesEstimated Fair Value
Commercial paper$106,388 $ $(450)$105,938 
Corporate debt securities14,259  (167)14,092 
Government obligations75,373  (438)74,935 
Total$196,020 $ $(1,055)$194,965 

As of December 31, 2021 (in thousands)
Amortized CostGross Unrealized GainsGross Unrealized LossesEstimated Fair Value
Commercial paper$145,894 $55 $ $145,949 
Corporate debt securities4,138   4,138 
Government obligations4,986  (6)4,980 
Total$155,018 $55 $(6)$155,067 
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The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of June 30, 2022 are as follows:


As of June 30, 2022 (in thousands)
Securities in an unrealized loss position less than 12 monthsSecurities in an unrealized loss position greater than 12 monthsTotal
Unrealized lossesFair ValueUnrealized lossesFair ValueUnrealized lossesFair Value
Commercial paper$(450)$105,938 $ $ $(450)$105,938 
Corporate debt securities(167)14,092   (167)14,092 
Government obligations(438)74,935   (438)74,935 
Total$(1,055)$194,965 $ $ $(1,055)$194,965 

The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of December 31, 2021 are as follows:

As of December 31, 2021 (in thousands)
Securities in an unrealized loss position less than 12 monthsSecurities in an unrealized loss position greater than 12 monthsTotal
Unrealized lossesFair ValueUnrealized lossesFair ValueUnrealized lossesFair Value
Commercial paper$ $ $ $ $ $ 
Corporate debt securities      
Government obligations(6)4,980   (6)4,980 
Total$(6)$4,980 $ $ $(6)$4,980 

Marketable securities on the balance sheet at June 30, 2022 and December 31, 2021 are as follows:


 June 30, 2022
Less than 12 MonthsMore Than 12 Months
Commercial paper$105,938 $ 
Corporate debt securities14,092  
Government obligations74,935  
Total Marketable securities$194,965 $ 

December 31, 2021
Less than 12 MonthsMore Than 12 Months
Commercial paper$145,949 $ 
Corporate debt securities4,138  
Government obligations 4,980 
Total Marketable securities$150,087 $4,980 

The Company classifies all of its securities as current as they are all available for sale and are available for current operations.

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The following tables present information about the Company's financial assets measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values:


As of June 30, 2022 (in thousands)
Level 1Level 2 Level 3Total
Cash equivalents:
   Money market funds$64,774 $ $ $64,774 
   Commercial paper 30,485  30,485 
Marketable securities:
   Commercial paper 105,938  105,938 
   Corporate debt securities 14,092  14,092 
   Government obligations 74,935  74,935 
      Total $64,774 $225,450 $ $290,224 

As of December 31, 2021 (in thousands)
Level 1Level 2 Level 3Total
Cash equivalents:
   Money market funds$67,289 $ $ $67,289 
   Commercial paper 80,541  80,541 
   Corporate debt securities 8,165  8,165 
Marketable securities:
   Commercial paper 145,949  145,949 
   Corporate debt securities 4,138  4,138 
   Government obligations 4,980  4,980 
      Total $67,289 $243,773 $ $311,062 
5. Property and Equipment, Net
Property and equipment consisted of the following:
June 30, 2022December 31, 2021
Leasehold improvements$2,877 $807 
Furniture and fixtures104 65 
Computer equipment and software631 471 
Construction in progress393 1,145 
4,005 2,488 
Accumulated depreciation(1,013)(606)
Total property and equipment, net$2,992 $1,882 
Total depreciation related to property and equipment was $0.2 million and $0.4 million for the three and six months ended June 30, 2022, respectively, and $0.1 million and $0.1 million for the three and six months ended June 30, 2021, respectively.
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6. Prepaid Expense and Other Current Assets
Prepaid expense and other current assets consist of the following:
June 30, 2022December 31, 2021
Advance payments to suppliers and rent deposit$1,750 $1,499 
Prepaid insurance3,007 7,378 
Deferred costs3 3 
VAT receivable1,600 1,176 
Other prepaid expenses781 298 
Total prepaid expenses and other current assets$7,141 $10,354 
7. Accrued Expenses
Accrued expenses consist of the following:
June 30, 2022December 31, 2021
Employee compensation and related benefits$3,426 $2,309 
Professional fees6,068 3,625 
Consulting and contracted research8,323 3,925 
Other155 117 
Total accrued expenses$17,972 $9,976 
8. Commitments and Contingencies
The Company is subject to claims and assessments from time to time in the ordinary course of business. The Company will accrue a liability for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated. As of June 30, 2022 and December 31, 2021, there have been no such matters identified. When only a range of possible loss can be established, the most probable amount in the range is accrued. If no amount within the range is a better estimate than any other amount within the range, the minimum amount in the range is accrued. The Company is not currently party to any material legal proceedings.
9. Share-Based Compensation
In December 2019, the Company adopted a shareholder-approved share-based compensation plan (the “2019 Plan”), which permits the granting of incentive share options, nonqualified share options, share awards and certain other awards to its employees, members of its Board of Directors and consultants.
In connection with the IPO, the Company adopted a shareholder-approved share-based compensation plan (the “2021 Equity Plan”), which permits the granting of incentive share options, nonqualified share options, share awards and certain other awards to its employees, members of its Board of Directors and consultants. The maximum number of shares that may be delivered in satisfaction of awards under the 2021 Equity Plan was initially approximately 14.2 million shares, plus the number of shares that remained available for issuance under the 2019 Plan and that may again become available for issuance under such plan, not to exceed approximately 10.7 million shares in the aggregate, and an annual increase, to be added as of January 1st of each year from January 1, 2022, to January 1, 2031, equal to the lesser of (i) four percent (4%) of the number of shares outstanding as of such date; and (ii) the number of shares determined by the Board of Directors on or prior to such date for such year. Subsequent to the effectiveness of the 2021 Equity Plan, no additional awards have been made pursuant to the 2019 Plan. However, any outstanding awards granted under the 2019 Plan will remain outstanding, subject to the terms of the 2019 Plan and award agreements. Through June 30, 2022, there were awards outstanding for approximately 8.6 million ordinary shares under the 2019 Plan and approximately 5.3 million ordinary shares under the 2021 Equity Plan.

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Share Option Awards
During the six months ended June 30, 2022, the Company issued options to purchase a total of 433,874 ordinary shares to various employees, directors and board members with a weighted-average exercise price of $3.46 per share option and a weighted-average fair value of $2.37 per share option. The fair-value based method for valuing each share option grant on the grant date uses the Black-Scholes Model, which incorporates a number of valuation assumptions. The weighted-average fair value was estimated based on the following assumptions: risk-free interest rate of 2.56% - 3.19%; expected dividend yield of 0.00%; expected share price volatility of 76.83% - 79.65%; and expected term of 5.50 - 6.08 years.
During the six months ended June 30, 2021 the Company issued options to purchase 3,820,173 ordinary shares with a weighted-average exercise price of $6.84 per share option and a weighted-average fair value of $3.47 per share option. The fair-value based method for valuing each share option grant on the grant date uses the Black-Scholes Model, which incorporates a number of valuation assumptions. The weighted-average fair value was estimated based on the following assumptions: risk-free interest rate of 0.09% - 1.22%; expected dividend yield of 0.00%; expected share price volatility of 60.00%; and expected term of 0.50 - 6.25 years.
As of June 30, 2022, $