0001628280-21-021773 | 10-Q | XBRL Viewer | Neoleukin Therapeutics INC

Earnings (loss) per share - Schedule of Potentially Dilutive Shares From Diluted Net Loss Per Share (Details) - shares	3 Months Ended	9 Months Ended
Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Securities excluded from computation of earnings per share (in shares)	9,814,603	6,972,441	9,814,603	6,972,441
Outstanding stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Securities excluded from computation of earnings per share (in shares)	9,619,138	6,767,930	9,619,138	6,767,930
Restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Securities excluded from computation of earnings per share (in shares)	170,500	186,500	170,500	186,500
Shares issuable under 2020 ESPP
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Securities excluded from computation of earnings per share (in shares)	24,965	18,011	24,965	18,011

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Current assets
Cash and cash equivalents	$ 154,924	$ 192,556
Other current assets	1,574	1,966
Total current assets	156,498	194,522
Property and equipment, net	6,257	3,570
Operating lease right-of-use assets	11,008	10,154
Intangible asset, net	183	347
Other non-current assets	1,988	1,926
Total assets	175,934	210,519
Current liabilities
Accounts payable and accrued liabilities	7,774	7,181
Operating lease liabilities	1,118	659
Finance lease liabilities	104	49
Total current liabilities	8,996	7,889
Non-current operating lease liabilities	12,004	11,306
Non-current finance lease liabilities	68	108
Total liabilities	21,068	19,303
Stockholders’ equity
Common stock - $0.000001 par value - authorized, 100,000,000 as of September 30, 2021 and December 31, 2020; issued and outstanding, 42,428,134 as of September 30, 2021 and 42,196,296 as of December 31, 2020.	0	0
Preferred stock - $0.000001 par value - authorized, 5,000,000 as of September 30, 2021 and December 31, 2020; issued and outstanding, 0 as of September 30, 2021 and December 31, 2020.	0	0
Additional paid-in capital	533,197	524,022
Accumulated deficit	(378,331)	(332,806)
Total stockholders’ equity	154,866	191,216
Total liabilities and stockholders’ equity	$ 175,934	$ 210,519

Condensed Consolidated Statements of Stockholders’ Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit
Balance, beginning (in shares) at Dec. 31, 2019		37,996,849
Balance, beginning at Dec. 31, 2019	$ 141,687		$ 441,216	$ (299,529)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued upon exercises of stock options (in shares)		376,311
Shares issued upon exercises of stock options	3,392		3,392
Shares issued upon vesting of restricted stock units (in shares)		13,000
Stock-based compensation	683		683
Net loss	(8,642)			(8,642)
Balance, ending (in shares) at Mar. 31, 2020		38,386,160
Balance, ending at Mar. 31, 2020	137,120		445,291	(308,171)
Balance, beginning (in shares) at Dec. 31, 2019		37,996,849
Balance, beginning at Dec. 31, 2019	$ 141,687		441,216	(299,529)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued upon exercises of stock options (in shares)	581,270
Net loss	$ (20,637)
Balance, ending (in shares) at Sep. 30, 2020		41,876,590
Balance, ending at Sep. 30, 2020	200,340		520,506	(320,166)
Balance, beginning (in shares) at Mar. 31, 2020		38,386,160
Balance, beginning at Mar. 31, 2020	137,120		445,291	(308,171)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued upon exercises of stock options (in shares)		98,882
Shares issued upon exercises of stock options	303		303
Shares issued upon vesting of restricted stock units (in shares)		1,500
Stock-based compensation	1,022		1,022
Net loss	(9,746)			(9,746)
Balance, ending (in shares) at Jun. 30, 2020		38,486,542
Balance, ending at Jun. 30, 2020	128,699		446,616	(317,917)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock and pre-funded warrants, net of commissions and offering expenses (in shares)		3,262,471
Issuance of common stock and pre-funded warrants, net of commissions and offering expenses	71,320		71,320
Shares issued upon exercises of stock options (in shares)		106,077
Shares issued upon exercises of stock options	882		882
Shares issued upon vesting of restricted stock units (in shares)		21,500
Stock-based compensation	1,688		1,688
Net loss	(2,249)			(2,249)
Balance, ending (in shares) at Sep. 30, 2020		41,876,590
Balance, ending at Sep. 30, 2020	200,340		520,506	(320,166)
Balance, beginning (in shares) at Dec. 31, 2020		42,196,296
Balance, beginning at Dec. 31, 2020	191,216		524,022	(332,806)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued upon exercises of stock options (in shares)		91,737
Shares issued upon exercises of stock options	282		282
Shares issued upon vesting of restricted stock units (in shares)		38,000
Stock-based compensation	2,420		2,420
Net loss	(14,950)			(14,950)
Balance, ending (in shares) at Mar. 31, 2021		42,326,033
Balance, ending at Mar. 31, 2021	178,968		526,724	(347,756)
Balance, beginning (in shares) at Dec. 31, 2020		42,196,296
Balance, beginning at Dec. 31, 2020	$ 191,216		524,022	(332,806)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued upon exercises of stock options (in shares)	124,366
Net loss	$ (45,525)
Balance, ending (in shares) at Sep. 30, 2021		42,428,134
Balance, ending at Sep. 30, 2021	154,866		533,197	(378,331)
Balance, beginning (in shares) at Mar. 31, 2021		42,326,033
Balance, beginning at Mar. 31, 2021	178,968		526,724	(347,756)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued upon exercises of stock options (in shares)		25,124
Shares issued upon exercises of stock options	95		95
Issuance of shares under Employee Stock Purchase Plan (in shares)		22,972
Issuance of shares under Employee Stock Purchase Plan	219		219
Shares issued upon vesting of restricted stock units (in shares)		45,000
Stock-based compensation	2,918		2,918
Net loss	(15,129)			(15,129)
Balance, ending (in shares) at Jun. 30, 2021		42,419,129
Balance, ending at Jun. 30, 2021	167,071		529,956	(362,885)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued upon exercises of stock options (in shares)		7,505
Shares issued upon exercises of stock options	31		31
Shares issued upon vesting of restricted stock units (in shares)		1,500
Stock-based compensation	3,210		3,210
Net loss	(15,446)			(15,446)
Balance, ending (in shares) at Sep. 30, 2021		42,428,134
Balance, ending at Sep. 30, 2021	$ 154,866		$ 533,197	$ (378,331)

Summary of significant accounting policies	9 Months Ended
Summary of significant accounting policies	Sep. 30, 2021
Accounting Policies [Abstract]
Summary of significant accounting policies	Summary of significant accounting policies (a)Basis of presentation The accompanying unaudited condensed consolidated financial statements are presented in United States (“U.S.”) dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, these consolidated financial statements do not include all of the information and footnotes required for complete consolidated financial statements and should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission on March 25, 2021. On December 31, 2020, Neoleukin Corporation, the Company's wholly owned subsidiary, was merged into the Company. As a result, the Company has consisted of a single operating company since December 31, 2020. In management’s opinion, the unaudited condensed consolidated financial statements reflect all adjustments (including reclassifications and normal recurring adjustments) necessary to present fairly the financial position of the Company as of September 30, 2021, and results of operations and cash flows for all periods presented. The interim results presented are not necessarily indicative of results that can be expected for a full year. (b)Use of estimates and assumptions The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. Significant areas requiring estimates include valuation and recognition of stock-based compensation, the incremental borrowing rate utilized in the measurement of operating and finance lease liabilities, amortization and depreciation of property, plant and equipment and intangible assets, and pre-clinical, clinical, and other accruals. Actual results could differ from those estimates. (c)Leases At contract inception, the Company determines if the contract is or contains a lease. Lease liabilities are recognized on the lease commencement date based on the estimated present value of lease payments over the lease term. To determine the present value of the lease payments, the Company utilizes its estimated incremental borrowing rate based on information available at the lease commencement date as the interest rate implicit in the lease is typically not readily determinable. The related right-of-use assets are recorded net of any lease incentives received. Variable lease cost primarily includes building operating expenses as charged to the Company by its landlords and payments for lessor-owned assets that are not covered by a tenant improvement allowance. The Company includes options to extend the lease in its lease liability and right-of-use asset when it is reasonably certain that it will exercise that option. None of the Company's options to extend the rental term of any of its existing leases were considered reasonably certain as of September 30, 2021. For leases of office space and equipment, the Company has elected to not separate the lease components from the non-lease components. For leases with a lease term of 12 months or less and which do not include an option to purchase the underlying asset, the Company has elected to recognize the lease payments in the statement of operations on a straight-line basis over the lease term. (d)Fair value of financial instruments The carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, restricted cash, receivables, accounts payable and other liabilities, approximate their fair values because of their nature and/or short maturities. At September 30, 2021, and December 31, 2020, the Company had $152.4 million and $108.3 million in money market funds, respectively. Money market funds are level one financial instruments as they are valued at the closing price reported by the fund sponsor from an actively traded exchange. (e)Earnings (loss) per share Basic net loss per share is calculated by dividing the net loss by the weighted average number of shares of common stock outstanding for the period, without consideration for common stock equivalents. Common stock equivalents such as outstanding stock options and unvested restricted stock units are included in the calculation of diluted earnings per share only in periods of net income. Such common stock equivalents are excluded in the calculation of diluted net loss per share in periods of net loss as inclusion of such amounts would be anti-dilutive. Outstanding pre-funded warrants as of September 30, 2021 and September 30, 2020 were 12,663,010 and are considered outstanding as of their issuance date and are included in the basic and diluted net loss per share calculation because they are fully vested and exercisable after 61 days' notice for nominal cash consideration. (f)Accounting for stock-based compensation The Company has issued stock options and restricted stock units (“RSUs”). The Company measures the cost of services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The cost of such award is recognized on a straight-line basis over the requisite service period, which is generally the vesting period. Awards subject to performance-based vesting requirements are expensed utilizing a graded vesting model if achievement of the performance criteria is determined to be probable. The Company accounts for forfeitures as they occur. The Company utilizes newly issued shares to satisfy option exercises and the vesting of RSUs. The Company estimates the fair value of options using the Black-Scholes option pricing model on the grant date. This approximation uses assumptions regarding a number of inputs that requires management to make significant estimates and judgments. The expected term represents the period that the Company’s stock-based awards are expected to be outstanding. As the Company does not have sufficient historical experience for determining the expected term of the stock option awards granted, the Company has based its expected term for awards issued to employees on the simplified method, which represents the average period from vesting to the expiration of the stock option. In addition, the Company does not have sufficient trading history for the Company’s common stock, and therefore, the expected stock price volatility for the Company’s common stock was estimated by taking the average historical price volatility for industry peers. The Company has never declared or paid any cash dividends to common stockholders and does not presently plan to pay cash dividends in the foreseeable future. Consequently, the Company used an expected dividend yield of zero. The risk-free interest rate was based on the yields of treasury securities with maturities similar to the expected term of the options for each option group. The fair value of each RSU is measured using the closing price of the Company’s common stock on the date of grant. (g)Recently issued and recently adopted accounting standards In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12 “Simplifying the Accounting for Income Taxes.” The objective of this ASU is to improve areas of GAAP by removing certain exceptions permitted by Accounting Standards Codification (“ASC”) Topic 740 - Income Taxes and clarifying existing guidance to facilitate consistent application. ASU 2019-12 became effective for fiscal years and interim periods beginning after December 15, 2020. The Company adopted this standard on January 1, 2021 on a prospective basis. The adoption of this ASU did not have a material impact on the Company's financial condition, results of operations, cash flows, and financial statement disclosures.

Equity - Additional Information (Details) $ / shares in Units, $ in Thousands		3 Months Ended		9 Months Ended
	Jul. 07, 2020 USD ($) $ / shares shares	Sep. 30, 2021 USD ($) $ / shares shares	Sep. 30, 2020 USD ($) shares	Sep. 30, 2021 USD ($) offering $ / shares shares	Sep. 30, 2020 USD ($) $ / shares shares	Dec. 31, 2020 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, shares authorized (in shares)		100,000,000		100,000,000		100,000,000
Common stock, par value (in dollars per share) \| $ / shares		$ 0.000001		$ 0.000001		$ 0.000001
Common stock, shares issued (in shares)		42,428,134		42,428,134		42,196,296
Common stock, shares outstanding (in shares)		42,428,134		42,428,134		42,196,296
Warrants, notice period for nominal cash consideration				61 days
Percentage of outstanding stock per stockholder, maximum				9.99%
Underwriting discounts, commissions, and offering costs for issuance of common stock and pre-funded warrants \| $	$ 4,900
Proceeds from issuance of common stock and pre-funded warrants, net of costs \| $	$ 71,300			$ 0	$ 71,675
Unrecognized stock-based compensation cost \| $		$ 35,900		$ 35,900
Unrecognized stock-based compensation cost, weighted-average period recognized				2 years 11 months 19 days
Shares issued upon exercises of stock options (in shares)				124,366	581,270
Aggregate intrinsic value of options exercised \| $				$ 1,300	$ 2,800
Weighted average grant date fair value for options granted in period (in dollars per share) \| $ / shares				$ 6.49	$ 8.69
Number of common stock shares issued upon vesting of restricted stock unit (in shares)		1		1
Stock-based compensation expense \| $		$ 3,210	$ 1,688	$ 8,548	$ 3,393
2020 Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock shares reserved for issuance under employee stock purchase plan (in shares)		759,936		759,936
Issuance of shares under Employee Stock Purchase Plan (in shares)				22,972
Sale of stock, price per share (in dollars per share) \| $ / shares		$ 9.53		$ 9.53
Proceeds from ESPP \| $				$ 200
Accrued employee benefits \| $		$ 200		$ 200
Performance-based RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units granted (in shares)				50,000
Performance-based RSUs \| Share-based Payment Arrangement, Tranche One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units vested (in shares)				25,000
Stock-based compensation expense \| $				$ 300
Performance-based RSUs \| Share-based Payment Arrangement, Tranche Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units not expected to vest (in shares)		25,000		25,000
Unrecognized stock-based compensation, excluding options \| $		$ 300		$ 300
Shares issuable under 2020 ESPP \| 2020 Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
ESPP max contribution rate		15.00%		15.00%
ESPP, purchase price of common stock, percent of market price				85.00%
ESPP number of offerings per year \| offering				2
ESPP offering period				6 months
Prefunded Warrants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price of pre-funded warrants (in dollars per share) \| $ / shares	$ 0.000001
Number of common stock in prefunded warrants (in shares)	1,737,529
Pre funded warrant issued (in dollars per share) \| $ / shares	$ 15.249999
Public Stock Offering
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Sale of shares under public offering (in shares)	3,262,471
Sale of shares under public offering (in dollars per share) \| $ / shares	$ 15.25
Prefunded Warrants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding pre-funded warrants (in shares)		12,663,010	12,663,010	12,663,010	12,663,010
Warrants, notice period for nominal cash consideration				61 days	61 days
Exercise price of pre-funded warrants (in dollars per share) \| $ / shares		$ 0.000001		$ 0.000001

Leases - Additional Information (Details) $ in Thousands		9 Months Ended
Leases - Additional Information (Details) $ in Thousands	Jun. 30, 2020 USD ($) ft²	Sep. 30, 2021 USD ($) ft² option	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)
Lessee, Lease, Description [Line Items]
Tenant improvements (up to)		$ 9,500
Increase in right-of-use asset		0	$ 169
Increase in lease liability		(427)	313
Termination fee for lease termination	$ 500
Loss on termination of lease			300
Loss on disposal of property and equipment		0	$ 180
Operating lease right-of-use assets		11,008		$ 10,154
Finance lease right-of-use assets		$ 200		$ 300
Washington \| Office space, principal executive offices and laboratory
Lessee, Lease, Description [Line Items]
Square feet of office space leased \| ft²		33,300
Number of option to extend leases \| option		2
Lease agreement extended period		5 years
Washington \| Office Space, additional offices and laboratory
Lessee, Lease, Description [Line Items]
Square feet of office space leased \| ft²		6,272
Lease agreement extended period		28 months
Increase in right-of-use asset		$ 1,600
Increase in lease liability		$ 1,600
Canada
Lessee, Lease, Description [Line Items]
Square feet of office space leased \| ft²	10,946

Equity - Schedule of Stock Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Number of Shares
Outstanding, beginning balance (in shares)	6,846,289
Options granted (in shares)	3,019,749
Options exercised (in shares)	(124,366)	(581,270)
Options cancelled/ forfeited (in shares)	(122,534)
Outstanding, ending balance (in shares)	9,619,138		6,846,289
Weighted Average Exercise Price
Outstanding, beginning balance (in dollars per share)	$ 6.42
Options granted (in dollars per share)	8.85
Options exercised (in dollars per share)	3.28
Options cancelled/forfeited (in dollars per share)	11.14
Outstanding, ending balance (in dollars per share)	$ 7.16		$ 6.42
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Outstanding, Weighted Average Remaining Contractual Life (in Years)	8 years 6 months 10 days		8 years 8 months 15 days
Outstanding, Aggregate Intrinsic Value (in Thousands)	$ 18,377		$ 53,127
Exercisable, Number of Shares (in shares)	3,134,157
Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 5.90
Exercisable, Weighted Average Remaining Contractual Life (in Years)	7 years 6 months 29 days
Exercisable, Aggregate Intrinsic Value (in Thousands)	$ 9,339

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2021	Dec. 31, 2020
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.000001	$ 0.000001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	42,428,134	42,196,296
Common stock, shares outstanding (in shares)	42,428,134	42,196,296
Preferred stock, par value (in dollars per share)	$ 0.000001	$ 0.000001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0

Equity - Summary of Nonvested Restricted Stock Unit Activity (Details) - Restricted stock units	9 Months Ended
	Sep. 30, 2021 $ / shares shares
Number of Shares
Non-vested, beginning balance (in shares) \| shares	186,500
Restricted stock units granted (in shares) \| shares	70,000
Restricted stock units vested (in shares) \| shares	(84,500)
Restricted stock units forfeited (in shares) \| shares	(1,500)
Non-vested, ending balance (in shares) \| shares	170,500
Weighted Average Grant Date Fair Value
Non-vested, beginning balance (in dollars per share) \| $ / shares	$ 8.19
Restricted stock units granted (in dollars per share) \| $ / shares	12.94
Restricted stock units vested (in dollars per share) \| $ / shares	7.20
Restricted stock units forfeited (in dollars per share) \| $ / shares	12.00
Non-vested, ending balance (in dollars per share) \| $ / shares	$ 10.59

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Operating activities
Net loss	$ (45,525)	$ (20,637)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	8,548	3,393
Depreciation and amortization	916	578
Amortization of operating lease right-of-use assets	730	784
Loss on disposal of property and equipment	0	180
Write-off of right-of-use asset upon lease termination	0	113
Changes in operating assets and liabilities:
Other current assets and other non-current assets	36	(5,026)
Accounts payable and accrued liabilities	332	5,125
Operating lease right-of-use assets	0	(169)
Operating lease liabilities	(427)	313
Net cash used in operating activities	(35,390)	(15,346)
Investing activities
Purchase of property and equipment	(2,867)	(1,566)
Net cash used in investing activities	(2,867)	(1,566)
Financing activities
Proceeds from issuance of common stock and pre-funded warrants, net of commissions of $4.6 million	0	71,675
Payment of offering costs	0	(355)
Proceeds from exercise of stock options	408	4,576
Proceeds from the issuance of common stock under Employee Stock Purchase Plan	219	0
Payment on finance lease obligations	(2)	(49)
Net cash provided by financing activities	625	75,847
Net change in cash, cash equivalents, and restricted cash during the period	(37,632)	58,935
Cash, cash equivalents, and restricted cash, beginning of period	193,434	143,093
Cash, cash equivalents, and restricted cash, end of period	155,802	202,028
Supplemental disclosure of non-cash investing and financing activities:
Operating lease liabilities arising from obtaining ROU asset	1,584	10,618
Purchases of property and equipment unpaid at period-end	$ 297	$ 271

Cover Page - shares	9 Months Ended
Cover Page - shares	Sep. 30, 2021	Nov. 03, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2021
Document Transition Report	false
Entity File Number	001-36327
Entity Registrant Name	Neoleukin Therapeutics, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	98-0542593
Entity Address, Address Line One	188 East Blaine Street
Entity Address, Address Line Two	Suite 450
Entity Address, City or Town	Seattle
Entity Address, State or Province	WA
Entity Address, Postal Zip Code	98102
City Area Code	866
Local Phone Number	245-0312
Title of 12(b) Security	Common Stock, par value $0.000001
Trading Symbol	NLTX
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	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		42,428,134
Amendment Flag	false
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001404644
Current Fiscal Year End Date	--12-31

Leases	9 Months Ended
Leases	Sep. 30, 2021
Leases [Abstract]
Leases	Leases The Company enters into lease arrangements for its facilities as well as certain equipment, classified either as operating or finance leases. The Company has a lease agreement, as amended by the execution of two subsequent amendments, for approximately 33,300 square feet of office space in Seattle, Washington for the Company’s principal executive offices, a laboratory for research and development, and related uses. The lease commenced on January 15, 2020 and expires on February 1, 2029, with the option to extend the lease for two five-year terms. The lease provides for a tenant improvement allowance of up to $9.5 million, which had been fully utilized as of September 30, 2021. The Company has a lease agreement for approximately 6,272 square feet of office space in Seattle, Washington, for additional office and laboratory space for research and development and related uses. In March 2021, the Company executed an amendment to this lease pursuant to which the contractual lease term was extended through September 30, 2026, unless terminated earlier, with the option to extend the lease for an additional 28-month term. The execution of this amendment was accounted for as a modification to the lease due to the extension of the lease term and an increase in lease payments, and the Company recorded an increase in the lease liability and related right-of-use asset of $1.6 million. The Company had a lease agreement for approximately 10,946 square feet of office space in Vancouver, Canada. On June 30, 2020, the Company entered into a lease amendment agreement. Under the amended agreement, the lease term expired on June 30, 2020, and the Company paid an early termination fee of $0.5 million. The Company accounted for the lease amendment as a lease termination which resulted in an extinguishment of the lease liability and the write-off of the related right-of-use asset. After incurring additional expenses included in the termination fee, the Company recognized a loss of $0.3 million on the termination of the lease, which was recorded in general and administrative expenses in the nine months ended September 30, 2020. In addition, the Company wrote-off leasehold improvements and other property and equipment associated with the lease and incurred a loss on disposal of $0.2 million in the nine months ended September 30, 2020. As of September 30, 2021, and December 31, 2020, the Company’s operating lease right-of-use assets were $11.0 million and $10.2 million, respectively. As of September 30, 2021, and December 31, 2020, the Company’s finance lease right-of-use assets were $0.2 million and $0.3 million, respectively.
Leases	Leases The Company enters into lease arrangements for its facilities as well as certain equipment, classified either as operating or finance leases. The Company has a lease agreement, as amended by the execution of two subsequent amendments, for approximately 33,300 square feet of office space in Seattle, Washington for the Company’s principal executive offices, a laboratory for research and development, and related uses. The lease commenced on January 15, 2020 and expires on February 1, 2029, with the option to extend the lease for two five-year terms. The lease provides for a tenant improvement allowance of up to $9.5 million, which had been fully utilized as of September 30, 2021. The Company has a lease agreement for approximately 6,272 square feet of office space in Seattle, Washington, for additional office and laboratory space for research and development and related uses. In March 2021, the Company executed an amendment to this lease pursuant to which the contractual lease term was extended through September 30, 2026, unless terminated earlier, with the option to extend the lease for an additional 28-month term. The execution of this amendment was accounted for as a modification to the lease due to the extension of the lease term and an increase in lease payments, and the Company recorded an increase in the lease liability and related right-of-use asset of $1.6 million. The Company had a lease agreement for approximately 10,946 square feet of office space in Vancouver, Canada. On June 30, 2020, the Company entered into a lease amendment agreement. Under the amended agreement, the lease term expired on June 30, 2020, and the Company paid an early termination fee of $0.5 million. The Company accounted for the lease amendment as a lease termination which resulted in an extinguishment of the lease liability and the write-off of the related right-of-use asset. After incurring additional expenses included in the termination fee, the Company recognized a loss of $0.3 million on the termination of the lease, which was recorded in general and administrative expenses in the nine months ended September 30, 2020. In addition, the Company wrote-off leasehold improvements and other property and equipment associated with the lease and incurred a loss on disposal of $0.2 million in the nine months ended September 30, 2020. As of September 30, 2021, and December 31, 2020, the Company’s operating lease right-of-use assets were $11.0 million and $10.2 million, respectively. As of September 30, 2021, and December 31, 2020, the Company’s finance lease right-of-use assets were $0.2 million and $0.3 million, respectively.

Equity

9 Months Ended

Sep. 30, 2021

Equity [Abstract]

Equity

(a)Common stock and pre-funded warrants

The Company is authorized to issue 100,000,000 shares of common stock with a par value of $0.000001 as of September 30, 2021 and December 31, 2020. As of September 30, 2021 and December 31, 2020, the total number of shares of common stock issued and outstanding was 42,428,134 and 42,196,296, respectively.

As of September 30, 2021, the Company had pre-funded warrants outstanding to purchase an aggregate of 12,663,010 shares of common stock. The pre-funded warrants are exercisable at any time, with 61 days' notice, for an exercise price of $0.000001, except that the pre-funded warrants cannot be exercised by the holders if, after giving effect thereto, the holders would beneficially own more than 9.99% of the outstanding common stock, subject to certain exceptions. The holders of the pre-funded warrants will not have the right to vote on any matter except to the extent required by Delaware law.

On July 7, 2020, the Company completed an underwritten public offering of 3,262,471 shares of its common stock at a price of $15.25 per share and pre-funded warrants to purchase 1,737,529 shares of its common stock at a price of $15.249999 per pre-funded warrant. The pre-funded warrants can be exercised at any time after issuance for an exercise price of $0.000001 per share. The aggregate net proceeds received by the Company from the offering, net of underwriting discounts and commissions and offering costs of approximately $4.9 million, were $71.3 million.

(b)Stock-based compensation expense

Stock-based compensation expense is classified in the condensed consolidated statement of operations as follows:


(in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Research and development expenses	$	1,423	$	571	$	3,850	$	1,200
General and administrative expenses	1,787		1,117		4,698		2,193
Total stock-based compensation expense	$	3,210	$	1,688	$	8,548	$	3,393

Total unrecognized compensation expense for all stock-based compensation plans was $35.9 million as of September 30, 2021. This expense is expected to be recognized over a weighted average remaining vesting period of 2.97 years.

The fair values of stock options granted are estimated using the Black-Scholes option pricing model with the following weighted average assumptions:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Expected volatility	89.17	%	94.84	%	89.18	%	93.86	%
Expected dividends	0	%	0	%	0	%	0	%
Expected terms (years)	6.07		6.07		6.03		6.02
Risk free rate	0.83	%	0.34	%	0.89	%	0.42	%

(c)Stock options

A summary of the Company’s stock option activity and related information for the nine months ended September 30, 2021 is as follows:


	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in Years)	Aggregate Intrinsic Value (in Thousands)
Outstanding at December 31, 2020	6,846,289	$	6.42	8.71	$	53,127
Options granted	3,019,749	$	8.85
Options exercised	(124,366)	$	3.28
Options cancelled/forfeited	(122,534)	$	11.14
Outstanding at September 30, 2021	9,619,138	$	7.16	8.53	$	18,377
Exercisable as of September 30, 2021	3,134,157	$	5.90	7.58	$	9,339

During the nine months ended September 30, 2021, 124,366 shares of common stock were issued upon exercise of options with an aggregate intrinsic value of $1.3 million. During the nine months ended September 30, 2020, 581,270 shares of common stock were issued upon exercise of options with an aggregate intrinsic value of $2.8 million. The weighted-average grant date fair value of options granted during the nine months ended September 30, 2021 and September 30, 2020 was $6.49 and $8.69 per share, respectively.

(d)Restricted stock units

A summary of the Company’s RSU activity and related information for the nine months ended September 30, 2021 is as follows:


	Number of Shares	Weighted Average Grant Date Fair Value
Non-vested at December 31, 2020	186,500	$	8.19
Restricted stock units granted	70,000	$	12.94
Restricted stock units vested	(84,500)	$	7.20
Restricted stock units forfeited	(1,500)	$	12.00
Non-vested at September 30, 2021	170,500	$	10.59

During the nine months ended September 30, 2021, the Company granted 50,000 RSUs which vest based on certain performance conditions in two equal tranches. Each RSU entitles the holder to receive one share of the Company's common stock when the RSU vests. Twenty-five thousand of such performance-based RSUs vested during the nine months ended September 30, 2021 as the related performance condition was met. Related stock-based compensation expense recognized was $0.3 million. The remaining 25,000 RSUs are not currently considered probable to vest. As such, expense of $0.3 million related to this tranche remained unrecognized as of September 30, 2021.

(e)Employee stock purchase plan

The Company’s 2020 Employee Stock Purchase Plan (“2020 ESPP”) was adopted by the Company’s Board of Directors in March 2020 and approved by the Company’s stockholders in May 2020. A total of 759,936 shares of common stock have been reserved for issuance under the 2020 ESPP.

Subject to share and dollar limits as described in the plan, the 2020 ESPP allows eligible employees to contribute, through payroll deductions, up to 15% of their earnings for the purchase of shares of the Company’s common stock at the lower of 85% of the closing price of the Company’s common stock on the first trading day of the offering period or 85% of the closing price of the Company’s common stock on the last trading day of the offering period. There are two six-month offering periods during each fiscal year, ending on May 15 and November 15.

For the nine months ended September 30, 2021, the Company issued 22,972 shares of common stock at a purchase price per share of $9.53 under the 2020 ESPP. Cash received from the purchases under the 2020 ESPP for the nine months ended September 30, 2021 was $0.2 million. As of September 30, 2021, $0.2 million of employee contributions are included in accounts payable and accrued liabilities in the accompanying condensed consolidated balance sheet.

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Operating loss
Research and development	$ 9,896	$ 6,216	$ 29,402	$ 16,557
General and administrative	5,556	3,860	16,122	12,359
Gain on sale of Aquinox Canada	0	(7,826)	0	(7,826)
Total operating loss	15,452	2,250	45,524	21,090
Other income (loss), net	6	1	(1)	453
Net loss	$ (15,446)	$ (2,249)	$ (45,525)	$ (20,637)
Net loss per share – basic (in dollars per share)	$ (0.28)	$ (0.04)	$ (0.83)	$ (0.41)
Net loss per share – diluted (in dollars per share)	$ (0.28)	$ (0.04)	$ (0.83)	$ (0.41)
Basic weighted average common shares outstanding (in shares)	55,087,777	54,121,676	55,020,059	50,896,014
Diluted weighted average common shares outstanding (in shares)	55,087,777	54,121,676	55,020,059	50,896,014

Summary of significant accounting policies (Policies)	9 Months Ended
Summary of significant accounting policies (Policies)	Sep. 30, 2021
Accounting Policies [Abstract]
Basis of presentation	Basis of presentation The accompanying unaudited condensed consolidated financial statements are presented in United States (“U.S.”) dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, these consolidated financial statements do not include all of the information and footnotes required for complete consolidated financial statements and should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission on March 25, 2021. On December 31, 2020, Neoleukin Corporation, the Company's wholly owned subsidiary, was merged into the Company. As a result, the Company has consisted of a single operating company since December 31, 2020. In management’s opinion, the unaudited condensed consolidated financial statements reflect all adjustments (including reclassifications and normal recurring adjustments) necessary to present fairly the financial position of the Company as of September 30, 2021, and results of operations and cash flows for all periods presented. The interim results presented are not necessarily indicative of results that can be expected for a full year.
Use of estimates and assumptions	Use of estimates and assumptionsThe preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. Significant areas requiring estimates include valuation and recognition of stock-based compensation, the incremental borrowing rate utilized in the measurement of operating and finance lease liabilities, amortization and depreciation of property, plant and equipment and intangible assets, and pre-clinical, clinical, and other accruals. Actual results could differ from those estimates.
Leases	Leases At contract inception, the Company determines if the contract is or contains a lease. Lease liabilities are recognized on the lease commencement date based on the estimated present value of lease payments over the lease term. To determine the present value of the lease payments, the Company utilizes its estimated incremental borrowing rate based on information available at the lease commencement date as the interest rate implicit in the lease is typically not readily determinable. The related right-of-use assets are recorded net of any lease incentives received. Variable lease cost primarily includes building operating expenses as charged to the Company by its landlords and payments for lessor-owned assets that are not covered by a tenant improvement allowance. The Company includes options to extend the lease in its lease liability and right-of-use asset when it is reasonably certain that it will exercise that option. None of the Company's options to extend the rental term of any of its existing leases were considered reasonably certain as of September 30, 2021. For leases of office space and equipment, the Company has elected to not separate the lease components from the non-lease components. For leases with a lease term of 12 months or less and which do not include an option to purchase the underlying asset, the Company has elected to recognize the lease payments in the statement of operations on a straight-line basis over the lease term.
Fair value of financial instruments	Fair value of financial instruments The carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, restricted cash, receivables, accounts payable and other liabilities, approximate their fair values because of their nature and/or short maturities. At September 30, 2021, and December 31, 2020, the Company had $152.4 million and $108.3 million in money market funds, respectively. Money market funds are level one financial instruments as they are valued at the closing price reported by the fund sponsor from an actively traded exchange.
Earnings (loss) per share	Earnings (loss) per shareBasic net loss per share is calculated by dividing the net loss by the weighted average number of shares of common stock outstanding for the period, without consideration for common stock equivalents. Common stock equivalents such as outstanding stock options and unvested restricted stock units are included in the calculation of diluted earnings per share only in periods of net income. Such common stock equivalents are excluded in the calculation of diluted net loss per share in periods of net loss as inclusion of such amounts would be anti-dilutive. Outstanding pre-funded warrants as of September 30, 2021 and September 30, 2020 were 12,663,010 and are considered outstanding as of their issuance date and are included in the basic and diluted net loss per share calculation because they are fully vested and exercisable after 61 days' notice for nominal cash consideration.
Accounting for stock-based compensation	Accounting for stock-based compensation The Company has issued stock options and restricted stock units (“RSUs”). The Company measures the cost of services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The cost of such award is recognized on a straight-line basis over the requisite service period, which is generally the vesting period. Awards subject to performance-based vesting requirements are expensed utilizing a graded vesting model if achievement of the performance criteria is determined to be probable. The Company accounts for forfeitures as they occur. The Company utilizes newly issued shares to satisfy option exercises and the vesting of RSUs. The Company estimates the fair value of options using the Black-Scholes option pricing model on the grant date. This approximation uses assumptions regarding a number of inputs that requires management to make significant estimates and judgments. The expected term represents the period that the Company’s stock-based awards are expected to be outstanding. As the Company does not have sufficient historical experience for determining the expected term of the stock option awards granted, the Company has based its expected term for awards issued to employees on the simplified method, which represents the average period from vesting to the expiration of the stock option. In addition, the Company does not have sufficient trading history for the Company’s common stock, and therefore, the expected stock price volatility for the Company’s common stock was estimated by taking the average historical price volatility for industry peers. The Company has never declared or paid any cash dividends to common stockholders and does not presently plan to pay cash dividends in the foreseeable future. Consequently, the Company used an expected dividend yield of zero. The risk-free interest rate was based on the yields of treasury securities with maturities similar to the expected term of the options for each option group. The fair value of each RSU is measured using the closing price of the Company’s common stock on the date of grant.
Recently issued and recently adopted accounting standards	Recently issued and recently adopted accounting standardsIn December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12 “Simplifying the Accounting for Income Taxes.” The objective of this ASU is to improve areas of GAAP by removing certain exceptions permitted by Accounting Standards Codification (“ASC”) Topic 740 - Income Taxes and clarifying existing guidance to facilitate consistent application. ASU 2019-12 became effective for fiscal years and interim periods beginning after December 15, 2020. The Company adopted this standard on January 1, 2021 on a prospective basis. The adoption of this ASU did not have a material impact on the Company's financial condition, results of operations, cash flows, and financial statement disclosures.

Nature of operations	9 Months Ended
Nature of operations	Sep. 30, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of operations	Nature of operationsNeoleukin Therapeutics, Inc. (“Neoleukin” or “the Company”) is a biopharmaceutical company creating next generation immunotherapies for cancer, inflammation, and autoimmunity using de novo protein design technology. Neoleukin uses sophisticated computational methods to design proteins that demonstrate specific pharmaceutical properties that provide potentially superior therapeutic benefit over native proteins.

Sale of Aquinox Canada (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
Sale of Aquinox Canada (Details) - USD ($) $ in Thousands	Jul. 31, 2020	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Subsidiary, Sale of Stock [Line Items]
Gain on sale of asset		$ 0	$ 7,826	$ 0	$ 7,826
Acqinox Canada
Subsidiary, Sale of Stock [Line Items]
Consideration from sale of assets	$ 8,200
Gain on sale of asset	7,800
Transaction cost on sale of asset	$ 400

Sale of Aquinox Canada	9 Months Ended
Sale of Aquinox Canada	Sep. 30, 2021
Disclosure Description Of Subsidiaries [Abstract]
Sale of Aquinox Canada	Sale of Aquinox CanadaOn July 31, 2020, the Company sold all issued and outstanding capital stock of its Canadian subsidiary, Aquinox Pharmaceuticals (Canada) Inc. (“Aquinox Canada”) to an unrelated third party for cash consideration of $8.2 million. The Company concluded that the sale did not meet the criteria for discontinued operations reporting as it did not represent a strategic shift that had a major effect on the Company’s operations and financial results. As of the date of sale, Aquinox Canada’s remaining assets included intellectual property and other assets developed through past research and development activities, all of which had no book value. The transaction resulted in a net gain on sale of $7.8 million, after deducting $0.4 million in transaction costs, which was recorded as a reduction of operating loss in the Company’s condensed consolidated statement of operations. The sale of Aquinox Canada triggered a significant capital loss carryforward for tax purposes. However, most of the capital loss carryforward was limited by the prior ownership change under Section 382 of the Internal Revenue Code. The remaining unlimited portion of the capital loss carryforward was subject to a full valuation allowance as the Company had determined that it was more likely than not that the benefit of the loss would not be realized.

Cash, cash equivalents, and restricted cash - Additional Information (Details) $ in Millions	Sep. 30, 2021 USD ($)
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract]
Cash deposit	$ 0.9

Equity - Schedule of Weighted Average Assumptions (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Equity [Abstract]
Expected volatility	89.17%	94.84%	89.18%	93.86%
Expected dividends	0.00%	0.00%	0.00%	0.00%
Expected terms (years)	6 years 25 days	6 years 25 days	6 years 10 days	6 years 7 days
Risk free rate	0.83%	0.34%	0.89%	0.42%

Condensed Consolidated Statements of Cash Flows (Parenthetical) $ in Millions	9 Months Ended
	Sep. 30, 2020 USD ($)
Statement of Cash Flows [Abstract]
Commissions	$ 4.6